Document of The World Bank FOR OFFICIAL USE ONLY Report No: 83571-ZR INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON A PROPOSED GRANT IN THE AMOUNT OF SDR 51.4 MILLION (US$ 79.1 MILLION EQUIVALENT) TO THE DEMOCRATIC REPUBLIC OF CONGO FOR THE EASTERN RECOVERY PROJECT February 12, 2014 Social Protection, West Africa (AFTSW) Country Department AFCC2 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 World Bank’s policy on Access to Information. CURRENCY EQUIVALENTS Exchange Rate Effective 31 December 2013 Currency Unit = USD SDR .65 = US$1 US$ = SDR 1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy CDD Community-Driven Development CMC Community Management Committee CTC Coordinating Technical Committee DIME World Bank’s Development Impact Evaluation Initiative ESMF Environmental and Social Management Framework FM Financial Management FSRDC Social Fund of DRC (Fonds Social de la République Démocratique du Congo) ICB International Competitive Bidding IDA International Development Association IDP Internally Displaced Person IFR Interim Un-audited Financial Reports IPMP Integrated Pest Management Plan IPPF Indigenous People Planning Framework I4S International Security and Stabilization Support Strategy LC Letter of Credit LCS Least Cost Selection LIF Livelihoods Innovation Fund LIPW Labor-intensive public works M&E Monitoring and Evaluation NCB National Competitive Bidding NGO Non-Governmental Organization PASU Emergency Social Action Project (Project d’Action Sociale d’Urgence) PDO Project Development Objective PFM Public Financial Management PIM Project Implementation Manual RETF Recipient Executed Trust Fund RFP Request for Proposals SPF State and Peace Building Fund SQC Selection Based on Consultant Qualifications STAREC The Government’s Stabilization and Reconstruction Program STEP IDA-Funded Eastern Recovery Project (Projet de Stabilisation de l’Est pour la paix) Vice President : Makhtar Diop Country Director : Eustache Ouayoro Acting Sector Director : Tawhid Nawaz Sector Manager : Stefano Paternostro Task Team Leader : Maurizia Tovo ii COUNTRY: Congo, Democratic Republic Project Name: Eastern Recovery (P145196) Table of Contents I. STRATEGIC CONTEXT ......................................................................................................1 A. Country Context ............................................................................................................ 1 B. Situations of urgent need of assistance or capacity constraints .................................... 2 C. Sectoral and Institutional Context................................................................................. 4 D. Higher-level objectives to which the project contributes ............................................. 5 II. PROJECT DEVELOPMENT OBJECTIVE AND RESULTS ..........................................6 A. PDO............................................................................................................................... 6 B. Project beneficiaries ...................................................................................................... 6 C. PDO-level Results indicators ........................................................................................ 7 III. PROJECT DESCRIPTION ...................................................................................................7 A. Project components ....................................................................................................... 7 B. Project Financing ........................................................................................................ 11 C. Lessons Learned and Reflected in the Project Design ................................................ 12 IV. IMPLEMENTATION ..........................................................................................................13 A. Institutional and Implementation Arrangements ........................................................ 13 B. Results Monitoring and Evaluation ............................................................................ 15 C. Sustainability............................................................................................................... 15 V. KEY RISKS AND MITIGATION MEASURES ...............................................................16 A. Risk rating and summary table ................................................................................... 16 B. Overall Risk Rating Explanation ................................................................................ 17 VI. APPRAISAL SUMMARY ...................................................................................................18 A. Economic and Financial Analysis ............................................................................... 18 B. Technical ..................................................................................................................... 19 C. Financial Management ................................................................................................ 20 D. Procurement ................................................................................................................ 20 E. Social (including safeguards) ...................................................................................... 21 F. Environment (including safeguards) ........................................................................... 23 Annex 1: Results Framework and Monitoring .........................................................................24 Annex 2: Detailed Project Description ......................................................................................30 Annex 3: Implementation Arrangements .................................................................................38 Annex 4: Operational Risk Assessment Framework (ORAF) ................................................55 Annex 5: Implementation Support Plan ...................................................................................58 Annex 6: Environmental and Social Screening Assessment Framework (ESSAF) ..............59 MAP ..............................................................................................................................................82 iv . PAD DATA SHEET Democratic Republic of Congo Eastern Recovery Project (P145196) PROJECT APPRAISAL DOCUMENT . AFRICA AFTSW Report No.: 83571-ZR . Basic Information Project ID Lending Instrument EA Category Team Leader P145196 Investment Project B- Partial Assessment Maurizia Tovo Financing Project Implementation Start Date Project Implementation End Date February 27, 2014 June 30, 2018 Expected Effectiveness Date Expected Closing Date May 30, 2014 June 30, 2018 Joint IFC No Sector Manager Sector Director Country Director Regional Vice President Stefano Paternostro Tawhid Nawaz Eustache Ouayoro Makhtar Diop . Borrower: Ministry of Finance Responsible Agency: Social Fund for the Democratic Republic of Congo (FSRDC) Contact: Ruphin Bo-Elongo Title: Director Telephone +243 99 8193585 Email: ruphinboel@yahoo.fr, No.: fondsocialdrc@fondsocial.cd . Project Financing Data(in USD Million) [ ] Loan [X] Grant [ ] Other [] Credit [ ] Guarantee Total Project Cost: US$79.1 million Total Bank Financing: US$79.1 million Financing Gap: 0.00 . v Financing Source Amount BORROWER/RECIPIENT 0 International Development Association (IDA) 79.1 Total US$79.1 million . Expected Disbursements (in USD Million) Fiscal Year 2014 2015 2016 2017 2018 2019 Annual 5 16 21 21 15 1.1 Cumulative 5 21 41 63 78 79.1 . Proposed Development Objective(s) The project development objective is to improve access to livelihoods and socio-economic infrastructure in vulnerable communities in the eastern provinces of DRC. . Components Component Name Cost (USD Millions) Community Support 31.0 Livelihoods and Employment Generation 31.0 Capacity Building 17.1 . Institutional Data Sector Board Social Protection . Sectors / Climate Change Sector (Maximum 5 and total % must equal 100) Major Sector Sector % Adaptation Mitigation Co-benefits % Co-benefits % Other social services Other social services 30 Education General education sector 15 Health and other social services Health 5 Transportation Rural and inter-urban 20 roads and highways Water, sanitation, flood protection General water, sanitation 10 and flood protection sector Agriculture fishing and forestry General agriculture, 25 fishing and forestry sector Total 100 vi 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 % Conflict prevention and post-conflict Social Protection 100 reconstruction 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 On or before three months after the 3 months after the Effective Date, the Recipient shall Effective Date cause the Project Implementing Entity to adopt in form and substance satisfactory to the Association, and vii furnish to the Association, the Environmental and Social Management Framework, the Resettlement Policy Framework and the Indigenous People’s Planning Framework Description of Covenant . Conditions Name Type Subsidiary agreement Effectiveness condition Description of Condition Subsidiary Agreement has been executed on behalf of the Recipient and the Project Implementing Entity Team Composition Bank Staff Name Title Specialization Unit MauriziaTovo Lead Social Development TTL ECSSO Specialist Fanta Touré Operations Officer Social Protection/CDD AFTSW Lisette Khonde Social Protection Specialist Social Protection/Gender AFTSW Holly W. Benner Operations Officer Fragile Countries OPSFC Spyridon Demetriou Sr. Operations Officer Fragile Countries OPSFC Thembi Kumapley Program Assistant Administrative Support AFTSW Angelo Donou Financial Management Specialist Financial Management AFTMW BouramaDiaite Sr. Procurement Specialist Procurement AFTPW Luc Laviolette Sector Leader Human Development AFTHD Aissatou Diallo Sr. Finance Officer Disbursement CTRLA Isabella Micali Drossos Sr. Counsel Legal LEGAM DanièleJaekel Operations Analyst Health AFTHW Abdoulaye Gadière Environmental Specialist Environment AFTN1 Antoine Lema Sr. Social Development Specialist Social Safeguards AFTCS Hugo de Vries Consultant Fragile Countries OPSFC Non Bank Staff Name Title Office Phone City Jean-Paul Chausse Consultant Abidjan Catherine Gibbons Consultant Washington . viii Locations Country First Location Planned Actual Comments Administrative Division DRC South Kivu Provincial DRC North Kivu Province DRC Orientale Province ix I. STRATEGIC CONTEXT A. COUNTRY CONTEXT 1. Over the past three decades, the eastern provinces of the Democratic Republic of Congo (DRC) have been host to an explosive mix of weak governance, widespread poverty, natural resource mismanagement, land disputes and the exploitation of ethnic divisions for political and economic gain by foreign and Congolese armed groups, creating an instability that has frequently spilled over into outright violent conflict. The cumulative impact has been catastrophic. Conflict related deaths since 1998 are estimated to exceed 5.4 million, while millions of others have been plunged into a state of acute vulnerability due to displacement, dispossession, the breakdown of communal and social bonds, and the loss of livelihoods. 2. The 1994 Rwandan genocide set in motion a chain of events that culminated in the first Congo war (1996-1997), ultimately overthrowing the Mobutu regime. The second Congo war (1998-2002), which involved several armed groups and foreign forces, led to economic collapse, widespread devastation, militia-rule across parts of the country, mass displacement and a humanitarian crisis of epic proportions. A series of multilateral peace agreements have attempted to bring the conflict to an end and put the country on the path towards democracy, peace and prosperity. However, key drivers of conflict persist. Competing land tenure regimens and claims arising from legal pluralism (statutory, informal and customary tenure rights) frequently give rise to disputes. The situation is exacerbated by high population density, combined with cycles of forced displacement. These conflicts undermine social cohesion, contribute to tensions between communities and ethnic groups, and perpetuate deep social and economic inequalities. 3. DRC ranks last in the 2013 Human Development Report of UNDP 1, with a human development index of .304, lower than the sub-Saharan Africa average of .479. Access to basic social services and infrastructures (in particular roads and power distribution) is limited across the country, including the eastern provinces. Indeed, years of civil war have caused a breakdown in the social contract and reinforced the isolation of many parts of the east, creating a haven for armed groups and holding back the economic and social development that are crucial for long-term stability. 4. The continued presence of armed groups, some of which operate across borders, remains an immediate threat to the consolidation of peace. Although the main rebel group, the M23 has recently officially ended, a number of foreign and Congolese armed groups continue to pose a significant threat to stability. Between ten and twenty such groups are estimated to operate in the eastern provinces, with concentrations in North Kivu, South Kivu and the Ituri district of Orientale Province. Many of these groups are relatively new creations, established to capitalize on the weakness of the State or to advance specific interests, while others represent actors who felt marginalized and excluded from the 2003 peace accord, as well as subsequent agreements (notably the 2008 Goma Accords and the 23 March 2009 Agreement). Armed groups enrich themselves through mining and trade in minerals, as well as non-mineral 1 Human Development Report (2013). The Rise of the South: Human Progress in a Diverse World. United Nations Development Programme. 1 natural resources. The spoils and economic benefits of war help maintain the violence and create perverse incentives for continued instability to prevent the return of state authority and displaced people. 5. Finally, the extreme socioeconomic vulnerability of the population is both a symptom and a cause of instability. Conflict has had a profound social and economic impact in the eastern provinces since the late 1990s, affecting approximately 30 percent of the country’s population (approximately 20 million people). While disaggregated and accurate development indicators are difficult to obtain, available data points to the persistence of severe disruptions in livelihoods and basic services for a significant proportion of this population. In such a context of extreme fragility, there is significant potential for new forms of conflict and violence to emerge. Displaced populations are particularly vulnerable. At present, it is estimated that about 2.7 million people are displaced, up from 1 million in 2006, including 400,000 who live as refugees in neighboring countries. The displaced face tremendous challenges during displacement and upon their return. They can also constitute potential triggers for further conflict as they represent additional claims on available resources, and are vulnerable to recruitment into armed groups. B. SITUATIONS OF URGENT NEED OF ASSISTANCE OR CAPACITY CONSTRAINTS 6. Tackling the above-mentioned drivers of conflict in the eastern provinces requires significant engagement at a national and local level. This would help strengthen governance structures, bolster conflict resolution mechanisms, restore security and state authority, and address the severe socioeconomic vulnerabilities. 7. Since 2006, the international community has been actively involved in efforts to end conflict and consolidate peace in eastern DRC. International assistance currently spans a broad range of security, humanitarian, stabilization, peace-building and economic recovery interventions, implemented by a wide range of multilateral actors (including notably the UN, but also the EU and World Bank), regional organizations, bilateral partners and international NGOs. Collectively, these interventions represent significant investments in peace and stability, and amount to a considerable portion of the over 15 billion USD allocated in international assistance to the DRC since 2007. At the same time, most of this financing has been focused on humanitarian and peacekeeping activities, with relatively few allocations to economic recovery and development interventions considered critical for long-term and sustainable peace consolidation. The international community has been supporting stabilization and peace-building in eastern DRC through the International Security and Stabilization Support Strategy (I4S) coordinated by the UN, with over USD 340 million invested in security, state-building, conflict management and community level economic recovery programs. Since 2009, the I4S has provided an important vehicle for coordinating international assistance within the overall framework of the Government’s Stabilization and Reconstruction Plan for War-Affected Zones in the East (STAREC). The geographic area covered by the STAREC and I4S includes all conflict-affected parts of eastern DRC, that is, the provinces of South Kivu and North Kivu, the districts of Ituri, Haut-Uélé, and Bas-Uélé in Orientale Province, Maniema province and the Tanganyika district of Katanga province. 8. The presence of the UN, bilateral donors, donor-funded project implementation units, and international NGOs provides a viable logistical apparatus, in-depth knowledge on the 2 security and development situation on the ground, as well as decades-worth of cumulative experience in project implementation. In recognition of the limitations and challenges of past stabilization and peace-building efforts in the east, the UN and international donors initiated a strategic review of the I4S in 2012 at the request of the UN Security Council, and with the aim of informing international donor assistance strategies in the context of the Peace, Security and Cooperation Framework for DRC and the Great Lakes signed by regional governments in February 2013. The revised I4S has five pillars: (i) support to democratic dialogue; (ii) security; (iii) restoration of state authority; (iii) return, reintegration, and socio-economic recovery; and (v) the fight against sexual violence. The strategy takes a bottom-up approach through its ‘democratic dialogue’, bringing communities together to discuss the local root causes of conflict and programming on the basis of their recommendations 2. All interventions related to stabilization and peace consolidation are coordinated through the government’s national and provincial STAREC-structure, and supported by MONUSCO. 3 In Eastern DRC, its Stabilization Unit works closely with provincial authorities and the STAREC to support the prioritization, development and implementation of stabilization interventions. 9. The Bank's Country Assistance Strategy (CAS) for FY2013-16 rests on the fundamental thrust that business as usual is not an option for a country that will have the world’s eleventh largest population in 2050 and that is facing the challenges of stabilization and peace consolidation in its eastern provinces. In recognition of these challenges, one of the four goals of the CAS is to support “the country's transition out of fragility, with a focus on addressing the developmental deficits that help to perpetuate violence and conflicts in the eastern provinces”. 4 Thus, the CAS fourth pillar concentrates on peace-building and stabilization with two objectives: (a) strengthening governance and the provision of essential state functions; and (b) improving community resilience through the expansion of socioeconomic opportunities and strengthening local conflict management capacities. 5 This focus on conflict and fragility in the eastern DRC provinces is complemented and linked to the Bank’s regional strategy for supporting peace and stability in the Great Lakes, which was announced in May 2013 and for which USD 1 billion has been committed. It also links the Bank’s work closely to the revised I4S and especially its return, reintegration and socio-economic recovery (or ‘RRR’)-pillar, which undertakes recovery projects to contribute to conflict risk reduction, conflict transformation and peaceful co-existence and creating the conditions for future development. 6 The proposed 2 The revised I4S defines stabilization as “an integrated, holistic but targeted process of enabling state and society to build mutual accountability and capacity to address and mitigate existing or emerging drivers of violent conflict, creating the conditions for improved governance and longer-term development”. 3 At the national level, the prime minister chairs the STAREC’s Steering Committee and Monitoring Committee, while at the provincial level the governors chair the Joint Technical Committees (Comités Techniques Conjoints or CTCs). 4 The other three goals are: (i) increase the effectiveness of the state at the center and at decentralized levels and improve good governance while strengthening the development impact of World Bank operations; (ii) boost the competitiveness of the economy by accelerating private-sector-led growth that will create jobs; and (iii) improve social service delivery to raise human development indicators. Gender and climate change are treated as cross- cutting issues and are addressed through the above four strategic objectives as relevant. 5 World Bank, “Country Assistance strategy for the Democratic Republic of Congo for the Period FY2013- FY2016”, April 12, 2013, Report No.66158-ZR, p. 39-41. 6 The general objective of the revised RRR-pillar of the I4S is stated as follows: “Based on their own recommendations, the population of conflict-affected areas of the Eastern DRC is engaged in small-scale socio- economic recovery and building social cohesion despite external shocks and notices a tangible dividend from these 3 intervention constitutes part of a three-track approach under objective (b) to support strengthened resilience, peace consolidation and development in conflict-affected provinces, with the other two tracks consisting of alignment of Bank financed projects under other CAS pillars and the identification of flexible financing instruments to drive innovative approaches. C. SECTORAL AND INSTITUTIONAL CONTEXT 10. The central government in DRC has met significant challenges in tackling the threats that jeopardize its security. While the 2005 Constitution committed the central government to a decentralization agenda that would allocate 40 percent of national revenues to the provinces, 7 during 2007-2011 fiscal transfers to the provinces fluctuated between 6 and 15 percent. As a result, provincial governments have very limited means to provide for and protect local populations. The Bank has been recently engaged at the provincial level through a $9.75 million public financial management project in South Kivu, which supported the development and management of budget, payroll and monitoring and evaluation systems, as well as capacity building of local officials and peer learning. However, challenges persist, including insufficient checks and balances on provincial authorities and little civilian oversight. 11. At the community level, there exist many local informal and traditional structures with various responsibilities for community management and organization. Their capacity varies greatly and conflicts of interest can arise, particularly when responsibilities overlap. In some cases, customary chiefs have lost their credibility through implication in opaque land sales, supporting rebels or favoring certain patronage networks. The use of participatory approaches by development actors has resulted in the proliferation of community level structures (e.g., various committees and task forces), often with competing mandates. Furthermore, many of these informal and formal organizations are not representative and can reinforce the exclusion of the most vulnerable within the community. 12. Formal structures for dealing with disputes at the local level are weak, but a strong tradition of customary dispute resolution exists. While a 1978 law mandated that Peace Tribunals replace customary structures to adjudicate in local matters, their roll out was incomplete, with only 53 of the expected 108 tribunals currently in operation. In their absence, customary structures have continued to operate. These courts vary widely in their levels of organization and transparency, their relationship to state authority and power, and the span of their jurisdiction (which can be restricted to a certain geographic location or ethnic group). They handle primarily everyday grievances and abuses, such as intra-family disputes, small scale civil- commercial disputes as well as ‘abuse of power’ complaints. 13. Subsistence farming employs the majority of the population in the eastern provinces and is typically low input and low output, with the livestock sector severely stunted by the war. Food insecurity is widespread, resulting from a lack of agricultural infrastructure and capital, low productivity and prost-harvest losses, limited skills and the absence of extension services, and weak organizational capacity. These problems are compounded by difficulties to activities, such as increased social cohesion and resilience at the community level. This will help provide a space for potential longer term development.” 7 Article 115, Law n° 08/016. 4 sell agricultural production because of impassable roads to markets, insecurity, illegal/informal taxation, and the lack of storage and agro-processing facilities that would enable farmers to earn more from their production. The country’s agricultural potential is severely underutilized, resulting in the acute socioeconomic vulnerability of the majority of the population. Exacerbating the situation, inter-ministerial collaboration between the key institutional actors – the Ministry of Agriculture, the Ministry of Rural Development and the Ministry of Research– needs improvements in terms of effective organization, skilled human capital, and resources to collect, process, and collate data for policymakers. 8 14. Labor-intensive public works (LIPW) have been used as a means for providing short- term employment to unskilled or semi-skilled individuals, to supplement meager agricultural incomes, make up for lost employment in mining (e.g., IDA and SPF-financed activities in the mining areas of Katanga), provide income to displaced people, and offer alternatives to youth at risk of recruitment from armed groups. The bad state of the road network lends itself well to this type of initiative, though the quality/durability of some of the works carried out with labor-intensive techniques has been questioned. While there appear to be a number of actors, both national and international, who possess the capacity to organize and supervise LIPW, transitioning this short-term employment into something more sustainable remains a challenge. D. HIGHER-LEVEL OBJECTIVES TO WHICH THE PROJECT CONTRIBUTES 15. The proposed intervention aims to increase community resilience and in this way contribute to stabilization in Eastern DRC. 9 As mentioned in paragraph 9, the project is fully aligned with the objectives of the I4S/STAREC and of the CAS. Regarding the I4S/STAREC, the project will (i) work towards the same I4S outputs and goals, particularly those of the Return, Reintegration, and Socio-Economic Recovery pillar; (ii) liaise with the I4S/STAREC coordination structures (the Joint Technical Committees and their technical sub-committees) to ensure alignment of programs with other stabilization partners; and (iii) the project outcomes will be integrated into the broader I4S M&E-framework, allowing stakeholders to have an overview of the aggregate impact of the various interventions on the stabilization of Eastern DRC. 16. The present project complements other planned WB interventions in Eastern DRC. These include the US$170 million Agriculture Growth Pole Project that is being designed to increase agricultural productivity among conflict affected populations in Eastern DRC. The project will also be implemented in coordination with the US$75 million Great Lakes Emergency Women’s Health and Empowerment project, which aims to: (i) expand utilization of a package of health and nutrition interventions targeted to poor and vulnerable females; and (ii) expand the provision of services to mitigate the short and medium-term impact of sexual and gender-based violence. Finally, the Eastern Recovery Project will help bring to scale results from an ongoing USD 4.9 million pilot project financed by the State and Peace-building Fund (SPF). 8 World Bank, Agricultural Rehabilitation and Recovery Support Project, Project Appraisal Document, March 2010. 9 Community resilience is defined as the sustained ability of a community to utilize available resources to respond to, withstand, and recover from adverse situations. It is therefore linked to access to socio-economic infrastructures, livelihoods and social cohesion. 5 The SPF grant has been designed to generate learning on the most effective approaches to foster community recovery and resilience in eastern DRC. The proposed project contributes to the World Bank’s social protection strategy that emphasizes the promotion of improved opportunities, livelihoods and better jobs particularly in fragile states. By creating temporary employment and increasing access to basic social economic infrastructure, the project is contributing to vulnerability reduction and resilience, and is thus directly linked to the World Bank’s objective of eradicating poverty and contributing to shared prosperity. II. PROJECT DEVELOPMENT OBJECTIVE AND RESULTS A. PDO 17. The project development objective is to improve access to livelihoods and socio- economic infrastructures in vulnerable communities in the eastern provinces of DRC. B. PROJECT BENEFICIARIES 18. Beneficiaries will be poor and conflict-affected communities in the eastern provinces of DRC, more specifically the North Kivu, South Kivu, and the Oriental province and their surroundings 10. Particular attention will be paid to internally displaced populations to ensure that they can take advantage of temporary employment opportunities while in displacement and are supported in their reintegration upon returning home. The active participation of women and youth will be encouraged both in decision making and in benefit sharing, including through the use of quotas when feasible (e.g., in village development committees and in LIPW) as well as in the design of employment-related activities (e.g., schedules mindful of women’s household obligations). 19. The components are being piloted through the SPF fund in select low and high-risk environments in the project area, so that a tailored approach will be possible under the proposed operation. Zones will be selected in close cooperation with other stabilization- partners to make sure that gaps are filled and there is no overlap of projects. Low-risk zones are more stable and therefore positive outcomes are more likely, but the impact in terms of improved stability would be smaller; high-risk zones include zones only recently stabilized, prone to destabilization or adjacent to conflict zones where it may prove more difficult to carry out project activities but the stabilization impact would be considerable. These are also the zones which are most vulnerable to recruitment of young people into the armed groups. Tentatively, the less risky areas include: (a) the “Grand Nord” of North Kivu, around Beni-Butembo; (b) the Bunia-Mahagi axis in Ituri; and (c) the Ruzizi Plains in South Kivu. Amongst the ‘riskier zones’ are (a) Walungu-Shabunda and Fizi-Minembwe in South Kivu, and Miti-Hombo-Walikale passing from South- into North-Kivu; (b) the Faradje-Niangara-Doruma axis in Haut-Uélé; (c) the area around Mambasa in Ituri; (e) the district of Walikale in North Kivu; (f) the Sake-Masisi- Walikale axis in North Kivu; and (g) the Rutshuru-Ishasa axis, also in North Kivu. In the 10 The rehabilitation of some road axes that cut across several provinces may require that work be conducted in Maniema and Katanga. This could apply to the following axis: (i) . Fizi-Kabembare (South Kivu and Maniema), Shabumda-Pangi (South Kivu and Maniema), Fizi-Kalemi (Katanga and South Kivu), Walikale-Lubutu-Pugnia (between North Kivu and Maniema). 6 medium, term, the Bank should work with, and build the expertise of, government partners in order to expand its engagement into riskier areas, drawing upon the lessons learnt from implementation. C. PDO-LEVEL RESULTS INDICATORS 20. Achievement of the PDO will be measured by the Key Performance Indicators below. These indicators will also feed into the broader I4S/STAREC M&E-framework to assess the project’s wider impact on the stabilization of Eastern DRC. Perception studies undertaken under the I4S will also provide feedback to the Bank on the impact of programs. a. Direct project beneficiaries (number), of which female (percentage) 11 b. Average percentage increase in access to improved community social and economic infrastructure. c. Average percentage increase in annual revenues among beneficiaries of the livelihood support subcomponent (by sex) d. Percentage of beneficiaries of the livelihood support subcomponent whose revenue increased (by sex) III. PROJECT DESCRIPTION A. PROJECT COMPONENTS 21. The project will have three components: (i) community support; (ii) livelihoods and employment generation; and (iii) capacity building. Component 1: Community Support (approx. US$31 million) 22. This component will focus on strengthening community resilience. This will be achieved through: (a) improving access to community social and economic infrastructure; (b) facilitating and improving inclusive community participation processes; and (c) strengthening local conflict prevention and resolution mechanisms. The Project Implementation Manual (PIM) will specify the mechanisms and processes to improve access to social and economic infrastructure while ensuring social inclusiveness and discourage elite-capture. As every community is different, interventions will be tailored to the specific ethnic, social, physical and economic dynamics of each community, paying special attention to the needs and preferences of vulnerable groups such as women and the displaced. In particular, assistance to the (previously) displaced will be adapted to their specific circumstances (e.g., encouraging to the participation of returning individuals in community decision-making). 23. The sub-projects preparation and selection processes will be similar to those successfully used under the Emergency Social Action Project (PASU). This US$101.8 million IDA-funded project was implemented by the Social Fund of the Democratic Republic of 11 This indicator will be calculated by adding the number of direct beneficiaries of (i) rehabilitated/constructed infrastructures; (ii) conflict prevention and mediation trainings; (iii) labor intensive public works; and (iv) livelihoods and employment generation programs. 7 Congo (FSRDC) from 2004 to 2013 and built over 1,000 community infrastructure across the country’s eleven provinces 12. These processes rely on local executing agencies, i.e., NGOs and construction companies, contracted by FSRDC to work with communities (these will generally be villages represented by Community Management Committees). NGOs help communities assess and prioritize their needs, develop a sub-project proposal, monitor sub-project implementation and organize maintenance. The Social Fund pre-qualifies and trains local executing agencies, conducts field checks, and submits eligible proposals to a Provincial Consulting Committee for approval. Funds for approved sub-projects are then provided to communities; training and assistance will be provided to ensure proper management of funds by the communities. 24. The conflict/post conflict context requires that risks of conflict at the local level be taken into consideration in the project design despite the urgent need of improving basic infrastructures. Hence, NGOs specialized in conflict prevention and management will be contracted to train key stakeholders in conflict assessment and management. In areas where existing conflicts may impact ability to deliver the sub-projects proposed (for instance areas recently liberated from rebel control, or where interethnic tension is high), local capacity to prevent and manage conflicts will be strengthened through targeted activities such as in-depth conflict analysis and participatory conflict transformation plans. 25. With a ceiling of US$100,000 per sub-project, a total of at least 310 communities would be covered by the component. The selection criteria in terms of geographic area will be kept flexible to take into account the evolving security situation as well as the activities of other actors (under the I4S, but DFID and USAID also finance large CDD-type programs in the East). The STAREC’s technical sub-committees may act as a mechanism to align programs with each other. Based on PASU experience, it is expected that community priorities will include rehabilitation and construction works in the health, education, water and sanitation, trade (markets) and transport (small bridges) sectors. 26. The component will finance: • Information, consultation, preparation and training including: informing communities and local authorities about component activities and approaches, organizing and training community members (including to prioritize and select community infrastructure needs), carrying out preparatory economic and social analysis to identify operational challenges and resilience factors. • Community infrastructure, built or rehabilitated either by local contractors or by communities themselves, and including equipment where appropriate (e.g., desks for schools). • Technical assistance and supervision to accompany communities throughout sub-project implementation and ensure high technical quality. • In-depth and ongoing conflict-sensitivity analysis, mediation, conflict management training and support at least at the project onset. Component 2: Livelihoods and Employment Generation (approx. US$31 million) 12 Bank and Borrower performance was rated Satisfactory in the Project’s Implementation Completion Report which was finalized on December 30, 2013. 8 27. This component will support employment creation through two sub-components that will create short-term employment as well as sustainable livelihood options. In light of the persistent joblessness and poverty, as well as of the need to provide immediate tangible benefits to the region, LIPW will likely absorb at least half of the funds available for this component. It is expected that employment creation will contribute both to poverty reduction and stabilization. 28. Subcomponent 1: LIPWs (about US$19 million). In an effort to address the high unemployment rates and poor state of infrastructure in the East, a number of LIPWs programs have already been supported by the donor community (e.g., UNOPS under the I4S) primarily focusing on road maintenance and rehabilitation. They have proven to be an effective means to create short-term employment while contributing to the improvement of public infrastructure and other public goods. Also, there appears to be a reasonably good supply of local contractors familiar with labor-intensive techniques and the project implementing agency has experience with managing LIPW programs. Road rehabilitation will be the main activity supported by the sub-component, as both local authorities and development partners have been unanimous in indicating accessibility as a crucial and urgent ingredient for both stabilization and development. The project will select strategic corridors where road rehabilitation will serve to improve rural households’ access to social services and markets. 29. Road rehabilitation will be carried out along with investments to strengthen agricultural value chains in strategic corridors combining a high density of population at risk and a high agricultural potential, as described below. Selection of areas for road works and other LIPWs will be done in accordance with I4S priorities and in close coordination with government partners (through the STAREC’s technical sub-committee on Economic Recovery) and with MONUSCO military engineers through provincial road coordination meetings. Other types of possible LIPWs could include: (i) reforestation and other soil and water conservation works (also as natural disaster prevention measures), and (ii) urban garbage collection and street cleaning in the main urban centers. In rural areas, LIPWs would be primarily implemented during the agricultural off-season, to avoid interfering with agricultural employment/livelihoods. Specific arrangements would be made to ensure the participation of women in rural and urban LIPWs. While LIPWs are ongoing, the Government will be supported to explore the extent to which funds can be made available to continue maintenance works after Bank funding runs out. 30. Considering the temporary nature of LIPW employment, LIPW will be supplemented by activities aimed at increasing participants’ employability at the end of their employment. These will include: (i) training to give participants non-cognitive life learning skills to promote good work and social habits; (ii) a voluntary savings program to help participants put aside part of their wages as start-up capital for initiating post-LIPWs activities; and (iii) training in basic business (e.g., understanding the economic environment, preparing a business plan for a micro-enterprise, basic accounting principles) and technical skills in areas where the local job market offers employment opportunities (agriculture and other non- agricultural rural activities, to be determined on the basis of local market analysis). If requested by participants, training activities may also include functional literacy. 9 31. Subcomponent 2: Strengthening Agricultural Value Chains (about US$12 million). The agricultural value chain sub-component was designed to start enhancing the scope from prior projects with single focus on vulnerability/urgent needs to enhancing livelihoods. It will increase the food security and incomes of agricultural households along the same strategic corridors targeted for the rural roads to be rehabilitated under the LIPW sub-component above. The targeted provinces have tremendous agricultural potential. Each produces a wide range of food and cash crops, including manioc, maize, rice, banana, beans, tea, coffee and cacao. Livestock and fishing in the lakes and rivers and in man-made ponds also have considerable potential. Under this sub-component, the project will support priority agricultural value chains selected through a participatory process on the basis of their impact on household food security, income generation potential and potential to decrease livelihoods-based conflict at the community level. Project support will address constraints all along the selected value chains (on-farm productivity, post-harvest handling, storage and processing), in an effort to strengthen the hand of small-scale farmers in the value chain and get more profits returning to farmer households and villages. Value chains coordination will be done through “innovation platforms” which will also be used to plan and deliver activities aimed at organizing/strengthening farmers groups and/or cooperatives, delivering training and extension, establishing and managing improved storage and agro-processing facilities as well as small hydro-electric plants to power irrigation and processing equipment. 32. The investments/activities under this sub-component will be supported through a Livelihood Innovation Fund (LIF). The purpose will be to provide subsidies/matching grants to the activities summarized above as well as to other eligible activities that may emerge during project implementation and would contribute to sustainable employment and improved household incomes for low-income people living in the target areas (e.g., vocational training, agricultural research activities, private investments with significant positive externalities for the communities such as seed multiplication activities). LIF support will vary according to the type of investment/activity to be undertaken (productive/capacity-building), degree of public/private good, and beneficiary types. For some eligible productive investments, beneficiaries may need to mobilize financing from local financial institutions, with assistance from the project. The list of eligible activities, expected form of community/beneficiary contributions and implementation procedures will be detailed in the PIM. Component 3: Capacity Building (US$ 17.1 million) 33. Capacity building will be provided on a need-basis to national and provincial actors who will play a direct role in project implementation. Provincial and district (territoires) authorities will be offered training and other capacity building opportunities (e.g., study visits to another province or district) to strengthen their ability to play a constructive role in project implementation and, more in general, to contribute to the project goal; it is expected that governance-related topics will be identified as a priority. Other public and private actors at the provincial and local level may need up-front and subsequent training on technical subjects, particularly in relation to Component 2 (e.g., the organization of maintenance on rehabilitated feeder roads, cooperative development, support to specific agricultural value chain development) but also on cross-cutting themes such as conflict or gender sensitivity. 10 34. The project will strengthen the capacity of existing local Savings and Loan Associations programs to allow beneficiaries to save and have access to small loans for emergency/consumption or investment purposes (such as for productive investments under Component 2). In particular, it will stimulate the formation of micro-savings groups that can affiliate with existing local Savings and Loan Associations or other microfinance institutions, providing technical assistance from an experienced micro-savings specialist as needed (it is expected that women savings and loans groups will be supported by a regional IDA-financed project under preparation and targeting the same DRC provinces, so activities will be mindful of possible overlapping). Technical assistance may also be made available from international sources if it becomes apparent that Congolese actors cannot quickly acquire the required competence level. In this case, the mandate of the international assistance will include the transfer of capacity to local actors. 35. This component will also cover all costs related to the management of the project. This will include the provision of goods, consultant services, training and operating costs to support project coordination, implementation, management, and monitoring and evaluation. Given the high incidence of corruption in the country, funding will also be made available to support a robust internal auditing function. Budget allocation to project management, estimated at about 20 percent of the total project cost) takes into consideration lessons learned during the implementation of PASU in terms of the high cost of doing business in DRC due to a combination of factors including the poorly developed transport network, difficult terrain and large land mass, which often require travel by air, as well as to the high salaries necessary to attract and retain highly qualified individuals. It should be noted that salaries of FSRDC staff are consistent with salaries paid by other Bank-financed projects. B. PROJECT FINANCING 36. The project will be financed by an IDA grant under World Bank policies relative to Investment Project Financing. It is covered by paragraph 11 of OP 10.00 which refers to Projects in Situations of Urgent Need of Assistance or Capacity Constraint. 11 Project cost and financing Grant Financing Project Components 13 Project cost ($) % Financing ($) 1.Community Support 31,000,000 31,000,000 100 2. Livelihoods and Employment Generation 31,000,000 31,000,000 100 3. Capacity building 17,100,000 17,100,000 100 Total Baseline Costs Physical contingencies Price contingencies Total Project Costs 79,100,000 79,100,000 100 Interest During Implementation N/A Front-End Fees N/A Total Financing Required 79,100,000 C. LESSONS LEARNED AND REFLECTED IN THE PROJECT DESIGN 37. Community-Driven Development (CDD) programs have been used extensively to address the challenges presented by fragile and post-conflict situations. Emerging evaluation evidence suggests considerable success in service delivery. 14 The experience in DRC also indicates that CDD approaches are quite effective in improving community access to basic infrastructure and services. 38. The experience of PASU is particularly relevant to the present project because it covers both CDD and labor-intensive public works, and the implementing agency is the same. The project completion report highlights the following lessons that are applicable to project design and implementation: • Promote community ownership: Community contributions should be required everywhere as it stimulates strong ownership. However, it should be possible to reduce the required contribution in exceptional cases, such as communities of returning IDPs or refugees, to allow the poorest communities to benefit from the project. • Invest adequately in project management: The DRC context requires investments in project management costs that exceed the Bank’s standard ceiling of 20 percent of total budget costs. This will help project implementation units be better equipped to effectively support operations over a vast territory, where transport facilities are often expensive and precarious. Adequate funding needs to be allocated to monitoring and evaluation (M&E). Project indicators need to be very clearly defined, and project staff and partners need to be trained in a common methodology for gathering, recording, and documenting indicator data. To do this effectively, provincial offices need to have M&E specialists on staff. 13 Include US$6 million made available as Project Preparation Advance. 14 Barron, Patrick (2010): “CDD in post-conflict and conflict-affected areas: Experiences from East Asia”, Background paper for World Development Report 2011. Wong, Susan (2012): “What have been the impacts of World Bank Community Driven Development Programs? CDD impact evaluation review and operational and research implications”, Social Development Department, World Bank. 12 Data audits, carried out by an internal or third party auditor, are as important as financial audits in verifying that a project is on track in achieving project results transparently. • Engage with government for increased project sustainability: Actively engaging provincial and local government in the sub-project selection process at the provincial level is a good way to ensure that the sub-projects funded are considered priorities by both the beneficiary community and the relevant sector ministries and local government. This in turn helps to ensure that completed sub-projects are staffed and equipped by complementary government financing. Likewise, the national government must be required to make invest in the Social Fund, either by contributing public sector resources or by engaging with other donor or private sector companies to raise additional Social Fund capital. The lack of national government contributions undermines the long-term sustainability of the social fund, increasing the likelihood that it will cease to exist once World Bank funding ends. • Allow some flexibility in sub-project budget levels for remote locations: Construction costs vary within different parts of a country based on a number of factors, including distance from main markets, security, road quality, cost of labor, and supply of skilled labor. For this reason, budget envelopes may need to be adjusted by province to reflect these variations; otherwise, sub-projects may need to be scaled down to fit within the budget in remote, underserved areas that may have the greatest need. 39. Concerning labor-intensive public works, experience from DRC, in particular under the first phase of I4S programming, as well as from other post-conflict contexts (e.g., Liberia and Côte d’Ivoire) suggests the following principles: (a) beneficiary selection should be perceived as fair and transparent –in the case of DRC, a public lottery is probably the best way to do it; (b) quotas for women or other vulnerable groups (e.g., IDPs, ex-combatants) can be used as long as there is general agreement on the special obstacles faced by such groups, and should be discussed in advance with communities to ensure it will not generate animosity; (c) public work should be combined with training and/or savings to give beneficiaries a better chance to create sustainable livelihoods; (d) local authorities should be involved in the choice of works after having clearly explained selection criteria (e.g., minimum labor content, acceptable types of works, eligible geographic areas) but should not be given the final say to minimize the risk of elite capture and ensure synergy with other efforts. IV. IMPLEMENTATION A. INSTITUTIONAL AND IMPLEMENTATION ARRANGEMENTS 40. The project will be implemented by FSRDC, a public legal entity created in 2002 under the Office of the President to improve the living conditions of the poor by making available to communities the resources --financial and human-- necessary for implementing self- selected sub-projects. FSRDC successfully managed PASU, a US$101.8 million IDA-financed operation to improve community-level infrastructure using a CDD approach, as well as to finance medium size inter-communal and urban infrastructure, secondary school scholarships and labor-intensive public works. The Implementation Completion Report confirms the impressive results achieved despite the challenging context as well as the good reputation enjoyed by the implementing agency --including a reputation for good governance and high 13 technical quality. Overall, FSRDC carried out its fiduciary responsibilities in a satisfactory manner, to the point that it was asked to provide fiduciary services for another IDA project. 41. The presidential decree creating FSRDC identifies two management structures: (i) a Board of Directors; and (ii) a Management Team. The Board of Directors is responsible for providing general oversight, including reviewing annual work plans, budgets and reports, receiving financial audits, and approving the recruitment of senior staff. It comprises representatives of key government offices (six ministries 15 and the Presidency); representatives from faith-based organizations, UN agencies, the private sector, and community based organizations; and FSRDC General Coordinator. The Management Team, on the other hand, is responsible for day-to-day management and for implementing decisions made by the Board of Directors. 42. In particular, FSRDC responsibilities will include the following: (a) strengthening community participatory planning and implementation capacity; (b) reviewing and selecting community proposals (including under the LIF); (c) after review and recommendation by the Provincial Consultative Committee (for alignment with general and sectoral priorities and programs), funding proposals; (d) selecting, sub-contracting and supervising local executing agencies (primarily NGOs) to work directly with communities or to manage labor-intensive public works and sub-projects; (e) selecting and contracting consultants to carry out studies and evaluations; (f) financial management and procurement in accordance with Bank rules; and (g) monitoring overall project implementation and reporting on it as appropriate. In addition, the Social Fund will liaise with national and international actors for coordination purposes. Based on past experience, the remuneration of local executing agencies working under Component 1 will be 12 percent of the total cost of the activities to attract a large number of organizations with strong accountability systems. The remuneration of local executing agencies working under Component 2 will be negotiated on a case by case and depend on the nature of the works but will not exceed 20 percent of the total cost of the activities. 43. At the provincial level, a committee including representatives of key provincial ministries and civil society institutions will ensure that sub-projects are consistent with sectoral policies and other planned investments. Under the previous project, FSRDC had set- up Provincial Consulting Committees to play such a role, but it is likely that these committees will be subsumed under the wider Joint Technical Committees. Provincial committees will meet regularly and receive regular updates from FSRDC. At the community level, for the implementation of Component 1, Community Management Committees (CMC) will be established to manage sub-project execution with the help of intermediary NGOs subcontracted by FSRDC. The CMC will participate in selecting the construction contractor, be responsible for collecting the community contribution, and for developing an operations and maintenance plan. In some cases, the CMC will also be responsible for operations and maintenance or it will take the lead in organizing a new committee. Under Component 2, the choice of strategic corridors will be endorsed by the Joint Technical Committees and the Provincial Road Commission; each strategic corridor will then have a Zone Committee including representatives of district 15 The Ministry of Finance, the Ministry of Primary, Secondary and Professional Education, the Ministry of Health, the Ministry of Social Affairs, Humanitarian Issues and Solidarity, and the Ministry of Gender, Children and Family. 14 (territoire) level entities such as the Agricultural and Rural Development Committees (known as CARG). Farmers will be supported in organizing themselves into associations or cooperatives capable of joint action that promotes economies of scale and empowerment. These groups will be assisted in preparing and implementing sub-projects to be presented to the LIF for funding. Funding will be in the form of grants matching farmers’ own contribution, in kind (e.g., labor, sheds for equipment) or cash. B. RESULTS MONITORING AND EVALUATION 44. A strong M&E system will be established to facilitate reliable and effective data collection. FSRDC has a management information system (MIS) that will be adapted to meet the needs of the proposed project. All intermediary NGO partners will be trained to have a common understanding of the project indicators and to follow a protocol for collecting, storing and reporting data. Innovative technology options, such as applications for mobile phones or tablets, will be explored to ensure efficient and timely data collection, reporting, and analysis of project indicators. Building on experience in similarly disadvantaged contexts (e.g., Sierra Leone), it should be possible to adapt technology to the Eastern DRC situation, for example by storing data on the phone or tablet until a connection is available. The M&E team will conduct regular data audits in the field to verify that the reports they receive reflect reality, although the use of ICT should make this task fairly straightforward. 45. Like all ongoing stabilization-related programs, the outcomes of Bank-funded projects will be integrated into the revised M&E-framework of the I4S. This framework links output and outcome indicators to broader trends. In combination with new baseline studies and regular perception surveys 16, this will allow partners to tentatively assess to which extent the collective result of programs has a positive impact on the country stabilization. This, in turn, will provide important feedback to the Bank on future socio-economic programming in conflict areas. 46. A semi-annual review of progress towards achieving the PDO, annual technical and financial audits, and the mid-term review will help strengthen project design and improve implementation until closing date. Monitoring and evaluation activities will also benefit from an SPF grant that supports an action-research approach to pilot activities, so as to be able to integrate lessons from implementation on an ongoing basis. In addition, the SPF grant supports a rigorous impact evaluation whose results will be used to adapt project design and procedures. C. SUSTAINABILITY 47. Sustainability will be addressed in several ways. Regarding the financial sustainability of the project activities, the FSRDC will continue to rely on WB funding in the short to medium term. For component 1, sub-projects proposals will be validated by the government at the provincial level to ensure that the salaries of staff associated with service delivery are budgeted. Community Management Committees will be set up based on guidelines included in the Project 16 The Harvard Humanitarian Initiative has started a baseline study on Security and Justice in the eastern provinces, which will be updated with three-monthly perception studies. This will form a critical evidence base for the I4S/STAREC. External donors have been engaged to expand the perception studies into the socio-economic field as well. In the meantime, I4S-partners working in this field will include more extensive baseline studies into their projects. 15 Implementation Manual to assist with maintenance of the infrastructures, including setting up user fees where feasible. 48. The ICR of PASU has identified FSRDC’s financial sustainability as an issue. On the basis of this lesson, the Bank will work with FSRDC to help it develop a fundraising strategy to diversify its funding basis. This could be done by putting greater emphasis upon communications during the life of the project both at the provincial and national levels with the Government and with donors (who tend to be unaware of how effective and cost-efficient FSRDC proved to be in generating tangible results on the ground). 49. The project will invest in durable materials for sub-project implementation and in the LIPW component, and a civil engineer will be recruited in all provinces to ensure the delivery of technically sound infrastructures. Community maintenance committees will be trained in the management of these infrastructures, including setting up user fees where feasible. 50. Experience with PASU implementation indicates that community contributions (in cash or in kind) have been crucial in fostering strong ownership of the new infrastructures and therefore community’s willingness to maintain those infrastructures. The present project will retain this concept. However, some flexibility will be introduced when determining community contribution requirements to facilitate inclusion of the most vulnerable communities. Likewise, more selectivity will be used in accepting in-kind contributions, to avoid undermining the technical quality of the works. Finally, the Social Fund will work closely with the provincial authorities to ensure that infrastructures rehabilitated do receive complementary government inputs, such as teachers’ and health staff’s salaries. 51. Under the livelihoods component, the project will invest in creating or strengthening agricultural cooperatives and farmers associations that will continue beyond the life of the project. Likewise, it will build the capacity of local NGOs to implement agricultural value chain strategies and microfinance approaches for micro and small enterprise development. Any economic infrastructure developed will need to be accompanied by a business plan and organizational mechanism clearly identifying who will be responsible for implementing the business plan and for keeping the agro-processing, storage facility, or irrigation system fully functional and well-maintained (e.g., a cooperative, a private sector management company). V. KEY RISKS AND MITIGATION MEASURES A. RISK RATING AND SUMMARY TABLE Risk Category Risk Rating Low Stakeholder Risk Implementing Agency Risk - Capacity Low - Governance Moderate Project Risk 16 - Design High - Social and Environmental Low - Program and Donor N.A. - Delivery Monitoring and Sustainability High Overall Implementation Risk High B. OVERALL RISK RATING EXPLANATION 52. Overall project risk rating for preparation and implementation is High. The project will be implemented in a high risk context. The two main risks are related to political insecurity and volatility, as well as poor governance, both of which have deep and widespread roots.17 Mitigating measures for the governance issues have been built in project design in the form of strict fiduciary control measures. While there will be no guarantee against the risk of political interference or corruption, the small size of individual sub-projects, the participatory approach adopted for sub-project selection and the track-record of the implementing agency should constitute fairly powerful mitigating measures. This is a high risk, but potentially high reward project that can have value not only through its immediate contribution to stabilization but also through the lessons learned from its implementation. 53. Eastern DRC is a volatile area, with pockets under the control --or at least the influence-- of armed groups (see also Country Context). The recent deployment of an international Intervention Brigade in an effort to bring the area known as Petit Nord back under government control has contributed to the end of the M23 rebellion, but several armed groups remain active. Several districts in the project area are considered relatively insecure, and the situation is continuously evolving as armed groups move around, get formed or disband. As a result, project implementation will have to be particularly mindful of security matters, keeping in constant touch with MONUSCO security. In such a context, flexibility and resourcefulness will be essential. The implementing agency is used to operate in such a volatile environment and has good relationships with both government and international actors. The bottom-up participatory approach adopted and the quality of its works have gained it a reputation that represents one of the best defenses against armed groups. The ORAF in Annex 4 provides a detailed project risk analysis. 54. Finally, as was the case during the implementation of PASU, FSRDC may face some challenges in finding local partners with strong capacity. This issue, which is related to the overall post-conflict and fragility context, will be addressed through the provisions made under component 3 (capacity needs assessment, capacity building, and close supervision). 17 DRC ranks 154 out of 177 countries on the Transparency International Corruption Perception Index of 2013. DRC’s country index is 22 (with 0 being “highly corrupt” and 100 being “very clean”). Source: http://cpi.transparency.org/cpi2013/results/. 17 VI. APPRAISAL SUMMARY A. ECONOMIC AND FINANCIAL ANALYSIS 55. No estimate of economic rate of return was undertaken given the emergency nature of the project preparation process. However, the project was assessed on the basis of (i) international evidence that suggests a positive link between stabilization, improved livelihoods and increased access to basic social services; (ii) expected impact on increased purchasing power of beneficiaries and increased agricultural production; (iii) international evidence demonstrating the positive link between increased access to social protection and socio-economic development; and (iv) cost-effectiveness. 56. Project impact on stabilization. International experience suggests that building confidence through collective action and restoring a sense of normalcy through access to basic services and employment, provided these are linked to locally identified drivers of conflict, are fundamental to breaking the cycle of violence and fragility. The proposed project design reflects these goals and is based on accumulated wisdom from previous post-conflict operations. In particular, a CDD approach has proven particularly effective in fragile environments as it combines the provision of basic infrastructure with a participatory, bottom-up approach. Other actors are also carrying out projects with similar approaches, but are relying on international implementing agencies thus missing an important opportunity to restore confidence in government action. The FSRDC is the only government agency with the proven capacity to implement a multi-sectoral project throughout the country, delivering good quality infrastructure in remote locations while respecting participatory and fiduciary principles. 57. Project’s contribution to food security: By stimulating an increase in revenue and in agricultural production, component 2 would contribute to improvements in food availability and food consumption for project beneficiaries. This would maximize the combined impact of ongoing or future interventions in health, nutrition and agriculture on food security and child nutrition in the targeted area. 58. Project’s contribution to socio-economic development: As indicated in the World Bank’s Africa Social Protection Strategy 2012-1022, “a growing body of evidence from African countries shows that social protection directly reduces chronic poverty and vulnerability, as these programs enable poor households to meet their basic consumption needs, protect their assets, and achieve better health, nutrition, and education outcome. These programs also build households’ productive assets and expand their income generating opportunities by building their labor market skills and enabling them to engage in higher risk, higher return activities.” 18 In addition, there is a consensus that investments in the knowledge economy and health systems boost productivity. For example, a meta-analysis of studies in high-, middle-, and low-income countries found that for each additional percentage point increase in school enrolment rates there was a 1-3 percent increase in per capita GDP; an additional year of secondary education in the population stimulated a growth in excess of 1 percent in per capita GDP. Studies have also estimated that the return on investment in education systems in various developed and 18 Africa Social Protection Strategy 2012-2022. World Bank. 18 developing countries ranges between 7 and 12 percent. 19 The proposed grant can be expected to affect positively additional indicators of socio-economic well-being such as the price of goods on the market, time saved to community members to collect water and travel, reduced incidence of water-borne diseases, etc. An economic analysis will be carried out during the life of the project to assess social and economic impact on beneficiaries. Cost effectiveness will also be assessed as part of this process. 59. Cost effectiveness. Some of the project benefits will be largely intangible, e.g., stability, social cohesion, resilience. The project design, therefore, is based on cost-effectiveness, attempting to minimize costs without forfeiting quality. This will be done in three main ways: using existing structures, seeking synergies with other initiatives, and selecting cost-effective technical solutions. Relying on FSRDC accumulated experience and logistical set-up represents a considerable saving compared to other government agencies, which would lack both know-how and field presence, or to establishing a new one. Also, technical audits of FSRDC output during the implementation of PASU indicate that comparable infrastructure built by other actors is more expensive; for example, standard elementary school blocks built by FSRDC are over 20 percent cheaper than the next cheapest. Close collaboration with DRC development partners and government will also help minimize costs in terms of project preparation, implementation and monitoring. For example: (a) the value chain development study financed by DFID will represent the building block for further analysis and provide the background against which to plan complementing investments; (b) I4S/MONUSCO’s identification of priority road axes for rehabilitation will inform the LIPW sub-component and allow for complementary rehabilitation schemes; (c) the I4S monitoring framework will not only help contextualize project progress but also facilitate joint data gathering efforts (e.g., perception surveys). 60. Rationale for public provision and comparative advantage of the Bank. This grant provides the Bank and the government of DRC (through the FSRDC) the opportunity to build on lessons learned through the satisfactory implementation of PASU. The Bank’s extensive experience funding large-scale CDD and livelihood support interventions in fragile contexts gives it a comparative advantage as a funder for such a project in DRC. Other comparative advantages include its capacity to engage diverse groups in open dialogue, normative functions, and extensive networks of expertise and to leverage additional resources. Most importantly, in a context where the majority of donors primarily finance short-term humanitarian interventions through NGOs, public provision of this five-year project appears as an effective way to contribute to the restoration of the social contract in the targeted areas, a key step in the process of stabilizing the eastern provinces. B. TECHNICAL 61. Project design follows best practices for post-conflict reconstruction interventions. In particular, the CDD component incorporates lessons learned on CDD in fragile states (see relevant section above), and is based on the experience of PASU and the first phase of I4S programming in DRC. Specific attention is paid to conflict analysis and the project will be linked to conflict assessments undertaken under the Dialogue pillar of the I4S. Moreover, a conflict specialist within FSRDC will help mainstream conflict sensitivity in the project, and specialized 19 Barro R (2000). "Education and economic growth." Paris: OECD. 19 NGOs will be recruited to build local capacity for further conflict analysis, prevention and management. The technical quality of the infrastructures constructed/rehabilitated will remain a priority for the Social Fund, and competent civil engineers based in each province will continue validate sub-project proposals, provide training to stakeholders, and control the technical quality of works (in some sectors, national standards are available and will be followed). 62. Findings from ongoing operational research and other stabilization programming will help gradually strengthen project design and implementation. The SPF-funded pilot project will inform project implementation on an ongoing basis thanks to its action research approach. It will in particular help determine the extent to which (a) a strong emphasis on “software” aspects (e.g., context analysis, mediation and cohesion building) contributes to overcome the stress and distrust generated by the conflict situation, and (b) the opportunity of gainful employment through LIPW represents a valid alternative to joining armed groups, as the latter are particularly attractive to jobless (or underemployed) young men. As the pilot just started implementation, its findings will be gradually incorporated in the design of the present project. 63. Finally, the conclusions of technical research on sustainable livelihoods will inform the type of activities that the project will fund at the local level. A study carried out by Adam Smith International (with DFID funding) on livelihoods options provides a solid starting point. However, more in-depth research, in collaboration with government, I4S partners, UN agencies, the private sector, and farmers will inform the choice of agricultural value chains and the strategic road networks in which the project will invest. C. FINANCIAL MANAGEMENT 64. The financial management (FM) of the project will follow an approach similar to the arrangements in place for PASU, which will be strengthened by the additional mitigation measures described below. The proposed FM arrangements, including the mitigation measures, are considered adequate to meet the Bank’s minimum fiduciary requirements under OP/BP10.00. In particular, the FSRDC possesses (a) a Project Implementation manual, (b) a multi-project and multi-site accounting software and (c) an internal audit function. The overall FM risk is considered substantial. 65. The review of present FM arrangements revealed that the following actions will need to be completed: (i) updating the existing Project Implementation Manual (PIM) to capture the specificities of the new project, ensure adequate ownership by the new stakeholders, and strengthen the anti-corruption aspects; (ii) configuring the existing version of the accounting software acquired under PASU’s financing to reflect the new project specificities; (iii) revising the terms of reference of the internal auditor to reflect the new project specificities; and (vi) recruiting an independent external auditor in compliance with acceptable terms of reference. Detailed financial management arrangements are included under Annex 3. D. PROCUREMENT 66. The project coordination unit of the previous project (PASU) will remain the procurement agent for the project until the mid-term review. This arrangement is made in the hope that by that time the new institutions recently set up by recommendation of the new 20 national procurement law will have the required qualifications and experience; at this time, a decision will be taken on the most appropriate approach to be used. The existing PIM was last updated in 2010 and already contains simplified procurement methods to be used for the pilot labor intensive public works. Should there be activities that are jointly financed with other entities (government, donors or private organizations), the procurement process will always follow Bank rules and procedures. 67. FSRDC has developed a procurement plan covering at least the first twelve months of project implementation, indicating the procurement methods to be used for each activity. The procurement plan will be updated, with the prior approval of the Bank, on an annual basis or as required by the Bank to reflect the project implementation needs and improvements in institutional capacity. The agreed and approved procurement plan will determine procurement methods and the contracts to be submitted to Bank prior review and no objection. In line with emergency procedures, sole source contracting may be used more frequently than it would be allowed under normal projects. 68. The following procurement, consultant, and anti-corruption guidelines will apply: • “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. • “Guidelines: Selecting Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers” dated January 2011. • “Guidelines: Procurement of Goods, Works and Non consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers” dated January 2011. E. SOCIAL (INCLUDING SAFEGUARDS) 69. Conflict mitigation. The project impact on conflict mitigation, and thereby on broader stabilization, will be provided and assessed in cooperation with other I4S/STAREC partners. FSDRC will participate in stabilization related assessment missions as needed, and relevant project results will be integrated into and analyzed by the I4S/STAREC structures. Flexible programming will allow sub-project implementation to be adapted to strengthen their contribution to stabilization. Follow-up and, where required, technical or political troubleshooting will be assured through the STAREC’s provincial and national coordination structures. 70. Social Benefits – Poverty, Equity, Gender. The socio-economic impacts of the proposed project are expected to be largely beneficial, both in enhancing social and economic infrastructure and in facilitating access to revenue generation. The implementation of the planned activities will contribute to improved access to basic social services, greater food security, increased rural mobility and trade between rural and urban areas. In addition, the project will strengthen provincial and national integration. Project benefits will be socially inclusive as the project will respond to needs identified through participatory and inclusive processes. The community support component will provide communities with better access to basic collective infrastructure, such as water points, health centers, schools and markets. The employment 21 generation component will be targeted to the poor and have specific measures to ensure the inclusion of women, youth and other disadvantaged groups (see Annex 2). A sample of expected social and poverty outcomes of the proposed project includes the following:(a) job creation and income generating opportunities in rural and urban areas; (b) enhanced transport access and services; (c) rehabilitation of infrastructures to promote the growth of small towns and villages/settlements in the project area; (d) enhanced agriculture production, and (e) increased social cohesion. 71. Consultations. The project concept and implementation strategy builds on a consultation process with several stakeholders: local communities, civil society, local and provincial administration, private sector, national authorities and international donors. Both the Government and the donor community have welcomed World Bank engagement in the stabilization process. Project components are the results of these consultations and designed to respond to the needs assessed and expressed in the Eastern DRC stabilization process. Joint missions will be organized with STAREC and MONUSCO to assess stabilization needs in the project areas, which will inform FSDRC planning. Not surprisingly, North Kivu, which has been most affected by the conflict, faces the biggest challenges and appears to have the lowest implementation capacity. At the opposite end of the spectrum, the government of Orientale province has reiterated its commitment to good governance and appears to have clear plans for development. These differences call for a tailored approach in each province, to leverage local competence and commitment to the extent possible. 72. Safeguards. The main adverse social impacts expected are (a) land acquisition –and the accompanying displacement– in relation to the civil works of components 1 and 2; (b) the potential workload increase for indigenous people , which would raise their vulnerability unless adequate social assessments are carried out prior to sub-project funding and mitigation measures are prepared and implemented (e.g., Indigenous People’s Planning Framework). Also, project activities may disturb the social cohesion and sources of livelihoods for indigenous people, and resentment may arise from non-beneficiary communities or individuals feeling left out. Finally, this project will operate in a post-conflict area where many people have been killed. The probability of encountering a mass grave during the works is not negligible. To mitigate adverse impacts, three social safeguards policies are policies are triggered: OP/BP 4.12/BP Involuntary Resettlement, OP/BP 4.11, Physical Cultural Resources and OP/BP 4.10, Indigenous People. Policy instruments will be prepared and disclosed no later than three months after effectiveness date, as stipulated under the exceptional deferral paragraph 11(a) of OP 10.00. In particular, the Resettlement Policy Framework (RPF) will address potential land acquisition or loss of economic activity on the part of individuals or groups of individuals in project intervention zones, while the Indigenous Peoples Planning Framework will make sure the indigenous peoples established in the project targeted areas have been consulted and some specific development activities in their favor are planned. Subject to the findings of the social screenings and assessments to be carried out prior to approval of sub-projects, Resettlement Action Plans and/or Indigenous Peoples Plans may be prepared. Finally, dialogue and sensitization activities will be undertaken by the project, implementing partners, and I4S/STAREC partners to ensure transparency in the beneficiary selection process. 22 F. ENVIRONMENT (INCLUDING SAFEGUARDS) 73. The physical environment of the target provinces is characterized by forests (Province Oriental, 350.000 km2), savanna, and highlands/mountains and hills (North and South Kivu). Rainfalls of 1000 to 2000 mm a year make the hilly landscapes sensitive to erosion and landslides are frequent. This situation induces potential risks for deforestation and soil erosion in conjunction with agriculture and road rehabilitation works. The three provinces together cover an area larger than Spain, Denmark, the Netherlands and Belgium together. 74. The project is classified as Environmental Category B since potential adverse environmental impacts associated with its investments are generally small-scale and site specific, thus manageable to an accepted level. Under Component 1, the Project will finance demand-driven construction/rehabilitation of key public social and economic infrastructures such as schools, health centers, water points, and markets. Potential negative impacts will be limited and are expected to be short-term (for example, the rehabilitation of open water sources may temporarily increase risks for water borne diseases in the surrounding area, while pollution and loud noises can be expected during part of the construction works for community buildings). The only long-term negative environmental impact could be linked to water and sanitation sub- projects (e.g., construction of latrines for a school), if the water table is affected. Component 2 will finance the rehabilitation of rural roads and small-scale productive agricultural investments. Potential negative impacts are limited and may include loss of vegetation (and an increase in solid waste in case urban LIPW are undertaken, linked to street and drainage systems cleaning). The rehabilitation and maintenance of small irrigation systems may increase risks for water borne diseases in the surrounding area and have potential adverse impacts on natural habitats. The Component design and implementation will be carried out in accordance with environmental procedures acceptable to IDA and include satisfactory measures to deal with these risks. 75. Three environmental safeguard policies are triggered: OP/BP 4.01 on environmental assessments, OP/BP 4.04 on natural habitats and OP/BP 4.09 on pest management. Since the locations of future activities are not yet known, the appropriate safeguard instruments in accordance with these policies are an Environmental and Social Management Framework (ESMF) and an Integrated Pest Management Plan (IPMP). The ESMF will outline an environmental and social screening process for component activities (e.g., Guidelines for an Environmental Management Plan, and Environmental Guidelines for Contractors). All these safeguard instruments will be prepared in full compliance with World Bank and national safeguard policies, including a broad consultation framework involving all relevant stakeholder groups, both public and private, as well as civil society. The ESMF, RPF, and IPPF will be disclosed three months after effectiveness in accordance with World Bank emergency project preparation guidelines. The IPMP has been disclosed before negotiations. 23 ANNEX 1: RESULTS FRAMEWORK AND MONITORING DRC: Eastern Recovery Project Project Development Objective (PDO): to improve access to livelihoods and socio-economic infrastructure in vulnerable communities in the eastern provinces of DRC Responsi Description Data Baseline bility for (indicator definition PDO Level Fre- Source/ Core Unit of Cumulative Target Values** Data etc.) Results quency Metho- Measure Collectio Indicators* dology n YR 1 YR 2 YR3 YR 4 YR5 Direct project Number/ 0 65,900 199,800 315,800 492,700 643,400 By Monitoring FSRDC This indicator will be beneficiaries percentage semes- and calculated by adding (number), of which female ter supervision up the number of female reports direct project (percentage) beneficiaries (broken down by gender) of: (i) rehabilitated/ constructed infrastructures; (ii) conflict prevention and mediation trainings; (iii) LIPW; and (iv) livelihoods and employment generation program. The female percentage will be calculated off the total number of female direct beneficiaries. 24 Increased access to Average 0 20 25 30 30 30 Twice Monitoring FSRDC This indicator will be improved increase in a year reports broken down by type community social access of social services, and economic (percent- including: (i) % infrastructure tage) percentage increase in primary school enrollment; % increase in number of medical consultations; % increase in access to water Average increase Percentage 0 0 10 15 15 15 By Monitoring FSRDC in annual revenues increase semest and among er supervision beneficiaries of the reports livelihood support sub-component (by sex) Beneficiaries of Percentage 0 50 50 60 60 60 Twice Monitoring FSRDC the livelihood a year and support supervision subcomponent reports whose revenue increased (by sex) INTERMEDIATE RESULTS Intermediate Result (Component One): Support to community resilience Number of Number 0 30 90 150 220 300 Every Monitoring FSRDC Equivalent to 80% of community social semester reports the budget allocated to and economic this component infrastructures constructed or rehabilitated (by type of infrastructure, 25 e.g., water points, schools, health centers, markets, etc.) Improvement in Percen- 0 15 20 20 20 20 Annual Perception FSRDC Social cohesion will social cohesion tage of survey be measured using a among people composite index that beneficiaries of surveyed will include: level of community sub- whose acceptance of others projects social into the community; cohesion level of trust in other score community members; improved propensity to work collectively to address development challenges Number of Number 0 20 40 60 85 130 Every Monitoring FSRDC created or semester reports strengthened community structures for conflict prevention, mediation and resolution Number of action Number 0 10 23 40 60 80 Every Monitoring FSRDC plans for conflict semester reports transformation adopted by the communities Representatives Percentage n.d. 5 10 15 15 15 Every Monitoring FSRDC Vulnerable or in community- semester reports marginalized groups based decision include women, youth making and (under 30), ethnic management minorities and structures that are displaced/returned 26 from the people (no double vulnerable or counting). marginalized beneficiary population Intermediate Result (Component Two): Employment and livelihoods generation Person days of Number 0 .125 .25 .48 .87 1,3 Monthly Monitoring FSRDC temporary of days million million million millio million reports employment n created (by gender) Beneficiaries of Number 0 1,500 3,000 5,800 8,000 12,000 Quarterly Monitoring FSRDC safety net reports programs – cash- for-work, food- for-work and public works Beneficiaries of Number 450 900 1,740 2,660 3,600 Quarterly Monitoring FSRDC safety net reports programs -female Roads Km 0 100 270 450 750 1100 Every Monitoring FSRDC rehabilitated semester reports LIPW Percent 0 30 40 50 60 60 Every Monitoring FSRDC beneficiaries age semester reports completing a training program Beneficiaries Number 0 0 7200 14400 21600 28800 Every Monitoring FSRDC The term technology who have semester reports includes a change in adopted an practices compared to improved currently used agricultural practices or technology technologies (seed promoted by the preparation, planning project (number) time, feeding schedule, feeding 27 ingredients, post- harvest, storage, processing, etc…) Client days of Number 5,000 15,000 28,000 40,000 50,000 Every Monitoring FSRDC Refers to all training training provided semester reports provided under component 2, including agricultural extension, agro- processing, organizational skills, etc. Intermediate result (Component Three): Capacity building Capacity building Number 12 24 36 48 60 Annual Monitoring FSRD events for local reports C authorities, civil society and the FSRDC Technical audit Yes/No No yes yes yes yes no Annual Monitoring FSRD implemented reports C Direct project Percent N.A. 70 70 70 70 70 Annual Report of FSRD beneficiaries age beneficiary C surveyed who satisfaction feel that project survey investments reflect their needs Sub-projects or Percent N.A. 70 70 75 75 75 Annual Report of FSRD investments for age beneficiary C which satisfaction arrangements for survey community engagement in post-project sustainability and/or operations and maintenance are established 28 Sub-projects Percen- N.A. 50 70 80 95 95 Every Monitoring FSRD implemented that tage semester reports C were subject to environmental screening 29 ANNEX 2: DETAILED PROJECT DESCRIPTION 1. Over two decades of conflict have resulted in widespread and repeated displacement, acute suffering, exclusion and poverty, citizen disempowerment and the breakdown of communal bonds. In line with the 2011 World Development Report, 20 building community resilience through transforming institutions -- particularly those related to enhancing citizen security, justice and jobs-- and restoring confidence through collective action are fundamental to breaking the cycle of conflict and violence. The project will finance activities aiming at improving access to basic services through collective action and at creating employment opportunities. However, it will focus primarily on testing two research hypotheses underlining the design of the planned Eastern Recovery Project, and more in general the content of donor initiatives in support of stabilization and post-conflict recovery in DRC as well as in other countries facing similar situations. Component 1: Support to Community Resilience (approx. US$31 million) 2. Community-Driven Development (CDD) programs have been used extensively to address the challenges presented by fragile and post-conflict situations, and emerging evaluation evidence suggests considerable success in service delivery. 21 The experience in DRC also indicates that CDD approaches are quite effective in improving community access to basic infrastructure and services, both country-wide and in the Eastern provinces in particular. At the same time, community participatory processes may also have peace building impacts, for example by incentivizing collective action across conflict divides or by contributing to local institution building. In Eastern DRC, the main international actors involved in CDD have adopted a conflict-sensitive approach, whereby the “regular” CDD approach is supplemented by specific activities aimed at identifying local conflict drivers, strengthening local governance, mediating disputes, and fostering social inclusion and pacific cohabitation. 20 World Bank, World Development Report: Conflict, Security and Development, 2011, p. 103. 21 Barron, Patrick (2010): “CDD in post-conflict and conflict-affected areas: Experiences from East Asia”, Background paper for World Development Report 2011. Wong, Susan (2012): “What have been the impacts of World Bank Community Driven Development Programs? CDD impact evaluation review and operational and research implications”, Social Development Department, World Bank. 30 3. This component will focus on strengthening community resilience through: (a) improving access to social and economic infrastructure; (b) facilitating and improving inclusive community participation processes; and (c) strengthening local conflict prevention and resolution mechanisms (these last activities will be financed initially, but may be scaled down or dropped as results from the impact evaluation financed under the SPF grant become available or as the situation on the ground evolves). As every community is different, interventions will be tailored to the specific ethnic, social, physical and economic dynamics of each community, paying special attention to the needs of vulnerable groups such as women and the displaced. In particular, assistance will be provided to returning individuals for their reintegration into the community (but only income support provided to those still in displacement). The PIM will specify the mechanisms to ensure social inclusiveness and discourage elite-capture. 4. Sub-project preparation and selection processes will be almost similar to those successfully used under the Emergency Social Action Project (PASU,2004-13), a US$101.8 million IDA- funded project implemented by FSRDC that built over 1,000 community infrastructures across the country’s eleven provinces. These processes rely on local executing agencies, i.e., NGOs and construction companies, contracted by FSRDC to work with communities (these will generally be villages represented by Community Management Committees). They are as follows: • FSRDC conducts a community sensitization campaign to share information about the project, and pre-qualifies and trains local NGOS and contractors; • Communities identify an NGO (pre-qualified by FSRDC) to help them prioritize their needs and develop a sub-project proposal, which is submitted for funding to FSRDC; • FSRDC shortlists proposals that are eligible for funding according to criteria listed in the PIM, and conducts field visits to confirm the needs; • Proposals are submitted to a provincial committee (which includes representatives from different ministries and civil society) for review and recommendation, to ensure alignment with general and sectoral priorities and programs; • Funds are provided to the communities for sub-project implementation; and • NGOs help communities to implement their sub-projects and organize the necessary maintenance activities. 5. The conflict/post conflict context requires that risks of conflict at the local level be taken into consideration in the project design and that projects are undertaken to have a conflict mitigating effect, despite the urgent need of improving basic infrastructures. Hence, NGOs specialized in conflict prevention and management will be contracted to train key stakeholders in conflict assessment and management and close cooperation will be sought with I4S/STAREC partners with experience in conflict management who are active in the area. In areas where existing conflicts may impact ability to deliver the sub-projects proposed or profit from them (for instance areas recently liberated from rebel control, or where interethnic tension is high), local capacity to prevent and manage conflicts will be strengthened through targeted activities such as 31 in-depth conflict analysis and participatory conflict management plans. Results from a pilot project financed by an SPF grant and from similar projects financed by other donors (in particular DFID and USAID) as well as the evolving security situation may suggest changes to the approach adopted to ensure conflict sensitivity and build social cohesion at the community level over the life of the Project. 6. With a community sub-project ceiling of US$100,000, a total of at least 310 communities would be covered by the component. Selection criteria will be detailed in the PIM and include expected contribution to area stabilization, security risk level and complementarity with the activities of other actors (e.g., DFID and USAID also finance large CDD-type programs in the East). Based on the experiences of PASU and the first phase of the I4S, it is expected that community priorities will include rehabilitation and construction works in the health, education, water and sanitation, trade (markets) and transport (small bridges) sectors. For the moment, it is not envisaged to restrict the eligibility of sub-projects by type/sector, though the availability of important funds for a given sector or type of infrastructure may later result in excluding them. 7. The component will finance: (i) Information, consultation, preparation and training including: informing communities and local authorities about component activities and approaches, organizing and training community members (including to prioritize and select community infrastructure needs), carrying out preparatory economic and social analysis to identify operational challenges and resilience factors; (ii) Community infrastructure, built or rehabilitated either by local contractors or by communities themselves, and including equipment where appropriate (e.g., desks for schools); (iii) Technical assistance and supervision to accompany communities throughout sub-project implementation and ensure high technical quality; and (iv) In-depth and ongoing conflict-sensitivity analysis, mediation, conflict management training and support at least at the project onset. Component 2: Livelihoods and Employment Generation (approx. US$31 million) 8. Decades of violence in the Eastern DRC have led to the sharp decline of agricultural production, the backbone of the region’s economy, in an area once known as the breadbasket of the country. Many farmers have been displaced by the recurring conflicts, and those who still have access to land practice subsistence agriculture due to the lack of access to markets, inputs and technical assistance. Low yields are further reduced by poor post-harvest handling, in particular the lack of adequate storage. Roads are impassable in many parts of the region as a result of insecurity and decades of neglected maintenance. Even when producers have a surplus for sale, agricultural production is very often purchased un-processed at a very low price because of the lack of processing facilities and exported to Burundi, Rwanda or Uganda, where it is processed into flour or other finished products (coffee) and returned to the DRC or exported at considerably higher prices. 32 9. The Livelihoods and Employment Generation Component seeks to address the most pressing of the barriers described above, in an effort to improve household incomes in rural communities of the targeted provinces, and also to create opportunities for returning IDPs and demobilized fighters. In addition, an important underlying hypothesis of the proposed livelihoods strategy is that, by creating improved livelihoods opportunities, particularly for youth in rural communities that have traditionally served as the recruiting grounds for the many armed groups operating in these provinces, the Project will help decrease the likelihood that young men will be attracted to joining an armed group. 10. The component will support employment creation through two sub-components, Labor Intensive Public Works and Support to Agricultural Value Chains, implemented jointly along strategic corridors of roughly 60-100 km in length, as improved access to markets is a pre- requisite for the development of agricultural production. Target areas will be selected in consultation with the local and provincial authorities as well as MONUSCO and other I4S actors to avoid duplication of effort, and promote synergies. Livelihoods activities will be designed to do no harm and, where possible, diminish the potential sources of conflict between different groups. For example, by clearly demarcating agricultural and grazing areas, and improving the nutritional quality of grasses in grazing areas, the project will help decrease the tension between farmers and herders. Livelihoods activities will be inclusive of returning Internally Displaced People (IDPs) and refugees and/or IDPs who have chosen to settle in their host community, while care will be taken to ensure that all vulnerable groups in the host communities can partake into the benefits from the livelihoods component. 11. A total of about US$31 million will be invested in employment creation. In light of the persistent joblessness and poverty, as well as of the need to provide immediate tangible benefits to the region, LIPW will likely absorb more than half of the funds available for this component (about US$ 19 million). The remaining $12 million will finance the development of agricultural value chains selected because of their growth and poverty alleviation potential in the target areas. 12. The component will finance: (i) sensitization and communications campaigns to inform communities and local authorities about component activities and approaches, and carry out preparatory economic and social analysis to identify operational challenges and resilience factors; (ii) the cost of LIPWs including tools and small equipment, management fees, participants’ wages and insurance against work-related accidents and other operating costs; and (iii) goods, services, training, technical assistance and other relevant operating costs for productive agricultural activities. Subcomponent 1: Labor Intensive Public Works (about US$19 million) 13. Road rehabilitation will be the main activity supported by the sub-component, as both local authorities and development partners have been unanimous in indicating accessibility as a crucial and urgent ingredient for both stabilization and development. The rehabilitation of rural roads through LIPW facilitates the evacuation of agricultural produce while putting cash into the hands 33 of local people, particularly returning IDPs and those without land. In an effort to address the high unemployment rates and dismal state of infrastructure in the East, a number of LIPWs programs have already been supported by the donor community (e.g., UNOPS under the I4S) primarily focusing on road maintenance and rehabilitation. They have proven to be an effective means to create short-term employment while contributing to the improvement of public infrastructure and other public goods. These programs have established a reasonably good supply of local contractors familiar with labor-intensive techniques and the project implementing agency (SFRDC) has experience with managing LIPW programs. 14. The project will select strategic corridors (of about 60-100 km) connecting rural centers that combine a high density of population at risk and a high agricultural potential, where rural road rehabilitation will be carried out along with investments to strengthen selected agricultural value chains. Roads targeted for rehabilitation will be chosen in collaboration with local authorities and in accordance with I4S priorities. Criteria guiding the selection will include (a) synergy with other planned rehabilitation, and in particular with MONUSCO’s work on the main axes that run parallel the Rwandan and Ugandan borders, and (b) relevance for conflict mitigation, security and development. 15. Other types of possible LIPW may also be considered selecting them on the basis of community priorities and their suitability for a labor-intensive approach (if their labor cost content is higher than 45% of total cost). They may include, for instance, reforestation and other soil and water conservation works (also as natural disaster prevention measures), and garbage collection and street cleaning in urban centers. In rural areas, LIPW would be implemented during the agricultural off-season, to avoid interfering with agricultural employment/livelihoods. 16. It is mandatory in DRC to pay workers the official minimum wage (equivalent to about US$3.00/day). It will therefore not be possible to use a wage level lower than this official minimum wage as a self-targeting instrument for selecting the poorest unemployed; on the other hand, US$3.00/day will only attract poor people (other LIPW programs pay US$3.00/day or more). In any case, it is expected that potential candidates will far exceed the number of jobs offered. In this case, the selection will include (i) a transparent lottery process, and/or (ii) a community-based approach for sharing available jobs equitably among households or targeting the neediest households. If necessary, extra measures will be taken to ensure that the more vulnerable groups are represented, for example by setting female quotas and ring-fencing places for IDPs or ex-combatants. The nature of the work, often with physically demanding tasks, may also lead to discrimination with regard to women. Particular care will therefore be taken to include tasks which are more suited to their abilities. Also, work may be paid on a piece rate basis to facilitate women attending their other obligations. 17. It is estimated that, on the basis of an average cost of about US$17,000/km of road rehabilitation (including culverts but excluding any significant bridge), about 1,100 km of rural roads could be rehabilitated over the project period. This would create about 1.3 million person days of work for about 16,250 families (4 months at 20 days/month for each household, one person/household), and distribute over US$ 3.9 million in wages in project areas. 34 18. Considering the temporary nature of LIPW employment, LIPW will be supplemented by activities aimed at increasing participants’ employability at the end of their employment: (i) a voluntary savings program to help participants put aside part of their wages as start-up capital for initiating post-LIPWs activities; (ii) training in life skills (e.g., conflict prevention, hygiene, HIV prevention, gender relations); and (iii) training in basic business (e.g., understanding the economic environment, setting up an income-generating activity, preparing a business plan for a micro-enterprise, basic accounting principles) and technical skills in areas where the local job market offers employment opportunities (agriculture and other non-agricultural rural activities, to be determined on the basis of local market analysis). If requested by participants, training activities may also include functional literacy. 19. It is envisaged that most training will be compulsory and carried out one day/week by suitable providers. It will be paid as other work days. Training requiring more time than one day per week during the employment period will be offered but require a participant’s contribution to promote responsible uptake. Subcomponent 2: Support to Agricultural Value Chains (about US$12 million) 20. The agricultural value chain component will increase the food security and incomes of agricultural households along the same strategic corridors targeted for the rural roads to be rehabilitated under the LIPW sub-component above. The targeted provinces have a good agricultural potential. Each produces a wide range of food and cash crops, including manioc, maize, rice, banana, beans, tea, coffee and cacao. Livestock and fishing in the lakes and rivers and in man-made ponds also have considerable potential. Under this sub-component, the project will support priority productive investments/activities in priority agricultural value chains selected through a participatory process on the basis of their impact on household food security and income generation potential. 21. Project support will address constraints all along the selected value chains (on-farm productivity, post-harvest handling, storage and processing) in an effort to strengthen the hand of small-scale farmers in the value chain and get more profits returning to farmer households and villages. Value chain coordination will be done through “innovation platforms” which will also be used to plan and deliver activities aimed at organizing/strengthening farmers groups and/or cooperatives, delivering training and extension, establishing and managing improved storage and agro-processing facilities as well as small hydro-electric plants to power irrigation and processing equipment. 22. The investments/activities under this sub-component will be supported through a Livelihood Innovation Fund (LIF), managed by the FSRDC, that will provide grants complementing beneficiaries’ own resources and contributions (in kind or cash) toward eligible activities such as 35 those mentioned above as well as to other activities that may emerge during project implementation and which would contribute to sustainable employment and improved household incomes for low-income people living in the target areas (e.g., vocational training, agricultural research activities, private investments with significant positive externalities for the communities such as seed multiplication activities). 23. Producers will be organized into groups and suitable NGOs (pre-qualified by FSRDC) will help them to prioritize their needs and develop sub-project proposals. Sub-project proposals will include the up-front training that may be needed to make the best possible use of the investment. They will be screened by FSRDC according to criteria listed in the PIM, and then submitted to the local Agricultural and Rural Development Committee (Comité agricole et rural de gestion - or CARG), which includes representatives from relevant ministries and civil society, for review and recommendation. 24. If accepted, a sub-project will receive support from the LIF. LIF support will vary according to the type of investment/activity to be undertaken (productive/capacity-building), degree of public/private good and beneficiary types. For some eligible productive investments, beneficiaries may need to mobilize financing from local financial institutions, with assistance from the project. The list of eligible activities, expected community/beneficiary contributions (form and level) and implementation procedures will be detailed in the PIM. Component 3: Capacity-Building (approx. US$17.1 million) 25. The component will support (i) capacity-building activities for all actors playing a role in project implementation; and (ii) the management of the project with the objective of ensuring efficient, effective, transparent and accountable project delivery. The component will finance the provision of goods, consultant services, training and relevant operating costs, as well as the setting up and operation of a comprehensive monitoring and evaluation system. Given the high incidence of corruption in the country, funding will be made available to support a robust internal auditing function. 26. Capacity building will be provided on a need-basis to national, provincial and local actors who will play a direct role in project implementation. Provincial and district (territoires) authorities will be offered training and other capacity building opportunities (e.g., study visits to another province or district) to strengthen their ability to play a constructive role in project implementation and, more in general, to contribute to the project goal; it is expected that governance-related topics will be identified as a priority. Other public and private actors at the provincial and local level may need up-front and subsequent training on technical subjects, particularly in relation to Component 2 (e.g., the organization of maintenance on rehabilitated feeder roads, cooperative development, and support to specific agricultural value chain development) but also on cross-cutting themes such as conflict or gender sensitivity. 27. The project will strengthen the capacity of existing local Savings and Loan Associations programs to allow beneficiaries to save and have access to small loans for emergency/consumption or investment purposes (such as for productive investments under Component 2). In particular, it will promote the formation of micro-savings groups that can 36 affiliate with existing local Savings and Loan Associations or other microfinance institutions, providing technical assistance from an experienced micro-savings specialist as needed (it is expected that women savings and loans groups will be supported by a regional IDA-financed project under preparation and targeting the same DRC provinces, so activities will be mindful of possible overlapping). Technical assistance may also be made available from international sources if it becomes apparent that Congolese actors cannot quickly acquire the required competence level. In this case, the mandate of the international assistance will include the transfer of capacity to local actors. 37 ANNEX 3: IMPLEMENTATION ARRANGEMENTS Project Administration Mechanisms Project Implementing Agency 1. The project will be implemented by the Social Fund of DRC (FSRDC), a public organization created in 2002 to improve the living conditions of the poor by making available to communities the resources --financial and human-- necessary for implementing self-selected sub-projects. FSRDC has successfully managed the Emergency Social Action Project and its two additional financings (2004-13), a US$101.8 million IDA-financed operation to improve community-level infrastructure using a CDD approach (e.g., schools, feeder roads, water supply, rural electrification, markets), as well as to finance medium size inter-communal and urban infrastructure, secondary school scholarships and labor-intensive public works (public works were also funded by a US$5 million SPF grant). The Implementation Completion Report of the project and its two additional financings confirms the impressive results achieved despite the challenging context as well as the good reputation enjoyed by the implementing agency – including a reputation for good governance and high technical quality. Overall, FSRDC carried out its fiduciary responsibilities in a satisfactory manner, to the point that it was asked to provide fiduciary services for another IDA project. Environmental safeguards have also been respected in accordance with the Environmental and Social Management Framework approved by the Bank. 2. The Social Fund will be responsible for project implementation through its headquarters in the capital and offices in each of the eastern provinces. FSRDC responsibilities will include: (a) selecting (in coordination with I4S/STAREC-partners) and funding community proposals, (b) selecting, sub-contracting and supervising local executing agencies (primarily NGOs) to work directly with communities or to manage labor-intensive public works, (c) selecting and contracting consultants to carry out studies and evaluations, (d) financial management and procurement in accordance with Bank rules, and (e) monitoring overall project implementation and reporting on it as appropriate, both to the Bank as well as to the broader I4S/STAREC M&E- framework. Based on past experience, the allocation to management costs of local executing agencies working under Component 1 will be 12% to attract a large number of organizations with strong accountability systems. The remuneration of local executing agencies working under Component 2 will be negotiated on a case by case and depend on the nature of the works. 3. FSRDC’s Board of Directors will be responsible for providing general oversight, including reviewing annual work plans, budgets and reports, receiving financial audits, and approving the recruitment of senior staff. It comprises representatives of key government offices (six ministries 22 and the Presidency); representatives from faith-based organizations, UN agencies, the private sector, and community based organizations; and FSRDC General Coordinator. 22 The Ministry of Finance, the Ministry of Primary, Secondary and Professional Education, the Ministry of Health, the Ministry of Social Affairs, Humanitarian Issues and Solidarity, and the Ministry of Gender, Children and Family. 38 4. The FSRDC will need to strengthen its technical staff to reflect its new involvement in sustainable livelihoods and the added emphasis on conflict management. In particular, experts in private sector development/employment generation and in labor intensive techniques will be required in the three provincial offices. In addition, at least one expert in conflict transformation will be needed to train the NGO(s) sub-contracted to provide conflict management training and support at the community level and supervise their work. Coordination 5. Given the multitude of stakeholders and actors in the eastern provinces, it is crucial that project-financed activities be planned and implemented in close coordination with other initiatives. For the implementation of PASU, FSRDC established Provincial Consulting Committees comprising representatives of key provincial ministries to examine sub-projects proposed for funding and make recommendations to ensure consistency with sectoral policies and other planned investments. Provincial committees met at least twice a year and received regular updates from the FSRDC. In 2009, however, a presidential decree created the Joint Technical Committees as the provincial coordination mechanism for all things related to STAREC/I4S and stabilization/peacebuilding. The Joint Technical Committees meet roughly every two months. They are chaired by the governor of the province, and include all relevant ministers as well as heads of international agencies, UN sections and international NGOs. Detailed programs and progress of activities are discussed in technical sub-committees. It is therefore envisaged that the Provincial Consulting Committees --and their responsibilities vis-à- vis project implementation, will be subsumed under the Joint Technical Committees. 6. Coordination and involvement of government actors will also be pursued at the provincial (territoire) level, especially in the context of Component 2. The composition of coordinating bodies will depend on the specific activity financed, and will be detailed in the PIM. In the case of road rehabilitation, for example, they would include representatives of the Road Bureau (Office des Routes), the Directorate for Agricultural Feeder Roads, the Ways and Drains Bureau (Office des Voiries et Drainage), and the Agricultural and Rural Management Committees (known as CARG). Targeting and Selection 7. Targeting of beneficiary communities will be done on the basis of criteria clearly stated in the PIM. These criteria will include: security risk level; community dynamism (for Component 1); previous, ongoing or planned support from other sources; proximity to a major market (for Component 2); and agricultural potential (for Component 2). Care will be taken to ensure that targeting criteria are applied in a transparent and objective way, and are widely known by all stakeholders. The project communication strategy will contribute in this sense. 8. Selection of individual beneficiaries for Component 2 will vary according to the activity and the location. Concerning LIPW, experience suggests that a transparent lottery system supplemented by quotas for specific vulnerable groups (e.g., women or IDPs) would be the most suitable way to go in urban settings. However, in rural areas it would be more appropriate to have a socially-driven process whereby village authorities would be responsible for ensuring that the benefits from the employment opportunity are distributed across households in a way that is 39 considered fair by the whole community. Concerning agricultural value chain development, because of logistics/ease of access and the need for economies of scale, the sub-component will target the poor but easily accessible and open to trade/progress farmers. At least at the project start, farmers will be encouraged to join existing groups (forming groups ex nihilo is probably not realistic in this kind of project). It is recognized that, in general, farmers belonging to or joining farmer groups are not the smallest/poorest and therefore the poorest, most remote farmers will probably not benefit from this sub-component. But the subcomponent is meant to support a transition to self-sustained growth and development, complementing the work of a multitude of humanitarian efforts that will target the poorest farmers. Financial Management 9. The Country Financial Accountability Assessment (CFAA), the Public Expenditures Review (PER), and the Public Expenditure and Financial Accountability (PEFA) 2008 and 2012 have shown an unsatisfactory economic and financial control environment including weak budgeting preparation and control, financial reporting, external audit and human resources. In-depth structural reforms are consequently required in the areas of economic governance, public expenditure management, financial sector and public enterprises to strengthen capacity in the public administration. To this end, with the support of the donor community, the Government of DRC has undertaken a series of Public Financial Management (PFM) reforms in budget preparation and execution, adhesion to Treasury forecasts, preparation of regular budget execution reports, and simplification of the national budget classification system. The first critical step of these series of PFM reforms is the adoption in July 2011 of a new PFM organic Law preceded by the adoption of a new Procurement code in December 2008. Additional decrees are being finalized to further clarify the organic Law. Yet, there is reason for cautious optimism; since it will take time for these reforms to yield substantial improvements in the management of public funds. As a result, the overall country fiduciary risk is still considered High. 10. The repeated PEFA, just concluded at the end of 2012, took stock of the areas of progress and revised the existing PFM strategy plan accordingly. This will pave the way for a new PFM Technical Assistance operation. In that vein, an assessment of the use of the country national PFM systems (UCS) has been undertaken in April 2013 with the aim to identify areas in which these systems could be relied upon for the implementation of Bank-financed projects. The UCS assessment report is in process to be finalized. While waiting for the outcomes on the use of country system assessment, the proposed project will (i) be entrusted at the FSRDC, (ii) and rely on PASU fiduciary arrangements that will be strengthened. Risk Assessment and Mitigation Measures 11. The Bank’s principal concern is to ensure that project funds are used economically and efficiently for the intended purpose. Assessment of the risks that the project funds will not be mismanaged is an important part of the financial management assessment work. The risk features are determined over two elements: (i) the risk associated to the project as a whole (inherent risk), and (ii) the risk linked to a weak control environment of the project implementation (control risk). The content of these risks is described below. 40 Risk Risk Risk Mitigating Measures Risk after Conditions Remarks rating Incorporated into Project mitigation For Design measures Effectiveness (Y/N) INHERENT RISK S S Country level H Finalize the preparation of H N The Bank last Delay in the the current project (US$ 26 assessment implementation of million) in support of the (September 2012) of the different PFM PFM reforms. This the implementation reforms that might operation will be prepared of the existing PFM hamper the overall under the Bank leadership strategy has shown an PFM environment. as to address the key new acceptable progress. challenges the country is facing. Rely on the existing coordination unit in charge the PFM reforms which has benefited from Bank – DFID initial TA. Entity level M M N (already in None except FSRDC is familiar with place) additional workload. IDAFM procedures and staffed with experienced fiduciary consultants. Project level H FSRDC will strengthen ex- H N The project funds ante and ex-post control of Over may not reach all funds allocated to the implement beneficiaries and implementing entities. The ation would be used for scope of the external audit goals other than the and Bank’s FM supervision intended purposes. will include review of expenditures incurred at all levels. Project’s staff fiduciaries capacity will be strengthened to strictly adhere to the fiduciary procedures included in the Project manual. CONTROL RISK S S Budgeting M Annual work plan and M Weak budgetary budget prepared each year. execution and The project FM Manual of control inducing Procedures will define the budgetary arrangements for budgeting, overspending or the budgetary control and the inefficient use of requirements for budgeting funds. revisions. Accounting M M N (in place) Risk of increasing of The current FM staffing The PASU’s the FM team arrangement is adequate but accounting software workload leading to may be strengthened with which has multi some delays in the additional accountants based project, multi sites submission of the on the work load and multi donors’ required reporting features will be used. Internal S S N 41 Controls and (i) Update the PASU’s Internal Audit existing manual of The PASU’s procedures to capture the manual of specificities of the new procedures used by project; (i) use of the FSRDC doesn’t internal audit unit to ensure describe the that the project complies specifics of the new with the procedures; and project Internal (iii) review of WA controls procedures. submitted by decentralized entity prior to payment. Funds Flow S (i) Payment requests will be S N (i) Risk of misused approved by the Coordinator of funds and (ii) use and the administrative and funds to pay non financial manager prior to eligible purposes disbursement of funds, and (i) Risk of misused (ii) the ToRs of the external and inefficient use auditors will include field of funds; and (ii) visits (physical verification delays in transfer of goods, services acquired). and justification of advances made to decentralized offices. Financial M M N Reporting (i) A computerized accounting system in place (i) Delay in the and adequate staffing submission of IFRs arrangements are in place due to the increase under PASU. in the PCU (ii) The current content and activities; format of the PASU’s IFR are acceptable to IDA. The (ii) format and IFR of the new project will content of the IFR use the same format and may not be content. appropriate External S S N Auditing Recruitment of an external Three auditor acceptable to IDA in months Scope of the audit line with International after may not cover key Accounting Standards effectiven issues; poor (including fraud and ess performance of the corruption). external auditor; or delays in submission of audit reports Fraud & H Anti-corruption action plan H N Corruption including a specific safety Over Possibility of mechanism that enables implement circumventing the individual persons and ation internal control NGOs to denounce abuses system with or irregularities will be colluding practices prepared in addition to the robust FM arrangements 42 as bribes, abuse of designed to mitigate the administrative fiduciary risks. The positions, mis- implementing agency will procurement..., is a prepare a code of conduct critical issue. including clear procedures for disciplinary action. Overall FM risk S S 43 12. The overall risk rating is Substantial. Financial Management Action Plan to reinforce the control environment Issue Remedial action recommended Responsible Completion Effectiveness entity conditions Information system Upgrade the existing accounting software FSRDC Three months N accounting version acquired under PASU’s financing after software to reflect the new project specificities effectiveness Administrative, Update the current PASU’s manual of FSRDC Three months N Accounting and procedures (i) to include the specificities after Financial Manual of the new project; (ii) ensure adequate effectiveness of procedures ownership by the new players; and (iii) strengthen the anti-corruption aspects. Internal auditing Revision of the ToRs of the current FSRDC Three months N internal auditor to reflect the new project after specificities. effectiveness External financial Recruitment of the external auditor FSRDC Three months N auditing acceptable to IDA after effectiveness 13. Governance and anticorruption considerations. The country political situation has weakened the governance and corruption environment. In the context of the project, the following governance and anti-corruption measures are required to enhance accountability during project implementation: (i) an effective implementation of the fiduciary mitigation measures should contribute to strengthen the control environment; (ii) an appropriate representation and oversight of the Board of Directors involving key actors and donors, as well as the transparency in both operation implementation and dissemination to stakeholders and the public during project implementation; (iii) the TOR of the external auditor will comprise a specific chapter on corruption auditing; (iv) FM manual of procedures will include anti- corruption measures with a specific safety mechanism that will enable individual persons and NGOs to denounce abuses or irregularities; (v) measures to improve transparency such as providing information on the project status to the public, and to encourage participation of civil society and other stakeholders will be built into the project design and (vi) an Anti-corruption action plan will be prepared in addition to the robust FM arrangements designed to mitigate the fiduciary risks. 14. Staffing and Training: The FSRDC staffing should be adequate and commensurate with the extent of the operations and activities under the project; should be sufficient to maintain accounting records relating to project financed transactions; and should be able to prepare the project’s financial reports. Currently, FSRDC is staffed, on the FM side, with (i) a qualified and experienced FM Manager in charge of the supervision of all FM activities of the project; (ii) an experienced Accountant; and (iii) an accountant in each of the provincial offices. On the internal audit side, the current arrangement is acceptable and will be applied to the new project. The ToRs of the internal auditor will be revised at the latest three months after effectiveness to take into consideration the new project specificities. The team will have the overall FM responsibility over budgeting, accounting, reporting, disbursement, internal control and auditing. The staff will have its capacity reinforced over the project implementation with the rolling out of the training 44 plan which includes among other, training on IDA disbursement procedures, training on OHADA accounting principles and its implication for a donor-financed operation, and training on IDA financial reporting arrangements. 15. Budgeting: The PASU’s manual of procedures previously used by FSRDC already includes detailed budgeting procedures, the preparation of annual work plan, and the adoption by the Board of Directors to the budget execution. It will be revised to incorporate the new project specifics. 16. Accounting Policies and Procedures: The PASU’s manual of procedures previously used by FSRDC details the accounting policies and procedures which are in line with the Congolese accounting principles. This manual of procedures will be revised to include the new project's specifics. The accounting software acquired under PASU’s financing will be used. This accounting software is multi-projects, multi-sites and multi-donors. 17. Internal Control and Internal Auditing: Subject to revision of the manual of procedures, the existing internal control arrangements will be applied. The terms of reference for the internal auditor will be revised at the latest three months after effectiveness to take into consideration the project specificities. The internal auditor will report directly to the Coordinator and the Board of Directors. He will undertake periodic assessments on the strengths and weaknesses of the internal control system at all levels. All control deficiencies or circumvented practices identified will be communicated in a timely manner to the overall senior management of the project for immediate corrective action as appropriate. One of each such report will also be communicated to the Bank. He will prepare relevant manuals and guidelines. 18. Funds Flow and Disbursement Arrangements: A Designated Account (DA) will be opened in a commercial bank on terms and conditions acceptable to IDA under the fiduciary responsibility of FSRDC. The ceiling of the Designated Account will be set at US$ 3.5 million equivalent to four (4) months expenditures forecast and will become effective upon grant effectiveness. This Designated Account will be used to finance all eligible project expenditures under the different components. Payments will be made in accordance with the provisions of the PIM (e.g., two authorized signatures will be required for any payment). FSRDC will open sub accounts at the provincial level. These sub-accounts will be used to pay the suppliers and consultants selected through acceptable Bank procurement procedures. Replenishment of these accounts will be done at least once a month by the project upon submission of acceptable supporting documents. Payments from the sub-accounts will be subject to acceptable arrangements for the Bank. The Designated Account will be replenished against withdrawal applications supported by Statements of Expenditures (SOE) and other documents evidencing eligible expenditures as specified in the Disbursement Letter. All supporting documents should be retained at the project and readily accessible for review by periodic IDA implementation support missions and external auditors. Disbursement arrangements 19. Disbursement method: Upon Grant effectiveness, transaction-based disbursements will be used during the first year of the project implementation. Thereafter, the option to disburse against submission of quarterly unaudited Interim Financial Report (also known as the Report-based disbursements) could be considered subject to the quality and timeliness of the IFRs submitted to 45 the Bank and the overall financial management performance as assessed in due course. In the case of the use of the report-based disbursement, the DA ceiling will be equal to the cash forecast for two quarters as provided in the quarterly unaudited Interim Financial Report. The option of disbursing the funds through direct payments to suppliers/contractors for eligible expenditures will also be available for payments equivalent to twenty percent (20%) or more of the DA ceiling. Another acceptable method of withdrawing proceeds from the IDA grant is the special commitment method whereby IDA may pay amounts to a third party for eligible expenditures to be paid by the Recipient under an irrevocable Letter of Credit (LC).The funds’ flows diagram for the DA are as follows: Transactions based IDA Direct payment FSRDC Designated Account in a commercial bank FSRDC Provincial Offices Provincial Sub-Accounts in commercial banks Suppliers / Service Providers Transfers of funds Flow of documents (invoices, good receipt notes, purchase order, contract) Payment to suppliers 20. Disbursement of Funds to other Service Providers and Suppliers: The FSRDC will make disbursements to service providers and suppliers of goods and services in accordance with the payment modalities, as specified in the respective contracts/conventions as well as the procedures described in the PIM(Administrative, Accounting, and Financial Manual). In addition to these supporting documents, the FSRDC will consider the findings of the internal auditor while approving the payments. In particular, the FSRDC, with the support of its internal audit unit, will reserve the right to verify the expenditures ex-post, and refunds might be requested for non-respect of contractual clauses. Misappropriated activities could result in the suspension of financing for a given entity. 46 21. Disbursements by category: The table below sets out the expenditure categories to be financed out of the Grant. This table takes into account the prevailing Country Financing Parameter for DRC in setting out the financing levels. In accordance with Bank standard procurement requirements, contracts will continue to be approved “all taxes included” for local expenditures. The project will, however, claim invoiced amounts excluding taxes. Percentage of IDA / Amount of the Category Expenditures to be Financing Allocated Financed (expressed in US$) [(inclusive of Taxes]) Goods, Works, Non-Consulting Services, 73.1M 100% Consultants’ Services, Community Grants for Community Subprojects under Component 1 of the Project, Agricultural Grants for Agricultural Value Chain Subprojects under Component 2(b) of the Project, Operating Costs, Workshops and Training for the Project Project Preparation advance 6.0 M 100% TOTAL AMOUNT 79.1M 100% 22. Financial Reporting and Monitoring: Financial reports will be designed to provide quality and timely information on Project performance to Project management, and relevant stakeholders. Formats of the various periodic IFRs to be generated from the financial management system will be developed using the World Bank’s Financial Management Practices in WB-financed Investment Operations. The Project will use the same format of IFRs as PASU which will be automatically generated from the project’s accounting software. This accounting software has features multi-projects, multi-sites and multi-donors. The quarterly IFR includes (i) the statements of sources and used funds, and utilization of funds per category, (ii) the updated of the procurement plan, (iii) the physical progress, (iv) expenditure types and implementing agent, showing comparisons with budgets; (iv) Designated Account activity statements and explanation notes to the IFR; (v) and the summary of missions of internal audit as well as implementation status of the recommendations of internal or external audit and supervision missions. The IFR will be prepared and submitted to IDA, 45 days after the end of each quarter. In compliance with International Accounting Standards and IDA requirements, the Project will produce annual financial statements. These include: (i) a Balance Sheet that shows Assets and Liabilities; (ii) a Statement of Sources and Uses of Funds showing all the sources of Project funds, expenditures analyzed by Project component and category expenditures (iii) a Designated Account Activity Statement; (iv) an Implementation Report containing a narrative summary of the implementation progress of the Project; (v) a Summary of Withdrawals using SOE (transactions-based disbursement), listing individual withdrawal applications by reference number, date and amount; and (vi) Notes related to significant accounting policies and accounting standards adopted by management and underlying the preparation of financial statements. The financial statements will be submitted for audit at the end of each year or other periods to be stated. 47 23. External Auditing: The project’s financial statements and internal control system will be subject to external annual audit by an independent external auditor which will be recruited on ToRs acceptable to IDA. The external auditor will give an opinion on the annual financial statements in accordance with auditing standards of IFAC. In addition to audit reports, external auditor will also produce a management letter on internal control to improve the accounting controls and compliance with financial covenants under the financing agreement. The project will be required to submit, no later than June 30 of each fiscal year, the annual audited financial statements of the previous year. In line with the new access to information policy, the project will comply with the disclosure policy of the Bank of audit reports (for instance making available to the public without delay after receipt of all reports final financial audit, including audit reports qualified) and place the information on its official website within one month after acceptance of final report by IDA. 24. Implementation support Plan: The Bank’s FM implementation support mission will be consistent with a risk-based approach, and will involve a collaborative approach with the entire Task Team. Based on the current overall residual FM risk, the project will be supervised twice a year to ensure that project FM arrangements still operate well and funds are used for the intended purposes and in an efficient way. A first implementation support mission will be performed three months after the project effectiveness. Afterwards, the missions will be scheduled by using the risk based approach model and will include the following: (i) monitoring of the financial management arrangements during the supervision process at intervals determined by the risk rating assigned to the overall FM Assessment at entry and subsequently during Implementation (ISR); (ii) integrated fiduciary review on key contracts, (iii) review the IFRs; (iv) review the audit reports and management letters from the external auditors and follow-up on material accountability issues by engaging with the task team leader, Client, and/or Auditors; the quality of the audit (internal and external) also is to be monitored closely to ensure that it covers all relevant aspects and provide enough confidence on the appropriate use of funds by recipients; and, (v) physical supervision on the ground specially; and (vi) assistance to build or maintain appropriate financial management capacity; (v) transactions reviews of expenditures occurred at both central and provincial level. 25. Conclusions of the FM Assessment: The overall residual FM risk is considered Substantial. The proposed financial management arrangements for this project are considered adequate to meet the Bank’s minimum fiduciary requirements under OP/BP10.00. Procurement 26. The project coordination unit of the previous project (PASU) will remain the procurement agent for the project until the mid-term review, hoping that by that time the new institutions recently set up in recommendation of the new national procurement law will have the required qualifications and experience; at this time, a decision will be taken on the most appropriate approach to be used. 27. Procurement activities will be carried out in accordance with the Bank’s guidelines “Guidelines: Procurement under IBRD Loans, and IDA Credits” dated January 2011 and “Guidelines: Selection and Employment of Consultants by the World Bank Borrowers” dated 48 January 2011, as well as the provisions stipulated in the Financial Agreement. The existing Project Implementation Manual (PIM) was last updated in 2010 and already contains simplified procurement methods to be used for the pilot labor intensive public works. Should there be activities that are jointly financed with other entities (government, donors or private organizations), the procurement process will always follow Bank rules and procedures. 28. Procurement plan. The FSRDC has developed a procurement plan covering at least the first twelve months of project implementation, indicating the procurement methods to be used for each activity. The procurement plan will be updated, with the prior approval of the Bank, on an annual basis or as required by the Bank to reflect the project implementation needs and improvements in institutional capacity. The agreed and approved procurement plan will determine procurement methods and the contracts to be submitted to Bank prior review and no objection. 29. Procurement methods and review thresholds. Procurement methods and Bank review requirements are summarized in the table below Contracts for goods and works Procurement Method Threshold for the method in 1000 Bank review in 1000 US$ US$ (a) International Competitive US$10,000 or more for works, US$ USD 5,000 for works and Bidding (ICB) 1,000 500 for goods (b) National Competitive All contracts estimated below the ICB USD 5,000 for works and Bidding (NCB) threshold and above shopping ceiling 500 for goods (c) Shopping Below US$200 for works and Post review US$100 for goods ( d) UN procurement agencies N/A (e) Community participation Implementation manual to determine Post review in procurement the process (f) Direct contracting No threshold All contracts Contracts for consultant services Procurement Method Threshold for the method in 1000 Bank review in 1000 US$ US$ (a) Selection based on quality No threshold All contracts estimated and cost above US$200 (b) Least Cost Selection No threshold All contracts estimated (LCS) above US$200 (c)Selection Based on 100 All contracts estimated Consultant Qualifications above US$200 (SQC) All contracts estimated (d) Individual Consultants No threshold above US$100 (f) Single Source Selection No threshold All contracts 49 30. The Bank standard bidding documents for goods and for works as well as the Bank standard Requests for Proposals will be used for all ICB contracts and consultant contracts advertised internationally. The same documents will be used for contracts advertised locally until the country has its own standard documents found acceptable by the Bank. For the purpose of clause 2.7 of the Consultant Guidelines, in all contracts estimated below the equivalent value of US$ 100,000 the short list may comprise only local firms. Reference to the National Procurement Regulatory Framework 31. For all contracts that are not advertised internationally, the Bank may authorize the use of the national institutions and regulations that comprise the law (including its texts of application), the institutions set up for control and regulation, and the institutions responsible for the implementation of procurement activities. The NCB procedures currently in force in the DRC deviate slightly from the corresponding World Bank Procurement Guidelines for procurement of works, goods and services (other than consultant services). They have been already reviewed and appropriate modifications have been proposed to ensure economy, efficiency, transparency, and broad consistency with the provisions included in Section I and paragraphs 3.3 and 3.4 of the Bank Procurement Guidelines (refer to the paragraph below). Requirements for National Competitive Bidding 32. National Competitive Bidding may be used subject to using the open procedure (“appel d’offres ouvert”) set forth in the Recipient’s Public Procurement Law No 10/010 dated April 27, 2010 and the Manual of Procedures of the Public Procurement Law as per Recipient’s Decree No 10/22 dated June 2, 2010, provided, however, that such procedure shall be subject to the provisions of Section I and Paragraphs 3.3 and 3.4 of Section III of the Procurement Guidelines and the additional modifications to the standard bidding documents set forth below. 33. All standard bidding documents to be used for the Project under NCB shall be found acceptable to the World Bank before their use during the implementation of Project: (a) Eligibility: Eligibility of bidders and acceptability of their goods and services shall not be based on their nationality and/or their origin; and association with a national firm shall not be a condition for participation in a bidding process; (b) Advertising and Bid Preparation Time: Bidding opportunities shall be advertised at least in a national newspaper of wide circulation and on the website of the Recipient’s Procurement Regulator (Autorité de Régulation des Marchés Publics) and bidders should be given at least 30 days from the date of invitation to bid or the date of availability of the bidding documents, whichever is later; (c) Criteria for Qualification of Bidders: Qualification criteria shall only concern the bidder’s capability and resources to perform the contract taking into account objective and measurable factors. Such criteria for qualification of bidders shall be clearly specified in the bidding documents; 50 (d) Bid Evaluation and Contract Award: A contract shall be awarded to the substantially responsive and lowest evaluated bidder provided that such bidder meets the qualification criteria specified in the bidding documents. No scoring system shall be allowed for the evaluation of bids, and no “blanket” limitation to the number of lots which can be awarded to a bidder shall apply. The criteria for bid evaluation and the contract award conditions shall be clearly specified in the bidding documents; (e) Preferences: No preference shall be given to domestic/regional bidders; to domestically/regionally manufactured goods; and to bidders forming a joint venture with a national firm or proposing national sub-contractors or carrying out economic activities in the territory of the Recipient; (f) Publication of Contract Award: Information on all contract awards shall be published in at least a national newspaper of wide circulation or in the Recipient’s Procurement Regulator (Autorité de Régulation des Marchés Publics) web-site; (g) Fraud and Corruption: In accordance with the Procurement Guidelines, each bidding document and contract shall include provisions stating the World Bank’s policy to sanction firms or individuals found to have engaged in fraud and corruption as set forth in the Procurement Guidelines; (h) Inspection and Audit Rights: In accordance with the Procurement Guidelines, each bidding document and contract shall include provisions stating the World Bank’s policy with respect to inspection and audit of accounts, records and other documents relating to the bid submission and contract performance; (i) Requirement for administrative documents and/or tax clearance certificate: The bidding documents shall not require foreign bidders to produce any administrative or tax related certificates prior to confirmation of awarding a contract; (j) Modifications of a Signed Contract: Any change in the contract amount which, singly or combined with all previous changes, increases the original contract amount by 15% (fifteen percent) or more must be done through an amendment to the signed contract instead of signing a new contract. Environmental and Social (including safeguards) 34. At national level, the DRC has a legislative and regulatory framework which is conducive to good environmental management. In addition, the DRC has signed a number of international treaties and conventions. However, implementation capacity is weak. Environmental policies and their compliance are governed by the Ministry of Environment, Conservation and Tourism (Ministère de l’Environnement, de la Conservation de la Nature et du Tourisme or MECNT). The MECNT has three departments in charge of environmental monitoring and management: (i) the DRC Environmental Studies Group (Groupe d’Etudes Environnementales du Congo or GEEC); (ii) the National center for Environmental Information (Centre National d’Information sur l’Environnement or CNIE); and (iii) the Environmental Regulation and Dispute Unit (Cellule Réglementation et Contentieux Environnementaux or CRCE). The GEEC is responsible for 51 safeguards compliance of all projects in the country, but with emphasis on environmental category A projects. The unit is understaffed and has limited capacity. Despite several donor- funded capacity building initiatives, the unit still largely relies on donor funds to carry out its field supervision duties. 35. At the project level, the preparation and implementation of the Bank-funded PASU (2004- 2013) helped the project implementing agency to lay a sound institutional foundation for preparing, managing and monitoring potential adverse environmental and social impacts of Bank-funded projects. FSRDC prepared and implemented the safeguards instruments of PASU. The current project triggers the same safeguard policies as PASU, consequently the safeguards instruments to be prepared for the current project will be a sequel of PASU’s and include: an Environmental Safeguards Management Framework (ESMF); a Resettlement Policy Framework (RPF); and an Indigenous People Planning Framework (IPPF). Drawing from this experience, the ESMF, RPF and IPPF will be prepared and disclosed no later than three months after effectiveness date, in line with the exceptional deferral allowed under paragraph 11 (a) of OP 10.00. The FSRDC will work with the GEEC to validate terms of reference and environmental impacts. Funds for this work have been included in the budget of the Eastern Recovery Project and a consultant has already been hired by the implementing agency thanks to a Project Preparation Advance. In addition, an Integrated Pest Management Plan (IPMP) has been developed and disclosed prior to negotiations. 36. The Safeguard Environmental Category is B. The policies triggered are as follows: Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) [x] [ ] Natural Habitats (OP/BP 4.04) [x ] [] Pest Management (OP 4.09) [x] [ ] Indigenous Peoples (OP/BP 4.10) [x] [ ] Physical Cultural Resources (OP/BP 4.11) [x] [ ] Involuntary Resettlement (OP/BP 4.12) [x] [ ] Forests (OP/BP 4.36) [ ] [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] 37. Environmental. Project activities under both components will finance small-scale community infrastructure works. This is expected to include the construction/rehabilitation of key public social infrastructures (schools, health centers, water points) for component 1, while under component 2 activities will include road maintenance, micro-irrigation and rehabilitation of agricultural feeder roads through labor-intensive methods, as well as construction of small agro-processing facilities. Farmer field schools will also be established to promote efficient and sustainable agricultural techniques. 38. Possible negative environmental impacts are expected to be short-term. For example, the rehabilitation of open water sources may temporarily increase risks for water borne diseases in the surrounding area, while pollution and loud noises can be expected during part of the construction works for community micro-projects. The only long-term negative environmental impact could be linked to water and sanitation sub-projects (e.g., construction of latrines for a 52 school), if the water table is affected. On the other hand, a number of positive and lasting environmental impacts can be expected as a result of reforestation activities under component 2, sanitation works under component 1 (e.g., the construction of latrines) and component 2 (cleaning of urban open drainage system), and rehabilitation of open water sources. 39. The ESMF and the IPMP will be the main instruments to address environmental safeguards. On particular, the ESMF will be implemented as follows: • A negative list and mitigation guidelines for the most common type of sub-projects will be provided to all implementing partners. The negative list will include sub-project characteristics that would make the project ineligible for financing such as involuntary resettlement, activities in protected areas, use of WHO category I or II pesticides. • Environmental guidelines for the most common type of sub-projects will also be provided to implementing partners. • A screening matrix and Environmental Impact Evaluation will be used for sub-projects costing more than US$ 100,000; only rehabilitation of feeder roads is expected to fall under this category. • Rather than monitoring environmental conditions, the FSRDC will only verify the implementation of mitigation measures. 40. Social. The social impact of the project is expected to be very positive, as its activities are targeted at poor populations and aim at having a conflict mitigating effect by fostering social inclusion and cohesion. From a social safeguards perspective, the activities to be undertaken under the Project are unlikely to have negative impact on livelihoods, restrict access to natural resources or involve expropriation of private land. Possible risks or negative social impacts of the project revolve around: (i) fueling resource-based conflicts; (ii) exclusion and inclusion errors in beneficiary selection; (iii) involuntary resettlement (OP/BP 4.12), particularly potential resettlement issues and restriction of access to some sites linked with construction/rehabilitation works, and (iv) encountering mass graves where people have been buried during the conflict. In particular: • Components 1 and 2 will be implemented in areas affected by conflict characterized by worsening social and economic conditions, deteriorating social capital, population displacements, localized resource-based conflicts, inter-ethnic tensions, destruction of infrastructure, and reduced access to social services. The project aims to encourage social cohesion and conflict resolution through economic activities and a participatory approach, but current patterns of population displacement and the lack of government capacity to mediate and manage land ownership disputes could constitute points of contention. • Exclusion and inclusion errors could occur in assessing and selecting beneficiaries for Component 2. In particular, given the high rate of underemployment/joblessness and widespread vulnerability, it can be expected that demand for temporary employment in public works will far outstrip supply, leaving many legitimate job-seekers out. The main challenge, therefore, would be to find selection mechanisms that minimize real or perceived errors of inclusion and that are considered fair, so as not to fuel discontent and possibly exacerbate conflict. 53 • While project activities are not expected to necessitate the large scale physical relocation of population groups, they could have implications for the livelihoods options of formerly displaced populations returning home during implementation. 41. The RPF and IPPF will be the main instruments to address social safeguards risks. To mitigate potential risks related to involuntary resettlement, the RPF will include steps to take into account the specific needs of displaced and returning populations, and integrate provisions for addressing possible land and other socioeconomic points of contention in an equitable, consultative and peaceful manner. A conflict specialist will be recruited and support the FSRDC on these issues, and will work closely with the Bank’s social safeguards staff. The IPPF will include steps for the identification of indigenous populations in the vicinity of sub-project sites, and detail procedures that will ensure that indigenous populations are properly consulted and feed-back mechanisms are established to allow for prompt action in case their rights are not respected or they are denied their fair share of project benefits. The implementing agency understands that both RPF and IPPF have the potential to play an important role in conflict prevention and management, considering that land disputes are a major conflict trigger. Project Monitoring and Evaluation 42. A strong M&E system will be established to facilitate reliable and effective data collection. The FSRDC has a management information system (MIS) that will be adapted to meet the needs of the proposed project. All intermediary NGO partners will be trained to have a common understanding of each of the project indicators and to follow a protocol for collecting, storing and reporting data. Innovative technology options, such as applications for mobile phones or tablets, will be explored to ensure efficient and timely data collection, reporting, and analysis of project indicators. Building on experience in similarly disadvantaged contexts (e.g., Sierra Leone), it should be possible to adapt technology to the eastern DRC situation, for example by storing data on the phone or tablet until a connection is available. The M&E team will conduct regular data audits in the field to verify that the reports they receive reflect reality, although the use of ICT should make this task fairly straightforward. 43. Like all ongoing stabilization-related programs, the outcomes of Bank-funded projects will be integrated into the revised M&E-framework of the I4S. This framework links output- and outcome-indicators to broader trends. In combination with new baseline studies and regular perception surveys, this will allow partners to very tentatively ‘measure’ whether the collective result of programs has a positive impact on the broader stabilization of the DRC. This will provide important feedback to the Bank on future socio-economic programming in conflict areas. 44. An annual review of progress towards achieving the PDO, technical audits reports, and the mid-term review will help strengthen project design and improve implementation until closing date. Monitoring and evaluation activities will also benefit from an SPF grant that supports an action-research approach to pilot activities, so as to be able to integrate lessons from implementation on an ongoing basis. In addition, the SPF grant supports a rigorous impact evaluation whose results will be used to adapt project design and procedures. 54 ANNEX 4: OPERATIONAL RISK ASSESSMENT FRAMEWORK (ORAF) th Risks . Project Stakeholder Risks Stakeholder Risk Rating Low Description: Risk Management: Project design is validated by key stakeholders including government Stakeholders raise objections to authorities, local authorities, financial and technical partners, and non- the design and implementation of governmental organizations the project Resp: Stage: Due Date: Frequency: Status: In Bank Preparation Recurrent: September progress 2013 Risk Management: The project is in line with government priorities as expressed in the Government stabilization and reconstruction program for Eastern DRC (STAREC) and with the International Strategy for Support to Security and Stabilization of the East (ISSS) Resp: Stage: Due Date: Frequency: Status: Recurrent: Client Preparation August 2013 Completed Implementing Agency (IA) Risks (including Fiduciary Risks) Capacity Rating Low Description: Risk management: The implementing agency does The Social Fund of DRC (FSRDC) will be the implementing agency. This not possess adequate skills to national institution (anchored in the office of the President) has successfully implement a multi-sectoral project implemented a USD$ 101.8 million IDA-funded multi-sectoral operation (the in a volatile environment. Emergency Social Action Project or PASU) from 2004-2013. It has regional offices throughout the country, including in the East where it cooperated with MONUSCO and other international partners to ensure delivery in remote areas. Resp: Stage: Due date: Frequency: Status: Client Implementation Recurrent: Effectiveness Not Yet Due Risk Management: The implementing agency is unable to provide competent The FSRDC is familiar with World Bank fiduciary processes. A fiduciary team financial management and including a financial management specialist, a procurement specialist, and an procurement functions. internal auditor will be maintained at all times, with TOR and qualifications satisfactory to the Bank. The FSRC will continue to use the accounting software purchased through PASU to handle all project transactions and generate the required financial information Resp: Stage: Due Date: Frequency: Status: Recurrent: Bank Implementation Completed Risk Management: An independent external auditor will be recruited under TORs and with qualifications satisfactory to the Bank. Resp: Stage: Due Date: Frequency: Status: Client Implementation Recurrent: effectiveness Not Yet Due Risk Management: A project implementation manual will provide a roadmap for implementing activities Resp: Stage: Due Date: Frequency: Status: Client Implementation Recurrent: Effectiveness Not Yet Due Governance Rating Moderate Description: Risk Management: The roles and responsibilities of each stakeholder will be clearly explained in Strong structures of clear lines of the project implementation manual. Provisions for regular meetings between governance exist within the all stakeholders will be included in the manual. FSRDC and are documented in its manual of administrative, Resp: Stage: Due Date: Frequency: Status: financial and accounting Client Implementation After Not Yet procedures. However, the role of effectiveness Due the Ministry of Social Affairs, National Solidarity and Humanitarian Affairs (MINAS) Recurrent: which has the official mandate to oversee social protection, and the role of other relevant technical ministries should be clarified Project Risks Design Rating High Component 2 on employment Risk management: The project will build on existing studies (for instance, the creation requires considerable background research conducted by Adam Smith International), and will technical input to maximize conduct further technical to identify viable income generation options for impact in a fragile and volatile targeted populations context Resp: Stage: Due date: Frequency: Status: Client Implementation Recurrent: After yearly Not yet Security conditions may effectiveness due negatively impact access to benefiting communities and Risk management: Flexibility will be maintained in the menu of interventions therefore the project delivery proposed and possible zones of interventions. The project will be implemented schedule in “high risks” and “low risks” areas, where security conditions are relatively more stable. In addition the implementing agency will be able to rely on MONUSCO logistical support to reach remote or temporarily inaccessible areas (e.g., military escort, airlifts). Resp: Stage: Due date: Frequency: Status: Technical challenges are expected Client Implementation Recurrent: After yearly Not yet in delivering good quality effectiveness due infrastructure to be constructed or rehabilitated through THIMO Risk management: Training will be provided to enterprises selected for the 56 given the difficult terrain (roads civil works. going through thick forests and Resp: Stage: Due date: Frequency: Status: mountains) Client Implementation After yearly Not yet effectiveness due Recurrent: Social and Environmental Rating Low Description: Risk Management: The project is expected to be rated The client will prepare a project-level safeguards planning document (referred environmental category B to to in par. 47 of BP10.00 as an “action plan”) reflect the limited negative impact Resp: Stage: Both Recurrent: Due Date: Frequency: Status: that it may have on the Client Decision Not yet environment compared to the review due benefits that it will provide. Infrastructure construction and rehabilitation can lead to restrictions in access to areas being rehabilitated. In addition, they could cause noise, create basic safety risks, and require handling and management of waste. Program and Donor Rating N/A Description: Risk Management: Not applicable Resp: Stage: Recurrent: Due Date: Frequency: Status: Delivery Monitoring and Rating High Sustainability Description: Risk management: Community committees will be set up and train to maintain Maintenance of rehabilitated and manage rehabilitated infrastructures infrastructures is not adequate, jeopardizing sustainability Resp: Stage: Due date: Frequency: Status: Client Implementation Before yearly Not yet Recurrent: closing due Overall risk: High Risk Description: Risks associated to the country context remain high and may have an impact on project preparation and implementation. 57 ANNEX 5: IMPLEMENTATION SUPPORT PLAN Preparation Schedule Dates Milestone Basic Forecast Actual AIS Release May 13, 2013 May 13, 2013 Concept Review June 11, 2013 September 30, 2013 September 16, 2013 AuthAppr/Negs (in January 27, 2014 January 23, 2014 January 24-25 principle) 2014 Bank Approval April 8, 2014 February 27, 2014 February 27, 2014 Sector Unit Estimate of Resources Required from Preparation through Approval Identification and Preparation Source of Funds Estimate of Resource Requirements (US$) Expenses to Date (US$) Fixed Variable Bank Budget From system $146,562.50 $69,687.50 Trust Funds -- NA NA Team Composition Name Title **Role Unit UPI Maurizia Tovo Lead Social Dev. Team Leader ECSSO 17426 Specialist Isabella Micali Senior Counsel Counsel LEGAM 191270 Drossos Aissatou Diallo Senior Finance Financial CTRLA 241610 Officer Management Bourama Diaite Senior Procurement Procurement AFTPW 76111 Specialist 58 ANNEX 6: ENVIRONMENTAL AND SOCIAL SCREENING ASSESSMENT FRAMEWORK (ESSAF) I. Objectives 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 (IPF), for Situations of Urgent Need of Assistance or Capacity Constraints (FCCE) and the guidance note for crises and emergency operations for application of Bank safeguard and disclosure policies. This ESSAF provides general policies, guidelines, codes of practice and procedures to be integrated into the implementation of the DRC-Eastern Recovery Project financed by the World Bank. This Framework has been developed to ensure compliance with the World Bank’s safeguard policies during the implementation of the emergency project. Its objective is to ensure that activities under the proposed recovery operations will address the following issues:  avoid or minimize environmental degradation as a result of either individual activity or their cumulative effects;  not threaten human health;  prevent land acquisition or compensate appropriately any loss of asset and/or livelihood; and  enhance positive environmental and social outcomes. II. General Principles 2. Recognizing the emergency nature of the proposed emergency 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: • The proposed operation will support multiple subprojects, the detailed designs and locations of which will be known only during implementation. To ensure effective application of the World Bank’s safeguard policies, the ESSAF provides guidance on the approach to be taken during project implementation for the selection, screening and design of subprojects and the planning of mitigation measures; category A activities will not be eligible for funding. • No resettlement issues are expected in any of the proposed subprojects under the emergency Project. If any do occur, Resettlement Action Plans (RAPs), for the specific subprojects will be prepared following the guidelines of the project’s Resettlement Policy Framework (RPF); 59 • The proposed emergency operation will finance feasibility and detailed design studies for the planned investments, which will include environmental assessments and social studies based of the ESSAF and in accordance with the World Bank safeguard policies; • Socio-economic opportunities as employment, access to basic services within the subprojects areas will be targeted and extended, as much as possible, to the affected communities and households that lost their livelihoods due to several rebellions in DRC eastern. In all subprojects which require consultations with local communities or beneficiaries, consultations will be conducted to elicit the views of the male and female population; and • Consultation and disclosure requirements will be simplified to meet the special needs of this operation. The full ESSAF will be disclosed in the concerned sector ministries and other public places in DRC and at the World Bank InfoShop. III. Environmental and Social Screening and Assessment Framework 3. The current ESSAF has been developed specifically for this proposed operation to ensure due diligence, to avoid causing harm, and to ensure consistent treatment of environmental social and issues during the implementation of project activities by the Government of DRC. The purpose of this Framework is also to assist the Project Implementation Unit (PIU) in screening all the subprojects for their likely environmental and social impacts, ensuring that mitigation measures are incorporated into final design and that implementation compliance is met, and prioritizing the investments. 4. OP 4.01 Environmental Assessment. Most of the proposed subprojects will be done under LIPW and will focus on the construction and rehabilitation works in the health, education, water and sanitation, trade(markets) and transport(small bridges) in order to improve and to upgrade basic socio-economic infrastructures. As an example, there will have: the construction of public infrastructures; rehabilitation of roads, urban garbage collection and streets cleaning. The work in these areas will be done under OP/BP 4.01, OP/BP 4.04, OP/BP 4.10, OP/BP 4.11 and OP/BP 4.12. 5. As potential environment adverse impacts are expected to be moderate, small scale and manageable, the proposed project is classified as EA Category B. As an OP/PB 8.00 operation, the requirement to carry out an Environmental and Social Management Plan (ESMP) and/or Environmental and Social Impact Assessment (ESIA) will be undertaken during project implementation. At the same time, prior to sub-project appraisal, the implementing agency will agree to apply the following minimum standards during implementation: Inclusion of standard Environmental Codes of Practice (ECOP) in the rehabilitation, improvement and construction bid documents of all subprojects; review and oversight of any major rehabilitation works by specialists; implementation of environmentally and socially sound options for waste management, the framing of chemical products(pesticides) management and their packing and provisions for adequate budget and satisfactory institutional arrangements for monitoring effective implementation. 60 6. OP4.09 Pest Management. The upcoming operation will also support some pest management activities in agriculture domain such as on-farm productivity, post-harvest handling, storage and processing. Consequently an Integrated Pest Management Plan (IPMP) will be prepared, consulted upon and disclosed prior to negotiations. 7. OP 4.04: Natural Habitats. This policy is triggered to prevent those activities which could induce direct or indirect significant impacts on natural habitat, fauna, flora, or biodiversity from being selected and financed by the project. Moreover, activities such as road rehabilitation may happen in overgrown areas in or adjacent to natural habitats. The ESMF, and subsequently the ESMPs, will include measures for avoiding or, if unavoidable, mitigating, impacts on fauna and flora in natural habitat areas. The project will not affect or involve critical natural habitats. The bidding documentation, of any activity which affects natural habitats, will set clear guidance for the avoidance or mitigation of any adverse impacts. 8. Excepted OP4.01, OP 4.04 and OP4.09, it is not anticipated that OP 4.36, OP 4.37, OP 7.50 and OP 7.60 would be triggered as the project will not affect physical cultural resources or forests, involve the construction of new dams or use of existing dams, or be implemented on any international waterways nor disputed area. 9. OP 4.11 Physical Cultural Resources. The policy is triggered. The project will operate in conflict areas where many people were killed. The probability of encountering an unknown grave, or human bones by the roadside, is not negligible once road works start. Adequate mitigation measures will be included in the relevant safeguards document. 10. OP 4.37 Safety of Dams. This policy is not triggered, as there will be no dam construction or rehabilitation or use of existing dams that will necessitate dam safety status report. 11. OP 7.50 Projects on International Waterways. The proposed project does not include any subprojects that would trigger this OP. 12. OP 7.60 Projects in disputed areas. This policy is not triggered because project intervention sites are not within disputed areas. 13. OP 4.12 Involuntary Resettlement. The need for involuntary resettlement or land acquisition in specific activity areas will only be known during project implementation, when site-specific plans are available. Therefore all activities will be screened for applicability of the resettlement policy and any activity involving involuntary resettlement or land acquisition will only be approved after preparation of a resettlement plan acceptable to the Bank. Several issues increase the complexity of land acquisition - the lack of reliable land record systems, and the inability of people losing land to either document ownership or be physically present to make their claims for eligibility. The safeguards framework will therefore include procedures for identifying eligible project-affected people, calculating and delivering compensation, and mechanisms for land dispute grievance redress. A Resettlement Policy Framework will be 61 prepared, consulted, finalized and disclosed within three months after the effectiveness of the project. 14. OP 4.10 Indigenous Peoples. The policy related to Indigenous People is triggered by the project because of the presence of this community in areas where the project is expected to be implemented. As the exact areas of activities will only be known during project implementation, the relevant safeguard instrument to be prepared in order to take into account their presence, concerns and their development in the project intervention zones, is an Indigenous People Planning Framework. It will be consulted upon, finalized and disclosed within three months after the effectiveness of the project. IV. Safeguard Screening and Mitigation 15. The following guidelines, codes of practice and requirements will constitute the framework of reference for the selection, design, contracting, monitoring and evaluation of subprojects. So, the safeguard screening and mitigation process will include: • A list of negative characteristics rendering a proposed activity ineligible for support (see. Attachment 1); • A proposed checklist of likely environment and social impacts to be filled out for each subproject or group of activities (see. Attachment 2); • Guidelines for land and asset acquisition, entitlements and compensation (see. Attachment 3); • Procedures for the protection of cultural property, including the chance discovery of archaeological artifacts, unrecorded graveyards and burial sites, etc. (see. Attachment 4); • Relevant elements of the codes of practice for the prevention and mitigation of potential environmental impacts (see. Attachment 5); and • A sample Environmental Safeguards procedures for Inclusion in the Technical Specifications of Contracts (see. Attachment 6). V. Responsibilities for Safeguard Screening and Mitigation 16. The PIU would be the same that implemented the previous emergency project called in French FSRDC( Fond Social de la République Démocratique du Congo)which already has experience in implementing Bank projects. It will be in charge of the implementation of the current ESSAF (screening, identification of measures) under the oversight of the national institution in charge of the environmental safeguard procedures and that called the GEEC (Groupe d’Etudes Environnementales du Congo). Furthermore, the PIU has an environmental and social specialist who will be responsible for following up all safeguards concerns and would also ensure that all implementing agencies and supervising consultants have environment and social focal points that will be responsible for applying the safeguard screening and mitigation requirements to each subproject. VI. Capacity Building and Monitoring of Safeguard Framework Implementation 62 17. As part of the capacity building to be provided for implementation of the proposed operation, the PIU’s environmental and social specialist will receive training on the Bank’s safeguards policies implementation requirements and on the ESSAF’s application from the Bank’s safeguards specialists. During supervision, the project team will assess the implementation of the ESSAF, including the preparation the remaining safeguards instruments (ESMF, RPF and IPPF) and the implementation of all the project’s safeguards instruments. The project team may recommend additional strengthening if required. VII. Consultation and Disclosure 18. This ESSAF will be shared with the directly involved ministries (Environment, Finance and Humanitarian Assistance), Participating Local Governments, concerned nongovernmental organizations and development partners of the Democratic Republic of Congo involved in the Eastern Recovery Project. Communities will be consulted on the ESSAF during project implementation. It will be disclosed in country and at the World Bank’s InfoShop. 19. The proposed operation will support a number of feasibility and detailed design studies for the planned activities, including environmental assessments and social studies, for which World Bank safeguard policies relating to consultation and disclosure will apply. In particular, the implementing agency will consult project-affected groups and local nongovernmental organizations on the project's environmental and social aspects, and will take their views into account. The implementing agency will initiate these consultations as early as possible, and for meaningful consultations, will provide relevant material in a timely manner prior to consultation, in a form and language(s) that are understandable and accessible to the groups being consulted. 63 Attachment 1 List of Negative Subproject Attributes Subprojects with any of the attributes listed below will be ineligible for support under the proposed Eastern Recovery Project. Attributes of Ineligible Subprojects GENERAL CHARACTERISTICS Natural habitats and Forests • Concerning significant conversion or degradation of critical natural habitats (protected areas, wetlands, etc) and forest ecosystems. 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. Pesticides and Chemicals Requiring pesticides that fall in WHO classes IA, IB, or II. Drinking Water Supply New or expansion of piped water schemes to serve 10,000 or more households Sanitation New wastewater treatment plants to serve 10,000 or more households. 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 5 meters high. Rehabilitation of dams more than 15 meters high. Power New power generating capacity of more than 10 MW. Income Generating Activities Activities involving the use of fuelwood, including trees and bush. Activities involving the use of hazardous substances. 64 Attachment 2 Checklist of Possible Environmental and Social Impacts of Activities I. Activity Related Issues 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 land be subject to potential encroachment by urban or industrial use or located in an area intended for urban or industrial development? B. Utilities and Facilities 4. Will the activity require the setting up of ancillary production facilities? 5. Will the activity require significant levels of accommodation or service amenities to support the workforce during construction (e.g., contractor will need more than 20 workers)? C Water and Soil Contamination 6. Will the activity require large amounts of raw materials or construction materials? 7. Will the activity generate large amounts of residual wastes, construction material waste or cause soil erosion? 8. Will the activity result in potential soil or water contamination (e.g., from oil, grease and fuel from equipment yards)? 9. Will the activity lead to contamination of ground and surface waters by herbicides for vegetation control and chemicals (e.g., calcium chloride) for dust control? 10. Will the activity lead to an increase in suspended sediments in streams affected by road cut erosion, decline in water quality and increased sedimentation downstream? 11. Will the activity involve the use of chemicals or solvents? 12. Will the activity lead to the destruction of vegetation and soil in the right-of-way, borrow pits, waste dumps, and equipment yards? 65 13. Will the activity lead to the creation of stagnant water bodies in borrow pits, quarries, etc., encouraging for mosquito breeding and other disease vectors? D. Noise and Air Pollution Hazardous Substances 14. Will the activity increase the levels of harmful air emissions? 15. Will the subproject increase ambient noise levels? 16. Will the activity involve the storage, handling or transport of hazardous substances? E. Fauna and Flora 18. Will the activity involve the disturbance or modification of existing drainage channels (rivers, canals) or surface water bodies (wetlands, marshes)? 19. Will the activity lead to the destruction or damage of terrestrial or aquatic ecosystems or endangered species directly or by induced development? 20. Will the activity lead to the disruption/destruction of wildlife through interruption of migratory routes, disturbance of wildlife habitats, and noise-related problems? F. Destruction/Disruption of Land and Vegetation 21. Will the activity lead to unplanned use of the infrastructure being developed? 22. Will the activity lead to long-term or semi-permanent destruction of soils in cleared areas not suited for agriculture? 23. Will the activity lead to the interruption of subsoil and overland drainage patterns (in areas of cuts and fills)? 24. Will the activity lead to landslides, slumps, slips and other mass movements in road cuts? 25. Will the activity lead to erosion of lands below the roadbed receiving concentrated outflow carried by covered or open drains? 26. Will the activity lead to long-term or semi-permanent destruction of soils in cleared areas not suited for agriculture? 27. Will the activity lead to health hazards and interference of plant growth adjacent to roads by dust raised and blown by vehicles? G. Cultural Property 28. Will the activity have an impact on archaeological or historical sites, including historic urban areas? 29. Will the activity have an impact on religious monuments, structures and/or cemeteries? 30. Have Chance Finds procedures been prepared for use 66 in the activity? H. Expropriation and Social Disturbance 31. Will the activity involve land expropriation or demolition of existing structures? 32. Will the activity lead to induced settlements by workers and others causing social and economic disruption? 33. Will the activity lead to environmental and social disturbance by construction camps? II. Site Characteristics No. ISSUES YES NO Comments 1. Is the activity located in an area with designated natural reserves? 2. Is the activity located in an area with unique natural features? 3. Is the activity located in an area with endangered or conservation-worthy ecosystems, fauna or flora? 4. Is the activity 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 activity located in an area which would create a barrier for the movement of conservation-worthy wildlife or livestock? 6. Is the activity located close to groundwater sources, surface water bodies, water courses or wetlands? 7. Is the activity located in an area with designated cultural properties such as archaeological, historical and/or religious sites? 8. Is the activity in an area with religious monuments, structures and/or cemeteries? 9. Is the activity in a polluted or contaminated area? 10. Is the activity located in an area of high visual and landscape quality? 11. Is the activity located in an area susceptible to landslides or erosion? 12. Is the activity located in an area of seismic faults? 13. Is the activity located in a densely populated area? 14. Is the activity located on prime agricultural land? 15. Is the activity located in an area of tourist importance? 16. Is the activity located near a waste dump? 17. Does the activity have access to potable water? 18. Is the activity located far (1-2 kms ) from accessible 67 roads? 19. Is the activity located in an area with a wastewater network? 20. Is the activity located in the urban plan of the city? 21. Is the activity located outside the land use plan? Recommendation: • Ineligible activity: • Change activity site: • Conduct a simple ESIA (category B): • No ESIA required. Apply following measures: o xxxx (measure, period/timeline, who ?) o yyyy (measure, period/timeline, who ?) o zzzz (measure, period/timeline, who ?) Signed by (Eastern Recovery Project designated person): Name: _____________________________ Title: _______________________________ Date: _______________________________ Signed by Project Manager: Name: _______________________________ Title: _______________________________ Date: _______________________________ Approved by The Head of the GEEC on (date and signature) Copied to: • xx • yy 68 Attachment 3 Guidelines for Land and Asset Acquisition, Entitlements and Compensation I. Objectives 1. Resettlement and private land acquisition will be avoided or kept to a minimum, and will be carried out in accordance with these guidelines. Activity 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 3(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 activity, Project Affected People (PAPs) and the magnitude of impacts, activities will be categorized as follows: (a) activities 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. These will be prepared prior to activity implementation. (b) activities that will affect less than 200 persons require the following documentation: (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) activities 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; 69 (b) those who do not have such formal legal rights but have a claim to usufruct rights rooted in customary law; and (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) Project affected peoples 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) Project affected peoples 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 will ensure that all occupants of land and owners of assets located in a proposed activity 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 3(ii). 7. The PIU 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. 70 VI. Activity Approval 8. In the event that an activity involves acquisition against compensation, the PIU shall: (a) not approve the activity unless satisfactory compensation has been agreed with the affected person; and (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, which shall establish a register of resettlement/compensation related grievances and disputes mechanism. The Grievance Redress Mechanism being established for the project will facilitate this. 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 activity 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: (i) Mayor; (ii) Legal advisor; (iii) Local Representative within the elected Council; (iv) Head of Community Based Organization; and (v) 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. 71 Attachment 3(i) Land Acquisition Assessment Data Sheet (To be used to record information on all land 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 grievance mechanisms available: 72 Schedule of Compensation of Asset Requisition Summary of Units to be Compensated Agreed Compensation Affected Unit/Item a. 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): 73 Attachment 4 Protection of Cultural Property 1. Cultural property include monuments, structures, works of art, or sites of significance points of view, and are defined as sites and structures having archaeological, historical, architectural, or religious significance, and natural sites with cultural values. This includes cemeteries, graveyards and graves. 2. The initial phase of the proposed project poses limited risks of damaging cultural property since activities will largely consist of rehabilitation of existing roads and minor public works for rehabilitation of school and health buildings, irrigation systems, water and sanitation, markets and small bridges. Other than those activities, there are on-farm productivity, post- harvest handling, storage and processing. Further, the list of negative activity attributes, which would make an activity ineligible for support (Attachment 1), includes any activity that would adversely impact cultural property. Nevertheless, the following procedures for identification, protection from theft, and treatment of discovered artifacts should be followed and included in standard bidding documents as provided in Attachment 6. Chance Find Procedures 3. Chance find procedures will be used as follows: (a) Stop the construction activities in the area of the chance find; (b) Delineate the discovered site or area; (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 (within 24 hours or less); (e) Responsible local authorities and the Ministry of Culture would be in charge of protecting and preserving the site before deciding on subsequent appropriate procedures. 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; those include the aesthetic, historic, scientific or research, social and economic values; (f) Decisions on how to handle the finding shall be taken by the responsible authorities and the Ministry in charge of Cultural Heritage and Archeology. This could include changes in the layout (such as when finding 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 Cultural heritage; and (h) Construction work could resume only after permission is given from the responsible local authorities and the Ministry of Culture concerning safeguard of the heritage. 74 4. These procedures must be referred to as standard provisions in construction contracts, when applicable, and as proposed in section 1.5 of Attachment 6. During project supervision, the Site Engineer shall monitor the above regulations relating to the treatment of any chance find encountered are observed. 5. Relevant findings will be recorded in World Bank Project Supervision Reports (PSRs), and Implementation Completion Reports (ICRs) will assess the overall effectiveness of the project’s cultural property mitigation, management, and activities, as appropriate. 75 Attachment 5 Codes of Practice for Prevention and Mitigation of Environmental Impacts Potential Impacts Prevention and Mitigation Measures 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 • Provision of energy dissipaters, cascades, steps, and ponds, streams and rivers due checks dams. to erosion from road tops and • Provision of sufficient number of cross drains. sides. • Balancing of cut and fill. • Increased run-off and flooding. • Re-vegetation to protect susceptible soil surfaces. • Rehabilitation of borrow areas. Erosion: • Erosion of land downhill from • Design to prevent soil erosion and maintain slope stability. the road bed, or in borrows • Construction in the dry season. areas. • Protection of soil surfaces during construction. • Physical stabilization of erodible surfaces through turfing, • Landslides, slips or slumps. 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. Loss of access. • Design to include accessibility to road sides in case roadbed is raised. • Alternative alignments to avoid bisecting villages by road widening. 76 Potential Impacts Prevention and Mitigation Measures Impacts during construction: • Fuelwood 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 • Removal of work camp waste, proper disposal of oil, wastes. bitumen and other hazardous wastes. • Groundwater contamination (oil, grease). • Accidents during • Management of construction period worker health and construction. safety. • Potential impacts to cultural • Use archaeological chance find procedures and coordinate property. with appropriate agencies. • Increased migration from • Provide comprehensive community participation in nearby cities. planning, and Migration issue to be resolved through local conflict resolution system. 77 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: (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) borrow 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. 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 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. 78 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. Quarries and Borrow Pits 17. Operation of a new borrow 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. 18. 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. 79 19. 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. 20. 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. V. Earthworks 21. Earthworks shall be properly controlled, especially during the rainy season. 22. 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. 23. 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. 24. 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. 25. Any excavated cut or unsuitable material shall be disposed of in designated tipping areas as agreed to by the Engineer. 26. 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. VI. Historical and Archeological Sites 27. 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. 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 80 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. VII. Disposal of Construction and Vehicle Waste 28. Debris generated due to the dismantling of the existing structures shall be suitably reused, to the extent feasible, in the proposed 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 (a) are not located within designated forest areas; (b) do not impact natural drainage courses; and (c) do not impact endangered/rare flora. Under no circumstances shall the contractor dispose of any material in environmentally sensitive areas. 29. 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. 30. 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. 31. 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. 32. 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 provided for wash down and refueling areas. Fuel storage shall be located in proper bounded areas. 33. 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 and important water bodies or as directed by the Engineer. 81 10°E 15°E 25°E 30°E CENTRAL AFRICAN REPUBLIC SOUTH SUDAN To 5°N Ubang To Bangasso 5°N To i Kembe Bangui To Zongo Gbadolite BAS-UELE Juba Bondo Faradje NORD-UBANGI Uele Libenge Gemena Businga HAUT-UELE Titule DEM. REP. Buta Isiro Watsa Kiba li OF CONGO SUD- Aketi To Imese UBANGI Akula Lisala Pakwach Bumba ORIENTALE Wamba MONGALA C Mongbwalu Bunia UGANDA angui Aruwimi ITURI on Banalia g nga Lake o . Lulo Bongandanga Oub Mts Basankusu TSHOPO Bafwasende Albert EQUATEUR Yangambi Beni ba É Q U AT E U R Kisangani Butembo Margherita Peak tum Wanie Rakula (5,110 m) 0° Mbandaka Boende 0° Mi CONGO Tshu a pa NORD Lake G ABON Lubutu KIVU Edward Lake Lo m Lua Bikoro T S H U A PAL Ikela mi a l NORD- aba om uil ak ela Victoria L a Lowa KIVU Goma Ul To Ruhengeri Inongo i Lake Kivu nd Betamba Congo Yumbi i To MAI-NDOMBE Kalima Bukavu Kibuye RWANDA Kutu Kindu SUD Buna KIVU KINSHASA Bandundu Lukenie Lodja Uvira To KINSHASA CITY Kasa i MANIEMA SUD- Bujumbura uru SANKURU Kama BURUNDI BANDUNDU Mangai Sank MANIEMA KIVU Ilebo KINSHASA Bulungu KASAI Malela Lusambo Kasongo Kenge KWILU K A S AÏ Lulimba 5°S CABINDA BAS-CONGO ORIENTAL 5°S Kikwit Idiofa (ANGOLA) To KONGO CENTRAL Mbanza-Ngungu Luebo LOMAMI Kongolo TA N Z A N I A Pointe- Boma KASAI Kananga ga Kalemie Kw Noire Mbuji- Luku Lake ATLANTIC KASAÏ- Mayi ilu Matadi To Feshi OCCIDENTAL Tanganyika Kabinda Kabalo OCEAN Damba Tshikapa Ka sa ORIENTAL TANGANYIKA KWANGO LULUA Kw i Moba ang Mwene-Ditu Manono i DEMOCRATIC REPUBLIC am o Lom KATANGA Luv OF CONGO ua H A U T- L O M A M I Kapanga s. Pweto Kamina t Lueo M SELECTED CITIES AND TOWNS ba Lulua Lu PROVINCE CAPITALS* ANGOLA L Kilwa Lake m Mweru itu uf ira l ua NATIONAL CAPITAL Sandoa M Lubudi HAUT- 10°S RIVERS LUALABA KATANGA MAIN ROADS Kolwezi To 0 100 200 300 400 Kilometers Dilolo Likasi Luwingu ZAMBIA RAILROADS To Lu Lake lab Lucano Malawi a a PROVINCE BOUNDARIES** 0 100 200 Miles Lubumbashi I IBRD 33391R2 M A L AW INTERNATIONAL BOUNDARIES This map was produced by the Map Design Unit of The World Bank. *The creation of 26 new Provinces was approved by the ratification of the 2005 Constitution, to take effect by February, The boundaries, colors, denominations and any other information ZAMB I A Sakania JULY 2011 shown on this map do not imply, on the part of The World Bank To 2009. The existing 11 Province Capitals, shown with green circles, will retain their status, with the exception of Bandundu. Kitwe Group, any judgment on the legal status of any territory, or any Future Province Capitals are shown with white circles. endorsement or acceptance of such boundaries. **The existing 11 Province boundaries and names are shown in dark green; future in light green. 25°E 30°E