INTEGRATED SAFEGUARDS DATA SHEET APPRAISAL STAGE Report No.: ISDSA1376 Public Disclosure Copy Date ISDS Prepared/Updated: 25-Mar-2013 Date ISDS Approved/Disclosed: 25-Mar-2013 I. BASIC INFORMATION 1. Basic Project Data Country: West Bank and Gaza Project ID: P127163 Project Name: GZ-Second Municipal Development Project (P127163) Task Team Soraya Goga Leader: Estimated 26-Mar-2013 Estimated 23-May-2013 Appraisal Date: Board Date: Managing Unit: MNSUR Lending Specific Investment Loan Instrument: Sector: Sub-national government administration (93%), Public administration- Energy and mining (7%) Theme: Urban services and housing for the poor (42%), Municipal finance (42%), Municipal governance and institution building (16%) Financing (In USD Million) Total Project Cost: 65.00 Total Bank Financing: 0.00 Public Disclosure Copy Total Cofinancing: Financing Gap: 55.00 Financing Source Amount Borrower 0.00 Special Financing 10.00 Total 10.00 Environmental B - Partial Assessment Category: Is this a Yes Repeater project? 2. Project Objectives The objective of the project is to improve municipal management practices for better service delivery and municipal transparency. 3. Project Description The Project will be implemented through 4 Components. These include (i) Component 1: Municipal Page 1 of 7 Grants for Capital Investments allocates performance-based grants to municipalities for capital investments or operating expenditures through a transfer formula; (ii) Component 2: Support to Municipal Innovations and Efficiency facilitates learning and innovation to promote municipal Public Disclosure Copy development; (iii) Component 3: Technical Assistance for Municipalities and the Municipal Development and Lending Fund (MDLF) supports municipalities to graduate to a higher performance category, and supports the implementing entity to build its capacity; (iv) Component 4: Project Implementation Support and Management Costs finances project management. Social Accountability and gender inclusion will be mainstreamed across all Components. Component 1: Municipal Grants for Capital Investments: This Component will allocate performance-based grants for capital investment service provision, per mandate of municipalities defined in the Local Councils Law No. 1 of 1997, for sectors described as eligible in the Operations Manual as well as for operating expenditures for Municipalities in Gaza. The allocation amount would be determined through a transfer formula consisting of performance (50%), population (30%) and need (20%). To determine performance, municipalities would be ranked from A through E, based on 16 good governance indicators. Proxy indicators for municipal infrastructure, poverty rates and a flat rate allocation to municipalities are used to calculate ‘need’. Municipalities will then propose priority sub-projects, based on a consultative planning process, for the grant. The priority projects will be financed and implemented with assistance from the MDLF. Public disclosure of subproject information will enhance social accountability between municipalities and citizens. This Component would be implemented in two funding allocations, each spanning 18 months. The Component will finance the costs of goods, works and services. Component 2: Support to Municipal Innovation: This Component finances goods, works and consultants services for capacity building and capital investments in innovations that support MoLG and PA policies including: (a) Strengthening Newly Amalgamated Municipalities will support amalgamated municipalities in financing small scale social infrastructure and demand driven municipal capacity building Public Disclosure Copy packages that allow the amalgamated municipalities to reach the service levels of existing municipalities. The list of proposed investments and capacity building packages are listed in Annex 2. This sub-Component will finance goods, works and consultants services. (b) Piloting Innovations to improve municipal responsiveness and efficiency will support three main areas including: (i) E-governance: Will pilot the introduction of e-governance initiatives in 4 selected municipalities for more citizen-responsive service provision. Thus promoting social accountability. The initiative will promote knowledge sharing; enhance awareness and accountability in service delivery (specifically e-licensing, e-participation and e-payment) and revenue generation. This is a demand driven sub-Component where selection of municipal proposals would be based on p re- defined criteria. The activity will finance goods, software and consultant services. (ii) Renewable Energy will assist municipalities in piloting sub-projects on renewable energy with a focus on solar energy for public buildings. (iii) Support to Local Economic Development initiatives within municipalities will develop a municipal approach to LED and pilot such an approach in 4 selected municipalities. Component 3: Technical Assistance for Municipalities and the MDLF: Technical Assistance for Municipalities would support municipalities in improving their performance to graduate to a higher performance category within which they are currently classified through a Page 2 of 7 series of technical assistance packages. The Component would finance goods, works and consultants services. This sub-Component would be implemented in two funding allocations, spanning 18 months each. Public Disclosure Copy (a) Technical Assistance packages include: (i) Support for Improved Financial Management. Technical assistance packages will include support for the roll out of Financial Policies and Procedures Manual; Fixed Assets Valuation and Registration; Budgeting Guidelines; promotion of Municipal External Audits; and a Revenue Enhancement Program that would include an Integrated Financial Management System and a Revenue Public Awareness Campaign. (ii) Support for Improved Planning Capacity primarily through Strategic Development and Investment Plans. Technical assistance packages would include the roll out of Phase 1-3 of SDIPs to all municipalities that do not have SDIPs; roll out of Phase 4 & 5 of SDIPs to municipalities with Phase 1-3 SDIPs and Update of Municipal SDIPs. (iii) Support for Improved Social Accountability: This activity would assist municipalities in establishing Citizen Service Centers (piloted under MDP 1) and also in developing and rolling out Citizen Guidelines for Service Delivery. The establishment and use of such centers enhances transparency and responsiveness towards citizens, as well as enable citizens to participate and monitor municipal performance. The development and implementation of Citizen Guidelines would guide citizens on their roles and responsibilities vis a vis municipal services. (iv) Support for improving Operations and Maintenance would assist municipalities in improving their operations and maintenance for roads and public buildings. (b) Technical Assistance for the MDLF will strengthen the MDLF’s capacity to implement the MDP, ensuring that it continues to use innovative approaches that build on international best practices. It will provide support for human resource development and institution building based on the MDLF’s Medium Term Strategic Plan (currently under development) and its Human Resources Development Plan. The sub-Component would finance goods and consultants services. Component 4: Project Implementation Support and Management Costs: will support Project Public Disclosure Copy Implementation including MDLF management fee, monitoring and evaluation, outreach and communication, local technical consultants for the engineering supervision of Component 1 Sub- project implementation and social accountability awareness measures. The Component would finance goods and consultants services. 4. Project location and salient physical characteristics relevant to the safeguard analysis (if known) 134 municipalities in the West bank and Gaza. 5. Environmental and Social Safeguards Specialists Hana Salah (MNSSO) Zeyad Abu-Hassanein (MNSWA) 6. Safeguard Policies Triggered? Explanation (Optional) Environmental Assessment OP/ Yes OP 4.01 is triggered and requires an BP 4.01 environmental assessment for activities that involve infrastructure construction. The development and rehabilitation of municipal infrastructure includes roads, rehabilitation of Page 3 of 7 water wells, water networks, and wastewater and sanitation facilities, parks, and others. Negative environmental impacts, associated with municipal Public Disclosure Copy subprojects, are expected to be minor during the construction phase. These impacts will be mitigated by the MDLF through EMP implementation and the project is classified as category "B". Furthermore, the size of funds available to municipalities under this program limit the scope of the subprojects, and hence larger scale subprojects which require a full- fledged EIA (category A) will be excluded (negative list) in the sub-project screening process and will not be feasible due to the ceilings of funds available under the project. An Environmental and Social Management Framework has been prepared by MDLF since all sub-projects are not fully known a priori. The ESMF contains provisions for screening of sub- projects and acceptance/rejection criteria, negative lists. MDLF will monitor compliance on EMP provisions of different municipalities during implementation. Natural Habitats OP/BP 4.04 No Forests OP/BP 4.36 No Pest Management OP 4.09 Yes OP 4.09 is triggered, a few municipalities, Public Disclosure Copy particularly in Gaza support subprojects which may require financing to purchase of some chemicals for pest control, primarily mosquitoes. A pest management plan which is based on lessons learned under the MDP 1 has been updated for this project to ensure compliance with OP 4.09 policy on chemical purchased for pest management and proper storage and handling during project implementation. Physical Cultural Resources OP/ No The project will contain a “chance find clause� BP 4.11 in its bidding documents which will be described in the ESMF/EMP. Any sub project activity that might trigger cultural heritage operational polices will be excluded. Indigenous Peoples OP/BP 4.10 No Involuntary Resettlement OP/BP No Any subprojects that could trigger the 4.12 involuntary resettlement policy (OP 4.12) will be Page 4 of 7 excluded, and a respective negative list is part of the Operational Manual. The project will thus not fund municipal sub-projects that involve direct Public Disclosure Copy economic and social impacts through: (a) the temporary or permanent involuntary taking of land resulting in relocation or loss of shelter, loss of assets or access to assets, or loss of income sources or means of livelihood, whether or not the affected persons must move to another location; or (b) involuntary restriction of access to legally designated parks and protected areas resulting in adverse impacts on the livelihoods of the displaced persons in relocation of individuals, households or loss of shelter, loss of income or other livelihood means for individuals or community members, loss of assets or access to assets. Safety of Dams OP/BP 4.37 No Projects on International No Water and wastewater rehabilitation sub- Waterways OP/BP 7.50 projects are of limited scope and minor extensions to existing networks. No new water wells are allowed under the project and the impacts of the activities are minor and easily mitigated by EMP implementation. No significant impacts are expected to the shared groundwater aquifers in West Bank and Gaza. Public Disclosure Copy Projects in Disputed Areas OP/BP No 7.60 II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the Restructured project. Identify and describe any potential large scale, significant and/or irreversible impacts: This project excludes any sub-projects that trigger any Bank policies except for OP 4.01 and OP 4.09. The OP 4.09 is triggered since a few municipalities, especially in Gaza, are expected to purchase chemicals intended for pest control, primarily mosquitoes. An abbreviated pest management plan has been included in the ESMF prepared by MDLF which included provisions on allowed chemicals and safe handling and disposal of pesticides. Projects of large scale impacts (of category A) are excluded from funding and the financing ceiling of the projects excludes this type of projects by the fact of limited funds allocated to a single municipality. A provision of chance finds is included to cater for the case of any archaeological finds especially in the road rehabilitation projects. The expected environmental impacts are limited and temporary during the construction phase and easily mitigated by implementation of site specific ESMP that will be prepared by the municipalities and monitored by MDLF. Page 5 of 7 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: N/A Public Disclosure Copy 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. N/A 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. The borrower has prepared an ESMF which includes the provisions of project screening and preparation of specific ESMP to mitigate the negative impacts during construction. For social safeguards for MDP2, an emphasis has been made in implementing procedures for: (1) social safeguards monitoring during sub-project implementation, particularly those involving construction; (2) voluntary land donations; and (3) a complaints handling mechanism. The MDP2 Operations Manual (OM) provides specific guidance on these procedures. MDLF is staffed with environmental and social specialists, supported by a full task force of site engineers who have good experience following up the implementation of ESMP during the predecessor project, MDP. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. During project identification and preparation, consultations were conducted with beneficiary municipalities in West Bank and Gaza.MDLF documented in the ESMF the consultation process that took place and the municipalities, local communities and NGOs that took part of the consultations. B. Disclosure Requirements Environmental Assessment/Audit/Management Plan/Other Date of receipt by the Bank 25-Mar-2013 Public Disclosure Copy Date of submission to InfoShop 25-Mar-2013 For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors "In country" Disclosure West Bank and Gaza 24-Mar-2013 Comments: Pest Management Plan Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 25-Mar-2013 Date of submission to InfoShop 25-Mar-2013 "In country" Disclosure West Bank and Gaza 24-Mar-2013 Comments: If the project triggers the Pest Management and/or Physical Cultural Resources policies, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/ Audit/or EMP. If in-country disclosure of any of the above documents is not expected, please explain why: Page 6 of 7 C. Compliance Monitoring Indicators at the Corporate Level Public Disclosure Copy OP/BP/GP 4.01 - Environment Assessment Are the cost and the accountabilities for the EMP incorporated Yes [ ] No [ ] NA [ ] in the credit/loan? OP 4.09 - Pest Management If yes, has the PMP been reviewed and approved by a Yes [ ] No [ ] NA [ ] safeguards specialist or SM? Are PMP requirements included in project design?If yes, does the project team include a Pest Management Specialist? The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the Yes [ ] No [ ] NA [ ] World Bank's Infoshop? Have relevant documents been disclosed in-country in a public Yes [ ] No [ ] NA [ ] place in a form and language that are understandable and accessible to project-affected groups and local NGOs? All Safeguard Policies Have satisfactory calendar, budget and clear institutional Yes [ ] No [ ] NA [ ] responsibilities been prepared for the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included Yes [ ] No [ ] NA [ ] in the project cost? Does the Monitoring and Evaluation system of the project Yes [ ] No [ ] NA [ ] include the monitoring of safeguard impacts and measures related to safeguard policies? Public Disclosure Copy Have satisfactory implementation arrangements been agreed Yes [ ] No [ ] NA [ ] with the borrower and the same been adequately reflected in the project legal documents? III. APPROVALS Task Team Leader: Soraya Goga Approved By Sector Manager: Name: Franck Bousquet (SM) Date: 25-Mar-2013 Page 7 of 7