Document of The World Bank FOR OFFICIAL USE ONLY Report No: PAD918 INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF SDR42.3 MILLION (US$65 MILLION EQUIVALENT) TO THE REPUBLIC OF MADAGASCAR FOR AN EMERGENCY FOOD SECURITY AND SOCIAL PROTECTION PROJECT FEBRUARY 10, 2014 Agriculture, Rural Development and Irrigation (AFTA2) Sustainable Development Department Country Department AFCS4 Africa Region This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank’s policy on Access to Information. i CURRENCY EQUIVALENTS (Exchange Rate Effective December 31, 2013) Currency Unit = Malagasy ariary MGA 2,248 = US$ 1 US$ 1.5400 = SDR 1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS AF Additional Financing AFD Agence Française de Développement (French Development Agency) AfDB African Development Bank BVPI Projet Bassins Versants et Périmètres Irrigués (Irrigation and Watershed Management Project) CAS Country Assistance Strategy CQS Consultant’s Qualifications Selection CPAR Country Procurement Assessment Report CPIA Country Policy and Institutional Assessment CPGU Cellule de Prévention et Gestion des Urgences (Disaster Prevention and Management Unit) DA Designated account DRDR Direction Régionale de Développement Rural (Regional Directorate of Rural Development) DSM Dam Safety Manual DRM Disaster Risk Management EU European Union ESIA Environmental and Social Impact Assessment ESMP Environmental and Social Management Plan ESMF Environmental and Social Management Framework ESSAF Environmental and Social Screening and Assessment Framework FAO United Nations Food and Agriculture Organization FBS Fixed Budget Selection FCS Fragile and Conflict-affected States FID Fonds d’Intervention pour le Développement (Intervention Fund for Development) FM Financial management GDP Gross domestic product ha Hectare HAT Haute Autorité de la Transition (Transition High Authority) HDI Human Development Index IA Implementing Agency ICB International Competitive Bidding IDA International Development Association IEG Independent Evaluation Group IFAD International Fund for Agricultural Development ii IFR Interim financial report INSTAT Institut National de la Statistique de Madagascar (National Institute of Statistics of Madagascar) IPMP Integrated Pest Management Plan IRR Internal rate of return ISN Interim Strategy Note kg Kilogram LCS Least Cost Selection MAP Madagascar Action Plan M&E Monitoring and evaluation MINAGRI Ministry of Agriculture MDG Millennium Development Goals NATOP National Technical Assistant for Operation NCB National Competitive Bidding NPV Net present value ORAF Operational Risk Assessment Framework PDO Project Development Objective PAH Project Affected Household PAP Project Affected Person PAUSENS Projet d’Appui d'Urgence destiné à la Préservation des Services Essentiels de l'Education, de la Nutrition et de la Santé (Emergency Support to Critical Education, Health, and Nutrition Services) PIU Project Implementation Unit PN-BVPI Programme National de Gestion des Bassins Versants et des Périmètres Irrigués (National Program for Irrigation and Watershed Management) PNF Programme National Foncier (National Land Tenure Program) PPL Public Procurement Law PPMP Pests and Pesticides Management Plan PRMP Personne Responsable des Marchés Publics (Head of Public Procurement in PN- BVPI) PRSP Poverty Reduction Strategy Paper PUPIRV Projet d’Urgence pour la Préservation d’Infrastructure et la Réduction de la Vulnérabilité (Emergency Infrastructure Preservation and Vulnerability Reduction Project) QBS Quality-based Selection QCBS Quality- and Cost-based Selection RAP Resettlement Action Plan RATOP Regional Technical Assistant for Operation RPF Resettlement Policy Framework SEFP Social and Environmental Focal Point TOR Terms of Reference UNICEF United Nations Children Funds WFP World Food Programme wk Week yr Year iii Regional Vice President: Makhtar Diop Country Director: Haleh Bridi Sector Director: Jamal Saghir Sector Manager: Severin Kodderitzsch Task Team Leader: Ziva Razafintsalama iv REPUBLIC OF MADAGASCAR Emergency Food Security and Social Protection Project (P147514) TABLE OF CONTENTS I. STRATEGIC CONTEXT ..................................................................................................... 1 A. Country Context ................................................................................................................. 2 B. Situation of Urgent Need of Assistance ............................................................................. 3 C. Sectoral and Institutional Context...................................................................................... 4 D. Higher-level Objectives to which the Project Contributes ................................................ 8 II. PROJECT DEVELOPMENT OBJECTIVES .................................................................... 8 A. PDO.................................................................................................................................... 8 B. Project Beneficiaries .......................................................................................................... 9 C. PDO Level Results Indicators ............................................................................................ 9 III. PROJECT DESCRIPTION .................................................................................................. 9 A. Project Components ......................................................................................................... 11 B. Project Financing ............................................................................................................. 13 C. Lessons Learned and Reflected in the Project Design ..................................................... 13 IV. IMPLEMENTATION ......................................................................................................... 15 A. Institutional and Implementation Arrangements ............................................................. 16 B. Results Monitoring and Evaluation ................................................................................. 16 C. Sustainability.................................................................................................................... 17 V. KEY RISKS AND MITIGATION MEASURES .............................................................. 18 A. Risk Ratings Summary Table .......................................................................................... 18 B. Overall Risk Rating Explanation ..................................................................................... 18 VI. APPRAISAL SUMMARY .................................................................................................. 19 A. Economic and Financial Analysis .................................................................................... 19 B. Technical .......................................................................................................................... 21 C. Financial Management ..................................................................................................... 22 D. Procurement ..................................................................................................................... 22 E. Social and Environment (including Safeguards) ............................................................. 23 v Annex 1: Results Framework and Monitoring ............................................................................. 27 Annex 2: Detailed Project Description ........................................................................................... 30 Annex 3: Implementation Arrangements ...................................................................................... 42 Annex 4: Disclosable Operational Risk Assessment Framework ................................................ 64 Annex 5: Implementation Support Plan ........................................................................................ 68 Annex 6: Environmental and Social Screening and Assessment Framework (ESSAF) ........... 70 vi . PAD DATA SHEET Republic of Madagascar Madagascar Emergency Food Security and Social Protection Project (P147514) PROJECT APPRAISAL DOCUMENT . AFRICA AFTA2 Report No.: PAD918 . Basic Information Project ID EA Category Team Leader P147514 B - Partial Assessment Ziva Razafintsalama Lending Instrument Fragile and/or Capacity Constraints [ X ] Investment Project Financing - Fragile States - Natural or man made disaster Financial Intermediaries [ ] Series of Projects [ ] Project Implementation Start Date Project Implementation End Date 27-Feb-2014 30-Aug-2017 Expected Effectiveness Date Expected Closing Date 28-May-2014 28-Feb-2018 Joint IFC No Sector Manager Sector Director Country Director Regional Vice President Severin L. Kodderitzsch Jamal Saghir Haleh Z. Bridi Makhtar Diop . Borrower: Republic of Madagascar (MINAGRI) Responsible Agency: Bureau National, Bassins Versants Perimetres Irrigues Contact: Title: Telephone (261-20) 247-4385 Email: cpnbvpi@blueline.mg No.: Responsible Agency: FONDS D'INTERVENTION POUR LE DEVELOPPEMENT Contact: Title: Telephone 002612236150 Email: dirgen1@fid.mg No.: . Safeguards Deferral (from Decision Review Decision Note) Will the review of Safeguards be deferred? [ ] Yes [ X ] No Project Financing Data(in USD Million) [ ] Loan [ ] Grant [ ] Guarantee vii [X] Credit [ ] IDA Grant [ ] Other Total Project Cost: 65.00 Total Bank Financing: 65.00 Financing Gap: 0.00 . Financing Source Amount BORROWER/RECIPIENT 0.00 International Development Association (IDA) 65.00 Total 65.00 . Expected Disbursements (in USD Million) Fiscal 2014 2015 2016 2017 2018 0000 0000 0000 0000 Year Annual 10.00 15.00 20.00 18.00 2.00 0.00 0.00 0.00 0.00 Cumulati 10.00 25.00 45.00 63.00 65.00 0.00 0.00 0.00 0.00 ve . Proposed Development Objective(s) Project's development objective is to strengthen the Recipient’s immediate capacity to respond effectively to the food security and locust crises, by: (i) increasing agricultural production capacity in Project Areas, while enabling extremely poor households, in the Project Areas, to access cash transfers and cash for work activities; and (ii) improving the Recipient’s capacity to respond promptly and efficiently to an Eligible Crisis or Emergency. . Components Component Name Cost (USD Millions) Component A: Restoring and maintaining essential 39.00 agricultural productive capacity Component B: Providing a social safety net for the poor 17.20 Component C: Contingency emergency fund 0.00 Component D: Project management 8.80 . Institutional Data Sector Board Agriculture and Rural Development . Sectors / Climate Change Sector (Maximum 5 and total % must equal 100) Major Sector Sector % Adaptation Mitigation Co-benefits % Co-benefits % Agriculture, fishing, and forestry General agriculture, 65 fishing and forestry sector Health and other social services Other social services 35 Total 100 viii I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information applicable to this project. . Themes Theme (Maximum 5 and total % must equal 100) Major theme Theme % Rural development Rural services and infrastructure 45 Social protection and risk management Social safety nets 25 Environment and natural resources Water resource management 15 management Environment and natural resources Land administration and management 15 management Total 100 . Compliance Policy Does the project depart from the CAS in content or in other significant Yes [ ] No [ X ] respects? . Does the project require any waivers of Bank policies? Yes [ ] No [ X ] Have these been approved by Bank management? Yes [ ] No [ ] Is approval for any policy waiver sought from the Board? Yes [ ] No [ X ] Does the project meet the Regional criteria for readiness for implementation? Yes [ X ] No [ ] . Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 X Natural Habitats OP/BP 4.04 X Forests OP/BP 4.36 X Pest Management OP 4.09 X Physical Cultural Resources OP/BP 4.11 X Indigenous Peoples OP/BP 4.10 X Involuntary Resettlement OP/BP 4.12 X Safety of Dams OP/BP 4.37 X Projects on International Waterways OP/BP 7.50 X Projects in Disputed Areas OP/BP 7.60 X . Legal Covenants Name Recurrent Due Date Frequency National Steering Committee 28-Jun-2014 Description of Covenant ix The Recipient shall establish and thereafter maintain the National Steering Committee with composition and terms of reference satisfactory to the Association. Name Recurrent Due Date Frequency Recruiting Project Secretariat staff 28-Jul-2014 Description of Covenant The Recipient shall recruit a monitoring and evaluation specialist and a financial management specialist, each on the basis of terms of reference, qualifications and experience satisfactory to the Association and in accordance with the provisions of Section III of Schedule 2 to the Financing Agreement, to be assigned to the Project Secretariat. Name Recurrent Due Date Frequency PN-BVPI Project Manuals 28-Jul-2014 Description of Covenant The Recipient shall revise and update the PN-BVPI Project Manuals, and adopt the Project Implementation Manual, each in form and substance acceptable to the Association, for the purpose of implementing Project activities to be implemented by PN-BVPI. Name Recurrent Due Date Frequency FID Project Manuals 28-Jul-2014 Description of Covenant The Recipient shall have caused the Project Implementing Entity to revise and update the FID Project Manuals (except the Cash-for-Tree Procedure Manual), in form and substance acceptable to the Association, for the purpose of implementing its Respective part of the Project. Name Recurrent Due Date Frequency Cash-for-Tree Procedure Manual 28-Feb-2015 Description of Covenant The Recipient shall have caused the Project Implementing Entity to adopt the Cash-for-Tree Procedure Manual, in form and substance acceptable to the Association, for the purpose of implementing Part A.2(a) of the Project. Name Recurrent Due Date Frequency Audit 28-Nov-2014 Description of Covenant The Recipient has engage independent auditors for the purpose of carrying out the Project’s annual audits in accordance with the provisions of Section III of Schedule 2 to the Financing Agreement. Name Recurrent Due Date Frequency Procurement Complaint handling 28-Aug-2014 mechanism Description of Covenant The Recipient shall have established a procurement complaint handling mechanism acceptable to the Association. . Conditions Name Type Subsidiary Agreement Effectiveness x Description of Condition The Subsidiary Agreement has been executed on behalf of the Recipient and the Project Implementing Entity Name Type Recruitment of PN-BVPI staff Effectiveness Description of Condition The Recipient has recruited the following staff to work at least part time for the Project and be assigned to PN-BVPI, each on the basis of terms of reference, qualifications and experience satisfactory to the Association and in accordance with the provisions of Section III of Schedule 2 to the Financing Agreement. Name Type Establishment of Project Secretariat Effectiveness Description of Condition The Recipient has established the Project Secretariat in accordance with Section I.A.2 of Schedule 2 to the Financing Agreement. Name Type Disbursement of Category 3 (IRM Part with no Safeguard triggered) Disbursement Description of Condition The Recipient has determined that an Eligible Crisis or Emergency has occurred, has furnished to the Association a request to include said activities in the IRM Part in order to respond to said Eligible Crisis or Emergency, and the Association has agreed with such determination, accepted said request and notified the Recipient thereof Name Type Disbursement of Category 3 (IRM Part with no Safeguard triggered) Disbursement Description of Condition The Recipient's Coordinating Authority has adequate staff and resources, in accordance with the provisions of Section I.C.2 of this Schedule 2 to the Financing Agreement, for the purposes of said activities Name Type Disbursement of Category 3 (IRM Part with no Safeguard triggered) Disbursement Description of Condition The Recipient has adopted an IRM Operations Manual in form, substance and manner acceptable to the Association whose provisions remain - or have been updated in accordance with the provisions of Section I.C.1(c) of this Schedule 2 to the Financing Agreement so as to be - appropriate for the inclusion and implementation of said activities under the IRM Part. Name Type Disbursement of Category 4 (IRM Part with Safeguard triggered) Disbursement Description of Condition All conditions to a first disbursement under Category (3) as described in paragraph (b) of the Financing Agreement are satisfied Name Type Disbursement of Category 4 (IRM Part with Safeguard triggered) Disbursement xi Description of Condition The Recipient has prepared and disclosed all safeguards instruments required for said activities, and the Recipient has implemented all actions which are required to be taken under said instruments, all in accordance with the provisions of Section I.C.3(b) of Schedule 2 to the Financing Agreement. Name Type Retroactive Financing Disbursement Description of Condition Withdrawals up to an aggregate amount not to exceed equivalent to USD3,200,000 may be made for payments made prior to this date but on or after January 1, 2014, for Eligible Expenditures Team Composition Bank Staff Name Title Specialization Unit Michael Morris Lead Agriculture Lead Agriculture LCSAR Economist Economist Katy Roffe Sr Program Asst. Sr Program Asst. AFCMG Hassine Hedda Senior Finance Officer Senior Finance Officer CTRLA Juvenal Nzambimana Senior Operations Senior Operations AFTA1 Officer Officer Marie-Claudine Fundi Language Program Language Program AFTA2 Assistant Assistant Ziva Razafintsalama Senior Rural Team Leader AFTA2 Development Specialist Andrea Vermehren Lead Social Protection Lead Social Protection AFTSE Specialist Specialist Marie Jeanne Senior Executive Senior Executive AFTA2 Uwanyarwaya Assistant Assistant Cheikh A. T. Sagna Senior Social Senior Social AFTCS Development Specialist Development Specialist Andre Teyssier Sr Land Administration Sr Land Administration AFTA2 Specialist Specialist Helene Bertaud Senior Counsel Senior Counsel LEGAM Paul-Jean Feno Senior Environmental Senior Environmental AFTN1 Specialist Specialist Lova Niaina Procurement Specialist Procurement Specialist AFTPE Ravaoarimino Pierrick Fraval Sr Water Resources Sr Water Resources AFTA2 Spec. Spec. Joseph Byamugisha Financial Management Financial Management AFTME Specialist Specialist Jan Joost Nijhoff Senior Agriculture Senior Agriculture AFTA2 Economist Economist Bodomalala E T Temporary E T Temporary AFMMG xii Sehenoarisoa Rabarijohn Non Bank Staff Name Title Office Phone City Christophe Ribes Ros Consultant Barcelona . Locations Country First Location Planned Actual Comments Administrative Division Madagascar Sava Sava Region X X Madagascar Boeny Boeny Region X Madagascar Alaotra Mangoro Alaotra Mangoro X Region Madagascar Bongolava Bongolava Region X Madagascar Vakinankaratra Vakinankaratra X Region Madagascar Itasy Itasy Region X Madagascar Menabe Menabe Region X Madagascar Amoron'i Mania Amoron'i Mania X Region Madagascar Upper Matsiatra Haute Matsiatra X Region Madagascar Ihorombe Ihorombe Region X xiii I. STRATEGIC CONTEXT 1. Madagascar is on the brink of an unprecedented national food security crisis. A major locust infestation and repeated cyclones, floods, and droughts have compounded the socioeconomic effects of a five-year political crisis triggered by the unconstitutional ousting of the President in 2009. These devastating, overlapping events have caused extensive losses of infrastructure, agricultural production, and livelihoods in this predominantly rural country, where over 17 million people depend on agriculture for all or part of their livelihoods. In June 2013, 1 an estimated 90 percent of the population —approximately 19 million people— lived on less than US$2 per day. At US$430, gross national income per capita is lower than it was a decade ago, and food insecurity (defined as a lack of availability and economic access to nutritious food sufficient for a healthy and active life) affects approximately 20 percent (some 4 million persons) of Madagascar’s population of 21 million. 2. Since the onset of the political crisis, government expenditure to maintain rural irrigation infrastructure, agricultural support services, and social protection services has dropped virtually to zero as the transitional government (Haute Autorité de la Transition, HAT) has focused on ensuring macro-economic stability. The first round of presidential elections in October 2013 was followed by a second round in December 2013 which resulted in the election of Hery Rajaonarimampianina, the first president democratically elected since 2009. Regardless, the scale and depth of the country’s political and social and economic crises clearly indicate that any recovery will be long, complex, and require emergency assistance in the short term to address the most urgent food security challenges. 3. The proposed Emergency Food Security and Social Protection Project aims to restore agricultural production in areas severely affected by locusts and drought, and to preserve production in the country’s major rice-producing areas where neglect and locusts have not yet devastated the production base. The proposed project is one of a series of emergency measures supported by the World Bank to respond to Madagascar’s continuing humanitarian and political crises. It seeks to address the immediate effects of the crises and avert food shortages on an even wider scale, which could have highly adverse social impacts and foster additional civil unrest. In parallel with the proposed project, the Bank is proposing an Additional Financing to the Emergency Support to Critical Education, Health, and Nutrition Services Project. The Additional Financing will support community nutrition sites in additional regions of the country to deliver a set of “nutrition-specific” or “direct” interventions to mitigate child malnutrition. It will also support multisectoral activities delivered through the nutrition sector to promote food security at the community and household levels. Together, these proposed interventions—which would operate in the same geographic areas—can address three essential elements of food security: production (by increasing agricultural production), supply (by providing community nutrition services), and demand (by providing safety net activities for extremely poor families). 1 Madagascar Poverty, Gender, and Inequality Assessment, Poverty Reduction and Economic Management (PREM), June 2013. 1 A. COUNTRY CONTEXT 4. Presidential and parliamentary elections. The first round of presidential elections in October 2013 was followed by a second round in December 2013 which resulted in the election of Hery Rajaonarimampianina, the first president democratically elected since 2009. 5. Economic growth has stagnated in Madagascar since the onset of the political crisis, and poverty has increased substantially, particularly in rural areas. The ongoing political crisis— which is only the most recent episode in a long cycle of periodic political instability (Figure 1)— has strangled economic growth. Prior to the crisis, Madagascar’s economy was growing by 5 percent per year on average, but growth was flat in 2009–13, and the cumulative cost of the crisis to the Malagasy economy is now an estimated US$ 8 billion. From the onset of the crisis in 2008 to 2013, poverty increased by 10 percentage points, leaving Madagascar entrenched among the world’s most impoverished nations. The effects have been most severe among rural households. Figure 1. The correlation between Growth and Socio-political crises in Madagascar (1960–2010) 150 50% 45% 130 40% 35% Political crisis 1972 Political 30% 110 crisis 1991 Political crisis Political crisis 25% 2001-02 2008-09 20% 90 15% 10% 70 5% 0% 50 -5% -10% 30 -15% PIB par tête (1984=100) Tx croissance PIB (réel ; éch. droite) Source: Razafindrakoto et al. (2012), “Institutions, gouvernance et croissance de long terme à Madagascar : l’énigme et le paradoxe, ” IRD/DIAL, Université Paris Dauphine. Based on INSTAT data. 6. The socioeconomic effects of the political crisis have been exacerbated by the suspension of external aid. International aid traditionally represented at least half of the government budget. When aid was suspended, the government slashed expenditures drastically. Some of the most extreme reductions occurred in expenditures on public investment and the delivery of public services in health, education, and land administration, particularly in rural areas. The operation and maintenance of key lifeline infrastructure was severely curtailed. The relative share of social protection expenditures in the national budget fell from 13.4 percent in 2007 to 2.9 percent in 2010—of which 86 percent was allocated to public pension schemes. 7. Rising prices of staple foods, particularly rice, have historically been at the heart of social and political unrest in Madagascar. Market prices for staple foods rose significantly in 2013, in some cases by 100 percent compared to the same period in the previous year, amid reports of shortages. Four years of political transition and related instability have depleted Madagascar’s productive capacity in agriculture, led to deregulation or weak enforcement of public policies, and 2 heightened pressure on natural resources (including forests) and incentives for land grabbing. Crop failures induced by the continuing locust plague and drought were acute in 2012–13. Drought has negatively affected crop production in 2013 in most regions. The ongoing locust infestation has destroyed up to 50 percent of food crops, primarily in regions that are not covered by the two emergency operations currently supported by the World Bank. Nationally, 21 percent less rice was produced in 2013 compared to 2012, reducing the marketed surplus and availability of food for producers as well as consumers in rural and urban areas. The import gap for rice widened further from the usual 100,000 metric tons to 240,000–300,000 tons (FAO and private sector estimates, respectively). Madagascar’s international commodity trading capacity (especially its logistical and financial systems) and its domestic marketing systems probably cannot accommodate import volumes of this magnitude in the short term. If history is any guide, failure to manage imbalances in rice availability and curb soaring prices will likely spark civil unrest. 8. Amid the cumulative effects of weakened governance, agro-climatic instability, and an unfolding food security crisis, the Malagasy population is falling deeper into poverty and increasingly unable to cope with exogenous shocks. Crop failures in the highlands south of Antananarivo (the capital city), which have traditionally produced surplus rice for the market, have unleashed a series of adverse outcomes. Farm households have lost income and depleted their assets. Emergency sales of cattle and land are on the rise, accompanied by an alarming increase in cattle theft and banditry. School attendance has fallen off. In several parts of the country, acute malnutrition, measured as the incidence of wasting (the reduction in weight for height for a reference population) is spreading. For example, in some of the most food-insecure regions in southeastern, southwestern, and central Madagascar, rates of acute malnutrition have risen by over 50 percent since 2012. Access to basic healthcare and other social services is limited by the increasing out-of-pocket expenditures, among other factors. In sum, households that were once relatively resilient and productive are exhausting their coping mechanisms, going hungry, and descending into poverty. Without effective safety nets, these “newly poor” households, together with those households that were already poor or extremely poor prior to the current crises, face a future of deeply entrenched poverty in which their most basic human development needs—for food, health, and education—are unmet. B. SITUATION OF URGENT NEED OF ASSISTANCE 9. The continuing locust infestation is one of three key drivers of Madagascar’s unfolding food security crisis. Since April 2012, in most of the surplus food production areas identified previously, the Malagasy migratory locust (Locusta migratoria capito) has threatened the livelihoods of 13 million people, 9 million of whom earn a living from agriculture. Rice production in those areas declined by an estimated 400,000 tons in 2013. As marketable surplus dwindled, food prices in some densely populated areas doubled compared to previous year. The Food and Agriculture Organization (FAO) reports that food insecurity now affects four million people. FAO estimates that at least three successive locust control campaigns costing a total of US$43.9 million will be required to treat more than two million hectares between September 2013 and September 2016. IDA, through the ongoing Emergency Infrastructure Preservation and Vulnerability Reduction Project, has contributed the equivalent of US$10 million toward the first campaign, which is expected to extend from September 2013 to August 2014. Aerial surveys to assess the extent of the outbreak, identify the hotspots of infestation, forecast the movements of locust populations, and deploy aerial bases, started in late September 2013. Control operations were launched the following November. Almost 50,000 hectares have been treated or protected with 3 conventional pesticides and insect growth regulators. In the outbreak areas alone, more than 13,000 hectares were treated. 10. The second driver of the food security crisis is the widespread loss of resilience in Madagascar’s agricultural production systems, which increases the likelihood of long-term food insecurity. Six months after a crop failure, many producers will have exhausted their resources to recover, and with no outside assistance to pay for seed, fertilizer, and labor, they will struggle to revive their farm enterprises. The country’s exposure to severe cyclones, floods, and drought has always been high and has never been moderated by an effective early warning or risk management systems at the local level. Even without locust infestations and drought, the productive capacity and resilience of the agricultural sector was precarious in recent years as budget cuts decimated funds for repairing road and irrigation infrastructure and delivering services to farmers. Unless Madagascar restores and maintains the productive capacity of its agricultural communities and systems in the areas that are critical producers of surplus food, the agricultural sector will become even less capable of rebounding from its recent setbacks, initiating a vicious cycle of food insecurity, income insecurity, increasing vulnerability, and poverty. Several related issues demand immediate attention in an integrated manner, including insecure land tenure (which fosters the predatory acquisition of land and discourages investments to improve productivity) as well as environmental degradation in key watersheds, which destroys irrigation infrastructure and renders agricultural land far less productive. 11. The third driver of food insecurity is extreme and widespread poverty. About one-third of the population is extremely poor. They are the “have-nots,” lacking food, basic education, healthcare, basic household assets, and electricity. Their extreme deprivation makes it difficult for most activities and programs, whether related to agriculture, education, health, or nutrition, to include them in a beneficial way. As the locust and drought crises continue to expand the numbers of households in extreme poverty, including households that previously supplied food to the main urban areas, the key to their survival—and their children’s long-term development—is access to targeted safety net programs that complement and enable them to benefit from rural development and community nutrition programs. C. SECTORAL AND INSTITUTIONAL CONTEXT 12. The vast majority of the Malagasy population lives in households whose income is highly dependent on agriculture, and the agricultural sector contributes to about one-third of gross domestic product (GDP). For 81 percent of all households (89 percent in rural areas), agriculture is either a principal or secondary economic activity. 2 Most of these households engage in subsistence farming, which is characterized by extremely low levels of productivity. Productivity is low for a wide range of reasons, including limited uptake of improved technology, such as high-yielding seed, fertilizer, and agricultural machinery; insecure land tenure under traditional tenure arrangements; poor access to credit (only 3 percent of farmers use formal credit); inadequate storage facilities; and deficient transport infrastructure. Most agriculture is highly dependent on rainfall. The livelihoods provided by subsistence farming are already meager, owing to the persistent environmental degradation brought about by unsustainable farming practices, and they are extremely vulnerable to the depredations of drought, cyclones, and floods. 2 INSTAT (2011). “Enquête périodique auprès des Ménages 2010.” Ministry of Economy and Industry. 4 13. Madagascar’s urban population (one-third of the total, or approximately 7 million people) depends on rural rice production zones for their staple food supply. A large proportion of these populated areas are located in the central highlands that constitute the inner regions of the country (Analamanga, Itasy, Vakinankaratra, Amoron’i Mania, and Haute Matsiatra Regions) and along the eastern coast. The supply of rice for these areas originates from important surplus production zones in Alaotra Mangoro (Central-East), Boeny (North-West), Itasy and Bongolava (Midwest), the western parts of Vakinankaratra and Amoron’i Mania, Haute Matsiatra, and specific areas in Ihorombe (Central-South). Virtually all surplus rice is produced by smallholders, some of whom have access to irrigation, although most rice is grown under less-efficient rain-fed conditions. 3 Domestic trade in rice and maize is complemented by imports (as noted, usually less than 100,000 tons per year). Improved and expanded small-scale irrigation facilities would reduce the growing dependence on imports. 14. Allegations of land grabbing contributed to the unrest in 2009. Land grabbing not only diminishes the asset base of the households involved but can push them deeper into poverty and trigger further widespread unrest. Short-term protection of smallholders’ land rights is urgently needed to prevent further land losses and disputes. Unfortunately no lessons were drawn from the land-grabbing events that precipitated the current crisis, and new large-scale acquisitions of land by foreign companies are occurring despite regular alerts from civil society. 15. No social safety net exists for Madagascar’s extremely poor households. Social safety net expenditures decreased alarmingly following the 2009 crisis. The remaining safety net programs (mostly supported by international organizations) have provided short-term support to a limited number of households—a valuable intervention, but one that cannot meaningfully counter a crisis as wide and deep as the current crisis in Madagascar. The recent national elections have revived hope that a window of opportunity will emerge for Madagascar to develop a safety net approach for the longer term, to which the proposed project could contribute. An unrealized government strategy 16. The current transitional government is operating without an overriding economic or poverty reduction strategy. The previous government had developed an ambitious poverty reduction strategy—the Madagascar Action Plan (MAP)—for the period from 2007 to 2012. The plan reaffirmed the government’s commitment to build and maintain infrastructure, increase agricultural production, enhance social protection, and mitigate and respond to the impacts of natural disasters. The MAP outlined a strategy for Madagascar to reach the Millennium Development Goals (MDGs) and support the poorest and most vulnerable segments of the population. The deepening political crisis prevented the MAP from being realized. 17. Of necessity, the transition administration has focused on the daily management of the country rather than long-term policy initiatives. The approach of the HAT has been prudent and pragmatic. Faced with a severe decline in fiscal revenues following the economic slowdown, coupled with sharp cutbacks in development partners’ financial support, the authorities elected to reduce public spending in many areas, including social spending, rather than to engage in spending based on monetary expansion that would feed inflation. The government has remained current on salary payments to civil servants and the military, but it has fallen behind in the operation and 3 Approximately 40 percent of Madagascar’s rice fields are irrigated. 5 maintenance of critical infrastructure for transport, agriculture, health, and education. New investments have been extremely limited. 18. To deal effectively with the locust crisis, the HAT developed a national action plan for locust control in collaboration with development partners, led by FAO. The three-year emergency locust control program attempts to bring the outbreak under control in the short term and strengthen the capacity to prevent similar outbreaks over the medium term. Partial funding for the program has been secured, including a Bank contribution of US$ 10 million from the contingency component of the Emergency Infrastructure Preservation and Vulnerability Reduction Project (Projet d’Urgence pour la Préservation d’Infrastructure et la Réduction de la Vulnerabilité, PUPIRV). The proposed project will contribute resources to an important institutional capacity-building component of the national locust action plan. The World Bank’s response and rationale for the proposed project 19. The proposed project aims to address rising food insecurity and vulnerability among rural households and a significant proportion of urban consumers. The project aims to restore and maintain agricultural productive capacity among farming communities in key areas that produce surplus food and are affected by locusts and other natural disasters, and to reduce vulnerability among the poorest households. These interventions will not only directly improve the livelihoods of the rural population in the target areas but will restore and increase the food supply for urban centers in a sustainable manner. The interventions have the potential to benefit several million consumers while reducing dependence on food imports to manageable levels consistent with market capacity. The project would also create short-term employment through cash-for-work and other cash transfer modalities that provide a temporary social safety net for the most vulnerable groups. 20. The proposed project will also support key institutions that would otherwise become ineffective or disappear entirely. The project will build institutional capacity to develop early warning systems and prevent future locust infestations, maintain the capacity to manage irrigation infrastructure to mitigate the risks associated with drought, and protect investments in irrigation infrastructure through interventions in land management and upstream watershed management. The project will also provide vital support to the Malagasy Land Observatory (Observatoire du Foncier à Madagascar), which plays a key role in monitoring land tenure security. 21. The interventions to be supported under the project have been selected based on three criteria. First, they have potential to help restore and maintain critical surplus food production capacity and to reduce vulnerability among affected households in project areas. Second, they can be implemented quickly and achieve results rapidly on the ground. Third, no alternative means exist to support the intervention. While an emergency response calls for an immediate focus on priority actions to forestall the deepening food security crisis, it will take some time to restore the capacity and resilience of Madagascar’s food security systems and overcome the widespread neglect of recent years. 22. The high-potential production areas affected by locusts and drought and targeted by the proposed project have not largely received development assistance and are experiencing a financing shortfall. The activities financed under the proposed project would complement interventions currently supported or proposed by other development partners in and around the targeted areas. Support for agriculture from the European Union (EU) and African Development Bank (AfDB) is concentrated in poor regions in far southern and southwestern Madagascar. The 6 International Fund for Agricultural Development (IFAD) supports agriculture throughout the country, and IFAD’s support for rural enterprises and agricultural service delivery in two of the regions targeted by the proposed project will foster complementarities and synergies rather than duplication. Similarly, social protection activities focus on southern and eastern Madagascar; the emergency PUPIRV project, the proposed project, and activities implemented by the World Food Programme (WFP) and UNICEF will provide complementarity. The high-potential areas included in the proposed project consist of small-scale irrigated production schemes in districts that are already affected by locusts and drought. In those schemes, which border densely populated areas in the central highlands and are also found in some eastern coastal areas, agricultural productive capacity needs to be restored, expanded, and made more resilient and sustainable. In addition, the project will operate in three highly productive and large irrigated rice schemes in northwestern, central east, and northern Madagascar. These areas need to maintain their strategic capacity to supply food despite drought (which has already affected them) and locusts (from which they must be protected to avoid future production losses). The proposed project’s geographic coverage is mapped in Annex 7 and discussed in greater detail in Section III. 23. IDA has a demonstrated record of delivering results in the activities envisaged under the proposed project, has the knowledge required to plan effective multi-sectoral interventions, and benefits from established implementation capacity. In the agricultural sector, IDA has financed successful rural development projects that are the centerpiece of the national agricultural development strategy. The recently closed Rural Development Support Project (Projet de Soutien au Développement Rural) demonstrated an effective approach for delivering agricultural services to vulnerable groups in remote rural areas. The recent Irrigation and Watershed Management Project (Projet Bassins Versants et Périmètres Irrigués, BVPI) has catalyzed substantial productivity increases and built technical and institutional capacity that will contribute to the proposed project. In social protection, community development and cash-for-work activities pioneered by IDA through the Intervention Fund for Development (Fonds d’Intervention pour le Développement, FID) have significantly increased incomes in target groups. 24. The proposed project will take advantage of existing implementation capacity and explore synergies between sectors. To facilitate implementation and deliver rapid results on ground, it will build on activities that are already underway. The implementing agencies (IAs) for the proposed project are the National Irrigation and Watershed Management Program (PN-BVPI) for agricultural activities and FID for social safety net activities. Both institutions have a successful project implementation history and are well suited to implement the emergency measures described here. Furthermore, the proposed project builds synergies between agricultural and safety net interventions. Both types of intervention will occur in parallel in the same areas to ensure that support is available for the extremely poor households as well as the agricultural producers targeted by the project. Second, the cash-for-work safety net will complement agricultural activities by providing, for example, aid in return for employment to rehabilitate terraces, eroded hillsides, or small feeder roads between irrigated perimeters and markets. Third, the project will support better land management to prevent households from falling into extreme poverty by using FID to implement a cash-for-trees program (which is not a safety net activity but rather an erosion prevention activity). 25. The project is prepared in accordance with the recently revised OP 10.00, which under Paragraph 11 provides for the possibility of undertaking projects in “Situations of Urgent Need of Assistance or Capacity Constraints.” In cases where the beneficiary is deemed by the Bank to: (i) be in urgent need of assistance because of a natural or man-made disaster or conflict or (ii) experience 7 capacity constraints because of fragility or specific vulnerabilities; the Bank may provide support through Investment Project Financing under normal Investment Project Financing policy requirements with exceptions. Both of these situations apply to Madagascar, and therefore the application of OP 10.00, paragraph 11 to the proposed project is deemed to be warranted. D. HIGHER-LEVEL OBJECTIVES TO WHICH THE PROJECT CONTRIBUTES 26. In March 2009, the Bank suspended the preparation and approval of new lending to Madagascar in accordance with OP/BP 7.30 (Dealings with De Facto Governments) following an unconstitutional regime change. Given the continued application of OP/BP 7.30 to Madagascar, a two-year Interim Strategy Note (ISN), discussed by the Board in February 2012, proposes a cautious, strategic, and selective approach to new operations in Madagascar (recently classified as a fragile state) to mitigate the severe impact of the political and humanitarian crises on the most vulnerable populations. The ISN identifies education, health, nutrition, and the impact of external shocks on the poor (such as food crises and natural disasters requiring disaster rehabilitation/repairs, safety nets, and agricultural support) as key initial focus areas for FY13 operations. In line with the ISN, two emergency operations were approved in FY13, one focusing on preserving essential infrastructure damaged during a series of cyclones in 2012 and 2013, and another on maintaining essential health, nutrition, and education services to vulnerable populations, mostly in central and southeastern Madagascar. 4 27. In the context of the ISN and the ongoing emergency operations, the project will address emergency needs in complementary sectors—namely agriculture, land management, and social protection. As mentioned, an Additional Financing to the nutrition subcomponent of the existing Emergency Support to Education, Health, and Nutrition Services Project (Projet d’Appui d'Urgence destiné à la Préservation des Services Essentiels de l'Education, de la Nutrition et de la Santé, PAUSENS) (P131945) has been proposed to provide nutrition interventions in the areas targeted by the proposed project. II. PROJECT DEVELOPMENT OBJECTIVES A. PDO 28. The PDO is to strengthen the Recipient’s immediate capacity to respond effectively to the food security and locust crises, by: (i) increasing agricultural production capacity in Project Areas, while enabling extremely poor households, in the Project Areas, to access cash transfers and cash for work activities; and (ii) improving the Recipient’s capacity to respond promptly and efficiently to an Eligible Crisis or Emergency. 4 PUPIRV (P132101) and PAUSENS (P131945). 8 B. PROJECT BENEFICIARIES 29. Project beneficiaries include rural communities in targeted districts and municipalities (communes) with irrigated crop production. They will include individual farmers and farm households, as well as farmer organizations and water user associations, for an estimated total of 30,000 households. Service providers will be strengthened through capacity building and carrying out activities that will benefit an additional number of farmers (possibly 10,000) who may not be included in the project’s irrigation rehabilitation activities. Indirectly, many thousands of consumers will benefit from the increased output that is marketed as a result of the proposed project’s activities. A total of 325,000 smallholders whose rights to land are presently undocumented will receive land certificates. These smallholders cultivate less than 0.8 hectare and remain at risk of losing their property as long as their rights are not officially recognized, especially in the current context of weakened governance and political uncertainty. Some 80,000 households will be subsidized to participate in an emergency tree planting operation in the upstream watershed connected with the irrigated perimeter to be rehabilitated. That activity will protect and foster the sustainability of investments in irrigation and agricultural intensification. 30. As mentioned, the beneficiaries of the social safety net component are extremely poor households living in the two project areas described in detail in Section III. Within these areas, FID and PN-BVPI will work together to select the specific localities (micro-areas) in which they will coordinate their interventions. The committees of the selected communities, with the guidance of nongovernmental organizations (NGOs), would identify their poorest members based on previously established criteria, as indicated in the FID Operational Manual. A poverty scorecard (based on a proxy means test) would be applied to validate the community’s selection and produce the final list of beneficiaries. The proxy means test would include such information as the composition of the household and its assets. About 60,000 extremely poor households, representing an estimated 330,000 people, would be included in the safety net activities and receive a regular income over two to three years (depending on the date of selection). Extremely poor female-headed households, elderly persons, or disabled persons would receive direct cash transfers. Families with able-bodied members would receive income conditional on providing labor and/or participating in nutrition and other community-based activities that would foster their inclusion in the larger community and develop their human capital. C. PDO LEVEL RESULTS INDICATORS 31. Three core indicators have been selected to measure the PDO: i. Area provided with irrigation and drainage services (measured in hectares). ii. Beneficiaries of safety net programs in project areas, 50 percent of whom are female (measured in number). iii. Project beneficiaries, 50 percent of whom are female (measured in number). III. PROJECT DESCRIPTION 32. The proposed financing of the Emergency Food Security and Social Protection Project for an equivalent amount of US$65 million would be funded from the remaining IDA16 allocation for 9 Madagascar. The proposed project would complement the Bank’s series of ongoing emergency operations in the infrastructure and human development sectors. 33. The proposed project aims to reduce widespread food insecurity in the aforementioned project areas through three complementary elements. The first element is to restore and maintain productive capacity in small-scale irrigated food production zones of the central-west highlands that are affected by locusts and drought. These areas supply surplus rice and other commodities to densely populated urban and peri-urban areas. Improved land tenure security—which is integral to food security and part of the first element of the project—will help to increase agricultural productivity, as shown by evidence on land practices in rural Madagascar. The second element is to maintain and expand productive capacity in selected large irrigated rice production schemes that supply over 100,000 tons of rice to the market. These areas are not yet affected by the locust plague but suffered from drought during critical periods of the 2013 cropping season. The third element is to protect extremely poor families from food insecurity by providing a social safety net to selected vulnerable households in the two aforementioned project areas. Geographical Targeting 34. The two geographically and agriculturally distinct production areas targeted by the project jointly supply most of the food for Madagascar’s most densely populated areas. Several million people in urban and peri-urban areas in the highland areas of Analamanga, Itasy, Vakinankaratra, Amoron’i Mania, and Haute Matsiatra, as well as in various areas along the eastern coast, depend on the surplus rice and other crops produced in these two areas. 35. Despite their commonalities as surplus food producers, the two project areas differ in the type of agricultural production systems they support and in the extent to which production has been affected by locust attacks, drought, failure to maintain essential irrigation infrastructure, and deteriorating socioeconomic conditions. These differences have influenced the different project interventions envisioned for each area. 36. Project Area 1 (locust-affected zones) includes small-scale irrigated schemes in districts that have already been affected by locusts and drought and where agricultural productive capacity needs to be restored and maintained (made more resilient and sustainable). These schemes are located in Itasy, Bongolava, Menabe, Vakinankaratra, Amoron’i Mania, Haute Matsiatra, and specific areas in Ihorombe. Despite their agricultural activity, the selected regions rank among the poorest in the country, with a 70–90 percent poverty count. 5 Within these regions, the precise locations for interventions will be selected closer to the time of project effectiveness so as to best meet current needs on the ground, based on updated information on locust infestations and drought. 37. Project Area 2 (drought-affected breadbaskets) comprises three large, highly productive irrigated rice schemes in northwestern (Marovoay in Boeny Region), central-east (Alaotra), and northern (Andapa) Madagascar that have been affected by drought and whose strategic food supply capacity must be maintained and expanded to prevent future production losses. These targeted areas have not yet been affected by locusts, but drought caused severe crop losses in Boeny and Alaotra during 2013, confirming the importance of preserving and expanding irrigation infrastructure to enhance resilience to unpredictable rainfall. The three irrigation schemes provide 5 INSTAT/DSM, 2010. 10 livelihoods to tens of thousands of farmers and, as noted, supply an estimated 100,000 tons of rice to the national market. The poverty count in the regions where the three irrigation schemes are located ranges from 60 to 80 percent. 38. Within these two areas, the project will identify micro-areas where the project components can be combined to provide an effective package to combat food insecurity. Where possible, this effort would encompass activities of the community nutrition program under the proposed Additional Financing. Furthermore, within these micro-areas, the safety net beneficiaries would be targeted through a combination of community pre-selection and proxy means testing, which FID is developing. Synergies of Project Interventions 39. To support the wider effort to meet Madagascar’s emergency needs in complementary sectors—namely, in agriculture, land and watershed management, and social protection—the proposed project will coordinate and develop synergies with other programs of the government and development partners, based on the activities involved or geographical location and comparative advantage of those programs. For example, the project will coordinate with EU, AfDB, and IFAD programs in complementary sectors in many parts of the country. The Project is well aligned with the proposed Irrigation and Watershed Management Project of US$12.6 million to be funded by the Japanese Policy and Human Resources Development Fund. Project activities have also synergies in implementation with the two ongoing Bank-funded emergency operations (PUPIRV and PAUSENS). 40. In addition, the two project components (agriculture and safety net activities) will be implemented in the same geographic areas, thus supporting both the poor (that own some land) and the extreme poor (the 'have nothings'). A. PROJECT COMPONENTS Component A: Restoring and maintaining essential agricultural productive capacity (US$ 39million) 41. Subcomponent A.1: Rapid delivery of agricultural services and rehabilitation of essential irrigation and market access infrastructure (US$ 29 million). To improve food productivity and production and preserve rural incomes in the short term, both in areas affected by locusts and in the highly productive breadbasket zones, this subcomponent will finance three major activities. The first is the emergency distribution of improved seed, fertilizer, tools, and associated technical assistance to enable rapid increases in food production, including the promotion of nutrition- enhancing crops. The second set of activities involves the rehabilitation and maintenance of small- scale agricultural infrastructure, both micro-irrigation systems and large irrigation schemes, complemented by capacity strengthening for producer organizations and water user associations to sustainably manage irrigation infrastructure and take advantage of income-generating opportunities generated by the project (including rehabilitation of small storage infrastructure). The third set of activities involves institutional capacity building to enable the Recipient’s locust control unit (CNA) to carry out its mission more efficiently (diagnostic and implementation of CNA’s reform). 11 42. Subcomponent A.2: Protecting infrastructure investments by improving watershed and land management and climate resilience (US$ 10 million). This subcomponent will include the following activities to support erosion control efforts in Project Area 1: (i) a cash-for-trees approach that would provide incentives for smallholders to reforest their lands in the watersheds surrounding the irrigated areas and (ii) a cash-for-work operation to support erosion control works. 43. This subcomponent also supports the independent national Land Observatory and provides support to land offices at the municipal level—Communal Land Offices (Guichets Fonciers)—to facilitate rapid and low-cost transfer of legal land rights to farming households. To make agricultural investments more resilient when they are exposed to natural disasters, this subcomponent supports the expansion of national early warning systems for cyclones and floods, as well as the development of basic, climate-resilient infrastructure for agriculture in project zones. 44. The project implementation unit (PIU) of PN-BVPI will implement all activities under Component A, except for the subset of activities related to the cash-for-trees operation which will be implemented by FID. Component B: Providing a social safety net for the poor (US$ 17.2 million) 45. This component provides a basic safety net to the poorest families in selected project areas through cash-for-work activities or conditional cash transfers. The cash-for-work activities, selected for their potential synergies with the productive activities under Component A, will provide selected extremely poor households with temporary employment of up to 45 days per year; households that cannot provide labor (such as female-headed households) will receive temporary cash transfers. Particularly vulnerable groups will receive bi-monthly cash transfers conditional on the use of health, nutrition, and/or other locally available services. To establish a beneficiary registry, enhance payment modalities, and support third-party monitoring (for example, through operational audits) and impact evaluation, the project will provide essential equipment and selected technical assistance. FID is considering using the services of UNICEF with respect to training on communications related to human development outcomes of beneficiaries and support the implementation of essential family services at the community level. 46. FID will implement all activities under Component B. Component C: Contingency emergency fund (US$ 0 million) 47. This component establishes a disaster recovery contingency fund that could be triggered in the event of a natural disaster through formal declaration of a national or regional state of emergency, or upon a formal request from the Government of Madagascar in the wake of a disaster. In that case, funds from the other project components could be reallocated to Component C to facilitate rapid financing of a positive list of goods and services related to Components A and B. Eligible activities would include clearing and rehabilitating road and irrigation infrastructure, rehabilitating schools and health centers, or purchasing construction materials, agricultural inputs, or materials for schools or health centers. This component will be managed either by PN-BVPI or FID, depending on the nature of the disaster response to be implemented. Component D: Project management (US$ 8.8 million) 12 48. Based on lessons learned from ongoing emergency operations, the proposed project will use a simple organizational structure that relies on the institutional capacity and experience of two project implementation agencies that have performed well: PN-BVPI and FID. PN-BVPI will be in charge of managing the proposed project, including the planning and implementation of activities under Component A and technical assistance for policy analysis in support of the development of well-functioning staple food markets as part of Component D. As noted, FID will implement activities under Component B. The agency in charge of managing Component C will be determined if and when an emergency response measure is defined. B. PROJECT FINANCING Table 1: Project cost and financing Project cost IBRD or IDA Project components Financing (%) (US$ million) financing 1. Component A (Agricultural Production) IDA 100% Subcomponent A.1 29 Subcomponent A.2 10 2. Component B (Social Safety Nets) 17.2 IDA 100% 3. Component C (Contingency Fund) 0 IDA 100% 4. Component D (Project Management) 8.8 IDA 100% Total costs 65 IDA 100% Total financing required 65 IDA 100% C. LESSONS LEARNED AND REFLECTED IN THE PROJECT DESIGN 49. Improvements in agricultural productivity are integral to economic growth, poverty reduction, and food security throughout sub-Saharan Africa, most particularly in fragile and conflict-affected states (FCS). Despite its impressive potential, sub-Saharan Africa continues to lag behind all other regions in terms of agricultural productivity. Agriculture employs about 65 percent of the labor force in sub-Saharan Africa on average, yet the sector provides about 32 percent of GDP, reflecting its relatively low productivity. 6 Several studies have noted that meeting the MDGs will require consistent, broad-based growth led by the agricultural sector, accompanied by dramatic improvements in infrastructure, governance, and other social indicators. Improving the productivity of agriculture in sub-Saharan Africa will depend on a host of factors, including climate, efficient and effective use of production factors (land, water, and labor) and agricultural inputs (seed, fertilizer, irrigation, and capital equipment), and farmers’ skills. 50. In FCS, agriculture is the largest real sector, accounting for about one-fourth of GDP on average and a much larger share of employment. 7 In FCS and IDA countries more generally, agriculture is dominated by small-scale private enterprises that employ a large proportion of the national labor force (a characteristic shared by Madagascar). Agriculture is a critical sector for future growth in production and employment as well as food security in FCS. Household surveys 6 Alliance for a Green Revolution in Africa (AGRA) (2013), Africa Agriculture Status Report 2013, Nairobi. 7 IEG (Independent Evaluation Group) (2013), “World Bank Group Assistance to Low-Income Fragile and Conflict- Affected States: An Independent Evaluation” (World Bank, Washington, DC). 13 have shown that growth in the agricultural sector is more effective in reducing poverty among the poorest groups than among any other groups in rural areas, because the poorest groups tend to be most closely involved with agriculture and thus to gain most directly and immediately from higher agricultural productivity. For all of these reasons, the proposed project devotes considerable resources to interventions that enable extremely poor households to recover and maintain the momentum of their small-scale farming enterprises. 51. The experience with locusts in West Africa offers significant lessons for Madagascar. In 2012, the Sahel in West Africa faced the most serious desert locust threat since 2005. More than 50 million people were potentially affected in Chad, Mali, Mauritania, and Niger. Successful control operations in the Sahel during the summer of 2012 reduced the scale of the autumn migration to Northwest Africa, but locust populations increased in Algeria, Libya, and Morocco as a result of winter/spring breeding. Adult groups and perhaps small swarms formed and are expected to move to the northern Sahel of Chad, Mali, Mauritania, and Niger and breed with the onset of the summer rains, causing locust numbers to increase. The West African experience shows the importance of having funds immediately available for proper survey and control operations against incoming swarms and forthcoming generations, and it also show that it is crucial to prepare for a second, potentially larger, generation of breeding. These actions are essential to protect crops, ensure food and nutrition security, and reduce the formation of swarms and their migration to neighboring countries. The proposed project considered these lessons in designing its interventions in areas that are currently or potentially threatened by infestations and by including support to build institutional capacity for implementing the national locust action plan. 52. Irrigation and watershed management are critical to sustain improvements in agricultural productivity. Irrigation projects tend to fail for a number of well-known reasons: the beneficiaries did not participate sufficiently in project design; the public sector has limited capacity to implement such projects, incurring delays and cost overruns; insufficient attention is given to operation and maintenance; levels of cost recovery are low; low-value agricultural production systems remain in place even after irrigation is available; profitability does not receive sufficient attention at the scheme and farm level, resulting in high unit costs; and complementary public investments are never made, such as investments in secure land tenure, rural access roads, and electrification. 53. Many of these lessons informed the design of the ongoing BVPI irrigation project in Madagascar, which is the first of four projects that are laying the groundwork for viable irrigated agriculture and natural resource management in four large irrigation sites and their surrounding watersheds. BVPI has helped to increase productivity and incomes in irrigation schemes and surrounding watersheds, in addition to improving the provision of agricultural extension services and inputs to poor farmers. The proposed project is designed to protect, build on, and sustain the results attained and investments made under BVPI, which continues to make good progress; most of its end-of-project indicators have been or soon will be met. 54. A decentralized approach to land registration in Madagascar helps to circumvent the delays and costs of traditional procedures for assigning land rights and provides a supportive context for the activities and investments envisioned under the proposed project. Lack of clarity on land rights can be a major cause of conflict, fragility, and stagnation in rural areas, aside from acting as a major barrier to private sector engagement. 8 In sub-Saharan Africa, where the great 8 IEG (Independent Evaluation Group) (2013), “World Bank Group Assistance to Low-Income Fragile and Conflict- Affected States: An Independent Evaluation” (World Bank, Washington, DC). 14 majority (76 percent) of FCS are located, only 10 percent of rural land is registered; the rest is exposed to various types of land grabbing and misallocation. The land reform launched in Madagascar in 2005 significantly improved land management services for rural communities. Despite the political crisis, during the past seven years one-third of Malagasy municipalities were equipped with land offices entitled to issue land certificates. The new, decentralized procedure to obtain written proof of ownership costs 30 times less and was 12 times faster than the centralized land titling system. 55. Yet even this decentralized approach of land certification “on demand” remains too slow and expensive for most Malagasy households, and the first phase of the land reform (in a country with approximately 10 million parcels to register) has yet to meet its initial objective of nationwide land rights registration. To accelerate land rights registration, in 2012 the French Development Agency (Agence Française de Développement, AfD) and World Bank provided support for the National Land Tenure Program (Programme National Foncier, PNF) to pilot locally driven land administration based on a large-scale, low-cost process of systematic land rights registration. 9 The experience provided the basis for a scaled-up land rights registration exercise that would rapidly protect poor rural households from the risk of losing their land. In September 2013, the Projet de Gouvernance et de Développement Institutionnel (PGDI2) initiated a field operation in 90 municipalities based on the new approach. 56. To measurably alleviate poverty, safety net interventions must support families over the medium term. Past cash-for-work activities financed by FID provided beneficiaries with one-time income support but were not designed to continue over multiple years to help families manage the crisis and advance their livelihoods. For that reason, the proposed project will provide the same families with support over three years to stabilize consumption and enable them to move beyond their present circumstances. The recent Implementation Completion and Results Report (ICR 2816) for the Emergency Food Security and Reconstruction Project, approved by the Bank in 2008 and implemented by FID, confirmed that cash-for-work activities had a measurable and immediate effect on stabilizing and improving food consumption. Through a combination of geographical and community-based targeting, supported by proxy means indicators, the project successfully directed benefits to food-insecure households. A similar approach will be used to identify the extremely poor households eligible for safety net support under the proposed project. IV. IMPLEMENTATION 9 See Madagascar Support to Reform on Land Administration and Management Technical Assistance (127211) and Madagascar Land Policy Reform Economic and Sector Work (P132491). These analyses found that despite the short processing time, the new process made it possible to demarcate 80,000 parcels (80 percent of the land in five communes) in under seven months. The cost of obtaining a land certificate fell from US$ 15 to US$ 2, and more than 23,000 land certificates were issued (an increase of 600 percent). These experiences formed the basis for initiating a pro-poor land rights registration operation designed to rapidly protect poor rural households from the risk of losing their land. 15 A. INSTITUTIONAL AND IMPLEMENTATION ARRANGEMENTS 57. To efficiently and successfully implement the proposed project, the implementation arrangements will be similar to those used under present operations—BVPI (IDA/GEF and PUPIRV) and FID (PUPIRV)—and rely on experienced PIUs with strong records in implementing World Bank projects. The two implementing agencies for the proposed project are PN-BVPI and FID. The proposed implementation arrangements require no significant changes in policies or institutions, which would be extremely difficult in the current political context. 58. Project oversight will be provided by a streamlined National Steering Committee composed of the two chairpersons of the PN-BVPI National Steering Committee and FID Board of Directors. Overall project coordination will be the responsibility of a streamlined Project Secretariat, managed jointly by the project coordinators of PN-BVPI and FID. Since the proposed project is under the technical purview of the Ministry of Agriculture, the project coordinator of PN-BVPI will have primary responsibility for representing the project as a whole. The Secretariat will be staffed with a financial management (FM) specialist and a monitoring and evaluation specialist. 59. As noted, PN-BVPI will implement Component A and FID will implement Component B. These implementing agencies will also be responsible for overall project planning, the quality of project oversight, implementation, procurement, financial management, and monitoring of project activities, including the provision of technical assistance, training, equipment, and evaluation studies. Implementation of the capacity-building activities for the locust control operation could be outsourced to FAO as part of the joint Government of Madagascar and FAO three-year Locust Containment Plan. 60. FID's Operational Manuals of Procedures for cash-for-work activities have been updated for the proposed project, ensuring that FID continues to apply policies, standards, and norms acceptable to the project and relevant ministries. Regular Operational Audits will be conducted to confirm that all participating entities—FID, service providers, communities, and so on—follow agreed operating procedures. B. RESULTS MONITORING AND EVALUATION 61. Given the proposed project’s multi-sectoral nature, the implementation of activities will be supervised closely. At least two full implementation review missions and two limited implementation review missions will occur each year. Each implementation review mission will include a procurement specialist and a financial management specialist, whereas a safeguard specialist would join at least once a year. Other specialists, including individuals with expertise in agriculture, land management, disbursement, and targeting, will also join selected missions. 62. The results framework appearing in Annex 1 presents the performance indicators for project components and sub-components. The preliminary baseline values were obtained from donors’ and NGOs reports and from data collection undertaken during the preparation of the soon to be effective PHRD Grant for Irrigation and Water Management. Due to difficulty of accessing some of the project areas and the tight timeline for preparation of the proposed project, some of the baseline and target figures are missing in the results framework. All preliminary baseline values and targeted results will be confirmed or revised depending on the results of the technical and financial data to 16 be collected as project implementation progresses. The framework will serve both as a day-to-day management tool and as a mechanism for assessing project impacts. It will also support project supervision by ensuring that baseline data on performance indicators are updated and made available on a regular basis. 63. For component A, quarterly M&E reports, including environmental and social monitoring results, will be generated at decentralized levels in project targeted areas and by M&E staff within PN-BVPI. The quarterly M&E reports will be summarized, compiled and analyzed by the Project Secretariat in form of standard annual reports. The M&E specialist at the Project Secretariat level will be responsible for training staff in charge of data collection within PN-BVPI and FID, staff working with service providers, and Ministry of Agriculture staff. This will help to ensure that all of the people involved in the M&E function have the expertise needed to collect the required information and that they adhere to a uniform reporting process. 64. The monitoring and evaluation framework for Component B includes the following main elements: (i) regular supervision of NGO-implemented activities by FID; (ii) social accountability mechanisms, including a community scorecard; (iii) regular operational audits by a contracted firm selected competitively under the project; and (iv) an impact evaluation of the cash-for-work activities, with a particular focus on the safety net’s effects on (a) food consumption, nutrition, and hygiene practices of parents and children and (b) primary school enrolment and attendance. The impact evaluation will also examine local economic effects related to synergies established with the agricultural sector. The impact evaluation is only partially financed under the proposed project, as other funds may be available to co-finance it. C. SUSTAINABILITY 65. Activities under Component A will be implemented using existing and proven structures. The demand for agricultural services and needs for rehabilitation are identified by the agricultural service centers, which are funded by the Ministry of Agriculture. The implementation of the proposed project is managed by PN-BVPI which, even though its activities are mostly donor- funded, is an integral part of the Ministry of Agriculture. To ensure the long-term sustainability of investments in productivity made under the proposed project, including irrigation infrastructure, the project includes critical land and watershed management activities. Farmers who have received land certificates will have a much stronger incentive to protect their agricultural enterprises by participating in activities to protect the watershed. 66. Activities under Component B should have positive, sustainable effects among recipients and institutions. Cash-for-work beneficiaries have been shown to use the additional income mainly for food and for expenditures on health and education. Similar choices by households under the proposed project will help to improve their well-being over the long term. FID is a public interest association since 1993. At the institutional level, the project will strengthen FID’s capacity to provide services in an efficient manner. FID’s growing capacity in a low-capacity environment makes it likely that other development partners and the government (post-crisis) will increasingly use FID to provide services. 17 V. KEY RISKS AND MITIGATION MEASURES A. RISK RATINGS SUMMARY TABLE Risk Rating Risk Rating Stakeholder risk High Project risk Operating environment risk High - Design High - Country High - Social and environmental Moderate - Sector and multisector High - Program and donor Low Implementing agency risk - Delivery monitoring and sustainability Moderate - Capacity Moderate - Governance Moderate - Fraud and corruption (subcategory of Moderate governance) Overall preparation risk High Overall implementation risk Moderate 67. The political crisis underway since 2009 has severely affected government capacity at the central and decentralized levels to implement policies and donor programs. The risk inherent in these capacity constraints is inevitably high. To limit the impact of this risk on project implementation, the implementing agencies for the proposed project were selected based on their good track records and experience in managing Bank and other donors’ funds. 68. Because the proposed project involves multiple sectors, one of the main challenges is to ensure effective coordination, consistency, and linkages among activities. The associated risk is that the Ministry of Agriculture, which will oversee the work of the proposed project, might lack the convening power to coordinate activities among the other ministries involved in the project. Cognizant of this risk, the Ministry of Agriculture intends to ensure balanced, strong representation of other ministries in the proposed project, instill principles of transparent communication among the implementing agencies, and foster ownership of project implementation among all stakeholders. To further mitigate the risk related to coordination, the proposed project was designed intentionally to keep implementation simple. It bundles activities in packages of services/support to be provided to beneficiaries, relies on the capacity that is already available in the implementing agencies to carry out Bank-funded projects, and does not create new institutions or entities, which would lack experience in monitoring, evaluation, or other aspects of managing Bank-funded projects. B. OVERALL RISK RATING EXPLANATION 69. The overall preparation risk is rated as high, given Madagascar’s volatile political and economic situation as well as the uncertainties related to the outcomes of the ongoing elections, both nationally and in the regions. Overall implementation risk is rated as moderate, although the implementing agencies were selected carefully and are well-established partners with solid operational and fiduciary capacities. The project risks are also rated as high, given that the project’s design is multi-sectoral and hence more complex than a single sector project would be. Risks relating to safeguards are rated as moderate, and those related to donors are rated as low, as no other donors are currently involved in the project’s areas of intervention. 18 VI. APPRAISAL SUMMARY A. ECONOMIC AND FINANCIAL ANALYSIS 70. The proposed project is expected to improve the economic conditions of people in the targeted regions and generate economic benefits in three ways. First, it will increase revenues for rural households by strengthening and protecting their agricultural production capacity and safeguarding their food security. Second, it will provide income-earning opportunities for vulnerable households through cash-for-work programs. Finally, it will improve the capacity of public agencies and communities to become more resilient to natural disasters such as locusts and droughts. 71. A comprehensive economic assessment for the proposed project could not be done owing to the short timeframe for preparation and the limited data available to develop a formal cost-benefit analysis. A preliminary assessment of the project’s economic aspects was done for Subcomponent A.1, however, which supports agricultural intensification and irrigation infrastructure, and Subcomponent A.2, which supports watershed management. 72. The likely returns to the agricultural investments being proposed under these subcomponents were explored using simple farm models and conservative assumptions about costs and expected benefits. 10 Two main benefit streams were identified. Benefit Stream 1 reflects the increased production of rice and other crops that is expected to result from project-financed investments in agricultural intensification and irrigation development. Benefit Stream 2 simulates the yield losses avoided through the project’s watershed protection activities, which are designed to prevent hillside erosion. Erosion contributes to the siltation and loss of water control in the irrigation and drainage channels being rehabilitated by the project and ultimately causes yields to decline. 73. The analysis was carried out using financial prices only, because in the absence of obvious policy distortions affecting the agricultural sector, financial prices are believed to fairly represent economic prices. Using constant price assumptions for inputs and outputs, and conservative assumptions concerning productivity gains, area expansion, and prices, the total net present value (NPV) of the benefits generated by Components A.1(i), A.1(ii), and A.2(i) is estimated at MGA 14,651 million (equivalent to US$ 6.66 million at an exchange rate of 2,200:1). The internal rate of return (IRR) generated by the investments is estimated to be about 16.1 percent over an assumed investment life of 25 years. The attractiveness of the investments would decline as and when large unfavorable movements in input and/or output prices occur or if the proposed project fails to meet its production and productivity targets. These indicative results, which are consistent with a large body of detailed economic analyses done for other irrigation development projects, including BVPI, provide some reassurance that the investments proposed under Component A are economically sound. 10 For consistency, the farm models used in the economic analysis of the agriculture component of the Emergency Infrastructure Preservation and Vulnerability Reduction Project were used, with the necessary adjustments, to reflect the Emergency Food Security and Social Protection Project scenario. 19 Table 2: Expected returns to agricultural and watershed management investments proposed under Component A Benefit stream 1: Benefit stream 2: Combined Increased production Production losses benefits avoided (Streams 1 Without With Without With and 2) project project project project Key assumptions: Yields Rice (kg/ha) 2,500 4,500 3,681 4,500 Maize (kg/ha) 2,000 3,500 2,863 3,500 Irrigated area (ha) 0 15,600 15,600 15,600 Yield loss (% /yr) 0.1 0 NPV (MGA million) 12,872 1,779 14,651 IRR (%) 16.5 14.3 16.1 74. During implementation, criteria will be applied systematically to ensure that investments are cost-effective. Costs and impacts of the proposed project will be monitored throughout implementation to allow a comprehensive ex-post evaluation. 75. Rationale for public funding: The activities to be financed under the proposed Project merit public support, although the rationale differs somewhat by component. The above preliminary economic assessment of the project suggests that the proposed public investments in agricultural productivity and watershed management are economically viable. The activities under Component A will provide infrastructure and services that can be expected to benefit the general public and from which non-paying users could be excluded, making public provision necessary. Over time, as agriculture becomes more commercialized and more stable in Madagascar, private suppliers will be expected to come in, reducing public support to the minimum. The activities under Component B will support the public sector’s capacity to reach out to a growing number of vulnerable populations in a timely and targeted manner. 76. World Bank value added: World Bank support for the Project is justified for many reasons. The main ones are: (i) by allocating IDA resources to the agricultural sector, the World Bank is signaling its readiness to support with financing the priorities identified in the Country Partnership Strategy. (ii) World Bank involvement is critical at this important juncture when the soon to be established government will need considerable financing support to bring the country back on the path of economic growth after years of political and economic crises. (iii) The restoration of production capacity will contribute in limiting food insecurity and have positive impact on households’ economics in the covered areas. 77. The efficiency of cash-for-work transfers is a function of the labor intensity achieved and the extent to which the transfer actually reaches poor people. The majority (55 percent) of FID’s previous cash-for-work subprojects involved road rehabilitation, and 32 percent involved repairing and cleaning irrigation canals in rural areas or sanitation canals in urban and peri-urban areas. The labor intensity in these types of public works is high (75–85 percent)—very high by international 20 standards, in which labor intensity is typically 50–75 percent for labor-intensive public works programs. The vast majority of transfers reached the target population. Ex post studies found that 65 percent of beneficiaries had been experiencing severe food insecurity and 33 percent had been experiencing moderate food insecurity. The cash-for-work beneficiaries expended their additional income on food, health, and education; as discussed, such behaviors should have long-lasting benefits on well-being. 11 B. TECHNICAL 78. Subcomponent A.1. The proposed project will support the distribution of improved seed, fertilizer, tools and associated technical assistance and extension to rapidly increase staple food production, mainly of rice but also other crops. The project will also support the rehabilitation and maintenance of small-scale agricultural infrastructure, both micro-irrigation systems and large perimeter irrigation schemes. Following good practice adopted under the PURPIV and BVPI projects, “hard” investments in water control structures would be complemented with “soft” investments designed to build capacity in water user associations and producer associations. During the first year, the inputs would be distributed to vulnerable households in the zones where irrigation systems are being rehabilitated. During the second and third years, to maximize the benefits of those irrigation investments, the inputs would be distributed to farmers working in the rehabilitated irrigation systems. 79. Subcomponent A.2. PN-BVPI and FID will implement this subcomponent through a limited number of contracts with private operators possessing the requisite skills and experience. The operations will be implemented differently in Project Areas 1 and 2. In Project Area 1, the service provider will help communes implement a comprehensive land inventory and, working with groups of smallholders, rapidly complete the land registration and certification process. Through local nurseries, this service provider will also acquire tree seedlings for farmers to plant under the cash-for-trees initiatives. Another service provider hired by FID will be in charge of inventorying the planted trees and paying the corresponding subsidies. In Project Area 2, the service provider will support a similar land inventory and certification process but will not be involved in reforestation. PN-BVPI, which is responsible for assuring the quality of the services delivered, will augment its technical capacity by recruiting additional staff specialized in land administration and forestry. The land administration services are responsible for ensuring the quality of the legal procedures involved in certifying land rights. The Land Observatory will receive support from the project to maintain its capacity to collect the data required for monitoring the implementation of the land policy. 80. Component B. FID will contract service providers to implement the cash-for-work activities under this component of the project. The service providers will work with communities previously identified by FID to identify prospective participants in cash-for-work activities, work with local authorities to identify the types and physical locations of cash-for-work subprojects to be undertaken, and monitor the labor requirements of subprojects. The service providers will also be responsible for paying workers when no other payment option is available. Another role of the service providers is to ensure collaboration with complementary programs at the local level; examples include local agricultural extension, health, nutrition, or HIV/AIDS prevention programs that could benefit the cash-for-work families. In turn, FID staff from the regional offices will 11 See the Implementation Completion and Results Report of the Madagascar Food Security and Reconstruction Project, (Report No. BRD33439R1). 21 monitor the service providers’ performance and participate in some of the key activities, such as coordinating the selection of sites for subprojects. 81. FID is setting up a beneficiary database and has already developed the modules to manage operations. The modules include a database that will be used to identify prospective beneficiaries; the database will be populated with verifiable socioeconomic information on households obtained through a rigorously developed questionnaire (such as a scorecard based on proxy means indicators). FID is exploring the possibility of paying beneficiaries electronically; in areas where this service can be provided, FID will initiate bidding to select the most suitable partner(s) and pilot e-payments. C. FINANCIAL MANAGEMENT 82. A financial management assessment of the two implementing agencies (PN-BVPI and FID) formed part of the project appraisal process to determine whether the proposed financial management arrangements were adequate to comply with the Bank’s Policy on Investment Project Financing (OP/BP 10.00) and the procedures specified in the Financial Management Manual. The financial management residual risk rating for the project is moderate. 83. The two implementing agencies will be responsible for the financial management of their respective components, Designated Accounts, and all related disbursement processes. FID’s financial management staff possesses the appropriate qualifications and experience to comply with the World Bank’s financial management procedures and requirements, but to carry out its responsibilities under the proposed project, PN-BVPI will need to recruit financial management personnel, including a finance manager and project accountant for the head office and eight regional financial accountants. D. PROCUREMENT 84. An assessment of procurement capacity within PN-BVPI and FID ascertained that FID’s procurement staff has appropriate qualifications and experience to comply with the World Bank’s procurement procedures and guidelines. FID’s procurement staff in the Central, Antsiranana, Fianarantsoa, and Tuléar offices will be maintained for the proposed project. The Central, Fianarantsoa, and Tuléar offices will be responsible for procurement related to Project Area 1; the Antsiranana office will handle procurement for Project Area 2. 85. The procurement capacity assessment for PN-BVPI was conducted at the Ministry of Agriculture level and focused specifically on the Public Procurement Management Unit (Unité de Gestion de Passation des Marchés Publics). The Head of Public Procurement (Personne Responsable des Marchés Publics, PRMP) and the team within the ministry are technically proficient and fully involved in the coordination unit of the PN-BVPI as far as procurement activities are concerned. To carry out its responsibilities under the proposed project, eight of PN- BVPI’s highly qualified procurement officers would be appointed (one at the central office and seven for regional offices. Before project effectiveness, four new, highly qualified procurement officers will be recruited for the four new Regional Directorates of Rural Development (Directions Regionales de Développment Rural, DRDRs) covering Project Area 1 (Vakinankaratra, Amoron’i 22 Mania, Haute Matsiatra, and Menabe). The three procurement officers currently working under the BVPI/IDA project in the three DRDRs covering Project Area 2 (Andapa, Boeny, and Lac Alaotra) will be retained for the proposed project and assigned either to their current or another one of those DRDRs. At the central level, the proposed project will retain the procurement officer working with the BVPI/IDA project; that person will be assigned a procurement assistant and assume charge of procurement for the central unit and Project Secretariat, provide close support to the civil servant in charge of procurement in Itasy Region (Area 1), and ensure overall coordination of all procurement officers across the seven offices. All procurement staff will operate under the overall guidance and control of the PRMP of the Ministry of Agriculture. 86. FID and the MINAGRI PRMP have already initiated or will carry out, several procurement processes during preparation, including a call for Expressions of Interest, evaluation of Expressions of Interest, and drafting of bidding documents and Requests for Proposals. Procurement documentation for the proposed project will be fully prepared and approved by the Bank, and ideally procurement will be launched prior to effectiveness. Some previously identified and authorized activities will be launched and evaluated, and contracts will be signed upon effectiveness. 87. Although the procurement systems within both implementing agencies are adequate, the overall procurement risk rating for activities to be financed under the proposed project is substantial, given that external factors could undermine the implementation of procurement activities (see Annex 4, Table 4.1). The Procurement Capacity Assessment Reports for PN-BVPI and FID are available in the project file. E. SOCIAL AND ENVIRONMENT (INCLUDING SAFEGUARDS) 88. The proposed project is expected to improve the social well-being of the Malagasy population in general and of people in the target regions in particular in a number of important ways. For the general population, the project will improve agricultural production and the volume of food reaching Madagascar’s markets; for extremely poor households in the target zones, it will improve income through direct cash transfers. The project’s human capital development and income-generating activities will benefit women, youths, the poor, and other vulnerable groups. Finally, the project will foster social accountability and a sense of ownership in relation to the infrastructure developed by the government. The specific beneficiaries of the project are rural communities in targeted districts and regions—individual farmers, farm households, producer associations, and water user associations. 89. Although the social benefits generated by the project are difficult to quantify in advance of implementation (and difficult to quantify in general), they are estimated to be high. The social benefits of cash-for-work activities will be leveraged through a multistage, pro-poor targeting mechanisms. As discussed, after the communities most affected by locusts and drought in the target zones are identified, a community-based, participatory, transparent mechanism will be used to select the individuals in greatest need of assistance. This process will increase the probability that activities supported under the project reach the extremely vulnerable populations that they are designed to assist. At least half of the targeted beneficiaries will be women (about 60,000 women). A simple, transparent budgeting mechanism will be used at the commune level to forestall local elites from capturing the benefits intended for others members of society. Where possible, 23 beneficiary households will be linked to local health, nutrition, and hygiene programs, such as UNICEF’s Key Family Practices (Pratiques Familiales Essentielles). Like similar projects supported by the Bank, the proposed project will emphasize links with efforts to support women’s and children's nutrition and well-being. 90. The environmental and social classification of the proposed project is Category B. The activities and related works to be financed under the project include the rehabilitation and preservation of irrigation infrastructure, the restoration of access to social and economic services through the rehabilitation of feeder roads, the rehabilitation of small-scale agricultural infrastructure (primarily micro-irrigation systems and grain processing and storage facilities), and activities that protect the watershed and preserve agricultural infrastructure (planting cover crops and trees on slopes to prevent soil erosion). The environmental and social impacts of those activities are expected to be moderate, site-specific, and manageable to an acceptable level, and the proposed project requires no exceptions to the Bank’s policies on environmental and social safeguards. Table 3: Safeguard policies triggered by the proposed project Safeguard policies triggered Yes No Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Physical Cultural Resources (OP/BP 4.11) X Indigenous Peoples (OP/BP 4.10) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP X 7.50) Projects in Disputed Areas (OP/BP 7.60) X 91. None of the activities envisioned under the proposed project trigger Safeguard Policy OP/BP 4.37 (Safety of Dams), but some activities may have certain site-specific adverse environmental and social impacts and thus trigger Safeguard Policies OP/BP 4.01 (Environmental Assessment), OP 4.09 (Pest Management), and OP/BP 4.12 (Involuntary Resettlement). 92. In compliance with BP 10.00 (Investment Project Financing), Paragraph 47, Section (a) relating to emergency operations, an Environmental and Social Screening and Assessment Framework (ESSAF) has been prepared to ensure compliance with the World Bank’s safeguard policies during implementation. The ESSAF is designed to guide the preparation of safeguard instruments during the project preparation phase. Note that two safeguard instruments are already in place for some subcomponents of the proposed project—an Environmental and Social Management Frameworks (ESMF) and Resettlement Policy Framework (RPF). These instruments are acceptable to the Bank and were prepared, consulted upon, and disclosed in May 2012. Therefore, for the preparation of the proposed project, each executing agency will rely upon its applicable safeguard framework(s) (ESMF and/or RPF) to prepare the required additional safeguard documents. The ESSAF contains sample Terms of Reference (TORs) for Environmental and Social Impacts 24 Assessments (ESIAs) that may be needed for project-supported activities, as well as social and environmental screening guidelines for contractors hired to implement project-supported works (such as the rehabilitation/reconstruction of small-scale agricultural infrastructure). Based on the outcomes of the screening process, the ESIA, Environmental and Social Management Plan (ESMP), and/or RAP would be carried out as necessary. As the proposed project aims to improve the livelihoods of vulnerable communities and extremely poor households, specific attention will be paid to women, children, and youths, as well as to the elderly and other vulnerable groups. During implementation of the proposed project, the environmental and social safeguard instruments (ESIA, RAP, ESMP, and so forth) will be prepared by building upon existing safeguard instruments (in this case, the ESMF and RPF) through a consultative, participatory process involving all stakeholders at the regional level, local communities, and beneficiaries of subprojects. 93. Given the emergency nature of the proposed project and the need to ensure that adequate measures and capacity are in place to implement its various subcomponents, it was agreed that its implementing agencies (FID and PN-BVPI), which already have Social and Environmental Focal Points (SEFPs) in place, would have overall responsibility for safeguards related to the activities to be implemented. These focal points are familiar with World Bank safeguard policies through their involvement in other Bank-funded projects. In the agricultural and social protection sectors, environmental and social assessment instruments—ESMFs, RPFs, RAPs, ESIAs, ESMPs, Pests and Pesticides Management Plans (PPMPs), and Dam Safety Guidelines, among others—have been prepared, approved, and satisfactorily implemented in Madagascar for IDA-funded projects. The SEFPs are responsible for following up on all concerns related to safeguards and social development; will ensure that all subprojects identified for operation financing include consistent, coherent environmental and social measures; and are responsible for applying the safeguard screening and mitigation requirements to each subproject as well as related safeguard documents (ESMF/ESMP and RPF/RAP). Each implementing agency has the institutional capacity to manage the relevant safeguards for the proposed project, including specialists with the capacity to manage the safeguard dimensions of each agency’s mandated activities. Moreover, a strong, continuous capacity-building program will be designed and delivered to provide additional reinforcement in technical capacity among the SEFPs and district/local actors. 94. Before approving bidding documents for all civil works, each implementing agency will prepare: (i) detailed environmental and social measures to manage potential environmental and social risks and mitigate adverse impacts and (ii) wherever the RPF is applicable, a site-specific RAP satisfactory to the Bank. In addition, the TORs for the consultants in charge of monitoring the works will include: (i) before the works actually start, the fine-tuning/validation of the social and environmental measures defined by the implementing agency and (ii) during the works, the monitoring of the implementation of such environmental and social mitigation measures. Each implementing agency will prepare its safeguard documents as shown in Table 4 below and disclose them in Madagascar (sending thereafter a copy to the project for its records). Each implementing agency will consult project-affected groups and local NGOs about the environmental and social aspects of the proposed project and take their views into account. The implementing agencies will initiate these public consultations as early as possible and provide, in a timely manner prior to consultation, all the relevant materials in the form and language(s) needed to be understandable and accessible to the groups being consulted. This ESSAF will be shared with concerned NGOs and other development partners, consulted upon with the Government of Madagascar, and ultimately disclosed in country and at the World Bank InfoShop before project implementation. 25 95. Although the project funds will not be used to purchase and distribute agrochemicals, the agricultural subcomponent (emergency distribution of improved seed, fertilizer, tools and associated technical assistance to enable rapid increases in food production) will encourage farmer groups to use more inorganic fertilizers and pesticides. For that, the Recipient will address OP 4.09 requirements by using the existing Pests and Pesticide Management Plan (PPMP) developed for the ongoing IDA funded agriculture project (BVPI- P128831 Madagascar-Irrigation and Watershed Management Project). The PPMP includes a number of relevant actions to reduce the exposure of farmer groups to pesticides used in agricultural production systems. It also includes guidelines to be adopted on the possibility of agrochemical application and disposal. Training kits to strengthen capacity building of different actors (farmers, local vendors, regional agricultural agents, etc.) on the safe use, storage and disposal of agrochemical products are also available. This PPMP is acceptable to the Bank and was prepared, consulted upon, and disclosed both in-country and to Infoshop on May 25, 2012. Table 4: Safeguard policies triggered by the proposed project Implementing Safeguard policy Component/subcomponent agency triggered Subcomponent A.1: Rapid delivery of agricultural PN-BVPI OP/BP 4.01 services and rehabilitation of essential irrigation and OP 4.09 market access infrastructure OP/BP 4.12 Subcomponent A.2: Protecting infrastructure PN-BVPI OP/BP 4.01 investments by improving watershed and land OP/BP 4.12 management and climate resilience Component B: Providing a social safety net for the FID OP/BP 4.01 poor 26 . ANNEX 1: RESULTS FRAMEWORK AND MONITORING Country: Republic of Madagascar Project Name: Madagascar Emergency Food Security and Social Protection Project (P147514) . Results Framework . Project Development Objectives . PDO Statement To strengthen the Recipient’s immediate capacity to respond effectively to the food security and locust crises, by: (i) increasing agricultural production capacity in Project Areas, while enabling extremely poor households, in the Project Areas, to access cash transfers and cash for work activities; and (ii) improving the Recipient’s capacity to respond promptly and efficiently to an Eligible Crisis or Emergency. These results are at Project Level . Project Development Objective Indicators Data Responsibility Cumulative Target Values Source/ for Unit of End Methodolog Data Collection Indicator Name Core Baseline YR1 YR2 YR3 YR4 Frequency Measure Target y Area provided PCU based on with irrigation Twice a Project Hectare(Ha) 12000.00 16770.00 22026.00 27670.00 27670.00 27670.00 inputs from PN- and drainage year reports BVPI services (ha) Number of beneficiaries of Twice a Project safety net Number 0.00 27500.00 50000.00 50000.00 50000.00 50000.00 FID year reports programs in project areas 27 Direct project Project Number 0.00 36500.00 71000.00 81350.00 81350.00 81350.00 Once a year FID and BVPI beneficiaries reports Percentage Female Sub-Type 0.00 18250.00 35500.00 40675.00 40675.00 40675.00 beneficiaries Supplemental . Intermediate Results Indicators Data Responsibility Cumulative Target Values Source/ for Unit of End Methodolog Data Collection Indicator Name Core Baseline YR1 YR2 YR3 YR4 Frequency Measure Target y Clients who have received agricultural Twice a Project Number 0.00 4000.00 8000.00 12000.00 16000.00 16000.00 BVPI services year reports promoted by the project Number of communes that have rehabilitated Twice a Project Number 0.00 0.00 10.00 15.00 20.00 20.00 BVPI small-scale year reports infrastructure to access markets in project areas Land parcels with use or 130000.0 195000.0 325000.0 325000.0 Project Number 25000.00 0.00 Once a year PNF ownership rights 0 0 0 0 reports recorded as a 28 result of the project Area restored or Once a Project Hectare(Ha) 0.00 4000.00 8000.00 15500.00 15500.00 BVPI re/afforested year reports Person-days of 360000.0 1980000. 3600000. 4824000. 4824000. Twice a Project employment Number 0.00 FID 0 00 00 00 00 year reports created Number of families Twice a Project included in the Number FID 40000.0 65000.00 70000.00 70000.00 year reports beneficiary registry 0 Regular project Project Number 0.00 4.00 8.00 12.00 16.00 Quarterly BVPI and FID progress reports reports . 29 ANNEX 2: DETAILED PROJECT DESCRIPTION Madagascar Emergency Food Security and Social Protection Project Geographic targeting 1. The two priority geographical areas where the proposed project will focus its efforts are: (i) food-surplus areas affected by locusts and drought, where households have become increasingly vulnerable because of the resulting crop failure and the socioeconomic effects of the political crisis and (ii) food-surplus areas still unaffected by locusts but somewhat affected by drought, where infrastructure and households have become increasingly vulnerable because of the socioeconomic effects of the political crisis. The emergency response will differ in each area to accommodate their distinct farming systems and the variation in levels and types of damage caused by locusts and drought. Together, these two areas are the foundation of Madagascar’s surplus rice production capacity, making them the primary source of food for the rural producers themselves as well as many millions of urban and peri-urban consumers. 2. Project Area 1 (locust-affected zones) includes small-scale irrigated schemes in districts that have already been affected by locusts and drought and where agricultural productive capacity needs to be restored, expanded, and made more resilient and sustainable. These schemes are located in Itasy, Bongolava, Menabe, West Vakinankaratra, West Amoron’i Mania, Haute Matsiatra, and specific areas in Ihorombe. Despite their agricultural activity, the selected regions rank among the poorest in the country, with a 70–90 percent poverty (INSTAT/DSM 2010). Within these regions, small-scale irrigated areas where intensification and rehabilitation would be justified have been tentatively identified, but the precise locations for interventions will be selected closer to the time of project effectiveness so as to best meet current needs on the ground, based on updated information on locust infestations and drought conditions. 3. Project Area 2 (drought-affected breadbaskets) comprises three large, highly productive irrigated rice schemes in northwestern (Marovoay in Boeny Region), central east (Alaotra), and northern (Andapa) Madagascar that have been affected by drought and whose strategic food supply capacity must be maintained to prevent future production losses. These targeted areas have not yet been affected by locusts, but drought caused severe crop losses in Boeny and Alaotra during 2013, confirming the importance of preserving and expanding irrigation infrastructure to enhance resilience to unpredictable rainfall. The three irrigation schemes provide livelihoods to tens of thousands of farmers and, as noted, supply an estimated 100,000 tons of rice to the national market. The poverty count in the regions where the three irrigation schemes are located ranges from 60 to 80 percent. 4. Note that in addition to the geographical targeting just mentioned, the safety net activities supported under the proposed project will target extremely poor households through a participatory process in which communities identify the poorest households in a village and those households are screened based on a proxy means test (poverty scorecard). The scorecard uses monitorable indicators to assess household composition, assets, and other relevant information. Project components Component A: Restoring and maintaining essential agricultural productive capacity (US$ 39 million) 30 Subcomponent A.1: Rapid delivery of agricultural services and rehabilitation of essential irrigation and market access infrastructure (US$ 29 million) Subcomponent background 5. Madagascar’s economy depends heavily on agriculture, which contributes about 30 percent of GDP and serves as the principal livelihood source for approximately 70 percent of the population. The agricultural sector has chronically underperformed, failing for decades to live up to its potential. A recent World Bank study identified five major constraints that contribute to the sector’s poor performance: (i) low productivity at the farm level; (ii) high transportation costs; (iii) unstructured marketing channels; (iv) an unfavorable business climate; and (v) weak institutions and inconsistent policies. 6. The agricultural sector, which was struggling even before the political crisis, has been hit especially hard by a recent series of economic shocks and natural disasters that include drought and locust infestation. Weakening demand for food associated with Madagascar’s overall economic decline during the crisis has been compounded by agricultural supply disruptions after natural disasters damaged the capacity to produce rice and other staples. These shocks have damaged the primary source of livelihood for many rural households, provoking sharp declines in rural incomes and welfare. In the present context of rising food insecurity, coupled with growing vulnerability across rural households and large portions of the market-dependent urban population, the proposed project aims to restore and preserve agricultural productive capacity among farming communities in key areas that produce surplus food, including areas severely affected by locusts. These activities will complement activities under Component B, which will be implemented in the same areas to reduce vulnerability among the poorest households through short-term employment and income opportunities based on cash-for-work and other cash transfer modalities. 7. Subcomponent A.1 will support activities designed to stabilize food production capacity in areas that have experienced declines in food production and associated increases in food insecurity. The objective is to safeguard the livelihoods of poor rural households in the short term, while laying the foundation for sustainably increasing surplus production and incomes over the longer term. Although other food staples will be supported, the focus is on rice, given its overriding economic and political significance in Madagascar. Rice is the leading crop grown by the vast majority of rural households and the main food staple, accounting for 48 percent of all calories consumed. Rice is also an important wage good whose price indirectly influences the real incomes of most households. Subcomponent description 8. Subcomponent A.1 will fund three major activities: agricultural intensification, irrigation rehabilitation, and capacity building for the national locust control program. Details on each activity follow. Table 2.1 summarizes the costs associated with each activity. 9. Agricultural intensification (US$ 4.5 million). Few farmers in Madagascar use improved inputs, so the most effective way to boost food production and preserve rural incomes in the short term is to intensify agricultural production. This subcomponent supports the distribution of improved seed, fertilizer, tools, and associated technical assistance to enable rapid increases in food production. During the first year, inputs will be distributed to vulnerable households in the zones where irrigation systems are rehabilitated. During the second, third, and fourth years, inputs 31 will be distributed to farmers working in the rehabilitated irrigation systems to maximize the benefits of the irrigation investments. Seed production centers supported at the commune level will develop capacity and a large degree of seed self-sufficiency that will benefit all producers in the communes. 10. The various inputs and associated technical assistance for rice cultivation and diversification of production systems for targeted crops will be packaged into “micro-projects” designed to benefit producer associations, water user associations, vulnerable households severely incapacitated by the recent locust infestation, and other community groups. For selected commodities (rice or other cash crops), the project will identify, in collaboration with DRDRs, research institutes, and agricultural development NGOs, the best agricultural practices to be disseminated to producer groups. In Project Area 1, the project will finance a “working capital package” consisting of improved seed, fertilizer, tools, and technical assistance, and the beneficiaries will provide in-kind contributions, including labor. In Project Area 2, the project will adopt the same approach used in the IDA and GEF co-financed BVPI project, in which the beneficiaries contribute 20 percent of the “package” in the first year, 50 percent in the second year, and 80 percent in the third year. 11. Activities to diversify agriculture as well as the nutritional composition of local diets are integrated in this subcomponent. Farmers will be encouraged to plant more nutritionally diverse crops during the lean season, including green beans, maize, sweet potatoes, orange sweet potatoes, Irish potatoes, and other vegetables, which also have the potential to provide additional income. Other interventions focused on nutrition will be provided in the project areas through proposed Additional Financing to the PAUSENS project, which is being processed in parallel with this project. 12. Following good practice, “hard” investments in water control structures will be complemented by “soft” investments to build capacity among water user associations and producer associations. This complementary approach will help to ensure that infrastructure supported by this subcomponent is operated properly and maintained sustainably. 13. Irrigation rehabilitation (US$ 22.5 million). Many irrigation systems used for the production of rice and other staples have deteriorated during the crisis. As their incomes have declined, many farmers have been unable to invest in the maintenance needed to keep water control structures in good working condition. To reverse the decline in irrigation capacity and preserve the country’s food production capacity, this subcomponent will support the rehabilitation and maintenance of small-scale agricultural infrastructure, mainly irrigation systems. All infrastructure rehabilitation will follow a “build back better” approach and adopt guidelines and standards for climate-resilient infrastructure that have already been developed (for roads and irrigation infrastructure) or are being developed (for product storage and small scale water storage) by the Disaster Prevention and Management Unit (Cellule de Prévention et Gestion des Urgences, CPGU) with the support of the World Bank. 14. Approximately 8,000 hectares of irrigated fields will be rehabilitated in communities in Project Area 1. An additional 8,000 hectares are scheduled to be rehabilitated in the three large irrigation schemes in Project Area 2. 32 15. Experience has shown that investments in micro-irrigation infrastructure are not sustainable in most regions in Madagascar unless the watersheds surrounding irrigated zones are protected. Investments are needed to preserve the productive capacity of agricultural infrastructure by: (i) constructing soil erosion control structures; (ii) planting cover crops; (iii) establishing tree nurseries; and (iv) reforesting hillsides. Building on the approach that is being used successfully under PN-BVPI, subprojects to protect watersheds will be implemented at the community level using participatory methods to secure buy-in from beneficiaries. In the three large irrigation schemes in Project Area 2, US$ 1 million will finance watershed management. In the small-scale irrigation areas in Project Area 1, land and watershed management activities are implemented under Subcomponent A.2. 16. Also included under this subcomponent is the rehabilitation of small-scale structures to store agricultural produce (US$ 1 million). This activity will provide matching resources to communities to rehabilitate small-scale storage structures. It will be implemented based on demand expressed through the agricultural service centers (Centres de Services Agricoles) and producer organizations. As discussed, rehabilitation will be done in accordance with a “build back better” approach and climate resilience guidelines produced under Subcomponent A.2. 17. Strengthening the capacities of the National Locust Unit (US$ 2 million). Strengthening the capacities of the National Locust Unit, to enable it to perform its mission more efficiently (diagnostic and implementation of the National Locust Unit’s reform). Table 2.1: Subcomponent A.1—Cost breakdown Activity Cost (US$ million) Agricultural intensification 4.5 Irrigation rehabilitation 22.5 Locust control 2.0 Total subcomponent cost 29.0 Subcomponent A.2. Protecting infrastructure investments by improving watershed and land management (US$ 10 million): Subcomponent background 18. Land tenure. Food security and land tenure security are closely related. Clear and secure property rights contribute to food security by providing incentives to increase agricultural productivity. Evidence from Madagascar shows that the first parcels secured by rural households are the parcels that ensure the food supply. 12 Aside from providing incentives to invest in land, land rights reduce the potential for conflict and the threat of eviction, encourage perennial crops and tree plantations, allow a land rental market to develop (enabling landless households to obtain land), and may facilitate access to credit if land is accepted as collateral. Secure access to land is also fundamental to encouraging sustainable land and watershed management. 12 A survey of 600 households showed that applications for land certificates were made for 48 percent of rice fields versus 22 percent of the land used for homesteads (see “Madagascar Land Policy Reform: Perspectives and Prospects,” Economic and Sector Work (World Bank, Washington DC, 2014). 33 19. In Madagascar, the political situation has weakened governance in land management as in other sectors, and no lessons seem to have been drawn from the attempts at large-scale land acquisition by foreign companies that were used to justify the 2009 coup. New cases of land grabbing occur despite regular denunciation by civil society organizations. Land grabbing depletes households’ asset base, can push them into poverty, and can provoke social unrest. Short- term protection of smallholders’ land rights is urgently required to prevent further land losses, claims, and disputes that could destabilize the newly elected government and initiate a new political crisis. 20. Since 2005 Madagascar has adopted an innovative legal framework that allows more than 500 Communal Land Offices to issue land certificates more quickly and cheaply to households compared to the traditional titling process. Since the government no longer subsidizes the Communal Land Offices, they have virtually no support. Although 33 percent are still operating (usually with support from external donors), 25 percent are struggling, and 11 percent have closed. 13 If nothing is done, a growing number of Communal Land Offices will soon cease operations. 21. The knowledge acquired through this innovative land registration effort has made it possible to further streamline the land registration process and respond rapidly to rural smallholders who apply collectively for written documentation of their land rights. Pilot operations conducted by PNF in five communes in 2012 with support from the World Bank and AfD have enabled Communal Land Offices to identify 90 percent of parcels and register 25 percent of land rights within less than a year. These efforts will be scaled up under the proposed project to assure smallholders’ property rights even in the present context of weakened governance. 22. Watershed management. Strong links exist between watershed management and agricultural production in Madagascar. For downstream farming activities, upstream watersheds provide essential ecosystem services, including water supply and regulation and sediment control. Qualitative evidence suggests that the combined effects of the political crisis and the locust infestation have increased deforestation in some areas, as agricultural households are forced to seek alternative livelihoods based on the exploitation of natural resources. For example, evidence suggests that households in need of food have resorted increasingly to charcoal production to generate revenue to buy food. Deforestation related to charcoal production and other activities further reduces the capacity of watersheds to provide ecosystem servicers, which further depletes the capacity for agricultural production—creating a vicious circle that smallholders are hard- pressed to escape. The links between watershed management and land tenure are also clear. Secure land rights are a prerequisite for stimulating reforestation, because farmers with secure land rights know that they will benefit from the trees they plant on the parcels they own. 23. Soil geology in the project intervention areas. The irrigated perimeters in Project Areas 1 and 2 are surrounded by watersheds with similar physical soil features. The granitic bedrock is covered by 10–80 meters of weathered rock (kaolinite) formed by the aggressive tropical climate. The upper soil surface (tens of centimeters deep) is dry and hard; when it splits, runoff water infiltrates the weathered rock and causes it to erode. Erosion is exacerbated when groundwater passes over the bedrock and provokes huge landslides of weathered rock—a phenomenon internationally known by the Malagasy name of lavaka. Lavaka wreaks havoc with downstream 13 Based on information from the PNF. 34 irrigated areas by depositing sediment into the rivers that feed irrigation perimeters, which causes siltation of dams and raises the level of water channels. Erosion caused by lavaka greatly increases the cost of maintaining irrigation schemes and demands regular maintenance that farmers sometimes lack the capacity to provide. For that reason, most irrigation projects in Madagascar have launched environmental activities in the surrounding watersheds to contain erosion by protecting riverbanks, promoting sustainable agricultural practices, and reforesting barren slopes. 24. Reforestation. Three major explanations are advanced for why so few watershed reforestation projects in Madagascar have improved landscapes significantly. First, most projects encourage farmers to plant trees voluntarily, even though reforestation is a physically demanding and time-consuming task that must be performed during the (often labor-intensive) agricultural production cycle. Farmers prefer to dedicate their time and energy to income-generating agricultural work and plant trees only when and if time allows. Second, most reforestation projects have been undertaken on community land, but individuals are less motivated to invest in planting and maintaining trees on communally held land than on privately owned parcels A third reason for the unimpressive performance of most reforestation projects is that the lack of clear rights to hillside land reduces the motivation to invest in their reforestation. Rural households do not risk planting trees on untitled land when they are unsure of benefiting from the mature trees. The proposed project will use a different, incentive-based approach to reforestation that IDA and other donors have used in a number of other African countries since the 1980s with success. 25. Successful incentive-based reforestation projects in Africa have inspired the approach in Madagascar. In Niger’s Dosso Department, the Gao Forestry Project was the forerunner of using financial incentives to encourage farmers to preserve trees (Acacia albida—gao in the local languages). Through an information campaign and the payment of a small financial incentive (less than 0.1 euro per tree preserved and protected for 3 years), within 10 years this project significantly increased tree density from 5 to 35 trees per hectare on 15,000 hectares. Since 1996 in northern-Cameroon, a similar operation (DPGT Project ) increased tree density from 4 to 30 trees per hectare within 4 years by paying an individual grant of FCFA 50 the first year, FCFA 25 the second year, and FCFA 25 in the third year. In the three subsequent years, the grant was FCFA 25 per year, half paid by the project and half paid by local farmer organizations. Some 19,000 farmers took part in this operation, which covered about 25,000 hectares. In both Niger and Cameroon, hundreds of thousands of young trees were protected within a few years at a limited cost. Evaluations have shown that some farmers continued these forestry practices once the projects came to an end. In both cases, the keys to success were to ensure that subsidies were proportional to the number of trees planted and to provide close supervision that ensured that subsidies went directly to farmers who complied with project requirements and an effort. 26. Climate resilience. Madagascar’s rural communities are highly vulnerable to the effects of natural disasters. Recurrent cyclones affect the East and West coasts, with an average of three to four cyclones making landfall each year. Cyclones and subsequent flooding can impoverish households directly (through injury, deaths, or loss of crops and other physical assets) or indirectly (by closing off access to markets or other essential social services). Households can better withstand the effects of cyclones and floods if they have better access to information on climatic conditions and possible response strategies. Resilience can also improve by ensuring that essential irrigation, road, and agricultural storage infrastructure is built to withstand severe 35 climatic events. Madagascar’s early warning system for cyclones and floods is patchy in its geographical coverage, especially on the West coast. The World Bank currently supports the Government of Madagascar to expand and harmonize coverage of the early warning system through PUPIRV project. The Bank has also supported the government to develop and adopt climate-resilient construction standards for irrigation and road infrastructure and is supporting the development of guidelines for climate resilience in small-scale water supply infrastructure as well. Subcomponent description 27. In summary, this subcomponent will finance activities related to land registration (in conjunction with reforestation based on financial incentives), technical assistance to the Land Observatory and National Land Program, and activities to improve the resilience of agriculture to adverse climatic events. Details on that support follow, and costs are specified in Table 2.2. 28. Rapid and low-cost land registration and cash-for-trees operation (US$ 8.1 million). These activities target communes where the project will rehabilitate irrigation schemes under subcomponent A.1, that already have a Communal Land Office, and that make an official request to PN-BVPI for support. Communal Land Offices in project areas will receive support to use simple procedures to identify each parcel and landowner according to the new legal framework and provide each confirmed landowner with a land certificate for a payment of less than US$ 2 in under three months. The project will also support the production of tree seedlings by establishing nurseries at the commune level and providing technical advice for reforestation on private property. Privately owned parcels (which constitute most of the area in Project Area 1) have not had a successful history of reforestation in Madagascar. To ensure the sustainability of investments made under this subcomponent, it will support a rapid and low-cost conditional cash- for-trees approach. A financial incentive for each tree planted on privately held land will be offered to encourage farmers to reforest. Upon presentation of a land certificate, 50 percent of the incentive will be paid in the first year based on the number of living trees planted on the parcel, and the remaining 50 percent will be paid in the following year based on the number of living trees found on the parcel. FID will be considered among the potential service providers that could implement the cash-for-trees approach because it has experience with cash-for-work activities that have a productive purpose. FID will monitor this activity throughout the duration of the project. 29. The service provider for the cash-for-trees approach will be responsible for counting planted trees and paying the incentive amounts. The incentive will be reasonably priced according to the daily agricultural wage in each region and will be offered exclusively to the smallholders who own land upstream of the irrigation schemes rehabilitated by the project (in other words, it will be properly targeted). Details of the design and implementation of this activity will be included in the Project Implementation Manual. 30. The combined land and reforestation activities will be implemented in Project Area 1. In Project Area 2, land management activities similar to those conducted under BVPI will be implemented, and reforestation will be undertaken through the watershed protection subprojects as described under Subcomponent A.1. 31. Technical assistance to the Land Observatory and National Land Program (US$ 0.9 million). The Land Observatory, established in 2007, is an indispensable tool for the government to monitor implementation of the land reform and obtain strategic information to guide policy and 36 decision making. The Land Observatory is a small unit consisting of six consultants who have produced significant data on land policy and analytical work on the implementation and impacts of the land reform. This subcomponent provides technical assistance over 36 months to maintain essential capacity for monitoring land policy implementation, such as the collection of nationwide data on Communal Land Offices and National State Land Administration Services, maintenance of the Land Observatory’s website (www.observatoire-foncier.mg), and the continued publication of data and periodic information sheets. The team’s operating costs, including consultant fees, communication, and domestic travel expenses, will also be financed under this subcomponent. 32. Activities related to making agricultural production more resilient (US$ 1.0 million). This subcomponent supports the expansion of the national early warning system for cyclones and floods to reach vulnerable communes in zones targeted by other project activities. In keeping with the approach adopted in for PUPIRV, support will be provided to conduct a needs assessment, develop technical specifications, purchase simple equipment (telephones, radios, megaphones, flags) to operate the early warning system, and train leaders of commune subdivisions (fokontany) and local communities about the system’s operation. 33. This activity also involves the development of climate-resilient construction and operation guidelines for important agricultural infrastructure (including the storage facilities that will be rehabilitated under Component A.1), training in using the guidelines, and the development of prototypes in the most vulnerable project zones. This activity builds on the success of earlier Bank-funded interventions to foster the development and adoption of climate-resilient standards for irrigation infrastructure. Table 2.2: Subcomponent A.2—Cost breakdown Activity Cost (US$ million) Low-cost land registration and cash-for-trees $8,100,000 operation Technical assistance to the Land Observatory $900,000 Disaster early warning system $1,000,000 Total subcomponent cost $10,000,000 Component B: Providing a social safety net for the poor (US$ 17.2 million) Component background 34. About one-third of the population in Madagascar, representing about 7 million people, is extremely poor and deprived in multiple ways. These “have-nots” lack food, basic education, basic household assets, and electricity. The deprivation of this part of the population is so acute that it is challenging for most activities and programs—whether related to agricultural production, education, or health and nutrition—to reach out and include them in a beneficial and meaningful way. The recent locust and drought crises, and continued land grabbing, have caused many more households to fall into extreme poverty, including households in rural communities that until recently were relatively resilient and supplying surplus food to the major urban areas. 37 35. Protecting the poorest of these families through targeted safety net activities that complement more traditional rural development activities is central to their survival and their children’s long-term development. Because of the deep and extensive effects of the current crisis on health, education, and nutrition outcomes, there is a risk that a generation of children from extremely poor households will suffer a profound loss of well-being that will have long-term repercussions for the development of Madagascar and its rural economy. It is vital to include these households in rural development interventions. 36. The approach adopted in the proposed project to engage these households involves cash- for-work activities and cash transfers. These efforts will create short-term employment and income opportunities that offer a social safety net for the most vulnerable groups in the target areas. The cash-for-work opportunities and cash transfers will be conditional on participation in community nutrition and health activities that extremely poor households may otherwise have difficulty accessing. In many settings, cash-for-work activities have had a measurable and immediate effect on stabilizing and improving food consumption. The proposed project will provide the same families with support over three years to prevent them from becoming entrenched in extreme poverty. Cash-for-work beneficiaries in Madagascar have tended to use the additional income mainly for food consumption and also for expenditures on health and education—choices that should make a lasting, positive contribution to the resilience of the households involved. 37. These interventions will complement the efforts of other partners, such as UNICEF, in the project areas. As mentioned, they will also be complemented by a series of nutrition interventions planned under the previously mentioned Additional Financing to the Madagascar Emergency Support to Education, Health, and Nutrition Services Project. Description of component activities 38. This component will provide cash-for-work opportunities and conditional cash transfers to more than 50,000 extremely poor households (about 275,000 individuals). 39. Beneficiary households in Project Areas 1 and 2 will be selected through community and socioeconomic targeting. The selection of communities will be coordinated closely with PN- BVPI to take advantage of synergies and links between safety net beneficiaries and the broader agricultural development agenda. Selected households will benefit from the program over a three- year period, receiving payments directly from NGOs or through electronic transfers where possible. 40. Most of these beneficiaries will be involved in the cash-for-work activities similar to those successfully implemented by FID for many years in Madagascar. FID will contract NGOs to organize the cash-for-work activities, which will be selected in collaboration with BVPI where possible and could include reforestation as well as the rehabilitation of terraces, eroded hillsides, and small feeder roads linking irrigated perimeters or providing access to markets. The households will participate in the program for three years to allow them to stabilize their consumption over a longer period and support their participation in local programs and services (related, for example, to health, nutrition, hygiene, and HIV/AIDS). The work activities will involve about 20 days per household from August to September—just before school starts—to allow families to cover the out-of-pocket expenditures they generally incur when enrolling their children in school. To promote greater food security, a second cash-for-work activity of about 25 38 days per household will follow from January , during the lean season for agriculture (the timing and duration vary by agro-ecological zone). Beneficiaries will not work more than five hours per day to prevent the disruption of their other duties. Households that cannot supply labor because of age, disability, or other eventualities (pregnancy, childcare) could be eligible for direct cash transfers, conditional on their participation in community activities identified by the project. This group constitutes maximum 20 percent of the beneficiaries in a community. 41. Where possible, the project will enable safety net beneficiaries to participate in other locally implemented programs such as UNICEF’s Key Family Practices program, the Community Nutrition Program supported under the Additional Financing discussed earlier, or the HIV/AIDS program supported by the Ministry of Health. UNICEF could work with FID on a communication program to increase the awareness of behaviors and practices related to human development among cash-for-work participants to achieve longer-term human development goals. The messages would be transmitted through the NGOs contracted to manage the cash-for-work activities. 42. The conditional cash transfers could be linked to UNICEF’s family service programs, which can include measures related to health, nutrition, or hygiene. The mother in the participating household would receive a bimonthly cash payment in exchange for a commitment to participate regularly in the UNICEF program. The selection of eligible households, payment, and other implementation modalities for this intervention will be similar to those used for the cash-for-work activities, although the responsibilities of the participating households will differ. 43. FID will be the implementing agency for all cash transfers, given its longstanding experience in this area, its record of success, and its solid institutional setup. This component includes financing for essential equipment as well as technical assistance to establish a beneficiary registry, enhance payment through electronic transfers, foster third-party monitoring (for example, through operational audits), and conduct an impact evaluation. FID will be trained in developing messages on human development outcomes for beneficiaries and support implementation of the family services program. Component C: Contingency emergency fund (zero budget) 44. This component establishes a disaster recovery contingency fund that could be triggered in the event of a natural disaster through formal declaration of a national or regional state of emergency, or upon a formal request from the government in the wake of a disaster. Upon triggering this zero-budget line contingency fund, funds from other project components will be reallocated to rapidly finance a positive list of goods and services in the agricultural, watershed management, and social protection sectors. Component D: Project management (US$ 8.8 million) 45. Based on lessons learned from ongoing emergency operations, the project will develop a simple, streamlined organizational structure involving two agencies experienced in implementing such operations: PN-BVPI and FID. The objectives of this component are to manage and use resources in accordance with the proposed project’s objectives and procedures and to evaluate its 39 results. The Ministry of Agriculture will oversee the implementation of project activities. The project management component will finance the following activities (for details, see Annex 3). 46. Project management costs for PN-BVPI (US$ 5.5 million) to carry out project planning and implementation of Component A. PN-BVPI will carry out overall project planning, quality oversight, implementation, procurement, financial management, and monitoring of proposed project activities in Component A, including the provision of technical assistance, training, and equipment. PN-BVPI will also be responsible for managing information systems and developing procedures for data collection and reporting to enable (i) regular project monitoring and completion evaluations of project output and impact indicators and (ii) surveys and participatory assessments, including periodic assessments of beneficiary satisfaction for Component A. 47. Project management costs for FID (US$ 2.8 million) to carry out project planning and implementation of Component B. FID will carry out overall project planning, implementation, procurement, financial management, and monitoring of proposed project activities in Component B. FID will also be responsible for managing information systems and developing procedures for data collection and reporting to enable regular project monitoring and completion evaluations of project output and impact indicators. 48. Provision of technical assistance on staple food trade and markets (US$ 0.5 million). This activity, managed by PN-BVPI, will provide technical assistance to the Ministry of Agriculture to develop a clear policy and strategy on food trade, both domestic and international. The strategy will help the government and private sector to plan food imports in times of crisis and guide development of the agricultural sector more generally. 40 Table 2.3. Detailed project costing by component and activity Component/activity Cost (US$) Component A: Restoring and maintaining productive agricultural capacity Subcomponent A.1 Productivity and nutrition Intensification package 3,500,000 Nutrition extension 1,000,000 Infrastructure Irrigation infrastructure rehabilitation 20,500,000 Storage infrastructure 1,000,000 Watershed protection (Area 2) 1,000,000 Locust control 2,000,000 Subtotal 29,000,000 Subcomponent A.2 Watershed management Cash for trees (nurseries, cash for work) 3,860,000 Program administration 500,000 Land management, administration, quality control 3,600,000 Land administration quality control 140,000 Disaster early warning system covering project areas 1,000,000 Land Observatory 900,000 Subtotal 10,000,000 Component B: Providing a social safety net for the poor 17,200,000 Component C: Contingency emergency fund - Component D: Project management Project management PN-BVPI 5,500,000 Project management FID 2,800,000 Trade policy technical assistance 500,000 Subtotal 8,800,000 Total 65,000,000 41 ANNEX 3: IMPLEMENTATION ARRANGEMENTS Project Institutional and Implementation Arrangements 1. The proposed project will adopt the implementation arrangements used under the existing BVPI (IDA/GEF and PUPIRV) and FID (PUPIRV) operations. The agencies that will implement project activities (PN-BVPI and FID) have strong records of ensuring efficient implementation of World Bank projects. These arrangements prevent the need for implementing significant new changes in policies or institutions, which would be extremely difficult in the current political circumstances. Figure 3.1 depicts the arrangements detailed in the following paragraphs. Figure 3.1: Implementation arrangements 2. Project oversight. Project oversight will be provided a streamlined National Steering Committee composed of the two chairpersons of the PN-BVPI National Steering Committee and FID Board of Directors. Both steering committees include representatives of other ministries (such as the Ministry of Decentralization and Land Use Planning, Ministry of Environment and Forests, Ministry of Economy and Industry, Ministry of Finance and Budget) and have proven effective. Creating a new multi-sectoral steering committees for the proposed project would not only lead to inefficiencies but difficulties in coordination and possibly confusion. 3. The steering committee for the proposed project will meet twice a year. Its responsibilities for overall leadership and oversight of the proposed project include: (i) reviewing and approving work plans and budgets; (ii) monitoring implementation and results, particularly the analysis and approval of activity reports and financial and operational audits; and (iii) recommending corrective measures as needed to improve implementation. 42 4. Project coordination and management. Overall project coordination will be ensured by a streamlined Project Secretariat managed jointly by the project coordinators of PN-BVPI and FID. Since the proposed project is under the technical purview of the Ministry of Agriculture, the project coordinator of PN-BVPI will have primary responsibility for representing the project as a whole. The Secretariat will be staffed with a financial management specialist and a monitoring and evaluation specialist. 5. PN-BVPI will implement Component A of the proposed project (Restoring and Maintaining Productive Agricultural Capacity) and FID will implement Component B (Social Protection). These implementing agencies will also be responsible for overall project planning, the quality of project oversight, implementation, procurement, financial management, and monitoring of project activities, including the provision of technical assistance, training, equipment, and evaluation studies. Implementation Arrangements by Component 6. Component A. Implementation of Component A will adopt the implementation arrangements of the IDA-financed BVPI and the agriculture component of PUPIRV. Implementation arrangements will be detailed in the Project Implementation Manual and are discussed below. 7. Overall implementation of Component A will be ensured by PN-BVPI and its Coordinating Unit (Cellule de Coordination, CelCo), which oversees implementation of all donor- funded projects that form part of PN-BVPI. CelCo is staffed by a financial manager, a procurement specialist, an M&E specialist, and technical staff from relevant public agencies, including the Directorate of Agricultural Engineering (Direction du Genie Rural) and the Directorate of Agricultural Production (Direction de la Production Agricole). All are civil servants. CelCo will be responsible for monitoring implementation and results, reviewing progress reports, and recommending corrective measures as needed. It will also ensure that activities supported by the proposed project comply with national policies on irrigation development and watershed protection. Day-to-day implementation of the activities funded under Component A will be coordinated by the National Technical Assistant for Operation (NATOP), assisted by a fiduciary specialists (financial manager, procurement specialist) and other technical staff (infrastructure specialist, agronomist, environment specialist, land tenure specialist, and a monitoring and evaluation specialist). The proposed project will provide additional support to strengthen the implementing agency’s technical capacity and enable PN-BVPI to assume its additional responsibilities under the proposed project. 8. At the regional level, DRDR of the Ministry of Agriculture will be responsible for project coordination. DRDR, a public agency, is charged with the supervision (and in some cases the execution) of public agricultural and rural development programs. DRDR staff based in regional offices are responsible for ensuring the compatibility of activities being implemented under donor-funded projects with regional priorities, reviewing project progress and performance, and proposing corrective measures when projects are determined to be off course in achieving their objectives. Under the oversight of the NATOP, in each selected region a Regional Technical Assistant for Operation (RATOP) will be recruited and be responsible for the day-to-day implementation of project activities. Each RATOP will be assisted by fiduciary specialists (procurement specialist and financial management specialist) and other technical staff, including 43 an infrastructure specialist to oversee rehabilitation of irrigation infrastructure and other productive infrastructure (product storage, feeder roads, and so on), a social mobilization specialist to build capacity in beneficiary associations, and an environmental specialist to oversee watershed protection and forestry activities and monitor the implementation of safeguard policies. 9. Component B. Since its inception in 1993 as an association of public interest with administrative and financial autonomy, FID has successfully implemented several IDA-financed projects, including the US$ 40 million IDA-financed Emergency Food Security and Reconstruction Project (closed on June 30, 2013) and the social protection component of PUPIRV (ongoing). During the implementation of PUPIRV, FID has effectively responded to emergencies through the prompt implementation of a cash-for-work program for vulnerable groups and has been an efficient mechanism for rehabilitating and reconstructing basic infrastructure following catastrophic events, including cyclones. Given FID’s good capacity in what is otherwise a low- capacity environment, the government is increasingly using FID to provide services for other ministries, such as building schools to implement the Education-for-All Fast Track Initiative. During the implementation of the proposed project, FID will ensure that it operates efficiently and that it has the staff and skills appropriate for implementing the scheduled activities, primarily under Component B, as well as a subset of activities under Component A.2. Should a natural disaster trigger the contingency emergency fund in Component C, FID will be able to quickly mobilize its capacity to respond. 10. Policy guidance and overall institutional oversight of FID are the responsibility of the Board of Directors of FID under the chairmanship of the Prime Minister. The nine members of the Board of Directors include one representative nominated by the Prime Minister and representatives from the Ministry of Finance, mayors of rural communes, civil society, socioprofessional organizations, as well the Executive Secretaries of the National Office for Disaster Risk Management (Bureau National de Gestion des Risques et des Catastrophes) and the CPGU. The Director of Administration and Financial Management at the central level is in charge of financial management for the IDA funding, including budgeting, maintenance of records and accounts of all transactions related to the General Directorate, consolidation and production of the financial statements and quarterly interim unaudited financial reports (IFRs), and administration of the Designated Account. The Regional Directorates manage disbursements from regional bank accounts, maintain records and accounts for all transactions under their jurisdiction, send the balance sheet to the General Directorate for consolidation on a monthly basis, and prepare financial and other basic information on project management/monitoring as required by the General Directorate. To do so, each Regional Directorate has an accountant in charge of regional accounts. Financial Management and Disbursements 11. A financial management assessment of the two implementing agencies (PN-BVPI and FID) formed part of the project appraisal process. Specifically, the assessment sought to determine whether the proposed financial management arrangements were adequate to comply with the Bank’s Policy on Investment Project Financing (OP/BP 10.00), the procedures specified in the Financial Management Manual issued by the Financial Management Sector Board, and the requirements specified in OP/BP 8.00 (Rapid Response to Crises and Emergencies). 44 12. Based on the appraisal, it was established that FID’s financial management staff has the relevant qualifications and the appropriate experience with regard to World Bank financial management procedures and requirements and will maintain its current financial management staffing. In the case of PN-BVPI, the new financing will necessitate the recruitment of financial management personnel for this project, including a finance manager and a project accountant based at the head office, together with eight regional financial accountants. The overall financial management risk rating is assessed as moderate. Financial Management Arrangements for the Project 13. Budgeting and planning. The implementing agencies will prepare the annual budgets for their respective components, which will subsequently be consolidated by the Project Secretariat prior to approval by the Project Steering Committee. The implementing agencies will be responsible for producing variance analytical reports comparing planned and actual expenditures on a monthly and quarterly bases. The periodic variance analysis will enable the timely identification of deviations from the budget. These reports will be part of the IFRs submitted to the Bank on a quarterly basis. 14. Accounting software. PN-BVPI and FID will use their current accounting software to process transactions, prepare quarterly IFRs, and prepare annual financial statements. 15. Internal controls/Financial Management Manual. The implementing agencies will amend their existing manuals of financial management procedures to meet the requirements of this project. The implementing entities will periodically review the manuals over the life of the project to ensure their continued adequacy and compliance with the requirements set out therein. 16. Internal audit. The implementing agencies both have internal audit departments, which will prepare quarterly reports for submission to the Project Steering Committee. To ensure that it remains independent in executing its work, each internal audit department will perform an objective assurance function and will not be involved in carrying out operational tasks. 17. Financial reporting. The implementing agencies will prepare quarterly unaudited IFRs for the project in form and content satisfactory to the World Bank. IFRs will be submitted to the Bank within 45 days after the end of the quarter to which they relate. The project will prepare and agree with the Bank on the format of the IFRs prior to negotiations, and annual financial statements will be prepared using internationally accepted accounting standards. At the end of each fiscal year, the project will prepare annual financial statements that will be subjected to an external audit. 18. Staffing. The two implementing agencies will be responsible for the financial management of their respective components under the project. Given that FID has financial management staff with the requisite qualifications and appropriate experience with regard to the Bank’s financial management procedures and requirements, FID will maintain its existing financial management staffing. PN-BVPI will recruit financial management personnel for this project, including a finance manager and a project accountant based at the head office, together with eight regional financial accountants. The recruitment will have to be finalized within two months of project effectiveness. 45 Disbursement Arrangements and Flow of Funds 19. Flow of funds. Each implementing agency will open a Designated Account (DA) denominated in US dollars to enable payment of eligible project expenditures The proceeds of the Credit will be disbursed in accordance with the World Bank’s traditional disbursement procedures and will be used to finance project activities through the disbursement procedures currently used, namely, Direct Payment, Advances, Reimbursement, and Special Commitment. 20. Replenishment and reimbursement withdrawal applications. These applications will be accompanied by a Statement of Expenditures (SOE) in accordance with the procedures described in the Disbursement Letter and the Bank's “Disbursement Guidelines.” IFRs and annual financial statements will be used as financial reporting mechanisms and not for disbursement. The minimum application size for direct payment and reimbursement will be the equivalent of 20 percent of the Advance ceiling amount. The Bank will honor eligible expenditures completed, and services rendered and delivered, by the project closing date. A four-month grace period will be granted to allow for the payment of any eligible expenditure incurred before the Grant Closing Date. 21. Designated account. PN-BVPI and FID will open segregated DAs at a commercial bank(s) acceptable to the World Bank in US dollars to cover the Credit's share of eligible project expenditures. The Ceiling of the DAs will be up to 10 percent of the Credit amount. The implementing agencies will be responsible for submitting monthly replenishment applications with appropriate supporting documentation. Authorized signatories, names, and corresponding specimens of their signatures will be submitted to the World Bank prior to the receipt of the first Withdrawal Application. Replenishment of each DA will be associated with the categories listed in Table 3.1. Table 3.1: Designated accounts and associated categories Designated account Associated category(ies) Ceiling amount (US$) A (BVPI) 2,3,4 5,000,000 B (FID) 1,3,4 3,000,000 22. Subaccounts. Each implementing agency will also maintain a bank account in local currency (ariary) provided it is within the agreed ceiling. Payments from the subaccounts can be replenished as disbursements occur and proper supporting documents are filed. The Borrower is responsible for bearing all risks associated with foreign exchange fluctuations when making transfers from the DA (denominated in US dollars) to the subaccount (denominated in ariary). At the end of the project, any unused balances in the subaccount shall be converted into US dollars and deposited in the related DA. 23. Statements of expenditure. During implementation, the requisite supporting documents will be sent to the World Bank in connection with contracts that are above the prior review threshold, except for expenditures under contracts with an estimated value of: (i) US$ 500,000 or less for goods and works; (ii) US$ 100,000 or less for consulting firms; (iii) US$ 50,000 or less for individual consultants and training, grants, and operating costs that will be claimed on the basis of SOEs. The documentation supporting expenditures will be retained at the respective Project Implementation Unit and be readily accessible for review by the external auditors and World Bank supervision missions. 46 24. e-Disbursement. The World Bank has introduced e-Disbursement for all projects in Madagascar. Under e-Disbursement, all transactions will be conducted and associated supporting documents and SOEs scanned and transmitted online through the World Bank’s Client connection system. The use of e-Disbursement will streamline online payment processing by preventing common errors in filling out withdrawal applications, reducing the time and cost of sending withdrawal applications to the World Bank, and expediting the World Bank’s processing of disbursement requests. 25. The Credit will disburse 100 percent of eligible expenditures (inclusive of taxes). The proceeds of the Credit have been allocated as specified in Table 3.2. Table 3.2: Allocation of Credit by category of eligible expenditure for the proposed project Category Amount of Credit Percentage of allocated (US$) expenditures to be financed Goods 1,460,000 100% Works 18,400,000 100% Consulting services 33,910,000 100% Training 930,000 100% Operating costs 7,800,000 100% Grants 2,500,000 100% TOTAL AMOUNT 65,000,000 26. Disbursement of funds to service providers, contractors, and suppliers. The implementing agencies will make payments to service providers, contractors, and suppliers of goods and services for specified eligible activities under the Credit. Such payments will be made on the basis of the terms and conditions of each contract. Fund Flow Diagram World Bank BVPI FID Designated Account Designated Account BVPI FID Project Account Project Account Contractors and suppliers of goods and services 27. External audit. The project accounts will be audited annually, and the audit report will be submitted to the World Bank no later than six months after the end of each financial year. The 47 recruitment of the project external auditor will be finalized no later than six months following effectiveness to enable procurement of external audit services to begin. At the time of this appraisal, no audit report for the sector is overdue. The proposed project will comply with the World Bank’s disclosure policy on audit reports. For example, it will make all financial audit reports (including qualified audit reports) publicly available on the official website within one month after they are accepted as final by the World Bank. 28. Supervision plan. Based on the current overall residual financial management risk and the multi-sectoral approach of this operation, the project will be supervised at least twice a year, in addition to routine desk-based reviews, to ensure that its financial management arrangements operate as intended and that funds are used efficiently for the intended purposes. 29. Financial management risk assessment and mitigation. The Bank’s principal concern is to ensure that project funds are used economically and efficiently for the intended purpose. Assessing the risk that project funds will not be used appropriately is an important part of the financial management assessment. The risk features comprise two elements: (i) the risk associated with the project as a whole (inherent risk) and (ii) the risk associated with a weak control environment with regard to project implementation (control risk). Table 3.3 details these risks and their corresponding mitigation measures for the proposed project. Table 3.3: Analysis of inherent and control risk related to financial management of the proposed project and mitigation measures incorporated into the project’s design Risk Risk Risk mitigating measures Condition Resi- rating incorporated into project design for dual effectivene risk ss (Y/N) Inherent risk S S Country level: The S The implementation of public N S Public Expenditure and financial management reform has Financial Accountability stalled owing to limited donor assessment identified engagement with the de facto critical public financial government. The continued use of management weaknesses standalone IAs will mitigate these at central and weaknesses. decentralized levels. Entity level: The M The IAs will retain (in the case of N M implementing entities may FID) and supplement (in the case of not be able to meet the PN-BVPI) existing financial financial management management personnel who possess requirements due to a lack adequate experience and competence. of financial management capacity. 48 Risk Risk Risk mitigating measures Condition Resi- rating incorporated into project design for dual effectivene risk ss (Y/N) Project level: The M The IAs will comply with the internal N M resources of the project control processes as set out in the may not be used for the respective FM Procedures Manuals. intended purposes. The internal audit units will also continuously review the adequacy of internal controls and make recommendations for improvement. Control Risk M M Budgeting: Weak M The FM Procedures Manuals will N M budgetary execution and spell out the budgeting and budgetary control leading to control arrangements to ensure budgetary overruns or appropriate budgetary oversight. inappropriate use of project funds. Accounting: The M The IAs will recruit/retain suitably N M accounting function might qualified and experienced FM not be able to execute its personnel to ensure appropriate duties and to generate performance of the accounting and financial information in a FM functions. Financial reporting timely manner. will also be facilitated by use of the existing information systems. Internal control: Specific M The FM Procedures Manuals will be N M aspects of project reviewed to ensure continuing activities may not be adequacy over the course of the appropriately addressed in project. The manuals will contain all the FM Procedures the key internal control processes Manuals. pertaining to the various project activities. Fund flow: Risk of M The rigorous review of all N M misused and inefficient transactions prior to final payment use of funds. will be performed by the Project Coordinator and the Finance Manager under each IA. Internal audit reviews will also mitigate the risk that funds will be used for unintended purposes. 49 Risk Risk Risk mitigating measures Condition Resi- rating incorporated into project design for dual effectivene risk ss (Y/N) Financial reporting: The M FID will use the existing FM N M project may not be able to personnel, who are appropriately produce the financial experienced in financial reporting reports required in a and conversant with the related Bank timely manner as required requirements. PN-BVPI will recruit for project monitoring and appropriately qualified and management. experienced FM personnel. All the IAs have computerized accounting systems that will enable the efficient, timely generation of financial information. Auditing: Delays in M An independent external audit firm N M submission of audit will be hired by the project with reports or delays in regard to the audit submission implementing the timelines set out in the Financing recommendations of the Agreement. The Bank will monitor Management Letter. audit submission compliance and ensure implementation of Management Letter recommendations. Governance and S Robust FM arrangements (including S accountability: A critical a comprehensive annual audit of issue is the possibility of project accounts and Bank corrupt practices supervision of FM, including the including bribes, abuse of review of transactions and asset administrative and verification) are designed to mitigate political positions, fiduciary risks in addition to the IAs’ misprocurement and overall internal control systems. misuse of funds, and related practices. OVERALL FM RISK M M 30. The overall financial management risk rating, taking into account the mitigation measures, is deemed to be moderate. Environmental and Social Aspects of the Project (including related safeguards) 31. As discussed, the proposed project will adopt implementation arrangements similar to those used under the existing BVPI (IDA/GEF and PUPIRV) and FID (PUPIRV) operations. These experienced agencies have strong experience in ensuring efficient implementation of World Bank projects, and both have SEFPs (focal points) in place. A strong, continuous capacity- building program will be designed and delivered to reinforce the technical capacity of the focal points and district/local actors. 50 Monitoring and Evaluation 32. The proposed project will be supervised closely, including at least two full implementation review missions per year and at least two limited implementation review missions. Monitoring and evaluation arrangements for the proposed project will be identical to those used by the implementing agencies for project financed through IDA or Trust Funds. The indicators and results framework will be updated and consolidated by the Project Secretariat. The monitoring and evaluation arrangements of the implementing agencies are considered adequate and have been progressively updated during implementation of past projects. 33. Activities related to social protection will include an impact evaluation near the time of the project’s Medium-term Review to establish causality between Component B activities and outcomes. The evaluation will also inform the decision to scale up or otherwise adjust cash-for- work activities, or possibly increase the project’s scope to ensure better results. Procurement Arrangements General 34. Madagascar is in the process of major procurement reforms. The Senate and Parliament passed a new Procurement Code that became effective in July 2004. The main pillars of the code are transparency, efficiency and economy, accountability, equal opportunity for all bidders, prevention of fraud and corruption, and promotion of local capacity. The Procurement Code was complemented by new regulations and procedure manuals as well as standard bidding and other procurement documents. The Procurement Code defines methods of procurement and review procedures. In 2006, the code also created the Public Procurement Oversight Authority (Autorité de Régulation des Marchés Publics), which oversees the National Tender Board (Commission Nationale des Marchés) for procurement reviews and the Regulatory and Appeals Committee (Commission de Régulation et de Recours) for handling norms and complaints. Finally, the code provides for the creation of Procurement Units (Unités de Gestion de la Passation de Marchés) under the leadership of a Head of Public Procurement (Personne Responsable des Marchés Publics, PRMP), as well as a Tender Commission (Commission d’Appel d’Offres) in each ministry and decentralized departments of national public institutions. 35. The Procurement Code is largely consistent with good public and international practices and includes provisions for: (i) far-reaching and effective advertising of upcoming procurement opportunities (issuance of general procurement notices for each procuring entity and their inclusion on the Public Procurement Oversight Authority website); (ii) open public bidding; (iii) pre-disclosure of all relevant information, including clear and transparent bid evaluation and contract award procedures; (iv) clear accountabilities for decision making; and (v) an enforceable right to review for bidders when public entities breach the rules. The Country Procurement Assessment Report (CPAR) was submitted to the government and adopted in June 2003. The CPAR action plan was agreed upon and approved by the government at the December 2003 CPAR mission and workshop. During the preparation of Poverty Reduction Support Credits 2–6, four key ministries (Education, Health, Transport, and Agriculture) were assessed on the application of the new Procurement Code provisions, with assessments being used to trigger successive Poverty Reduction Support Credits. 51 Guidelines 36. General observations. In general, Madagascar’s Procurement Code and regulations do not conflict with IDA guidelines. Procurement for the proposed project will be carried out in accordance with: (i) the World Bank’s “Guidelines: Procurement under IBRD Loans and IDA Credits,” dated January 2011; (ii) “Guidelines: Selection and Employment of Consultants by World Bank Borrowers,” dated January 2011; and (iii) the provisions of the Financial Agreement. Furthermore, in accordance with OP 10.00, Paragraph 11, the project will be processed under specific procurement arrangements as set forth in “Procurement under Situations of Urgent Need of Assistance or Capacity Constraints: Simplified Procurement Procedures” (referred to in OP 11.00, paragraph 20). 37. Anticorruption guidelines. The “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants,” dated October 15, 2006, and revised in January 2011, will apply to this project. 38. Procurement documents. Procurement transactions will be carried out using the Bank’s Standard Bidding Documents for all International Competitive Bidding (ICB) and Standard Request for Proposal for selection of consultants using the Quality- and Cost-based Selection (QCBS) method. For National Competitive Bidding (NCB), the Borrower may submit a sample form of bidding documents to the World Bank for prior review, which it will then use for the duration of the project pending approval. The list of exceptions to use NCB (approved by LEGOP) is provided at the end of this Annex. The Bank’s Sample Form of Evaluation Reports will also be used. Advertising Procedures 39. General Procurement Notices, Specific Procurement Notices, Requests for Expression of Interest, Invitation to Bid, results of the evaluation, and awards of contracts should be published in accordance with advertising provisions in the following guidelines: “Guidelines: Procurement under IBRD Loans and IDA Grants,” dated January 2011, and “Guidelines: Selection and Employment of Consultants by World Bank Borrowers,” dated January 2011. The borrower will maintain a list of responses received from potential bidders interested in the contracts. 40. For ICB and requests for proposals that involve international consultants, the contract awards shall be published in UN Development Business online within two weeks of receiving IDA’s "no objection" to the contract award recommendation. Procurement Methods 41. Procurement of works. Works to be financed by IDA will include construction, rehabilitation of irrigation schemes, community-level infrastructure such as small feeder roads, small-scale agricultural infrastructure, rehabilitation of lavaka (major areas of erosion), and rehabilitation of product storage facilities and DRDR offices. Works estimated at or above US$ 5,000,000 per contract shall be procured through ICB. Contracts estimated at less than US$ 5,000,000 may be procured through NCB. Contracts estimated at less than US$ 200,000 may be procured through prudent Shopping procedures. The borrower should solicit at least three price quotations to formulate a cost comparison report. Direct contracting may be used to extend an existing contract or award new contracts in response to disasters. For such contracting to be justified, the Bank should be satisfied that the price is reasonable and that no advantage could be 52 obtained by further competition. The direct contracting may be from contractors or NGOs that are already mobilized and working in the emergency area. 42. Procurement of goods. Goods to be financed by IDA will include: agricultural equipment, disaster response equipment, vehicles, IT equipment, and so on. Similar goods that could be provided by a single vendor will be grouped in bid packages estimated to cost at least US$ 500,000 per contract and will be procured through ICB. Contracts estimated at less than US$ 500,000 may be procured through NCB. Readily available off-the shelf goods of values less than US$ 100,000 per contract may be procured through Shopping procedures. For Shopping, contracts will be awarded following evaluation of bids received in writing following a written solicitation issued to several qualified suppliers (at least three) who have a physical shop carrying the goods concerned. The award will be made to the supplier with the lowest price, but only after comparing a minimum of three quotations at the same time and determining that the supplier has the experience and resources to execute the contract successfully. For Shopping, the project procurement officer will keep a register of suppliers to be updated at least every six months. Goods may also be procured through United Nations Agencies. 43. Prequalified suppliers and contractors. Lists of prequalified suppliers and contractors to whom periodic invitations are issued could be used for a large number of similar simple contracts of any size. Prequalification documents may use a simple format that is acceptable to the Bank. Suppliers and contractors would be asked to provide quotations for simple unit prices. Contracts should be awarded on a competitive basis. 44. Accelerated bid times. Under ICB and NCB, accelerated bid times might be envisaged, but bidding periods shorter that 21 days for ICB and 10 days for NCB should be cleared with the Regional Procurement Manager, taking into consideration the capacity of firms (local and international) to prepare responsive bids in a short period. 45. Advance payment. Where it is not easy for contractors and suppliers to obtain lines of credit from banks, the Borrower may consider increasing the amount of advance payment under works and supply contracts to up to 20 percent of the contract value, provided that the contractor/supplier provides a bank guarantee for the same amount and the World Bank clears this increased value of advance payment. 46. Selection of consultants. The project will finance consultant services such as technical and financial audits, technical assistance, diagnostic and feasibility studies, survey and plot inventories, activities under the institutional strengthening component, engineering designs and supervision of works, and capacity-building activities. Consultant firms will be selected through the following methods: (i) QCBS; (ii) Quality-based Selection (QBS); (iii) Consultant’s Qualifications Selection (CQS) for specialized assignment contracts to cost less than US$ 500,000; (iv) Least Cost Selection (LCS) for standard tasks such as insurance and financial and technical audits; (v) Fixed Budget Selection (FBS); and (vi) Single Source Selection with prior approval of the Bank for services in accordance with Paragraphs 3.10–3.12 of the Consultant Guidelines. Individual Consultants will be hired in accordance with Paragraphs 5.1–5.6 of the World Bank Guidelines. 47. Lists of shortlisted consultants for services estimated at less than US$ 200,000 per contract may be composed entirely of national consultants in accordance with Paragraph 2.7 of 53 the Consultant Guidelines, as long as a sufficient number of qualified individuals or firms are available. However, if foreign firms express interest, they would not be excluded from consideration. 48. Subproject procurement. Some small-scale infrastructure will be built using a community-driven development approach through which the procurement and management of contracts are delegated by the implementing agency (in this case FID) to local communities. Contracts will be awarded based on the simplified procedures judged acceptable by the Bank in the project procedures manual. FID will operate through its regional offices to ensure compliance with the agreed upon procedures. 49. Training, workshops, and conferences. Training events (including training materials and support), workshops, and conferences will be carried out in accordance with the approved annual training and workshop/conference plan. A detailed plan describing the nature of the training/workshop, the number of trainees/participants, and the duration, staff months, timing, and estimated cost will be submitted to IDA for review and approval prior to initiating the process. The appropriate methods of selection of training centers will be derived from the detailed schedule. After the training, participants will be asked to submit a brief report indicating the skills they have acquired and how these skills will contribute to their performance and the attainment of the PDO. 50. Operational costs. Operating costs financed by the project are incremental expenditures, such as office supplies, vehicle operation and maintenance, maintenance of equipment, communication costs, office rental, supervision costs (that is,. transport, accommodation, and per diem), and salaries of locally contracted staff. These items will be procured using the procurement procedures specified in the Bank-approved procedures manual of each agency. Procurement Capacity and Risk Assessment of Implementing Agencies 51. The procurement capacity assessment of the PN-BVPI (centrally and at the four existing DRDRs) and FID, the two implementing agencies, has been carried out and was determined to be satisfactory. FID possesses procurement staff with the necessary qualifications and appropriate experience with Bank procurement procedures and Guidelines. As a result, the existing procurement staff will be maintained for FID (in the Central, Antsiranana, Fianarantsoa, and Tuléar Regional Offices). As for PN-BVPI, the Public Procurement Management Unit (Unité de Gestion des Marchés Publics) within the Ministry of Agriculture, headed by the PRMP and staffed by a core team, is technically proficient and fully involved in the PN-BVPI’s coordination unit. The PN-BVPI will be staffed by eight high-performing officers (one at the central office and seven in the regions). For the four new DRDRs covering Project Area 1 (Vakinankaratra, Amoron’i Mania, Haute Matsiatra, and Menabe), four new highly qualified procurement officers would be recruited before project effectiveness. As for the existing three DRDRs covering Project Area 2 (Andapa, Boeny, and Lac Alaotra), the three efficient procurement officers working under the current BVPI/IDA project would be retained and posted either to the same DRDR or another DRDR among the three. At the central level, the project would maintain the competent procurement officer working currently under the BVPI/IDA project. That person would be in charge of procurement activities for the central unit as well as for the Project Secretariat, would provide close support to the competent civil servant in charge of procurement in Itasy Region (Area 1), and would ensure overall coordination of all procurement officers across the seven offices. That person would be assigned a procurement assistant. 54 52. All procurement staff under PN-BVPI in the proposed project would operate under the overall guidance and control of the PRMP of the Ministry of Agriculture. 53. The overall Procurement Risk Assessment rating is Substantial. Table 4.1 summarizes the risk assessment and corresponding mitigation measures incorporated into the project’s design. Table 4.1: Procurement risk assessment and corresponding risk mitigation measures for the proposed project Designation Concerns Risk mitigation Due date Capacity of Newly recruited - Recruit highly qualified Recruitment and procurement procurement officers for 4 person who could be training prior to staff in Area 1 new DRDRs covering immediately operational. effectiveness Area1. Risk of delay in - Capacity to be procurement processes and strengthened. thus of untimely disbursement. Simplified Risk of sloppiness, - Hands-on training in the Continuous procurement favoritism, and misuse of use of simplified procedures funding due to large number procedures. (high threshold, of small and medium-sized flexible method, contracts. (Bidders also may - Put a system into place for Continuous e.g., take advantage of the handling complaints and Qualifications system.) advertise its existence to Criteria) improve transparency. - Use of internal Continuous review/audit procedures. - Close and frequent supervision from Bank Continuous Procurement Specialist. Fraud and Increase of - Rigorous due diligence by Constantly corruption suspended/debarred Bank staff and continuous medium-sized firms for client sensitization and Madagascar lately due to information on debarred forged documents. firms. - Systematic authentication of bid security to issuing bank; and/or any doubtful official documents. Market-specific Project covers seven Ensure large diffusion of As needed risk regions: lack of bidders’ advertisements for bidding participation; lack of process, lighten competition. Qualifications Criteria Since most procurement (more flexibility), but will be done through ensure close supervision by Shopping procedures, this technical staff/experts with 55 will not be an issue. deep knowledge of the However, lack of foreign market. bidders’ participation is an issue. 54. Other mitigation measures. Apart from identifying the minimum staff and equipment needed for a procurement unit to be satisfactory to IDA, no additional mitigation measures can be identified at this time. To address and mitigate the increased risks associated with an emergency operation, however, and given that the Bank’s procurement specialist is based in Madagascar, close supervision and hands-on support will be provided. Frequency of Procurement Reviews and Supervision 55. The Bank’s prior and post reviews will be carried out in accordance with the thresholds described in Table 4.2. The Bank will conduct frequent supervision missions and annual Post Procurement Reviews with 20 percent of contracts. The Bank may also conduct an Independent Procurement Review at any time up and until two years after the Closing Date of the Project. Table 4.2: Procurement and selection review thresholds Expenditure Contract value Procurement Contract subject to category (threshold) (US$) method prior review 1. Works ≥5,000,000 ICB All The first two <5,000,000 NCB contracts The first two <200,000 Shopping contracts No threshold Direct Contracting All 2. Goods ≥500,000 ICB All The first two <500,000 NCB contracts The first two <100,000 Shopping contracts No threshold Direct Contracting All 3. Consulting firms QCBS, QBS, LCS, ≥200,000 FBS, CQS All contracts QCBS, QBS, LCS, The first two <200,000 FBS, CQS contracts Individuals ≥100,000 Comparison of 3 CVs All contracts The first two <100,000 Comparison of 3 CVs contracts Firms and Single Source individuals No threshold All Note: All Terms of Reference regardless of contract value are subject to prior review. Irrespective of contract value, the first two contracts of all goods, works, and consultant services are subject to the World Bank’s prior review. 56 56. All contract amendments raising the initial contract value by more than 15 percent of the original amount or above the prior review thresholds will be subject to IDA’s prior review. All contracts not submitted for prior review will be submitted to IDA for post review in accordance with Annex 1, Paragraph 5, of the Bank’s Consultant Selection Guidelines and the Bank’s Procurement Guidelines. Procurement Plan 57. All procurement activities will be carried out in accordance with the original or updated approved Procurement Plans. The Procurement Plans will be updated at least every 18 months or as necessary to reflect actual implementation needs and capacity improvements. All Procurement Plans should be published at the national level and on the World Bank website as stated by the Guidelines. Table 4.3 displays a Simplified Procurement Plan for a duration of at least six months. 58. This preliminary Procurement Plan lists only activities requiring prior review by IDA. Such activities are mostly related to Component A. Social protection and small-scale agricultural activities are by nature small in size and consequently will be post reviewed. FID and PN-BVPI have developed and submitted their Procurement Plans for their respective components, and their scheduled activities are therefore not included in this PAD apart from their first two contracts for all goods, works, and consultant services. Procurement Filing 59. Procurement documents must be maintained in the project files and archived in the safe place until at least two years after the closing date of the project. Staff recruited into the procurement unit within the implementing agency will be responsible for properly filing procurement documentation. Tables 4.3: Simplified Procurement Plan (with methods and time schedule) a) Works 1 2 3 4 5 6 7 8 9 10 Expected Estim. Proc. Pre- Dom. Prior Comm Ref. Contract Bid- Start Amount Metho qualific. Pref. Rev. ents No. (Description) OpeningD Date (US$) d (yes/no) (yes/no) (yes/no) ate Rehabilitation works of Sahamaloto March April 1 $239,000 NCB No No YES (Alaotra) 2014 2014 Irrigation scheme Rehabilitation works of Secteur 10 March April 2 $409,000 NCB No No Yes (Boeny) 2014 2014 irrigation scheme 57 Rehabilitation works of Irrigation Shoppi 3. $ 93,750 No No Yes July 2014 Aug. 2014 scheme ng (Ambatomainty Miandrivazo) Rehabilitation works of March April 4. Ankaibe (Sava) $ 1,375,000 ICB No No Yes 2015 2015 Irrigation scheme Rehabilitation works of (2) Irrigation Shoppi 5. scheme : $175,000 No No Yes May 2015 May 2015 ng Antsirabe II – Andranomanela tra / Ambano Rehabilitation works of (3) Irrigation scheme : Shoppi 6. $ 132,000 No No Yes May 2015 May 2015 Tsironomandidy ng (Volidina, Bandrarezina, Ambatoatrano) Rehabilitation works of Manadriana (Amoron’I Mania) Shoppi 7. $ 62,500 No No Yes May 2015 May 2015 Irrigation ng scheme : Antsirabe II – Andranomanela tra /Ambano Rehabilitation works of (4) Irrigation schemes : Haute Matsiatra 8. (Ankotrakotraka $ 293,750 NCB No No Yes May 2015 June 2015 , Andohanatanak o, Sarindrano, Ambalambositr a Rehabilitation works of Anony 9. (Alaotra) $ 4,625,000 ICB No No Yes Aug. 2015 Sept.2015 Irrigation scheme b) Goods 1 2 3 4 5 6 7 8 9 10 Expected Estim. Pre- Dom. Prior Com Ref. Contract Proc. Bid- Start Amount qualific. Pref. Rev. ment No. (Description Method Opening Date (US$) (yes/no) (yes/no) (yes/no) s Date 1. Acquisition of $664,000 UNOPS No No Yes June 2014 (11) vehicles 58 (4x4) and (32 motorcycles for PN-BVPI 2. Acquisition of (4) vehicles $105,000 NCB No No Yes Oct.2014 Dec.2014 for FID 3. Purchase of equipment for function of March cyclone and $200,000 ICB No No Yes Mai 2015 2015 flood early warning system c) Consultancy Assignments 1 2 3 4 5 6 7 Ref. No. Description of Assignment Estimated Selection Prior Expected Comme Cost Method Review Proposals nts (US$) (yes/no) Submission Date Control & monitoring of irrigation works in Ifanja – Itasy Region $120,000 QC Yes March 2014 1. Questionnaire, survey and data collection for targeting and 2. $500,000 QCBS Yes March 2014 recertification of beneficiaries (FID – B.a;B.b) Study, control and monitoring of (2) irrigation works (Andovihana, 3. $227,000 QCBC Yes April 2014 Befotaka) in Manja – Menabe Region Cash-for work Amoron’I Mania 1 4. $12,500 QC Yes March 2014 (FID) 5. Cash-for-work Menabe (FID) $12,500 QC Yes March 2014 Initial statement of state of communal land offices, inventory of 6. $ 750,000 QCBS Yes April 2014 plots, land certification and supply of forestry plants – Bongolava (Area 1) Initial statement of state of 7. communal land offices, inventory of plots, land certification and supply of $ 750,000 QCBS Yes April 2014 forestry plants – Amoron’iMania, (Area 1) Initial statement of state of communal land offices, inventory of 8. $500,000 QCBS Yes April 2014 plots, land certification and supply of forestry plants –Ihorombe (Area 1) Initial statement of state of communal land offices, inventory of 9. plots, land certification and supply of $500,000 QCBS Yes April 2014 forestry plants – Vakinakaratra (Area 1) Initial statement of state of communal land offices, inventory of 10. plots, land certification and supply of $500,000 QCBS Yes April 2014 forestry plants – Haute Matsiatra (Area 1) Initial statement of state of communal land offices, inventory of 11. $ 400,000 QCBS Yes July 2014 plots, land certification and supply of forestry plants – in Boeny (AREA 2) 59 1 2 3 4 5 6 7 Ref. No. Description of Assignment Estimated Selection Prior Expected Comme Cost Method Review Proposals nts (US$) (yes/no) Submission Date Initial statement of state of communal land offices, inventory of 12. plots, land certification and supply of $ 400,000 QCBS Yes July 2014 forestry plants – in Alaotra (AREA 2) Initial statement of state of communal land offices, inventory of 13. $ 400,000 QCBS Yes July 2014 plots, land certification and supply of forestry plants – in SAVA (AREA 2) Assessment and development of technical specification for cyclone 14. $60,000 QCBS Yes July 2014 EWS in Marovoay, Alaotra, Andapa, Vakinankaratra and Menabe Feasibility study and technical 15. specification for flood RWS in $100,000 QCBS Yes July 2014 Menabe, Alaotra and Andapa Conditional Cash-transfer Menabe 1 16. $80,000 QC Yes Sept. 2014 (FID) Audit Financier 3 exercises (PN- 17. $420,000 QCBS Yes Oct.2014 BVPI, FID) Cash-for-Tree Amoron’I Mania 1 18. (FID) $10,000 QC Yes March 2015 Study, control and monitoring of (2) 19. irrigation works (Bevia, Anderiky) in $186,000 QCBS Yes April 2015 Manja – Menabe Region Control and surveillance of Anony 20. irrigation works $231,000 QCBS Yes Aug. 2015 60 Madagascar NCB Exceptions (Based on the Procurement Guidelines as revised January 2011) General 60. The procedures to be followed for National Competitive Bidding (NCB) shall be those set forth in “Law no. 2004-009 of July 2004 portant Code des Marchés Publics”—the Public Procurement Law (PPL)—with the modifications described in the following paragraphs. Eligibility 61. The eligibility of bidders shall be as defined under Section I of the Procurement Guidelines; accordingly, no bidder or potential bidder shall be declared ineligible for contracts financed by the Association for reasons other than those provided in Section I of the Procurement Guidelines. The requirement of producing a registration number (Numéro d’Immatriculation) for any bidder to participate in the bidding process, shall not be interpreted as a prior requirement to any sort of local registration, license, or authorization. 62. Government-owned enterprises or institutions of the Republic of Madagascar shall be eligible to participate in the bidding process, only if they can establish that they are legally and financially autonomous, operate under commercial law, and are not dependent agencies of the Borrower or Sub-Borrower. Bidding Documents 63. Standard bidding documents acceptable to the Association shall be used so as to ensure economy, efficiency, transparency, and consistency with the provisions of Section I of the Procurement Guidelines. Participation by Joint Ventures 64. Participation shall be allowed from joint ventures on condition that such joint venture partners will be jointly and severally liable for their obligations under the Contract. Therefore, the “Groupement Conjoint,” as set forth in the PPL, shall not be allowed under NCB. Preferences 65. No domestic/regional preference, or any other kind of preferential treatment, shall be given for domestic/regional bidders, and/or for domestically/regionally manufactured goods, and/or for domestically/regionally originated related services. Applicable Procurement Method 66. Subject to these provisions, procurement shall be carried out in accordance with the “Open Competitive Bidding” method (Appel d’offres ouvert) set forth in the PPL. Qualification 67. Qualification criteria shall entirely concern the bidder’s capability and resources to perform the contract, taking into account objective and measurable factors. The qualification criteria shall be clearly specified in the bidding documents, and all criteria so specified, and only such criteria so specified shall be used to determine whether a bidder is qualified. Qualification criteria shall be assessed on a “pass or fail” basis, and merit points shall not be used. Bidders’ qualifications shall be assessed by post-qualification. 61 Fees for Bidding Documents 68. If a fee is charged for the bidding documents, it shall be reasonable and reflect only the cost of their typing, printing or publishing, and delivery to prospective bidders, and it shall not be so high as to discourage bidders’ participation in the bidding process. Bids may be submitted by electronic means only provided that the Association is satisfied with the adequacy of the system, including, inter alia, that the system is secure, maintains the integrity, confidentiality, and authenticity of the bids submitted, and uses an electronic signature system or equivalent to keep bidders bound to their bids. Bid Validity and Extension of Bid Validity 69. The bid validity period required by the bidding documents shall be sufficient to complete the evaluation of bids and obtain any approval that may be required. If justified by exceptional circumstances, an extension of the bid validity may be requested in writing from all bidders before the original bid validity expiration date, and it shall cover only the minimum period required to complete the evaluation and award of the contract. The extension of the bid validity requires the Association’s no objection for those contracts subject to prior review, if it is longer than four (4) weeks, and for all subsequent requests for extension, irrespective of the period. Bid Evaluation 70. (a) Evaluation of bids shall be made in strict adherence to the evaluation criteria declared in the bidding documents. Evaluation criteria other than price shall be quantified in monetary terms, and the manner in which they will be applied for the purpose of determining the lowest evaluated bid shall be established in the bidding documents. A weighting/scoring system shall not be used. (b) A contract shall be awarded to the qualified bidder offering the lowest-evaluated and substantially responsive bid. No negotiations shall be permitted. (c) Bidders shall not be eliminated on the basis of minor, non-substantial deviations. (d) In case of requests for clarifications, bidders shall not be asked or permitted to alter or complete their bids. Rejection of All Bids and Re-bidding 71. All bids shall not be rejected, the procurement process shall not be cancelled, and new bids shall not be solicited without the Association’s prior concurrence. Securities 72. Securities shall be in the format included in the bidding documents. No advance payment shall be made without a suitable advance payment security. Publication of Contract Award 73. Information on contract award shall be published at least in a national newspaper of wide circulation within two (2) weeks of receiving the Association’s no objection to the award recommendation for contracts subject to prior review, and within two (2) weeks from the award decision for contracts subject to post review. Publication shall include the following information: (a) the name of each bidder which submitted a bid; (b) bid prices as read out at bid opening; (c) evaluated prices of each bid that was evaluated; (d) the names of bidders whose bids were rejected and the reasons for their rejection; and (e) the name of the winning bidder, the final total contract price, and the duration and summary scope of the contract. 62 Contract Modifications 74. In the case of contracts subject to prior review, the Association’s no objection shall be obtained before agreeing to: (a) a material extension of the stipulated time for performance of a contract; (b) any substantial modification of the scope of services or other significant changes to the terms and conditions of the contract; (c) any variation order or amendment (except in cases of extreme urgency) which, singly or combined with all variation orders or amendments previously issued, increases the original contract amount by more than 15 percent; or (d) the proposed termination of the contract. A copy of all contract amendments shall be furnished to the Association for its records. Right to Inspect/Audit 75. In accordance with the Procurement Guidelines, each bidding document and contract financed from the proceeds of the Financing shall provide that bidders, suppliers, and contractors, and their subcontractors, agents, personnel, consultants, service providers or suppliers, shall permit the Association, at its request, to inspect their accounts, records and other documents relating to the submission of bids and contract performance, and to have them audited by auditors appointed by the Association. Acts intended to materially impede the exercise of the Association’s inspection and audit rights constitute an obstructive practice as defined in the Procurement Guidelines. Fraud and Corruption 76. Each bidding document and contract financed from the proceeds of the Financing, and as deemed acceptable by the Association, shall include provisions stating the Bank’s policy to sanction firms or individuals found to have engaged in fraud and corruption as defined in the Procurement Guidelines. Debarment under National System 77. The Association may recognize, if requested by the Borrower, exclusion from participation as a result of debarment under the national system, provided that the debarment is for offenses involving fraud, corruption, or similar misconduct, and further provided that the Association confirms that the particular debarment process afforded due process and the debarment decision is final. 63 ANNEX 4: DISCLOSABLE OPERATIONAL RISK ASSESSMENT FRAMEWORK Republic of Madagascar: Madagascar Emergency Food Security and Social Protection Project (P147514) . . Project Stakeholder Risks Stakeholder Risk Rating High Risk Description: Risk Management: To limit the impact of this risk on project implementation, it is proposed that dedicated Madagascar has been in the throes of a political crisis for and experienced project implementation agencies are responsible for implementation, the past 4 years with severe effects on the country's thus ensuring timely and efficient implementation of activities. The two agencies economic and social outcomes. The government's included in the implementation of this project already possess the requisite fiduciary and capacity, at the central and decentralized levels, to technical expertise and have extensive experience managing projects financed by IDA implement its own policies and donors' programs has been and other donors. These agencies have a good record with regard to the fiduciary and very fragile and limited, leading many donors to rely on monitoring and evaluation (M&E) aspects of implementation, as well as overall project the services of NGOs and private service providers. management skills. In addition, to prevent further deterioration of the government’s institutional capacity, the project will support capacity building in the public implementing agencies (IAs) and technical units in concerned technical ministries such as Agriculture and Nutrition. Resp: Status: Stage: Recurrent: Due Date: Frequency: Both In Progress Both With Presidential and Parliamentary elections taking place Risk Management: between the end of October 2013 and May 2014, it is The team will remain engaged with the Ministry’s technical staff to ensure continuity of uncertain whether officials of the different ministries will dialogue and agreements at the technical level. remain in position after the new government has been elected. The current Minister of Agriculture and his Resp: Status: Stage: Recurrent: Due Date: Frequency: technical staff are very supportive of the concept Both In Progress Both underlying the proposed project and have contributed substantially to conceptualizing its different aspects. Implementing Agency (IA) Risks (including Fiduciary Risks) Capacity Rating Moderate Risk Description: Risk Management: 64 Dialogue with government to ensure stability of staffing in IAs. With specific regard to Staff turnover and change in management of IAs could financial management, personnel to be recruited will be required to possess extensive weaken their institutional capacity. experience in Bank-funded projects and the appropriate qualifications. Resp: Status: Stage: Recurrent: Due Date: Frequency: Both In Progress Both Risk Management: Work overload of the IAs implementing other Bank The staff of the IAs already possess the relevant expertise and experience to manage projects (IDA/GEF and PUPIRV for BVPI; PURPIV for donors’ funds and projects financed by IDA, as well as a good record in managing the FID). fiduciary and M&E aspects of such projects. The IAs’ staffing will be increased to ensure that they can absorb the implementation load of this project. Resp: Status: Stage: Recurrent: Due Date: Frequency: Both In Progress Both 15-Mar-2014 PN-BVPI: Newly recruited procurement staff for the (4) Risk Management: new DRDR in Area 1. Risk of delays in procurement Recruit highly qualified personnel who can be immediately operational; provide training processes and thus disbursement. by Bank staff and a closely supervised inception program to strengthen their capacity prior project approval. Resp: Status: Stage: Recurrent: Due Date: Frequency: Both In Progress Both 15-Mar-2014 Project Risks Design Rating Low Risk Description: Risk Management: As a multisectoral project, the main challenges of the The Ministry of Agriculture, as the implementing ministry, is willing to make an extra proposed project are coordination and effort in terms of transparent communication among IAs and ownership of overall consistency/linkages among activities. The IAs in the project implementation performance. To further mitigate this risk, the project design is project report to either the Prime Minister’s Office. intentionally simple. It bundles activities into packages of services/support to be provided to beneficiaries, and it relies on the IAs’ proven capacity to implement other IDA-funded projects. The project also avoids creating new operating mechanisms and new institutions/entities without previous experience in M&E or project management. Resp: Status: Stage: Recurrent: Due Date: Frequency: Both In Progress Both Social and Environmental Rating Moderate 65 Risk Description: Risk Management: An ESSAF has been prepared for the project, though some of the project components Project activities might have direct impacts on soil, will draw on relevant safeguard instruments prepared for previous projects that are being vegetation, and the human population in the project areas. completed/revised by this project (e.g., ESMF/ESMP, RPF/RAP, PMP, and/or DSM) Potential negative impacts of the project include the based on the subcomponent activities to tangibly minimize the potential social and following: (i) depletion and deterioration of water supply; environmental impacts. The project will give specific attention to gender (to be (ii) deterioration of soil quality; (iii) surface water and mainstreamed throughout the project lifecycle), children, youths, the elderly, and other groundwater pollution risks due to increased use of vulnerable groups. Finally, to ensure both social accountability and sustainability of the pesticides; (iv) loss of vegetation following the installation rehabilitated or reconstructed infrastructures, the Borrower will ensure that a systematic, of infrastructure (irrigation schemes, feeder roads, and so participatory public consultation process is implemented for adequate decision making. on); risks of HIV/AIDS proliferation; and (v) risks of land The two existing IAs (PN-BVPI and FID) of this proposed emergency operation have acquisitions. their safeguard documents and each has a SEFP operational. In the Agriculture and Social Protection sectors, safeguards and ESIA instruments (ESMF, RPF, RAP, ESIA, ESMP, PPMP, Dam Safety Guidelines, and so on) have been prepared, consulted upon, disclosed, and, appropriately and satisfactorily implemented in the country under the ongoing IDA-funded projects. The project will thus be able to draw upon successful previous experiences from ongoing Bank operations in addition to the available teams from both PIUs, which are fully operational. A mechanism to ensure much closer safeguard follow-up will be put into place during the implementation of subprojects by the PIU and the regular Bank team supervision missions. Resp: Status: Stage: Recurrent: Due Date: Frequency: Both In Progress Both Risk Management: Lack of social cohesion leads to unsustainable outcomes, Overall, in addition to boosting agricultural productivity and enhancing social protection such as non-functioning water user associations, in the target communities, especially among women, children, youths, the elderly, and involuntary resettlement, environmental problems (such as other vulnerable groups (>60,000 households targeted through cash transfer, 50% increasing lavaka and erosion), nonfunctioning or female), the proposed project is expected to improve social and environmental outcomes unmaintained irrigation schemes, excessive pesticide use, through proper design, including continuous involvement of beneficiaries and other and the increasing spread of HIV. stakeholders. This proposed operation has triggered 3 safeguard policies, namely OP/BP 4.01, OP 4.09, and OP/BP 4.12. The potentially negative impacts are being addressed through the development and application of safeguard documents. The project team has prepared an ESSAF, which will be consulted upon with the Recipient prior to disclosure during project implementation. Though some of the project components will draw on relevant safeguard instruments prepared for previous/ongoing emergency projects in Madagascar, the project will endeavor to complete/improve these instruments (e.g., ESMF/ESMP, RPF/RAP, and PMP) as necessary, based on the subcomponent activities in order to tangibly minimize potential adverse social, gender, and environmental 66 impacts. Resp: Status: Stage: Recurrent: Due Date: Frequency: Both In Progress Both Program and Donor Rating Moderate Risk Description: Risk Management: The project will likely operate under a newly elected IDA will continue to support intensive technical dialogue. Resumption of governance government which will have inherited a lack of sound activities will also contribute to addressing key issues on governance. The existing PIUs, accountability mechanisms and weak institutional capacity while created under the Government Decree, will continue to maintain their autonomy. at the central and local level. This environment could They are subject to the Bank's oversight and obligated to follow Bank procedures and increase governance risks for the project (for example, guidelines. The majority of funds will benefit target communities and government at the potential political interference in project management). decentralized levels, but not central government. The project intends to use existing central government information systems (data collection) and contribute to capacity- building activities. Resp: Status: Stage: Recurrent: Due Date: Frequency: Both In Progress Both Overall Risk Overall Implementation Risk: Rating Moderate Risk Description: 67 ANNEX 5: IMPLEMENTATION SUPPORT PLAN COUNTRY: REPUBLIC OF MADAGASCAR Emergency Food Security and Social Protection Project (P147514) Strategy and Approach for Implementation Support 1. Because of the emergency nature of the Project and its multi-sectoral nature, the Bank will provide close and regular implementation support, both formally and informally. Key Bank staff involved in supporting project implementation—including the Task Team Leader and agricultural specialist, an environmental specialist, a disaster risk management specialist, a safeguards specialist, and a procurement specialist—are all based in Madagascar and would ensure regular formal and informal contact with the implementing agencies, including hands-on technical support as needed. In addition, a locally based, part-time consultant will be engaged by the Bank project team to coordinate internal activities on the project, facilitate regular contact with implementing agencies, and coordinate supervision missions and implementation support. 2. The proposed project will be supervised closely, including at least two full implementation review missions per year and at least two limited implementation review missions. Each implementation review mission would include a procurement specialist and a financial management specialist, while a safeguard specialist would join at least once a year. Other specialists, including specialists in risk mitigation management, agriculture, land management, environment/forestry, disbursement, and targeting, would also join selected missions. 3. Monitoring and evaluation arrangements for implementation of the proposed project would be identical to those currently used by the implementing agencies in implementing projects financed by IDA or Trust Funds, while indicators and the results framework would be updated and consolidated by the Project Secretariat. The monitoring and evaluation arrangements of the implementing agencies are considered adequate and have been progressively updated during implementation of ongoing IDA projects. Implementation Support Plan 4. Main focus in terms of support to implementation during: Time Focus Skills needed Resource estimate Partner role First 12 Project Procurement, legal, - 30 weeks total - Consultation with months effectiveness, agricultural, social staff time AfDB, EU, IFAD on procurement, protection, land targeting and safeguards, and FM tenure, DRM, FM, collaboration with readiness; support safeguards complementary technical studies and agricultural activities specifications; in Project Area 1 targeting and -30 weeks - Collaboration with selection of zones consultant time UNICEF on social and households protection activities 12–36 Activity Procurement, - 25 weeks total - Ongoing months implementation; agricultural, social staff time / year consultation with 68 technical support; protection, land AfDB, EU, IFAD on ongoing tenure, DRM, FM, complementary procurement, FM, safeguards agricultural activities and safeguards - 30 weeks in Project Area 1 support consultant time / - Collaboration with year UNICEF on social protection activities 5. Skills mix required: Skills needed Number of staff Number of Comments weeks trips Agricultural/rural 10 wk/yr (Year n/a Based in Madagascar / TTL development 1) 5 wk/yr (subsequent years) Environment, forestry, 2 wk/yr n/a Based in Madagascar DRM Land management 4 wk/yr 2/yr 2 full supervision missions; limited implementation review missions to be done remotely Social protection 4 wk/yr 2/yr 2 full supervision missions; limited implementation review missions to be done remotely Procurement 3 wk/yr n/a Based in Madagascar Financial management 3 wk/yr 2/yr 2 full supervision missions; limited implementation review missions to be done remotely Safeguards 3 wk/yr n/a Based in Madagascar Legal 1 wk/yr 1/yr - Coordination/operations 30 wk/yr n/a To be recruited as part-time skills consultant 6. Partners Name Institution/country Role UNICEF Madagascar - Collaboration with FID on communications and messaging of human development related behaviors and practices - Links between cash-transfers and essential family services provided by UNICEF EU Madagascar Consultation during targeting of agricultural interventions in AfDB Madagascar Project Area 1 to ensure synergies and ongoing liaison during project implementation IFAD Madagascar 69 ANNEX 6: ENVIRONMENTAL AND SOCIAL SCREENING AND ASSESSMENT FRAMEWORK (ESSAF) Republic of Madagascar: Emergency Food Security and Social Protection Project (P147514) I. Objective 1. The Environmental and Social Screening and Assessment Framework (ESSAF) is consistent with Bank operational policies and procedures, investment operations subject to OP/BP 10.00, Investment Project Financing under paragraph 11 at the possibility of undertaking projects in Situations of Urgent Need of Assistance or Capacity Constraints. The Bank may provide support through Investment Project Financing for an exceptional arrangement following paragraph 47 of Investment Project Financing policy. In compliance with BP 10.00, this ESSAF provides general policies, guidelines, codes of practice and procedures to be taken into consideration and integrated as needed into the implementation of World Bank-supported Madagascar Emergency Food Security and Social Protection Project. This Framework has been developed to ensure compliance with the World Bank’s safeguards policies during the Project implementation. The objective of this ESSAF is to ensure that activities under the proposed emergency operations will address the following issues: • Minimize environmental and social degradation as a result of either individual subprojects or their cumulative effects • Protect and preserve human health • Enhance positive environmental and social outcomes • Prevent or adequately compensate any loss of livelihood caused by the Project. II. Project Background 2. The proposed IDA credit to the Republic of Madagascar is a multi-sector emergency project to address urgent needs in agriculture, social protection and environment. The proposed Emergency Food Security and Social Protection Project (P147514) for an equivalent amount of US$ 65 million will be funded from the remaining IDA16 allocation for Madagascar. The proposed project would complement the ongoing Human Development, Environment and 70 Infrastructure emergency operations. It has been developed by a multi-sector Task Team from the World Bank and seeks to address the emergency needs created by the impacts of the: (i) looming food crisis as a result of the ongoing locust infestation and drought; and (ii) loss of agricultural productivity capacity and vulnerability to natural disasters. These crises have resulted in a dramatic increase in poverty levels, all crops were damaged where the farmers lost between 50 to 100% of the rice crops, and the next rice cycle is also compromised as rice nurseries are threatened. Discouragement is such that some people prefer to rent out their fields whereas others sell. About a third of the population in Madagascar is extremely poor and deprived on multiple dimensions—they are the “have nots”, lacking food consumption, literacy and education, basic household assets, and electricity. The deprivation of this part of the population is such that most activities and programs, whether related to agricultural production, education, or health and nutrition find it difficult to reach out to them and include them in a beneficial way, which calls for a safety net program. Protecting the poorest families during the ongoing crisis through targeted safety net activities will be key for their survival as well as their children’s long term human development. 3. The PDO of the proposed Project is to strengthen the Recipient’s immediate capacity to respond effectively to the food security and locust crises, by: (i) increasing agricultural production capacity in Project Areas, while enabling extremely poor households, in the Project Areas, to access cash transfers and cash for work activities; and (ii) improving the Recipient’s capacity to respond promptly and efficiently to an Eligible Crisis or Emergency. 4. The project design will be kept simple and build on existing activities currently being implemented in ongoing projects that can be either continued or scaled-up. The proposed operation would comprise the following four components: 5. Component A: Restoring and maintaining essential agricultural productive capacity (US$ 39million) • Subcomponent A.1: Rapid delivery of agricultural services and rehabilitation of essential irrigation and market access infrastructure (US$ 29 million). To improve food productivity and production and preserve rural incomes in the short term, both in areas affected by locusts and in the highly productive breadbasket zones, this subcomponent will finance three major activities. The first is the emergency distribution of improved seed, fertilizer, tools, and associated technical assistance to enable rapid increases in food production, including the promotion of nutrition-enhancing crops. The second set of activities involves the rehabilitation and maintenance of small-scale agricultural infrastructure, both micro-irrigation systems and large irrigation schemes, complemented by capacity strengthening for producer organizations and water user associations to sustainably manage irrigation infrastructure and take advantage of income-generating opportunities generated by the project (including rehabilitation of small storage infrastructure). The third set of activities involves institutional capacity building to enable the Recipient’s locust control unit (CNA) to carry out its mission more efficiently (diagnostic and implementation of CNA’s reform). 71 • Subcomponent A.2: Protecting infrastructure investments by improving watershed and land management and climate resilience (US$ 10 million). This subcomponent will include the following activities to support erosion control efforts in Project Area 1: (i) a cash-for-trees approach that would provide incentives for smallholders to reforest their lands in the watersheds surrounding the irrigated areas and (ii) a cash-for-work operation to support erosion control works. This subcomponent also supports the independent national Land Observatory and provides support to land offices at the municipal level—Communal Land Offices (Guichets Fonciers)—to facilitate rapid and low-cost transfer of legal land rights to farming households. To make agricultural investments more resilient when they are exposed to natural disasters, this subcomponent supports the expansion of national early warning systems for cyclones and floods, as well as the development of basic, climate- resilient infrastructure for agriculture in project zones. 6. The project implementation unit (PIU) of PN-BVPI will implement all activities under Component A, except for the subset of activities related to the cash-for-trees operation which will be implemented by FID. 7. Component B: Providing a social safety net for the poor (US$ 17.2 million). This component provides a basic safety net to the poorest families in selected project areas through cash-for-work activities or conditional cash transfers. The cash-for-work activities, selected for their potential synergies with the productive activities under Component A, will provide selected extremely poor households with temporary employment of up to 45 days per year; households that cannot provide labor (such as female-headed households) will receive temporary cash transfers. Particularly vulnerable groups will receive bi-monthly cash transfers conditional on the use of health, nutrition, and/or other locally available services. To establish a beneficiary registry, enhance payment modalities, and support third-party monitoring (for example, through operational audits) and impact evaluation, the project will provide essential equipment and selected technical assistance. FID is considering using the services of UNICEF with respect to training on communications related to human development outcomes of beneficiaries and support the implementation of essential family services at the community level. 8. FID will implement all activities under Component B. 9. Component C: Contingency emergency fund (US$ 0 million). This component establishes a disaster recovery contingency fund that could be triggered in the event of a natural disaster through formal declaration of a national or regional state of emergency, or upon a formal request from the Government of Madagascar in the wake of a disaster. In that case, funds from the other project components could be reallocated to Component C to facilitate rapid financing of a positive list of goods and services related to Components A and B. Eligible activities would include clearing and rehabilitating road and irrigation infrastructure, rehabilitating schools and health centers, or purchasing construction materials, agricultural inputs, or materials for schools or health centers. This component will be managed either by PN-BVPI or FID, depending on the nature of the disaster response to be implemented. 72 10. Component D: Project management (US$ 8.8 million). Based on lessons learned from ongoing emergency operations, the proposed project will use a simple organizational structure that relies on the institutional capacity and experience of two project implementation agencies that have performed well: PN-BVPI and FID. PN-BVPI will be in charge of managing the proposed project, including the planning and implementation of activities under Component A and technical assistance for policy analysis in support of the development of well-functioning staple food markets as part of Component D. As noted, FID will implement activities under Component B. The agency in charge of managing Component C will be determined if and when an emergency response measure is defined. Intervention Zone Areas: 11. The targeted areas of the proposed emergency project are: 12. Areas 1: regions of food producing that have already been affected by locusts and drought and where agricultural productive capacity needs to be restored (regions of Itasy, Bongolava, Menabe, West Vakinankaratra, West Amorono'I Mania, Haute Matsiatra, and specific areas in Ihorombe); and 13. Areas 2: regions with highly productive rice on irrigated schemes which are schemes in the Northwest (Marovoay in Boeny region), Central East (Alaotra) and North (Andapa) of the country. General Principles 14. Due to the emergency nature of the proposed operation and the related need for providing immediate assistance while at the same time ensuring due diligence in managing potential environmental and social risks, the ESSAF is based on the following principles: • To ensure effective application of the World Bank’s safeguard policies, the ESSAF provides guidance on the approach to be taken during multi-sector emergency project implementation for the selection and design of subprojects and the planning of mitigation measures. • No physical resettlement issues are expected in any of the proposed subprojects under the emergency Project as they are primarily concerned with rehabilitation and reconstruction. If any occur, Resettlement Action Plans (RAPs) for the specific subprojects will be prepared, consulted upon, and disclosed, following the guidelines of this ESSAF (attachment 8). • The proposed emergency operation will finance feasibility and detailed design studies for subsequent investments to include environmental and social assessments as required by the World Bank safeguards policies. 73 • Employment/income generating opportunities within the subproject areas will be targeted and expanded as much as possible to the affected communities and households that lost their livelihoods due to the political crisis and/or to natural disasters, especially locust invasion. Special attention will be given to women, youth and other most vulnerable groups, including host-communities for displaced disaster-affected populations. • Participatory Public Consultation and Disclosure requirements, as specified by World Bank Safeguards policies, will be simplified and adopted to meet the special needs of these operations. All subprojects which require public consultations with local communities or beneficiaries will be conducted to help elicit the views and comprehension of the male and female populations. 15. The ESSAF prepared by the Task Team complies with World Bank safeguards policies and is subject to public consultation and disclosure by the Borrower during project implementation. As such, it will be disclosed both in-country (in the appropriate communication channels, concerned sector ministries, and other public places of project intervention areas) as well as at the World Bank InfoShop during project implementation. Compliance with World Bank safeguards policies 16. Parts of the activities described above will focus on capacity building, material and equipment procurements, and institutional support where no environmental and social safeguard aspect would be expected. The remainder of the proposed subprojects will focus on: (i) the rehabilitation and asset preservation of irrigation infrastructures (ii) the restoration of access to social and economic services through the rehabilitation or reconstruction of existing feeder roads; (iii) the rehabilitation of small-scale agricultural infrastructure, primarily micro-irrigation systems and grain processing and storage facilities; and (iv) the watershed protection activities to preserve the agricultural infrastructure through the stabilization of soil erosion and slopes and the planting of cover crops and trees. Activities supported by the proposed operation are expected to have certain site-specific adverse environmental and social impacts; therefore, the following Safeguards policies are triggered: OP/BP 4.01 (Environmental Assessment); OP 4.09 (Pest Management), OP/BP 4.12 (Involuntary Resettlement). 17. Considering the nature and magnitude of potential environmental and social impacts from relatively limited scale of rehabilitation and improvement works, the Emergency Food Security and Social Protection Project is classified as a Category “B”. Due to the emergency nature of the proposed operation, the requirement to carry out an Environmental and Social Impact Assessment (ESIA) that includes an Environmental and Social Management Plan (ESMP) will be undertaken during project implementation in parallel with subproject technical feasibility studies. At the same time, prior to subproject appraisal, the implementing agency will agree to apply the following minimum standards during implementation: inclusion of standard Environmental Codes of Practice (ECOP) (Attachment 5) in the rehabilitation, improvement and reconstruction bid documents of all subprojects; review and oversight of any major reconstruction works by specialists; implementation of environmentally and socially sound options for disposal of debris or drain spoils; and provisions for adequate and satisfactory budget and institutional arrangements for monitoring effective implementation. 74 III. Environmental and Social Screening and Assessment Framework (ESSAF) 18. This ESSAF has been developed by the Task Team specifically for the proposed operations described above to ensure due diligence, to avoid causing harm, and to ensure consistent treatment of social and environmental issues by the Government of Madagascar. The purpose of this Framework is also to further assist the already existing two Project Implementing Units (PIU) in the ongoing Bank funded operations (BVPI and FID) in the screening of all subprojects for their likely social and environmental impacts, sub-categorization and appropriate additional safeguards documents, i and ultimately prioritizing the investments (Attachment 3). 19. OP/BP - 4.01 Environmental Assessment. This policy is triggered as most of the proposed subprojects will focus on: (i) the rehabilitation and asset preservation of irrigation infrastructures (ii) the restoration of access to social and economic services through the rehabilitation or reconstruction of existing feeder roads; (iii) the rehabilitation of small-scale agricultural infrastructure, primarily micro-irrigation systems and grain processing and storage facilities; and (iv) the watershed protection activities to preserve the agricultural infrastructure through the stabilization of soil erosion and slopes and the planting of cover crops and trees. All of these activities may have environmental and social impacts that need to be managed appropriately. The Project will also support activities that will have a positive impact on the environment and social sector. The executing agencies will undertake a thorough social and environmental screening of all subprojects to properly determine whether or not they trigger any World Bank safeguards policies and/or safeguards instruments (attachment 3). While the ESSAF guides the preparation of safeguards instruments during project preparation, some of the sub- projects have already safeguards instruments acceptable to the Bank that have been prepared, consulted upon, and disclosed notably Environmental and Social Management Frameworks (ESMFs) and Resettlement Policy Frameworks (RPFs) that were disclosed in March 2013. Therefore, for the preparation of the proposed emergency Project, each executing agency will rely upon its applicable safeguards frameworks (ESMF and/or RPF) to prepare the required additional safeguard documents. The ESSAF contains sample TORs for Environmental and Social Impacts Assessments (ESIA) (Attachment 7) that may be needed for side specific project- supported activities, as well as social and environmental screening guidelines to be used by contractors hired to implement Project-supported works (e.g.: rehabilitation of feeder roads, rehabilitation/reconstruction of small scale agriculture infrastructures, etc…). Based on the outcomes of the screening process, site specific Environmental and Social Impacts Assessments (ESIAs) and/or ESMPs will be carried out as necessary. The proposed operation will not finance any new construction or rehabilitation of dams above 15 meters but will finance the rehabilitation of small irrigation infrastructure, small check-dams to treat lavakas (gully erosion) and the replacement of old hydraulic equipment/material. As these structures do not have dam safety issues, OP/BP 4.37 on Dam Safety is not triggered per se; howeve,r the recipient will use the available FAO Dams Safety Manual (DSM) that is currently operational in the agriculture sector with the ongoing IDA project (BVPI). The current Dam Safety Manual (DSM) has been prepared/updated by the Recipient to harmonize and improve Project operations in the existing irrigation perimeters currently funded through the agriculture sector. The DSM provides basic characteristics on the types of dams, irrigation equipment and hydraulic materials as well as the 75 forms of management of irrigation schemes, the institutional arrangement and the social and environmental clauses to be respected by construction companies during rehabilitation and exploitation of the existing irrigation perimeters. This DSM has been cleared by the Bank and publicly disclosed both in Country on May 25, 2012, and at the InfoShop on May 25, 2012. Link to ESMF: http://documents.worldbank.org/curated/en/2012/05/16289673/madagascar- phrd-complementary-financing-irrigation-watershed-management-project-environment-social- management-plan-vol-1-2-environment-social-management-plan. Link to RPF: http://documents.worldbank.org/curated/en/2012/05/16289910/madagascar-phrd- complementary-financing-irrigation-watershed-management-project-resettlement-policy- framework-cadre-de-politique-de-réinstallation Link to the DSM: http://documents.worldbank.org/curated/en/2012/05/16290055/madagascar- phrd-complementary-financing-irrigation-watershed-management-project-dams-safety- guidelines-elaboration-dun-manuel-de-gestion-de-securite-des-petirs-barrages 20. OP 4.09 - Pest Management -: Although the project funds will not be used to purchase and distribute agrochemicals, the agricultural subcomponent (emergency distribution of improved seed, fertilizer, tools and associated technical assistance to enable rapid increases in food production) will encourage farmer groups to use more inorganic fertilizers and pesticides. Therefore, this policy is triggered because the Project will support scaling up and/or intensification of agricultural production activities. Project beneficiaries are likely to adopt integrated pest management practices that may involve increased use of chemical pesticides, which could have negative environmental, health and social impacts (especially since river and lake waters are used for drinking, washing and cooking purposes throughout the project intervention areas). The Recipient will address OP 4.09 requirements by using the existing Pests and Pesticide Management Plan (PPMP) developed for the ongoing IDA funded agriculture project (BVPI- P128831 Madagascar-Irrigation and Watershed Management Project). The PPMP includes a number of relevant actions to reduce the exposure of farmer groups to pesticides used in agricultural production systems. It also includes guidelines to be adopted on the possibility of agrochemical application and disposal. Training kits to strengthen capacity building of different actors (farmers, local vendors, regional agricultural agents, etc.) on the safe use, storage and disposal of agrochemical products are also available. This PPMP has been approved by the Bank and ultimately disclosed both in-country and at Infoshop on May 25, 2012, by the Bank’s ongoing agriculture project. Link to PMP: ..\..\..\..\Documents\AFTA2\Plan des gestion des pestes et des pesticides, Vol. 1 of 7.pdf 21. OP/BP 4.12 Involuntary Resettlement. No land acquisition that results in the physical resettlement of peoples or loss of assets and/or sources of livelihoods is expected in any of the proposed subprojects under this emergency Project. The need for involuntary resettlement resulting from land acquisition in specific subproject areas will only be known during project implementation when footprints of site-specific plans are made available. Therefore, subprojects will be screened for application of the resettlement policy and any subprojects involving 76 involuntary resettlement or land acquisition will only be approved after preparation of a resettlement action plan acceptable to the Bank. Several issues will increase the complexity of land acquisition, including the lack of reliable land record systems and the inability of people losing land to either document ownership or be physically present to make eligibility claims. Based on the existing RPF for BVPI- P128831 Madagascar-Irrigation and Watershed Management Project, the safeguards framework will thus include procedures for identifying eligible project-affected individuals, calculating and delivering compensation cost, and determining mechanisms for land dispute grievance redress, as well as mechanism for adequately monitoring and evaluating the level of safeguards compliance. 22. The following safeguards policies are not triggered: OP/BP 4.04 – Natural Habitats – The project will not take place in or near natural habitats. OP/BP 4.10 – Indigenous Peoples – There are no Indigenous Peoples in the project area. OP/BP 4.11 – Physical Cultural Resources - The project is not expected to affect or involve any physical cultural resources. OP/BP 4.36 – Forests – While the project may involve some local tree planting activities, it does not involve the significant conversion of forests, nor does it involve large-scale reforestation/afforestation. OP/BP 4.37 – Dam Safety – The proposed operation will finance the rehabilitation of small irrigation infrastructure, small check-dams to treat lavakas (gully erosion) and the replacement of old hydraulic equipment/material, none of which pose dam safety issues. OP/BP 7.50 Projects on International Waterways. Madagascar is itself an island, therefore the policy doesn’t apply. OP/BP 7.60 Projects in Disputed Areas – There are no disputed areas in the Country. IV. Safeguards Screening, Mitigation and Implementation Support 23. The selection, design, contracting, monitoring and evaluation of subprojects will be consistent with the following guidelines, codes of practice and requirements. The safeguard screening and mitigation process will include: • A list of negative characteristics rendering a proposed subproject ineligible for support, Attachment 1. • Steps for Screening potential environmental and social impacts, mitigation measures and implementation, Attachment 2. • Subproject characteristics and a proposed checklist of likely environment and social impacts to be filled out for each subproject or group of subprojects, Attachment 3. • Guidelines for land and asset acquisition, entitlements, compensation and land donation, Attachment 4. • Relevant elements of the codes of practice for the prevention and mitigation of potential environmental impacts, Attachment 5. • A sample Environmental and Social Safeguards with procedures/clauses for Inclusion in the Technical Specifications of Contracts, Attachment 6. 77 • A sample Terms of Reference to prepare Environmental and Social Impacts Assessment (ESIA) of the selected subproject with the required Environmental and Social Management Plan (ESMP), Attachment 7. • General Guidelines for the Preparation of Resettlement Action Plan (RAP), Attachment 8. V. Responsibilities for Social and Environmental Safeguards Screening and Mitigation 24. The existing two PIUs (BVPI and FID) of this proposed emergency operations have their safeguard documents and each has a social and environmental focal point (SEFP) responsible for following up on safeguard concerns and to ensure that all subprojects identified for operation financing have included consistent and coherent environmental and social measures and are responsible for applying the safeguard screening and mitigation requirements to each subproject. Each of the components (feed roads, agriculture infrastructures and safety net) will be appropriately coordinated and supervised by an existing project implementing units (PIU), specifically Programme National Bassin Versant et des Périmètre Irrigués (PN-BVPI) and Fonds d’Investissement pour le Dévelppement (FID). The PIUs will be responsible for day-to- day project management and implementation, including fiduciary (financial and procurement) and safeguards management. Established for some time now, each project executing agency has relatively good and proven experience in implementing World Bank projects. VI. Capacity Building and Monitoring of Safeguards Framework Implementation 25. As stated above, Recipient is familiar with World Bank safeguards policies through the implementation of other World Bank-funded projects. In the agriculture and social protection sector, safeguards instruments (ESMF, RPF, RAP, ESIA, ESMP, PPMP, Dams Safety Guidelines, etc.) have been prepared, consulted upon, disclosed and satisfactorily implemented in the country under the ongoing IDA-funded projects. The Project will thus be able to draw upon successful previous experiences from ongoing Bank’s operations in addition to the available teams from both PIUs which are fully operational. During and throughout the project supervision, the World Bank task team will assess the appropriate implementation of the environmental and social mitigation measures and subsequently recommend additional strengthening measures as needed. Information sharing with the public will be part of the capacity building plan and will be accomplished with the help of local media and communication systems. 26. As part of the capacity building to be provided for the implementation of the proposed operation, the Social and Environmental Focal Point of each PIU will be trained on the application of the Bank’s safeguards policies by the Bank’s Social and Environmental Safeguard Specialists. During supervision, the project team will assess the implementation status of the ESSAF and the safeguards instruments and recommend additional capacity strengthening if required. VII. Public Consultation and Disclosure 78 27. IDA funding will support a number of subprojects classified as Environment and Social Category B to which the public consultation and disclosure policy will apply. During implementation of the proposed multi-sector IDA-funded operations in these selected sectors, the safeguards instruments (ESIA/ESMP, RAP ...etc.) will be prepared and build upon existing safeguards instruments (ESMF, RPF, PMP, DSM, etc.) through a consultative and participatory process involving all stakeholders at the regional and national levels, as well as within local communities and among beneficiaries of the subprojects. In particular, the Executing Agency will consult project-affected groups and local nongovernmental organizations on all environmental and social aspects of the project and will take their views into account accordingly. The implementing agency will initiate these public consultations as early as possible and will provide all relevant material in a form and languages (Malagasy and French) that are understandable and accessible to the groups being consulted in a timely manner prior to consultation. The ESSAF will be shared with the Government of Madagascar, concerned nongovernmental organizations and other development partners and will be disclosed in-country and at the World Bank’s InfoShop during project implementation. 79 Attachment 1 List of Negative Subproject Attributes Subprojects with any of the following attributes will be ineligible for support under the proposed emergency infrastructure renewal project. Attributes of Ineligible Subprojects GENERAL CHARACTERISTICS Concerning significant conversion or degradation of critical natural habitats. Damages on cultural property, including but not limited to, any activities that affect the following sites: • Archaeological and historical sites; and • Religious monuments, structures and cemeteries. Requiring pesticides that fall in WHO classes IA, IB, or II. Solid Waste New disposal site or significant expansion of an existing disposal site. Irrigation New irrigation and drainage schemes. Dams Construction of dams more than 15 meters high. Rehabilitation of dams more than 15 meters high. Income Generating Activities Activities involving the use of fuel wood, including trees and bush. Activities involving the use of hazardous substances. 80 Attachment 2 Steps for Screening potential environmental and social impacts, mitigation measures and implementation • The selection, design, contracting, monitoring and evaluation of sub-projects will be consistent with the guidelines, codes of practice and requirements listed below and included as attachments to this document. Screening of potential environmental and social safeguards impacts, mitigation and management measures and implementation will follow these steps: • Step 1: Screening of potential environmental and social safeguards impacts, and determination of the appropriate set of safeguard instruments. • During the preparation of the sub-projects, the PIU will ensure that technical design can avoid or minimize environmental and social impacts, including land acquisition. • A more detailed environmental and social screening criteria, i.e. list of negative sub-project attributes is included as Attachment 1, and • A proposed checklist of likely environment and social impacts, to be filled out for each sub- project will be used to determine the type and scope of the environmental and social safeguards impacts (Attachment 3). • Step 2: Define the environmental and social safeguards instruments of the project and for each sub-project. • The PIU, with the assistance of the consultant team, will determine and prepare the appropriate instruments for mitigating environmental and social safeguards impacts identified in the screening: • Sample Environmental Safeguards procedures for inclusion in the Technical Specifications of construction contracts (attachment 6). • An Abbreviated RAP is sufficient for each sub-project requiring land, if it involves less than 200 land owners or all of the PAPs would lose less than 10% of their productive assets and do not need to move to another location. Otherwise, a full RAP will be needed. General guidelines for preparation of a RAP are included in Attachment 8. • In the case that the sub-project affected people are voluntarily willing to donate their land despite their understanding that they are eligible for compensation, the PIU has to document the consultation process and the agreement on the donated land. A standard format for land donation is presented in Attachment 4(ii). • The PIU will prepare a Safeguard Screening Summary (SSS) which includes: o A list of sub-projects that have environmental and social safeguards impacts; o The extent of the impacts; o The instruments used to address such impacts; and o Timeline to prepare the instruments. 81 • Step 3: Review of the Safeguards Screening Summary. The PIU will keep the SSS properly for possible review by the MEF and the World Bank. The review, which may be conducted on sample basis, will verify the screening process including the scoping of the potential impacts, and the choice and application of instruments. • Step 4: Preparation of the safeguards instruments. The PIU will prepare the safeguards instruments including the ESMP and RAP as required. The ESMP and RAP will be prepared in consultation with affected peoples and with relevant NGOs, as necessary. The ESMP and the RAP will be submitted to the MEF, for review, prior to the submission to the Bank for approval. The documentation of the process and agreement for land donation will be the responsibility of the PIU, in consultation with the Ministry responsible for land acquisition. • Step 5: Application of the safeguards instruments. Appropriate mitigation measures will be included in the bidding documents and contract documents to be prepared by the PIU. Compliance by the contractors will be monitored in the field by the project engineers under close supervision. The performance of the contractors will be documented and kept for review. • RAPs will be implemented by the PIU in collaboration with the Ministry responsible for land acquisition if necessary. The PIU will ensure that civil works will only start after RAP implementation and land donation process are completed. • The PIU will supervise and monitor the overall activities and prepare a progress report on the application of the safeguard policies during the planning, design, and construction phases of the Project. The PIU will also develop the reporting requirements and procedures to ensure compliance of the contractors; conduct public consultation and public awareness programs, and carry out periodic training for field engineers and contractors as appropriate. 82 Attachment 3 Checklist of Possible Environmental and Social Impacts of proposed multi -sector Project This Form is to be used by the Safeguard Specialist (SP) or Project Implementing Unit (PIU) in Screening Sub-project Applications. Note: One copy of this form and accompanying documentation to be kept in the PIU office and one copy to be sent to the World Bank Task Team Leader. Name of project: Number of Sub-projects: Proposing Agency: Subproject Location: Project Objective: Estimated Cost: Proposed Date of Commencement of Work: Community to be included in the sub-project location: Relevant details: Any environmental and social issues: Area of land needed (if there): Number of land owners: Scheme for land acquisition (choose appropriate ones) (if appropriate): A. Land donation B. Cash compensation C. Other scheme Estimated costs: Proposed starting date of works: Designs / plans / specifications reviewed: Yes __ No __ Other comments: Completed by: Date: Reviewed by: Date: I. Subproject Related Issues S No ISSUES YES NO Comments A. Zoning and Land Use Planning 1. Will the subproject affect land use zoning and planning or conflict with prevalent land use patterns? 2. Will the subproject involve significant land disturbance or site clearance? 3. Will the subproject affect community land or agricultural parcels where the income of local population could be lose? B Water and Soil Contamination 4. Will the subproject require large amounts of raw materials or construction materials? 83 5. Will the subproject generate large amounts of residual wastes, construction material waste or cause soil erosion? 6. Will the subproject result in potential soil or water contamination (e.g., from oil, grease and fuel from vehicles)? 7. Will the subproject lead to contamination of ground and surface waters by herbicides for vegetation control and chemicals? 8. Will the subproject lead to an increase in suspended sediments in streams affected by road cut erosion, decline in water quality and increased sedimentation downstream? 9. Will the subproject involve the use of chemicals or solvents? 10. Will the subproject lead to the destruction of vegetation and soil in the right-of-way, borrow pits, waste dumps, and equipment yards? 11. Will the subproject lead to the creation of stagnant water bodies in borrow pits, quarries, etc., encouraging for mosquito breeding and other disease vectors? C. Noise and Air Pollution Hazardous Substances 12. Will the subproject increase the levels of harmful air emissions? 13. Will the subproject increase ambient noise levels? 14. Will the subproject involve the storage, handling or transport of hazardous substances? D. Fauna and Flora 15. Will the subproject involve the disturbance or modification of existing drainage channels (rivers, canals) or surface water bodies (wetlands, marshes)? 16. Will the subproject lead to the destruction or damage of terrestrial or aquatic ecosystems or endangered species directly or by induced development? 17. Will the subproject lead to the disruption/destruction of wildlife through interruption of migratory routes, disturbance of wildlife habitats, and noise-related problems? E. Destruction/Disruption of Land and Vegetation 18. Will the subproject lead to unplanned use of the infrastructure being developed? 19. Will the subproject lead to long-term or semi-permanent destruction of soils in cleared areas not suited for agriculture? 20. Will the subproject lead to the interruption of subsoil and overland drainage patterns (in areas of cuts and fills)? 21. Will the subproject lead to landslides, slumps, slips and other mass movements in road cuts? 22. Will the subproject lead to erosion of lands below the roadbed receiving concentrated outflow carried by covered or open drains? 23. Will the subproject lead to long-term or semi-permanent 84 destruction of soils in cleared areas not suited for agriculture? 24. Will the subproject lead to health hazards and interference of plant growth adjacent to roads by dust raised and blown by vehicles? F. Expropriation and Social Disturbance 25. Will the subproject involve land expropriation or demolition of existing structures? 26. Will the subproject lead to induced settlements by workers and others causing social and economic disruption? 27. Will the subproject lead to environmental and social disturbance by construction camps? G. Utilities and Facilities Will the sub-project require the setting up of ancillary 28. production facilities? Will the sub-project require significant levels of accommodation or service amenities to support the workforce during construction (e.g., contractor will need 29. more than 20 workers)? H. Cultural Property Will the sub-project have an impact on archaeological or 30. historical sites, including historic urban areas? Will the sub-project have an impact on religious 31. monuments, structures and/or cemeteries? Have Chance Finds procedures been prepared for use in 32. the sub-project? Is the sub-project located in an area with designated physical cultural resources, such as archaeological, 33. historical and/or religious sites? I. Games, reserves and Natural Habitat Does the sub-project require land acquisition? [Note: If 34. YES, fill in the land acquisition form] Will the sub-project negatively impact livelihoods? [Note: 35. Describe separately if YES] Is the sub-project located in an area with designated 36. natural reserves or protected areas? Is the sub-project located in an area with unique natural 37. features? Is the sub-project located in an area with endangered or 38. conservation-worthy ecosystems, fauna or flora? Is the sub-project located in an area falling within 500 m of natural forests, protected areas, wilderness areas, wetland, biodiversity, critical habitats, or sites of historical 39. or cultural importance? Is the sub-project located in an area which would create a 40. barrier for the movement of conservation-worthy wildlife? Is the sub-project located close to groundwater sources, 41. surface water bodies, watercourses or wetlands J. Pesticides and Agricultural Chemicals 42. Involve the use of pesticides or other agricultural 85 chemicals, or increase existing use? Cause contamination of soil by agrochemicals and 43. pesticides? II. Site Characteristics S. No ISSUES YES NO Comments 1. Is the subproject located in an area with designated natural reserves? 2. Is the subproject located in an area with unique natural features? 3. Is the subproject located in an area with endangered or conservation-worthy ecosystems, fauna or flora? 4. Is the subproject located in an area falling within 500 meters of national forests, protected areas, wilderness areas, wetlands, biodiversity, critical habitats, or sites of historical or cultural importance? 5. Is the subproject located in an area which would create a barrier for the movement of conservation-worthy wildlife or livestock? 6. Is the subproject located close to groundwater sources, surface water bodies, water courses or wetlands? 7. Is the subproject located in an area with designated cultural properties such as archaeological, historical and/or religious sites? 8. Is the subproject in an area with religious monuments, structures and/or cemeteries? 9. Is the subproject in a polluted or contaminated area? 10. Is the subproject located in an area of high visual and landscape quality? 11. Is the subproject located in an area susceptible to landslides or erosion? 12. Is the subproject located in a densely populated area? 13. Is the subproject located on prime agricultural land? 14. Is the subproject located in an area of tourist importance? 15. Is the subproject located near a waste dump? Respond with (Yes) or (No) and include quantitative data if available. Remarks and recommendations on the selected subproject to be financed: _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ ___________________________________ Signed by Environment and/or Social Specialist: Name: _______________________________ 86 Title: _______________________________ Date: _______________________________ Signed by Project Manager: Name: _______________________________ Title: _______________________________ Date: _______________________________ 87 Attachment 4 Guidelines for Land and Asset Acquisition, Entitlements and Compensation I. Objectives 1. Resettlement and land acquisition will be kept to a minimum, and will be carried out in accordance with these guidelines. Subproject proposals that would require demolishing houses or acquiring productive land should be carefully reviewed to minimize or avoid their impacts through alternative alignments. Proposals that require more than minor expansion along rights of way should be carefully reviewed. No land or asset acquisition may take place outside of these guidelines. A format for Land Acquisition Assessment Data Sheet is attached as Attachment 4(i). 2. These guidelines provide principles and instructions to compensate negatively affected persons to ensure that they will be assisted to improve, or at least to restore, their living standards, income earning or production capacity to pre-project levels regardless of their land tenure status. II. Categorization 3. Based on the number of persons that may be affected by the project, Project Affected People (PAPs) and the magnitude of impacts, projects will be categorized as follows: (a) Projects that will affect more than 200 PAPs due to land acquisition and/or physical relocation and where a full Resettlement Action Plan (RAP) must be produced. If the RAP cannot be prepared prior to project appraisal, a waiver can be provided by the World Bank Managing Director (MD) in consultation with the Resettlement Committee. In such cases, the Task Team should agree with the Borrower on a timetable for preparation of the RAP. (b) Projects that will affect less than 200 persons require the preparation of an Abbreviated RAP (see Annex 8), which would include, inter alia: : (i) a land acquisition assessment, (ii) the minutes or record of consultations which assess the compensation claimed and agreement reached, and (iii) a record of the receipt of the compensation, or voluntary donation, by those affected (see below). (c) Projects that are not expected to have any land acquisition or any other significant adverse social impacts; on the contrary, significant positive social impact and improved livelihoods are expected from such interventions. III. Eligibility 4. PAPs are identified as persons whose livelihood is directly affected by the project due to acquisition of the land owned or used by them. PAPs deemed eligible for compensation are: (a) Those who have formal legal rights to land, water resources or structures/buildings, including recognized customary and traditional rights; (b) Those who do not have such formal legal rights but have a claim to usufruct rights rooted in customary law; and 88 (c) Those whose claim to land and water resources or building/structures do not fall within (a) and (b) above, are eligible to resettlement assistance to restore their livelihood. IV. Compensation Principles 5. The project implementation agencies will ensure timely provision of the following means of compensation to affected peoples: (a) PAPs losing access to a portion of their land or other productive assets with the remaining assets being economically viable are entitled to compensation at a replacement cost for that portion of land or assets lost to them. Compensation for the lost assets will be made according to the following principles: (i) Replacement land with an equally productive plot, cash or other equivalent productive assets; (ii) Materials and assistance to fully replace solid structures that will be demolished; (iii) Replacement of damaged or lost crops and trees, at market value; (iv) Other acceptable in-kind compensation; (v) In case of cash compensation, the delivery of compensation should be made in public, i.e., at the Community Meeting; and (vi) In case of physical relocation, provision of civic infrastructure at the resettlement sites. (b) PAPs losing access to a portion of their land or other economic assets rendering the remainder economically non-viable will have the options of compensation for the entire asset by provision of alternative land, cash or equivalent productive asset, according to the principles in (a) i-iv above. V. Consultation Process 6. The PIU and the concerned implementing entity will ensure that all occupants of land and owners of assets located in a proposed subproject area are consulted. Community meetings will be held in each affected district and village to inform the local population of their rights to compensation and options available in accordance with these Guidelines. The Minutes of the community meetings shall reflect the discussions held; agreements reached, and include details of the agreement, based on the format provided in Attachment 4(ii). 7. The PIU and the concerned implementing entity shall provide a copy of the Minutes to affected people and confirm in discussions with each of them, their requests and preferences for compensation, agreements reached, and any eventual complaint. Copies will be recorded in the posted project documentation and be available for inspection during supervision. VI. Subproject Approval 8. In the event that a subproject involves acquisition against compensation, the PIU through the concerned implementing entity shall: (a) Not approve the subproject unless satisfactory compensation has been agreed between the affected person and the local community; and 89 (b) Not allow works to start until the compensation has been delivered in a satisfactory manner to the affected persons. VII. Complaints and Grievances 9. Initially, all complaints should be registered by the PIU and the concerned implementing entity as the case maybe, which shall establish a register of resettlement/compensation related grievances and disputes mechanism. The existence and conditions of access to this register (where, when, how) shall be widely disseminated within the community/town as part of the consultation undertaken for the sub-project in general. A committee of knowledgeable persons, experienced in the subject area, shall be constituted at a local level as a Committee to handle first instance dispute/grievances. This group of mediators attempting amicable mediation/litigation in first instance will consist of the following members: (a) Head of District; (b) Legal advisor; (c) Local Representative within the elected Council; (d) Head of Community Based Organization; and (e) Community leaders. This mediation committee will be set up at local level by the implementation agency on an “as-needed” (i.e. it will be established when a dispute arises in a given community). 10. When a grievance/dispute is recorded as per above-mentioned registration procedures, the mediation committee will be established, and mediation meetings will be organized with interested parties. Minutes of meetings will be recorded. The existence of this first instance mechanism will be widely disseminated to the affected people as part of the consultation undertaken for the sub-project in general. It is important that these mediation committees be set up as soon as RAP preparation starts. Disputes documented e.g. through socio-economic surveys should be dealt with by appropriate mediation mechanisms which must be available to cater for claims, disputes and grievances at this early stage. A template form for claims should be developed and these forms be collated on a quarterly basis into a database held at project level. VIII. Verification 11. The Mediation Meeting Minutes, including agreements of compensation and evidence of compensation made shall be provided to the Municipality/district, to the supervising engineers, who will maintain a record hereof, and to auditors and socio-economic monitors when they undertake reviews and post-project assessment. This process shall be specified in all relevant project documents, including details of the relevant authority for complaints at the municipal/district or implementing agency level. 90 Attachment 4(i) Land Acquisition Assessment Data Sheet (To be used to record information on all lands to be acquired) 1. Quantities of land/structures/other assets required: 2. Date to be acquired: 3. Locations: 4. Owners: 5. Current uses: 6. Users: • Number of Customary Claimants: • Number of Squatters: • Number of Encroachers: • Number of Owners: • Number of Tenants: • Others (specify): ______________________ Number: ___________________ 7. How land/structures/other assets will be acquired (identify one): • Donation • Purchase 8. Transfer of Title: • Ensure these lands/structures/other assets are free of claims or encumbrances. • Written proof must be obtained (notarized or witnessed statements) for the voluntary donation, or acceptance of the prices paid from those affected, together with proof of title being vested in the community, or guarantee of public access, by the title-holder. 9. Describe available grievance redress mechanisms: 91 Attachment 4 (ii) Format to Document Contribution of Assets The following agreement has been made on............................ day of...................………. between...............................................resident of ............................................(the Owner) and ……………………………………………….(the Recipient). 1. That the Owner holds the transferable right of ........................………………… ………………………………………………………... land (m2)/structure/asset in.........……………………………………………………………………………. 2. That the Owner testifies that the land/structure is free of squatters or encroachers and not subject to other claims. 3. That the Owner hereby grants to the Recipient this asset for the construction and development of ................................for the benefit of the villagers and the public at large. 4. (Either, in case of donation:) 5. That the Owner will not claim any compensation against the grant of this asset. 6. (Or, in case of compensation:) 7. That the Owner will receive compensation against the grant of this asset as per the attached Schedule. 8. That the Recipient agrees to accept this grant of asset for the purposes mentioned. 9. That the Recipient shall construct and develop the……………………and take all possible precautions to avoid damage to adjacent land/structure/other assets. 10. That both the parties agree that the………………………so constructed/developed shall be public premises. 11. That the provisions of this agreement will come into force from the date of signing of this deed. ______________________________ _____________________________ Signature of the Owner Signature of the Recipient Witnesses: 1. ______________________________ 2. ______________________________ (Signature, name and address) 92 Attachment 4(iii) Schedule of Compensation of Asset Requisition Summary of Units to be Compensated Agreed Compensation Affected Unit/Item a. Urban/agricultural land (m2): _____________________ ___________________ b. Houses/structures to be demolished (units/m2): _____________________ ___________________ c. Type of structure to be demolished (e.g. mud, brick, cement block, etc.,) _____________________ Not Applicable. d. Trees or crops affected: _____________________ ___________________ e. Water sources affected: _____________________ ___________________ Signatures of local community representatives, Sheikh/Head of Tribe: Include record of any complaints raised by affected persons: Map attached (showing affected areas and replacement areas): 93 Attachment 5 Codes of Practice for Prevention and Mitigation of Environmental and Social Impacts Potential Impacts Prevention and Mitigation Measures Roads • Rehabilitation/Reconstruction (improvement) of National roads. • Rehabilitation/Reconstruction (improvement) of access road /bridges Disruption of drainage: • Inhibits free drainage, causes • Design to provide adequate drainage and to minimize changes stagnant pools of water. in flows, not limited to the road reserve. • Increased sediments into ponds, • Provision of energy dissipaters, cascades, steps, and checks streams and rivers due to erosion dams. from road tops and sides. • Provision of sufficient number of cross drains. • Increased run-off and flooding. • Balancing of cut and fill. • Revegetation to protect susceptible soil surfaces. • Rehabilitation of borrow areas. Erosion: • Erosion of land downhill from the • Design to prevent soil erosion and maintain slope stability. road bed, or in borrows areas. • Construction in the dry season. • Protection of soil surfaces during construction. • Landslides, slips or slumps. • Physical stabilization of erodible surfaces through turfing, planting a wide range of vegetation, and creating slope breaks. • Bank failure of the borrow pit. • Rehabilitation and re-grading of borrow pits and material collection sites. Loss of vegetation. • Balancing of cut and fill. • Revegetation to protect susceptible soil surfaces. • Minimize loss of natural vegetation during construction. • Revegetation and replanting to compensate any loss of plant cover or tree felling. 94 Potential Impacts Prevention and Mitigation Measures Impacts during construction: • Fuel wood collection. • Provision of fuel at work camps to prevent cutting of firewood. • Disease due to lack of sanitation. • Provision of sanitation at work camps. • Introduction of hazardous wastes. • Removal of work camp waste, proper disposal of oil, bitumen and other hazardous wastes. • Groundwater contamination (oil, grease). • Accidents during construction. • Management of construction period worker health and safety. • Potential risk to improve HIV/Aids contaminations • Increased migration from nearby • Provide comprehensive community participation in planning, cities. and Migration issue to be resolved through local conflict resolution system. Rehabilitation and construction of rural feed roads. Disruption of drainage: • Hampers free drainage, causes • Design to provide adequate drainage and to minimize stagnant pools of water. changes in flows, not limited to the road reserve. • Increased sediments into ponds, • Provision of sufficient number of cross drains. streams and rivers due to erosion from road tops and • Balancing of cut and fill. sides. • Revegetation to protect susceptible soil surfaces. • Increased run-off and flooding. • Rehabilitation of borrow areas. Erosion: • Design to prevent soil erosion and maintain slope stability. • Erosion of land downhill from • Construction in the dry season. the road bed, or in borrow areas. • Protection of soil surfaces during construction. • Physical stabilization of erodible surfaces through turfing, planting a wide range of vegetation, and creating slope • Landslides, slips or slumps. breaks. • Rehabilitation and re-grading of borrow pits and material collection sites. • Bank failure of the borrow pit. 95 Potential Impacts Prevention and Mitigation Measures Loss of vegetation. • Balancing of cut and fill. • Revegetation to protect susceptible soil surfaces. • Minimize loss of natural vegetation during construction. • Revegetation and replanting to compensate any loss of plant cover or tree felling. Loss of access. • Design to include accessibility to road sides in case roadbed is raised. • Alternative alignments to avoid bisecting villages by road widening. Impacts during construction: • Fuel wood collection. • Provision of fuel at work camps to prevent cutting of firewood. • Provision of sanitation at work camps. • Disease due to lack of sanitation. • Removal of work camp waste, proper disposal of oil, bitumen and other hazardous wastes. • Introduction of hazardous wastes. • Groundwater contamination (oil, grease). • Management of construction period worker health and • Accidents during construction. safety. • Potential impacts to cultural • Use archaeological chance find procedures and coordinate property. with appropriate agencies. • Increased migration from nearby • Provide comprehensive community participation in planning, cities. and Migration issue to be resolved through local conflict resolution system. 96 Potential Impacts Prevention and Mitigation Measures Dams • Construction of dams lower than 5 meters or rehabilitation of dams lower than 15 meters. Injury, death or loss of productive • Application of generic dam safety measures and rapid resources caused by dam failure. hydrological assessment by qualified engineers. • For earthen dams, crushing of earth lumps, watering to near optimal moisture content, and compacting during construction. • Design of earthen dams to prevent excessive seepage through the dam-body and piping at or near the toe or abutment of the dam. • Design to incorporate spillway to prevent over-topping. • Local awareness-raising for breach situations. Irrigation and Drainage Siltation and erosion. • Plan disposal of spoil material from cleaned canals to ensure it will not wash back into the system, and is not deposited on fields without the owners’ permission. • Re-grading and rehabilitation of borrow areas or pits. Water-logging and salinization. • Incorporation of adequate drainage to prevent water-logging and salinization. Over-exploitation of aquifers. • Analysis of the sustainability of groundwater yield, if increased abstraction is proposed. Injury, death or loss of productive • See section on dams, above. resources caused by dam failure Livestock Unsustainable grazing. • Before livestock are purchased, grazing requirements for the new and projected herd should be estimated, and legal access to sufficient sustainable grazing ensured. Small Scale Agricultural Production 97 Potential Impacts Prevention and Mitigation Measures Environment Impacts: • Loss of vegetative cover, decrease in • Avoid infringing on protected areas, critical habitats or areas soil fertility. with significant biodiversity (e.g., wetlands). • Possible pesticide, herbicide and • Apply pesticides, herbicides and fertilizers at recommended fertilizer use leading to soil and times and doses. water pollution. • Irrigation system may break down • Educate population in the proper use, storage and disposal of and not be repairable. pesticides, herbicides and fertilizers. • Potential diversion of water • Ensure that construction and rehabilitation of irrigation systems resources from its natural are carried out by using materials easily accessible through course/location. local market. Social Impacts: • Conflict over user rights of irrigation • Ensure that inhabitants around water reserves are not deprived systems. of access to water due to irrigation and other activities. 98 Attachment 6 Safeguards Procedures for Inclusion in the Technical Specifications of Contracts I. General 1. The Contractor and his employees shall adhere to the mitigation measures set down and take all other measures required by the Engineer to prevent harm, and to minimize the impact of his operations on the environment. 2. The Contractor shall not be permitted to unnecessarily strip clear the right of way. The Contractor shall only clear the minimum width for construction and diversion roads should not be constructed alongside the existing road. 3. Remedial actions which cannot be effectively carried out during construction should be carried out on completion of each Section of the road (earthworks, pavement and drainage) and before issuance of the Taking Over Certificate (TOC): (a) These sections should be landscaped and any necessary remedial works should be undertaken without delay, including grassing and reforestation; (b) Water courses should be cleared of debris and drains and culverts checked for clear flow paths; and (c) Borrowed pits should be dressed as fish ponds, or drained and made safe, as agreed with the land owner. 4. The Contractor shall limit construction works to between 6 am and 7 pm if it is to be carried out in or near residential areas. 5. The Contractor shall avoid the use of heavy or noisy equipment in specified areas at night, or in sensitive areas such as near a hospital. 6. To prevent dust pollution during dry periods, the Contractor shall carry out regular watering of earth and gravel haul roads and shall cover material haulage trucks with tarpaulins to prevent spillage. 7. Prohibitions The following activities are prohibited on or near the project site: • Cutting of trees for any reason outside the approved construction area; • Hunting, fishing, wildlife capture, or plant collection; • Use of unapproved toxic materials, including lead-based paints, asbestos, etc. • Disturbance to anything with architectural or historical value; • Building of fires; • Use of firearms (except authorized security guards); II. Transport 7. The Contractor shall use selected routes to the project site, as agreed with the Engineer, and appropriately sized vehicles suitable to the class of road, and shall restrict loads to prevent damage to roads and bridges used for transportation purposes. The Contractor shall be held responsible for any 99 damage caused to the roads and bridges due to the transportation of excessive loads, and shall be required to repair such damage to the approval of the Engineer. 8. The Contractor shall not use any vehicles, either on or off road with grossly excessive, exhaust or noise emissions. In any built up areas, noise mufflers shall be installed and maintained in good condition on all motorized equipment under the control of the Contractor. 9. Adequate traffic control measures shall be maintained by the Contractor throughout the duration of the Contract and such measures shall be subject to prior approval of the Engineer. III. Workforce 10. The Contractor should whenever possible locally recruit the majority of the workforce and shall provide appropriate training as necessary. 11. The Contractor shall install and maintain a temporary septic tank system for any residential labor camp and without causing pollution of nearby watercourses. 12. The Contractor shall establish a method and system for storing and disposing of all solid wastes generated by the labor camp and/or base camp. 13. The Contractor shall not allow the use of fuel wood for cooking or heating in any labor camp or base camp and provide alternate facilities using other fuels. 14. The Contractor shall ensure that site offices, depots, asphalt plants and workshops are located in appropriate areas as approved by the Engineer and not within 500 meters of existing residential settlements and not within 1,000 meters for asphalt plants. 15. The Contractor shall ensure that site offices, depots and particularly storage areas for diesel fuel and bitumen and asphalt plants are not located within 500 meters of watercourses, and are operated so that no pollutants enter watercourses, either overland or through groundwater seepage, especially during periods of rain. This will require lubricants to be recycled and a ditch to be constructed around the area with an approved settling pond/oil trap at the outlet. 16. The contractor shall not use fuel wood as a means of heating during the processing or preparation of any materials forming part of the Works. IV. Distribution of Agricultural Inputs 17. The treated seed should be well labeled with such information as the variety name, whether it is hybrid or open pollinated, maturity period and lot number to help farmers understand what they are receiving. Detailed information about treated seeds should be included into capacity-building activities. 18. The seed distribution should be targeted in coordination with the efforts of other donors and NGOs to ensure farmers do not receive multiple packs from different donors. 19. Strong monitoring is necessary to ensure agricultural inputs are supplied by the seed companies on a timely basis and distributed to farmers on time. V. Quarries and Borrow Pits 100 20. Operation of a new borrows area, on land, in a river, or in an existing area, shall be subject to prior approval of the Engineer, and the operation shall cease if so instructed by the Engineer. Borrow pits shall be prohibited where they might interfere with the natural or designed drainage patterns. River locations shall be prohibited if they might undermine or damage the river banks, or carry too much fine material downstream. 21. The Contractor shall ensure that all borrow pits used are left in a trim and tidy condition with stable side slopes, and are drained ensuring that no stagnant water bodies are created which could breed mosquitoes. 22. Rock or gravel taken from a river shall be far enough removed to limit the depth of material removed to one-tenth of the width of the river at any one location, and not to disrupt the river flow, or damage or undermine the river banks. 23. The location of crushing plants shall be subject to the approval of the Engineer, and not be close to environmentally sensitive areas or to existing residential settlements, and shall be operated with approved fitted dust control devices. VI. Earthworks 24. Earthworks shall be properly controlled, especially during the rainy season. 25. The Contractor shall maintain stable cut and fill slopes at all times and cause the least possible disturbance to areas outside the prescribed limits of the work. 26. The Contractor shall complete cut and fill operations to final cross-sections at any one location as soon as possible and preferably in one continuous operation to avoid partially completed earthworks, especially during the rainy season. 27. In order to protect any cut or fill slopes from erosion, in accordance with the drawings, cut off drains and toe-drains shall be provided at the top and bottom of slopes and be planted with grass or other plant cover. Cut off drains should be provided above high cuts to minimize water runoff and slope erosion. 28. Any excavated cut or unsuitable material shall be disposed of in designated tipping areas as agreed to by the Engineer. 29. Tips should not be located where they can cause future slides, interfere with agricultural land or any other properties, or cause soil from the dump to be washed into any watercourse. Drains may need to be dug within and around the tips, as directed by the Engineer. VII. Historical and Archeological Sites 30. If the Contractor discovers archeological sites, historical sites, remains and objects, including graveyards and/or individual graves during excavation or construction, the Contractor shall: a. Stop the construction activities in the area of the chance find. b. Delineate the discovered site or area. 101 c. Secure the site to prevent any damage or loss of removable objects. In cases of removable antiquities or sensitive remains, a night guard shall be present until the responsible local authorities and the Ministry of Culture take over. d. Notify the supervisory Engineer who in turn will notify the responsible local authorities and the Ministry of Culture immediately (less than 24 hours). e. Contact the responsible local authorities and the Ministry of Culture who would be in charge of protecting and preserving the site before deciding on the proper procedures to be carried out. This would require a preliminary evaluation of the findings to be performed by the archeologists of the Ministry of Culture (within 72 hours). The significance and importance of the findings should be assessed according to the various criteria relevant to cultural heritage, including the aesthetic, historic, scientific or research, social and economic values. f. Ensure that decisions on how to handle the finding be taken by the responsible authorities and the Ministry of Culture. This could include changes in the layout (such as when the finding is an irremovable remain of cultural or archeological importance) conservation, preservation, restoration and salvage. g. Implementation for the authority decision concerning the management of the finding shall be communicated in writing by the Ministry of Culture; and h. Construction work will resume only after authorization is given by the responsible local authorities and the Ministry of Culture concerning the safeguard of the heritage. VIII. Disposal of Construction and Vehicle Waste 31. Debris generated due to the dismantling of the existing structures shall be suitably reused, to the extent feasible, in the proposed irrigation scheme rehabilitation/construction (e.g. as fill materials for embankments). The disposal of remaining debris shall be carried out only at sites identified and approved by the project engineer. The contractor should ensure that these sites: (i) are not located within designated forest areas; (ii) do not impact natural drainage courses; and (iii) do not impact endangered/rare flora. Under no circumstances shall the contractor dispose of any material in environmentally sensitive areas. 32. In the event any debris or silt from the sites is deposited on adjacent land, the Contractor shall immediately remove such, debris or silt and restore the affected area to its original state to the satisfaction of the Supervisor/Engineer. 33. Bentonite slurry or similar debris generated from pile driving or other construction activities shall be disposed of to avoid overflow into the surface water bodies or form mud puddles in the area. 34. All arrangements for transportation during construction including provision, maintenance, dismantling and clearing debris, where necessary, will be considered incidental to the work and should be planned and implemented by the contractor as approved and directed by the Engineer. 35. Vehicle/machinery and equipment operations, maintenance and refueling shall be carried out to avoid spillage of fuels and lubricants and ground contamination. An oil interceptor will be 102 provided for wash down and refueling areas. Fuel storage shall be located in proper bounded areas. 36. All spills and collected petroleum products shall be disposed of in accordance with standard environmental procedures/guidelines. Fuel storage and refilling areas shall be located at least 300m from all cross drainage structures. 103 Attachment 7 Term of Reference to prepare the Environmental and Social Impacts Assessment (ESIA) for the selected subproject with the required Environmental and Social Management Plan (ESMP) The environmental and social impacts assessment should be composed of the following core aspects: PROJECT DESCRIPTION: The Components of this section are as follows: • Project components and its technical infrastructure • Project right-of-way (ROW) and its legal status • Timeline and useful future maintenance • Implementation timetable • Resources and Workforce used • Pollution, disturbances and potential nuisances directly caused by the project ENVIRONMENTAL DESCRIPTION The components of this section are as follows: Environmental Challenges: • Physical Environment (includes nuisances and aesthetic aspects) • Biological Environment • Human Environment Physical Environment (includes nuisances and aesthetic aspects): • Climate • Geology, topography, geomorphology, soils and erosion • Hydrology et hydrogeology • etc. Biologic Environment: • Flore et habitats • Fauna • etc. Socio-economic environment: • Geographic and administrative context • Population and demographics • Education • Health • Habitats and Land • Local Culture • Infrastructure and services • Economic activities • Etc. ENVIRONMENTAL AND SOCIAL IMPACTS ASSESSMENT AND MITIGATION MEASURES This section focuses on the assessment of both the positive and negative impacts of the project throughout its life cycle: 104 • Preparatory Phase (includes supply of materials and equipment) • Construction phase • Implementation and Maintenance The analysis includes the identification of actions to optimize positive impacts while also working to mitigate, prevent or compensate the negative impacts. Pollution, disturbances and damages will have environmental impacts which are identified and assessed in this section. The impacts are identified for the physical biological and socio-economic environment. The impact analysis comes from the inventory of foreseen impacts, taking into account the project elements, the phases and the known impacts of the projects as well as the environment description. To improve clarity and to be more concise, the negative and positive impacts assessment and also the mitigation measures of the negatives impacts are presented in a table. Impacts are evaluated on 4 criteria: - Intensity: ranked as strong, average and low; this ranking takes into account disturbances and also sensitivity of the affected component - Duration: ranked as temporary (limited to the work duration or only a short period of time following the work duration) or permanent (irreversible or not reversible for an extended time after the work duration) - Size: expressed in terms of affected geographical element (adjacent land, Fokontany/Commune, carrier and borrowing, access, etc.) - Frequency: expressed in terms of occurrence (at each material exploitation, at each rainy season, at each truck passage, etc.) It is important to note that the majority of the impact evaluations is performed qualitatively, and therefore reflects the professional judgment of the consultant. In fact, the quantitative assessment of the intensity, duration, or size of the expected impacts is often impossible due to numerous reasons, including: a lack of data, a lack of means, an insufficient appropriate model, or simply because of abstract values that cannot easily be quantified. ENVIRONMENTAL AND SOCIAL MANAGEMENT PLAN AND ENVIRONMENTAL MONITORING The potential components of this section are given below: - Summary of mitigation measures, schedule and responsibilities - Specifications related to carriers and borrowing - Pollution control and prevention during the work: o General measures o Other measures (specific) - Pollution control and prevention during exploitation phase - Waste evacuation plan - Site close-out and restoration plan - Awareness raising, communication and education programs toward the affected population o Public communication plan before and during the work o Communication plan for health services o Communication plan for local authorities and local population representatives o Communication plan for users and operators - Emergency prevention plan for accidents during the work o Scenarios o Prevention measures 105 o Emergency actions - Emergency plan for accidents during the exploitation phase o Objectives of the emergency response plan o Potential accident scenarios and preventive measures o Emergency actions o Emergency equipment o Emergency contact o Logbook maintenance - Environmental training program for the affected staff - HIV/AIDS prevention during the work - Environmental monitoring indicators - Cost estimation - Remaining negative impacts after mitigation measures: o Impacts of the preliminary phase (including site installation, carriers and borrowing, if applicable) o Impacts of work o Impacts after the work o Conclusion - Non-technical summary in Malagasy and French - Annexes (map, pictures, protocols, etc.) 106 Attachment 8 General Guidelines for Preparation of Resettlement Action Plan (RAP) 1. Following the screening and identification of the potential land acquisition that is needed for a sub-project, the PCU will have to prepare a technical design that could be as much as possible avoid or minimize land acquisition. In the case that land acquisition is unavoidable, the PCU will prepare a RAP. As it is expected that the amount of land acquisition needed by a sub- project or a section of the road will be insignificant and is likely involve less than 40 land owners, an abbreviated RAP will suffice. 2. An abbreviated RAP covers the following minimum elements: 3. Description of the sub-project. General description of the project and identification of the project area. 4. Potential impacts. Identification of (i) the sub-project component or activities that will require land acquisition; and (ii) the zone of impact of such component or activities. 5. Census of Sub-project Affected Persons (PAPs) and inventory of affected assets. The results of the census and the inventory of assets, including (i) a list of PAPs, distinguishing between PAPs with land rights and land users without such rights; and (ii) an inventory of plots and structures affected. The information generated by the census should be summarized in a table. 6. Legal analysis. Descriptions of legal steps to ensure the effective implementation of land acquisition under the sub-project, including, as appropriate, a process for recognizing claims to legal rights to land--including claims that derive from customary law and traditional usage. 7. Eligibility. Identification of the PAPs who will be eligible for compensation and explanation of the criteria used to determine eligibility. 8. Valuation of assets and calculation of compensation for losses. A description of the procedures that will be followed to determine the form and amount of compensation to be offered to PAPs. 9. Consultations with persons who lose land and other assets. A description of the activities carried out to (1) inform PAPs about the impacts of the project and the compensation procedures and options and (2) give the PAPs opportunities to express their concerns. 10. Organizational responsibilities. A brief description of the organizational framework for implementing land acquisition. 11 Implementation schedule. Develop an implementation schedule covering land acquisition, including target dates for the delivery of compensation. The schedule should indicate how the land acquisition activities are linked to the implementation of the overall project. 12. Costs and budget. Cost estimates for land acquisition for the sub-project. 107 13. Grievance procedures. Affordable and accessible procedures for third-party settlement of disputes arising from land acquisition; such grievance mechanisms should take into account the availability of judicial recourse and community and traditional dispute settlement mechanisms. 14. Monitoring. Arrangements for monitoring land acquisition activities and the delivery of compensation to PAPs. 15. Full RAP. In the case that a sub-project affects more than 40 land owners (or more than 200 persons) the project will have to prepare a full RAP. The PCU will prepare a full RAP with reference to the following outline: 16. Description of the sub-project. General description of the sub-project and identification of the sub-project area. 17. Potential impacts. Identification of (a) the subproject location that will require land acquisition or give rise to resettlement; (b) the zone of impact of such component or activities; (c) the alternatives considered to avoid or minimize resettlement; and (d) the mechanisms established to minimize resettlement, to the extent possible. Objectives. The main objectives of the RAP: 18. Census of Project Affected Persons (PAPs) and inventory of affected assets. The results of the census and the inventory of assets, including the following information: • list of PAPs, distinguishing between PAPs with land rights and occupants without such rights; • inventory of affected assets. • total number of PAPs and Project Affected Households (PAHs) • number of PAHs who will lose more than 10% of their productive assets. 19. Socioeconomic study. The socioeconomic study should produce information to facilitate resettlement planning, such as the following: • the patterns of social interaction in the affected communities, including social networks and social support systems, and how they will be affected by the sub-project; • information on vulnerable groups or persons for whom special provisions may have to be made; • public infrastructure and social services that will be affected; • social, economic and cultural characteristics of displaced communities; and • baseline information on livelihoods and standards of living of the displaced population. 20. Legal analysis. The results of an investigation of any legal steps necessary to ensure the effective implementation of land acquisition and resettlement activities under the sub-project, including, as appropriate, a process for recognizing claims to legal rights to land--including claims that derive from customary law and traditional usage. 21. Institutional Framework. The findings of an analysis of the institutional framework covering: • the identification of agencies responsible for resettlement activities and NGOs that may have a role in project implementation; • an assessment of the institutional capacity of such agencies and NGOs; and • any steps that are proposed to enhance the institutional capacity of agencies and NGOs responsible for resettlement implementation. 108 22. Eligibility. Identification of the PAPs who will be eligible for compensation, resettlement assistance and rehabilitation support and explanation of the criteria used to determine eligibility, including relevant cut-off dates. 23. Valuation of affected assets. A description of the procedures or methods to calculate the value the assets affected by the sub-project. 24. Compensation, resettlement assistance and rehabilitation support. A description of (1) the compensation packages to be offered to PAPs who lose land and/or other assets, (2) resettlement assistance to be offered to physically displaced persons, and (3) rehabilitation support to persons who lose income sources or livelihoods as a result of land acquisition for the sub-project. The compensation packages, combined with other assistance and support offered to each category of PAPs should be sufficient to achieve the objectives of World Bank Operational Policy 4.12 on Involuntary Resettlement. The relocation options and other assistance offered to the PAPs should be prepared in consultation with them and should be technically and economically feasible, as well as compatible with the cultural preferences of the PAPs. 25. Site selection, site preparation, and relocation (in cases of group relocation). Alternative relocation sites considered and explanation of those selected, covering: • institutional and technical arrangements for identifying and preparing relocation sites, whether rural or urban, for which a combination of productive potential, locational advantages, and other factors is at least comparable to the advantages of the old sites, with an estimate of the time needed to acquire and transfer land and ancillary resources; • any measures necessary to prevent land speculation or influx of ineligible persons at the selected sites; • procedures for physical relocation under the sub-project, including timetables for site preparation and transfer; and • legal arrangements for regularizing tenure and transferring titles to re-settlers. 26. Housing, infrastructure, and social services. Plans to provide (or to finance re-settlers' provision of) housing, infrastructure (e.g., water supply, feeder roads), and social services (e.g., schools, health services), plans to ensure comparable services to host populations; any necessary site development, engineering, and architectural designs for these facilities. 27. Environmental and Social protection and management. A description of the boundaries of the relocation area; and an assessment of the environmental impacts of the proposed resettlement and measures to mitigate and manage these impacts (coordinated as appropriate with the environmental assessment of the main investment requiring the resettlement). 28. Community Consultation and Participation. Involvement of re-settlers and host communities: • a description of the strategy for consultation with and participation of re-settlers and hosts in the design and implementation of resettlement activities; • a summary of the views expressed and how these views were taken into account in preparing the resettlement plan; • a review of the resettlement alternatives presented and the choices made by displaced persons regarding options available to them, including choices related to forms of compensation and resettlement assistance, to relocating as individuals families or as parts of preexisting communities or kinship groups, to sustaining existing patterns of group 109 organization, and to retaining access to cultural property (e.g. places of worship, pilgrimage centers, cemeteries); • institutionalized arrangements by which displaced people can communicate their concerns to project authorities throughout planning and implementation, and measures to ensure that vulnerable groups are adequately represented; and • measures to mitigate the impact of resettlement on any host communities, including consultations with host communities and local governments, arrangements for prompt tendering of any payment due the hosts for land or other assets provided to re- settlers, arrangements for addressing any conflict that may arise between re-settlers and host communities; and any measures necessary to augment services (e.g., education, water, health, and production services) in host communities to make them at least comparable to services available to re-settlers. 29. Grievance Redress Mechanism/Procedures. Affordable and accessible procedures for third-party settlement of disputes arising from activities included in the RAP; such grievance procedures should take into account the availability of judicial recourse and community and traditional dispute settlement mechanisms. 30. Organizational responsibilities. The organizational framework for land acquisition and resettlement, including identification of agencies responsible for the implementation of the RAP, the delivery of resettlement measures and provision of services; arrangements to ensure appropriate coordination between agencies and jurisdictions involved in implementation; and any measures (including technical assistance) needed to strengthen the implementing agencies' capacity to design and carry out resettlement activities; provisions for the transfer to local authorities or re-settlers themselves of responsibility for managing facilities and services provided under the project and for transferring other such responsibilities from the resettlement implementing agencies, when appropriate. 31. Implementation schedule. Develop an implementation schedule covering all resettlement activities, from preparation through implementation, including target dates for the achievement of expected benefits to re-settlers and hosts and terminating the various forms of assistance. The schedule should indicate how the resettlement activities are linked to the implementation of the overall project. 32. Costs and budget. Tables showing itemized cost estimates for all resettlement activities, including allowances for inflation, population growth, and other contingencies; timetables for expenditures; sources of funds; and arrangements for timely flow of funds, and funding for resettlement, if any, in areas outside the jurisdiction of the implementing agencies. 33. Monitoring and evaluation. Arrangements for monitoring of land acquisition and resettlement activities by the implementing agency, supplemented by independent monitors as considered appropriate by the Bank, to ensure complete and objective information; performance monitoring indicators to measure inputs, outputs, and outcomes for resettlement activities; involvement of the displaced persons in the monitoring process; submission of monitoring reports to the Bank; evaluation of the impact of resettlement for a reasonable period after all resettlement and related development activities have been completed; using the results of resettlement monitoring to guide subsequent implementation. 110