www.worldbank.org/lao

1 VAcknowledgments viAbbreviations and Acronyms viiExecutive Summary viiiEnvironmental Indicators xiiThe Lao Statistical Landscape xiiiSECTION I: TRENDS IN THE ENVIRONMENT 14 natural RESOURCES 14 Overview 14 Land Resources 15 Forest Resources and Protected Areas 18 Biodiversity and Habitats 22 Water Resources 26 ENVIRONMENTAL QUALITY 32 Overview 32 Water Quality 33 Municipal Solid Waste 38 Hazardous Chemicals 40 Air Quality 41 SECTION II: ENVIRONMENTAL MANAGEMENT 42 INSTITUTIONS AND LEGISLATION 42 Institutions 42 Legislation 46 Implementation Framework 50 CAPACITY DEVELOPMENT 51 Strengthening Management Capacity 51 Environmental Education 54 Public Awareness 55 SECTION III: CHALLENGES 58 Glossary of Environmental Terms 65 Relevant Websites 66 Lao PDR at a Glance 67 This report is a product of the staff and consultants of the International Bank for Reconstruction and Development / The World Bank.

2 The fi ndings, interpre-tations, and conclusions expressed in this paper do not necessarily refl ect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development / The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center, Inc.

3 , 222 Rosewood Drive, Danvers, MA 01923, USA, telephone 978-750-8400, fax 978-750-4470, All other queries on rights and licenses, including subsidiary rights, should be addressed to the Offi ce of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202-522-2422, e-mail OF CONTENTSiiiLIST OF FIGURESF igure 1. Estimated Land Area in Lao PDR in 2000 15 Figure 2. Agricultural Lands in Lao PDR (ha in 2002) 15 Figure 3. Percentage Agriculture to GDP 16 Figure 4. Increase in Irrigated Areas (ha) 16 Figure 5. Forest Cover in Lao PDR (1997) 18 Figure 6. Changing Forest Cover 18 Figure 7. Lao PDR Household Income 19 Figure 8. Income From NTFPs 19 Figure 9. Deforestation Rate (1993-1997) 20 Figure 10. International Significance of Species 21 Figure 11. Sources of Wildlife for Trade in Lao Across Borders 24 Figure 12.

4 Main Rivers Basins in Lao PDR 26 Figure 13. Average Annual Water Usage 27 Figure 14. Type of Irrigation Systems (2002) 27 Figure 15. Hydropower Consumption and Export 29 Figure 16. Sources of Fisheries Production (2001) 31 Figure 17. Fish Production in Lao PDR 31 Figure 18. Rural Sanitation, 2000 35 Figure 19. Waste Composition in Lao PDR 38 Figure 20. Disposal Practices in 57 Urban Areas 39 Figure 21. Number of Vehicles in Lao PDR, 1993 2003 41 Figure 22. Organization Chart of Selected Government Agencies 45 Figure 23 Annual Environmental Expenditure 2001-2005 53 Figure 24. Reason for (i) Choosing Employment and (ii) do Environmental Work 56 Figure 25. Reasons for (i) Visiting NPAs and (ii) Valuation of the Environment 56 TABLE OF CONTENTSivLIST OF TABLEST able 1. Type of Shifting Agriculture 16 Table 2. 1992 Forest Types in Lao PDR 18 Table 3.

5 Lao PDR Protected Area System 21 Table 4. Mammal Species Richness in Lao PDR 21 Table 5. Annual Sale of Wildlife in Lao PDR 24 Table 6. Average Market Prices (2001) for Selected Species 24 Table 7. Lao PDR s Estimated Water Flows 26 Table 8. Type of Irrigation Schemes in Lao PDR 28 Table 9. Existing Lao PDR Hydropower Plants 29 Table 10. Tentative Ambient Water Quality Classes for Fresh Surface Waters 33 Table 11. Industrial Growth in Lao PDR 34 Table 12. Urban Household Toilet Facilities (1995) 35 Table 13. Status of Lao PDR Millennium Development Goals for WSS (2004) 35 Table 14. Average Per Capita Waste Production, Secondary Towns (2002) 38 Table 15. Landfills in the Four Secondary Towns 38 Table 16. Solid Waste Collection 39 Table 17. Ambient Air Quality in Vientiane Capital from Sep 02 Feb 03 41 Table 18. Staffing Estimates in Environment Agencies 45 Table 19.

6 Key Environmental Laws and Regulations 47 Table 20. Lao PDR International Agreements 48 Table 21. Summary of Current Key Environment Policies and Strategies 50 LIST OF BOXESBox 1. Landmine and UXO Clearance Initiative 17 Box 2. Main habitats in Lao PDR of High International Signifi cance 22 Box 3. Hunting of the Siamese Crocodile 23 Box 4. Striped Rabbit Revealed in Lao PDR Forest 23 Box 5. Power Sector Development 30 Box 6. Monitoring Wastewater in Vientiane 34 Box 7. Supply of Water and Sanitation Services 36 Box 8. Environmental Health Concerns 37 Box 9. Vientiane Solid Waste Management 39 Box 10. Company Wants to Sift Through Your Trash 40 Box 11. Stakeholder Consultation in the Nam Theun 2 Project 44 Box 12. Responding to the EIA Decree 46 Box 13. NPA Management Constraints 51 Box 14. Strengthening Environmental Management Capacity 52 Box 15.

7 Country s First Degree Program in Environmental Management 54 Box 16. Biodiversity Field Guides in Lao PDR 55 Box 17. Enhancing Environmental and Social Sustainability 61 TABLE OF CONTENTSvFOREWORDLao PDR has a remarkable range of natural resources and environmental riches, despite being categorized as a least developed country . With almost half of the country under forest cover and abundance of water and a low population density, Lao PDR has a diversity of species that is found in few other countries in the region. The country s economic development is largely dependent on its natural resources, mainly water (for hydropower), forests and minerals. Once the Land of a Million Elephants, Lao PDR is now confronted with numerous environmental challenges. The unsustainable exploitation of resources has resulted in degradation of land and loss of natural habitats.

8 This degradation, combined with declining water quality and increasing threats to air quality, is disproportionately impacting the poorest groups in the country. This report studies the level of natural resource degradation and declining environmental quality, and their implications for long-term sustainable development and quality of life in a country where poverty reduction remains a key response to declining environmental conditions, the country has made important strides in instituting changes in partnership with local communities and international organizations. Over the past fi ve years, the country has invested millions of dollars in improving environmental management, focusing on building capacity among Government agencies and raising awareness more broadly, establishing protocols for monitoring and managing environment indicators, and making site-based investments.

9 The results of these investments have been mixed. The challenges facing the environment in Lao PDR are many and varied, requiring a more strategic approach. The Lao Environment Monitor 2005 is the fi rst of a series of monitors presenting a snapshot of environmental status, and key trends and challenges in Lao PDR. Its purpose is to engage and inform stakeholders of key environmental changes as they occur, in an easy-to-understand format. The report focuses on the general status of environment. Using charts and graphs the Monitor benchmarks trends in natural resources and environmental quality. In addition, this Monitor analyzes the effectiveness of Government policies and assesses the capacity of institutions to address environmental issues. Information has been obtained from a variety of sources, including the Lao Government and Bank publications, academic and scholarly material and personal experience.

10 Several surveys and assessments were undertaken to obtain additional data and insights: (i) A Capacity Assessment was undertaken to assess the effectiveness of the country s institutions regulatory framework; (ii) Public Environmental Expenditures were reviewed to better understand the allocation and trends in environment-related expenditures; (iii) A Survey of Environmental Attitudes was undertaken to assess the perceptions of individuals working in environmental professions in Lao PDR; and (iv) the Poverty-Environment Nexus in Lao PDR was further studied. The results of these surveys and analyses are included in the report. This Monitor builds on the experiences of other Country Environment Monitors in the region and embraces the key principles articulated by the framework for preparing Country Environmental Analysis initiatives of the Asian Development Bank and the World Bank.