The World Bank Additional Financing for Emergency Labor-intensive Gaza Municipal Services (P168544) Combined Project Information Documents / Integrated Safeguards Datasheet (PID/ISDS) Appraisal Stage | Date Prepared/Updated: 08-Apr-2019 | Report No: PIDISDSA26269 Dec 17, 2018 Page 1 of 17 The World Bank Additional Financing for Emergency Labor-intensive Gaza Municipal Services (P168544) BASIC INFORMATION OPS_TABLE_BASIC_DATA A. Basic Project Data Country Project ID Project Name Parent Project ID (if any) West Bank and Gaza P168544 Additional Financing for P159258 Emergency Labor- intensive Gaza Municipal Services Parent Project Name Region Estimated Appraisal Date Estimated Board Date GZ-Third Municipal Development MIDDLE EAST AND NORTH 17-Oct-2018 23-May-2019 Project AFRICA Practice Area (Lead) Financing Instrument Borrower(s) Implementing Agency Social, Urban, Rural and Investment Project Palestine Liberation Municipal Development Resilience Global Practice Financing Organization (For The Lending Fund (MDLF) Benefit of the Palestinian Authority) Proposed Development Objective(s) Parent The project development objective (PDO) is to enhance the institutional capacity of municipalities in the West Bank and Gaza for more accountable and sustainable service delivery. Components Municipal Performance and Service Delivery Capacity Development Municipal Partnership Projects Project Implementation Support and Management Cost PROJECT FINANCING DATA (US$, Millions) SUMMARY -NewFin1 Total Project Cost 15.00 Total Financing 15.00 of which IBRD/IDA 0.00 Financing Gap 0.00 DETAILS -NewFinEnh1 Dec 17, 2018 Page 2 of 17 The World Bank Additional Financing for Emergency Labor-intensive Gaza Municipal Services (P168544) Non-World Bank Group Financing Trust Funds 15.00 Partnership for Intrastructure Development MDTF 5.00 Special Financing 10.00 Environmental Assessment Category B-Partial Assessment Decision The review did authorize the team to appraise and negotiate Other Decision (as needed) B. Introduction and Context Country Context 1. The West Bank and Gaza (the Palestinian territories) have faced long lasting political instability and periodic episodes of violence over the last two decades, exacerbating macroeconomic volatility. The Palestinian territories are a small open economy with lower-middle income status with a population of 4.8 million in 2016. The Palestinian territories have experienced political instability (both regional and domestic) and a series of violent conflicts over the years. After the 2007-08 conflict, the territories were under control of two different political parties: Fatah held control of the West Bank while Hamas formed the de facto authority in Gaza. Regular legislative process is suspended as neither side can establish a necessary quorum. Instead, the Cabinet conducts necessary consultations and readings of proposed acts and the President signs them into law. Gaza’s represents one third of total Gross Domestic Product (GDP), and its borders are subject to highly restrictive controls by Israel and Egypt. 2. The economic conditions in the Palestinian territories have significantly weakened in 2018 due to a sharp decline in activity in Gaza. According to preliminary data by the Palestinian Central Bureau of Statistics (PCBS), real GDP growth contracted by 1.3 percent in the second quarter of 2018 —first negative rate of growth since the first quarter of 2015. For the first half of 2018, the economy grew just by 0.3 percent compared to the same period in the previous year. The economy has been hamstrung for more than two decades by restrictions on movement, access and trade that have kept investment levels extremely low and resulted in deindustrialization. Substantial transfers, mostly in the form of aid from the international community, have helped mitigate the impact of the restrictions by fueling consumption driven growth. Nevertheless, transfers have been on a declining trend and have witnessed a very large drop in 2017-18, particularly in Gaza, resulting in a lower growth trajectory for the overall economy and revealing the fragility of the aid-driven growth model. Dec 17, 2018 Page 3 of 17 The World Bank Additional Financing for Emergency Labor-intensive Gaza Municipal Services (P168544) Sectoral and Institutional Context 3. Gaza’s economy has seen a severe squeeze on movement of goods, people, and income support, pushing it towards a possible collapse. Gaza’s economy has been under a blockade since 2007 and has been kept afloat by large transfers including donor aid and spending through the budget of the Palestinian Authority (PA), both of which amounted to 70-80 percent of Gaza’s GDP. However, these two sources have significantly declined recently, negatively impacting growth. In fact, in 2017, the Gaza economy did not witness any real growth due to severe cuts in aid for reconstruction and transfers from the PA’s budget in addition to its continued economic isolation. The situation has become more difficult in 2018 as transfers from the PA have continued to drop, further worsening the liquidity squeeze and placing severe pressure on the depleting buffers of the economy. As a result, Gaza’s economy shrank by 6.1 percent in the first half of 2018 compared to the same period in 2017. The decline was seen in most economic sectors but mainly in construction and public administration and defense, both of which were Gaza’s main drivers of growth in recent years. Even though more recent growth data is not available yet, anecdotal evidence strongly suggests that the ongoing liquidity squeeze in Gaza has further worsened and that the economic decline has also led to a rapid decline in humanitarian conditions. Unless the liquidity crisis is addressed through pumping additional liquidity into the economy and raising transfers to their pre-2017 level, the Gaza economy may be heading towards a possible collapse in the medium term. 4. The economy in Gaza has continued to deteriorate resulting in rising and severe unemployment and worsening poverty. Around 52 percent of the labor force in Gaza were unemployed in 2018. Unemployment amongst Gaza’s youth exceeds 67 percent while it is even higher for females reaching 71 percent, compared to 43 percent for males. Moreover, unemployment for young women stands at 88 percent (compared to 58 percent for young men). The poverty rate in Gaza has increased dramatically from 39 percent in 2011 to 53 percent in 2018. 5. Without a peace process breakthrough, economic conditions are expected to worsen, and jobs created will not be sufficient to reduce unemployment and improve living standards. Under a baseline scenario that assumes a continuation of the restrictions being imposed by the Government of Israel, and the persistence of the internal divide between the West Bank and Gaza, private sector activity is not expected to pick up and real GDP growth of the Palestinian economy is projected to drop to 1.7 percent in 2018 (-5 percent in Gaza and 3.8 in the West Bank) and to hover around 1.9 percent in the medium term. This growth level implies a decline in real per capita income and an increase in unemployment. Notably, downside risks to this projection in Gaza are considerable. If transfers through the PA’s budget continue to decline, the United Nations Refugee and Works Agency’s (UNRWA) funding gap is not offset, and funds to continue the reconstruction efforts do not materialize, the current liquidity squeeze is expected to significantly worsen, which will have a severe impact on economic activity, service provision and social conditions in the Strip. This may, in turn, result in more violence and clashes. Consequently, the Gaza economy is expected to slip into deep recession, significantly raising the potential for unrest. 6. Municipal services are deteriorating further. The persistent economic contraction in Gaza, and reduced fiscal transfers and aid are severely compromising the ability of the municipalities to continue rendering services at the local level. Further deterioration of the already limited local services provision will expose the Gaza population to increased health and sanitation risks (due to mounting and decomposing solid waste in the very densely populated urban areas), safety risks (from unlit and damaged streets), and degradation of the environment. The Gaza municipalities therefore urgently need financial assistance and sustained donor support to maintain critical local services. Dec 17, 2018 Page 4 of 17 The World Bank Additional Financing for Emergency Labor-intensive Gaza Municipal Services (P168544) Rationale for the Additional Financing 7. The World Bank response to the dire situation in Gaza includes sustained engagement with the Gaza municipalities through the Municipal Development Project (MDP). The Bank provided Additional Financing (AF) to the Second Municipal Development Project (MDP-2), closed in February 2018, to address critical emergency needs faced by Gaza municipalities following the July-August 2014 conflict. The project implemented 332 rehabilitation subprojects that helped restore local services (roads, wastewater and solid waste management) in the Gaza Strip. Under the on-going Third Municipal Development Project (MDP-3), Gaza municipalities will continue to receive support for priority municipal subprojects. For municipalities in West Bank and Gaza, the MDP is a reliable source of investment funding and a dependable and fast channel to provide demand-based support through a transparent allocation mechanism. However, the funds available under the current project (MDP-3) would not allow the Gaza municipalities to maintain adequate level of local services considering their overall fiscal situation and in the absence of additional external resource mobilization. 8. The Borrower has requested the Bank to augment MDP-3 financing to expand coverage of support to Gaza municipalities and scale up local service provision in the Gaza Strip. The first request is for US$10 million AF to contribute to the efforts of the municipalities in Gaza to maintain adequate level of municipal services and implement urgent infrastructure projects. The reduced transfers to Gaza are deeply impacting on the deteriorating municipal service provision as municipalities are unable to pay salaries of staff. Maintaining a decent level of municipal infrastructure is key to expanding economic activity and improving productivity – fundamental requirements for job creation. Additionally, creating employment to mitigate the livelihood impacts of the liquidity squeeze in Gaza will help avoid escalation of instability in the strip. By selecting municipal activities that are labor-intensive, the AF will at the same time help create temporary jobs from the rich human resource base in Gaza. It is estimated that the activities that the AF will support in Gaza will generate about 5,000 jobs (or 2,500 jobs per year). This can be a significant contribution to the job creation efforts considering the number of jobs (27,000 annually) to absorb the new labor force entrants. The second request for AF is for US$5 million to close a financing gap to complete original project activities for the ongoing and well-performing MDP-3. At the time of project approval, it was anticipated that there would be a financing gap in the second cycle of the project as block grants are to be topped by performance grants that were expected to be covered through co-financing.1 However, the co-financing has not materialized. Moreover, the AF will cover the financing gap caused by the decision of USAID to discontinue the Communities Thrive Project that was financing Capacity Development activities in 55 of the 119 municipalities in West Bank. C. Proposed Development Objective(s) Original PDO 1 In order to incentivize better performance and respond to population growth in the second cycle of the project, EUR3.45 per capita needs to be topped up to cycle I per capita allocation of EUR11.8 per capita, Dec 17, 2018 Page 5 of 17 The World Bank Additional Financing for Emergency Labor-intensive Gaza Municipal Services (P168544) The project development objective (PDO) is to enhance the institutional capacity of municipalities in the West Bank and Gaza for more accountable and sustainable service delivery. Current PDO The original PDO is retained. No changes are being introduced. Key Results The proposed AF would finance the costs associated with the scaling-up of MDP-3 support to Gaza municipalities to enable them to expand local services provision though labor-intensive Operation and Maintenance (O&M) and municipal infrastructure development activities. Moreover, the AF would close a financing gap in order to complete original project activities under Component 1 and 2 in the second cycle of the project. The proposed AF will enable the 25 municipalities in Gaza to expand coverage of support and scale up local service provision in light of the reduced transfers to Gaza that deeply impact on the deteriorating municipal service provision. Achievement of outcomes will be evaluated in terms of: 1. Number of subprojects completed by Gaza municipalities under the AF. 2. Number of temporary jobs created by the AF in Gaza. 3. Number of municipalities successfully implementing an Operation and Maintenance (O&M) activity. D. Project Description 9. The original project has four (4) components: (a) Component 1 “Municipal Performance and Service Delivery� allocates performance-based grants for capital investments and operating expenditures through a transfer formula based on population, need and municipal performance; (b) Component 2 “Capacity Development of Municipalities and Palestinian Institutions� supports municipalities to graduate to a higher performance category and supports building the capacity of national level institutions namely, the Municipal Development and Lending Fund (MDLF) and the Ministry of Local Government (MOLG); (c) Component 3 “Municipal Partnership Projects� provides technical assistance to municipalities to engage more effectively with the private sector and develop joint and innovative investments for municipal service delivery and local economic development; and (d) Component 4 “Project Implementation Support and Management Costs� provides monitoring and evaluation, outreach and communication, mobilization of local technical consultants for the engineering supervision of Component 1, and MDLF management cost. 10. The proposed AF would finance the costs associated with the scaling-up of MDP-3 support to Gaza municipalities to enable them to expand local services provision though labor-intensive Operation and Maintenance (O&M) and municipal infrastructure development activities as part of the newly added Component – Component 5 “Emergency Labor- intensive Gaza Municipal Services�. Moreover, the AF would close a financing gap in order to complete original project activities under Component 1 and 2 in the second cycle of the project, The AF would thus finance: (a) Scale up of O&M activities to restore or maintain critical municipal services given severe funding constraints facing Gaza municipalities (US$5.52 million from Dec 17, 2018 Page 6 of 17 The World Bank Additional Financing for Emergency Labor-intensive Gaza Municipal Services (P168544) TFGWB). Based on consultations with all 25 Gaza municipalities and the MDLF, the O&M activities to be supported can include costs of labor, equipment and supplies for roads repairs and maintenance (filling of potholes, crack repair and sealing, etc.), periodic cleanup of drainage system, O&M of slaughterhouses, solid waste collection and sorting, fumigation, clean up and security of coastline and beaches. (b) Scale up of investment grants for Gaza municipal investments that employ labor- intensive methods in subproject implementation (US$3.68 million from TFGWB). The type of subprojects to be financed will be defined in a separate annex in the Project Operations Manual (POM) that will be revised to reflect these additional project activities. Municipal subprojects identified so far include roads, wastewater, solid waste management, parks and open space development, public markets, tax mapping, archiving of municipal records, solar energy, inventory of municipal assets, landscaping of road medians, etc. (c) Address the financing gap in the implementation of the second cycle of Component 1 “Municipal Performance and service delivery� (US$2.45 million from PID-MDTF) (d) Address the financing gap in the implementation of the second cycle of Component 3 “Capacity development to municipalities and Palestinian institutions� (US$2.2 million from PID-MDTF) (e) Augment Project implementation support and management cost (Total US$1.15 million, of which US$0.8 million from TFGWB and US$0.35 million from PID- MDTF) 11. Component 5 will apply simplified procurement procedures and the option of retroactive financing per OP/BP 10.00 paragraph 12. 12. All 25 Gaza municipalities will receive a simple per capita allocation to support O&M activities as well as investment grants for priority subprojects coming out of their Strategic Development Investment Plans (SDIPs). 13. For O&M, municipalities will screen and select the beneficiaries from verifiable list of unemployed persons in the Gaza Strip. For subprojects, the beneficiaries of jobs created will be selected by the contractor. As the Executing Agency of MDP-3, MDLF will supervise the screening and selection of beneficiaries of the O&M activities. The bid documents for works contracts will include provisions for beneficiary selection. Criteria for beneficiary selection will be presented in detail in the POM and apply the following general principles: (a) joblessness (e.g., unemployed for a certain duration); (b) equity (e.g., applicant is not a beneficiary of existing programs, only one from one family); and (c) vulnerability (e.g., youth, women, disabled, etc.). The list of candidates will be validated against relevant government databases including the Ministry of Labor’s database. 14. The selection of final beneficiaries of the temporary jobs generated by the operation will be carried out in a transparent and equitable manner. Job opportunities will be advertised and public notifications for job openings by the project will specify eligibility criteria, including extent of joblessness (e.g., unemployed for a certain duration) and vulnerability (e.g., youth, women, disabled, etc.). As employment by the project Dec 17, 2018 Page 7 of 17 The World Bank Additional Financing for Emergency Labor-intensive Gaza Municipal Services (P168544) is envisioned to be on rotation basis (e.g., 3 months per contract, to realize as many eligible beneficiaries as possible), preference will be extended to applicants who are (a) in the government’s list of unemployed labor, (b) on the waiting list in the UNRWA job creation program; and (c) not in other job creation (cash- for-work) and cash transfer programs. Payment to beneficiaries for project work rendered will be made through the banking system. The POM will be revised to specify process and eligibility criteria for job beneficiary selection, as well as the verification, contracting and payment procedures. The revised POM will be subject to review by the Bank. 15. Each municipality shall prepare an O&M Plan that will be submitted to MDLF for review and approval. From the approved O&M Plan, the municipality identifies packages for O&M implementation (that also defines required labor inputs). The municipality then advertises for job openings (specifying criteria for applicant selection). From the applications received, the municipality selects applicants, giving preference to those (a) who are on the Ministry of Labor’s list of unemployed persons in Gaza and on the waiting list of the UNRWA job creation program; and (b) who are currently not benefiting from existing job creation and cash transfer programs. The municipality will send the list of selected applicants to MDLF (to confirm that agreed procedures are followed), and then contract the services (on a 3-month rotation). For work rendered, the municipality will send payment authorization to MDLF that will pay the worker directly through the banking system. 16. The municipalities will identify proposals from their SDIP and propose urgent investment proposals. Subprojects to be funded will be selected from a pipeline developed by the municipalities in consultation with their constituents. The selection criteria will be established by the MDLF and specified in the revised MDP-3 POM and will highlight the labor intensity of works proposed in the subprojects. Based on the criteria, MDLF will appraise subproject proposals and approved subprojects will receive funding from Component 5. The municipalities will procure the subprojects competitively and contractors will select the workers based on skills required by the subprojects. MDLF will pay the contractors directly based on authorization from the municipalities. E. Implementation Institutional and Implementation Arrangements 17. No changes would be made to the implementation arrangements. The MDLF, the Executing Agency of the MDP-3, will continue to be responsible for project implementation including safeguards, fiduciary, Monitoring and Evaluation (M&E). The current safeguards instruments in place for the parent operation are sufficient and in full compliance with the Bank’s OP/BPs. All potential impacts will be addressed through the existing safeguards instruments. 18. The activities to be supported by the AF, in the amount of US$10 million to finance Component 5, are expected to be completed in 24 months. The 25 Gaza municipalities are currently preparing their respective O&M plans that will be the basis of selecting O&M activities to be supported by the AF. They will also begin the process of identifying and prioritizing subproject proposals for review by MDLF for funding support with the investment grants. Implementation of approved O&M and investment subprojects should be completed by December 31, 2020, the penultimate year of MDP-3 implementation. The US$5 million AF to close the financing gap for Components 1 and 2 will support activities that will be completed by the original closing date of the project, i.e., February 28, 2022. Dec 17, 2018 Page 8 of 17 The World Bank Additional Financing for Emergency Labor-intensive Gaza Municipal Services (P168544) . F. Project location and Salient physical characteristics relevant to the safeguard analysis (if known) 144 municipalities in West Bank and Gaza. For the Additional Financing, project location will be the 25 Gaza municipalities. G. Environmental and Social Safeguards Specialists on the Team Helen Z. Shahriari, Social Specialist Zeyad Abu-Hassanein, Environmental Specialist SAFEGUARD POLICIES THAT MIGHT APPLY SAFEGUARD _TBL Safeguard Policies Triggered? Explanation (Optional) OP 4.01 remains triggered. The project will require an environmental assessment for activities that involve infrastructure construction. The development and rehabilitation of municipal infrastructure includes roads, rehabilitation of water wells, water networks, and wastewater and sanitation facilities, parks, and others. Negative environmental impacts associated with municipal subprojects and O&M activities, are expected to be minor during the construction phase. Environmental Assessment OP/BP 4.01 Yes Therefore, the project is classified as category “B�. Subprojects and O&M activities are not known a priori. An ESMF was prepared for the original project and will continue to be used under the AF. The ESMF contains provisions for screening of subprojects and acceptance/rejection criteria Larger scale subprojects, which would require a full fledged EIA (category A) will be excluded. The size of funds available to municipalities under the AF has limited the scope of the subprojects. Performance Standards for Private Sector None of subprojects will be implemented by the No Activities OP/BP 4.03 private sector. All sub-projects to be financed by the AF will be Natural Habitats OP/BP 4.04 No implemented within the urban boundaries of Dec 17, 2018 Page 9 of 17 The World Bank Additional Financing for Emergency Labor-intensive Gaza Municipal Services (P168544) municipalities and no natural habitats are expected to be impacted negatively. All sub-projects to be financed by the AF will be implemented within the urban boundaries of Forests OP/BP 4.36 No municipalities and no forests are expected to be impacted negatively. A few participating municipalities, particularly in Gaza have subprojects, which may require purchasing of some chemicals for pest control, primarily mosquitoes. A Pest Management Plan based on lessons learned under MDP 1 and 2 has Pest Management OP 4.09 Yes been updated for this project to ensure compliance with OP 4.09 policy. The Pest Management Plan provides guidance on which chemicals can be financed for pest management as well as proper storage and handling during project implementation. The project, and its subprojects, will contain a “chance find clause� in the bid documents, as is Physical Cultural Resources OP/BP 4.11 No described in the ESMF. Any subproject activity, which a priori involves cultural heritage sites will be excluded. There are no indigenous peoples in the project Indigenous Peoples OP/BP 4.10 No areas. OP 4.12 is triggered since there is a possibility that under components 1 and 3 some larger joint projects will require land. The original project has prepared and disclosed Land Acquisition and Livelihood Policy Framework (LALPF) in the country and the World Bank website. The LALPF for the original project will be applied to this AF. This LALPF includes the principles for land acquisition or any land take that can result from the project. In the majority of cases, Involuntary Resettlement OP/BP 4.12 Yes subprojects will be built within the planned areas in which case only public land will be affected. However, in cases where subprojects will require private land or will impact livelihood site, specific Resettlement Action Plans (RAPs) will be prepared in accordance with the disclosed LALPF, consulted and disclosed before the commencement of any civil works. In the case of land donation, the processes will be defined clearly in the LALPF, including: (a) well-defined and transparent criteria and clear documentation of Dec 17, 2018 Page 10 of 17 The World Bank Additional Financing for Emergency Labor-intensive Gaza Municipal Services (P168544) transactions; (d) strong and readily accessible grievance redress mechanism; and (e) provisions for more meaningful community participation. In the case of willing –seller willing – buyer or voluntary provision of land, MDLF and Municipalities will document for power of choice. This project does not include any dam or structures Safety of Dams OP/BP 4.37 No related to dams. Projects on International Waterways There is no infrastructure which will affect No OP/BP 7.50 international waterways. No subprojects will be implemented in Projects in Disputed Areas OP/BP 7.60 No disputed areas. KEY SAFEGUARD POLICY ISSUES AND THEIR MANAGEMENT OPS_SAFEGUARD_SUMMARY_TBL A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: The proposed AF will trigger the same safeguards policies as the original project. It will not invoke any additional safeguards policies. The AF will continue to use the safeguards and instruments that have been originally prepared and disclosed. The proposed AF will continue to be category 'B' project. The activities under the AF are similar to the original project. These activities mainly cover small investment grants for rehabilitation of infrastructure and O&M expenses. The environmental and social impacts are expected to be positive after implementation due to the improvement of municipal services. Minor temporary negative impacts e.g. dust, noise, interruption of services, and disposal of wastes are expected to be temporary and localized and will primarily occur during the construction phases. Temporary negative impacts will be mitigated using procedures described in the ESMF of the parent project. The project has an established set of subproject screening criteria and acceptance/rejection criteria (e.g., a negative list). These are detailed in the ESMF as well as in the POM. MDLF will continue to be responsible for ensuring that the approved subprojects comply with the screening criteria. For category “B� subprojects, individual Environmental Management Plans (EMPs) will be produced to manage and mitigate adverse impacts. The MDLF will monitor compliance on EMP provisions of participating municipalities during implementation. OP 4.12 is triggered since there is a possibility that under component 1 and 3 some of the subprojects would require land. A Land Acquisition and Livelihood Policy Framework (LALPF) was prepared for the original project and disclosed. The type of subprojects to be supported under the AF will be of the same nature as the those currently financed or pipelined under MDP-3. The RPF for the original project therefore applies to this AF. Moreover, a Land Acquisition and Livelihood Policy Framework (LALPF) was prepared and will be disclosed in the country and in the Infoshop. The LALPF is prepared to set up the criteria to be followed in case any subproject would need land or would have an impact on livelihoods. The LALPF will guide the preparation of subprojects-specific RAPs Dec 17, 2018 Page 11 of 17 The World Bank Additional Financing for Emergency Labor-intensive Gaza Municipal Services (P168544) when needed. RAPs would be prepared, consulted, and disclosed before the beginning of any civil works. Since detailed subprojects funded under each municipality are not identified by appraisal stage, individual RAPs could not be prepared. It is relevant to highlight that the subprojects will be primarily built in public land. At the time of the last supervision mission (2-9 May, 2018), MDLF informed the Bank team that none of the subproject proposals approved required land or had impact on livelihoods, thus not requiring RAP or ARAP preparation. MDLF has adequate capacity of managing social safeguards risks. Under the previous MDPs, Gaza municipalities have also gained experience on social risk management. The 15 larger municipalities in Gaza have One-Stop Shops that also serve as grievance redress mechanism (GRM). The remaining 10 Gaza municipalities will establish theirs during MDP-3 implementation. Due to high unemployment rate among the youth, it is suggested that youth in Gaza (both male and female), the AF will give special attention to this sector in the identification of beneficiaries of the labor-intensive O&M and investment grants for subprojects. The MDLF and the 25 Gaza municipalities have likewise demonstrated adequate capacity of managing environmental risks, screening sub-projects, and implementing the EMPs successfully. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: There are no potential indirect or long-term impacts due to anticipated future activities in the project area. Most of the activities are small and limited in scope. They mainly consist of rehabilitation, with minor new construction. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. Subprojects are defined within the framework of a larger municipality-level master planning process to ensure that interventions are designed appropriately and the cumulative impact of interventions is adequately assessed. 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. MDLF is the executing agency of the original project and will continue to be such for the AF. The MDLF has adequate capacity to implement safeguards instruments and ensure compliance with WB safeguards policies. It has a full-time environmental safeguards specialist and a social safeguards specialist. The specialists have been trained by the World Bank under MDP-2. They have gained relevant knowledge and operational experience being involved in the implementation of MDP-2 and other WB-supported projects. Moreover, in order to ensure a smooth implementation of MDP-3, several Local Technical Consultants (LTC) have been hired and trained by the MDLF on environmental and social safeguards. Municipalities have also gained knowledge and experience in implementing environmental and social safeguards. However, considering the high number of municipalities involved, capacity is uneven and needs to be continuously built throughout the implementation of MDP-3. Weaker capacity municipalities showed lack of adequate capabilities during EMP preparation, MDP-3 took the corrective measure of reintroducing sectoral EMPs as guides. Moreover, environmental penalties showed a positive impact when applied on the ground and MDP-3 amended penalty covenants in order to simplify the process. These lessons learned are reflected in the ESMF, and will be reported in both the POM and the Local Technical Consultant Terms of Reference. Specifically, the MDP-3 ESMF includes a detailed assessment of the regulatory and institutional framework and capacity of MDLF, the environmental assessment of potential impacts and mitigation measures, an environmental management plan, as well as a monitoring plan with clear indicators and mechanisms for implementation and reporting. It also describes the training and capacity building required for effective environmental safeguards management at the municipal level. As Bank Policy OP 4.09 was triggered, the ESMF also includes a Pest Management Plan (PMP) and specific guidelines as mitigation measures for safe handling of the pests and management for insects and rodent control. These guidelines had been authorized by the Palestinian Ministry of Health. Furthermore, as Dec 17, 2018 Page 12 of 17 The World Bank Additional Financing for Emergency Labor-intensive Gaza Municipal Services (P168544) foreseen within the ESMF, project-specific environmental assessments and environmental management plans will continue to be prepared during project implementation by client municipalities. During ESMF preparation, the MDLF team consulted with other Development Partners supporting the MDP, and agreement was reached to apply the World Bank safeguards policies to the project as a whole. MDLF institutional capacity for safeguards management, including compliance monitoring and reporting, continues to be high as was the case in MDPI and MDPII. There was some delay in reporting on the screening of subprojects in the first project cycle of MDPIII and safeguards compliance in the last ISR was rated as MS. As highlighted above, MDLF safeguards team responsibilities during MDP-3 implementation will continue to include building municipal capacity for sub-project screening and construction-phase site monitoring. In addition to this, a further aspect to pay attention to is the GRM. During the last supervision mission (2-9 May, 2018), the AM noted the need to strengthen the understanding and engagement on transparency among municipalities and civil society stakeholders, advancing on the capacity building for grievance redress. Measures taken include an ongoing assessment of the GRM system of the municipalities and local councils. This assessment will lead to the development of a detailed action plan to enhance transparency and GRM. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. During project identification and preparation, consultations were conducted with beneficiary municipalities in West Bank and Gaza. MDLF documented in the ESMF the consultation process and the municipalities, local communities and NGOs that participated in the consultations. Consultations with beneficiary communities are conducted on a rolling basis as part of the continuing MDLF project cycle. OPS_SAFEGUARD_DISCLOSURE_TBL B. Disclosure Requirements (N.B. The sections below appear only if corresponding safeguard policy is triggered) OPS_EA_DISCLOSURE_TABLE Environmental Assessment/Audit/Management Plan/Other For category A projects, date of Date of receipt by the Bank Date of submission for disclosure distributing the Executive Summary of the EA to the Executive Directors 01-Mar-2017 15-Mar-2017 "In country" Disclosure West Bank and Gaza 13-Mar-2017 Comments OPS_RA_D ISCLOSURE_T ABLE Resettlement Action Plan/Framework/Policy Process Date of receipt by the Bank Date of submission for disclosure 01-Mar-2017 13-Mar-2017 Dec 17, 2018 Page 13 of 17 The World Bank Additional Financing for Emergency Labor-intensive Gaza Municipal Services (P168544) "In country" Disclosure West Bank and Gaza 13-Mar-2017 Comments OPS_ PM_D ISCLOSURE_TA BLE Pest Management Plan Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of submission for disclosure Yes 01-Mar-2017 15-Mar-2017 "In country" Disclosure West Bank and Gaza 13-Mar-2017 Comments OPS_PM_ PCR_TABLE If the project triggers the Pest Management and/or Physical Cultural Resources policies, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP. If in-country disclosure of any of the above documents is not expected, please explain why: OPS_COMPLIANCE_INDICATOR_TBL C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting) (N.B. The sections below appear only if corresponding safeguard policy is triggered) OPS_EA_COMP_TABLE OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) report? If yes, then did the Regional Environment Unit or Practice Manager (PM) review and approve the EA report? Are the cost and the accountabilities for the EMP incorporated in the credit/loan? OPS_ PM_COM P_TA BLE OP 4.09 - Pest Management Does the EA adequately address the pest management issues? Dec 17, 2018 Page 14 of 17 The World Bank Additional Financing for Emergency Labor-intensive Gaza Municipal Services (P168544) Is a separate PMP required? If yes, has the PMP been reviewed and approved by a safeguards specialist or PM? Are PMP requirements included in project design? If yes, does the project team include a Pest Management Specialist? OPS_IR_ COMP_TA BLE OP/BP 4.12 - Involuntary Resettlement Has a resettlement plan/abbreviated plan/policy framework/process framework (as appropriate) been prepared? If yes, then did the Regional unit responsible for safeguards or Practice Manager review the plan? Is physical displacement/relocation expected? Is economic displacement expected? (loss of assets or access to assets that leads to loss of income sources or other means of livelihoods) OPS_ PDI_ COMP_TA BLE The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank for disclosure? Have relevant documents been disclosed in-country in a public place in a form and language that are understandable and accessible to project-affected groups and local NGOs? OPS_ALL_COMP_TABLE All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities been prepared for the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included in the project cost? Does the Monitoring and Evaluation system of the project include the monitoring of safeguard impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed with the borrower and the same been adequately reflected in the project legal documents? Dec 17, 2018 Page 15 of 17 The World Bank Additional Financing for Emergency Labor-intensive Gaza Municipal Services (P168544) CONTACT POINT World Bank Christopher T. Pablo Sr Urban Spec. Borrower/Client/Recipient Palestine Liberation Organization (For The Benefit of the Palestinian Authority) Implementing Agencies Municipal Development Lending Fund (MDLF) Mohammad Ramahi Finance Director mramahi@mdlf.org.ps FOR MORE INFORMATION CONTACT The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects APPROVAL Task Team Leader(s): Christopher T. Pablo Approved By Safeguards Advisor: Nina Chee 03-Apr-2019 Practice Manager/Manager: Ellen Hamilton 04-Apr-2019 Dec 17, 2018 Page 16 of 17 The World Bank Additional Financing for Emergency Labor-intensive Gaza Municipal Services (P168544) Country Director: Ranjana Mukherjee 08-Apr-2019 Dec 17, 2018 Page 17 of 17