FOR OFFICIAL USE ONLY Report No: PAD3108 INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON A PROPOSED GRANT IN THE AMOUNT OF SDR27.6 MILLION (US$38.49 MILLION EQUIVALENT) TO THE FEDERATED STATES OF MICRONESIA FOR THE FEDERATED STATES OF MICRONESIA MARITIME INVESTMENT PROJECT April 18, 2019 Transport Global Practice East Asia And Pacific Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective February 28, 2019) Currency Unit = United States Dollar (US$) SDR 1 = US$1.39798 FISCAL YEAR October 1 – September 30 Regional Vice President: Victoria Kwakwa Country Director: Michel Kerf Senior Global Practice Director: Guangzhe Chen Practice Manager: Almud Weitz Task Team Leader(s): Sean David Michaels, James A. Reichert, Keelye Hanmer ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank AtoN Aids to Navigation CERC Contingent Emergency Response Component CIU Central Implementation Unit CMIP5 Coupled Model Intercomparison Project, Phase 5 DA Designated Account DECEM Department of Environment, Climate Change and Emergency Management DoFA Department of Finance and Administration DoJ Department of Justice DoTC&I Department of Transportation, Communications and Infrastructure EA Executing Agency EAC Entry Assurance Certificate EIA Environmental Impact Assessment EIRR Economic Internal Rate of Return ENSO El Niño Southern Oscillation ESMF Environmental and Social Management Framework ESMP Environmental and Social Management Plan FM Financial Management FMIS Financial Management Information System FSM Federated States of Micronesia FSMIP Federated States of Micronesia Maritime Investment Project FY Financial Year GBV Gender-based Violence GDP Gross Domestic Product GFDRR Global Facility for Disaster Reduction and Recovery GoFSM Government of the Federated States of Micronesia GP Global Practice GRM Grievance Redress Mechanism GRS Grievance Redress Service IA Implementing Agency ICR Implementation Completion and Results Report IDA International Development Association IDP Infrastructure Development Plan IFR Interim Financial Reports IMO International Maritime Organization INCOTERMS International Commercial Terms IOM International Organization for Migration IPCC Intergovernmental Panel on Climate Change IPF Investment Project Financing ISPS International Ship and Port Facility Security JICA Japan International Cooperation Agency KPA Kosrae Port Authority M&E Monitoring and Evaluation MD Marine Division MSC Micronesian Shipping Commission MTCC Maritime Technology Corporation Centre MTR Mid Term Review NDC Nationally Determined Contribution NORMA National Oceanic Resource Management Authority NPV Net Present Value OC Operating Costs OHS Occupational Health and Safety OM Operations Manual PDO Program Development Objective PIC Pacific Island Countries PIU Project Implementation Unit POM Project Operations Manual PPA Pohnpei Port Authority PPE Personal Protective Equipment PPSD Project Procurement Strategy for Development PSC Project Steering Committee RPF Regional Partnership Framework SAR Search and Rescue SISRI Small Islands States Resilience Initiative SOP Standard Operating Procedures SORT Systematic Operations Risk-Rating Tool SPC The Pacific Community SPREP Secretariat of the Pacific Regional Environment Programme TA Technical Assistance TEU Twenty-foot Equivalent Unit TVPA US Trafficking Victims Protection Act UNCTAD United Nations Conference on Trade and Development UNDP United Nations Development Program U.S. United States of America USCG United States Coast Guard USD/US$ United States Dollar TABLE OF CONTENTS DATASHEET..................................................................................................................................... 1 I. STRATEGIC CONTEXT............................................................................................................... 8 A. Country Context......................................................................................................................8 B. Sectoral and Institutional Context .......................................................................................... 11 C. Relevance to Higher Level Objectives...................................................................................... 15 II. PROJECT DESCRIPTION.......................................................................................................... 16 A. Project Development Objective.............................................................................................. 16 B. Project Components.............................................................................................................. 16 C. Project Beneficiaries.............................................................................................................. 21 D. Gender ................................................................................................................................. 21 E. Results Chain......................................................................................................................... 23 F. Rationale for Bank Involvement and Role of Partners............................................................... 24 G. Lessons Learned and Reflected in the Project Design............................................................... 25 III. IMPLEMENTATION ARRANGEMENTS................................................................................... 27 A. Institutional and Implementation Arrangements..................................................................... 27 B. Results Monitoring and Evaluation Arrangements ................................................................... 30 C. Sustainability......................................................................................................................... 30 IV. PROJECT APPRAISAL SUMMARY .......................................................................................... 31 A. Technical and Economic Analysis............................................................................................ 31 B. Fiduciary............................................................................................................................... 34 C. Safeguards............................................................................................................................ 35 V. KEY RISKS............................................................................................................................... 37 VI. RESULTS FRAMEWORK AND MONITORING ......................................................................... 39 ANNEX 1: Implementation Arrangements and Support Plan..................................................... 45 ANNEX 2: Detailed Project Description ....................................................................................... 55 ANNEX 3: Gender Action Plan...................................................................................................... 60 ANNEX 4: Contingent Emergency Response Component ........................................................... 67 ANNEX 5: Map of FSM with Project Sites and Satellite View of Project Sites ........................... 68 DATASHEET BASIC INFORMATION BASIC INFO TABLE Country(ies) Project Name Micronesia, Federated Federated States of Micronesia Maritime Investment Project States of Project ID Financing Instrument Environmental Assessment Category Investment Project P163922 B-Partial Assessment Financing Financing & Implementation Modalities [ ] Multiphase Programmatic Approach (MPA) [✓] Contingent Emergency Response Component (CERC) [ ] Series of Projects (SOP) [✓] Fragile State(s) [ ] Disbursement-linked Indicators (DLIs) [✓] Small State(s) [ ] Financial Intermediaries (FI) [ ] Fragile within a non-fragile Country [ ] Project-Based Guarantee [ ] Conflict [ ] Deferred Drawdown [ ] Responding to Natural or Man-made Disaster [ ] Alternate Procurement Arrangements (APA) Expected Approval Date Expected Closing Date 09-May-2019 01-Aug-2024 Bank/IFC Collaboration No Proposed Development Objective(s) To improve the safety, efficiency and climate resilience of maritime infrastructure and operations in the Recipient's territory, and in the event of an Eligible Crisis or Emergency, to provide an immediate response to the Eligible Crisis or Emergency. Components Component Name Cost (US$, millions) Page 1 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) Maritime Infrastructure 20,500,000.00 Maritime Safety and Security 7,550,000.00 Technical Assistance for Port Planning and Project Management 10,440,000.00 Contingent Emergency Response Component 0.00 Organizations Borrower: Federated States of Micronesia Implementing Agency: Department of Transportation, Communication & Infrastructure Department of Justice Department of Environment, Climate Change and Emergency Management PROJECT FINANCING DATA (US$, Millions) SUMMARY n 1 - N e wF i Total Project Cost 38.49 Total Financing 38.49 of which IBRD/IDA 38.49 Financing Gap 0.00 DETAILS n E n h 1 - N e wF i World Bank Group Financing International Development Association (IDA) 38.49 IDA Grant 38.49 IDA Resources (in US$, Millions) Credit Amount Grant Amount Guarantee Amount Total Amount National PBA 0.00 9.62 0.00 9.62 Regional 0.00 28.87 0.00 28.87 Total 0.00 38.49 0.00 38.49 Page 2 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) Expected Disbursements (in US$, Millions) WB Fiscal Year 2019 2020 2021 2022 2023 2024 2025 Annual 0.30 2.15 3.42 6.16 10.56 14.17 1.74 Cumulative 0.30 2.45 5.87 12.03 22.59 36.75 38.49 INSTITUTIONAL DATA Practice Area (Lead) Contributing Practice Areas Transport Climate Change and Disaster Screening This operation has been screened for short and long-term climate change and disaster risks Gender Tag Does the project plan to undertake any of the following? a. Analysis to identify Project-relevant gaps between males and females, especially in light of Yes country gaps identified through SCD and CPF b. Specific action(s) to address the gender gaps identified in (a) and/or to improve women or Yes men's empowerment c. Include Indicators in results framework to monitor outcomes from actions identified in (b) Yes SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk Category Rating 1. Political and Governance  Moderate 2. Macroeconomic  Moderate 3. Sector Strategies and Policies  Moderate 4. Technical Design of Project or Program  Moderate 5. Institutional Capacity for Implementation and Sustainability  Substantial 6. Fiduciary  Substantial Page 3 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) 7. Environment and Social  Substantial 8. Stakeholders  Low 9. Other 10. Overall  Substantial COMPLIANCE Policy Does the project depart from the CPF in content or in other significant respects? [ ] Yes [✓] No Does the project require any waivers of Bank policies? [ ] Yes [✓] No Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 ✔ Performance Standards for Private Sector Activities OP/BP 4.03 ✔ Natural Habitats OP/BP 4.04 ✔ Forests OP/BP 4.36 ✔ Pest Management OP 4.09 ✔ Physical Cultural Resources OP/BP 4.11 ✔ Indigenous Peoples OP/BP 4.10 ✔ Involuntary Resettlement OP/BP 4.12 ✔ Safety of Dams OP/BP 4.37 ✔ Projects on International Waterways OP/BP 7.50 ✔ Projects in Disputed Areas OP/BP 7.60 ✔ Legal Covenants Sections and Description Section I.A.2 of Schedule II to the Financing Agreement: Page 4 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) The Recipient shall, no later than 3 months after the Effective Date establish and thereafter maintain until the Closing Date, the Program Steering Committee, chaired by its Secretary of the Department of Transportation, Communications and Infrastructure, (or their representative), comprised of inter alia, the Secretary (or their representative) of the Department of Finance and Administration, and a representative of each of the State Governments, and with an institutional framework, functions, and resources satisfactory to the Association as shall be required for the Project. Sections and Description Section I.A.3 of Schedule II to the Financing Agreement: The Recipient shall maintain, until the Closing Date, the Central Implementation Unit with mandate, composition and resources satisfactory to the Association, which shall be responsible for providing safeguards, procurement, and financial management coordination and support for the Project. Sections and Description Section I.A.4 of Schedule II to the Financing Agreement: The Recipient shall, no later than three (3) months after the Effective Date, establish and thereafter maintain until the Closing Date, a Project Implementation Unit within the Department of Transportation, Communications and Infrastructure, with mandate, composition and resources satisfactory to the Association, which shall be responsible for day to day implementation of the Project. Without limitation to the generality of the foregoing, the Project Implementation Unit shall be headed by a Project Manager, with terms of reference, qualifications and experience satisfactory to the Association, and shall include the following minimum key staff, or be supported by specialists from the Central Implementation Unit, each with terms of reference, qualifications and experience satisfactory to the Association, in the following roles: (i) a Financial Management Specialist; (ii) a Procurement Specialist; (iii) a Safeguards Specialist; (iv) a Monitoring and Evaluation Specialist; and (v) a Communications Specialist. Sections and Description Section I.A.5 of Schedule II to the Financing Agreement: The Recipient shall maintain, until the Closing Date, a focal point within the Department of Justice, with terms of reference, qualifications and experience satisfactory to the Association, who shall be responsible for, inter alia, day- to-day implementation, reporting and monitoring and evaluation of Part 2.4(c) of the Project. Sections and Description Section I.B.1 of Schedule II to the Financing Agreement: To facilitate the carrying out of the Project, the Recipient shall enter into and maintain, until the Closing Date, Project Implementation Agreements, in form and substance satisfactory to the Association,with each of the State Governments and State Port Authorities, detailing, inter alia, the roles and responsibilities of each party for Project implementation and requiring, inter alia, each State Port Authority to maintain, until the Closing Date, a focal point, with terms of reference, qualifications and experience satisfactory to the Association. Sections and Description Section I.C of Schedule II to the Financing Agreement: Page 5 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) The Recipient shall prepare and, and, through the Steering Committee, adopt, by no later than three (3) months after the Effective Date, a Project Operations Manual, in form and substance acceptable to the Association, setting forth the arrangements and procedures for implementation of the Project. Sections and Description Section I.E of Schedule II to the Financing Agreement: The Recipient shall prepare and furnish to the Association not later than: (a) four (4) months after the Effective Date (or such later date as the Association may agree); and (b) August 31 of each year for every subsequent year during the implementation of the Project (or such later date as the Association may agree); for the Association’s review and no-objection, an Annual Work Plan and Budget, and the Recipient shall ensure that the Project is implemented in accordance with the Annual Work Plans and Budgets. Sections and Description Section I.F of Schedule II to the Financing Agreement: The Recipient shall ensure that: (a) the Project is carried out with due regard to appropriate health, safety, social, and environmental practices and standards, and in accordance with the Safeguards Instruments; and (b) any contracts for civil works under the Project include codes of conduct in form and substance acceptable to the Association detailing measures on environmental, health and safety and preventing gender-based violence. Sections and Description Section II.2 of Schedule II to the Financing Agreement: The Recipient shall carry out, jointly with the Association, not later than three (3) years after the Effective Date, or such other period as may be agreed with the Association, a mid-term review of the Project (“Mid-Term Review”) to assess the status of Project implementation. Conditions Type Description Disbursement Section III.B.(b). No withdrawal shall be made under Category (2) for Eligible Expenditures, unless and until Recipient has executed all Project Implementation Agreements in accordance with the provisions of Section I.B. of Schedule 2 to the Financing Agreement, to the satisfaction of the Association. Type Description Disbursement Section III.B.(c). No withdrawal shall be made under Category (3) for Emergency Expenditures, unless and until the Association is satisfied that all of the conditions listed in Section I.D.2 of Schedule 2 to the Financing Agreement have been met in respect of said expenditures. Page 6 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) Page 7 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) I. STRATEGIC CONTEXT A. Country Context 1. Geography and Demography. The largest nation in the Micronesian sub-region, the Federated States of Micronesia (FSM), is made up of four semi-autonomous states (Kosrae, Pohnpei, Chuuk, Yap) located between Palau and the Philippines to the west and the Republic of the Marshall Islands (RMI) to the east. Although its land area covers just 700 square kilometers, FSM consists of more than 600 islands scattered over an area of about 2.6 million square kilometers, including its Exclusive Economic Zone.1 2. As with other small island nations in the region, FSM faces significant challenges related to its small size, remoteness, geographical dispersion, environmental fragility and exposure to external shocks. 2 Frequent natural disasters and climate change impose high costs and may even threaten the physical viability of some areas of both the main islands and more remote outer islands. Such events can and do cause severe damage to infrastructure and other economic assets and have adverse impacts on livelihoods. As an archipelagic nation, FSM’s economy is highly dependent on marine resources for international, inter-state and inter-island trade. Citizens of outer islands depend on marine resources for travel to main and other outlying islands, and for access to education, markets and health services. Although seven islands have airstrips, only two seven-seat planes provide domestic air service to the outer islands. Maritime connectivity is, therefore, essential. 3. The overall population of FSM is estimated to be 105,544 (2017), of which approximately 45 percent live in Chuuk, 37 percent in Pohnpei, 11 percent in Yap, and 7 percent in Kosrae. Although the population declined from a high of 107,432 in CY2000 to 102,843 in CY2010, the trend stabilized in 2012, with slight annual increases continuing through the current year. 3 FSM has also experienced considerable internal migration across states, mostly from outer islands to the main islands’ urban areas, and especially to Pohnpei. Individuals are particularly drawn to employment with the national government, along with the availability of basic services in Pohnpei. 4. FSM is reported to have the highest estimated rates of poverty among the nine small remote islands (PIC9) covered in the Regional Partnership Framework (RPF) for FY17 to FY21. 4 These findings are based on a household income and expenditure survey conducted in 2013/14, which found about 41 percent of FSM’s population is struggling to meet basic needs and 10 percent are living below the food poverty line. The survey also documented stark variation across FSM, with the basic needs poverty rate most severe in Chuuk (46 percent), followed by Pohnpei and Yap (39 percent), and Kosrae (21 percent). 5. Economy and Market Considerations. Following independence in 1986, FSM entered into a Compact of Free Association (Compact) with the United States of America (U.S.), whereby the U.S. provides yearly financial transfers 1 An Excl us ive Economic Zone is a sea zone prescribed by the United Nations Convention on the Law of the Sea (UNCLOS) over which a state ha s special rights regarding the exploration a nd use of marine resources, i ncluding energy production from wa ter a nd wind. 2 Sys tematic Country Diagnostic, Report No. 102803, World Bank, January 20, 2016. 3 Worl d Development Indicators database, last update 9/21/2018. 4 Hous ehold income and expenditure survey, 2013/14; World Bank Group Regional Partnership Framework for Nine Pacific Island Countries, FY17-21, Report No. 120479, Worl d Bank, 2016. Page 8 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) to FSM and permits open migration to the U.S., among other arrangements. In 2003, certain provisions of the Compact were amended, most notably the economic provisions. 5 The most recent agreement not only supports Compact Sector Grants designed to help sustain the delivery of public services, but also establishes a Compact Trust Fund intended to replace the Sector Grants when they terminate in 2023. Through the Trust Fund, the Compact seeks to prepare FSM for self-sufficiency and economic sustainability post 2023. Nonetheless, it will be a major challenge for FSM to carry out requisite fiscal adjustments without reducing access to and quality of public services, especially those delivered to the poor. 6 6. In 2017, Gross Domestic Product (GDP) was about US$336 million, which equates to some US$3,188 per capita. State education and the health sector are supported by the Compact, but the country also receives substantial revenue from fishing license fees, and in recent years, corporate taxes. Personal remittances from overseas employment also contribute significant revenue (totaling about US$24 million in 2017). In 2016, the public sector contributed to less than 25 percent of GDP; agriculture and fisheries contributed around 26 percent of GDP; and, foreign grants were equivalent to 33 percent of GDP. 7 Most private sector activity centered on the production of non-traded goods and services to the Government and its employees. Most goods are imported, and there are few exports. During 2017, FSM ran a trade deficit, with the total value exports at around US$120 million and the total value of imports at around US$195 million. 7. Natural Hazards and Climate Change in FSM. Droughts, typhoons, storm waves, flooding and landslides all affect FSM. The climate in FSM varies considerably from year to year due to the El Niño Southern Oscillation (ENSO). In Pohnpei, El Niño tends to bring drier conditions during the dry season, but higher than average rainfall during the wet season, and La Niña tends to bring above average rainfall in the dry season. The West Pacific Monsoon affects the western states of Chuuk and especially Yap more than the eastern states of Pohnpei and Kosrae, tending to be farther east during El Niño resulting in more rainfall, and in a more western position during La Niña resulting in less rainfall. 8. FSM is particularly vulnerable to the impacts of climate change and is likely to suffer serious adverse environmental, social and economic losses as a result of climate change induced hazards.8 For example, in 2015, Typhoon Maysak wiped out 90 percent of key agricultural crops in Chuuk and Yap, affecting 29,000 people and causing US$8.5 million in damages. Many people live within the coastal zone and are therefore vulnerable to climate related changes in precipitation, sea level, storms and coastal erosion. The negative impacts of climate change are already evident in FSM, for instance, saltwater intrusion from rising sea levels that damage crops and contaminate freshwater supplies and increasing extreme weather events such as storm surges. In addition, as drought and sea level rise are amplified by regional ENSO processes, formerly sustainable atoll communities now rely on imported food and water during times of stress. Exacerbated by sea level rise, extreme spring tides, known in Micronesia as ‘King tides’, are causing intense marine inundation that damages taro beds, soil, agro-forestry resources, and critical infrastructure along the 5 The FSM Congress approved the a mendments on May 26, 2004 fol lowing earlier ra tification by the four FSM s tates. On June 25, 2004, the FSM a nd U.S. Governments s igned documents to officially implement the Compact, as a mended. http://www.uscompact.org/about/cofa.php 6 Worl d Bank Group Regional Pa rtnership Framework for Ni ne Pa cific Island Countries, FY17-21, Report No. 120479, Worl d Bank, 2016. 7 As provi ded by DoFA. 8 FSM Country Profi le. World Bank Group Cl imate Cha nge Knowledge Portal. 2018. Page 9 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) coast, especially on low atoll islets.9 9. Projections under all global greenhouse gas (GHG) emission scenarios indicate that annual average air temperature and sea surface temperature will increase in the future. Based on the widely used Coupled Model Intercomparison Project, Phase 5 (CMIP5) models (included in the Intergovernmental Panel on Climate Change (IPCC’s) Fifth Assessment Report), the average temperature in FSM will increase by 1.3°C in the high emission pathway, or by 0.78°C in the low emission pathway by 2050. In both scenarios, the intensity and frequency of days of extreme heat are projected to increase throughout the decades up to 2100. In addition, model projections show extreme rainfall days are likely to occur more frequently. The majority of the simulations estimate an increase of rainfall of greater than 5 percent by 2090 under the high emissions scenario. 10 In addition, sea levels near FSM have risen and will continue to rise throughout this century, with a projected rise in sea level in the range of 3 – 15 cm by 2030 under a high emissions scenario. This sea level rise combined with natural year-to-year changes will accentuate the impact of storm surges and coastal flooding. 11 10. Similar to other Small Island Developing States, FSM is vitally dependent on access to well-functioning and reliable transportation systems, in particular maritime and air transport systems. In the absence of a reliable, safe, and efficient maritime transport system, citizens in FSM, especially those living on outer islands, are extremely vulnerable to extreme climatic risks. When extreme events strike, which will become more likely and frequent with a changing climate, maritime transport is practically the only lifeline for outer islanders to access food, water, energy supply, and emergency response services. Even without disasters, a reliable and safe maritime service is crucial for the socio- economic resilience of local communities, supporting key economic activities such as fishery and trade of agriculture products. 12 As such, improvements in the efficiency and safety of shipping and port facilities will increase the reliability of access and improve safety for users of maritime services and enhance the resilience of the main island ports and of outer island maritime facilities. 11. Gender. Women in FSM face multiple barriers to equal opportunities and a life free from violence and coercion. Priority areas of the National Government of the Federated States of Micronesia (GoFSM) national gender planning include addressing female unemployment and a gender-stratified labor market, teenage pregnancy, violence against women and girls, and women’s limited access to justice and protection. 12. The labor force participation rate for women in FSM was only 48.4 per cent as of 2010, compared with 66.1 per cent for men. The number of female wage and salary earners was less than half that of males – and women comprised only 14 percent of the non-agricultural sector.13 Not only are women less represented in the paid workforce, they are concentrated at the lower levels of the hierarchy, with comparatively lower pay. Participation of women at the highest levels of decision making remains very limited, and women continue to be highly under-represented at the legislative and executive levels of government. In addition, FSM is one of only three countries worldwide that has zero women in the National Legislature.14 9 Cl i mate Change i n the FSM – Food and water security, cl imate risk management, a nd a daptive s trategies. University of Hawaii. 2010. 10 FSM’s Second National Communication to UNFCCC on a daptation 11 Current a nd future cl imate of the Federated States of Mi cronesia. Pacific Climate Change Science Program. 2011. 12 UNCTAD, 2014, Sma ll island developing States: Cha llenges in transport a nd tra de l ogistics 13 Ibi d. 14 http://archive.ipu.org/WMN-e/classif.htm . Situation as of January 1, 2019. Page 10 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) 13. Gender-Based Violence (GBV) and Human Trafficking. GBV prevalence levels in FSM are significant: one in three women (32.8 percent) have experienced physical and/or sexual violence by a partner in their lifetime, and eight percent have experienced sexual abuse by someone other than a partner. Fourteen percent of women experienced sexual abuse in childhood. 15 14. High incidence of GBV combine with and exacerbate conditions of gender inequality and mean that women are severely constrained in their ability to negotiate a life free of coercion. Many women live under the threat of violence and this restricts their ability to move freely in the community, to use public transport, to access health and education services, and to travel to market or to the workplace. The normalization of violence has specific implications for women’s trafficking risk: with limited sexual agency and high dependency on families, young women are acutely vulnerable to sexual coercion and trafficking. 15. FSM is a source, transit and, to a more limited extent, destination country for human trafficking; much of this trafficking is of women and girls for commercial sexual exploitation which is often linked to the maritime industry.16 Services for survivors of GBV, including trafficking, remain extremely limited in terms of availability, quality, and access. FSM recognizes human trafficking as an issue of concern and has ratified the United Nations Convention against Transnational Organized Crime (UNTOC), which encompasses human trafficking, and has recently passed comprehensive national laws in terms of definitions and criminalization of all aspects of human trafficking. B. Sectoral and Institutional Context 16. Sectoral Context. Given FSM’s dependence on the sea for commerce, trade and mobility, the maritime sector plays a central role in national development, social cohesion and service delivery. According to GoFSM’s Infrastructure Development Plan (IDP) FY2016-FY2025, the objective for the maritime sector is to provide maritime transport that: (i) enables market opportunities to be realized for all areas of the country, including labor market opportunities, and enhances the level of integration of state economies and the national economy; (ii) provides improved port facilities that meet both fishery and commercial shipping needs; (iii) facilitates modern, safe and efficient inter-state and inter- island passenger and cargo vessels; and, (iv) coordinates and facilitates the improvement of aids to navigation. 17. International shipping into FSM is administered through the Micronesian Shipping Commission (MSC) 17 through issuance of Entry Assurance Certificates (EACs). For FSM, three shipping lines are licensed to provide service along specific shipping routes, each according to a predetermined schedule and at a specific freight rate. The objective of this structured approach is to ensure the availability of reliable and affordable maritime services. Intra-state (domestic) shipping is essential, especially in Chuuk, Pohnpei and Yap, as each consists of multiple islands. Kosrae is a single island state with no outer islands. Local services enable mobility of people among the states, and provide employment for seafarers, access to other employment opportunities, and access to educational and health services. 15 FSM Department of Health and Social Affairs (2014), Federated States of Mi cronesia Family Health a nd Safety Study: A prevalence study on vi ol ence against women. 16 Tra ffi cking in Persons Report. June 2018. U.S. Department of State. 17 International shipping in the s ub-region (FSM, RMI a nd Pa lau) is regulated by MSC a nd governed by three commissions, one from each country. Page 11 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) Each of the four states has a main port on its main island, as follows: (a) Kosrae. Okat Port, Kosrae is the state’s primary commercial port facility, handling all commercial shipping and fishing activities. Okat Port receives on average two to three international multi-purpose vessel calls per month or 25 to 30 vessel calls per year. The vessels transfer an average of six to ten full containers for import, and export one to two full containers per call. Including empty containers, annual throughput is between 600 twenty-foot equivalent units (TEUs) and 700 TEUs per annum. Around ten long liner fishing vessels and four to five purse seiners 18 call at the port every month. If an international multi-purpose vessel arrives, fishing vessels must stop unloading and vacate the berth, causing severe disruptions. (b) Pohnpei. Pohnpei Port is the only commercial seaport and is owned and operated by Pohnpei Port Authority. The main cargo wharf serves international cargo vessels, tankers, and purse seiners, while a smaller adjacent wharf is used by domestic vessels. Located to the south of the main wharf, the separate and smaller Takatik Fishing Wharf is dedicated to fisheries with the quay occupied by long line fishing vessels, FSM patrol boats, and other shallow-draft vessels. In 2016, Pohnpei Port handled around 2,000 inbound TEUs, 70,000 tons of breakbulk cargo, and 25,000 tons of diesel and jet fuel (via a pipeline). There is little outgoing traffic as export volumes are limited. (c) Chuuk. Weno Port, Chuuk receives international ships and serves as a “hub” port for the state. In 2014, 72 ships called at the Port and the annual container throughput was 1,155 TEUs. Present annual throughput is estimated at 700 full import containers and 700 empty outbound containers, confirming a strong imbalance in trade. Domestic shipping originates from the Port to islands within the Chuuk Lagoon, as well as islands outside the Lagoon. Until 2012, inter-state shipping service was provided by the FSM Government-owned MV Chief Mailo, but it is now out of service and is currently being prepared for dry-docking. To fill the gap, several smaller, private fishing boats have been converted into cargo/passenger vessels and provide services within the Lagoon and outer islands. In addition, there has been a proliferation of unregulated small single- engine vessels providing daily commuter services between Weno and nearby islands for school, work and medical purposes. These vessels require a license and need to report on their routes and schedules, but compliance is not monitored. (d) Yap. Tomil Port, Yap serves international cargo vessels, fuel tankers, and the occasional longline fishing vessel. The port is served by three multi-purpose shipping lines about every two weeks. Around 15 to 30 full inbound TEUs and about the same number of empty TEUs are exported per ship call. 18. Outer islands throughout FSM typically lack access infrastructure and aids to navigation (AtoN), and many do not have reef channels to access the islands. Consequently, vessels must anchor offshore and transfer passengers and cargo using small workboats or tenders. This poses a high safety risk because many of the outer islands experience strong winds and waves. Government services to the outer islands are limited, and private operators are largely unregulated, particularly in Chuuk Lagoon. Provision of safe and reliable transportation services to the outer islands remains a significant challenge. 18A purs e seine is a wall of netting that i s released around a s chool of fish. The seine has floats along the top line with a lead line threaded through ri ngs a long the bottom. Once a school of fish is identified, a small boat encircles the school with the net. Page 12 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) 19. Impacts of Climate Change in the Sector. The United Nations Conference on Trade and Development (UNCTAD) conducted an extensive survey across 29 countries in 2017 to reveal the climate change impacts and adaptation needs for the port industry. 19 The survey highlights that climate change poses increasing threats to maritime infrastructure assets, operations and services. Due to their location in low lying coasts and estuaries and the planned longevity of infrastructural assets, ports and their connecting hinterland links are inherently exposed to marine and land hydro-meteorological hazards controlled by climate variability and change, such as rising mean and extreme sea levels, storm waves, extreme winds and heavy precipitation, riverine floods (and droughts) and heat waves. 20. Increasing climatic extremes challenge current thresholds for port infrastructure and equipment (Table 1) and require adaptive engineering measures to increase their resilience. For instance, paved assets such as container yards are put under higher physical stress with the increasing frequency and intensity of coastal flooding and extreme heatwaves. The capacity of drainage systems needs to be expanded and strengthened to prevent paved assets from frequent inundation and subsequent decay. Pavement material needs to be more resilient to extreme temperature to mitigate the risk of melting. Breakwaters need to be upgraded for sea defenses in the context of sea level rise and more frequent storm surges. Table 1. Climatic Stressor Thresholds for Port Infrastructure and Equipment 20 Climatic Stressors Port Infrastructure and Equipment Thresholds Mean sea level rise Most commonly between 1-2 m Wind speeds Most commonly between 50-100 km/h Extreme sea levels Most commonly between 3-5m High temperature 36 - 60 °C Extreme precipitation Up to 500 mm/day and 1000 mm/day, most commonly 100mm/day 21. The UNCTAD study (2017) also demonstrates that port operation and services are more sensitive to climate stressors than are physical assets, as thresholds for delaying or cancelling of port services for example are often lower than thresholds for damage to infrastructure. Extreme weather events and changes in key variables such as prevailing harbor winds, precipitation and fog, and approaching waves pose challenges for sailing navigation and potential safety hazards for ship, cargo, and crew. Potential modulation of tides may cause sedimentation and dredging in port/navigation channels and operational time table changes. The impact of climate change variables to maritime infrastructure and operations needs to be systematically incorporated into: the planning and development of future maritime activities, including protective structures; preparation of warning and emergency response systems; and, the increased monitoring of infrastructure conditions compounded with rigorous maintenance schemes. While the costs for maintenance of port infrastructure may increase, it is essential to plan and implement maintenance schemes systematically to prevent more costly rehabilitation and reconstruction in the future. 22. Climate change poses increasing threats to maritime infrastructure assets and operations in FSM. Sea level rise accelerates the rate of coastal erosion, which exacerbates the deterioration of key port infrastructure as the foundation soils of the infrastructure displaces over time. Aprons need to be upgraded and strengthened to prevent 19 Port Industry Survey on Cl imate Change Impacts and Adaptation - UNCTAD Research Pa per No. 18 (UNCTAD/SER.RP/2017/18). 20 Port Industry Survey on Cl imate Change Impacts and Adaptation - UNCTAD Research Pa per No. 18 (UNCTAD/SER.RP/2017/18). Page 13 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) sliding and sediment removal at the bottom of the structure. Paved assets such as container yards are put under higher physical stress with the increasing frequency and intensity of coastal flooding and extreme heatwaves. The capacity of drainage systems needs to be expanded and strengthened to prevent paved assets from frequent inundation and subsequent decay. Pavement material needs to be more resilient to extreme temperatures to mitigate the risk of melting. While the costs for maintenance of port infrastructure may increase, it is essential to plan and implement maintenance schemes systematically to prevent more costly rehabilitation and reconstruction in the future. 23. From an operational perspective, increasing extreme climatic events such as heavy rainfall, typhoons, and storm surges, will disrupt port operations more frequently and subsequently affect port service performance. Extreme weather events and changes in key variables such as prevailing winds, waves, and currents, pose challenges for sailing navigation and potential safety hazards for ship, cargo, and crew. This is particularly challenging when, as mentioned earlier, outer islands throughout FSM lack access infrastructure and AtoNs and vessels have to anchor offshore and transfer passengers and cargo using small workboats or tenders, which are much more fragile to operate/navigate in extreme weather and tide conditions. The improvement of maritime operational efficiency and safety in an increasingly intense climatic environment is therefore a high priority. 24. Institutional Context. Given FSM’s political structure, responsibility for the maritime sector is divided into a two-tier system involving the national and state governments. At the national level, the Marine Division (MD) of the Department of Transport, Communications and Infrastructure (DoTC&I) is responsible for overseeing FSM’s maritime sector. DoTC&I is tasked with managing the development and enforcement of legislation and regulations, coordinating among the states and external agencies such as the United States Coast Guard (USCG), and providing inter-state domestic shipping services using national vessels. DoTC&I also provides technical support to state port authorities and agencies responsible for managing the ports and other maritime affairs, and regulates tariffs, e.g., under its concession agreement with the Pohnpei Stevedoring Company. 25. At the state level, the institutional and governance arrangements vary and are complicated. All ports and port infrastructure are owned by the states, which operate these assets through a port authority or transport department. The states lack uniform port arrangements, have different forms of ownership, administration and financing arrangements, and there is some duplication of roles and responsibilities between the state agencies and the national MD. Kosrae and Pohnpei have port authorities, the Kosrae Port Authority (KPA) and Pohnpei Port Authority (PPA) respectively, which are state-owned entities established under state law. Both KPA and PPA operate under a hybrid approach, whereby each authority develops and maintains basic terminal infrastructure and regulates port activities, but leases cargo handling and terminal operations out to a private operator. Ports in Chuuk and Yap are overseen by their respective State Departments for Transport and Infrastructure, namely the Chuuk State Department of Transportation and Infrastructure and the Yap State Department of Public Works and Transportation but are operated by private stevedoring companies under differing arrangements. 26. Key Challenges. FSM faces three main challenges related to maritime sector: (i) institutional structure and capacity; (ii) condition of and access to port infrastructure; and, (iii) International Ship and Port Facility Security Code (ISPS) compliance and security. Firstly, there is no national law on ports. Although the National Maritime Act enacted by the Congress in 1997 accords the national government legislative power over shipping and navigation, no national port-related law has been passed. Instead each state has enacted port regulations that cover such matters as berthing and mooring of vessels, wharves and installations, handling of dangerous goods, landing, storage and delivery of cargo, licensing, pollution prevention, pilotage, and port charges. There is lack of clarity and/or duplication of roles Page 14 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) between and among the state agencies and national MD. 27. Secondly, all ports in FSM are required to be compliant with the ISPS, but a recent audit by USCG identified deficiencies in all FSM ports. Common shortcomings include inadequate control over access, existence of multiple providers working within port premises, and security issues at the cargo yard and repair facilities. Noncompliance with ISPS could preclude international vessels from entering or departing from FSM ports, with the potential for dire economic consequences for the country. As ISPS is geared at the national level, non-compliance of even one port could affect all four states. 28. Lastly, funding for maintenance and rehabilitation of port facilities, dredging of channels, access and navigational aids is inadequate and likely to be even more so when the agreements relating to the Sector Grants under the Compact expire. As a result, supportive infrastructure, including bollards, cleats and fenders, are in poor condition. In some areas, entrance channels and turning basins tend to be narrow and too shallow, hindering safe navigation. Most international ports in FSM require some level of dredging, wreck removal and upgrading of navigational aids to improve safety. In addition, port strategic plans either do not exist or are outdated, and capacity to implement them is limited. C. Relevance to Higher Level Objectives 29. The proposed Federated States of Micronesia Maritime Investment Project (FSMIP) is closely aligned with the World Bank Group’s twin goals of ending extreme poverty and boosting shared prosperity. The Project will facilitate access, which is important for poverty alleviation given evidence of a strong relationship between extreme poverty and lack of accessibility and mobility. In FSM, and other small remote island nations, maritime shipping is the nexus for internal/external connectivity necessary for food imports and distribution, essential services and the trade of basic goods. For sustainability moving forward, FSM wants and needs to act urgently to improve the climate resilience of its marine transport networks and facilities. 30. The World Bank Group Regional Partnership Framework (RPF) for FY17 to FY21 covers nine small Pacific Island Countries (PIC9) 21, including FSM. The RPF identifies four areas of focus for these PIC9 as: (i) fully exploiting the available economic opportunities; (ii) enhancing access to economic opportunities for all; (iii) protecting incomes and livelihoods; and, (iv) strengthening the enablers of growth and opportunities (macro-economic management, infrastructure and addressing knowledge gaps). Improved port and maritime services will facilitate better functioning transshipment services, thereby enhancing access to economic opportunities. Without a well-functioning maritime sector, livelihoods could be compromised, especially since FSM imports much of its food, pharmaceuticals and fuel. As such, FSMIP would support focus areas (i), (ii) and (iii). FSMIP, particularly the Strategic Plans (to be completed under Component 3.4), would also support focus area (iv) by creating more reliable access to maritime infrastructure, and by improving the safety, reliability and resilience of the services provided. 31. The scope and objectives of FSMIP are also aligned with several key Government development objectives delineated in FSM’s Infrastructure Development Plan for FY2016-FY2025 (IDP). The IDP recognizes the critical contribution that 21Ki ri bati, Republic of Nauru, RMI, FSM, Republic of Pa lau, Independent State of Samoa, Kingdom of Tonga, Tuvalu a nd Va nuatu; Regional Pa rtnership Framework FY17-21, Report No. 120479, Worl d Bank, 2016. Page 15 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) maritime transportation infrastructure and services play in supporting market opportunities throughout the country, and in facilitating modern, safe and efficient inter-state and inter-island passenger and cargo services. FSMIP will support port facilities that will better meet both fishery and commercial shipping needs, improve the quality of AtoNs to enhance safety, strengthen port planning and management, and help enhance the resilience of maritime infrastructure and facilities to climate change and natural disasters. II. PROJECT DESCRIPTION A. Project Development Objective PDO Statement 32. To improve the safety, efficiency and climate resilience of maritime infrastructure and operations in the Recipient’s territory, and in the event of an Eligible Crisis or Emergency, to provide an immediate response to the Eligible Crisis or Emergency. PDO Level Indicators 33. To monitor progress toward the PDO, the following set of indicators have been identified: (a) Reduction in cargo vessel turnaround times at project port(s) (minutes). (b) Increase in container yard productivity at project port(s) (percentage). (c) Project ports fully compliant with ISPS requirements (number). (d) Project ports rehabilitated with at least one climate resilience measure (number). (e) Ports with sectoral and contingency planning tools that address natural disasters and climate change (number). B. Project Components 34. The overall amount of funding for FSMIP will be SDR27.6 million (US$38.49 million equivalent), which includes US$9.62 million equivalent in National IDA and US$28.87 million equivalent in Regional IDA. The Project will improve the safety and efficiency of maritime operations and enhance resilience of maritime transport and of local communities to the impacts of climate change through: (i) investments to improve port infrastructure and maritime services; (ii) activities to strengthen safety and security of navigation and ports operations; and, (iii) technical assistance to supervise works, support project implementation, and develop local capacity to manage a more safe, efficient and climate resilient maritime sector. A Contingent Emergency Response Component (CERC) is also included within FSMIP to enable uncommitted funds to be quickly reallocated to respond to emergency events. 35. It is important to note that while the types of activities and investments to be carried out under FSMIP are known, the extent of the works that can be completed will depend on the results of the strategic planning exercise and conditional assessment of maritime assets, both of which will be expected to be completed no later than the second year of implementation. As such, the cost of proposed investments will not be known until FSMIP is under implementation, and the available funding may not be sufficient to finance all proposed investments. The following table estimates cost per component and source of funding. Page 16 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) Table 2. Project Costs and Financing Regional IDA Overall Cost National IDA Project Components (US$ mil. (US$ mil. (US$ mil. equivalent) equivalent) equivalent) Component 1: Maritime Infrastructure 2.69 17.81 20.50 Component 2: Maritime Safety and 0.99 6.56 7.55 Security Component 3: Technical Assistance for 5.94 4.50 10.44 Port Planning and Project Management Component 4: Contingent Emergency 0.00 0.00 0.00 Response Total Costs 9.62 28.8722 38.4923 36. Regional Financing. The Project is part of a Regional IDA Program which also includes a maritime investment project for RMI, and will enhance the safety, efficiency and climate resilience of key ports and maritime services beyond the borders of FSM. The primary justification for utilizing Regional IDA resources is that the investments in improved connective and international maritime infrastructure and oversight can bring regional benefits and can further enable potential intra-regional passenger and freight services. Specifically, the following components will contribute on a regional level: (a) Component 1: Maritime Infrastructure. The four project ports all receive international vessels that play a critical role in regional trade and travel. Investments to improve the safety, efficiency and climate resilience of the maritime infrastructure will ease access for the vessels, thereby strengthening regional trade (i.e. supporting affordability and access of imports and exports) and travel (i.e. FSM citizens travelling overseas and overseas citizens travelling to FSM). (b) Component 2: Maritime Safety and Security. International vessels are reliant upon safe and secure operations at the ports of call, particularly whether those locations are compliant with ISPS requirements. This component finances activities to support the ports’ compliance with ISPS requirements and will ensure access for international vessels so that there are no deleterious effects on the regional trade or travel. In addition, as FSM is a source, transit and, to a limited extent, destination country for human trafficking; the work that will be done through the Project to help address this challenge will have positive regional impacts. (c) Component 3: Technical Assistance for Port Planning and Project Management. FSMIP includes technical assistance that will serve as inputs to components 1 and 2 or future activities that will have a positive regional impact (e.g. the design and supervision consultancy for the maritime infrastructure and the strategic plans for the international ports). 22 The IDA18 small s tates exception was applied to support components with regional impacts. 23 Tota l IDA fi nancing is inclusive of the Programmatic Preparation Advance. Page 17 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) 37. The PDO indicator “Project ports fully compliant with ISPS requirements” has been identified to track the regional contributions of the Project. 38. The Project consists of the following components (for more detail on project components refer to Annex 2): 39. Component 1: Maritime Infrastructure (US$20.50 million). Component 1 will improve the safety and efficiency of port operations, as well as enhance the resilience of maritime structures to natural disasters and climate change impacts through the integration of planning, design, construction, rehabilitation and operation of facilities. Activities to be financed will be selected and prioritized by the Project Steering Committee (PSC) in accordance with the Project Operations Manual (POM), in accordance with the recommendations from the maritime infrastructure needs assessment to be prepared under Sub-component 3.1 and the strategic plans to be prepared under Sub-component 3.4. The following investments for Kosrae, Pohnpei, Chuuk and Yap Ports would be eligible for funding under FSMIP: 24 1.1. Surfacing and Drainage at Kosrae, Pohnpei, Chuuk and Yap Ports. Hardening and ensuring adequate drainage at container and cargo yards. 1.2 Rehabilitate Utilities. Rehabilitation of utilities, including water supply, sewerage and power supply in container storage areas. 1.3 Upgrade Terminal Superstructure. Repairs to the existing terminal superstructure and buildings, such as buildings and facilities in the primary cargo handling area, warehousing, and refrigerator container connection points (where responsibility is with the Government authority). 40. Component 2: Maritime Safety and Security (US$7.55 million). This component will strengthen safety and security of maritime transport and support better climate resilience of maritime facilities and for local communities by improving the reliability of connections between FSM states and outer islands for access to food, water, fuel, and emergency response services. The following investments for Kosrae, Pohnpei, Chuuk and Yap Ports would be eligible for funding under FSMIP: 2.1 Upgrade Berthing and Apron Facilities. Improve existing berths and facilities at FSMIP ports through repairs of quay wall structures, and replacing or repairing quay furniture (bollards, fenders, ladders), as required. Activities to be financed will be based on recommendations from the safety and security needs assessment to be prepared under Sub-component 3.1, as selected and prioritized by the PSC in accordance with procedures and criteria detailed in the POM. 2.2 Compliance with ISPS Requirements. Repair, upgrade or provide fencing, gates, lighting, back-up generators and CCTV systems to comply with ISPS requirements. 2.3 Replace/upgrade AtoNs. Replace/upgrade AtoNs at FSMIP ports as identified in the safety and security needs assessment to be undertaken under Sub-component 3.1, and as prioritized by the PSC following the criteria and procedures in the POM. 24 Investments a t all ports will need to be thoroughly discussed and coordinated wi th the s tevedoring companies well in advance of cons truction to mi nimize disruptions to their a ctivi ties. Page 18 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) 2.4 Safety and Security Improvements. (a) Provide spill kits for FSMIP ports, and 150m boom containment systems for Pohnpei Port. (b) Provide Search and Rescue (SAR) equipment and safety devices. (c) Support and elevate awareness and prevention of human trafficking and GBV by: (i) conducting a needs assessment on trafficking and GBV to identify the availability of services; (ii) conducting training activities for Project workers; (iii) conducting community awareness raising activities; (iv) supporting trafficking and GBV survivors through the provision of counselling, healthcare, and skilled police focal points; 25 and, (v) establishing a referral pathway for trafficking and GBV survivors. 41. Component 3: Technical Assistance for Port Planning and Project Management (US$10.44 million). Component 3 will enhance the capacity of Government to manage maritime assets in a more safe, efficient and climate resilient manner through technical assistance designed to strengthen the planning and management of climate resilient port facilities, improve coordination of emergency response systems, elevate awareness of ISPS and SAR requirements, and implement project activities: 3.1 Maritime Safety and Security Needs Assessment and Maritime Infrastructure Needs Assessment. The Maritime Safety and Security Needs assessment will include three key areas: (i) identifying gaps and actions needed for FSMIP ports to become compliant with ISPS requirements; (ii) conducting inventories of quay structures and furniture that relate to safety such as bollards, cleats, fenders and ladders and recommend actions to bring them in-line with international standards; and, (iii) conducting inventories of the present system of AtoNs at FSMIP project ports including buoys, markers, harbor lights and identify system elements that are missing, damaged, in states of decline, or in need of upgrade, and to recommend measures to repair, replace or upgrade the AtoNs so that they are aligned with international standards. The Maritime Infrastructure Needs Assessment will involve: (i) an assessment of maritime infrastructure under Component 1 to identify urgent needs; (ii) recommend upgrades to improve the safety, efficiency, and resilience of the infrastructure; and, (iii) provide a framework that prioritizes the recommended investments across the Project ports. 3.2 Design and Supervision. Prepare designs that consider climate resilient measures and supervise works on maritime infrastructure activities under Components 1 and 2 of the Project. 3.3 Review of Institutional and Governance Structures for Port Management. Carry out review of institutional arrangements, key policies, legislation, and roles and responsibilities of principle stakeholders involved in the maritime sector and develop recommendations to strengthen such arrangements. 25 Tra i ning a nd coordination a ctivities for Police Focal Points may be eligible for fi nancing under the Project. No policing a ctivities will be fi nanced under the Project. The economic rationale for the financing of training for Police Focal Points is that through strengthening existing forma l s ervices, it provides efficiencies i n coordination a nd more efficient response to a ny i dentified GBV and/or tra fficking cases. Page 19 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) 3.4 Strategic Planning. Prepare strategic development plans, review port operations, and develop maintenance regimes for Kosrae, Pohnpei, Chuuk and Yap ports with attention around key areas of concern including safety, security, and climate resilience. 3.5 Capacity Building Initiatives. To better operate and regulate the sector (SAR awareness, ISPS training, use of spill kits & booms, etc.). 26 3.6 Outer Island Services and Chuuk Lagoon. Assess options to better organize and strengthen oversight of private vessels operating in Chuuk Lagoon. 3.7 Project Management. Support to implement FSMIP, including support for DoTC&I for strengthening the capacity of the Central Implementation Unit (CIU), and establishing and supporting the Project Implementation Unit (PIU). 27 In addition, this includes operating costs (OCs) for FSMIP-related travel and communications costs. 3.8 Employment opportunities for women. To help close gender employment gaps, DoTC&I will develop and carry out a set of enabling policy and practices, which together help women enter and progress through maritime careers. In addition to internal process improvements, a budget will be set-aside to support relevant technical training and unpaid internship opportunities28 for women in DoTC&I and the maritime sector, thereby building a pipeline of appropriately qualified women to compete for employment. 3.9 Emerging Priority Issues. Providing technical assistance to strengthen FSM’s capacity to address emerging priority issues that could have an impact on the ability to manage a safe, efficient and climate resilient maritime sector. 42. Component 4: Contingent Emergency Response Component (CERC) (US$0.00 million). The CERC is designed to provide a swift response in the event of an Eligible Crisis or Emergency29 by enabling uncommitted funds to be quickly reallocated to address immediate post-crisis and emergency financing needs. The CERC may be used following natural disasters or other crises and emergencies, allowing funds to be reallocated from other components of the Project. 26 The USCG provi des SAR s upport a nd ca pacity development a ctivities throughout Mi cronesia a nd i s best positioned to provide SAR ca pa city development a ctivities under the Project. Only operating costs (e.g. tra vel, per diems, etc.) would be eligible for financing under FSMIP for a ny s upport that may be provi ded under this Sub-component by USCG. 27 Project ma nagement support incudes six full-time positions over 5 years: (i) PIU Project Manager, (ii) CIU Procurement Specialist, (iii) CIU Procurement Officer, (iii) CIU Financial Ma nagement Officer, (iv) CIU Safeguards Specialist, a nd (v) CIU Safeguards Officer. 28 In terms of internships, FSMIP eligible costs would be l imited to the cost of the trainer for on-the-job tra ining as well operating costs for the i nterns to ta ke part i n the program (e.g. travel, per diems, etc.). 29 Defi ned as “a n event that has ca used, or i s l ikely to i mminently ca use, a ma jor a dverse economic a nd/or s ocial i mpact associated with na tural or man-made crises or disasters”, Pa ragraph 12, Ba nk Policy: Investment Project Financing, Projects in Situations of Urgent Need of Assistance or Capacity Constraints. Page 20 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) C. Project Beneficiaries 43. As sea transport services are considered essential for the basic economic and social functions FSM, improving the safety, efficiency and climate resilience of maritime infrastructure and operations will have benefits for the population of FSM. The principal beneficiaries include residents of FSM, virtually all of whom depend on marine transport for delivery and consumption of goods and services, for tuna processing and sale, as well as for those who travel for education or work. Residents of outer islands will benefit from local wharf improvements, for whom the marine sector provides connectivity to schools, medical clinics, markets and other services. In strengthening the climate resilience of the maritime network, FSMIP’s activities will also help to deliver indirect benefits that extend beyond the local communities. In addition, the World Bank Gender Strategy (FY16 – FY23) and the Transport Global Practice (GP) Note (FY17 – FY20) 30 seek to enhance women’s agency and reduce gender gaps. FSMIP supports women and will address two gender-focused issues in support of project beneficiaries including: (i) employment opportunities for women (Sub-component 3.8); and, (ii) GBV and human trafficking prevention and response (Sub- component 2.4(c)). Table 3 provides an estimate of the number of beneficiaries for potential project activities. Table 3. Overview of Project Beneficiaries. Project Activities Location Beneficiaries (est.) Principal beneficiaries – Components 1 to Kosrae, Pohnpei, Chuuk, Yap 105,544 4 (100% of FSM population) Total Beneficiaries (est.): 105,544 D. Gender 44. Data collected during preparation of FSMIP emphasized the opportunity to: (i) close gender gaps in access to economic opportunities for women; (ii) strengthen human trafficking prevention and response; and, (iii) mitigate GBV risk. To address these constraints, the following will be implemented (see details of analysis, action and M&E in Annex 3– Gender Action Plan): (a) Closing the gap in women’s employment by strengthening approaches that help women enter and progress through maritime careers. In addition to internal process improvement, budget will be set-aside to support relevant technical training and unpaid internship opportunities for women engaged in the maritime sector, thereby building a pipeline of appropriately qualified women to compete for employment. Benefits associated with increased gender diversity and inclusive corporate cultures include: improved productivity, profitability, employee commitment and retention. The result of these activities will be an increased ratio of women in maritime employment during the Project period. (b) Strengthening anti-human-trafficking measures and increasing the number of victim referrals by improving port security infrastructure (lighting and fencing); strengthening management processes and procedures, including more consistent identification checks and staff training; development of maritime-specific Standard Operating Procedures (SOPs), considering victim support and referrals; and helping to resource and facilitate 30 Tra ns port GP’s Business Pl an for FY17-20 to support the implementation of the WBG Gender Strategy. Page 21 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) the work of the FSM Anti-Trafficking Program. Under the leadership of DoJ, DoTC&I and State Port Operators will conduct anti-trafficking education and awareness raising campaigns, and possibly through the funding of Department of Justice initiatives in cooperation with NGOs. This work will be closely coordinated with GBV prevention and response work outlined below, given the large overlap between the two areas of work. The result of these activities will be increased referral from Ports/ Maritime staff of trafficking survivors during project period. 45. As noted earlier, GBV is a barrier to women’s successful participation in employment, a key factor in women’s vulnerability to trafficking and a significant proportion of trafficking cases (in terms of commercial sexual exploitation); addressing GBV prevention and response can therefore contribute to the overall success of the Project. It is also important that the Project follows a ‘Do No Harm’ approach; that is, that the Project does not create any increased risk of GBV for those directly impacted by the Project. In order to achieve these objectives to mitigate risks directly associated with project activities, the following actions will be implemented by the DoJ under Sub-component 2.4(c), with collaboration from DoTC&I on the various activities that it is implementing under FSMIP where GBV risk exists: (a) GBV Needs Assessment: (i) Consultation with national stakeholders and regional partners such as The International Organization for Migration (IOM), Chuuk Women’s Committee to ensure alignment with national and regional GBV and anti-trafficking strategies and action plans; (ii) Once the quality and availability of services is improved through the actions below, a study can be undertaken using administrative data on GBV and trafficking (i.e. anonymized data collected from cases received by service providers). This will provide higher-quality and more ethical data as the availability of services will encourage more survivors to come forward and will help to reduce potential re-traumatization involved in discussing their experiences. (b) Prevention: (i) DoTC&I to ensure that all contractors adopt and adhere to a Code of Conduct (CoC) which addresses GBV. During implementation, ensure that CoCs are signed and understood by all contractor and consultant staff. Conduct relevant training; (ii) Training on GBV and trafficking for regular workers at project port sites and the workers (including managers) that will be hired for the Project, and for workers on vessels that monitor border control and clear vessels at project port sites; and (iii) Regular and widespread community awareness-raising sessions to share information on GBV, trafficking, available services and referral pathways, CoC content and GRM reporting channels. (c) Response: (i) Training for counsellors, healthcare professionals and police focal points to ensure capacity to respond to any identified GBV and/or trafficking cases; (ii) Providing funding for either local service providers or the hiring of social workers in relevant government agencies; (iii) Working with DoTC&I and development partners to establish and document referral pathways for survivors of GBV and trafficking. Page 22 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) E. Results Chain 46. To develop the results chain, a Theory of Change approach was adopted and is illustrated in Figure 1 below. Figure 1. FSMIP Results Chain Inputs Activities Outputs Outcomes Objective Reduction in cargo vessel turnaround times Enhanced Maritim e Infrastructure port Number of energy • Improve terminal storage operations efficiency areas and efficiency recommendations Strategic plans • Install or improve drainage implemented and Maritime • Strengthen the pavement of Infrastructure  the container yard    Needs Assessment • Undertake energy efficiency Increase in container Improved for FSMIP Ports improvements yard productivity climate • Rehabilitate utilities resilience of • Upgrade terminal maritime superstructures Number of ports w ith infrastructure drainage installed or improved Maritim e Safety and Security Increase in number of • Safety related repairs to ports fully compliant w ith berthing and apron facilities, ISPS requirements  quay w all structures/pilings; SAR recommendations and the repair or implemented replacement of quay furniture Improved Improved Safety and Security safety, etc. oversight and Needs Assessment    efficiency and • Replace/upgrade aids to Enhanced GBV, VAC safety of port for FSMIP Ports climate navigation and trafficking operations resilience of • SAR and safety devices prevention training and maritime • Fencing gates, lighting, support in the maritime infrastructure back-up generators etc. sector and operations • GBV and human trafficking prevention Technical Assistance for Port Planning and Project Planning documents Managem ent (e.g. design reports, Improved • Design and supervision strategic plans) capacity for • Strategic planning for ports completed oversight, incorporating climate planning and considerations   management  • Outer island services and of the Chuuk Lagoon Consultants hired, and maritime • Capacity building initiatives training delivered to fill sector and • Review of governance and capacity gaps operations institutional structures • Project management Provision of sw ift Improved Contingent Em ergency response in the event of emergency    Response Com ponent an Eligible Crisis or response Emergency Page 23 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) F. Rationale for Bank Involvement and Role of Partners 47. Rationale for Bank involvement. FSM is heavily reliant on the maritime sector and is vulnerable to climate change and natural disasters, particularly earthquakes, landslides and tropical cyclones, making reliable transport even more critical in the event of a natural disaster. The availability of efficient, reliable and affordable sea transport services is considered essential for the country’s basic economic and social functions, for achieving FSM’s national development plans, and enhancing resilience to the impacts of climate change. Investments under the Project are designed to improve the safety, resilience and efficiency of maritime services, which will help sustain the delivery of basic goods and access to critical services. 48. The rationale for public sector financing is primarily based on lack of private sector appetite to finance the activities under FSMIP. This is largely attributable to the remoteness of FSM that contributes to relatively high capital costs combined with limited volumes of trade at the ports because of the small size of the population. The World Bank’s involvement is critical for development impact to address binding operational and enabling environment constraints, which may help unlock private solutions where appropriate in the long-run. 49. The World Bank has gained considerable experience in both strengthening transport sector infrastructure and advising governments on institutional and regulatory strengthening within the transport sector in the Pacific region. The World Bank also brings experience in environmental and social issues, which is particularly important given the sensitivity of the physical and social environment in the Project areas. 50. The World Bank is supporting projects in the Pacific based on the premises of the Small Islands States Resilience Initiative (SISRI) that draws on the experience of the World Bank and other Global Facility for Disaster Reduction and Recovery (GFDRR) members in supporting climate and disaster resilience in small island states.31 FSMIP is aligned with the overall objective of other projects in the Pacific, by adopting a common approach to improving the resilience of the transport sector and in the event of an Eligible Crisis or Emergency, providing an immediate response to the Eligible Crisis or Emergency. Specifically, FSMIP includes the following activities: (i) using planning tools to improve the climate resilience of the maritime sector; (ii) constructing climate resilient maritime investments; (iii) strengthening the enabling environment by improving the capacity of the Government to manage a more climate resilient maritime sector; and (iv) adopting a CERC. 51. Role of Partners. The GoFSM has received assistance from various donors for investments in the maritime sector including the U.S. Government, the Pacific Community (SPC), and the Japan International Cooperation Agency (JICA). Coordination among all donors will be critical to ensure that there is no duplication of effort. The most relevant partners are outlined below. (a) U.S. Government. USCG, Sector Guam, works with FSM sea patrol to provide SAR support, train local staff, improve security and safety, assist with disaster planning, environmental response, and raise awareness among local boat users about basic safety at sea. The World Bank is collaborating with the USCG on the design of the Enhancing SAR Awareness activity (Sub-component 3.5). 32 In addition to the Compact, the U.S., 31 www.gfdrr.org/small-island-states-resilience-initiative 32 Onl y operating costs (e.g. travel, per diems, etc.) would be eligible for financing under FSMIP for any operating costs incurred by the FSM Page 24 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) Government also supports FSM’s efforts to address human trafficking and meet minimum standards under the U.S. Trafficking Victims Protection Act (TVPA) and under the Palermo Protocol. 33 The IOM is leading efforts in this regard. The Terms of reference (ToR) will be for training at the national level and financing will not be provided for any military purposes. (b) SPC. SPC was selected by the International Maritime Organization (IMO) to host the regional Maritime Technology Cooperation Centre for the Pacific region (MTCC-Pacific) in collaboration with the Secretariat of the Pacific Regional Environment Program (SPREP). The MTCC-Pacific is part of a global network on capacity building for climate mitigation in the maritime shipping industry. The global network project is implemented by IMO and funded by the European Union. The Pacific MTCC also provides training and advice on Ship Energy Efficiency Management Plans. SPC also provides technical support in the development of safe ship operation plans and associated safety training for owners, operators and crew of domestic passenger vessels, under SPC’s Pacific Islands Domestic Ship Safety Program. As part of this program, SPC has delivered workshopsand training on AtoNs for FSM ports and maritime administration staff and conducted a preliminary assessment of AtoNs in Pohnpei and Yap. (c) JICA. JICA is providing grant funding to examine options to expand Pohnpei Port, a project that was originally to be financed by the Asian Development Bank (ADB). The pre-feasibility study carried out by ADB identified two options for expanding the berth to the north and to the south. An expansion to the south would require significant amounts of dredging and land reclamation, and there are concerns about geotechnical issues. Extending the port to the north is problematic due to a long-standing dispute over land ownership, which has not yet been resolved. JICA plans to support expansion of the port to the north, provided GoFSM can resolve the land issues. G. Lessons Learned and Reflected in the Project Design 52. FSMIP is the first World Bank-supported transport project in FSM, but other recent World Bank-financed transport and infrastructure projects in small remote PICs can provide contextual information on design and implementation issues. Beyond transport, there are a number of World Bank projects - the Energy Sector Development Project (ESDP), 34 the FSM Connectivity Project,35 the Pacific Islands Regional Oceanscape Program (PROP),36 and the Project for Strengthening Public Financial Management 37 - currently under implementation in FSM that offer useful insights into local capacity and conditions. Government for SAR tra ining a nd ca pacity development activi ties provided by USCG under Component 3.5 i n a ccordance with a n Annual Work Pl a n a nd Budget that has been approved ex ante by the Association. 33 The Pa l ermo Protocols a re the three protocols that were adopted by the United Nations to supplement the 2000 Convention against Tra ns national Organized Cri me (the Palermo Convention). They a re: (i) the Protocol to Prevent, Suppress and Punish Tra fficking in Persons, es pecially Women a nd Children; (ii) the Protocol a gainst the Smuggling of Migrants by La nd, Sea and Air; a nd, (iii) the Protocol against the Il licit Ma nufacturing a nd Tra fficking i n Firearms, Their Pa rts and Components and Ammunition. 34 P148560. In a ddition, a follow-on Project has recently been approved, the Sustainable Energy Development and Access Project (P165183). 35P161363 36P151754 37P161969 Page 25 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) 53. Simplicity in project designs. The World Bank has gained considerable experience in strengthening transport infrastructure and in responding to and building resilience against natural disasters in similar environments. Lessons from engagements elsewhere include the need for a simple phased approach, whereby the most basic infrastructure shortcomings are addressed up front, while building the local capacity to plan and manage rehabilitation and maintenance. The adequacy of laws, regulations and institutional capacity often needs to be assessed, with analytical work carried out early on to identify shortcomings and recommend options for their resolution and strengthening in the longer term. FSMIP has been designed to address both aspects – immediate support for port infrastructure, safety, security and resilience improvements; and a review of institutional and governance structures (including clarification of national and state entities), port management and financing, port strategic plans, connectivity to outer islands, etc. to be implemented in a possible follow-on engagement or next phase. 54. The impact of PICs’ geographic characteristics on costs. The remoteness and dispersion of many PICs has a significant, and sometimes unpredictable, impact on costs. 38 Lessons learned from other World Bank-supported projects in small island states in the Pacific, such as Kiribati, have shown that higher cost contingencies should be factored into project design, where feasible. For FSMIP, the estimated costs in the PAD are based on preliminary assessments of the scope of works and services to be undertaken in each sub-component and are subject to further refinement in the scope and design, including following the outcome of the needs assessments that inform Components 1 and 2 and that precede the detailed design. The estimates are therefore not sufficient enough at this stage to include or exclude physical contingencies and the exact nature of procurements are not yet known. However, the needs assessments will prioritize activities taking into consideration FSMIP budget and economic evaluation in addition to other factors. 55. Capacity limitations. Experience from other World Bank-supported projects in small island states in the Pacific have highlighted key considerations around capacity limitations, including the need for realistic timelines, limited capacity of local project implementation teams, and the need for intensive implementation support. 39 Though DoTC&I have had experience with World Bank-supported projects through the ongoing Connectivity Project, FSMIP is the first World Bank-supported transport project in FSM, and likely risks need to be mitigated. For example, there are often delays in importing materials and civil works contracts should anticipate a “time” contingency in the implementation schedule. Secondly, the success of a project is dependent on the Project implementation team and the Project Manager. Where there is thin local capacity with a few people available to perform these roles, projects should continue efforts to build capacity of local specialists. The CIU staff will provide support to the Project implementation team drawing on lessons from other IDA projects under implementation. Lastly, an increased level of support during the first years of implementation is also anticipated, given the this will be the first project in the maritime sector. 56. Reducing the administrative burden. Experience from other FSM projects indicates that the burden of carrying out donor-financed projects often rests on one or two overworked individuals in relevant implementing agency(ies) (IAs). Avoiding overburdening existing implementation capacity has become an ongoing priority of World Bank projects in FSM, along with ensuring that sufficient capacity is available for proper design and implementation of each project. To address this problem, FSM has established a CIU, to support all World Bank-financed projects. Staff in the CIU will 38 Impl ementation Completion a nd Results Report for the Ki ribati Road Rehabilitation Project. Ma rch 7, 2019. Worl d Bank. Report No. ICR00004673. 39 Impl ementation Completion a nd Results Report for the Ki ribati Road Rehabilitation Project. Ma rch 7, 2019. Worl d Bank. Report No. ICR00004673. Page 26 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) support, advise and guide the national and state IAs as they proceed to carry out FSMIP project implementation functions. 57. Financial and technical support for implementation readiness. Implementation is often slow to begin in PICs due to lack of funding and difficulties in recruiting key personnel; lack of familiarity with preparing procurement, safeguards and operational documents; difficulties in carrying out needs assessment and estimating costs, etc. For FSM projects, delays in developing core safeguards instruments, delays in procurement and poor contract management have been recurring problems prior to the establishment of the CIU. To mitigate these delays, a Programmatic Preparation Advance was sourced to provide the financial means to jump-start project preparation for IDA18 projects, including for FSMIP, and the newly established CIU was tapped to provide safeguards and procurement support leading to project readiness. The Project also allows for procurement of both a Safeguards Specialist and a Procurement Specialist in the CIU working across the World Bank portfolio in FSM. 58. Coordination among the national government, states and departments. FSMIP is designed to work with the national government and with each of the four state governments and two port authorities. Each state has its own transport division and two of the states, Pohnpei and Chuuk, have port authorities. Experience from existing World Bank projects suggests that ensuring the appropriate representation of all parties in the Project Steering Committee will be critical for success. 59. Natural disasters. FSM is vulnerable to disaster events that prove a challenge to ensuring long-term resilience. Several projects in the Pacific have been severely affected by natural disasters in recent years, including in Tonga, Vanuatu and Fiji, which underscores the importance of incorporating provisions enabling quick response in the Project design. FSMIP thus not only focuses on building resilience into port infrastructure and AtoNs, but also includes a CERC to address urgent response and recovery needs. III. IMPLEMENTATION ARRANGEMENTS A. Institutional and Implementation Arrangements 60. FSMIP will be implemented over a five-year period following Board approval. The Department of Finance and Administration (DoFA) will be the Executing Agency. The Department of Environment, Climate Change and Emergency Management (DECEM) will serve as IA for Component 4 on the CERC. DoTC&I in Pohnpei and the DoJ will act as IAs for Sub-components under the remaining Components of FSMIP (see Figure 2 below). 61. PIU Implementation Support. A PIU will be established within the DoTC&I to provide advice to the Department as needed on technical issues. The PIU will include a Project Manager, with technical support, as needed on technical issues pertinent to FSMIP. The PIU will coordinate the implementation of the Project with the DoTC&I, the states, and the port authorities in a manner that is to be set forth in the Implementation Agreements that outlines the roles of each organization. The PIU will also be responsible for preparing and implementing the Project in accordance with annual work plans and budgets, which will detail FSMIP’s activities and eligible expenditures. The Implementing Agreements will clarify, among other things, the necessary state and intra-government cooperation and support necessary for the Project. The Project Manager will be responsible for working collaboratively with the IAs, states and port authorities to facilitate implementation by providing technical support and also by working with the CIU to facilitate the procurement, budgeting and work programming process. Page 27 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) 62. CIU Implementation Support. Under Sub-component 3.7, the Project is supporting the capacity development of the already established CIU within DoFA, a functional unit to support the implementation of the World Bank portfolio. The World Bank portfolio in FSM has grown quickly and is anticipated to expand even further over the next few years putting pressure on the thin capacity within GoFSM to implement effectively. The FSM Government identified early the need for strong implementation of the World Bank portfolio and to look for ways to maximize efficiencies. GoFSM has therefore decided to undertake a centralized approach to project implementation functions. The CIU will provide support on core implementation functions needed for all projects including, but not limited to procurement, financial management, social and environmental safeguards, monitoring and evaluation and outreach and communications. The individuals responsible for these functions will report to the CIU Program Manager and provide services and hands on support to all IAs for preparation, implementation and capacity building activities. The Sub-component will also support some goods, procurement, training, and OCs related to the functioning of the CIU. Project implementation responsibilities will however remain with the respective IAs. 63. A Program Manager currently in place will oversee and manage the CIU. The Program Manager will report to the Assistant Secretary of the Division of Investment and International Finance and will be responsible for coordinating the team of specialists housed in the CIU and will work collaboratively with the PIU Project Manager to ensure sufficient project implementation resources are available for effective implementation, preparation, closing and reporting of the World Bank-financed Projects in accordance with the legal agreements and all GoFSM and World Bank policies and procedures. In addition, the Program Manager will look for opportunities to enhance quality and timeliness of implementation, build systems and operating procedures, aligned where possible with GoFSM processes and procedures, develop and operationalize performance management standards for all project staff across the portfolio and strengthen the capacity of national staff. 64. In the first phase of the CIU (at least 5 years) the CIU specialist positions will be undertaken by consultants with international experience; however, the CIU will also consist of local consultants who will receive training and capacity building and work closely with these specialists. The objective will be to develop expertise in the local market in all project implementation functions and capacity building and training will be a core focus of the international specialists. 65. Focal Points and Implementation Agreements with States. As each port is under its respective State’s control, and to ensure good technical coordination, focal points will be appointed in each State to work on and manage day-to- day FSMIP activities associated with its port, and to liaise with the central DoTC&I. A focal point will also be identified in DoJ to implement FSMIP’s anti-trafficking component. Furthermore, Project Implementation Agreements will be executed prior to the commencement of Project activities under Components 1, 2.1 – 2.3, 2.4 (a) and (b), 2.4(c)(ii) – (v), 3.2, 3.3, 3.5, 3.6, 3.8, and 3.9 to ensure clarity and agreement between all relevant parties on implementation roles and responsibilities. Four Project Implementation Agreements will be required to help govern the Project activities in each State, with one Project Implementation Agreement for each of the following groups: (a) Department of Transportation, Communication, and Infrastructure, the Kosrae State Government, and the Kosrae Port Authority; (b) Department of Transportation, Communication, and Infrastructure, the Pohnpei State Government, and the Pohnpei Port Authority; (c) Department of Transportation, Communication, and Infrastructure, the Chuuk State Government, and the Chuuk State Department of Transportation, Communication, and Infrastructure; and, (d) Department of Transportation, Communication, and Infrastructure, the Yap State Government, and the Yap State Department of Public Works and Transportation. Page 28 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) 66. Role of IAs. During project implementation, IAs will carry out the FM functions with respect to their respective activities with support from the CIU. The CIU will also provide support to the IAs on environmental and social safeguards, procurement, monitoring and evaluation and communications activities. All contracts with consultants, contractors and suppliers will be signed by the IAs during project implementation. Each IA will sign off on all consultant and contractor invoices and authorize CIU to make payments. However, before doing so, the IAs will consult with each State focal point to ensure services and works have been completed and are satisfactory, where necessary. These arrangements are detailed in the POM. 67. Role and Composition of the Project Steering Committee. To ensure the four states are adequately represented in decision making, a PSC will be established and chaired by DoTC&I. The Secretary of DoFA will be a member, along with a member appointed by the Governor of each of the four states. The PSC will provide general oversight and policy direction to FSMIP stakeholders during project implementation, convene key stakeholders in the event of disagreement, and periodically review project progress. The PSC will have a central role in allocating project funds after the conditional assessments and reports on investments required at each port are available. 68. The proposed implementation arrangements are depicted in Figure 2 below. Page 29 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) Figure 2. FSMIP Implementation Arrangements 40 B. Results Monitoring and Evaluation Arrangements 69. Project monitoring and evaluation (M&E) will be conducted via periodic monitoring through semi-annual reports that track progress in terms of distribution of inputs, disbursement of funds, and achievement of targeted indicators as outlined in the Results Framework (Section VI). The IAs will be responsible for M&E of the Project outcomes of their respective activities against agreed indicators as presented in the Results Framework, including the provision of timely monitoring reports with operational data, with support from the CIU where required. C. Sustainability 70. The high level of dependence of FSM and its citizens on marine transport renders adequate and safe port facilities a high priority of GoFSM. FSMIP has been designed to address the sector’s most urgent and basic needs to ensure – as quickly as possible – that port infrastructure is safe, resilient, efficient and well-managed. As capacity is limited, FSMIP also includes technical assistance to address improvements needed for proper oversight and management of port facilities, better coordination of emergency response/SAR systems, full compliance with ISPS requirements and with 40 The CIU will provide servi ces and hands on support to all IAs for preparation, implementation and capacity building activities and functions rel a ted to procurement, fi nancial ma nagement, communications and outreach, environmental a nd social safeguards, and monitoring and eva l uation. The IAs will be responsible for i mplementing the technical a spects of the s pecific Sub-components for whi ch they are res ponsible. Page 30 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) minimum standards under the TVPA, and other priority issues arising. Although implementation of institutional, legislative and legal reforms, and building capacity take time, the intention is for the analytical work to set the stage for a follow-on engagement. IV. PROJECT APPRAISAL SUMMARY A. Technical and Economic Analysis 71. Technical analysis. Achieving increased and/or improved climate resilience of existing assets will form a fundamental part of the technical design of this project. In terms of cost and scope the major works to be implemented under FSMIP will primarily involve land- and marine- based civil infrastructure works, comprising the surfacing and drainage of container yards and repairs to quay walls and replacement or repairs of quay furniture at Pohnpei Port, Weno (Chuuk), Okat (Kosrae) and Tomil (Yap) Ports. Electrical and mechanical works – AtoN replacement, generators, CCTV, lighting, etc. – will make up most of the remaining cost and scope. For each activity, the preliminary and detailed designs will be required to include a specific analysis of the current and future climate-related hazards, and consideration of options to address such risks over the life of new and repaired assets. Agreed measures to respond to the identified risks will be included in all design specifications and bid documents for construction and installation of works. 72. The works by their nature will be relatively simple and will utilize conventional, well-tried and tested technical design, construction and installation methods, to best suit the remote locations and local resource constraints. All materials used in construction and installations will need to be of the highest quality to withstand the aggressive natural and physical environment, and general low levels of maintenance. To ensure this quality and sustainability, all works will be designed and supervised by an international firm of consulting engineers who will be selected on the strength of their technical merit and proven experience in this field. 73. FSM is at high risk of climate change induced natural disasters, in particularly extreme waves and high tides, storm surges and coastal inundation. In addition, critical port infrastructure and equipment are exposed to these risks, especially in the context of progressive sea level rise. FSMIP aims to systematically improve climate resilience of maritime industry in FSM through a combination of sectoral planning, engineering solutions, and institutional strengthening. (a) Climate adaptation. The Nationally Determined Contribution (NDC) for FSM highlights that adaptation is a priority, and that the formulation and implementation of transformational adaptation investment plans to protect the country against climate change, are necessary. Tools to be utilized under FSMIP include: (i) sectoral planning tools informed by climate change and natural disasters; (ii) more climate resilient port infrastructure; (iii) measures to strengthen the enabling environment to enable the Government to manage a more safe, efficient and climate resilient maritime sector; and, (iv) contingent emergency response. The actual scope and engineering design of infrastructure investment under Components 1 and 2 will be guided by the outcome of asset assessment as part of the strategic planning exercise under Component 3, to be carried out in the first two years of project implementation. The strategic planning will fully consider climate and disaster vulnerability of the targeted ports and assets and ensure efficient adaptation measures to be incorporated in the design of infrastructure investment. The initial scope for material investments under Components 1 and 2 are already targeting on most evident adaptation needs, including: Page 31 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) (i) Surfacing and drainage works at currently unpaved and undrained container yard area in Okat (Kosrae), Pohnpei, Weno (Chuuk), and Tomil (Yap) Ports to prevent the deterioration of the yard from constant inundation in increasing precipitation and flooding; (ii) Upgrade of berthing and apron facilities will enhance its port resilience to sea level rise, more intense wave action, and extreme winds; and, (iii) Upgrade AtoNs, communication facilities, and SAR equipment to improve the navigation and emergency response to assist vessels and boats, particularly in extreme weather and hydro- meteorological hazards such as heavy precipitation and fog, strong tides and approaching waves at the harbor. In addition, institutional capacity building and port management support activities will help the Port Authorities to incorporate climatic stressors as a key parameter to plan and manage port operations and services and put into place necessary institutional arrangements for effective climate informed port management. Through incorporating a variety of activities, this will support the overarching development objective of supporting the Recipient to improve the climate resilience of their maritime infrastructure and operations, and in the event of an Eligible Crisis or Emergency, to provide an immediate response to the Eligible Crisis or Emergency. Through improving port facilities, the FSMIP will improve the facilitation of relief mobilization following disasters, as well as reduce the risk that ports are unable to fully function immediately following an extreme weather event. Furthermore, climate risks are viewed in a holistic manner, through the integration of resilient transport interventions into planning and decision-making processes. (b) Climate mitigation. Improved efficiency of maritime transport contributes to reducing GHG emissions. In its NDC, FSM has committed to unconditionally reduce its GHG emissions by 28 percent by 2025, relative to the year 2000. Relative to the year 2000 inventory, electricity generation accounted for the largest share of total carbon dioxide equivalent emissions (42 percent). 41 FSMIP will involve rehabilitation of utilities related to water supply, sewerage processing, and power supply. It also involves upgrade of buildings and facilities. Although the detailed design of these constructions will be developed in the later stage of FSMIP’s implementation based on the needs assessment, FSMIP will explicitly seek to introduce energy efficient, renewable energy solutions as part of the preferred design options for these constructions where appropriate, such as installing photo-voltaic systems (PV Panels). 74. Economic Analysis. The results of the economic analysis are summarized in Table 3, indicating that the difference between the “with-project” and “without-project” cases yield an Economic Internal Rate of Return (EIRR) of 14.26 percent and a net present value (NPV) of US$13.73 million for the overall investments under the FSM Maritime Investment Project. The discount rate is 5.5 percent according to the World Bank’s guidance note on discount rate; and with a Standard Conversion Factor of 0.90. 41 http://prdrse4all.spc.int/node/4/content/nationally-determined-contribution-ndc-federated-states-micronesia-fsm. Page 32 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) Table 4. Results of Economic Analysis Benefits -20% Base Case Benefits -20% Costs +20% and Costs +20% EIRR (%) 14.26% 9.66% 10.44% 6.52% NPV (US$ million) 13.73 6.42 9.17 1.86 75. The cost-benefit analysis was conducted over the 30-year evaluation period (2019-2048) for the maritime infrastructure, whereas other investments on maritime safety and security components (such as fencing, gates, safety devices, boats, etc.) assumed a replacement requirement after 15 years. It is expected that the investment in security and safety equipment is done during the first two years of implementation, and maritime infrastructure investment comes in during the next three years of FSMIP’s implementation. FSMIP’s benefits for the safety and security component will start in year 3, whereas the benefits that come from infrastructure investment will commence in year 6. 76. Key benefits of FSMIP come from: (i) accident reduction and avoided future rehabilitation due to improved, climate- resilient infrastructure; and, (ii) ensuring safety and security standard. With a reduction in accidents, FSMIP will also help avoid cargo loss and damage, reduce lengthy and costly SAR missions, and reduce numbers of passenger fatalities and injuries. 77. Other benefits include improved efficiency of port operations, a reduction of vessel turnaround times, and passenger time savings. But their impacts are very small (about 1-2 percent of total benefits) and do not have a significant impact to the economic analysis results. 78. A sensitivity analysis shows that the EIRR would be 6.52 percent and the NPV would be US$1.86 million in the low case when the Project benefits decrease by 20 percent and the Project costs simultaneously increase by 20 percent. Because of the uncertainty on the timing and impact of non-compliance, another sensitivity analysis was conducted around the different timing of reduction in port calls by vessels. It is assumed that non-compliance could lead to a reduction as soon as 2022, where 60 percent of the vessel calls are lost, and it would take two years to reach compliance and resume normal operations. Figure 3 shows the sensitivity of the results around compliance benefits. Page 33 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) Figure 3. Sensitivity Analysis around Compliance Benefits 14.5% Year of disruption 14.0% 2025 13.5% 2030 13.0% 2035 EIRR 12.5% 12.0% 11.5% 11.0% 10% 20% 30% 40% 50% 60% 70% 80% Ratio of Ship Calls loss B. Fiduciary 79. Financial Management. The FM assessment was conducted in accordance with the “Principles-Based Financial Management Practice Manual” issued by the Board on March 1, 2010. Under the Bank’s Directive: Investment Project Financing, the borrower and IAs are required to maintain financial management systems, including accounting, financial reporting, and auditing systems, adequate to ensure accurate and timely information regarding FSMIP’s resources and expenditures. Overall, the assessment found that the proposed project FM arrangements meet the FM requirements stipulated in OP/BP 10.00. DoFA has already gained some experience with managing World Bank projects and recently established the CIU with experienced and qualified staff. FSMIP will finance a Financial Management Officer (a local consultant) or equivalent position to meet the needs of the CIU to enable it to maintain adequate resources to meet the FM requirements of the Project. The POM prepared for FSMIP will include a section on budgeting, disbursement, and financial management arrangements. The sharing of services with other World Bank projects will require processes to ensure that expenditures are properly recorded and documented, and associated funds flows closely monitored. Training on the FM requirements of the Project will be conducted and monitoring of compliance to FM processes will be a regular part of the review missions (see Annex 1 for details on FM). 80. Procurement. Procurement under the Project will follow the World Bank Procurement Regulations for IPF Borrowers dated July 2016, revised November 2017 and August 2018. The Bank will provide relevant procurement training and implementation support, and the Systematic Tracking of Exchanges in Procurement (STEP) application will be used to prepare, clear, and update Procurement Plans and conduct all procurement transactions for the Project. Accordingly, all the procurement activities under the proposed Project will be entered into, tracked and monitored online through the system. On the ground support will be provided by CIU’s Procurement Specialist with the assistance of a pool of procurement specialists as necessary while the Bank is also available to provide further support. The POM will include a procurement module to guide procurement implementation (see Annex 1 for details on procurement arrangements). Page 34 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) C. Safeguards 81. Environmental Safeguards (a) Environmental Assessment (OP/BP 4.01). OP/BP 4.01 was triggered at Concept Stage and an Environmental and Social Management Plan (ESMP) and an Environmental and Social Management Framework (ESMF) was prepared for the Project. 42 Consultations were held during the environmental assessment and on the draft instruments. The Project has been screened as Category B as the impacts are considered moderate and readily prevented and mitigated. The ESMP has been prepared for the activities identified during project preparation and mostly relate to the physical works to upgrade the various ports. The ESMF has been prepared to provide a screening and risk management process for sub-projects that are identified following the strategic management planning processes. The key environmental impacts identified in the environmental assessment are: (i) the existing and ongoing risks from oil spills, contaminated stormwater and other pollution discharges to the marine environment further modifying the coral and sand environments nearby; (ii) the significant volumes of scrap metal and other solid waste at the ports; and, (iii) the potential for contaminated fill to be discovered during earthworks. Minor impacts that will require management during construction include noise, dust, traffic-related safety, construction waste and interferences with other port operations. Environmental benefits, such as a reduction in the risk of oil spill and incidental releases of pollutants and waste into the marine environment, will be achieved through the removal of waste, provision of spill kits and booms, staff training and improved port operational procedures. (b) Natural Habitats (OP/BP 4.04). OP/BP 4.04 was triggered at Concept Stage and an assessment of the impact of physical works and technical advisory on the marine ecosystem undertaken. The assessment concludes that the maritime habitat near the ports is highly modified and degraded due to pollution, sedimentation and intermittent dredging. Further impacts on these environments will be negligible. There are coral habitats within the Project’s area of influence, which may be affected in the short term from contaminated stormwater from earthworks and construction activities and in the long term from contaminated stormwater drainage from the ports or spill events. Mitigation measures in the ESMP address the design and operation of drainage and stormwater treatment devices, erosion and sediment control measures, removal of waste, improved oil and fuel management procedures, and improved spill response skills and equipment, and are considered satisfactory for reducing short and long-term risk to these habitats. (c) Physical Cultural Resources (OP/BP 4.11). The baseline surveys carried out as part of the ESIA process did not identify the presence of any physical cultural resources within the Project’s area of influence. All physical works will be within the docks or government leased land and hence, the policy is not triggered. 82. Social Safeguards (a) Indigenous Peoples (OP/BP 4.10). Almost the entire population of each state is indigenous (Chuukese, Yapese, Mehn Pohnpei, Kosraean). To ensure that the principles of the policy are addressed, the Stakeholder Engagement and Consultation Plan has been prepared in compliance with the policy and consistent with an Indigenous Peoples 42The ESMF a nd ESMP were disclosed i n FSM on Ma rch 19, 2019 on the DoTC&I website. The ESMF a nd ESMP were disclosed on April 4, 2019 through the Bank’s external website. Page 35 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) Policy Framework, reflecting a Free, Prior and Informed Consultation approach that addresses the needs of vulnerable people and women. (b) Involuntary Resettlement (OP/BP 4.12). The Project will not involve any new footprints for infrastructure. Accordingly, no land access issues are anticipated with the Project and involuntary land acquisition or resettlement will not be required. (c) Occupational Health and Safety (OHS). All new works procurements will include clear provisions for OHS. Issues related to OHS on construction sites will need to be carefully managed and monitored. These include but are not limited to: access to workers compensation, first aid services, sanitation and hygiene at the work place, use of personal protective equipment (PPE), site safety and accidents as well as implementation of traffic management plan during construction. All contractors will be required to prepare an OHS mitigation plan and provide monthly progress reports on OHS risks. The OHS requires for FSMIP are consistent with the World Bank’s Environmental, Health and Safety (EHS) Guidelines. (d) GBV and Human Trafficking. The Project will implement all relevant recommendations of the GBV Good Practice Note, undertaking specific activities to prevent and respond to GBV and human trafficking, with the aim to reduce the induced impact from the Project as well as enhancing the available response services in project-affected communities. Further information can be found in Section II.D and Annex 3. (e) Grievance Redress Mechanism (GRM). A GRM will be established for the Project to register and manage all grievances, including those received by consultants and contractors, relaying them to the appropriate party for resolution, and advising the complainant of the outcome. A specific GRM pathway will be established for GBV complaints, including the involvement of local GBV service providers. 43 A GRM and Referral Pathway Plan that is agreed by all IAs will be finalized and appended to the POM prior to project effectiveness. The GRM and Referral Pathway Plan will provide detail as to the GRM and referral arrangements and the respective roles and responsibilities of the IAs. Statistics on grievance and complaint resolution will be collected and provided through the Project progress reports. Specifically, the Project will monitor the grievance redress citizen engagement approach through the indicator noted in the 2014 Guidance Note on Results Framework and Monitoring & Evaluation (M&E): grievances registered related to delivery of project benefits that are addressed (%). In addition, consultations were held during project preparation to help inform the Project, with the records contained in the Project ESMF and ESMP. Further information on the GRM and the Stakeholder Engagement Plan is supplied in the Project ESMF and ESMP. 83. World Bank Grievance Redress Service. Communities and individuals who believe that they are adversely affected by a World Bank-supported project may submit complaints to existing project-level grievance redress mechanisms or the World Bank’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed to address project-related concerns. Project affected communities and individuals may submit their complaints to the World Bank’s independent Inspection Panel which determines whether harm occurred, or could occur, because of World Bank non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given 43 No i dentifying i nformation regarding any GBV complaints will be s hared. Page 36 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/en/projects-operations/products-and- services/grievance-redress-service. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org. V. KEY RISKS 84. Overall risk rating - Substantial. The risk ratings for the Project have been identified using the Systematic Operations Risk-Rating Tool (SORT). The main concerns involve: (i) institutional capacity risk, (ii) fiduciary risk, and (iii) environmental and social risk, discussed in detail below. 85. Institutional capacity risk - Substantial. Thin capacity in the public sector presents a risk that could impede the implementation of reform measures supported by the Project. Capacity constraints are typical in small island states, especially in the Pacific, and FSM faces significant institutional limitations. These pose the risk that actions supported by FSMIP may not be implemented as successfully as expected or in the timeframe agreed due to staff changes or unavailability. FSM has the added problem of lack of clarity and possible overlap in the allocation of roles and responsibilities between the national and state governments. Decision-making can be difficult and thus cause further delays. However, the Government is proactively addressing institutional capacity risks through hiring consultants to provide technical and project management support during project implementation. The overlapping responsibility risk will be partially mitigated through the appointment of focal points from each state, who will have coordinated responsibilities with national representatives to help move implementation forward. 86. Fiduciary risk - Substantial. The FM risk is assessed as Moderate, while the procurement risk is assessed as Substantial, and the overall fiduciary risk is therefore assessed as Substantial. There is limited institutional capacity within the IAs and only a small pool of locally-based expertise in World Bank procurement processes. Capacity shortages, particularly in procurement, pose a substantial fiduciary risk for the Project. In recognizing that the lack of capacity affects all World Bank-supported projects, DoFA has established a CIU with the necessary expertise to support procurement and financial management functions to proactively mitigate the fiduciary risks. Key risks relating to procurement will be mitigated with the Procurement Specialist, the Procurement Officer and a reserve pool of specialists in the CIU providing support to the Project, although the task of managing and coordinating procurement activities in the Project will fall under the Project Manager of the PIU in DoTC&I, whose TOR will also include procurement related functions, among other responsibilities. 87. Environmental and social risk - Substantial. The overall environmental risk is assessed as Moderate while the overall social risk, including the GBV risk, is assessed as Substantial. The proposed physical investments have been assessed for impacts on the marine environment, port users, visitors and neighbors. The immediate marine environments are degraded, but there are reef ecosystems nearby that could be affected by sedimentation or discharges to the water during construction activities or future operations. There is potential to reduce the degradation of harbor water quality through improved environmental management at ports and regulations. For residents of outer islands in Chuuk lagoon, safer and more reliable transport between islands would reduce the risks for children traveling to school as well as for men and women who work and/or do business on Weno. Improved safety features and more efficient operations at ports would benefit workers, visitors and passengers. During construction there are safety risks for port users and bystanders, as well as noise and dust nuisances to manage. The social issues related to accommodating workers and their interactions with locals will also be managed under the Contractor’s ESMP. As identified in the gender section, there is also an opportunity to support the maritime sector to reduce the social harm Page 37 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) from GBV, strengthening the work carried out by local NGOs. The Project was screened using the World Bank’s GBV Risk Assessment Tool and was classified within the “Substantial Risk” category. 88. Climate screening. FSMIP was assessed using the World Bank’s Climate and Disaster Risk Screening Tool, which confirmed that the maritime sector in FSM is highly vulnerable to extreme weather and climate events. The assessment revealed that FSM’s current capacity and systems are not sufficient for adequate response to disruptions from climate and geophysical hazards, especially for SAR operations. Options to elevate awareness and preparedness among seafarers will be considered. . Page 38 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) VI. RESULTS FRAMEWORK AND MONITORING Results Framework COUNTRY: Micronesia, Federated States of Federated States of Micronesia Maritime Investment Project Project Development Objectives(s) To improve the safety, efficiency and climate resilience of maritime infrastructure and operations in the Recipient's territory, and in the event of an Eligible Crisis or Emergency, to provide an immediate response to the Eligible Crisis or Emergency. Project Development Objective Indicators T B L R E S U L T _ F R A ME _ _ P DO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 Efficiency Reduction in ca rgo vessel turna round ti mes at project 1,620.00 1,620.00 1,620.00 1,620.00 1,600.00 1,590.00 port(s ) (Minutes) Increase in container ya rd productivity a t project port(s) 0.00 0.00 0.00 0.00 10.00 10.00 (Percentage) Safety and security Project ports fully compliant wi th ISPS requirements 0.00 0.00 0.00 2.00 4.00 4.00 (Number) Climate resilience Project ports rehabilitated with 0.00 0.00 0.00 0.00 2.00 4.00 a t l east one climate resilience Page 39 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) T B L R E S U L T _ F R A ME _ _ P DO Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 mea sure (Number) Ports wi th sectoral a nd conti ngency planning tools 0.00 0.00 4.00 4.00 4.00 4.00 tha t a ddress natural disasters a nd cl imate change (Number) PDO Table SPACE Intermediate Results Indicators by Components R E S UL T I F R A ME T B L O Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 Maritime Infrastructure Area of ca rgo ya rd hardened at Pohnpei a nd Chuuk Ports 0.00 0.00 0.00 0.00 11,379.00 11,379.00 (Squa re Meter(m2)) Number of project ports with dra i nage measures 0.00 0.00 0.00 0.00 2.00 4.00 i mplemented (Number) Energy efficiency recommendations 0.00 0.00 0.00 0.00 2.00 4.00 i mplemented (Number) Maritime Safety and Security ISPS recommendations i mplemented against identified 0.00 0.00 0.00 20.00 50.00 100.00 s hortcomings (Percentage) Project ports with safety s ol utions i mplemented 0.00 0.00 0.00 2.00 3.00 4.00 (Number) Page 40 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) T B L R E S U L T _ F R A ME _ O _ I Indicator Name DLI Baseline Intermediate Targets End Target 1 2 3 4 FSMIP i mplementation of SOP on tra fficking referral servi ce No Yes Yes Yes Yes Yes (Yes /No) Women employed by FSMIP on 0.00 0.00 5.00 10.00 15.00 15.00 Sea Ports (Percentage) Percentage of contractor staff tra i ned on GBV & Codes of 0.00 100.00 100.00 100.00 100.00 100.00 Conduct (Percentage) Citizen Engagement Gri eva nces registered related to del ivery of project benefits 0.00 100.00 100.00 100.00 100.00 100.00 tha t a re addressed (Percentage) Contingent Emergency Response Component Adopti on of a CERC ma nual gi ven the risk of natural No Yes Yes Yes Yes Yes di s aster (Yes/No) IO Table SPACE UL Table SPACE Monitoring & Evaluation Plan: PDO Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Reduction in cargo vessel Project DoTC&I (Pohnpei); Port turnaround times with a Every 6 Measurement at Reduction in cargo vessel turnaround progress Authority or relevant target reduction of 30 months Project port(s) times at project port(s) reports State Department minutes. Starts from the time of pilot boarding to Page 41 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) vessel departure from Weno Port. Container yard productivity at Pohnpei and Chuuk Ports Project Every 6 Measurement at Increase in container yard productivity at is the number of containers progress DoTC&I months Project port(s) project port(s) moved per hour. The reports current baseline is 10 moves/hour. Project Cumulative and includes Every 6 Independent Project ports fully compliant with ISPS progress DoTC&I Pohnpei, Chuuk, Kosrae and months assessment requirements reports Yap Ports. A cumulative measure of repairs to existing berths or apron facilities, including to Stocktake conducted underwater quay structures, Project confirming climate Every 6 Project ports rehabilitated with at least installation of drainage progress resilient measures in DoTC&I months one climate resilience measure systems, improvements to reports detailed designs were anchoring and fendering implemented systems, acquisition of floating pontoons, SOPs for site management. Project Stocktake of strategic Ports with sectoral and contingency Every 6 Refers to strategic port progress plans and CERC-OM DoTC&I planning tools that address natural months plans and CERC manual. reports approved. disasters and climate change ME PDO Table SPACE Page 42 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) Monitoring & Evaluation Plan: Intermediate Results Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection Square meters of cargo yard Project Every 6 Area of cargo yard hardened at Pohnpei hardened with concrete, progress Site inspection DoTC&I months and Chuuk Ports concrete blocks or reports pavement. Cumulative number of Project Every 6 Number of project ports with drainage drainage systems installed progress Site inspection DoTC&I months measures implemented or improved at Pohnpei and reports Chuuk Ports. Number of energy efficiency Stocktake based on site Project DoTC&I (Pohnpei); Port recommendations Every 6 inspection to ensure Energy efficiency recommendations progress Authority or relevant implemented, such as PV months implementation of implemented reports State Department systems, switch to LED recommendations lighting systems. Measures implemented at Stocktake of measures Project ports to comply with Project Every 6 employed that ISPS recommendations implemented ISPS requirements, such as progress DoTC&I months address identified against identified shortcomings fencing, lighting, CCTV, reports shortcomings back-up generator, hardware/software. Stocktake of measures employed that were Cumulative number of Project Every 6 identified in the Project ports with safety solutions AtoNs, fenders, bollards, progress DoTC&I months Maritime Safety and implemented ladders and cleats installed reports Security Needs or repaired. Assessment FSMIP implementation of SOP on Implementation of SOP on Every 6 Project Verification assessment DoJ trafficking referral service trafficking referral service months progress Page 43 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) reports Increase in percentage of women employed in skilled positions, such as technical Project Every 6 Stocktake of women operations, security, progress DoTC&I Women employed by FSMIP on Sea Ports months employed at the ports administration and reports management as a result of project activities e.g., technical training. Project Percentage of contractor Every 6 Percentage of contractor staff trained on progress Stocktake assessment DoJ; DoTC&I staff trained on GBV & months GBV & Codes of Conduct reports Codes of Conduct Project Use of GRM system Grievances registered related to delivery A measure of citizen Continuous progress that tracks grievances DoTC&I of project benefits that are addressed engagement reports lodged and addressed Verification of receipt Project of WB No Objection to Every 6 Adoption of a CERC manual given the risk progress FSMIP CERC-OM and to DECEM Adoption of a CERC manual. months of natural disaster reports any updates to the manual ME IO Table SPACE Page 44 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) ANNEX 1: Implementation Arrangements and Support Plan COUNTRY: Micronesia, Federated States of Federated States of Micronesia Maritime Investment Project Project Institutional and Implementation Arrangements 1. FSMIP will be implemented over a five-year period following Board approval. DoFA will be the Executing Agency, while DoTC&I and DoJ will be IAs, working closely with each of the states. DECEM will serve as IA for Component 4 on the CERC. As each port is under its respective State’s control, and to ensure good technical coordination, focal points will be appointed in each State to work on and manage day-to-day FSMIP activities associated with its port, and to liaise with the central DoTC&I. A focal point, or champion, will also be identified in DoJ to implement FSMIP’s anti-trafficking component. 2. Because of its leading role in promoting anti-trafficking measures, the Sub-component on trafficking in persons will be implemented by DoJ. Although this adds an additional IA, the additional complexity is minimal as the CIU would extend support for the fiduciary and safeguards processes associated with this activity. It would also maximize impact by ensuring that the most appropriate organization is responsible for carrying out this important work. 3. A PIU will be established within the DoTC&I and include a Project Manager with technical advisory support, as needed. The PIU will be supported by CIU staff including an FM Officer, a Procurement Specialist, Procurement Officer, Safeguards Specialist and Safeguards Officer, who will support the implementation of various IDA-financed projects, including FSMIP. The PIU under DoTC&I will coordinate the implementation of the Project with the states, and the port authorities in a manner that is to be set forth in the Implementation Agreements that outlines the roles of each organization. The Project Manager under DoTC&I will support the implementation of FSMIP and will be responsible for working collaboratively with the IAs, states and the Port Authorities. The CIU Program Manager will oversee overall project implementation including, managing shared project services, coordination with the CIU, as well as monitoring and reporting on project implementation. 4. Project Implementation Agreements will be executed prior to the commencement of Project activities under Components 1, 2.1 – 2.3, 2.4 (a) and (b), 2.4(c)(ii) – (v), 3.2, 3.3, 3.5, 3.6. 3.8 and 3.9 to ensure clarity and agreement between all relevant parties on implementation roles and responsibilities. Four Project Implementation Agreements will be required to help govern the Project activities in each State, with one Project Implementation Agreement for each of the following groups: (a) Department of Transportation, Communication, and Infrastructure, the Kosrae State Government, and the Kosrae Port Authority; (b) Department of Transportation, Communication, and Infrastructure, the Pohnpei State Government, and the Pohnpei Port Authority; (c) Department of Transportation, Communication, and Infrastructure, the Chuuk State Government, and the Chuuk State Department of Transportation, Communication, and Infrastructure; and, (d) Department of Transportation, Communication, and Infrastructure, the Yap State Government, and the Yap State Department of Public Works and Transportation. Page 45 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) 5. During project implementation, the CIU will assist the IAs with the procurement and FM functions and provide input and guidance on environmental and social aspects (safeguards). All contracts with consultants, contractors and suppliers will be signed by the IAs during project implementation. Each IA will sign off on all consultant and contractor invoices and request DoFA to make payments. However, before doing so, the IAs will consult with each State focal point to ensure services and works have been completed and are satisfactory, where necessary. These arrangements will be detailed in the POM. 6. To ensure the four states are adequately represented in decision making, a PSC will be established and chaired by DoTC&I. The Secretary of DoFA will be a member, along with a member appointed by the Governor of each of the four states. The PSC will provide general oversight and policy direction to FSMIP stakeholders during project implementation, convene key stakeholders in the event of disagreement, and periodically review project progress. The PSC will have a central role in allocating project funds after the conditional assessments and reports on investments required at each port are available. Financial Management 7. The FM assessment was conducted in accordance with the “Principles-Based Financial Management Practice Manual” issued by the Board on March 1, 2010. Under the Bank’s Directive: Investment Project Financing, the borrower and IAs are required to maintain financial management systems, including accounting, financial reporting, and auditing systems, adequate to ensure accurate and timely information regarding project resources and expenditures. Overall, the assessment found that the proposed project FM arrangements meet the FM requirements stipulated in OP/BP 10.00. DoFA has gained some experience with managing World Bank projects and has recently established the CIU with experienced and qualified staff. It is recommended that FSMIP finance an FM Officer or equivalent position to meet the needs of the CIU to enable it to maintain adequate resources to meet the FM requirements for all World Bank-financed projects. The POM will include a section on budgeting, disbursement, and financial management arrangements. The sharing of services with other World Bank projects will require processes to ensure that expenditures are properly recorded and documented, and associated funds flows closely monitored. Training on the FM requirements of the Project will be conducted and monitoring of compliance to FM processes will be a regular part of the review missions. 8. FM Implementation Arrangements. The CIU under DoFA maintains the financial accounts and provides FM support to World Bank projects and hence will be responsible for the fiduciary aspects of this project. The CIU is headed by a Program Manager with a Project Accountant and two support staff. A Project Accountant has been financed to meet the needs of the CIU to enable it to maintain adequate resources to meet the FM requirements of all WB-financed projects. 9. Budgeting. The IAs will be responsible for preparing and monitoring the budgets for their respective activities with support from the CIU in the preparation and regular reviews of the Project budget. Foreign-assisted projects greater than US$50,000 are reviewed by Congress for approval by resolution. When the resolution is passed, allotments are entered into the Government’s accounting system. 10. The IAs will prepare annual work plans and budgets with appropriate levels of detail (for example, Component or Page 46 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) Category, whichever is deemed most relevant and useful).44 The CIU will support the IAs by reviewing this document and reporting on the analysis of budget versus actual expenditure, consolidate and incorporate this into the Project reports for each calendar semester for FSMIP. DoFA will submit the Project reports for each calendar semester along with the annual work plans and budgets to the World Bank. 11. Accounting Arrangements. GoFSM currently maintains financial accounts in FundWare, a software with the following fully integrated modules: accounts payable, accounts receivable, payroll and general ledger. The chart of accounts enables segregation of project transactions and classification by component. While it is envisaged a new financial reporting system will be introduced by Government during the life of FSMIP, this will not reduce the capacity of the current reporting requirements. A new chart of accounts will be developed for the new Financial Management Information System (FMIS) and the Project accounts will be incorporated in the new system. A separate cost center will be opened to account for transactions under the components to be implemented under this project. The new FMIS will include capability to account for World Bank-financed projects and it is anticipated that there will be a transition period during which both the existing FundWare and the new FMIS will be running in parallel after which the FundWare system will be decommissioned. Project transactions will be entered by the CIU directly into the Government’s accounting system. With the current staffing of CIU and the continuing expansion of the portfolio of World Bank-financed projects in FSM, the CIU will require additional staff over time. The Project will finance additional staff, including an FM Officer or equivalent position to enable the CIU to meet all its FM obligations. 12. Internal Controls. The FSM Financial Management Regulations dictate the Government’s internal control framework and provide adequate segregation of duties, asset controls, and approval and authorization controls. The POM will include a section on budgeting, disbursement, and financial management arrangements that will reference relevant government legislation and procedures. The POM will provide guidance on project internal controls either specifically required for the Project or not covered in sufficient detail in the Regulations. The CIU is also preparing a guidance note to be included in the POM on the role and responsibilities of the CIU for the areas of FM and procurement to ensure consistency across the portfolio. For the FM section, this will include a template for performance reviews, process for approving OCs, monitoring and management of travel advances as well as general processes for transactions. 13. Funds flow. One (1) segregated designated account will be opened in USD in a commercial bank or financial institution acceptable to the Bank. The Bank funds will flow from the World Bank directly into the designated account (DA), to be managed by DoFA. Project expenditures will be tracked through the Government’s accounting system and paid from the treasury account. Prior to completing a replenishment Withdrawal Application, the equivalent funds expended from the treasury account will be transferred from the DA into the treasury account, hence the DA will be replenished by that amount. Adequate documentation will be required to be maintained to ensure easy reconciliation of payments made from the treasury account to payments authorized by the Project. For larger project payments, the direct payment disbursement method can be chosen by DoFA and the Withdrawal Application enables funds to flow directly from the World Bank to the supplier. Where direct payments are used as the disbursement method, the transactions must be incorporated into the Project accounts. To facilitate the tracking of multiple projects, and the associated funds management aspects, it proposed that the ‘statement of expenditure’ method be used when documenting project expenditures and replenishing the designated accounts. 44 In no ca se will detailed information regarding cri minal investigations be provided. Page 47 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) 14. Periodic financial reporting. Financial reporting will be fully integrated into the Government’s accounting system. The Project will be allocated a cost center, and sub-accounts will be created to reflect the specific activities. Reports will initially be generated from the FundWare accounting system and will ultimately be generated by the new FMIS. The financial reports will include an analysis of actual expenditure for the current period, year to date, and for the cumulative to date, plus outstanding commitments, compared against total project budget. The Project will prepare Interim Financial Reports (IFRs) in USD and in the format agreed with the Bank, to be submitted no later than 45 days after the end of each semester. 15. External audit. The Audit of project funds will be part of the auditing of National Government accounts as project funds will be fully integrated therein. Audited National Government Accounts will be submitted to the Bank within nine (9) months of the end of each fiscal year. Subject to the inclusion of the following note in the national accounts produced during the life of the Project, no separate project audit will be required. The Bank reserves the right to request additional information to supplement information provided in the National Government Accounts and to request a project audit if the required note is not included in the National Government Accounts. Currently, the audit of the National Accounts is sub-contracted by the Public Auditor to a private contractor. DoFA, the Public Auditor, and the Bank will agree on the information required to be disclosed. The National Accounts will be published on the Office of the Auditor General’s web site. “Note X. World Bank Financing (a) GoFSM received financial support from the World Bank IDA Grant No. XX dated mm/dd/yy to support implementation of [describe]. Table 14. Summary information on transactions taking place during the year is as follows: Current Year Preceding Year Cumulative US$ US$ US$ Amounts received during the year X X X Expenditures during the year (X) (X) (X) (b) The total amounts received from World Bank IDA Grant No. [xx] since its commencement were [xx] as at September 30 [xx]. (c) The proceeds of the World Bank grant have been expended in accordance with the intended purposes as specified in the Grant Agreement.” Disbursements 16. Disbursement Methods and Supporting Documentation Arrangements. Disbursements under the Project may be under any of the following methods: (a) advances into and replenishment of the DA; (b) direct payment; (c) reimbursement; and, (d) Special Commitment. Direct payments will be used solely for large contracts. 17. Designated Account. Project funds will be disbursed directly into a DA in a commercial bank, acceptable to the World Bank. The DA will be operated on an advance basis and the initial advance will be made through the completion and submission of a withdrawal application. The DA will be held in US dollars. Subsequent replenishments will be made through the submission of withdrawal applications, along with details on the use of funds previously advanced, based on Statements of Expenditures and bank reconciliation of the DA. Page 48 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) 18. The disbursement table showing categories of expenditure and amounts eligible for financing are shown below and are also to be found in the legal agreement. Please note in the case of discrepancy, the version referred to in the legal agreement takes precedence over the table shown below. Table 1.1 Eligible Expenditures Percentage of Amount of the Amount of the Grant Expenditures to be Category Grant Allocated Allocated (Expressed in SDR) Financed (Inclusive of (Expressed in USD Taxes) equivalent) (1) Goods, non-consulting services, consulting services, Operating Costs, and Training and Workshops 4,750,000 6,600,000 100 for Part 2.4(c)(i), 3.1, 3.4, and 3.7 of the Project (2) Goods, works, non-consulting services, consulting services, Operating Costs, and Training and Workshops for Parts 1, 2.1, 2.2, 2.3, 22,130,000 30,890,000 100 2.4(a) and (b), 2.4(c)(ii) – (v), 3.2, 3.3, 3.5, 3.6, 3.8 and 3.9 of the Project (3) Emergency Expenditures under 0 0 100 Part 4 of the Project Amount payable pursuant to Section (4) Refund of Preparation Advance 720,000 1,000,000 2.07(a) of the General Conditions Total Amount 27,600,000 38,490,000 19. Programmatic Preparation Advance. A Programmatic Preparation Advance is in place for FSM and has been utilized to support the preparation of FSMIP by: (i) financing stakeholder engagement and consultations and the preparation of safeguard documents; and, (ii) financing a Project Manager and Procurement Specialist for the preparation and implementation readiness of the Project. Table 1.2 Funding Sources Amount (expressed Amount (expressed in Source Share of Total (%) in SDR) USD equivalent) World Bank – National IDA grant 6,900,000 9,620,000 25 World Bank – Regional IDA grant 20,700,000 28,870,000 75 Page 49 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) Total 27,600,000 38,490,000 100 20. Disbursement conditions. No withdrawals should be made: (a) for payments made prior to the Signature Date; (b) under Category (2) for Eligible Expenditures, unless and until Recipient has executed all Project Implementation Agreements in accordance with Section I.B. of Schedule 2 to the Financing Agreement, to the satisfaction of the Association; and, (c) under Category (3) for Emergency Expenditures, unless and until the Association is satisfied that all of the conditions listed in Section I.D.2 of Schedule 2 of the Financing Agreement have been met in respect of said expenditures. Procurement 21. Institutional arrangement for procurement. The IAs will be responsible for the procurement implementation of the Project. The CIU will provide support through its Procurement Specialist, Procurement Officer and a pool of procurement specialists as necessary. 22. Applicable procurement regulation. Procurement for the proposed project will be carried out in accordance with the World Bank Procurement Regulations for IPF Borrowers (Procurement Regulations), dated July 2016 (revised November 2017 and August 2018), and the provisions stipulated in the Financing Agreement. Procurement activities will use the Bank’s Standard Procurement Documents (SPD) where required or templates developed for the Project. A Project Implementation Guidance (ProcGuide) prepared for fragile and small states in the Pacific will also provide useful references and documents for use in the procurement implementation. 23. Procurement risk assessment. A procurement risk assessment has been carried out (refer to section V. Key Risks), and key procurement risk areas include: (a) Limited capacity hinders procurement and contract management; (b) Staff turnover in small team leads to loss of momentum; (c) Poor response to market approaches for civil works packages; (d) Poor performance by individual consultants causes implementation delays; (e) Equipment recipients lack capacity to deal with damage / missing parts, and other issues on arrival and installation; and, (f) Investments not supported by effective maintenance. 24. To help mitigate these risks, the following mitigation measures have been agreed: (a) The Project Manager will work closely with the CIU Procurement Specialist and other support staff. Major contracts listed in the Project Procurement Strategy for Development (PPSD) have a focused procurement arrangement and approach and will have a Contract Management Plan. The CIU will provide training, and ongoing coaching, in procurement and contract management. DoTC&I will work with the CIU to establish contract monitoring and recordkeeping system to ensure continuity of processes. (b) Contract opportunities to be advertised internationally in UNDB and other relevant websites including direct invitation to regional contractors’ associations. Particular care will be taken to ensure correct Category Codes are used in STEP to enable accurate market targeting. (c) DoTC&I to undertake periodic performance review of individual consultant contracts. Recipients to have procedures for dealing with shortages/damages. CIU to provide awareness and training, to PIU and others, Page 50 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) on International Commercial Terms (INCOTERMS), insurance, securities etc. (d) Sustainability of investments to be included in capacity building activities. 25. Procurement types. The various types of procurements to be financed by the proposed IDA grant and indicative cost estimate is detailed in the following table and in more detail below. Table 1.3 Procurement Types and Selection Methods Type of Procurement Selection Methods RFP, RFB, RFQ 1. Works (US$25.36 million equivalent) 2. Goods & Non-consulting Services (US$2.9 million RFB, RFQ, DIR equivalent) 3. Consulting Services - Firms (US$2.86 million QCBS, QBS, FBS, CQS & CDS equivalent) 4. Consulting Services - Individuals (US$4.75 million INDV (Open, Limited and Direct) equivalent) 26. Procurement of works. May include maritime infrastructure such as improvement of primary terminal storage areas, rehabilitation of utilities, upgrading of terminal superstructure, and safety and security works such as repairs to berths, aprons, quay walls, pilings; and replacement or repair of fencing, gates and lighting. 27. Procurement of goods. May include navigational aids, and miscellaneous safety and security equipment. 28. Procurement of consulting services (firms and individuals). May include design and supervision of civil works, review of institutional and governance arrangements, needs assessments, strategic planning, capacity building initiatives, private vessels oversight in Chuuk lagoon, and project management. 29. Frequency of procurement supervision. In addition to the prior review to be carried out by the World Bank, implementation support missions will be undertaken at least once per year. One in five procurement packages not subject to World Bank prior review will be examined ex post on an annual basis. 30. Procurement Plan. A draft Procurement Plan for the first 18 months has been prepared for Project. Once the Project is effective the Procurement Plan will be updated to cover the next 12 months and will be regularly updated at least once every 12 months. This is consistent with the arrangement detailed in the PPSD. Environmental and Social (including safeguards) 31. Environmental and social safeguards will be the responsibility of the IAs, and they will be fully supported by the CIU Safeguards Advisor. The CIU Safeguards Advisor will work in a team with the Project Manager and the State focal points to ensure that sub-projects are screened and scoped, environmental and social assessments are carried out prior to the completion of detailed designs, environmental and social clauses and the relevant safeguards instrument are included in bid documents and consultant’s ToR, environmental and social protection and mitigation measures are implemented by contractors, and that monitoring, grievance management, incident management and other activities are carried out in accordance with the safeguards instruments. Page 51 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) 32. Specialist consultants may be required on an ad hoc basis by the CIU to prepare environmental and social assessments, safeguards instruments and/or to conduct specialist supervision or monitoring services. 33. Human Trafficking. FSM’s DoJ leads FSM’s efforts to address human trafficking and exceed minimum standards under the TVPA. Presently FSM is ranked as a Tier 2 country, meaning that GoFSM does not fully meet the TVPA’s minimum standards, based on the Palermo Protocol, but are making significant efforts to bring themselves into compliance with those standards. 45 FSM has a full-time Anti-human Trafficking Coordinator position and three Assistant Anti- human Trafficking Coordinators whose roles include the identification of and provision of services to human trafficking victims. These positions are also involved in raising awareness and training relevant agencies in the identification and reporting of suspected human trafficking activities and referral of suspected human trafficking activities for criminal investigation. Furthermore, the Micronesia Resource and Research Institute provides training and conducts awareness raising activities throughout the country. Monitoring and Evaluation 34. Project M&E will be conducted via periodic monitoring through semi-annual reports that track progress in terms of distribution of inputs, disbursement of funds, and achievement of targeted indicators as outlined in the Results Framework (Section VI). 35. The Bank will provide implementation support for the Project on an on-going basis and visit FSM every 3 – 6 months to monitor and evaluate progress. 36. The Project will undergo a mid-term review no later than three years after the effective date of the Finance Agreement. Strategy and Approach for Implementation Support 37. FSMIP will provide ongoing and regular implementation support. The support plan is based on previous experience from other projects in FSM as well as the Project’s risk profile. The Government has had experience with World Bank projects and is familiar with the procedures and requirements. Additional support will be provided through the DoFA CIU. 38. DoFA, in consultation with the IAs, will determine the appropriate timing of semi-annual reviews, taking into consideration the availability of participants. The World Bank implementation review will cover non-technical aspects of the support including: (a) FM; (b) procurement; (c) implementation arrangements; and, (d) safeguards. In addition, field visits will also be undertaken to project sites. To the greatest extent possible, the World Bank team will accommodate any written request for ‘as-needed’ support for the Project, including fiduciary aspects. 39. Each implementation review mission will result in the production of a joint aide-memoire that will be discussed at a wrap-up meeting to be chaired by DoTC&I. It is envisaged that the aide-memoire will provide an overall view of the current situation relating to project implementation, including findings and observations from the World Bank. Representatives from the relevant government departments will be invited to attend the wrap-up meetings. 45 https ://www.state.gov/j/tip/rls/tiprpt/2018/index.htm Page 52 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) Furthermore, any adjustment requiring more frequent reviews will be discussed, agreed upon, and documented in the Aide-Memoire. 40. A mid-term review mission will be held not later than three years after the effective date, or such other period as may be agreed, and provides an opportunity to review the Project and take stock of implementation progress. The Recipient shall prepare and furnish to the Association, at least one month before the date of the mid-term review, a report, integrating the results of the monitoring and evaluation activities performed and, on the progress, achieved in the carrying out of the Project during the period preceding the date of such report and setting out the measures recommended to ensure the efficient carrying out of the Project and the achievement of the objectives. 41. Following the mid-term review adjustments to project support may be required, including a project restructuring and/or possible additional financing from any other sources based on the implementation experience. The World Bank task team will work with DoFA and DoTC&I to clarify the requirements necessary to effect any changes. Any changes to the Project that require amendments to the Financing Agreement will require a formal request from the Government’s signatory to the legal agreement. 42. Six months prior to the closing date of the Project, the Government will commence the preparation of its Implementation Completion and Results Report (ICR). The World Bank ICR author will participate in the final implementation review and will gather the necessary information to help prepare the ICR. Implementation Support Plan and Resource Requirements 43. Missions to support implementation for FSMIP will be carried out every 3 – 6 months. At least once per year the missions will include technical, fiduciary and safeguards team members, who will provide input into infrastructure design and construction, carry out post reviews on contract management, review safeguards compliance, and provide formal training where required. The implementation support plan will be reviewed annually to ensure that it meets the support needs of the Project. The estimated level of annual support needed to implement FSMIP is identified in the table below. Table 1.4 Implementation Support Plan Time Focus Skills Needed Resource Estimate Task Team Leader Operations Officer Maritime Engineer Port Institutional Specialist Project launch and Procurement Specialist First twelve months start-up Financial Management Specialist Environment Safeguards Specialist Social Safeguards Specialist Gender & Anti-Trafficking Specialist Administrative Support 12-60 months Project Task Team Leader Page 53 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) implementation Operations Officer Maritime Engineer Port Institutional Specialist Procurement Specialist Financial Management Specialist Environment Safeguards Specialist Social Safeguards Specialist Gender & Anti-Trafficking Specialist Administrative Support Other Skills Mix Required Skills Needed Number of Staff Weeks Number of Trips Comments Task Team Leader 8 per year 3 per year Operations Officer 8 per year 3 per year Maritime Engineer 4 per year 2 per year Procurement Specialist 4 per year 2 per year Gender & Anti-Trafficking Specialist 4 per year 2 per year Financial Management Specialist 3 per year 2 per year Environment Safeguards Specialist 3 per year 2 per year Social Safeguards Specialist 3 per year 2 per year Port Institutional Specialist 3 per year 2 per year Administrative Support 3 per year 0.5 per year Page 54 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) ANNEX 2: Detailed Project Description COUNTRY: Micronesia, Federated States of Federated States of Micronesia Maritime Investment Project FSMIP Investments and Activities 1. The SDR 27.6 million (US$38.49 million equivalent) project will improve the safety and efficiency of maritime operations and enhance resilience of maritime transport and of local communities to the impacts of climate change through: (i) investments to improve port infrastructure and maritime services; (ii) activities to strengthen safety and security of navigation and ports operations; and, (iii) technical assistance to supervise works, support project implementation, and develop local capacity. A CERC is also included within to enable FSMIP funds to quickly be reallocated to respond to emergency events. 2. It is important to note that while the types of activities and investments to be carried out under FSMIP are known, the extent of the works that can be completed will depend on the results of the strategic planning exercise (Sub- component 3.4) and the maritime infrastructure needs assessment (Sub-component 3.1), both of which will be carried out during the first two years of implementation. As such, the cost of proposed investments will not be known until FSMIP is under implementation, and the available funding may not be sufficient to finance all proposed investments. 3. Component 1: Maritime Infrastructure (US$20.50 million). Component 1 will improve the safety and efficiency of port operations, as well as enhance the resilience of maritime structures to natural disasters and climate change impacts through the integration of planning, design, construction, rehabilitation and operation of facilities. Activities to be financed will be selected and prioritized by the PSC in accordance with the POM, in accordance with the recommendations from the Strategic Planning activity to be undertaken under Sub-component 3.4 and the maritime infrastructure needs assessment to be undertaken under Sub-component 3.1. The following investments for Kosrae, Pohnpei, Chuuk and Yap Ports would be eligible for funding under FSMIP: 1.1 Surfacing and Drainage at Kosrae, Pohnpei, Chuuk and Yap Ports. (a) Sections of container yards at Okat (Kosrae), Pohnpei Port, Weno (Chuuk), and Tomil (Yap) Ports are unpaved and undrained, which makes the container loading, offloading and storage operations less efficient, slower and more vulnerable to increasingly frequent flooding, breakdowns, including damage to vehicles, containers and their contents. The unpaved surfaces also increase sediment load in port surface water that discharges into the surrounding environment. FSMIP will provide operational areas with paved/concreted surfaces to improve operations. (b) The specific improvements at each yard will be subject to detailed design to meet different requirements and to optimize their cost effectiveness, but generally the work will include new hard surfacing in either (i) bitumen/asphalt; (ii) reinforced concrete; or, (iii) segmental concrete blocks. Given the weight of containers and the equipment used to move them, the use of reinforced concrete or segmental concrete blocks should be considered, since they carry several technical and cost advantages. Well-designed drainage of the paved area will be critical, since the new surface will be impervious and run-off volumes will increase significantly, hence improving structural resilience against increasing extreme rainfall and flooding. Drain entry points will need to withstand high point loads and outfalls will include sediment and pollution traps that will require regular maintenance. Page 55 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) (c) Some ports have significant volume of scrap lying in the yards, in the form of old containers, tires, vehicles, boats and equipment, all of which will need to be moved, or preferably removed, prior to the surfacing works commencing. It should be investigated how best to deal with this problem. A possible option would be to include the cutting up, safe removal and export of the scrap as a separate contract under the Project. (d) Since the container yards are operated by private stevedoring companies, surfacing and drainage works will need to be carried out in phases to ensure that container operations can continue unobstructed throughout the works, and construction activities closely coordinated with the firm to avoid conflicts between the operations and the works. 1.2 Rehabilitate Utilities. This will include the rehabilitation of utilities related to water supply, sewerage and power supply in container storage areas. The maritime infrastructure needs assessment (Sub-component 3.1) to be undertaken early in project implementation will prioritize interventions under this Sub-component. 1.3 Upgrade Terminal Superstructure. Upgrades may include buildings and facilities in the primary cargo handling area, warehousing, and refrigerator container connection points (where responsibility is with the Government authority), but potential activities have yet to be defined. 4. Component 2: Maritime Safety and Security (US$7.55 million). This component will strengthen safety and security of maritime transport and support better climate resilience of maritime facilities and for local communities by improving the reliability of connections between FSM states and outer islands for access to food, water, fuel, and emergency response services. The following investments for Kosrae, Pohnpei, Chuuk and Yap Ports would be eligible for funding under FSMIP: 2.1 Upgrade Berthing and Apron Facilities. For FSMIP ports, this is likely to include repairs to quay wall structures/pilings, repairs to aprons, and replacement or repair of quay furniture (e.g. fenders, bollards, ladders) which are in various states of condition. Activities to be financed will be based on recommendations from the safety and security needs assessment to be prepared under Sub-component 3.1, as selected and prioritized by the PSC in accordance with procedures and criteria detailed in the POM. 2.2 Compliance with ISPS Requirements. Upgrade/provide fencing, gates, lighting, back-up generators and CCTV systems to comply with ISPS requirements where applicable. 2.3 Replace/Upgrade AtoNs. Based on a condition survey of existing AtoNs through the Maritime Safety and Security Needs Assessment to be conducted under Sub-component 3.1, practical measures will be implemented to improve navigational safety. It is expected that AtoNs would be repaired, installed and/or upgraded for all principal ports in the four states, including fixed, floating or virtual/electronic AtoNs, and leading lights. 2.4 Safety and Security Improvements. (a) Spill Kits for Project Ports. Spill kits and associated training for FSMIP ports and 150m containment boom system for Pohnpei Port. (b) SAR Equipment and Safety Devices. This would include: (i) financing of equipment and safety devices and training to enhance communications networks, both onshore and onboard, erecting durable pictorial signs with key water safety messages in the local language on key outer islands and waterways, data storage systems; and, (ii) support for initiatives to elevate public awareness about safe boating practices Page 56 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) and provide basic safety devices, such as radar reflectors and safety gear (personal flotation devices, etc.), for small domestic fishing craft and associated training. (c) Supporting and elevating awareness and prevention of human trafficking and GBV to address potential risks and impacts of the Project by: (i) conducting a needs assessment on trafficking and GBV to identify the availability of services; (ii) conducting training activities for Project workers; (iii) conducting community awareness raising activities; (iv) supporting survivors of trafficking and GBV through the provision of counselling, healthcare, and police focal points; and, (v) establishing a referral pathway for survivors of trafficking and GBV. 5. Component 3: Technical Assistance for Port Planning and Project Management (US$10.44 million). Component 3 will enhance the capacity of Government to manage maritime assets in a more safe, efficient and climate resilient manner through technical assistance designed to strengthen the planning and management of port facilities, improve coordination of emergency response systems, elevate awareness of ISPS and SAR requirements, and implement the Project activities: 3.1 Maritime Safety and Security Needs Assessment and Maritime Infrastructure Needs Assessment. The Maritime Safety and Security Needs Assessment will include three key areas: (i) identifying gaps and actions needed for FSMIP ports to become compliant with ISPS requirements; (ii) conducting inventories of quay structures and furniture that relate to safety such as bollards, cleats, fenders and ladders and recommend actions to bring them in-line with international standards; and, (iii) conducting inventories of the present system of AtoNs at FSMIP ports including buoys, markers, harbor lights and identify system elements that are missing, damaged, in states of decline, or in need of upgrade, and to recommend measures to repair, replace or upgrade the AtoNs so that they are aligned with international standards. This assessment will inform Component 2. The Maritime Infrastructure Needs Assessment will involve (i) an assessment of maritime infrastructure under Component 1 to identify urgent needs; (ii) recommend upgrades to improve the safety, efficiency, and resilience of the infrastructure; and (iii) provide a framework that prioritizes the recommended investments across the Project ports. 3.2 Design and Supervision. Funding of a design and supervision consultancy to design more efficient, safe and climate resilient works and oversee contractor(s) hired to undertake those designs. The consultancy will be responsible for both the detailed design of components for construction through conventional works contracts, and the concept design and oversight of design-build contracts for specialist construction and installation work where this is deemed appropriate. 3.3 Review of Institutional and Governance Structures for Port Management. Carry out a review of policies, legislation, institutional arrangements, and roles and responsibilities of principle stakeholders involved in the maritime sector at the federal and state levels. The review will recommend ways to strengthen oversight and streamline coordination, particularly around key areas of concern including climate resilience, safety and security. 3.4 Strategic Planning. (a) Port strategic planning including developing strategic plans for each state’s main port, considering both existing and long-term commercial opportunities and likely impacts of climate change and natural disasters. Optimal layouts and configurations of ports, including, but not necessarily limited to cargo yard Page 57 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) activities will be identified, as well as key GoFSM responsibilities and services for improving operational efficiency and safety. (b) Review of port operations based on analyses of current cargo and container handling facilities and equipment related to international and domestic vessels, including current practices related to security and compliance with ISPS requirements, as well as customs and immigration policies and practices. Forecast future cargo and containers volumes and passenger numbers, including possible commercial opportunities, and assess the financial and environmental sustainability of operations under different scenarios. (c) Based on opportunities and needs and considering designs for works, identify standards and good practices to strengthen and maintain port and terminal infrastructure and assets. (d) Overall, this assessment will inform Components 1 and 2. 3.5 Capacity Building Initiatives. Design and conduct training and specialized technical advisory services to develop local capacity to operate and regulate the sector under a revised governance structure; ensure compliance with ISPS requirements; better manage SAR, and the response, containment and clean-up of spills (such as the use of spill kits and boom containment systems). 3.6 Outer Island Services and Chuuk Lagoon. Assess options to better organize and strengthen oversight of private vessels operating in Chuuk Lagoon for the purposes of safety, efficiency and climate resilience. 3.7 Project Management. Provide funding for FSMIP implementation, including support for DoTC&I for strengthening the capacity of the CIU and establishing and supporting the PIU. This will include financial support to hire qualified staff to oversee technical aspects of the Project, as well as support procurement, financial management, and safeguards. This would include short- or long-term technical and advisory support (i.e., consultants). 3.8 Employment Opportunities for Women. To help close gender employment gaps, DoTC&I will develop and implement a set of enabling policies and practices, which together help women enter and progress through maritime careers. As part of this work, DoTC&I will be supported to develop an equal opportunities strategy, which could then be integrated into its human resources policy and processes. In addition to internal process improvements, a budget will be set-aside to support relevant technical training and unpaid internship opportunities 46 for women in DoTC&I and the maritime sector, thereby building a pipeline of appropriately qualified women to compete for employment. 3.9 Emerging Priority Issues. Funds would be set aside to respond to existing or emerging priority issues in the maritime sector that could impact project implementation. 6. Component 4: Contingent Emergency Response (US$0.00 million). This Component is designed to provide swift 46 In terms of i nternships, FSMIP eligible costs would be l imited to the cos t of the tra iner of on-the-job tra ining as well as operating costs for the i nterns to ta ke part i n the program (e.g. travel, per diems, etc.). Page 58 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) response in the event of an Eligible Crisis or Emergency 47 to enable uncommitted funds to be quickly reallocated to address immediate post-crisis and emergency financing needs. The CERC may be used following natural disasters or other crises and emergencies, allowing funds to be reallocated from other components of the Project. 7. The estimated costs of each Component and Sub-component are summarized in the following table. Table 2.1 Project Cost Breakdown by Component and Sub-component Proposed Activities and Cost Estimates (US$ mil) 48 Base National Regional Expected Cost IDA IDA Implementation Period Component 1: Maritime Infrastructure 20.50 2.69 17.81 1.1 Surfacing and Drainage at Okat (Kosrae), Pohnpei, Weno (Chuuk), Years 3 to 5 and Tomil (Yap) Ports 1.2 Rehabilitate Utilities Years 3 to 5 1.3 Upgrade Terminal Superstructure Years 3 to 5 Component 2: Maritime Safety and Security 7.55 0.99 6.56 2.1 Upgrade Berthing and Apron Facilities Years 1 & 2 2.2 Compliance with ISPS Requirements Years 1 & 2 2.3 Replace/upgrade AtoNs Years 1 & 2 2.4 Safety and Security Improvements Years 1 to 5 Component 3: Technical Assistance and for Port Planning and Project 10.44 5.94 4.50 Management 3.1 Needs Assessments Years 1 & 2 3.2 Design and Supervision Years 1 to 5 3.3 Review of Institutional and Governance Structures for Port Years 1 & 2 Management 3.4 Strategic Planning Years 1 & 2 3.5 Capacity Building Initiatives Years 1 to 5 3.6 Outer Island Services and Chuuk Lagoon Years 1 to 5 3.7 Project Management 49 Years 1 to 5 3.8 Employment Opportunities for Women Years 1 to 5 3.9 Emerging Priority Issues Years 1 to 5 Component 4: CERC 0.00 0.00 0.00 Years 1 to 5 Overall Totals 50 38.49 9.62 28.87 47 Defi ned as “a n event that has ca used, or i s l ikely to i mminently ca use, a ma jor a dverse economic a nd/or s ocial i mpact associated with na tural or man-made crises or disasters”, Pa ragraph 12, Ba nk Policy: Investment Project Financing, Projects in Situations of Urgent Need of Assistance or Capacity Constraints. 48 As of February 21, 2019. 49 Incl uding the Project Manager a nd other technical advisory s upport within the PIU, OCs , and the financing of approximately five full time pos itions over fi ve yea rs wi thin the CIU: (i ) Procurement Specialist; (i i) Procurement Offi cer; (i ii) Fi nancial Ma nagement Offi cer; (iv) Sa feguards Specialist; a nd (v) Sa feguards Officer. 50 Component costs (Components 1, 2 a nd 3) a re i nclusive of the amounts for refinancing the Programmatic Preparation Advance. Page 59 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) ANNEX 3: Gender Action Plan COUNTRY: Micronesia, Federated States of Federated States of Micronesia Maritime Investment Project 1. The purpose of this annex is to elaborate gender considerations mentioned in the PAD (refer Section D: Gender) by: (i) clarifying gender gaps between the experiences and status of women and men relevant to the Project; (ii) identifying project-specific activities to address these gaps; and, (iii) establishing a baseline and suitable indicators, targets, and a measurement methodology to track progress. The assessment is based on information from: (i) document review including FSM specific material and information related to international good practice in relation to gender and ports, national gender planning notes, the World Bank Gender Strategy (FY16 – FY23), the World Bank Regional Gender Action Plan and World Bank the Transport GP Note (FY17 – FY20); and, (ii) Discussions with GoFSM, non-government, and donor-program representatives working in relevant areas. 2. Context. Women in FSM face multiple barriers to equal opportunities and a life free from violence and coercion. Priority areas in Government national gender planning include female unemployment and a gender-stratified labor market, teenage pregnancy, violence against women and girls, and limited access to justice and protection. With limited sexual agency and high dependency on families, young women are acutely vulnerable to GBV and coercion/ trafficking. GBV, particularly intimate partner and sexual violence against women is widespread. This brings a range of serious physical, mental, community, and family consequences felt in the home, workplace, and society as a whole, and correlates with a high incidence of Human Trafficking. Table 3.1 Snapshot of Gender Inequality in FSM 51 Gender Inequality Index, Value = 0.636 (No Rank, 2002) Education Females Males Ratio of girls to boys in primary education 0.96 1 Ratio of girls to boys in secondary education 1 0.98 Employment Labor Force Participation Rate 48.4% 66.1% 51 Stock-ta ke pf the gender mainstreaming capacity of Pa cific Island governments: Federated States of Micronesia. SPC. 2012. Page 60 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) Leadership There has never been a woman elected to the FSM National Congress (14 seats). There are presently 3 women National Cabinet Members. 3. Priority gender gaps identified. The following priority gaps have been identified for the Project to address during implementation: (a) Low representation of women at all levels of the workforce, including all maritime-related areas. (i) Analysis: The Female Labor Force Participation Rate in FSM is 48.4 percent as compared to 66.1 percent for men.52 The number of women wage and salary earners is less than half that of men. Not only are women less represented in the paid workforce they are lower down the hierarchy. While there is considerable variation across states, a 2012 SPC gender stock-take reported that employment levels surpassed women in all fields. The maritime sector is symptomatic of the wider barriers to women’s access to employment and skills: there is one woman in a senior operations job (Head of Security) and no other women work on maritime focused jobs. (ii) Action: To close the gender employment gaps, FSMIP will develop and implement a set of enabling policies and practices, which together will help women enter and progress through maritime careers. Priorities are to assess human resources policies and practices at different points in the employment relationship, at the stages of recruitment, retention, development and retrenchment, in order to identify appropriate actions to strengthen the systems and processes that govern behaviors, monitoring and management in terms of equal opportunities. In addition to internal process improvement, budget will be set-aside to support relevant technical training and unpaid internship opportunities for women in the transport sector and maritime transportation in particular, thereby building a pipeline of appropriately qualified women to compete for employment. Benefits associated with increased gender diversity and inclusive corporate cultures, including improved productivity, profitability, employee commitment and retention. Benefits associated with increased gender diversity and inclusive corporate cultures, including improved productivity, profitability, employee commitment and retention. (iii) M&E: • Indicator: Women employed by FSMIP at Sea Ports (percentage). (iv) IA: DoTC&I (b) Women’s safety from Human Trafficking. (i) Analysis: FSM is a source, transit and, to a limited extent, destination country for human trafficking; it ranked as Tier 2 in the 2018 U.S. Trafficking in Persons Report. Some of the most vulnerable groups include foreign migrant workers and Micronesian women and girls who are commercially sexually exploited at restaurants frequented by crew members of docked fishing vessels. Given the geography and transport system of FSM, the maritime industry plays a role in human trafficking and has the potential to play a significant role in the 52 FSM 2010 Cens us of Population and Housing. Division of Statistics, FSM. 2010. Page 61 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) detection and prevention of human trafficking; indeed, it is both a mode of transport and a source of demand for human trafficking. FSM’s attention and response to human trafficking is increasing, with a focus on victims who are women or girls. Legal and policy developments in FSM in 2012 included legislation to outlaw human trafficking activities, provide heavy penalties for perpetrators, and provisions to protect and support victims of trafficking. To manage this work, the FSM Anti-Human Trafficking Program was created under the DoJ, which spearheads national planning and coordinates to State-level Human Trafficking Taskforces in Kosrae, Chuuk and Pohnpei. Accordingly, to ensure FSMIP’s efforts to strengthen anti-trafficking measures are integrated into and leverage existing structures and coordination capacity, it is proposed to implement the Project’s anti-trafficking component through the DoJ. (ii) Action: Maritime facilities are key transit points for Micronesian girls and women subjected to sex trafficking and, less common, for foreign fishermen subjected to labor trafficking (who are more likely to be forced to remain on boats). There was general agreement that FSMIP’s emphasis on port security, including improved SOPs and the ISPS Security Plan, will include focused attention to preventing human-trafficking, in coordination with port operations companies and existing Government programs. This will be through improved lighting and fencing; strengthening processes and procedures, including more consistent identification checks and staff training; development of maritime-specific SOPs, considering victim support and referrals; and helping to resource and facilitate the work of the Justice Department’s Human Trafficking Unit. In so doing, FSMIP will help protect trafficking victims by developing and conducting anti- trafficking education and awareness raising campaigns, and possibly through funding for protective services for survivors in cooperation with NGOs. This will be through implementing the following actions (i) improved lighting and fencing; (ii) strengthening process and procedures, including more consistent identification checks and staff training; (iii) development of maritime-specific SOPs, considering victim support and referrals; and, (iv) helping to resource and facilitate the work of the National Task Force on Human Trafficking (DoJ). The main goal of these objectives is to define and implement the procedures at Ports for the identification, referral, reception and assistance of potential victims of human trafficking. FSM currently has a National Anti-Human Trafficking Program, which has developed anti-trafficking taskforces in each state and is in the process of creating a National Taskforce of Trafficking (NTHT). In undertaking the above activities, FSMIP will support the implementation of the National Action Plan to Combat Trafficking in Persons and strengthen nascent communication frameworks between national and ad hoc working groups, non-government organizations, civil society and other service providers such as the Chuuk Women’s Council in order to ensure the effective collaboration and coordination of identifying, assisting and protecting victims of human trafficking. FSMIP will also help protect trafficking victims by developing and conducting anti- trafficking education and awareness raising campaigns, and possibly through funding for protective services for survivors in cooperation with NGOs. (iii) M&E: • Indicator: FSMIP implementation of SOP on trafficking referral service (yes/no). (iv) IA: DoJ and DoTC&I. (c) Women’s safety and security in and outside of the workplace (including GBV considerations). Page 62 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) (i) Analysis: GBV prevalence levels are significant in FSM; the National Department of Health and Social Affairs completed a national Family Health and Safety Study in 2014, which showed that one in three women (32.8 percent) have experienced physical and/or sexual violence by a partner in their lifetime, and eight percent have experienced sexual abuse by someone other than a partner. The prevalence rate of ‘ever partnered’ women in Chuuk is above the national average at one in two, and in Kosrae is higher again at close to three women in five. 53 Fourteen percent of respondents experienced sexual abuse in childhood. 54 Help-seeking behavior is extremely low, with only eleven percent of women who experienced violence (including both GBV and trafficking) having sought help from formal services (e.g. healthcare professionals, counsellors or police), and two thirds of survivors having told no-one at all, including family and friends, about the violence. Prevailing social and cultural attitudes and stigma prevent reporting of violence against women, and established services are limited in reach, quality and accessibility. A comprehensive review of GBV services in all FSM states was conducted by Pacific Women Shaping Pacific Development (Pacific Women) in 2017 and highlighted severe limitations across all states in all areas of essential services (healthcare, social services, policing and justice, material support, and coordination). Particular shortfalls were noted in social services (including counselling and case management). The need to establish a systematic referral mechanism for survivors has also been identified. Such a referral mechanism would simultaneously ensure access to services for survivors, while allowing the safe and confidential collection of data on vulnerable groups, trafficking routes, and the role of the maritime industry. (ii) Action: • GBV Needs Assessment: (i) consultation with national stakeholders and regional partners such as IOM, Chuuk Women’s Committee and Department of Justice to ensure alignment with national and regional GBV and anti-trafficking strategies and action plans; and, (ii) once the quality and availability of services is improved through the actions below, a study can be undertaken using administrative data on GBV and trafficking (i.e. data collected from cases received by service providers). This will provide higher- quality and more ethical data as the availability of services will encourage more survivors to come forward and will help to reduce potential re-traumatization involved in discussing their experiences. • Prevention: (i) requiring all contractors to have a CoC which addresses GBV. During implementation, ensure that CoCs are signed and understood by all contractor and consultant staff. Conduct relevant training; (ii) training on GBV and trafficking for regular workers at project port sites, the workers (including managers) that will be hired under FSMIP, and workers on vessels that monitor border control and clear vessels at project port sites; (iii) regular and widespread community awareness-raising sessions to share information on GBV, trafficking, available services and referral pathways, CoC content and GRM reporting channels. 53 Pa ci fic Women Shaping Pacific Development (2018), ‘El iminating Violence a gainst Women (EVAW) in Pohnpei a nd Chuuk, Federated States of Mi cronesia: Assessment of EVAW Servi ces and Gaps in Services Section 1 – FSM Na tional Report. 54 FSM Department of Health and Social Affairs (2014), Federated States of Mi cronesia Family Health a nd Safety Study: A preva lence study on violence against women. Page 63 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) • Response: (i) training for counsellors, healthcare professionals and police focal points to ensure capacity to respond to any identified GBV and/or trafficking cases; (ii) providing funding for either local service providers or the hiring of social workers in relevant government agencies; and, (iii) working with other development partners to establish and document referral pathways for survivors of GBV and trafficking. (iii) M&E: • Indicator: Percentage of contractor staff trained on GBV & Codes of Conduct (percentage). (iv) IA: DoTC&I and DoJ. 4. GBV GPN Recommended Activities. The Project was prepared using the Bank’s ‘GBV Risk Assessment Tool’ and was classified within the Substantial risk category. As highlighted in Table 3.2, the Project will undertake specific activities to address GBV, to address the potential induced impact from the Project. Table 3.2 Actions Included to Implement the GBV GPN Recommended Activities Action to Address GBV Risks Timing for Action Who is Ongoing Risk Actions Taken During Preparation/Appraisal Responsible Management for Action Sensitize the IA as to the importance of • Preparation. • Task Team. • Task team to monitor • Discussions held with Government, NGOs, etc. addressing GBV on the Project, and the • Implementation. and provide additional • GBV specialist undertook in country mechanisms that will be implemented. guidance as necessary. discussions regarding GBV, VAC and trafficking prevention. • Project documents contain clear strategy for addressing GBV, VAC and trafficking prevention. The Project’s social assessment to include • Preparation. • IA for social • Ongoing review during • During preparation discussions held with assessment of the underlying GBV risks and • Implementation assessment implementation support Government. social situation, using the GBV risk (screening of new and ESMP. missions. • Project ESMP includes guidance on how the assessment tool to provide guidance and sub-projects, • Contractor • Update project ESMP Project will address GBV, VAC and trafficking. keeping to safety and ethical including in strategic for C-ESMP. and Contractor’s ESMP • Issues discussed during ESMP consultations. considerations related to GBV data management plans, • Task Team (C-ESMP) if risk situation collection. No prevalence data or baseline before civil works for GBV Risk changes. data should be collected as part of risk commence). Assessment • New screening and assessments. Tool. assessment and ESMP Page 64 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) • Decision Review (GBV for new-subprojects Risk Assessment identified during project Tool). implementation. Map out GBV prevention and response • Preparation. • IA. • Update mapping as • GBV prevention and response network actors in project area of influence. This • Implementation. appropriate. mapped. should incorporate an assessment of the capabilities of the service providers to provide quality survivor centered services including GBV case management, acting as a victim advocate, providing referral services to link to other services not provided by the organization itself. Have GBV risks adequately reflected in all • Preparation. • IA for social • Ongoing review during • Project ESMP includes these considerations. safeguard instruments (i.e., Project ESMP, • Implementation assessment implementation support The requirements will be clearly defined in the C-ESMP)—particularly as part of the (before civil works and ESMP. missions. bid documents, and the Contractor’s ESMPs assessment in the ESIA. Include the GBV commence). • Contractor • Update FSMIP’s ESMP will be reviewed to ensure that they are mapping in these instruments. for C-ESMP. and Contractor’s ESMP properly addressed before being accepted for (C-ESMP) if risk situation implementation. changes. Develop a GBV Action plan including the • Preparation. • IA. • Ongoing review during • Included as part of the ESMP. Accountability and Response Framework as • Implementation implementation. part of the ESMP. The (before civil works contractor/consultant’s response to these commence). requirements will be required to be reflected in their C-ESMP. Review the IA’s capacity to prevent and • Preparation. • Task Team. • Ongoing review during • Included as part of ESMF and ESMP. respond to GBV as part of Safeguard • Implementation. implementation support Preparation. missions. • Update project ESMP if risk situation changes. As part of the Project’s stakeholder • Consultations need to • IA. • Monitoring of • Included under the Stakeholder Engagement consultations, those affected by the Project be continuous implementation of and Consultation Plan. should be properly informed of GBV risks throughout the Stakeholder Page 65 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) and project activities to get their feedback project cycle, not just Engagement and on project design and safeguard issues. during preparation. Consultation Plan. Consultations need to engage with a variety • Ongoing consultations, of stakeholders (political, cultural or particularly when C- religious leaders, health teams, local ESMP is updated. councils, social workers, women’s organizations and groups working with children) and should occur at the start and continuously throughout the implementation of the Project. The FSMIP Stakeholder Engagement and • Consultations need to • IA. • Monitoring of • Included as part of the ESMF and ESMP. Consultation Plan, which will be be continuous implementation of implemented over the life of the Project to throughout the Stakeholder keep the local communities and other project cycle, not just Engagement and stakeholders informed about the Project’s during preparation. Consultation Plan. activities, to specifically address GBV • Ongoing consultations, related issues. particularly when C- ESMP is updated. Make certain the availability of an effective • Continuous • IA, but • Ongoing monitoring and • The Project will implement a GRM. There will GRM with multiple channels to initiate a throughout the discussed reporting on GRM to not be a separate/parallel GRM for GBV as it is complaint. It should have specific Project. and agreed verify it is working as a medium risk project. procedures for GBV including confidential upon with intended. reporting with safe and ethical the Task documenting of GBV cases. Team. For supervision, FSMIP will have a • During TOR • IA. • Ongoing reporting. • The TOR for the Supervision Consultant will Safeguards Specialist in the supervision preparation and require the team to have someone with consultant’s team with GBV specific skills to procurement experience in addressing GBV. supervise issues related to GBV (e.g., evaluation process. supervise signing of Codes of Conduct, verify working GRM for GBV is in place, refer cases where needed) and work with GBV Services Providers as entry points into service provision to raise awareness of the GRM. Page 66 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) ANNEX 4: Contingent Emergency Response Component COUNTRY: Micronesia, Federated States of Federated States of Micronesia Maritime Investment Project 1. The CERC is a contingent financing mechanism available to gain rapid access to financing to respond to a crisis or emergency and provides for immediate rehabilitation or reconstruction needs without needing to first restructure the original project thus facilitating rapid implementation. The CERC minimizes time and effort needed to make available uncommitted funds from an IPF to finance urgent needs. Following an eligible crisis or emergency, the Borrower may request the Bank to re-allocate project funds to support emergency response and reconstruction. This component would draw from the uncommitted grant resources under the Project from other project components to cover emergency response. Consistent with Paragraph 12, Bank Policy: Investment Project Financing, the CERC does not finance humanitarian assistance or relief. 2. Key principles relevant to CERCs include: (i) focus on activities that can readily be implemented on the ground in the circumstances; (ii) favor smaller-scale, local activities generate buy-in and goodwill; (iii) keep the scope simple and realistic, especially where local conditions do not allow much situational analysis; and, (iv) take advantage of working with and completing the activities of development partners to maximize impacts. 3. Activation criteria. The project-specific CERC will be funded under the Project budget. Following an eligible crisis or emergency, the Government would confirm the need to trigger the CERC, which would then be implemented in accordance with the rapid response procedures governed by the World Bank under Paragraph 12, Bank Policy: Investment Project Financing. In addition, the provisions of Paragraph 12, Bank Policy: Investment Project Financing, regarding “Projects in Situations of Urgent Need of Assistance or Capacity Constraints” apply to CERCs when they are triggered. The funding provision for the CERC is SDR0.00 million, however it can be increased by drawing down against uncommitted IDA funds under other components if necessary. Disbursement conditions would define the circumstances under which the CERC funds would become available. 4. The request to trigger the CERC and seek approval of activities to be eligible expenditures for financing under Disbursement Category 2 (refer Table 1.1) will be communicated to the World Bank’s Pacific Country Director by the Secretary of Finance and Administration, or their delegate, in a letter. The letter should include information pertaining to: (i) the nature of the emergency, its impacts and confirmation of causal relationship (as supported by the “Declaration of Disaster”) between the event and the need to access the financing allocated to Disbursement Category 2; (ii) the nature of emergency activities (brief description); and, (iii) the CERC action plan of activities. 5. The Financing Agreement stipulates the establishment of adequate implementation arrangements, satisfactory to the International Development Association (“the Association”), including staff and resources for implementation of activities under Component 4: Contingent Emergency Response, to the Bank for its review and approval. A CERC Project Operations Manual (CERC POM) for FSMIP will detail: (i) the proposed emergency activities to be financed by the proceeds of the CERC; (ii) the safeguards arrangements; and, (iii) the coordination and implementation arrangements related to the execution of the activities. Page 67 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) ANNEX 5: Map of FSM with Project Sites and Satellite View of Project Sites COUNTRY: Micronesia, Federated States of Federated States of Micronesia Maritime Investment Project Page 68 of 69 The World Bank Federated States of Micronesia Maritime Investment Project (P163922) Page 69 of 69