THE WORLD BANK - ENVIRONMENTAL AND SOCIAL COMMITMENT PLAN (ESCP) - MODERNIZATION OF PUBLIC FINANCIAL MANAGEMENT SYSTEMS IN MEXICO PROJECT (P169959) The United Mexican States / Secretariat of Finance and Public Credit Modernization of Public Financial Management Systems in Mexico Project (P169959) Draft Version for Negotiations ENVIRONMENTAL and SOCIAL COMMITMENT PLAN (ESCP) December 11, 2019 1|Page THE WORLD BANK - ENVIRONMENTAL AND SOCIAL COMMITMENT PLAN (ESCP) - MODERNIZATION OF PUBLIC FINANCIAL MANAGEMENT SYSTEMS IN MEXICO PROJECT (P169959) ENVIRONMENTAL AND SOCIAL COMMITMENT PLAN 1. The United Mexican States will implement the Modernization of Public Financial Management Systems in Mexico Project (the Project), through the Secretariat of Finance and Public Credit (SHCP). The International Bank for Reconstruction and Development (hereinafter the Bank) has agreed to provide financing for the Project. 2. The United Mexican States will implement material measures and actions so that the Project is implemented in accordance with the Environmental and Social Standards (ESSs). This Environmental and Social Commitment Plan (ESCP) sets out material measures and actions, any specific documents or plans, as well as the timing for each of these. 3. The United Mexican States will also comply with the provisions of any other environmental and social (E&S) documents required under the ESSs and referred to in this ESCP, including Labor Management Procedures (LMP) and other E&S provisions set out in the Operational Manual (OM), and the timelines specified in those E&S documents. 4. The United Mexican States is responsible for compliance with all requirements of the ESCP even when implementation of specific measures and actions is conducted by the SHCP. 5. Implementation of the material measures and actions set out in this ESCP will be monitored and reported to the Bank by the United Mexican States as required by the ESCP and the conditions of the legal agreement, and the Bank will monitor and assess progress and completion of the material measures and actions throughout implementation of the Project. 6. As agreed by the Bank and the United Mexican States, this ESCP may be revised from time to time during Project implementation, to reflect adaptive management of Project changes and unforeseen circumstances or in response to assessment of Project performance conducted under the ESCP itself. In such circumstances, the United Mexican States, through the SHCP, will agree to the changes with the Bank and will update the ESCP to reflect such changes. Agreement on changes to the ESCP will be documented through the exchange of letters signed between the Bank and the SHCP. The SHCP will promptly disclose the updated ESCP. 7. Where there are Project changes, unforeseen circumstances, or where Project performance results in changes to the risks and impacts during Project implementation, the United Mexican States shall provide additional funds, if needed, to implement actions and measures to address such risks and impacts, which may include environmental, health, and safety impacts and gender-based violence. 2|Page THE WORLD BANK - ENVIRONMENTAL AND SOCIAL COMMITMENT PLAN (ESCP): Modernization of Public Financial Management Systems in Mexico Project (P169959). October 2019 MATERIAL MEASURES AND ACTIONS TIMEFRAME RESPONSIBILE ENTITY/AUTHORITY MONITORING AND REPORTING A REGULAR REPORTING Six-monthly reporting throughout Project The Project Administration Unit (PAU) Prepare and submit to the Bank, as part of the six-monthly progress implementation. within the SHCP (PAU/SHCP) reports on the Project implementation, regular monitoring reports on the environmental, social, health and safety (ESHS) performance of the Project, including but not limited to, implementation of the ESCP, occurrence of incidents and accidents, stakeholder engagement activities, and functioning of the grievance mechanism. B INCIDENTS AND ACCIDENTS Within 48 hours after learning of any PAU/SHCP Promptly notify the Bank of any incident or accident related to the fatality or other incident or accident. Project which has, or is likely to have, a significant adverse effect on the Timing of the subsequent report will be environment, the affected communities, the public or workers. Provide provided within a timeframe acceptable to sufficient detail regarding the incident or accident, indicating immediate the Bank, as requested. measures taken or that are planned to be taken to address it, and any information provided by any contractor and supervising entity, as appropriate. Subsequently, as per the Bank’s request, prepare a report on the incident or accident and propose any measures to prevent its recurrence. A Borrower’s Guide to Response to Environmental, Social and Occupational Health and Safety Incidents for World Bank Financed Projects that further details how to address any incidents or accidents will be included as an annex to the OM. ESS 1: ASSESSMENT AND MANAGEMENT OF ENVIRONMENTAL AND SOCIAL RISKS AND IMPACTS 1.1 ORGANIZATIONAL STRUCTURE Starting latest at one month after Project SHCP SCHP will establish and maintain a PAU with qualified staff and effectiveness and throughout Project resources to support management of E&S risks of the Project. implementation. 1.2 MANAGEMENT TOOLS AND INSTRUMENTS The OM, acceptable to the Bank, is PAU/SHCP The E&S risk management processes and procedures to be followed expected to be finalized prior to during Project implementation will be included in the Project’s negotiations or at latest by Project Operational Manual (OM), consistent with relevant requirements of effectiveness. Once approved, the OM will ESS1, ESS2 and ESS3, and in a manner acceptable to the World Bank. be implemented throughout Project implementation. 3|Page THE WORLD BANK - ENVIRONMENTAL AND SOCIAL COMMITMENT PLAN (ESCP): Modernization of Public Financial Management Systems in Mexico Project (P169959). October 2019 MATERIAL MEASURES AND ACTIONS TIMEFRAME RESPONSIBILE ENTITY/AUTHORITY ESS 2: LABOR AND WORKING CONDITIONS 2.1 LABOR MANAGEMENT PROCEDURES A draft LMP has been prepared prior to PAU/SHCP Finalize, adopt, and thereafter implement the Labor Management Appraisal and the final LMP will be finalized Procedures (LMP), the draft of which has been prepared for the Project, prior to negotiations or at latest by Project in a manner acceptable to the World Bank. The LMP will be included as effectiveness. The LMP will be an annex to the OM. implemented throughout Project implementation and subject to review in case necessary. 2.2 PAU/SHCP will ensure that bidding documents and Project-financed Throughout Project implementation. PAU/SHCP contracts with consultancy firms include a clause to ensure that working conditions are in line with the ESS2 requirements. 2.3 GRIEVANCE MECHANISM FOR PROJECT WORKERS Throughout Project implementation. PAU/SHCP Establish, maintain, and operate a grievance mechanism for Project workers, or require the operation of a grievance mechanism (in the case of consultancy firms), as applicable, and as further described in the LMP. ESS 3: RESOURCE EFFICIENCY AND POLLUTION PREVENTION AND MANAGEMENT 3.1 E-WASTE MANAGEMENT PLAN E-Waste Management Plan will be PAU/SHCP Develop and implement an E-Waste Management Plan, including by prepared and disclosed prior to incorporating relevant provisions of the plan in procurement processes. implementing any disposal of old IT The E-Waste Management Plan will be included as an annex to the OM equipment. The Plan is expected to be and disclosed as a stand-alone document at the SHCP website and the finalized by March 2021 and thereafter World Bank external website. implemented throughout Project implementation. 3.2 RESOURCE EFFICIENCY AND POLLUTION PREVENTION AND The OM will be finalized prior to PAU/SHCP MANAGEMENT negotiations or at latest by Project Resource efficiency and pollution prevention and management effectiveness. The requirements will be requirements will be included in the OM to secure procurement of reflected in the procurement documents of energy efficient IT equipment. the IT equipment throughout Project implementation. 4|Page THE WORLD BANK - ENVIRONMENTAL AND SOCIAL COMMITMENT PLAN (ESCP): Modernization of Public Financial Management Systems in Mexico Project (P169959). October 2019 MATERIAL MEASURES AND ACTIONS TIMEFRAME RESPONSIBILE ENTITY/AUTHORITY ESS 4: COMMUNITY HEALTH AND SAFETY Not relevant for the Project. ESS 5: LAND ACQUISITION, RESTRICTIONS ON LAND USE AND INVOLUNTARY RESETTLEMENT Not relevant for the Project. ESS 6: BIODIVERSITY CONSERVATION AND SUSTAINABLE MANAGEMENT OF LIVING NATURAL RESOURCES Not relevant for the Project. ESS 7: INDIGENOUS PEOPLES/SUB-SAHARAN AFRICAN HISTORICALLY UNDERSERVED TRADITIONAL LOCAL COMMUNITIES Not relevant for the Project. ESS 8: CULTURAL HERITAGE Not relevant for the Project. ESS 9: FINANCIAL INTERMEDIARIES Not relevant for the Project. ESS 10: STAKEHOLDER ENGAGEMENT AND INFORMATION DISCLOSURE 10.1 STAKEHOLDER ENGAGEMENT PLAN PREPARATION AND PAU/SHCP IMPLEMENTATION Disclose information on Project actions and progress to interested Communication mechanism implemented parties within SHCP and establish a mechanism to ensure effective throughout Project implementation. communication with them. Project activities on improving fiscal transparency will engage relevant Consultations on transparency start in year civil society stakeholders, including NGOs, think thanks, and opinion 3 of implementation. makers starting in year 3. Workshops and dissemination material will be developed to inform Last year of Project implementation. stakeholders on the results of the Project. 10.2 PROJECT GRIEVANCE MECHANISM The grievance mechanism will be operated PAU/SHCP SHCP has a grievance mechanism and transparency channels that will be throughout Project implementation. used throughout Project implementation to address any complaints Regular reports under action A above will related to the Project. This mechanism is described in the OM and the provide information on its functioning. SHCP website. 5|Page THE WORLD BANK - ENVIRONMENTAL AND SOCIAL COMMITMENT PLAN (ESCP): Modernization of Public Financial Management Systems in Mexico Project (P169959). October 2019 MATERIAL MEASURES AND ACTIONS TIMEFRAME RESPONSIBILE ENTITY/AUTHORITY CAPACITY SUPPORT (TRAINING) CS1 Sufficient training on how to comply with the ESSs will be provided to Training to PAU staff will be provided once PAU/SHCP the PAU staff before the start of Project execution, specifically on: the PAU has been established, and stakeholder mapping and engagement, grievances mechanisms and thereafter throughout Project labour management procedures. implementation as needed. In addition, Project workers will be provided with training and Trainings to Project workers will be documentation on labour management procedures including grievance provided once contracts are signed and mechanisms required by ESS2. before execution of the service. 6|Page