Burapha Agro-Forestry Co., Ltd

The Land Degradation Neutrality Fund SLP (LDN Fund), and other potential investors to be determined (the Guarantee Holders or GHs) are seeking MIGA guarantees for their equity, and shareholder loan investments into Burapha Agro-Forestry Co., Ltd (Burapha, the Project Enterprise or the ‘PE’) against the risk of expropriation for up to 15 years. Burapha implements and operates agroforestry plantations (primarily Eucalyptus timber species) in Vientiane Prefecture and the Provinces of Vientiane, Xayabouly, and Saisomboun in Central Lao People’s Democratic Republic (Laos). Current operations include over 2,000 individual plantations spread out on approximately 5,800 hectares (ha), wood processing facilities and supporting infrastructure across Vientiane prefecture and the three provinces. The LDN Fund is an impact investment fund which provides long-term financing to sustainable land use projects that reduce or reverse land degradation, mostly in the field of sustainable agriculture and forestry. Further information on the proposed MIGA guarantee is available in the Summary of Proposed Guarantee.

Burapha started developing its plantations in the 1990’s; however, its current shareholders, SilviLao AB and Bafco invest AB, acquired the company in 2011. The plantations cover approximately 4,200 ha of private land acquired under various land lease agreements with farmers and village cooperations, and close to 1,600 ha of concession land from the Government of Laos (GoL). Burapha’s plantations are all Forest Stewardship Council (FSC) certified. Burapha implements a seven-year plantation cycle and an agroforestry model, whereby local villagers are given the option to practice intercropping with annual crops such as rice during year 1-2, and cattle-grazing from years 3 to 7. The cycle continues throughout the lease period, and when the lease expires, the land is returned to the local communities.

Burapha operates a sawmill and furniture factory in Nabong village, Vientiane Prefecture, which processes eucalyptus logs harvested from their plantations, as well as teak and eucalyptus purchased from outside entities. The sawmill has recently been upgraded with new machinery to enhance efficiency and productivity, and the facility currently produces approximately 420 cubic meters (m3) of ready-made products per year. Burapha also has a tree nursery and a research and development (R&D) facility situated adjacent to the Nabong sawmill. Burapha’s breeding program includes trials of 60 types of eucalyptus clones to support plantation development, and ongoing trials of bamboo and other species for research purposes.

In 2021, Burapha completed construction and commissioning of a veneer and plywood mill at Hin Heup, in Vientiane Province, close to the newly built China to Laos railway and Lao-China expressway. The veneer/plywood mill has the capacity to process approximately 150,000 m3 of sawlogs annually, and to produce an estimated 32,500 m3 of veneer and 26,000 m3 of plywood per annum. Operations started in June 2021; the facility is currently running at 60 percent of full production capacity and is expected to reach its full capacity by the end of 2023.

The MIGA guarantee will be used to support (i) the management and operation of Burapha’s existing plantations, sawmill, furniture factory, veneer, and plywood mill, and (ii) the development of up to approximately 60,000 ha of plantations in new Production Forest Areas (PFA) concessions in partnership with the GoL (together, the ‘Project’). The 60,000 ha is within 3 PFAs with a total area of approximately 264,000 ha .  Burapha land concession in the 3 PFAs cover natural and planted forests designated for supply of timber forest products (TFPs) and non-timber forest products (NTFPs). Burapha is aiming to scale up its business in the coming years through the development of a mosaic of greenfield plantations totaling 3000 ha annually. Individual plantation stands areas are expected to range from 100 ha to 200 ha. Plantation size depends on the availability of land and the agreement of local communities and land users to develop plantations on the land. The plantations will be in PFAs in the same four provinces / prefectures in central Laos. It is proposed that the plantations will be developed on forest land identified as ‘degraded’ and ‘barren’ by the Lao PDR Department of Forests (Forestry Law 2019). The PE has already identified 10,000 ha of degraded land in PFAs that is potentially suitable for acquisition and plantation establishment.

The Project is a Category A according to MIGA’s Policy on Environmental and Social (E&S) Sustainability (2013). The key E&S issues associated with the Project include land acquisition, compensation, and livelihood restoration, impacts on ethnics’ minorities, including impacts that require Free, Prior and Informed Consent (FPIC) from the ethnic minorities; biodiversity impacts; labor conditions, occupational and community health and safety, including risk related to unexploded ordinances, and child and forced labor (contractors and supply chain) and risk of gender-based violence in the workplace and in the community.

While all Performance Standards are applicable to this investment, based on our current information, the investment will have impacts which must be managed in a manner consistent with the following Performance Standards:

• PS1:  Assessment and Management of Environmental and Social Risks and Impacts
• PS2:  Labor and Working Conditions
• PS3:  Resource Efficiency and Pollution Prevention
• PS4:  Community Health, Safety and Security
• PS5:  Land Acquisition and Involuntary Resettlement
• PS6:  Biodiversity Conservation and Sustainable Management of Living Natural Resource
• PS7: Indigenous Peoples
• PS8:  Cultural Heritage

In addition, the following World Bank Group Environmental, Health, and Safety (WBG EHS) Guidelines are applicable to the Project:

• General EHS Guidelines (2007)
• Forest Harvesting Operations (2007)
• Sawmilling and Wood-based Products (2007)

Key E&S documents reviewed include:

• Burapha Annual Sustainability Report 2021
• Burapha Environmental, Social and Safety Management System(ESSMS) (March 2020)
• ​​Burapha Agro-Forestry Expansion Project​ : Preliminary Critical Habitat Assessment​ (April 2023)
• Feasibility Study for Tree Plantation and Reforestation Project Between Public-Private and People Partnership on Production Forest Aare in 60,000 Hectares:  Burapha Proposal for Long-term Investment. (June 2020)
• Burapha Agroforstry – ESIA Plywood Mill (Jan 2019 )
• Burapha Agroforstry – ESIA 3000 ha (May 2022)
• Burapha Agroforestry & Mill Operations in Lao PDR Environmental and Social Review (May 2022)
• Occupational Health and Safety procedure ( July 2019)
• Plywood Mill Waste Management for the Operation phase ( Jan 2019)
• Hazard Identification and Risk Assessment Procedure (Dec 2021)
• Hazardous Material Storage  Procedure ( July 2022)
• Emergency Preparedness and Response Standard Operating Procedure (Dec 2021)
• Plantation Fire Management, Preparedness and Response (March 2022)
• Communication Participation and Consultation Procedure (Dec 2021)
• Human Resources Policy  (Feb 2023)
• Counselling and Discipline Standard Procedure  (Nov 2022)
• Fair Treatment Standard Procedure (Feb 2023)
• Workplace Behaviour Standard Procedure (Feb 2023)
• Learning and Development Standard Procedure (Feb 2023)
• Corporate Code of Conduct Procedure (Feb 2020)
• Internal Staff Rules Procedure (undated)
• Health Safety Environmental and Social Management of Contractors Procedure (Oct 2021)
• Camp Establishment Safety and Environmental Management (Nov 2022)
• Labor Engagement for Plantation Establishment (undated)
• Employee Working Group Charter and Guidelines (undated)
• Recruitment and Selection Standard Procedure (Oct 2019)
• Competence Training and Awareness Procedure ( March 2021)
• Non-Compliance Reporting System (undated)
• 1st Amendment and Additional clauses Agreement to the Concession Agreement on the Industrial Tree Plantation Project in the National Production Forest in Vientiane Province (March 2022)
• Operations Manual Land Acquisition (Dec 2019)
• Manual Land Acquisition in Production Forest Areas (undated)
• Unexploded ordnance (UXO) Management Procedure ( Jan 2022)
• UXO Chance Find (May 2022)

In addition to reviewing the above and other available documents, MIGA carried out two E&S due diligence site visits. The first visit was in June 2022, which included meeting with key E&S staff and management, regulatory authorities, and affected communities, as well as visiting Project sites. The second visit was in March 2023, which included meetings Burapha staff, village committee members and Project Affected People. MIGA also met with the World Bank and IFC environmental and social specialists working on projects in Laos.

MIGA’s due diligence review considered the environmental and social management planning process and documentation for the Project and identified gaps between these and MIGA’s requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable time period, are summarized in the paragraphs that follow and in the Environmental and Social Action Plan (ESAP) attached to this ESRS. Through the implementation of these measures, the Project is expected to be designed and operated in accordance with the Performance Standards.

Key environmental and social (E&S) issues associated with the Project business activities are summarized in the paragraphs that follow.

PS1:  Assessment and Management of Environmental and Social Risks and Impacts

Environmental and Social Assessment and Management System:

Burapha has developed an Environmental, Social and Safety Management System (ESSMS). The ESSMS applies to all operations of the Company. The ESSMS provides an overarching project-specific E&S policy; identifies environmental and social risks and impacts; outlines a framework for the development of site-specific management plans; defines obligatory standards; provides guidance and direction for ESSMS implementation to all personnel; and briefly outlines roles and responsibilities. The objective of the ESSMS is to enhance environmental performance and facilitate the fulfillment of compliance obligations and environmental, social and safety objectives. The ESSMS is based on the requirements of the PSs, and the International Standards Organization (ISO) standards for environmental management systems (ISO 14001) and occupational health and safety management systems (ISO 45001).

Policy:

Burapha’s Environmental and Social Corporate Policy sets out the company’s commitment to sustainability, including protecting the environment and enhancing the livelihoods of local communities. It also describes commitments to provide a safe workplace, transparent governance, compliance with laws and regulations of Lao P.D.R. and adhering to the requirements of the PSs.

Identification of Risks and Impacts:

 In 2016-2017, Burapha completed a framework Environmental and Social Impact Assessment (ESIA), which referenced national law, IFC Performance Standards (PS) and WBG EHS Guidelines. The ESIA reviewed the existing 3000 ha of plantations, and contemplated the potential expansion to 60,000 ha. The framework ESIA provides site-specific baseline and assessment of impacts for the existing plantations and then a broad baseline of the region; an indication of the potential risks and impacts associated with Burapha’s operation and proposed mitigation measures for future plantation sites. However, as the future sites were not known, the identification of impacts and mitigation measures were not site specific. The exact sites of future locations are identified on a rolling basis following detailed feasibility studies and community engagement (refer to Performance Standard 5).

Priority environmental aspects identified for ongoing operational management are catalogued in the Burapha Environmental Management and Monitoring Plans (ESMMP), Plantation Site Development Plans, Operation Manuals, SOPs, Work Instructions etc.  Risk Assessments are conducted for all company sites and specific tasks / programs deemed potentially hazardous to Burapha staff, contractors and / or the environment. The risk assessment process is described in the Hazard Identification and Risk Management procedure. Social risks are screened through the PFA Manual. Key risks screened through the risk assessment process include biodiversity; community land use; community and occupational health and safety (including fire and transportation accident risks); and erosion and general water quality impacts. The risk assessment process procedure is described in the Hazard Identification and Risk Management procedure.  Once potential risks are identified, for individual plantations, significant environmental and social risks are mitigated through site selection (i.e. sites are selected to avoid significant adverse environmental and social impacts).

A preliminary climate risk screening was conducted to identify potential climate change impacts to the Project. This screening assessed if acute climate hazards such as extreme temperature, wind and rainfall can lead to an increase in the number of heatwaves, wildfires, storms, floods, and landslides in the Project region. In addition, chronic climate hazards such as shifts in average temperature and rainfall were also reviewed to identify if the risk for increased water scarcity, pest prevalence can result in potential detrimental effects on plantation yields and wood-processing operations.   This assessment focused on evaluating shifts in climate exposure for the Project region only, it did not factor the degree to which existing or planned climate risk mitigation measures can impact the climate risk profile for the Project. The screening has indicated that Project operations are vulnerable to both acute and chronic climate hazards. Climate models across a range of future warming scenarios and time horizons, indicate that extreme weather events will increase in intensity, e.g., model ensembles project that average maximum 5-day rainfall could increase from 135mm to over 150mm, and that the number of days in which temperatures exceed 35 degrees Celsius could increase from 40 days to between 80-110 days by 2050. Monthly minimum and maximum temperatures in the Project region are expected to increase 10-20 percent faster than global averages, with models suggesting that the largest increases will be in the hottest months of the year, April and May. Burapha will conduct a Climate Risk and Vulnerability Assessment to identify the materiality of climate change risks to their operations and define appropriate climate resilience measures where necessary (ESAP item).

Per the framework ESIA, the Burapha Agroforestry Project, along with other current and planned development projects throughout Vientiane Prefecture, Vientiane Province, Xayabouly Province, and Saysomboun Province has the potential to have both positive and adverse cumulative effects. The framework ESIA considered the cumulative effects of multiple projects occurring within a region, as well as the cumulative impact of Burapha’s planned expansion. For the Burapha expansion project, the assessment determined that if the individual plantations were widely disbursed through the region, then the cumulative impacts were likely to be minimal; however, if multiple plantations are concentrated in one area or one catchment or sub-catchment, then the cumulative impacts may be more significant.

The framework ESIA also identifies the potential for “leakage”(i.e. replacing the historic subsistence agricultural land now used by the Project by converting natural forest to new subsistence agricultural land). The potential for leakage will be somewhat mitigated by allowing intercropping in the plantation. Burapha will also include consideration of the risk of leakage in their site selection process, and where there is high risk of leakage, Burapha will consider livelihood restoration measures in addition to intercropping and incorporate communication discouraging leakage into community engagement processes (ESAP).   

There are a large number of existing agricultural activities and agricultural and / or industrial projects planned and operational in Vientiane Prefecture and the three provinces where Burapha operates and plans to expand. These existing activities and projects include subsistence agriculture and livestock grazing, growing of cash crops (e.g. rubber and cassava), mining, hydropower, development of other industries, and transportation infrastructure. Any project that requires large-scale vegetation clearing may have similar impacts to those of the Project. The framework ESIA indicates that the cumulative impacts from the existing activities and planned and operational projects in the region, including the Project, are expected to be: (i) high for air quality due to regional slash and burn activity; (ii) moderate for biodiversity, forest clearance, erosion, and sedimentation; and (iii) minor for hydrology and water use. Burapha’s contribution to all identified adverse cumulative impacts was estimated to be low.

The key government agency responsible for environmental and social assessment of the Project via the ESIA process is the Department for Environmental and Social Impact Assessment (DESIA) within the Ministry of Natural Resources and Environment (MONRE). The Decree on Environmental Impact Assessment (2010, updated in 2019; updated again in 2022), the Environmental Assessment Guidelines (2012) and the Guideline on Public Involvement in the Environmental and Social Impact Assessment Process (2012) currently guide the environmental and social assessment process in Lao PDR. The framework ESIA was submitted to DESIA; however, it has not been formally approved.

In 2017, Burapha submitted its first draft Forest Operations ESIA to MONRE which was finally approved in July 2022. This ESIA covered the operations of plantation areas planted from 2011 to 2017, approximately 3000 hectares. The plywood mill ESIA commissioned in 2017 and approved by MONRE in February 2019. Environmental Compliance Certificates (ECCs) were subsequently issued for both ESIAs. Both ESIAs identified the baseline conditions, the environmental and social risks and benefits of Project implementation, and the potential impacts associated with Project during planting, construction, and operation. The ESIAs also provided management, mitigation, and enhancement measures in a standalone Environmental and Social Management and Monitoring Plan (ESMMP). For existing and expansion, Burapha to i)  agree with MONRE on a process of  receiving Environmental Clearance Certificates (ECCs) for the 1500 ha outside the PFA areas  (ii) agree with Xayabouri provinces,  Vientiane provinces and Vientiane Prefecture on a process of  receiving Environmental Clearance Certificates (ECCs) for all plantations; and (ii) follow the process agreed and prepare required environmental and social documents; and (iii) to receive ECCs for all plantations (ESAP).

Per the February 24th, 2023, government decree item #4 of the Decision on Categorization of Investment Projects and Activities Requiring Initial Environmental Assessment (IEE) and Environmental and Social Impact Assessment (ESIA), commercial tree plantation established in degraded and barren land identified within the production forest area as per GOL’s land allocation programs of all sizes requires an IEE to be prepared which are approved at the provincial level. In this case, Burapha is preparing separate IEEs for plantations within the PFAs of Xayabouri and Vientiane Provinces. Additionally, Burapha is seeking confirmation with the Ministry of Natural Resources and Environment (MONRE) that plantations not in PFAs can be covered under the new IEE framework. Once confirmed, it would mean Burapha will prepare an additional IEE for Vientiane Prefecture which has plantations established between 2017 to 2020, which were not originally captured under the approved ESIA. Therefore, Burapha will develop environmental and social documents,  or other documentation as requested by MONRE and the provinces for the existing plantations and for expansion and these will be shared with MIGA (ESAP).

Management Programs:

The ESSMS is implemented through a set of management plans, operating procedures, and work instructions to manage risks associated with the Burapha operations. The management plans and procedures are documented in a ESSMS register and reviewed and updated periodically to take into consideration current activities and any changes to applicable requirements. A number of management plans and procedures are still pending, including wastewater and effluent management, air quality monitoring and management, security management, transportation and traffic management and biodiversity management (ESAP, refer to PS3). Burapha’s ESSMS and supporting management plans apply to all Burapha operations, and there are separate management plans for mill and nursery operations and agroforestry (plantation) operations. The management plans include details on monitoring actions, and the frequency of monitoring, along with the performance indicators and roles and responsibility.

Organizational Capacity and Competency:

Burapha has established a Risk and Sustainability Department (RSD) department that oversees and manages the E&S risks and impacts at all Burapha facilities, forest operations and land acquisitions. The department is responsible for implementation of the ESSMS in line with Company policies and standards, including the Performance Standards. The RSD team is comprised of the RSD Manager, a Health, Safety and Environment (HSE) Superintendent (vacant), two HSE officer (one currently vacant) and 3 community liaison officers (one position currently vacant) who are responsible for managing the projects E&S risks and impacts. The RSD Manager has overall responsibility for establishing, operating, maintaining, and reporting on the performance of the ESSMS and oversees all ESSMS related activity across Burapha operations. The RSD Manager is supported in day-to-day implementation of the ESSMS by all Department Managers of land acquisition, forestry operations, and industry managers (at the sawmill, nursery, and plywood mil).  As the Project expands, Burapha will hire an additional qualified HSE superintendent and an additional safety officer, community liaison officer, and biodiversity specialist (consultant (ESAP). Burapha will engage a qualified biodiversity consultant to lead biodiversity risk screening and support Project management of biodiversity risks and impacts in line with PS6 requirements (refer to PS6) (ESAP).

The RSD manager meets weekly with the COO and the Departments Managers to discuss Burapha project  Environmental, Social Health and Safety performance. At each site is an officer assigned to manage daily environmental and safety matters. These positions are also supported by site management and the Risk and Sustainability Manager who both undertake periodic inspections and provide planning support. The plywood mill has an established safety committee that comprises of the on-site safety officer, Deputy Production Manager and RSD Manager. They meet weekly to discuss the plywood mill HSE related matters. The sawmill has not yet established a safety committee.

For the plywood mill and sawmill most employees are locally recruited. Social matters affecting the villagers, including grievances, are discussed through regular informal meetings conducted by Burapha’s local office and administrative staff.  If issues need to be elevated, formal requests are prepared by villages and submitted to site management.

Burapha has a comprehensive annual training program for staff and contractors. The ESSMS is introduced in the staff and contractors’ induction training, which is followed up by regular refresher sessions. All Burapha employees participate in a training needs analyses, and then attend training sessions as required. Burapha Human Resources department ensures that all E&S personnel are qualified and competent to carry out their duties through a rigorous hiring and selection process.

Emergency Preparedness and Response:

Burapha has developed and implemented an Emergency Preparedness and Response Plan (EPRP), and site-specific emergency preparedness and response procedures for all district offices, camps, the Nabong Sawmill, the nursery facility, and the plywood mill. The focus of the emergency preparedness plan is the evacuation and treatment of the injured. As part of the ESMS, Burapha will prepares site-specific EPRPs for the expansions phase.

All Burapha’ s operational facilities and plantations have fire management plans and firefighting equipment.  Fire is the more significant emergency risk in plantation operations, and is managed through Burapha’s procedure for plantation fire management. The procedure includes appointment of fire guards from local villages, plantation patrols, fire risk information signs, the establishment of fire breaks, specific controlled burns during preparation for plantation establishment and training for local villages. Burapha also employees a ‘Call Before You Burn’ program which provides an incentive payment to local villagers who provide Burapha with advance warning of their intent to backburn for agriculture. At these activities, Burapha mobilize its own firefighting crew and equipment to control out breaks but also give locals fire management advice.

Burapha forestry teams carry out firefighting activities themselves and have all necessary equipment.  equipment, and All districts have their own designated fire crews who training locals on fore management and safety. workers are provided with safety training and contacts in case of incidents. Fire campaign signs are posted at appropriate locations around the PE’s plantations, and fire drills are conducted on a regular basis at the plywood mill and sawmill. Burapha fire guards are employed to routinely patrol plantations between the high fire risk dry season months of February to May.

Monitoring and Review:

As part of the ESSMS, Burapha has established, implemented, and maintains procedures to monitor its operations and activities that have may have impacts on the environment, local communities, and OHS. This includes procedures for tracking of performance, applicable operational controls and conformity with the Company’s objectives and targets. The Company uses 3rd party service providers to test environmental aspects such as wastewater and emissions. The RSD department is responsible for analyzing the results of monitoring and reporting on E&S and OHS performance of Burapha. Burapha undertakes internal compliance audits (Non-Compliance Reporting) on a regular basis. Burapha senior management team along with the RSD department undertake reviews of the implementation of the ESSMS to confirm its suitability and effectiveness. The ESSMS is updated as needed to address any issues or gaps identified through the review.

The RSD Manager develops monthly safety, environmental and social (E&S) management reports covering all aspects of company operations for Burapha management. Burapha has also been providing GOL with quarterly E&S / OHS reports in relation to the plywood mill development since June 2019.  For the Forestry operations, Burapha reports to GoL on a quarterly and annual basis. Under Lao law sawmills and tree nurseries are not required to prepare environmental and social impact assessments. However, these facilities are subject to Forest Stewardship Council and investor annual audits that cover these issues, along with OHS.

The GOL conducts periodic site visits of Burapha operations for both silviculture and land acquisition aspects. Burapha reports to Ministry of Agriculture and Forestry (MAF) government on a monthly and annual basis on plantation expansion progress. Burpha also reports to the Ministry of Environment and Natural Resources (MONRE) on a quarterly and annual basis regarding environmental and social impacts, as is required under the ECC conditions.

Burapha prepares Annual Sustainability Report that provides internal and external stakeholders with information about the Company’s’ activities and programs. This report is publicly disclosed on its website in English. As a condition of MIGA’s Contract of Guarantee (CoG), Burapha will be required to provide MIGA with an annual E&S performance report. Also,  since 2019, the  Lenders Independent Environmental and Social Consultant (IESC),  carries out independent site visits annually to monitor the implementation of the Project-specific ESSMS, ESMPs and ESAP implementation within the IFC PS Framework. Per each annual site visit, the IESC develops a report which outlines the company’s priorities for the interim 12-month period. The investors will have routine follow up meetings with Burapha to ensure progress is being made on action items raised in the report.

Stakeholder Engagement:

Burapha undertakes extensive stakeholder engagement as part of its land acquisition process (refer to PS5) and ongoing operations. As part of the ESIA process in formal consultations were undertaken with national, provincial and district government officials, as well as local communities that are participating or otherwise have been affected by the implementation of the first 3,000 ha. The consultation included regular discussions and the dissemination of Project information to local residents and government staff. Formal consultations have included meetings with all relevant government agencies and environmental and socio-economic studies at the village level. Consultation workshops at all levels are structured with comments from stakeholders recorded in formal minutes that are then transferred into subsequent redrafts of the ESIA and ESMMP reports.

For its expansion activities and in addition to the ESIA consultations, Burapha undertakes a process of informed consultation and participation, including disclosure and dissemination of information and consultation with project communities as part of its land use rights acquisition process at village level and at individual households (refer to PS5 for details). Currently, after securing land consent, communication with partner villages reduces until such times that Burapha has a planned activity and there is at times limited communication until Burapha’s receives the permit to plant or undertake maintenance.  Burapha will update its Community Engagement and Communication Procedure to include regular communication with villages during the period between securing consent and starting to plant, and to better record informal consultation (ESAP). Once there is a plantation within a village, meetings are held with the village on an annual basis. Key topics discussed include the progress of operations, community development activities, upcoming work programs and employment opportunities, and any grievances raised. Meeting minutes and registers of community concerns are maintained by Burapha. In addition to the formal annual meetings, there is ongoing regular informal communication with the local villages and Burapha plantation staff.  

External Communication and Grievance Mechanisms:

As part of the ESSMS, Burapha has developed a grievance management and dispute resolution procedure for the Project. This procedure is designed to provide an open and transparent channel for communication between the community and Burapha. The grievance mechanism is disclosed to communities during consultations meetings and through village notice boards. Consultation during the site visit by MIGA with affected communities indicated awareness of the grievance mechanism. A dedicated telephone number has also been set up to receive grievances, details of which are available from village authorities and Burapha notice boards installed at each partner village. All grievances are recorded in a grievance register.

As indicated previously, Burapha prepares and discloses an Annual Sustainability Report on its website, and Burapha has a team responsible for communicating with external parties requesting information on Burapha operation.

PS2:  Labor and Working Conditions

As of February 2023, Burapha employs 464 permanent staff across its operations, of which 44% are women.  Approximately 2,000 additional daily local workers are hired with 100 to 2,000 workers working on the plantations at any given time depending on the type of work required for the different stages of the plantations. Women account for 60% of the workforce at the plantations. About 32 full time employees and up to an additional 45 daily workers (depending on the demand) can be employed at the Nabong sawmill and furniture factory. The plywood mill is currently running at 60% of full production capacity and has approximately 320 staff in total, of which approximately 60% are women. It is anticipated that about 1500 full-time positions will be required to implement the Project at full capacity.

For plantation management, workers are prioritized and sourced from the PFA land users themselves, and also through recruitment from the village where the PFA is located. PFA land users also come from nearby villages, and these are also given priority. Agreements for labor are entered into via household contract, which are contracts with local households to manage plantation work, or via daily labor agreement, which is typically with individuals from outside the project area. The preference for Burapha is for household contracts. Where there is insufficient labor from local recruitment efforts contract labor teams are occasionally used.

For the sawmill, plywood mill and nursery operations, while most of the workforce comes from the local communities, the Company workforce also includes those coming from other parts of the country and/or nearby countries (supervisory and management level) to complement and assist local labor.

Working Conditions and Management of Worker Relationship:

Burapha has developed and implemented a Human Resources (HR) Policy and a set of standards and procedures (Code of Conduct; Workplace Behavior and Standard; and Counseling and Discipline Standards), consistent with Lao law and PS2 requirements. All permanent and daily workers sign written contracts and receive induction covering the Staff Rules prior to starting employment. All workers are required to work 48 hours per week and are paid salaries above the Lao minimum wage. Burapha’s HR documentation also includes a Fair Treatment Standard which provides a process for concerns related to unfair treatment.  A worker grievance mechanism is also in place and communicated to workers as part of the induction process. The mechanism includes various channels to file complaints either by directly submitting a form to HR or through  grievance boxes or email.

The Workplace Behavior Standards contain provisions against sexual harassment which apply to all persons who are engaged by Burapha or who are working on its behalf (e.g. contractors and consultants).  The standards extend outside of the workplace and cover community interactions of Burapha personnel.  The standards also include a grievance procedure to receive complaints, and a corresponding investigation procedure is outlined in the Counseling and Disciplining Standard.  Training on these standards will be conducted by Burapha for all its personnel.  Burapha shall also increase capacity to manage GBV risks by developing procedures related to gender-based violence (GBV) response (ESAP).   

Burapha’s Code of Conduct affirms the companies ’s commitment to the freedom of workers to establish and join trade union organizations without intimidation or fear of reprisal. An Employee Working Group is in place, comprised of 9-12 individuals elected for a two-year period and the Employee Working Group’s rights and responsibilities are set out in the Employee Working Group Charter. An Internal Staff Rules is also in place and will be reviewed by end of 2023.  The draft Labor Engagement for Plantation Establishment Procedure will need to be finalized (ESAP).

Burapha operates multiple worker camp facilities to provide accommodation for field staff. Rates of occupancy depend on the type of plantation work being undertaken throughout the year. Burapha has a procedure in place for Camp Establishment, Safety and Environmental Management, and conducts periodic inspections of work camps. The procedure will be reviewed and updated against the IFC and the European Bank for Reconstruction and Development (EBRD) Guidance Note on Worker Accommodation Process and Standards (2009) (ESAP).

Protecting the Work Force:

Undocumented migrant workers coming from neighboring Vietnam, Myanmar and China are present in Laos, however risks related to migrant and forced labor are considered to be low given that Burapha employs mostly Lao nationals and conducts identification checks prior to recruitment.

Child conducting labor in the Lao agriculture sector in the context of working family groups is common, and at times children may be engaged to support their parents with activities at the PE’s plantations. Burapha has policies and procedures in place to minimize and monitor the risk of use of child labor within its workforce. As per the PE’s HR Policy, the PE’s Recruitment and Selection Standard includes provisions against child labor and measures to ensure minimum employment age for employees, contractors and employees is 14 years. Workers between 14 and 18 are limited to 6 hours of work per day, and to perform light duties only. Personal identity documents are checked to verify the age of new recruits, and each Plantation Site Manager visits the household plots on a regular basis to identify any heavy or dangerous work being undertaken by children.  Burapha also conducts awareness raising on prevention of child labor in its operations. Anti-child labor conditions are in all types of Burapha labor contracts.

Occupational Health and Safety:

Burapha has established an OHS management procedure process which includes: i) health and safety risk assessment ii) identification and management of hazards; (iii) provision of preventive and protective measures; (iv) training; (v) documentation and reporting of occupational accidents, and incidents; and (vi) emergency preparedness and response. The procedure is applicable to all Burapha personnel (full time staff and the casual workforce) and all contractors working within Burapha operations. Monitoring reports indicate that each operational facility has a site-specific safety plan (including a fire management plan), firefighting equipment and Material Safety Data Sheets (MSDS) that is available in both Lao / Thai and English at the operational facilities.  A strong occupational health and safety (OHS) culture is maintained across Burapha’s operations through regular toolbox meetings, allocation of OHS responsibilities to suitably qualified staff, routine OHS monitoring, and implementation of appropriate corrective actions when OHS accidents occur. All new Burapha staff receive training on personal protective equipment (PPE) requirements, emergency response and first aid during induction and ongoing refresher training. Annual health checks are carried out for full-time staff. Hearing protection is enforced near any noisy equipment at the wood processing facilities and while using mobile machinery. The OHS procedure also details incident reporting and response process, and workers receive training on its implementation. Burapha Incident and Accident Reporting Database has been established to record: (i) accidents, incidents, or near misses; (ii) actions taken in response; (iii) dates of corrective actions; (iv) measures to avoid or minimize the chance of a similar action occurring in the future; and (v) dates for ensuring implementation of corrective actions identified. Burapha has a Covid-19 emergency operational plan in place, which includes measures to reduce transmission such as regular disinfection of work areas, minimization of meetings and travel, and provision of PPE.

The transportation contractor, Linfox, that is responsible to transport Burapha’ s raw logs from plantations to the mills and to the port has their own strict safety protocols and through introduction of the new harvesting equipment that included comprehensive training for Burapha staff, they have further strengthened Burapha’ s OHS culture.

Workers Engaged by Third Parties:

Forestry operations work such as clearing, planting and maintenance activities are undertaken by local villagers under the supervision of Burapha staff.  Burapha employs contractors for harvesting and haulage of materials, and for provision of road works. Burapha’s HR Policy and ESMS require all contractors and service providers to follow Lao labor law and to adhere to the PE’s environmental, social, health and safety standards and policies. Burapha’s Contractors Operational Plan includes provisions on working hours and number of shifts of contracted employees, training requirements, safety and emergency measures, accommodation arrangements, vehicles maintenance requirements, recruitment, monitoring and auditing. The service agreements signed with contractors include requirements for provision of safe working conditions, submission of all employees’ wages and salaries, and compliance with the Burapha Code of Conduct which covers aspects such as use of drugs, sexual misconduct, and trade in wildlife and plants. Contractors use their own internal grievance management procedures, including weekly toolbox talks. The Burapha  conducts periodic audits and spot checks to oversee contractors’ compliance with its requirements, any gaps identified are captured in a non-compliance report register for appropriate corrective actions.

Supply Chain:

Third party suppliers are used to supply raw logs to the sawmill and raw logs and veneer to the plywood mill The FSC Chain of Custody Procedures, which Burapha applies to the procurement of timber from third party timber suppliers, do not include details regarding the identification and management of labor and biodiversity risks within the primary supply chain.  Depending on demand, Burapha source raw logs and veneer from non-FSC certified suppliers. Burapha will develop and implement a supply chain risk assessment and management plan (ESAP), including provisions on risk assessment and ranking of primary suppliers, identification of labor risks, screening to be conducted through the procurement process, and applicable management and monitoring measures to be applied to minimize risks of use of child and forced labor within the primary supply chain.

PS3:  Resource Efficiency and Pollution Prevention:

Resource Efficiency:

The Project is not expected to generate more than 25,000 tons of Greenhouse Gas (GHG) emissions per year, as such Burapha will not be required to report annually on the gross GHG emissions generated by its operations.   Burapha uses energy efficient equipment, including at the new plywood mill, and electricity at all facilities is sourced from renewable sources (hydropower). Vehicle and machinery use (e.g. chainsaws) will result in limited emissions (e.g. for vehicles estimated to be 1.6 kg of carbon dioxide equivalent (CO2e) per km). While the removal of fallow forest will produce GHG emissions (approximately 38.9 tCO2e per hectare per year), this will be offset by the carbon sequestration potential of the plantations, estimated to be 243.2 tCO2e per hectare per year. The PE has recently completed a carbon credit audit and verification for the Project under the Verified Carbon Standard (VCS) and were issued 134,440 carbon credits in June 2023. For the first VCS application, which assumes a rotation of 7.5 years, mean annual increment of 30mm, and 9m x 1m tree spacing for 2986 planted hectares, net GHG emissions reductions are estimated to be 168,050 tCO2e.

Burapha is in the process of upgrading its tree nursery at Nabong to expand the nursery capacity. Currently the nursery water usage is approximately 348m3/day of groundwater for irrigation during the dry season (December -June) and negligible irrigation during the wet season (July – November). The nursery expansion plan will require Burapha to source significant additional water (about 1,000m3/day) during the dry season, which Burapha is planning to source from the nearby Nam Ngum River (approximately 2km away) to replace existing groundwater supply. The design of the upgraded nursery, which is currently being finalized, includes a plan to minimize water use requirements through the use of greenhouses with fully automated drip and spray irrigation systems. Rainwater harvesting is also being explored. Burapha also abstracts water from the Nam Lik river at a maximum rate of 150m3 per day for the use at the Hinheup plywood mill.

For individual plantations, as part of the risk assessment and site selection process, Burapha will assess the potential impact of water use on instream ecology and downstream users, and if any potential impact is identified, Burapha will develop and implement measures to avoid or reduce the impact (ESAP). Burapha will develop water quality management and monitoring plans for (1) plantation operations and (2) the mills in line with national and MIGA PS requirements (ESAP).

Pollution Prevention:

The Project potential environmental impacts from the plantations and operations of plywood mill, Nabong Sawmill, and the nursery facility include impacts on air quality; noise; water usage, effluent discharges (e.g. pesticides, hydrocarbons, fertilizers), waste generation; hazardous and non-hazardous materials spillages, erosion, and sediment transport (from vegetation clearing), and forest fires. These potential impacts will be minimized through adherence to GOL laws and regulations, international environmental standards and through the application of good international industry practices. The relevant recommendations and mitigation measures suggested in the ESIA for the initial 3,000 hectares and the sawmill and plywood mill are incorporated into the Project ESSMP and operational procedures and manuals, and the implementation of these measures is applied across all operations and is regularly monitored by Burapha.

The Plywood Mill ESIA identifies potential air emissions during operations as emissions of dust (TSP, PM10 and PM2.5 ), VOCs including formaldehyde (CH₂O ), and combustion gases (SO2 , NOx and CO) due to sawing and milling, plywood and veneer process, boiler and Sawmill wood drying unit. As detailed in the ESIA and ESMPs, Burapha will monitor boiler stack emissions for NOx, SOx, PM10 and develop air quality monitoring reports to be shared with MIGA annually (ESAP) Monitoring will be annually for the first three (3) years of operations, and then, if concentrations are below national and international emissions standards for the first three (3) years, every five (5) years. Burapha will be required to develop air quality monitoring systems and develop air quality management plan for the sawmill and the plywood mill in line with local laws and PS3 requirements (ESAP). 

For the planation expansions, the potential emissions are from vegetation clearing and burning and dust from the trucks transporting raw logs. Burning for site preparation is generally only conducted prior to the first planting, and therefore, the potential impact is limited to a short period of time for any individual plantation. Measures have been identified to minimize the impact of dust emissions on local communities, and the potential for nuisance dust will be monitored through the grievance mechanism, and additional measures to address nuisance dust will be implemented, as needed.  

Noise impacts are mainly from the sawing and milling process at operating facilities and increased noise along haul routes (hauling of raw logs and finished product). Given the location of the mills, the ESIA indicates that the potential noise impacts on local communities are expected to be low. Noise impacts from plantations are also expected to be low, and to further minimize the potential for impact, Burapha only operates during the day, including haulage of logs.  For plantations, the site screening process will identify the nearest sensitive receptor, and where noise-related risks are high, specific measures will be identified to minimize the risk (ESAP). Nuisance noise will be monitored through the grievance mechanism, and measures to address noise will be developed and implemented, if needed.

Waste generated by Burapha from the operational facilities and plantation activities consists of 2 types of waste namely solid wastes and hazardous waste. All waste is managed in line with the applicable laws and regulations and per the ESIA, impacts to receptors from non-hazardous waste will be low. Solid waste mainly includes waste wood generated from the sawmills and other domestic waste. All waste wood at the sawmill and the plywood mill is either sold or utilized to fuel the boiler for mill drying processes. The wood grading process used at the sawmill and plywood mill reduces waste by ensuring that all high-quality timber is utilized to produce premium products while lesser quality timber is utilized for other products. Solid waste at all operational facilities is collected by a licensed waste contractor. Burapha has separate General Waste Management Plans in place for the mills and the plantations, and these plans will be updated fully align with PS 3 and WBG EHS Guidelines (ESAP).

For hazardous materials, Burapha uses glyphosate for weed spraying across its operations. Chemicals used at the nursery and timber processing facilities are kept in locked storage areas that are well ventilated and include adequate spill containment measures. However, the plywood volumes of hazardous materials (waste and non-waste products) have exceeded the current storage capacity and Burapha plans to install a larger facility to meet current and forecast demands (ESAP).

Burapha’ s insecticide (borax) treatment facility, which was built at the sawmill in 2021 in response to export requirements for the dry branch sticks product, includes a bunded concrete tank surrounded by a concreted containment area to reduce the risk of spillage. All of Burapha’ s hazardous waste and spent pesticide containers are processed by a certified contractor in compliance with Lao laws and international standards. 

In the absence of suitable management and mitigation, surface, and groundwater quality downstream / downgradient of Burapha operations may be impacted by the discharge of pesticides, hydrocarbons, fertilizers, additional hazardous / non-hazardous materials, and suspended sediment.  Burapha is committed to meeting national and international standards for effluent discharge.  The sewage treatment plant at the Plywood mill, which was designed to treat up to 50,000 L per day, is currently not operational.  Burapha will engage a service provider to finalize commissioning of the sewage treatment plant, which will address current water contamination issues at the sediment treatment pond (ESAP).  Burapha is monitoring water sources used and wastewater discharge at the site and based on the findings will identify measures to enhance wastewater management in a Wastewater Monitoring and Management Plan (ESAP).

PS4:  Community Health, Safety and Security

Community Health and Safety:  

Pedestrian and road safety risks mainly relate to an increase in traffic along village access roads during plantation establishment, vegetation clearance and harvesting periods. Risks are managed through Burapha’s ESSMS and site-specific road and transportation management plans, which include safe driving protocols, training for drivers, procedures for hazardous material transport, safety audits of access roads, and vehicle checklists and maintenance programs.

As mentioned above, wildfires in plantations are a key risk to community safety during Project operations. Burapha has a fire management program in place which includes regular meetings on fire management with partner villages, communication with local communities on fire control measures, fire awareness posters placed at all plantation entrances, appointment of fire guards from local villages and incentive measures for villagers to inform Burapha of plans to undertake controlled burns for swidden agriculture during the dry season. Burapha’s Emergency Preparedness and Response Procedure includes engagement with workers and communities including a communication protocol on preparation and response measures in the event of incidents.  As Burapha expands, it will roll these measures into a standalone site-specific Emergency Response Plans for each site, which will also include emergency evacuation for the project teams and the community. (ESAP).

Policies and Procedures for both PE staff and contractors are in place to manage GBV risks (refer to PS2).

Burapha’s plantations are located within areas at low to moderate risk of unexploded ordinance (UXO) contamination. Community health and safety risks related to UXOs are managed through the conduct of a UXO preliminary risk assessment for each newly acquired land parcel, and implementation of a UXO chance find procedure for when suspected UXOs are found during Project works.

Security Personnel:

Burapha’s security arrangements include a perimeter fence along all operational facilities and surveillance provided by security staff who are directly employed from local communities. There are one to three security guards employed at each plantation site, three at the head office, six at the plywood mill, and two at the sawmill. Burapha will develop a security management plan, including training requirements and code of conduct for security personnel (ESAP).

PS5:  Land Acquisition and Involuntary Resettlement

As of February 2023, Burapha has planted approximately 5,800 hectares (ha) of land planted across 40 partner villages through different modes of land use rights acquisition.  Approximately 1,150 hectares were acquired via lease agreements with individual farmers (415 farmer agreements), 1,537 hectares of communal land via lease agreement with villages (13 village cooperative agreements).  For both farmer agreements and village cooperative agreements, land is priced based on market rates and paid on a lumpsum basis. Burapha also has 1,539 hectares of land in state-owned production forest areas . The remaining balance of about 1,500 hectares was acquired through perpetual use rights (90 company land agreements and 7 other concession agreements).  Its current landholding also comprises approximately 18 hectares used for company facilities (tree nursery, R&D facility, sawmill and plywood mill) acquired through state concessions.

 For its expansion, Burapha will be acquiring land use rights under the Concession Agreement awarded to Burapha by the GoL in July 2020 (amended March 2022) for a period of 50 years. The Concession Agreement allocates to Burapha 60,000 hectares of land in production forest area in the Provinces of Vientiane and Xayaburi. As of February 2023, Burapha has obtained approval from respective government offices (national, provincial, and district) and consent from village committees for 10,000 hectares of land out of the 60,000 hectares for its expansion.

Community Engagement:

Production Forest Areas are state owned land gazetted for the specific use of timber and timber products procurement. As it is state owned land, there is no legal land title afforded to the general public. The PFAs are however used by villagers and communities for livelihood and Burapha acknowledges these customary uses. Burapha seeks to minimize adverse impacts from land acquisition through the implementation of the land selection criteria defined in its Production Forest Area (PFA) Land Acquisition Manual – nine step program. Upon obtaining respective authorizations from national, provincial, and district offices, Burapha conducts initial village level consultation with members of the village committee for purposes of explaining the operation model and for gathering information on land cover and land use patterns in the production forest area, including information on lands used for customary purposes, identification of sacred forest areas and cultural sites, and existing land disputes. The results of this exercise comprise a village profile, history, community map, and seasonal calendar. Village level consent is then secured to conduct an in-depth land classification survey and land user survey which targets all those who are using land in the identified potential production forest area (PFA land users). This agreement to conduct survey is documented in village community meeting minutes. In addition to the selection criteria applied to determine suitable PFA land for plantation, in practice through the request of the village and /or individual land users, Burapha also excludes certain areas from the concession area; however, this is not currently articulated in the consolidated site selection criteria. Burapha will update the PFA Manual with clear site selection criteria combining both environmental and social considerations (ESAP).

The PFA land user survey gathers information on each household’s livelihoods and where and how they are – or have been – using the land in the PFA, and consequently conducts a series of consultations (up to 3 times) with land users to secure consent for the use of the land for Burapha plantation. This survey includes land users who may reside in other villages. Results of the survey including the boundaries of the plantation identified in the PFA area are presented in a village meeting with respective PFA land users for validation.  The results of this meeting are documented via minutes of the meeting.  In both village consultations and PFA land user consultations, Burapha presents the operation model in detail, including labor opportunities and inter-cropping arrangements for land users as well as the various measures offered to support village development (such as the village development funds, road improvement and other voluntary contributions)

The final proposed concession area (i.e. area where the land users have consented to be planted) is then presented in a community meeting where agreement is reached between Burapha, the Village Chief, and the District Governor as chairperson on the concession area (as evidenced by maps, location of border posts and layout of the proposed access roads), and any requests made by the villagers and any commitments made by the Company.  The minutes of this meeting document the formal consent of the village to the project and proposed concession. After which district, provincial and central approval from Department of Forestry are respectively obtained over the concession area. Once approval from these government offices is secured, Burapha applies for planting authorization from DoF and enters into a lease agreement for the remaining period of the concession agreement (50 years) with respective Village Committees upon receipt of such authorization.  Under the Concession Agreement requirements Burapha provides financial compensation for land acquired for the Project through payment of land lease (Village Development Fund) fees to impact villages, village khoums (a cluster of villages under the same administration), district and provincial authorities. . These arrangements are captured in lease agreements with respective authorities. 

Livelihood Restoration:

At the PFA land user level, agricultural development within the Project plantation areas is an integral part of Burapha’s agroforestry model.  PFA land users have access to intercropping agreements and support to develop agricultural crops, pasture, and livestock. Through intercropping agreements, Burapha provides PFA land users with plots in the Project plantations to cultivate annual crops between the trees during the first year of the plantation cycle, and for livestock grazing from year three to seven; after which the 7-year cycle is repeated until the end of the lease agreement. While impacts resulting from the development of plantations do not include physical displacement, restrictions on the use of land and loss of natural resources, including non-timber forest products, may adversely impact communities’ livelihoods. A summary of impact will need to be prepared to capture impact of project activities in the concession area with corresponding measures to be undertaken to address such impact with special focus on livelihood restoration particularly of those belonging in vulnerable groups. (ESAP).  Burapha will update the PFA Land Acquisition Manual to include an entitlement matrix offered to both at village level and PFA land user and to document actual entitlements received by respective PFA land user. (ESAP) Monitoring of livelihood conditions of PFA land users will also need to be undertaken for vulnerable PFA land users (ESAP).

Grievance Mechanism:

In cases where consent is obtained at village level but not the entire PFA land users, this is documented in the minutes of meetings and co-signed by the PFA land user withholding consent, the village chief who has authority over the PFA land user (i.e., the village chief of the village where the PFA land user resides) and the survey team. The documentation includes details about the land (area and location) and the reason for the lack of consent. These cases are entered in the land use limitation register and monitored by Burapha until a solution to the limitation is found. While the areas with concerns are not taken out of the identified PFA plantation area, Burapha operations over the area does not commence until concern has been resolved. In cases where the meeting cannot reach consensus and it is the Village Authority who does not wish to provide the consent of his village to the project and sign the meeting minutes, Burapha repeats its process of negotiation with support from District authorities to try and reach agreement with the local community. These cases are also entered in the land use limitation register for monitoring of resolution.

PS6:  Biodiversity Conservation and Sustainable Management of Living Natural Resource

General:

The GoL has designated three forest management categories, each with its own corresponding level of protection and use according to the Forestry Law. These are protection, conservation, and production forests. Protection forests are largely to preserve soil and water resources and prevent natural disasters – ecosystem services. Conservation forests are designed to protect species and ecosystems and are represented by the National Parks and Provincial Protected area network, and production forest areas are for wood production. Burapha’s future planting is concentrated in three central Laos Production Forest Areas (PFAs) namely: (1) Phou-Yeuy (100,184 ha); (2) Nongpet-Naxaeng (68,771 ha); and (3) Phou pha dam (95,174ha).

Legally Protected and Internationally Recognised Areas:

There are no internationally protected areas or Alliance for Zero Extinction (AZE) sites in Burapha’s existing or Project expansion areas. Several national, provincial, district and village Conservation Forests as well as Key Biodiversity Areas (KBAs) are present. The three National Protection Areas (NPA) in proximity to Burapha’s existing and future plantations are the Nam Poui, the Phou Pha Nang and Phou Khao Khuay. The Nam Poui/Nam Phouy NPA encompasses dry evergreen and mixed deciduous forest and is home to the largest wild population of Asian elephants left in Laos. Phou Pha Nang NPA is largely degraded with patches of evergreen forest and the Phou Khao Khoay which is also a KBA, contains a mosaic of forest types and supports several species of conservation value. The Nam Ngum Reservoir is a KBA due to the presence of threatened and range restricted fish.  The Mekong River from Luang Prabang to Vientiane is also a KBA supporting an exceptional diversity of fish, some of which are threatened, and range restricted. It also comprises a variety of habitat types, sand and gravel bars, islands, rock outcrops, which are particularly important for birds. None of the KBAs overlap the PFAs.

The Burapha Land Acquisition process requires that all protected areas are avoided. A review of areas planted to date; however, indicated that due to discrepancies in protected area boundaries, approximately 22 ha of areas planted in 2015encroached upon the boundary of the Phou Phanang NPA.  There has also been encroachment into the very degraded Provincial Protected Area (PPA) Phou Inthin, as Burapha was unaware of its status. Government approval was granted for Burapha to continue its plantation within the PPA, which, due to the degraded nature, was subsequently reclassified under the Forestry Law from “protected” to “ordinary.” Burapha is enhancing their ESSMS to prevent planting in protected areas in the future, regardless of whether they are degraded (ESAP, see PS1). Burapha will engage a qualified biodiversity consultant to lead biodiversity risk screening and support Project management of biodiversity risks and impacts in line with PS6 requirements (ESAP, refer to PS1).

Protection and Conservation of Biodiversity: Natural Habitat:

They key risks and impacts associated with eucalyptus plantations include the potential for direct and indirect loss of and fragmentation of Natural Habitat, as well potential indirect impacts related to increased accessibility due to the upgrade of existing and construction of new roads, particularly in some of the more remote parts of Nongpet Naseng PFA. The cumulative loss of swidden and crop land within the PFA, could result in clearance of other remaining Natural Habitat within and / or outside of the PFA, as villagers develop new swidden areas to replace the areas lost to Burapha’s plantations. If not properly managed, increased erosion and sedimentation, and improper use of herbicides and fertilisers may also affect water quality and biodiversity in receiving waterways, particularly in the wet season, and water abstraction may also affect aquatic ecology.

With respect to loss of habitat, Burapha’s practices are in line with PS 6 requirements, which indicate that “where feasible, the client will locate land-based agribusiness and forestry projects on unforested land or land already converted.” Burapha’s land acquisition process stipulates that plantations cannot be established on native forests as classified by the Department of Forestry or areas that support High Conservation Values (HCV). They should only be established in degraded landscapes. As per the definition in the Forestry Law of 2019, this includes “forest land areas where forests have been heavily and continuously disturbed and will take a number of decades to regenerate naturally”.  Degraded areas identified by Burapha have typically been used for swidden (shifting cultivation) agriculture and are regenerating fallow forests as well as some bamboo forests. Natural and modified habitats exist on a continuum ranging from the pristine to those that are intensively managed. Although fallow forests are composed of native species, young fallow is clearly a modified habitat. As fallow matures, this habitat can revert to Natural Habitat (as defined by PS6) over time depending on the extent of anthropogenic disturbance in the surrounding area and pool of species available for recolonisation. In general, the level of disturbance in the PFAs is high, and it is unlikely that succession of fallow into Natural Habitat forests within the fallow cycle would occur due to the high pressures on the surrounding land. Burapha tend to avoid more mature swidden if it is contiguous to native forests.

Burapha’s process for determining whether a site is “degraded” involves various steps including desktop analysis, site visits to determine topography, land use, vegetation, soil character as well using satellite imagery, drone imagery, photography, and consultation with local communities. A review of recently (2018 – 2023), cleared land for Burapha was undertaken to determine potential impacts on Natural Habitat. Over this period, a total of 2,855ha was planted. Of this, approximately 1,255 ha comprised upland crop, 805 ha were young fallow (defined as fallow for less than 5 years), 636 ha was old fallow (greater than 5 years fallow), 66.76 ha was bamboo, and 88.5 ha were other plantations or agriculture. While no areas of undisturbed forest were found to have been cleared, as there is no distinct cut-off point for when regenerating fallow forest becomes ‘Natural Habitat’. Therefore, additional parameters were included to assess whether the vegetation cleared was ‘Natural’ or ‘Modified’.  These included vegetation density / condition using Normalised Differential Vegetation Index (NDVI) analysis; canopy cover; signs of anthropogenic disturbance (roads, settlements etc.); distance from forest edge; and history of swidden agriculture. Based on this review, no Natural Habitat has been identified as having been cleared as part of Burapha’s operations in the last five years.

Despite very high levels of forest loss and land clearance within the PFAs, patches of natural forests still exist alongside seasonal wetlands particularly in Nongpet-Naseng PFA where GIS analysis indicates 59% of it could be degraded deciduous forests with some degraded evergreen forest.  Some of these may support habitats or species that trigger Critical Habitat (CH) which could be affected through by Burapha’s operations. The Forest Stewardship Council FSC requires Burapha to set side 10% of every management unit to facilitate retention of Natural Habitat and migration corridors. These areas are called Special Management Areas (SMAs). SMAs include single large trees, remnant patches of natural forest, wetlands and riparian/gallery forests along waterways and areas with steep slopes. SMAs are not currently actively managed and are not consistently demarcated on maps.  Burapha will develop a management framework for SMAs. The framework will require engagement with affected communities and other interested stakeholders and experts to identify a site-specific management strategy for SMAs within each management unit (ESAP). 

Protection and Conservation of Biodiversity:  Critical Habitat:

A desktop Critical Habitat Assessment (CHA) and a site visit  was carried out to assess both Burapha’s existing plantations that were planted in the last five years and potential future expansion into the three PFAs. The key objectives were (i) to assess whether there may be Critical Habitat adjacent to existing plantations that may require enhanced management; and (ii) to identify future areas in the PFAs that may support Critical Habitat and therefore will require additional species-specific survey work As indicated previously, Burapha’s systems will be strengthened to improve risk screening, including screening for potential risks and impacts to Critical Habitat, and Burapha’s E&S team will include a biodiversity specialist.

Given the size of the Production Forest Areas (PFAs) and the fact that the location of future management units within the PFAs are unknown at present, it is not possible to undertake a site-specific CHA. With respect to future plantations, the desktop CHA identified one species, Elephas maximus Asian Elephant which is considered to qualify for Critical Habitat (despite being wide ranging), under Criterion 1a as it is the last viable population in Laos. It has recently been recorded within the southern and northern Phoupadam PFA. An additional eight species likely qualify if present, and another four possibly qualify under Criteria 1-3 if they are present.  It is unlikely that all of these species are present for a range of reasons, including hunting pressure and / or river regulation, but even if present, not all species are likely to be impacted by Burapha’s future expansion.  For example, six of species are fish. Potential impacts on fish are anticipated to be limited, as the project is not expected to result in significant changes to hydrology or water quality and Burapha’s screening process leaves riparian buffers near watercourses. Burapha’s will use the desktop CHA to inform its enhanced sites selection process and implement targeted surveys if CH or CH-triggering species are likely to be present within the potential expansion areas. The objective of the site selection process will be to avoid expansion into areas identified as CH.

With respect to CH in proximity to existing plantations, there has been a possible sighting of the Critically Endangered Northern White-cheeked Gibbon Nomascus leucogenys in or near the Na-An plantation in Nongpet PFA which includes a large SMA.  Burapha will conduct a specific survey for Nomascus leucogenys to determine its presence and range in the area, and if needed, will identify measures to prevent current and future activities from impacting the population (ESAP). As mentioned above, Burapha will also be developing an SMA Management Plan.  Burapha is currently extracting 150m3/day water from the Nam Lik for the plywood mill and 348m3/day of groundwater for the nursery. Planned nursery expansion will require approximately 1,000 m3/day during the dry season, which Burapha intends to source from the Nam Ngum river. Based on desktop research, the Nam Lik used to support the range restricted and Data Deficient Pseudecheneis sympelvica. This species was last assessed in 2012 and it is not clear whether it is still present given that it prefers strong rapids and edges of waterfalls, and the river is now heavily regulated by a hydropower dam about 17km downstream of the plywood mill site. The abstraction relative to existing flows is small and the species is unlikely to be affected.  Any Burapha future abstraction from the Nam Ngum river will be downstream of the Nam Ngum reservoir and downstream of the confluence with the Nam Lik river. This stretch of river is heavily regulated by the dams on the Nam Ngum and Nam Lik rivers, and the proposed abstraction compared with the existing flow is low, and therefore, impact on aquatic species and habitat is unlikely. Foraging areas for the range restricted and Vulnerable Phou Khao Khouay Leaf-nosed Bat Hipposideros khaokhouayensis and the Endangered La Touche's Free-tailed Bat Tadarida latouchei overlap with some of Burapha’s existing plantations; however, Burahpa is waiting for expert opinion to confirm their presence and foraging ranges in the area, and if present what the potential impacts might be. If Critical Habitat is confirmed adjacent to any of management units, then Burapha will prepare a Biodiversity Action Plan to facilitate effective management of areas supporting Critical Habitat. Burapha’s site selection process will be independently reviewed annually to verify effective implementation, and, in the unlikely event that Burapha’s plantation is in Critical or Natural Habitat was affected, then Burapha will need to quantify any impacts and develop a biodiversity action plan to achieve no net loss for Natural Habitat and net gain for Critical Habitat.

Management of Ecosystem Services:

High level information pertaining to priority ecosystem services for either local beneficiaries (Type I) and/or the Project (Type II) was collected as part of the social field work undertaken in March 2023 This data was further supported by desktop information. Priority Ecosystem Services for the Project are likely to include Provisioning Services (water supply and use), regulating services (soil erosion regulation, air quality regulation and hydrological services) and supporting services (nutrient Cycling and soil formation). According to the communities consulted, the land acquired by Burapha is not important for many provisioning services due to the degraded nature of the habitat, although hunting, timber and non-timber forest products collection still occur in SMAs. Burapha allow grazing to take places in the plantations after year 1 Areas identified as having cultural or spiritual significance to local communities are identified through the community consultation and site selection process (see PS5) and are excluded from the land acquisition process.  Burapha plantations are located on areas adjacent to ephemeral first and second order streams, and the water from these streams is not used in the plantations themselves.  Water resource use for the plywood mill and nursery is not anticipated to have any impact on ecosystem services (refer to PS3). Project activities, such as land clearing and upgrade of access roads for new plantations may indirectly affect Priority Ecosystem Services.  However, active management of Burapha’s SMAs may provide benefits to Priority Regulating and Supporting services through the maintaining of SMA, riparian buffer zones and protection of areas from fire for the life of the plantation.

Sustainable Management of Living Natural Resources:  

Sustainable management is achieved through the application of industry-specific good management practices. Burapha has achieved Forest Stewardship Council (FSC) Forest Management for its agroforestry operations, which requires adherence to the principles and standards of the select certification scheme (Forest Management and Chain of Custody) and is subject to annual independent audits for verification of compliance.

PS7: Indigenous Peoples:

Lao PDR is a multi-ethnic country with 50 major ethnic groups classified into four ethnolinguistic families: Lao-Tai (8 groups), Mon-Khmer (33), Sino-Tibetan (7) and Hmong-Mien (2). Lao Tai speaking people account for majority of the population and are the economically and culturally dominant group in the country.  The rest of the ethnic groups are considered socially and culturally distinct from the Lao majority population and meet the characteristics and definition of Indigenous Peoples (IPs) under PS7, including self-identification as distinct cultural and ethnic group, speaking distinct languages, having customary cultural practices and reliance to natural resources in their habitat. 

Typically, the Lao-Tai reside in the agriculturally productive lowland areas around the Vientiane Plains and are also primary residents of urban areas. The Mon Khmer traditionally live in midland rural areas, whilst the Hmong Mien are generally found in the upland and highland mountains in the northern section of the Project area. The Project area is comprised of a mix of Lao-Tai, Mon Khmer and Hmong Mien ethnic groups. All ethnic groups in the Project area recognize the governance structure of the Village Committee.

Circumstances requiring Free, Prior, and Informed Consent (FPIC):

For projects with adverse impacts to IPs, the additional FPIC requirement applies when there are: (i) impacts on lands and natural resources subject to traditional ownership or under customary use; (ii) relocation of IPs from lands and natural resources subject to traditional ownership or under customary use; or; (iii) significant impacts on IPs’ critical cultural heritage, or proposed commercial use of their cultural heritage. 

Per its PFA Manual, Burapha does not develop plantations in areas that are identified as important for traditional cultures of local communities or indigenous peoples.  However, PFA land is subject to customary use of households across all ethnic groups for both livelihood and subsistence (collection of timbers and NTFPs) and impacts may vary according to the specific use of each ethnic groups present in the village.  The PFA manual will be updated to include screening for impacts specific to ethnic groups based on information collected through Burapha’s consultation process and commensurate measures adopted if impacts are confirmed (ESAP).

As taking of PFA land for Burapha operations may affect land under customary use of ethnic groups, FPIC principles are applicable and currently incorporated in Burapha’s PFA Land Acquisition Manual through a process of informed consultation and participation, good faith negotiation, and securing of consent of both individual PFA land users and Village Authority.  

The Burapha process for acquiring PFA land is outlined in its PFA Land Acquisition Manual (refer to PS5).  A key step in this process is data collection on village profile and history where Burapha obtains information on the ethnic diversity of a village.  Burapha then engages with communities through a process involving informed consultation and participation (ICP). This includes multiple rounds of community consultation meetings, land use surveys conducted with all affected land users, consultations with focus groups such as women and vulnerable households, validation of minutes, engagement with village councils and elders, etc. Ethnic groups are integrated into the ICP activities carried out during the land acquisition process, though because impacts are consistent across ethnic groups, they are not necessarily treated as a separate distinct group.

A key objective of the Burapha community consultation process is avoidance of impacts, by identifying any plots with cultural, spiritual, archeological or other values identified by the community so that such plots are excluded from plantation development.  Decision-making process involves securing individual consent of all affected PFA land users and a wider village commitment secured for the entire concession area through the consent of the village committee in the presence of community members.  Throughout this process members of ethnic groups may participate in the process either as an affected PFA land user or as a community member during community-wide consultations.  In cases where consent is not secured from either an individual PFA land user or from a village authority, these are entered into a land use limitation register for appropriate resolution (refer to PS5).  Burapha’s FPIC process will be verified by an independent expert on a yearly basis with focus on participation of vulnerable groups (ESAP).

Mitigation and Development Benefits:

While Burapha operations provide for access to employment opportunities and inter-cropping arrangements, considering the nature and scale of project impacts and the dependence of ethnic groups to PFA land, Burapha also conducts awareness raising activities in partner villages to promote conservation and sustainable management of the natural resources to help reduce forest dependency.

PS8:  Cultural Heritage

The study on Archaeology and Cultural Heritage which was undertaken as part of the ESIA for the current plantations did not identify any direct impacts of the Project on sites of archaeological or cultural heritage significance. As part of its land acquisition process, Burapha conducts consultations with the relevant authorities, potential partner village committees and community members to identify any sites of cultural significance and excludes them from the proposed plantation areas. Stakeholders interviewed during MIGA’s and the IESC’s site visits did not report concerns or incidents related to Project impacts on cultural heritage or the Project’s consultation process on cultural heritage matters.

A Chance Find Procedure in line with PS 8 requirements has been in place since 2019. The procedure defines the roles and responsibilities of Burapha’s staff, as well as the governmental representatives of the Ministry of Information and Culture at the district, provincial and central levels. No chance finds have been reported to date, however, given the scale of the PE’s expansion plans, Burapha’s operations staff will receive training on the Chance Find Procedure (ESAP) to manage the potential risk of chance finds during future plantation establishment.

The documentation listed below is available electronically as PDF attachments to this ESRS at www.miga.org.

• Burapha Annual Sustainability Report 2021
• Burapha Environmental, Social and Safety Management System (March 2020)
• ​​Burapha Agro-Forestry Expansion Project​ : Desktop Critical Habitat Assessment​ (April 2023)
• Burapha Agroforstry – ESIA Plywood Mill
• Burapha Agroforstry – ESIA 3000 ha

The above documentation is also available for viewing at the following locations:

Project  contact person:

• Mr Przemeck Pruszynski, CEO

23 Singa Rd. Ban Phonexay, Saysettha District, Vientiane Capital, Lao PDR.

• Email: przemek.pruszynski@buraphawood.com
• Burapha Webites: https://www.buraphawood.com/

MIGA supports its clients (as defined in MIGA Policy on Environmental and Social Sustainability) in addressing environmental and social issues arising from their business activities by requiring them to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities.

In addition, Affected Communities have unrestricted access to the Compliance Advisor/Ombudsman (CAO), the independent accountability mechanism for MIGA. The CAO is mandated to address complaints from people affected by MIGA-guaranteed business activities in a manner that is fair, objective, and constructive, with the goal of improving environmental and social project outcomes and fostering greater public accountability of MIGA.

Independent of MIGA management and reporting directly to the World Bank Group President, the CAO works to resolve complaints using a flexible, problem-solving approach through its dispute resolution arm and oversees project-level audits of MIGA’s environmental and social performance through its compliance arm.

Complaints may relate to any aspect of MIGA-guaranteed business activities that is within the mandate of the CAO. They can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of a MIGA-guaranteed business activity. Complaints can be submitted to the CAO in writing to the address below:

Compliance Advisor/Ombudsman
International Finance Corporation
2121 Pennsylvania Avenue NW
Room F11K-232
Washington, DC 20433 USA
Tel: 1 202 458 1973
Fax: 1 202 522 7400
E-mail: cao-compliance@ifc.org