This study examines how the Bank approached environmental concerns in several large projects in Brazil, so as to draw lessons for future Bank operations involving environmental protection, assessment, and management for the guidelines and procedures that shape these activities. The study also illustrates the evolution of environmental awareness both in the Bank and Brazil, and the growing integration of environmental concerns into Bank-assisted projects over the past two decades. The report traces the direct and indirect impacts of the investments involved on both the natural resource base and existing communities, new settlements, and productive activities and to assess the adequacy and effectiveness of planned mitigatory measures. The report draws lessons in three overlapping areas: environmental protection; environmental assessment and management; and Bank activities and procedures. Preconditions for effective environmental protection are: policy, legal, and regulatory framework; institutional and technical capacity; political commitment and accountability; public awareness and community participation; regulations and economic incentives. It concludes with lessons for environmental assessment and management and recommendations for Bank operations.

Accompanying CD-ROM contains background and reference material for the text, including the text itself, as well as a slightly modified version of the World Bank's New ideas for pollution regulation (NIPR) web site, current as of 9/29/99. CD-ROM also includes Netscape, Adobe Acrobat, and Real Media audio/video player.

The ratings for the Water Quality and Pollution Control Project to the States of Sao Paulo and Parana were as follows: outcome was satisfactory; sustainability was likely; institutional development impact was substantial; Bank performance was satisfactory; and Borrower performance was satisfactory. The ratings for the Espirito Santo Water Coastal Pollution Management Project were as follows: outcome was moderately satisfactory; sustainability was likely; institutional development impact was negligible; Bank performance was satisfactory; and Borrower performance was unsatisfactory. Some of the lessons learned included: (i) the importance of treating the institutional and environmental objectives as long term program areas, rather than projects, and this requires persistence, patience, and follow up by the Bank; (ii) that integrated approaches work well, for the most part, with low income settlements; (iii) that the hybrid approach represents a useful model for Brazil and elsewhere; and (iv) that metropolitan planning in Brazil requires urgent attention. One of the richest lessons from this assessment, finally, concerns the perceptions and judgments of high level professionals who managed the course of project implementation. Institutional actors were given the scope to form and agree on core values.