Document of The World Bank FOR OFFICIAL USE ONLY Report No: PAD2063 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT PROJECT APPRAISAL DOCUMENT ON A PROPOSED LOAN IN THE AMOUNT OF US$48 MILLION TO THE REPUBLIC OF INDIA FOR THE MEGHALAYA COMMUNITY-LED LANDSCAPES MANAGEMENT PROJECT January 30, 2018 Environment and Natural Resources South Asia This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Exchange Rate Effective December 31, 2017 Currency Unit = Indian Rupee (INR) INR 63.87 = US$1 FISCAL YEAR April 1 – March 31 ABBREVIATIONS AND ACRONYMS ADC Autonomous District Council AWP Annual Work Plan BNRGSK Bharat Nirman Rajiv Gandhi Seva Kendra BPMU Block Project Management Unit C&RD Community and Rural Development CAG Comptroller and Auditor General CBO Community-Based Organization CDD Community-Driven Development CEO Chief Executive Officer CLLMP Community-led Landscape Management Project CNRM Community-led Natural Resource Management COM Community Operations Manual CTI Conservation Training Institute DG&SD Directorate General of Supplies and Disposals DPM District Project Manager DPMU District Project Management Unit DS Direct Selection EFC Enterprise Facilitation Center EMF Environmental Management Framework EIRR Economic Internal Rate of Return ENPV Economic Net Present Value EOI Expression of Interest EX-ACT Ex Ante Carbon Balance Tool FM Financial Management FTI Forest Training Institute GDP Gross Domestic Product GeM Government e-Marketplace GHG Greenhouse Gas GIS Geographic Information System GoI Government of India GoM Government of Meghalaya GRM Grievance Redressal Mechanism IBDLP Integrated Basin Development and Livelihood Promotion Program IEC Information, Education, and Communication IFR Interim Financial Report IPDP Indigenous Peoples Development Plan IPF Investment Project Financing ISR Implementation Status and Results Report LAMP Livelihood Access to Markets Project M&E Monitoring and Evaluation MBDA Meghalaya Basin Development Authority MBMA Meghalaya Basin Management Agency MCLLMP Meghalaya Community-led Landscapes Management Project MIS Management Information System MTR Midterm Review NESAC Northeast Space Application Centre NGO Nongovernmental Organization NRM Natural Resource Management PDO Project Development Objective PMU Project Management Unit PPSD Project Procurement Strategy for Development RFB Request for Bids RFP Request for Proposal RFQ Request for Quotation SA Social Assessment SIRD State Institute for Rural Development SMF Social Management Framework SPMU State Project Management Unit (in MBMA) STEP Systematic Tracking of Exchanges in Procurement VNRMC Village Natural Resource Management Committee Regional Vice President: Annette Dixon Country Director: Junaid Kamal Ahmad Senior Global Practice Director: Karin Kemper Practice Manager: Kseniya Lvovsky Task Team Leaders: Pyush Dogra and Madhavi Pillai India Meghalaya Community-led Landscapes Management Project TABLE OF CONTENTS Page I.  STRATEGIC CONTEXT .................................................................................................1  A.  Country Context ............................................................................................................ 1  B.  Sectoral and Institutional Context ................................................................................. 2  C.  Higher Level Objectives to which the Project Contributes .......................................... 3  II.  PROJECT DEVELOPMENT OBJECTIVES ................................................................3  A.  PDO............................................................................................................................... 3  Project Beneficiaries ........................................................................................................... 3  PDO Level Results Indicators............................................................................................. 4  III.  PROJECT DESCRIPTION ..............................................................................................4  A.  Project Components ...................................................................................................... 4  B.  Project Financing .......................................................................................................... 7  C.  Lessons Learned and Reflected in the Project Design .................................................. 8  IV.  IMPLEMENTATION .......................................................................................................8  A.  Institutional and Implementation Arrangements .......................................................... 8  B.  Results Monitoring and Evaluation .............................................................................. 9  C.  Sustainability............................................................................................................... 10  V.  KEY RISKS ......................................................................................................................11  A.  Overall Risk Rating and Explanation of Key Risks.................................................... 11  VI.  APPRAISAL SUMMARY ..............................................................................................12  A.  Economic and Financial (if applicable) Analysis ....................................................... 12  B.  Technical ..................................................................................................................... 13  C.  Financial Management ................................................................................................ 13  D.  Procurement ................................................................................................................ 14  E.  Social (including safeguards) ...................................................................................... 15  F. Environment (including Safeguards) ............................................................................ 17  G. Other Safeguards Policies Triggered ........................................................................... 18  H. World Bank Grievance Redress ................................................................................... 18  Annex 1: Results Framework and Monitoring .........................................................................19  Annex 2: Detailed Project Description .......................................................................................31  Annex 3: Implementation Arrangements ..................................................................................38  Annex 4: Implementation Support Plan ....................................................................................61  Annex: 5: Economic Analysis .....................................................................................................65  Annex 6: GHG Balance Accounting...........................................................................................67  Annex 7: Map of Project Area ....................................................................................................69  . PAD DATA SHEET India Meghalaya Community-led Landscapes Management Project (P157836) PROJECT APPRAISAL DOCUMENT . SOUTH ASIA 0000009274 Report No.: PAD2063 . Basic Information Project ID EA Category Team Leader(s) P157836 B - Partial Assessment Pyush Dogra, Madhavi M. Pillai Financing Instrument Fragile and/or Capacity Constraints [ ] Investment Project Financing Financial Intermediaries [ ] Series of Projects [ ] Project Implementation Start Date Project Implementation End Date 28-Feb-2018 30-Jun-2023 Expected Effectiveness Date Expected Closing Date 25-May-2018 30-Jun-2023 Joint IFC No Practice Senior Global Practice Country Director Regional Vice President Manager/Manager Director Kseniya Lvovsky Karin Erika Kemper Junaid Kamal Ahmad Annette Dixon . Borrower: Republic of India Responsible Agency: Government of Meghalaya Contact: R.M. Mishra Title: Principal Secretary, Planning Telephone No.: 08575017989 Email: rm.mishra@nic.in . Project Financing Data(in USD Million) [X] Loan [ ] IDA Grant [ ] Guarantee [ ] Credit [ ] Grant [ ] Other Total Project Cost: 60.00 Total Bank Financing: 48.00 Financing Gap: 0.00 . Financing Source Amount i Borrower 12.00 International Bank for Reconstruction and 48.00 Development Total 60.00 . Expected Disbursements (in USD Million) Fiscal 2018 2019 2020 2021 2022 2023 0000 0000 0000 0000 Year Annual 1.60 7.12 10.49 13.02 9.76 6.01 0.00 0.00 0.00 0.00 Cumulati 1.60 8.72 19.21 32.23 41.99 48.00 48.00 0.00 0.00 0.00 ve . Institutional Data Practice Area (Lead) Environment & Natural Resources Contributing Practice Areas Agriculture, Gender, Macroeconomics, Trade and Investment Proposed Development Objective(s) The project development objective is to strengthen community-led landscapes management in selected landscapes in the state of Meghalaya. . Components Component Name Cost (USD Millions) Strengthening Knowledge and Capacity for Natural Resource 13.00 Management Community-led Landscape Planning and Implementation 30.00 Project Management and Governance 5.00 . Systematic Operations Risk- Rating Tool (SORT) Risk Category Rating 1. Political and Governance Moderate 2. Macroeconomic Moderate 3. Sector Strategies and Policies Moderate 4. Technical Design of Project or Program Moderate 5. Institutional Capacity for Implementation and Sustainability Moderate 6. Fiduciary Substantial 7. Environment and Social Substantial 8. Stakeholders Moderate 9. Other ii OVERALL Substantial . 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 [ X ] 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 Institutional Arrangements X CONTINUOUS Description of Covenant Meghalaya shall vest the overall responsibility for the implementation of the Project activities in the MBMA. Name Recurrent Due Date Frequency SPMU X CONTINUOUS Description of Covenant Meghalaya to ensure that the MBMA maintains throughout the Project implementation period, an SPMU, headed by a Project Director, assisted by multi-disciplinary and competent staff, all with experience and qualifications, in numbers and under terms of reference agreed with the Bank and set out in the PIP; which unit shall be provided with such powers, financial resources, functions and competencies, agreed with the Bank, as shall be required for it to carry out the day-to-day iii implementation of the activities under the Project, including evaluating the recommendations made by the DPMUs. Name Recurrent Due Date Frequency DPMU X CONTINUOUS Description of Covenant Meghalaya to ensure that the MBMA maintains throughout the Project implementation period, the (i) DPMUs within each District, with functions, composition and responsibilities acceptable to the Bank, including guiding and supervising the Project, reviewing and approving the community-led NRM plans submitted to the SPMU; and (ii) maintaining , such number of the BPMUs for the support of each selected village, as needed, including, supporting the VNRMCs, providing trainings and demonstrations and monitoring the implementation of the Project at the village level. Name Recurrent Due Date Frequency VNRMC X CONTINUOUS Description of Covenant Meghalaya shall cause the MBMA (acting through its district and block level units) to require the constitution of the VNRMCs for the submission of expression of interest (EOIs) from any selected village based on the satisfaction of the criteria specified in the Community Operations Manual. Name Recurrent Due Date Frequency Project Community Operations Manual X CONTINUOUS Description of Covenant Meghalaya shall prepare and adopt a Community Operations Manual, acceptable to the Bank, setting forth, inter alia the guidelines on the preparation of community-led NRM plans, criteria for selection of activities in the NRM plans, milestones to be achieved, the participatory planning processes to be adopted and the eligibility criteria for the provision of Village Grants, as such manual may be revised, updated or supplemented from time to time with the prior written concurrence of the Bank. Name Recurrent Due Date Frequency Project Documents X CONTINUOUS Description of Covenant Meghalaya shall ensure that the MBMA and the Project specific beneficiaries carry out the Project in accordance with the Project Implementation Plan and/or the Community Operations Manual. Name Recurrent Due Date Frequency Safeguards X CONTINUOUS Description of Covenant Meghalaya shall, through the MBMA, ensure, and cause the Project specific beneficiary(ies) to ensure, that the Project (including any activities carried out under the Village Grants and the Innovation Grants) is carried out pursuant to, and in compliance with the provisions set forth in the EMF and the SMF (collectively the “Safeguard Documents”); Name Recurrent Due Date Frequency Civil works X CONTINUOUS Description of Covenant iv Meghalaya shall, through MBMA, ensure, and cause the Project specific beneficiary(ies) to ensure, that, each contract for civil works under the Project (including any activities carried out under the Village Grants and the Innovation Grants) include the obligation of the relevant contractor to comply with the relevant Safeguard Documents applicable to said civil works. Name Recurrent Due Date Frequency Grievance Redress Mechanism X CONTINUOUS Description of Covenant Meghalaya, through the MBMA shall maintain and operate, throughout the period of implementation of the Project, a multi-layered and multi-level grievance redress mechanism acceptable to the Bank for the handling of any stakeholder complaints arising out of the implementation their activities under the Project. Name Recurrent Due Date Frequency Project Monitoring, Reporting and X CONTINUOUS Evaluation Description of Covenant Meghalaya shall cause VNRMCs to: (a) prepare and provide to the Borrower and the Bank the Project execution/completion report referred to in Section 5.08 (c) of the General Conditions; and (b) provide all such information as the Borrower or the Bank shall reasonably request for the purposes of that Section. . Conditions Source Of Fund Name Type IBRD Community Operations Manual Disbursement Description of Condition No withdrawals shall be made for payments under Category 3 [Village Grants under sub-components 2A and 2B of the Project, unless the Community Operations Manual has been prepared and adopted by the MBMA in a manner satisfactory to the Bank. Team Composition Bank Staff Name Role Title Specialization Unit Pyush Dogra Team Leader Senior GEN06 (ADM Environmental Responsible) Specialist Madhavi M. Pillai Team Leader Sr Natural GEN06 Resources Mgmt. Spec. Geeta Shivdasani Procurement Procurement GGOPZ Specialist (ADM Analyst Responsible) Arvind Prasad Mantha Financial Sr Financial GGOIS Management Management Specialist Specialist v Anders Jensen Team Member Senior Monitoring GENOS & Evaluation Specialist Foluso Okunmadewa Team Member Lead Specialist GSP08 Martin M. Serrano Counsel Senior Counsel LEGES Mridula Singh Social Safeguards Senior Social GSU06 Specialist Development Specialist Payal Malik Madan Team Member Program Assistant SACIN Poonam Rohatgi Team Member Senior Program GEN06 Assistant Radha Narayan Team Member Procurement GGOPZ Assistant Sandhya Krishnan Team Member Program Assistant SACIN Sharlene Jehanbux Environmental Environmental GEN06 Chichgar Safeguards Specialist Specialist Siddharth Padmanabh Team Member Program Analyst GEN06 Merchant Victor Manuel Ordonez Team Member Senior Finance WFACS Conde Officer Vidya Venugopal Counsel Counsel LEGES Extended Team Name Title Office Phone Location Aditi Jha Consultant 8517366628 Narendra Rathore Consultant 9900393800 Simi Mishra Communications 9937012207 Consultant . Locations Country First Location Planned Actual Comments Administrative Division . Consultants (Will be disclosed in the Monthly Operational Summary) Consultants Required? Consultants will be required vi I. STRATEGIC CONTEXT A. Country Context 1. India’s growth continues to be impressive but sustainability depends on judicious management of the country’s natural resources. Despite a modest slowdown in fiscal year 2017, economic activity is expected to accelerate and the gross domestic product (GDP) expected to grow at 7.2 percent in the fiscal year 2018. The country still faces development challenges with the largest number of poor in the world1. The primary sector (agriculture, fisheries, and forestry) contributes only 13.9 percent to the GDP but is the principal source of livelihood for nearly 50 percent of the population2. Yet, about 29 percent of India’s land is undergoing degradation—loss of topsoil and loss of vegetation due to rainfall, surface runoff, and degradation of forests3, hampering the rise of agricultural productivity and incomes. 2. Emphasis on growth in the northeastern states is likely to benefit Meghalaya. India’s northeast4 currently lags on several development indicators. The per capita income of Meghalaya was historically 15 percent above the national average but came down to 8 percent below the national average by 2000–2001 and remains there. As part of the vision of the Government of India (GoI) for the northeast and to integrate better with East Asian economies, there is a renewed focus on the growth and development of infrastructure and connectivity of this region. Meghalaya has high potential to develop its rich mineral resources (coal, limestone, and uranium) and nearly 3,000MW of hydropower (only 185 MW is operational). In addition, there is potential to develop tourism owing to its biodiversity, scenic landscapes, and unique cultural heritage. 3. The degradation of land and water in Meghalaya, which is likely to be further exacerbated by climate change, needs to be addressed to sustain the benefits of natural resource-based growth. In 2011–2012, about 22 percent of the state’s area was under degradation, primarily because of loss of vegetation cover (19.4 percent) and erosion (2.4 percent). Given the hilly terrain, loss of top soil makes valleys unsuitable for cultivation and increases incidences of landslides and floods. Despite receiving the highest rainfall in the world, several towns in Meghalaya now face water shortage. The state has 60,000 natural springs which provide drinking water for 80 percent of the population. However, over 54 percent of these springs have either dried or their water discharge has reduced by more than half. A statewide climate vulnerability analysis5 for the period ending in 2050 indicates an increase in water and agricultural vulnerability in parts of the state due to high variability of projected rainfall. Eastern parts of the state are projected to see an increase of about 3 percent and western parts, an increase of about 18 percent. 1 World Bank. 2016. Poverty and Shared Prosperity 2016: Taking on Inequality. Washington, DC 2 Government of India. 2016. State of Indian Agriculture 2015–16. Ministry of Agriculture and Farmers’ Welfare, Government of India. 3 ISRO (Indian Space Research Organization). 2016. Desertification and Land Degradation Atlas of India (Based on IRS AWiFS data of 2011–13 and 2003–05). Space Applications Centre, ISRO, Ahmedabad, India. 4 Assam, Meghalaya, Manipur, Mizoram, Nagaland, Tripura, and Sikkim are considered part of the northeast. 5 Ravindranath et. al. (2011): Climate Change vulnerability profiles for North East India, Current Science, Vol. 101, No.3, 10 Aug 2011 pp. 384-394 1 B. Sectoral and Institutional Context 4. Meghalaya has a unique community-based natural resource management (NRM) system. Distinct from the rest of India, where the states are responsible for the protection and management of forests, nearly 90 percent of the forests in Meghalaya are managed under customary law by the Khasi, the Garo, and the Jaintia tribes, the majority population of the state. Their elaborate system of use-based classification of their lands has been in practice for centuries. The national and the state forest laws do not formally recognize this form of community management. These forests are designated as ‘unclassified forests’ in the state records and for the most part do not receive technical or financial support from state institutions. There are no water- related institutions or legal frameworks for water management in the state. Waterbodies, rivers, and springs are considered common property like forests and are managed by traditional tribal institutions. 5. State institutions have not been able to support Meghalaya’s community management of natural resources. Autonomous District Councils6 (ADCs) were established under the Constitution of India to facilitate tribal societies’ way of life and serve as a link between formal state structures and traditional tribal institutions. The role of ADCs, with respect to management of natural resources, has been diluted over the years. They do not have the financial or other resources for management of forests or waterbodies. Communities and clans have ownership rights, but little else. Together, these lacunae leave nearly 90 percent of Meghalaya’s forests without much financial or technical assistance for sustainable use. The absence of appropriate incentives, resources, or recognition of long-term management by communities is resulting in a preference for short-term returns through poorly managed coal mining and timber extraction. While joint forest management has been the dominant model to involve communities in forest management in India, it has little relevance for Meghalaya where communities already have forest rights and traditional management systems. The state needs an approach that resonates with the community’s management systems and that is tailored to the state’s unique sociopolitical context. 6. The Government recognizes the importance of integrated planning and natural resource sustainability for economic development. The Department of Planning, Government of Meghalaya (GoM) through the Meghalaya Basin Development Authority (MBDA), leads an ambitious program—the ‘Integrated Basin Development and Livelihood Promotion Program (IBDLP)’ which focuses on poverty alleviation, employment generation, and livelihood promotion. It has nine focal areas in agriculture, water, and NRM; and aims to bring new knowledge and skills to empower communities to make the best use of their natural resources through the value chain. The state has also recognized that its geo-environmental context, being in the eastern Himalayan region in the Brahmaputra - Meghna river systems, makes it vulnerable to climate induced water hazards such as floods, landslides and water scarcity. The state has a comprehensive State Action Plan on Climate Change with detailed analysis and options to increase climate resilience of agriculture, forestry and agroforestry systems. The GoM has also started shifting the emphasis from single sector programs toward integrated community-led natural 6 As a state under the Sixth Schedule of the Constitution Meghalaya has a middle layer of elected bodies, the ADCs, established in 1952 with the objective of safeguarding customary practices and way of life of the predominantly tribal population. The ADCs have legislative, executive and judiciary functions including, in respect of forests other than reserved forests, on allocation of land for mining and agriculture and collection of taxes and user fees for water resources within their districts. 2 resources management with community-level planning and approval at the village level and convergence of funding streams at the district level. The MBDA-steered IBDLP, is an opportunity to transform the way the state and communities manage natural resources. C. Higher Level Objectives to which the Project Contributes 7. The higher-level objectives of the project are to (a) manage and conserve the natural resources, especially forests and water sources, so that it supports accelerated economic growth and well-being of every community in Meghalaya; and (b) to institutionalize and demonstrate a model for government support to community-led management of natural resources, especially forests, that could be replicated in other parts of India. 8. The proposed operation is consistent with the World Bank India Country Partnership Strategy of April 11, 2013, which focuses on transformation and inclusion by supporting community-led interventions to restore and sustainably manage forests, land and water resources, and biodiversity, on which 80 percent of the population depends, and by enhancing the involvement of the World Bank in a low-income state of India that is committed to reforms. 9. The proposed project is also aligned with India’s Systematic Country Diagnostic 2017, which stresses the importance of a resource-efficient and inclusive growth path. Meghalaya is in the northeast, a financially excluded region in the country with lower per capita income than the national average, low human development index, and a large population of scheduled tribes. In addition to supporting community-led natural resource management (CNRM) in the state, the proposed project will have a positive impact with regard to improving the availability and reliability of water sources for drinking and economic purposes through various interventions in soil and water conservation. Furthermore, the proposed project is well aligned with the World Bank Group Forest Action Plan and its focus area of sustainable forestry. It will contribute to the goals of the Climate Action Plan by optimizing the potential of natural forests to provide monetary and nonmonetary benefits, participatory management, and rehabilitation of degraded lands. II. PROJECT DEVELOPMENT OBJECTIVES A. PDO 10. The Project Development Objective (PDO) is to strengthen community-led landscapes management in selected landscapes in the state of Meghalaya. Project Beneficiaries7 11. The project will provide targeted support to landscape restoration activities in an estimated 400 villages, in prioritized degraded and highly degraded landscapes, of the state. Benefits will accrue to community members from these targeted villages and to surrounding villages through 7 While communities under the project will receive grants as beneficiaries, GoM envisages that they will be partners and active participants in planning and implementation of the project. 3 improvement in natural resources, including an increase in availability of water, and enhanced soil productivity. 12. The ultimate beneficiaries of the project are village communities (estimated number not less than 100,000, 50 percent women) in the targeted landscapes that depend on land, forests, water, and agroforestry for their livelihood. In addition, at least five members from each of the 6,026 villages across the state will benefit from training and capacity building and knowledge- sharing activities. Village councils, traditional leaders, local community institutions such as NRM groups, women, and youth will benefit from the project through capacity building, access to knowledge, promotion of innovation, use of technology for decision making and availability of technical, managerial, and financial support for preparation and implementation of CNRM plans. At the global level, benefits will be from the provision of public goods such as reduced greenhouse gas (GHG) emissions, improved hydrological services, and restored habitats for biodiversity. PDO Level Results Indicators  PDO Indicator 1: Village NRM Committees functioning with adequate fiduciary capacities and capable of monitoring capacities to lead on landscapes management  PDO Indicator 2: Share of village-level NRM Plans under implementation according to agreed criteria  PDO Indicator 3: Share of target beneficiaries with rating ‘Satisfied’ or above on process and impact of project interventions (disaggregated by gender)  PDO Indicator 4: Land area under sustainable landscapes management practices III. PROJECT DESCRIPTION A. Project Components 13. The project will support and inform the GoM’s state wide IBDLP. The IBDLP has two pillars: (a) Market Access and (b) Landscape Management for Sustainable Natural Resource Management. The Meghalaya Community-led Landscapes Management Project (MCLLMP) aligns with the latter by strengthening communities and traditional institutions to manage natural resources such as land, springs and other water sources, forests, and biodiversity, through a landscape approach.8It will prioritize about 400 villages in ‘very critical’ and ‘critical’ (degraded) landscapes over 5 years for the planning and treatment of these landscapes. Planning and investments will be preceded by training for communities and project management staff at the field level. The project will also extend such training to communities beyond the targeted 400 villages 8 There is no single widely accepted definition of this approach. The approach usually refers to decision making to reduce trade- offs between competing land uses (agriculture, forestry, mining, and so on) and multiple livelihood systems in a geographic unit to reduce poverty, increase food production, protect ecosystems, and increase resilience to climate change. The Ten Principles of Landscape Approach developed through an inter-institutional and intergovernmental process are a useful guide and have also been used to inform the approach in this project. In this project, the agriculture, forest, and other common land and water resources under the jurisdiction of a village is defined as the operational landscape. The terms landscape plan and NRM plans have been used interchangeably. See also Sayer, J, et al. 2013. Proceedings of the National Academy of Sciences, USA. May 2013. vol.110 no.21. 4 to amplify the reach of the MCLLMP approach to a larger cohort of villages to take up landscape- based management with funds from other government programs. 14. Participation and leadership of communities in landscape planning and implementation will be central to the project. A community9will lead the preparation of its own NRM plan to promote integrated NRM including, resource mapping, data collection, land-use planning, project design, and monitoring. A village will be the unit of such plans under the project. From an administrative point of view, each landscape will comprise one or more settlements under a traditional tribal institution (Dorbars, Nokma, and Doloi), typically under a single village council. This approach will also facilitate planning for funds from other government programs for convergence of development programs at the village level. Component 1: Strengthening Knowledge and Capacity for Natural Resource Management (NRM) (IBRD Financing US$13.00 million) 15. The objective of this component is to enable the development, assimilation, analysis, and dissemination of knowledge and skills to improve landscape management within the state. This component will comprise the following subcomponents. Subcomponent 1A: Promotion of traditional knowledge, grass-root innovations, and communication (IBRD Financing US$7.07 million) 16. This subcomponent will support (a) state- and regional-level workshops on sharing of unique and traditional NRM practices, relevant for climate change adaptation such as conservation of indigenous varieties of crops, natural spring rejuvenation etc. and lessons from other NRM projects, (b) development of a knowledge management strategy and web platform for sharing of NRM-related knowledge with the community under the MCLLMP and development of knowledge networks, (c) innovation grants to promote and pilot new approaches to sustainable NRM products and services including low cost approaches to increase climate resilience through agro-forestry, climate-smart agriculture and spring-shed conservation and (d) catalytic activities to encourage CNRM in new villages. For wider adoption of the MCLLMP approach, the District Project Management Units (DPMUs) will encourage communities that complete the initial training to initiate small activities as a demonstration of their interest to take up larger activities. Subcomponent 1B: Training and capacity building (IBRD Financing US$5.30 million) 17. This subcomponent will finance (a) training and capacity-building activities for all stakeholders and beneficiaries on community leadership and management of natural resources and the approaches promoted by the project, (b) development of training facilities at block level Bharat Nirman Rajiv Gandhi Seva Kendra (BNRGSK)/Enterprise Facilitation Centers, and (c) national and international exposure visits for project stakeholders. These training activities will be implemented in coordination with the Meghalaya Institute of Natural Resource Management, Institute of Governance, Department of Science and Technology, State Institute of Rural 9A community in this case would be defined as a group of households that have rights on the same or adjacent agricultural, forest, or other lands and belong to the same traditional institution (Dorbar Shnong or Chanong) or village and can act together. These are based on the three major ethnic blocks or regions in the state: Khasi Hills, Jaintia Hills, and Garo Hills. 5 Development (SIRD), Forest Training Institute (FTI, Tura) and Conservation Training Institute (CTI) of the Soil and Water Conservation Department. Subcomponent 1C: Preparation of strategies, research, and development (IBRD Financing US$0.28 million) 18. This subcomponent will support consultancy services to develop plans and strategies in the following areas: (a) preparation of strategy and action plan for development of an agency of excellence in knowledge management, innovation, climate change adaptation and communications; (b) institutional development study for the IBDLP; (c) preparation of a training plan for the project; (d) baseline study for the project; (e) study on drivers of deforestation and natural resource degradation; and (f) study on rehabilitation of population displaced due to mines. Subcomponent 1D: Monitoring, learning, and reporting (IBRD Financing US$0.35 million) 19. This subcomponent will support a management information system(MIS) to cover the entire state for tracking performance and implementation progress of the project. The Meghalaya Basin Management Agency (MBMA) will design and establish MIS infrastructure for the MCLLMP that can be scaled up to cater to other requirements of the IBDLP. Component 2: Community-led Landscape Planning and Implementation (IBRD Financing US$30.00 million) 20. This component will support both planning and implementation of the landscape plans by communities in the selected very high/high priority areas. Subcomponent 2A: Preparation of community landscape plans (IBRD Financing US$0.5 million) 21. Communities, with the help of project facilitating teams (subject matter specialists) at block-level and village-level service providers, will prepare plans to (a) optimize synergies between programs and funding streams and (b) plan holistically rather than be driven by sector- specific targets. The Community Operations Manual (COM) will outline processes of community consultation and development of CNRM plans. Plan preparation will be preceded by information sharing and awareness on the project with villages in the priority landscapes, followed by formation of Village NRM Committees (VNRMCs) with operational bank accounts. Funds for plan preparation will be released to those villages whose Expressions of Interest (EOIs) for participation in the project are selected, an agreed number of Committee members receive foundational training on the project and, the VNRMCs sign the Village Grant Agreement10 with the DPMU to carry out plan preparation according to the guidance in the COM. Subcomponent 2B: Implementation of community landscape plans and implementation support (IBRD Financing US$24.5 million) 22. Communities will implement CNRM plans in a phased manner, agreed through an addendum to the Village Grant Agreement between the VNRMC and respective DPMUs after a plan is approved. The addendum will specify the approved funding, milestones, and tranche 10 Government of Meghalaya generally refers to the Village Grant Agreement as Memorandum of Understanding 6 releases for the plan. Communities will implement agreed first-phase activities in their plan and graduate to the next phase of financing if implementation meets agreed criteria. This approach is meant to incentivize performance-based access to funds by the communities. Interventions needed will be decided by the community in their respective CNRM plans but will be designed to enhance soil and water conservation; soil health improvement and productivity enhancement; spring-shed development and water management; nursery, agroforestry, and community forestry including interventions to introduce climate resilient native species; optimization of shifting cultivation; rehabilitation of areas affected by mining, and other NRM interventions. Criteria for assessing successful implementation will be agreed between the VNRMC and DPMU in the addendum to the Village Grant Agreement. Subcomponent 2C: Implementation Support to Community Landscape Planning and Implementation (IBRD Financing US$5.00 million) 23. The State Project Management Unit (SPMU), with help from the Block Project Management Unit (BPMU) and village facilitators, will provide the geo-spatial data and analysis to inform the planning process in each village and later help monitor progress during implementation. Community members, in addition to village facilitators, will be trained to use some of the tools for data collection and mapping. Activities under this subcomponent will involve acquisition of satellite data; production of maps and reports; and training of technical personnel in the SPMU, selected facilitators, and community members. These tasks will be carried out under the direction of the SPMU. Component 3: Project Management and Governance (IBRD Financing US$5.00 million) 24. This component will support the strengthening of the institutional capacity and knowledge management of the project implementing entity, MBMA, for the implementation and management of the project including, among others, (a) establishment of the SPMU within the MBMA and support to seven DPMUs, including technical staff and consultants; (b) the incremental costs associated with implementation; (c) administrative support to 20 BPMUs; and (d) technical fiduciary and safeguards oversight and supervision of project activities in the field. 25. The GoM has also prepared a comprehensive Project Implementation Plan which will guide implementation and which will be updated from time to time by the GoM with the prior concurrence of the World Bank. B. Project Financing 26. The total project cost will be US$60 million, of which US$48 million will be IBRD financing. The GoM contribution will be US$12 million which includes community contribution in kind and only for activities under Component 2 (planning and implementation of CNRM plans). Project Cost and Financing GoM (Including Community Project Expenditure World Bank (IBRD) Contribution in Kind) (US$, (US$, millions) (US$, millions) millions) Component 1 18.00 13.00 5.00 7 Component 2 34.00 30.00 4 .00 Component 3 8.00 5.00 3 .00 Total 60.00 48.00 12.00 C. Lessons Learned and Reflected in the Project Design 27. The project draws on the experiences of community-driven development (CDD) and local institutional strengthening projects in India, Nigeria, Indonesia, and Brazil, for lessons on fiduciary and project management training for communities and village-level institutions; performance standards for state agencies; and inclusion, transparency, and accountability for communities and state agencies. Notable lessons that informed its design are the following:  CNRM is more likely to be sustainable, with the right support from state agencies. A conducive policy environment is essential to allow communities and state agencies to complement each other’s roles. Communities need technical and financial support, which state agencies can provide. The project is designed to foster a partnership between government agencies which provide technical backstopping and the VNRMCs.  Decentralized and CDD projects are more successful with reduced bureaucracy. Experience in several CDD projects has demonstrated that communities are effective in managing funds and implementing project activities. However, project management teams tend to increase the levels of scrutiny and delay release of funds, often as cautionary measures, which can be counterproductive for community empowerment goals. To counter this problem, a combination of social audits, participatory monitoring, and citizen engagement through regular feedback as well as performance benchmarks for project decision making will be used during implementation.  Create space to foster and share traditional knowledge and management practices. Traditional knowledge and NRM practices have a central role in indigenous/tribal societies, including in Meghalaya. Identifying, analyzing, and building on this knowledge and wisdom that has been handed down for generations in the Khasi, Garo, and Jaintia societies is important to develop more appropriate practices for agroforestry and spring-shed conservation. Activities under Component 1 will address this aspect. IV. IMPLEMENTATION A. Institutional and Implementation Arrangements 28. The implementation of the project will be managed by the MBMA, a section 8 company (erstwhile Section 25 company) which has the primary responsibility of implementing externally aided Projects, including the MCLLMP. The project will be managed under the overall umbrella of the IBDLP governance and management structure at the state, district, and block level. The MBMA has established an SPMU and will use existing GoM structures at the district and block levels and the traditional tribal institutions (Dorbars, Nokma, and Doloi) at the village level 8 for implementing the project. The Board of Directors of the MBMA under the chairmanship of the Chief Secretary, GoM, supported by a Deputy Chief Executive Officer (CEO) and Principal Secretary Finance (member) will have advisory and supervisory oversight of the project. The Deputy Commissioner at the district level and traditional institutions at the village level will be responsible for guiding and overseeing project execution. 29. The core staff of the SPMU will include (a) one State Project Director; (b) two Deputy Project Directors for the east region (Garo area) and west region (Khasi and Jaintia area); (c) five additional Project Directors for Soil, Water, Forest, Community, and Rural Development and Administration; and (d) managers for Environment, Social Safeguards, Monitoring, Administration, Training and Capacity Building, Monitoring and Evaluation (M&E), and Knowledge Management. The SPMU staff will be in place on a full-time basis, dedicated to the project. For execution and supervision of Geographic Information System (GIS) activities, the GIS Lab of the MBDA will have the overall responsibility and report to the Project Director. 30. The project will be implemented in seven districts through existing DPMUs. Each DPMU is headed by the Deputy Commissioner and managed by two District Project Managers (DPMs), all already in place, who will provide technical and safeguards oversight and carry out planning, M&E, procurement, finance, and capacity building for the project. A core technical team of managers from the line departments—Departments of Soil and Water, Forests, and Community and Rural Development (C&RD) will provide technical oversight. 31. It is estimated that 20 BPMUs under the oversight of the Block Development Officer will implement the project. Officers from the Department of Soil and Water Conservation, Water Resource Department, Forest Department, and C&RD Department will provide technical support and training at the village level. The existing Enterprise Facilitation Centre (EFC) and government officers will support the VNRMCs to plan and implement CNRM plans. 32. At the village level, a VNRMC will establish an Executive Committee with a total membership of nine wherein at least four members will be women. The VNRMC would be established with functional bank accounts for the village to submit an EOI to participate in CNRM plan preparation and implementation under Subcomponents 2A and 2B. 33. A village will nominate up-to eight youth to undertake training and offer services as facilitators in the core areas of forest, soil and water, environment, social, community and rural development management to be eligible as a village facilitator/green volunteer under the project. During CNRM plan preparation and implementation, the VNRMC will budget and pay for the services of these facilitators, based on the type of supported procured. 34. A COM will guide community and project management teams on project implementation. Annex 3 provides further details on implementation arrangements for the project. B. Results Monitoring and Evaluation 35. M&E in the MCLLMP is primarily (a) a tool for results-based management and to ensure that data and information on the progress of the project toward achievement of the outcomes under the PDO feed into management, that is, the SPMU, and that corrective measures can be 9 taken on time if necessary; (b) a framework for accountability of progress toward local and regional objectives in the management of natural resources in Meghalaya and between participating institutions; under this framework, demand-side social accountability of project interventions will be captured through an citizen engagement indicator (a corporate requirement); (c) an approach to monitor performance of different landscapes to ensure a certain level of coherence; (d) a platform for communication of results of the project and benefits delivered to local people, institutions, and the environment; and (e) to meet the World Bank’s routine reporting requirements, that is, the six-monthly progress report, the Implementation Status and Results Report (ISR), which is developed for each country and publicly disclosable, and data and information requirements for the midterm review (MTR) of the project. 36. The SPMU will have the overall coordinating role of the M&E function and will have an M&E Manager—and a team of analysts and assistants who will ensure that data and information from all landscapes and institutions are produced and collected on time and is of sufficient and necessary quality. The SPMU M&E Manager will be assisted by Deputy M&E Managers at the DPMUs. The frequency of data collection will be annual. The M&E activities will (a) generate information on progress of the project, (b) analyze and aggregate data generated at regional and local levels, and (c) document and disseminate key lessons to all stakeholders in Meghalaya together with the communication function of the SPMU. The MCLLMP will place special emphasis on mapping of project interventions and results through geocoding of activities and overlay with key indicators. This information will be accessible through platforms along the lines of the Mapping for Results initiative. C. Sustainability 37. The GoM has an ambitious statewide program, the IBDLP, which focuses on poverty alleviation, employment generation, and livelihood promotion. Its focal areas include agriculture, water, and NRM to bring new knowledge and skills, which empower communities to make the best use of natural resources through the value chain. The project is designed to inform and support the water and NRM focal areas of the IBDLP. The IBDLP is housed in the Department of Planning, where the MBMA and the SPMU for the project are housed. The MBMA is staffed with technical experts from multiple line departments and vertically, down to the block level. Thus, institutionally, as well as programmatically, the project is seamlessly integrated into the Government’s own program and delivery apparatus and will sustain well beyond the five-year period. 38. By providing training and skill development to communities from all over the state (beyond the targeted 400 villages) on community-led project management, fiduciary skills, NRM, conflict resolution, and so on, the MCLLMP’s principles and knowledge will be amplified in a greater number of villages, where the GoM undertakes community-led landscape planning with its own resources. Sustainability is also ensured through the enabling conditions and capacity for behavior change within community and state institutions for NRM. 10 V. KEY RISKS A. Overall Risk Rating and Explanation of Key Risks 39. Overall risk for the project is rated as Substantial. The project promotes a model of highly decentralized decision making with significant fund management responsibility at the community level which necessitates behavioral changes within government agencies and community institutions. The project’s approach is likely to challenge the local elite who benefit from the status quo of limited transparency in decision making over natural resources. While management of natural resources in the state is largely vested with traditional community institutions, the project will require these bodies to open their decision making to more participatory and transparent processes which may be resisted. Likewise, government agencies will be required to deliver on facilitation and technical assistance without impinging on the traditional roles of communities in NRM in the state. Adopting, demonstrating, and internalizing these behaviors will be the key challenge to the project. This risk is mitigated by inclusive decision making and increased transparency through (a) social audits, (b) participatory monitoring, and (c)the emphasis on performance standards for state and community institutions. 40. Social and environmental risks of the project are considered Substantial. Due to existing complexities that subsist in land governance and ownership in Meghalaya, the possible social impact may include conflict arising between traditional institutions, ADCs and government departments over jurisdiction. Further, although tribes of Meghalaya are mainly matrilineal, women have a limited role in the political and administrative setup. This may affect the participation of women in decision making and preparation of NRM plans. In compliance with OP 4.10, these risks are being mitigated by a Social Management Framework (SMF) and Indigenous Peoples Development Plan (IPDP) prepared for the project. In addition, safeguards management support will be provided at the state, district, and village levels to mitigate potential risks. To effectively achieve the compliance of above activities, training and capacity-building initiatives will also be carried out in the project. 41. The project will work toward reversing and reducing the level of degradation that current land management activities are causing. The project is expected to have an overall positive environmental impact, and environmental risks are mostly Moderate because there is the potential for project works or activities to cause unintended negative impacts, albeit, minor/small scale, unless carefully designed and implemented. The Environmental Management Framework (EMF) will screen all CNRM plans to identify any risks from proposed activities and mitigation measures for any anticipated negative impacts. Environmental guidelines have been developed for each typology of interventions to guide the design and implementation arrangements to ensure that the activities are environmentally sound and sustainable. Capacity building and skills on environment will be considered at the SPMU, the DPMU, and the block levels to ensure environmental management at the village level and to mitigate any risks. 42. The integrated fiduciary risk rating is Substantial. In procurement, major risks are related to staff capacity and turnover; delays in procurement and contract implementation (more so in view of the decentralized, small value, community procurement); and suppliers’/consultants’/bidders’ interest and participation given the remote location of Meghalaya. In financial management (FM), the risks mainly relate to low FM capacity and inadequate internal 11 controls at the community level in processing payments, poor maintenance of financial records, subsequent delay, and poor quality of financial reporting by community on project activities. The MBMA is supported by professional experts and is implementing the IBDLP of the GoM and Meghalaya Livelihood Access to Markets Project (LAMP) funded by the International Fund for Agricultural Development (IFAD).It is anticipated that this experience will accelerate the procurement decision making and improve the FM areas of the project. Although the MBMA lacks procurement experience in World Bank procurement procedures, staff identified by the MBMA to handle procurement under the project have received intensive training on procurement procedures in World Bank-financed projects. Additionally, the project is supported by a Procurement Expert who is well versed in World Bank procurement procedures. The MBMA will ensure that all staff handling procurement and FM at all levels are adequately trained in World Bank procurement and FM procedures. For community procurement, although the amount per transaction is expected to be small and works dispersed, the quantity of transactions has the potential for substantial risk. This risk will be mitigated by including financial guidelines, procurement procedures, preparation of a Community Operations manual and training the members of the community on finance and procurement. VI. APPRAISAL SUMMARY A. Economic and Financial (if applicable) Analysis 43. The economic analysis was conducted over a 10-year period reflecting the full lifetime of most of the costs and benefits. The economic cost of the contributions made by the beneficiaries are considered and any grant for landscape-based activities such as forestry, agriculture, and water management are deducted. The nonrecurring investment cost in the project is 82.62 percent of the investment cost in Components 1 and 2, that is, US$52.05million. Nonrecurring investment in horticulture and forestry to be made by the beneficiary from their own sources will be US$0.9million. Recurrent investment on Component 3 of the project will be US$7.95 million. The phasing of the project cost is assumed to be between Year 1 and Year 5. 44. The economic benefits included in the project economic analysis are related to (a) improving crop productivity, (b) improving cropping intensity and horticulture productivity due to improved water regime, (c) increasing crown density through conversion of parts of Meghalaya’s open forests in villages, and (d) converting of cultivable wasteland in villages into agroforestry and horticulture with improved package of agronomic practices. 45. The GHG emission mitigation potential and carbon sequestration potential for a range of project activities under the MCLLMP was calculated using the ExAnte Carbon Balance Tool (EX- ACT). The resulting net carbon balance is 3,508,376 tons of CO2e over 20 years. Annually, a net carbon balance of 175,419 tons is estimated. 46. To reduce soil erosion and conservation of in situ water, various measures are proposed. Meghalaya is prone to heavy rainfall with Mawsynram and Cherrapunji getting the highest rainfall in the world. Torrential downpours result in high soil erosion, leaching of nutrients, and loss of agriculture productivity, which are proposed to be mitigated under this project. More detailed quantitative information is available in annexes 5 and 6. 12 B. Technical 47. The MCLLMP responds to the Government’s priority manifested through the community- led and citizen-centric flagship IBDLP in 2012.This flagship program has two major investment areas: (a) NRM through landscape approach and (b) livelihood and market access through agri- value chain promotion and development of market infrastructure (Meghalaya LAMP). The project will support improved NRM as envisaged under the IBDLP. It has been well established that sustainability is more likely when communities that directly depend on natural resources are empowered to manage those resources. The project’s landscape approach is informed by the recent global developments in the field of landscape restoration and the growing body of action research on this subject. The project will promote negotiation and consensus building among stakeholders with diverse goals and competing uses, to optimize the benefits. Well-established technologies for soil and water conservation, afforestation, and agroforestry practices will be encouraged. A large body of action research on traditional NRM practices is available for the state, which will be drawn upon during implementation. In addition, the project will reward innovations in NRM and improvements of traditional practices through a competitive grants scheme. C. Financial Management 48. The project will be implemented by the MBMA, a section 8 ‘not-for-profit company’ incorporated in the Indian Companies Act 2013 by the GoM. Under the administration of the Project Director, an SPMU has been constituted. The SPMU will have the overall responsibility of maintaining the FM system and ensuring that these functions are carried out in accordance with the project’s Legal Agreements. 49. The FM risk of the project is Substantial, given the innovative nature of project design, providing grants to communities for implementation of activities and the fact that this is the first World Bank-financed project to be directly implemented by the GoM. The assessments indicate that the MBMA requires extensive support on the World Bank’s FM and disbursement processes/procedures. To support project implementation, essential FM capacity is provided through preparation of the COM, training/capacity building to communities, and by contracting professionals for project accounting and internal audit. A computerized accounting system will be used by the MBMA for project accounting and timely submission of financial reports. The oversight arrangements of internal and external audits will provide reasonable assurance on use of project funds. The statutory audit of the project will be conducted by an external audit firm appointed by the Comptroller and Auditor General (CAG) of India and the audit report will be submitted to the World Bank within nine months from the end of each financial year. During the first year of project implementation, the World Bank will undertake semiannual implementation support missions, including field visits to ensure that the agreed FM arrangements are understood and appropriately followed by the MBMA. As implementation progresses and capacity is strengthened within the MBMA, the team will rely on the FM reports and audit reports provided by the MBMA. The FM arrangements proposed under this project are considered adequate to account for and report on project expenditures, and they satisfy the fiduciary requirements of OP/BP 10.00. More detailed FM and disbursement arrangements are provided in annex 3. 13 50. Retroactive financing. Payments made by the MBMA during the one-year period before the signing of Legal Agreements for contracts awarded following World Bank procurement procedures will be eligible for retroactive financing. The limit for retroactive financing is US$8 million. The MBMA will submit a separate interim financial report (IFR) to claim such expenditures. D. Procurement 51. Procurement for the MCLLMP will be carried out in accordance with the World Bank’s Procurement Regulations for Borrowers for Goods, Works, Non-Consulting and Consulting Services, dated July 1, 2016, and applicable to Investment Project Financing (IPF), hereinafter referred to as ‘Regulations’, and the provisions stipulated in the Legal Agreements. The project will be subject to the World Bank’s Anticorruption Guidelines dated July 1, 2016. According to the requirement of the Regulations, a Project Procurement Strategy Document (PPSD) has been developed which will guide procurement approaches adopted under the project. A Procurement Plan has been prepared based on the PPSD, which sets out the selection methods and arrangements to be followed by the borrower during project implementation in the procurement of goods, works, and non-consulting and consulting services financed by the World Bank. The Procurement Plan will be updated annually or as required to reflect actual project implementation needs. The project will use the Systematic Tracking of Exchanges in Procurement (STEP) system for all its procurement activities. The COM and project Procurement Manual—describing the procurement procedures to be followed at the state, district, and community levels—have been prepared and will be adopted after approval from the World Bank. The project will use the World Bank’s online tool STEP. To meet the readiness requirements, the project has already initiated procurement of critical consultancy packages and the first 18 months’ Procurement Plan. 52. The project will be implemented by the MBMA, district-, and village-level authorities. No procurement will be carried out at the block level. The procurement under the project will be both centralized at the SPMU level and decentralized to district and village levels. The procurement profile at the center is likely to consist, among others, of service vehicles, office equipment, cameras, GIS and geospatial applications, satellite imagery, IT equipment and accessories, consultancies to support need-based studies and technical assistance, internal audit, baseline survey, M&E, MIS development, communications and outreach, individual technical experts to support SPMU, printing services for information, education, and communication (IEC), and minor civil works, and so on. The procurement profile at the district level is likely to include, among others, office equipment and furniture, IT equipment and accessories, minor repairs, and civil works. Communities will implement their procurement in accordance with their approved CNRM plans and the procurement profile is likely to include, among others, agriculture items and equipment, minor civil works including repairs of existing structures, and so on. Most procurement would involve National Competitive Procurement, Request for Quotations, and a few direct sections. All community-driven procurement will follow the procedures outlined in the procurement chapter of the COM and will be governed by the provisions of paragraphs 6.9 and 6.10 of Annex XII of the Regulations. 53. The MBMA is a Section 8 company registered under the Companies Act and is the nodal agency for channelizing all investments under the program. While the decision-making process and primary responsibility for the successful implementation of the project will rest with the 14 MBMA, given that Meghalaya CLLMP is primarily a decentralized and community-driven project, the support and close involvement of district and village councils at the village level will be critical. 54. The procurement risk rating for the project is Substantial. The unmitigated procurement risk rating for the project is High; the residual risk taking into consideration proposed mitigation measures is Substantial. The MMA has no prior experience with World Bank-financed projects. Major risks are related to staff capacity and turnover, lack of adherence to agreed procedures during implementation, unrealistic cost estimates, delays in procurement decision making, delays in procurement and contract implementation, suppliers’/consultants’/bidders’ interest and participation given the remote location of Meghalaya’s risk of inadequate monitoring of compliance with agreed fiduciary processes in CDD subprojects, disputes, and inadequate procurement record keeping at district and sub-district levels that has the potential to undermine any audit exercise that may be conducted, external interference in procurement process, and so on. Additionally, for community procurement, although the amount per transaction is expected to be small and subprojects scattered, the number of transactions has the potential for substantial risk. E. Social (including safeguards) 55. Approximately 86 percent of Meghalaya’s population belongs to the Scheduled Tribe category; therefore, the World Bank’s OP 4.10 (Indigenous Peoples) is triggered. A Social Assessment (SA) and enhanced consultations were conducted to prepare a comprehensive SMF and IPDP to ensure that the communities can access benefits accruing from project investments (annex 6). 56. Free prior informed consultations were organized in 27 villages spread across the three regions of the state. A workshop on conceptualization of the project was held along with three regional consultations with stakeholders namely women’s groups, local government, civil society, line departments, and traditional institutions in Shillong between February and March 2017. During the consultations, stakeholders recognized the need for integrated landscape development to enhance the natural resource base of the state and provided contributions to the project’s design and agreement on its participatory approach. 57. None of the planned project investments or activities are expected to generate adverse impacts on livelihoods and relocation of affected people. Moreover, no land acquisition is envisaged, as land required for small infrastructure will either belong to the community or the ADCs. Hence, even though OP/BP 4.12 (Involuntary Resettlement) is not triggered, the project will be cognizant of issues pertaining to loss of livelihood. 58. Social Assessment. The SA revealed that significant changes in land-use patterns in the state are leading to decrease in agricultural land, which may have an adverse impact on food security and child nutrition. To address this issue, project investments will focus on convergence with other schemes that promote nutritional value, livelihood and income-generation activities. 59. There is a transition from community ownership to privatization of land, which is promoted by the village councils. These councils allocate landholdings to individuals, resulting in growing landlessness. The project’s interventions will support documentation of ownership patterns, 15 strengthen local institutions, and build awareness and capacity to mitigate the risk arising from increasing private ownership. 60. Gender. The assessment highlights that women’s participation in decision making in local institutions is negligible. Although a matrilineal society, per customary norms women are not allowed to participate in the proceedings of the traditional tribal institutions. Yet, the workforce participation of women in Meghalaya (based on the baseline survey and available secondary resources) reflects that a large percentage of women participate in agriculture and allied activities and in small businesses. This dichotomy brings into question their capacity to enjoy equal rights in every sphere—civil, political, economic, social and cultural. To address these challenges, the project’s interventions provide an opportunity to build women’s leadership skills to engage in multiple spheres. The project is designed to enhance their decision-making role through inclusive participation in natural resource management. The project explicitly mandates at least 50% representation of women in the executive committee of Village Natural Resource Management Committees (VNRMC) which is responsible for implementation of the project at the village level. Further, the project will support capacity building of women through specific trainings to identify and fill their knowledge gaps in NRM, and promote women’s leadership in natural resource management. Women’s participation will also be emphasized with at least 50% participants, in the project’s exposure visits for communities. 61. Because the project is community driven, mainly involving activities such as information dissemination and documentation at the least, and low-scale construction at the most, the issue of labor influx does not arise. 62. SMF. The SMF includes a screening process for land sites along with a detailed social management plan and a gender strategy. To ascertain broad community support, the SMF includes a communication and consultation plan together with a Social Accountability Plan. It also comprises a detailed plan for capacity building and M&E for effective project implementation. 63. Citizen engagement. Key project stakeholders were identified during the SA. Project- related information was shared with these stakeholders through community and regional consultations and their feedback was duly incorporated. The project interventions, among others, also include citizen’s feedback, stakeholder consultations, and IEC activities with community members. As the project is community driven, stakeholder consultation in this project will be an ongoing process, starting from the pre-planning phase to the implementation phase of the project cycle. 64. Grievance Redressal Mechanism (GRM). The project’s GRM process will be supported both by a traditional and technology-based approach, for early resolution of complaints. Other social accountability measures such as social audit or citizen scorecard, and report card will be used for acquiring feedback on performance and recording citizens’ recommendations. A simple mobile-based feedback system will be used to capture and feed data into the MIS of the Project Management Unit (PMU). Additionally, nongovernmental organizations (NGOs) or community- based organizations (CBOs) will facilitate the beneficiaries’ access to the GRMs. 16 F. Environment (including Safeguards) 65. In compliance with OP 4.01 (Environmental Assessment), the GoM has prepared an EMF according to the requirements of a category B project. The EMF has been designed to integrate and mainstream environment management into the CNRM plans right from the planning stage and would be linked to the various stages of the plan preparation and implementation. It provides detailed guidance on the environmental screening and procedures, good practice guidelines, and formats to be followed for designing interventions, addressing any potential impacts, and ensuring their sustainability. The appropriate institutional mechanisms and specific training or capacity- building needs have also been identified along with the requirements and processes for supervising and monitoring the various mitigation measures during project implementation. 66. Environmental safeguards policies triggered within the project include Environmental Assessment (OP/BP 4.01), Natural Habitats (OP/BP 4.04), Forests (OP/BP 4.36), and Physical Cultural Resources (OP/BP 4.11). The project is assigned environmental Category B - Partial Assessment, as no significant and/or irreversible adverse environmental impacts are anticipated from the investments to be financed under the project. Any impacts or issues that may arise from the implementation of project-financed investments are minor and straightforward and require well-defined, standard mitigation and monitoring measures. The project activities are community led and will be selected (location, type, extent, and so on) based on the CNRM plan during project implementation. 67. Consistent with the PDO, the project seeks to reduce degradation of forest areas and improve soil and water management in Meghalaya. The current challenges include (a) soil erosion and high runoff leading to loss of productive land, (b) significant reduction in the fallow period of shifting cultivation activities, (c) forest fires, (d) uncontrolled logging and fuelwood extraction, (e) pollution of water bodies through unscientific coal mining activities, and (f) water scarcity issues. The project will seek to address these issues through community training, capacity building, and on-the-ground interventions proposed by the communities for management of forests and water resources. Typical investments will have a positive environmental impact and will include afforestation schemes, soil and water conservation works, spring-shed treatment, composting activities, agroforestry and restoration of jhum and mining affected areas, and where possible, converge with other larger centrally sponsored schemes for NRM, livelihoods, and economic improvement. 68. The development of the EMF is based on the extensive feedback received from various stakeholders, including consultations meetings held at the state, region, and village level. During the initial phases of the EMF development, the MBDA undertook field-level assessments and stakeholder meetings in villages in the Khasi, Jaintia, and Garo Hills. Focus group discussions were held with state-level government officers from the soil and water conservation, forest, water resources, fishery, and tourism departments. 69. The EMF and SMF have been disclosed (in-country) on August 17, 2017, on the MBDA webpage (http://www.mbda.gov.in/publication/index.html) and through the World Bank’s InfoShop on August 18, 2017. Translation of the executive summary of the EMF report to Khasi and Garo languages has been completed and disclosed on the MBMA website. 17 G. Other Safeguards Policies Triggered 70. OP 4.36 (Forests)is triggered because the project aims to bring about changes in the management, protection, or utilization of community-owned forests, in a positive manner. 71. OP 4.09 (Natural Habitats) is triggered. The project will have a positive impact on natural habitats and ecosystems in the state, by reducing ongoing patterns of land degradation, deforestation, and water scarcity. There will be no major, long-term change in land or water use or significant conversion or loss of these critical habitats; however, the best practices in natural habitat management will be ensured through this policy. 72. OP 4.11 (Physical Cultural Resources) is triggered as a preventative measure as project site-specific locations are currently unknown, and selected villages may be located near sacred forest groves (these areas have a high cultural and religious significance and are protected by traditional communities) or Archeological Survey of India protected structures that are located within the Jaintia Hills and East Khasi Hills. H. World Bank Grievance Redress 73. Communities and individuals who believe that they are adversely affected by a World Bank (WB) supported project may submit complaints to existing project-level grievance redress mechanisms or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project-related concerns. Project affected communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of WB non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/GRS. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org. 18 Annex 1: Results Framework and Monitoring . Country: India Project Name: Meghalaya Community-led Landscapes Management Project (P157836) . Results Framework . Project Development Objectives . PDO Statement The project development objective is to strengthen community-led landscapes management in selected landscapes in the state of Meghalaya. These results are at Project Level . Project Development Objective Indicators Cumulative Target Values End Indicator Name Baseline YR1 YR2 YR3 YR4 YR5 YR6 YR7 YR8 YR9 Target Village NRM Committees functioning with adequate fiduciary capacities, and capable of 0.00 50.00 150.00 400.00 400.00 400.00 400.00 monitoring capacities to lead on landscapes management. (Number) 19 Share of village- level NRM Plans under implementation 0.00 10.00 50.00 75.00 90.00 90.00 100.00 according to agreed criteria (Percentage) Percentage of beneficiaries ‘Satisfied’ with project 0.00 0.00 0.00 40.00 0.00 70.00 70.00 interventions (disaggregated by sex) (Percentage) Land area under sustainable landscape management 0.00 5000.00 12500.00 22000.00 28000.00 31510.00 31510.00 practices (Hectare(Ha)) - (Corporate) . Intermediate Results Indicators Cumulative Target Values End Indicator Name Baseline YR1 YR2 YR3 YR4 YR5 YR6 YR7 YR8 YR9 Target Share of villages supported with capacity- building 0.00 10.00 20.00 60.00 70.00 70.00 100.00 package in NRM (Percentage) 20 Forest area brought under management 0.00 700.00 4000.00 8000.00 12585.00 12585.00 12585.00 plans (Hectare(Ha)) - (Corporate) Meghalaya Basin Management Agency functional as No No No Yes Yes Yes Yes Agency of Excellence in community-led NRM (Yes/No) Community NRM management plans prepared and approved by Village CNRM Committees and DPMU of MBMA that 0.00 25.00 75.00 150.00 150.00 400.00 include financing from other central and state government sources available for NRM (Number) 21 Share of Village NRM Committees with equal or more representation of 20.00 30.00 50.00 75.00 90.00 100.00 women among 9 members of the Executive Committee (Percentage) . 22 Indicator Description . Project Development Objective Indicators Responsibility for Data Indicator Name Description (indicator definition etc.) Frequency Data Source / Methodology Collection Village NRM Committees Annual targets. The indicator captures the Annual Audit of fiduciary SPMU M&E function functioning with adequate improved capacity of Village NRM processes, technical skills, fiduciary capacities, and Committees necessary to lead on and use of IT systems for capable of monitoring landscapes management. It will be monitoring and preparation capacities to lead on measured by audits of fiduciary processes, of corrective plans landscapes management. technical skills, and use of IT systems for monitoring and preparation of corrective plans. Share of village-level NRM Annual targets. The indicator captures Annual Field Survey SPMU M&E function Plans under implementation community-led management through the according to agreed criteria village-level NRM plans that have been developed by communities (based on direct support and increased capacity) and have been approved and adopted under the project by DPMUs and SPMUs Villages will implement the plans in a phased manner, agreed through a Memorandum of Understanding (MoU) between the Village NRM Committee and respective District Project Management Units (DPMU). Communities will first implement agreed first phase activities in their plan and graduate to the next phase of financing if implementation meets agreed criteria. This approach is meant to incentivize performance based access to funds by the communities. Actual interventions needed will be decided by the community in their respective plans but will relate to soil and 23 water conservation measures; soil health improvement and productivity enhancement measures; spring-shed development and water management plans; nursery, agro-forestry and community forestry; optimization of shifting cultivation; rehabilitation of areas affected by mining etc. Criteria for assessing successful implementation will be agreed in the MoU. Percentage of beneficiaries Annual targets. The indicator captures Biennial Perception Survey SPMU M&E function ‘Satisfied’ with project citizen engagement (corporate interventions requirement). A feedback loop will be (disaggregated by sex) included. The dimensions under the perception survey to be included are: (1) Increase in productivity of agriculture and allied activities (2) management and access to forests, (3) livelihood aspects, and (4) others. Land area under sustainable The indicator measures, in hectares, the Annual Field Survey SPMU - M&E Function landscape management land area for which new and/or improved practices sustainable landscape management practices have been introduced. Land is the terrestrial biologically productive system comprising soil, vegetation, and the associated ecological and hydrological processes; Adoption refers to change of practice or change in the use of a technology promoted or introduced by the project ; Sustainable landscape management (SLM) practices refers to a combination of at least two technologies and approaches to increase land quality and restore degraded lands for example, agronomic, vegetative, 24 structural, and management measures that, applied as a combination, increase the connectivity between protected areas, forest land, rangeland, and agriculture land. . Intermediate Results Indicators Responsibility for Data Indicator Name Description (indicator definition etc.) Frequency Data Source / Methodology Collection Share of villages supported Annual targets. The indicator relates to all Annual Field survey SPMU M&E function with capacity-building four PDO indicators and captures Village package in NRM NRM committee members, Village Skills assessment Council Members, Village service providers (state-wide) that have been trained by the project and found skilled (in skills assessment) in natural resources management and especially integrated landscape management. Forest area brought under No description provided. Annual Review of forest SPMU M&E function management plans management plans and approvals Meghalaya Basin Annual targets. This indicator relates to all Annual Review of key documents SPMU M&E function Management Agency four PDO indicators. MBMA will be and websites functional as Agency of functional as Agency of Excellence in Excellence in community- community-led NRM in terms of Institutional assessment led NRM knowledge-sharing and innovation platform as assessed by an institutional assessment. In developing as a center of excellence, it will be supported by the Meghalaya Institute of Natural Resource Management drawing on the strengths of the Department of Science and technology, State Institute of Rural Development (SIRD), the Forest Training 25 Institute (FTI), Tura and the Soil and Water Conservation Department’s Training Institute. Community NRM Cumulative targets. This indicator is Annual Review of community DPMU and SPMU M&E management plans prepared related to PDO#2 and PDO#3. It further NRM management plans function and approved by Village captures convergence of government including financing table CNRM Committees and sources for NRM. and approvals DPMU of MBMA that include financing from Field survey other central and state government sources available for NRM Share of Village NRM Annual targets. Gender indicator. Annual Review of minutes of SPMU M&E function Committees with equal or Village NRM Committees more representation of minutes women among 9 members of the Executive Committee Indicator Description . Project Development Objective Indicators Responsibility for Data Indicator Name Description (indicator definition etc.) Frequency Data Source / Methodology Collection Village NRM Committees Annual targets. The indicator captures the Annual Audit of fiduciary SPMU M&E function functioning with adequate improved capacity of Village NRM processes, technical skills, fiduciary capacities, and Committees necessary to lead on and use of IT systems for capable of monitoring landscapes management. It will be monitoring and preparation capacities to lead on measured by audits of fiduciary processes, of corrective plans landscapes management. technical skills, and use of IT systems for monitoring and preparation of corrective plans. 26 Share of village-level NRM Annual targets. The indicator captures Annual Field Survey SPMU M&E function Plans under implementation community-led management through the according to agreed criteria village-level NRM plans that have been developed by communities (based on direct support and increased capacity) and have been approved and adopted under the project by DPMUs and SPMUs Villages will implement the plans in a phased manner, agreed through a Memorandum of Understanding (MoU) between the Village NRM Committee and respective District Project Management Units (DPMU). Communities will first implement agreed first phase activities in their plan and graduate to the next phase of financing if implementation meets agreed criteria. This approach is meant to incentivize performance based access to funds by the communities. Actual interventions needed will be decided by the community in their respective plans but will relate to soil and water conservation measures; soil health improvement and productivity enhancement measures; spring-shed development and water management plans; nursery, agro-forestry and community forestry; optimization of shifting cultivation; rehabilitation of areas affected by mining etc. Criteria for assessing successful implementation will be agreed in the MoU. Percentage of beneficiaries Annual targets. The indicator captures Biennial Perception Survey SPMU M&E function ‘Satisfied’ with project citizen engagement (corporate interventions requirement). A feedback loop will be (disaggregated by sex) included. The dimensions under the perception survey to be included are: (a) 27 Increase in productivity of agriculture and allied activities (b) management and access to forests, (c) livelihood aspects, and (d) others. Land area under sustainable The indicator measures, in hectares, the Annual Field Survey SPMU - M&E Function landscape management land area for which new and/or improved practices sustainable landscape management practices have been introduced. Land is the terrestrial biologically productive system comprising soil, vegetation, and the associated ecological and hydrological processes; Adoption refers to change of practice or change in the use of a technology promoted or introduced by the project; Sustainable landscape management (SLM) practices refers to a combination of at least two technologies and approaches to increase land quality and restore degraded lands for example, agronomic, vegetative, structural, and management measures that, applied as a combination, increase the connectivity between protected areas, forest land, rangeland, and agriculture land. . Intermediate Results Indicators Responsibility for Data Indicator Name Description (indicator definition etc.) Frequency Data Source / Methodology Collection Share of villages supported Annual targets. The indicator relates to all Annual Field survey SPMU M&E function with capacity-building four PDO indicators and captures Village package in NRM NRM committee members, Village Skills assessment Council Members, Village service providers (state-wide) that have been trained by the project and found skilled (in 28 skills assessment) in natural resources management and especially integrated landscape management. Forest area brought under No description provided. Annual Review of forest SPMU M&E function management plans management plans and approvals Meghalaya Basin Annual targets. This indicator relates to all Annual Review of key documents SPMU M&E function Management Agency four PDO indicators. MBMA will be and websites functional as Agency of functional as Agency of Excellence in Excellence in community- community-led NRM in terms of Institutional assessment led NRM knowledge-sharing and innovation platform as assessed by an institutional assessment. In developing as a center of excellence, it will be supported by the Meghalaya Institute of Natural Resource Management drawing on the strengths of the Department of Science and technology, State Institute of Rural Development (SIRD), the Forest Training Institute (FTI), Tura and the Soil and Water Conservation Department’s Training Institute. Community NRM Cumulative targets. This indicator is Annual Review of community DPMU and SPMU M&E management plans prepared related to PDO#2 and PDO#3. It further NRM management plans function and approved by Village captures convergence of government including financing table CNRM Committees and sources for NRM. and approvals DPMU of MBMA that include financing from Field survey other central and state government sources available for NRM Share of Village NRM Annual targets. Gender indicator. Annual Review of minutes of SPMU M&E function Committees with equal or Village NRM Committees more representation of minutes 29 women among 9 members of the Executive Committee 30 Annex 2: Detailed Project Description INDIA: Meghalaya Community Led Landscape Management Project (MCLLMP) 1. Rationale and project approach. The project will support and inform the GoM’s statewide IBDLP. The IBDLP has two pillars: (a) Market Access and (b) Landscape Management for Sustainable Natural Resource Management. The MCLLMP aligns with the latter by strengthening communities and traditional institutions to manage their natural resources such as soil, springs and other water sources, forests, and biodiversity, through a landscape approach. The MBMA through active involvement of various line departments has initiated its program but the progress has been slower than expected because of insufficient community participation in planning and implementation due to lack project management skills, knowledge, and capacity; non-availability of baseline information of causes of resource degradation; issues of governance; lack of integrated planning at the village level; department-based approach to program delivery; and so on. The project is expected to follow necessary guidelines and will demonstrate project implementation in the selected landscapes which then can be scaled up in the whole state. 2. The project will establish and demonstrate best practices for community-led planning and implementation of landscape management plans through investments in land, water, soil, and forests development activities in targeted villages so that those practices can be replicated in the entire state as part of the GoM’s own programs. The project will prioritize around 400 villages located in ‘very critical’ and ‘critical’ (degraded) landscapes as per Northeast Space Application Center (NESAC) criteria, over a period of five years, for the planning and treatment of these landscapes. Landscape planning and investments will be preceded by extensive training for communities and project management staff at the field level. The project will extend such training to communities beyond the targeted 400 villages to expand the reach of the MCLLMP approach through knowledge and training to a wider cohort of villages which would take up landscape-based planning and management of natural resources with funds from other government programs. 3. The project will achieve this through activities outlined under three components: (a) Component 1: Strengthening Knowledge and Capacity for Natural Resource Management(NRM) (b) Component 2: Community-led Landscape Planning and Implementation (c) Component 3: Project Management and Governance 31 Figure 2.1. Activities under the Components Component 1: Strengthening Knowledge and Capacity for Natural Resource Management (NRM) 4. The objective of this component is to enable the development, assimilation, analysis, and dissemination of knowledge and skills related to landscape management within the state. This component will comprise the following subcomponents. Subcomponent 1A: Promotion of traditional knowledge, grass-root innovations, and communication 5. This subcomponent will support (a) state- and regional-level workshops on sharing of unique and traditional NRM practices and learnings from other NRM projects, (b) development of a knowledge management strategy and web platform for sharing of NRM-related knowledge with the community under the MCLLMP and development of knowledge networks, (c) innovation grants to promote and pilot new approaches to sustainable NRM products and services, and (d)catalytic activities to encourage CNRM in new villages. For wider adoption of the MCLLMP approach, the DPMUs will encourage communities that complete the initial training to initiate small activities to as a demonstration of their interest to take up larger activities. Subcomponent 1B: Training and capacity building 6. This subcomponent will finance (a) training and capacity-building activities for all stakeholders and beneficiaries on community leadership and management of natural resources and the approaches promoted by the project, (b) development of training infrastructure at block level 32 BNRGSK/ Enterprise Facilitation Centers, and (c) national and international exposure visits for project stakeholders. These training activities will be implemented in coordination with the Meghalaya Institute of Natural Resource Management, Institute of Governance, Department of Science and Technology, SIRD, FTI, Tura and CTI. Subcomponent 1C: Preparation of strategies, research, and development 7. This subcomponent will support consultancy services to develop plans and strategies in the following areas: (a) preparation of strategy and action plan for development of an Agency of Excellence in knowledge management, innovation, climate change adaptation and communications; (b) institutional development study for the IBDLP; (c) preparation of a training plan for the project; (d) baseline study for the project; (e) study on drivers of deforestation and natural resource degradation; and (f) study on rehabilitation of population displaced due to mines. Subcomponent 1D: Monitoring, learning, and reporting 8. This subcomponent will support an MIS to cover the entire state for tracking performance and implementation progress of the project. The MBMA will design and establish MIS infrastructure for the project that can be scaled up to cater to other requirements of the IBDLP. Component 2: Community-led Landscape Planning and Implementation 9. This component will support both planning and implementation of the landscape plans by communities in the selected very high/high priority areas. 10. NESAC criteria. The project will use NESAC classification of critical landscapes that is based on a vulnerability analysis due to acute water shortage, high degradation of forests and soils and with high incidence of poverty of resource-dependent communities of all 35 watersheds and 179 sub-watersheds of Meghalaya and classified these landscapes as (a) very critical (very high priority) areas, (b) critical (high priority) areas, and (c) low priority areas. This classification is based on vegetation index, slope, and soil brightness index. The project will focus on landscape management activities in about 400 villages according to the above classification, for intervention under Component 2 of the project. Subcomponent 2A: Preparation of community landscape plans 11. Communities, with the help of project facilitating teams (subject matter specialists) at block-level and village-level service providers, will prepare plans that will allow communities to (a) optimize synergies between programs and funding streams, (b) plan holistically rather than be program/scheme-driven to meet targets, and (c) take a leadership role for the management of natural resources under their stewardship. A COM will outline processes of community consultation and development of CNRM plans. The COM will specifically define ‘bottom-up’ participatory planning and implementation processes. 12. CNRM plan. The following steps will be used to identify and bring awareness under the project to develop CNRM plans: 33 13. Sensitization and awareness generation. The villages will be sensitized to community- led landscape management, to facilitate screening by block-level officials and demonstrators through village-level meetings, ensuring participation of all village households. The village-level meetings will introduce the MCLLMP and its Operational Manual along with a draft Citizens’ Charter to village communities. Here, villages will be guided and encouraged to constitute their VNRMC and its Executive Committee and open a bank account according to the COM. Priority will be given to villages in critical and very critical landscapes for sensitization and information dissemination under this step. During the sensitization phase, a village will nominate up-to eight educated youth (to undertake trainings in the core areas of forest, soil and water, environment, social, community, and rural development management to be eligible as a village facilitator/green volunteer under the project).  Basic eligibility criteria under the project. The project will finance planning and implementation of CNRM plans (Component 2 of the project) in targeted villages (approximately 400) in critical and very critical landscapes. GIS tools and ground- truth verification will be carried out to select villages that also have high incidence of poverty among resource-dependent communities, acute water shortage, and high degradation of forests and soil resources.  Submission of EOI. If villages agree to participate and fulfil the criteria stated earlier, the villages (or cluster of villages) will submit their EOI at the block unit, for inclusion under the project through an agreed template.  Screening of EOI. The EOI by each village (or cluster of villages) will be screened using the following major and optional criteria: o Major criteria. (a) One female (head of the family) and one male member of each household signs the Green Citizens’ Charter; (b) bank account for the VNRMC is opened; (c) availability of undisputed land for the project; and (d) percentage performance under various state and centrally sponsored schemes, particularly the Mahatma Gandhi National Rural Employment Guarantee Scheme or MGNRES (this will be ‘ranking criteria’ to short-list villages if there are more number of applicants). o Optional criteria: (a) The VNRMC is established and Executive Committee for project planning and implementation is appointed; (b) land dispute, if any, is resolved or excluded from prospective development; (c) traditional knowledge- holders on NRM are identified, (d) community nursery is established, (e) 6–8 youth are selected for undergoing training on various aspects of landscape management (GIS and geospatial tools, CNRM plan preparation, accounting and book keeping, social and environmental safeguards, social audit, community mobilization, and so on). 14. Final selection and CNRM plan development. The first set of (400) villages that submit their EOI for inclusion under the project, after having satisfied the above criteria, will receive planning funds and technical assistance for preparation of the CNRM plan. On evaluation of the EOI, the District Screening Committee and DPMU will decide the source of finance for any village 34 (this project/other GoM sources). Funds for plan preparation will be released to those villages whose EOI for participation in the project are selected, an agreed number of committee members receive the foundational training for plan preparation, and whose VNRMCs sign the Village Grant Agreement with the DPMU to carry out plan preparation based on the guidance in the COM. 15. To satisfy the regional balance within the state among the three indigenous areas, villages will be selected in proportion to the number of villages in critical landscape in each of Garo, Khasi, and Jaintia regions. The subsequent sets of villages that submit their EOI will undergo a similar process of evaluation. All those villages that submit a valid EOI and are not covered under the project will be covered under the GoM’s program in a phased manner.  Preparation of a CNRM plan. The COM of the project will outline processes of community consultation and development of CNRM plans. The COM will specifically define ‘bottom-up’ participatory planning processes, namely, Participatory Rural Appraisal and Participatory Rural Investment Planning exercise in areas related to (a) introduction of the concept of sustainable landscape planning with an emphasis on enhancing climate resilience; (b) resource mapping (availability of natural resources and land-use pattern in and around villages); (c) social mapping (demographics, infrastructure, institutions, knowledge, and so on); (d) assessment of area affected by natural resource degradation through natural and artificial factors and identifying area available for intervention; (e) assessment of solutions and opportunities with a focus on cost-effectiveness, simplicity, sustainability and relevance for climate resilience through stakeholder-group discussions and identification of priority interventions; and (f) preparation of a CNRM plan involving planning and budgeting for interventions in soil and water conservation, land development, afforestation, and so on, including community contribution.  Role of village facilitators. During the sensitization phase, a village will nominate upto eight educated youth (to undertake trainings in the core areas of forest, soil and water, environment, social, community and rural development management to be eligible as a village facilitator/green volunteer under the project). During CNRM plan preparation and implementation, the community would budget for the services of these facilitators, according to the type of supported required. The village facilitators will be provided the skills and training under the project to sustain themselves as service providers in the long term. Sub-component 2B: Implementation of community landscape plans and implementation support 16. Communities will implement CNRM plans in a phased manner, agreed through a Village Grant Agreement between the VNRMC and respective DPMUs. Communities will first implement agreed first-phase activities in their plan and graduate to the next phase of financing if implementation meets agreed criteria. This approach is meant to incentivize performance-based access to funds by the communities. Actual interventions needed will be decided by the community in their respective CNRM plans but will be designed to enhance soil and water conservation; soil health improvement and productivity enhancement; spring-shed development and water management; nursery, agroforestry, and community forestry including interventions to introduce climate resilient native species; optimization of shifting cultivation; rehabilitation of areas affected 35 by mining, and other NRM interventions. Criteria for assessing successful implementation will be agreed in the Village Grant Agreement.  Implementation of CNRM plans will be in a phased manner, agreed through an addendum to the Village Grant Agreement between the VNRMC and respective DPMUs. The addendum will specify the milestones linked and tranche releases for implementation of the CNRM plan and the communities will first implement agreed first-phase activities in their plan and graduate to the next phase of financing if implementation meets the agreed criteria. This approach is meant to incentivize performance-based access to funds by the communities. Criteria for assessing successful implementation will be agreed in the Village Grant Agreement Addendum. Actual interventions needed will be decided by the community in their respective CNRM plans related to soil and water conservation measures, soil health improvement and productivity enhancement measures, spring-shed development and water management plans, nursery and agroforestry and community forestry, optimization of shifting cultivation, rehabilitation of areas affected by mining, and so on.  CNRM plan envelope. A typical village would comprise 245 ha of land, where about 50 percent would be available for treatment (about123 ha). Based on the cost norms of the state of major NRM activities (such as soil and water conservation works, afforestation, spring-shed treatment, and vermicomposting units) and the technical planning support required (from village facilitators and block development offices), a financing envelope for the CNRM plan has been arrived at INR 3.5 million (aboutUS$54, 000). A breakdown of the cost is given in table 2.1. Table 2.1. Average CNRM Plan Cost per Village for Subcomponent 2B Activities INR US$ % of Plan Cost (million) Spring development 0.175 2,692 5 Nursery 0.100 1,538 3 Composting 0.100 1,538 3 Other components of NRM plan (soil and water conservation 1.780 27,385 50 works, afforestation, and soil fertility improvement) External experts hired by the VNRMC 0.250 3,846 7 Allocation for cluster-level landscape management 0.500 7,692 14 investments Green service providers from village/village facilitator 0.652 10,030 18 Total 3.557 54,723 100 Subcomponent 2C: Implementation support to community landscape planning and implementation 17. The SPMU, with help from the BPMU and village facilitators, will provide the geo-spatial data and analysis to inform the planning process in each village, and later help monitor progress during implementation. Community members, in addition to the village facilitator, will be trained to use some of the tools for data collection and mapping. Activities under this subcomponent will involve acquisition of satellite data; production of maps and reports; and training of technical 36 personnel in the SPMU, selected facilitators, and community members. These tasks will be carried out under the direction of the SPMU. Component 3: Project Management and Governance 18. This component will support the strengthening of the institutional capacity and knowledge management of the project implementing entity, the MBMA, for the implementation and management of the project including, among others, (a) establishment of the SPMU within the MBMA, support to seven DPMUs, including technical staff and consultants; (b) the incremental costs associated with implementation; (c) administrative support to 20 block development offices; and (d) technical fiduciary and safeguards oversight and supervision of project activities in the field. Table 2.2. Sequence of Project Implementation Step Activity Responsibility 1  Establishment of SPMU, DPMUs, and BPMUs MBMA 2  Identification of critical and very critical landscapes SPMU 3  Sensitization and awareness to community-led landscape DPMU and BPMU under the management direction of SPMU  Discussion of NRM issues and draft Green Citizens’ Charter and the COM with the villages 4  Formation of the VNRMCs and Executive Committees Village  Opening of bank account  Identification of youth for training and capacity building 5  Submission of EOI for participation in MCLLM VNRMC-Executive Committee Project/Program 6  Screening of EOI from villages By DPMU and recommendation made to SPMU 7  Training and capacity building, awareness, critical SPMU with DPMU consultancies, research and development, and knowledge management 8  Release of funds for plan preparation for villages who have DPMU undergone training upon signing of the Village Grant Agreement 9  Procurement of services of village service providers (trained VNRMC under Component 1)  Requisition for expert assistance from block-level and district- level experts  Plan preparation 10  Submission of plan Village Committee to DPMU through BPMU 11  Review and approval of plan DPMU 12  Plan approval and signing of addendum with milestones to the DPMU Village Grant Agreement between the DPMU and Village Committee 13  Implementation training SPMU and DPMU 14  Release of funds for plan implementation in tranches DPMU to VNRMC 15  Procurement of labour and material VNRMC  Requisition for expert assistance from block-level and district- level experts 16  Plan implementation VNRMC 37 Annex 3: Implementation Arrangements INDIA: Meghalaya Community Led Landscape Management Project (MCLLMP) 1. The implementation arrangements of the project constitute the governance and management structure of the project from the state to the village level. The implementation arrangements also cover the details regarding FM, disbursement, and procurement. 2. Implementing agency. The MBMA is the implementing agency of the project at the state level. The MBMA has established an SPMU and will use existing GoM structures at the district and block levels and the traditional tribal institutions (Dorbars, Nokma, and Doloi) at the village level for implementing the project. The Board of Directors of the MBMA under the chairmanship of the Chief Secretary, GoM, with the support of a Deputy CEO and Principal Secretary Finance (member) will have an advisory and supervisory role under the project. The Deputy Commissioner at the district level and traditional institutions at the village level will be responsible for guiding and overseeing the project execution. 3. Staffing. The core staffing of the SPMU comprises (a) one State Project Director; (b) two Deputy Project Directors for the east region (Garo area) and west region (Khasi and Jaintia area); (c) five additional Project Directors for Soil, Water, Forest, Community, and Rural Development and Administration; and (d) managers for Environment, Social Safeguards, Monitoring, Administration, Training and Capacity Building, M&E, and Knowledge Management. The SPMU staff will be in place on a full-time basis, dedicated to the project. For execution and supervision of GIS activities, the GIS Lab of the MBDA will have the overall responsibility and report to the Project Director. Figure 3.1. SPMU Staffing Structure 4. DPMU. The project operations at the district level will be governed by the District Project Steering Committee, headed by the Deputy Commissioner (Chairperson). The members will be 38 the officers from the line departments in the districts as well as the blocks, DPM (Operations) and DPM (Administration) will be the Member Secretary, and there will be two independent members who will be invited by the Chairman based on the need. The Committee will convene quarterly meetings to guide, supervise, and monitor the progress of the project. In addition, the Committee will review and approve CNRM plans submitted by block units. The project will support hiring of consultants in seven DPMUs to support project-specific functions related to gender, safeguards, fiduciary oversight, and M&E. At the district level, the project unit will be headed by the Deputy Commissioner and managed by two DPMs, all already in place, comprising the DPM (Operations) who will provide technical and safeguards oversight and DPM (Administration),who will be responsible for planning, M&E, procurement, finance, and capacity building. Figure 3.2.DPMU Staffing Structure 5. BPMU. At the block level, the existing EFC and government officers will support the VNRMC to plan and implement CNRM plans. Under the project, it is envisaged that 20 BPMUs will participate. At the block level, the Block Development Officer will be in-charge of implementation of the project with the help of officers from the Department of Soil and Water Conservation, Water Resource Department, Forest Department, and C&RD, who will provide technical support, trainings, and demonstrations at the village level. 39 Figure 3.3.Block Development Office Staffing Structure Note: AM = Assistant Manager; BDO = Block Development Office; PA = Program Associate; 6. VNRMC. The project is community driven and the village is considered the primary unit of planning and implementation. A VNRMC will comprise one male and one female member of each household. At the village level, the VNRMC comprising all adult male and female members of the village will elect the Village Executive Committee with a total membership of nine wherein 55 percent are women. The VNRMC would be established with functional bank accounts for the village to submit an EOI to participate in CNRM plan preparation and implementation under Subcomponents 2A and 2B. 7. Village facilitators. During the sensitization phase, a village will nominate up-to eight educated youth (to undertake trainings in the core areas of forest, soil and water, environment, social, community and rural development management to be eligible as a village facilitator/green volunteer under the project). During CNRM plan preparation and implementation, the community would budget for the services of these facilitators, according to the type of supported required. The village facilitators will be provided the skills and training under the project to sustain themselves as service providers in the long term. 40 Figure 3.4. Project Implementation Arrangements Governance Implementation SPMU Project Director (1) MBMA Deputy Project Director East and Deputy Project Director West (2) Board of Directors State Assistant Project Director Forest, (Chief Secretary, Retired IAS Level Water, Soil, C&RD Administration Officer, Principal Secretary, (5) Finance) Manager for Procurement and Finance. Environment, Social, M&E, Knowledge Management, District Program Steering DPMU Committee Deputy Commissioner District (Deputy Commissioner and District Project Manager Level representative of Line Administration, operations (2) Departments and 2 Independent Assistant Manager Soil, Water people) Forests, C &RD, Environment, Social, KM, M&E, Procurement and Finance (9) Block Development Officer, Block Assistant Manager (operations) Level Demonstrators for Soil, Water, Forests, and C&RD VNRMC (all adults of the Village) Village Traditional Institution (Durbar, Executive Committee (9 with at least Level Nokma, and Dolois) 5 women) 41 Financial Management, Disbursements, and Procurement Financial Management 8. Under the administration of the Project Director, an SPMU has been established in the MBMA. The MBMA will have the overall responsibility of maintaining the FM system of the project and ensuring that these functions are carried out in accordance with the project’s legal agreements. These activities will include (a) adequate annual budgetary provision and effective utilization; (b) sufficient and timely flow of funds for project activities, including for community- led programs; (c) maintenance of adequate and competent FM staff; (d) appropriate accounting of project expenditures; (e) oversight on project funds spent by the VNRMCs based on the Village Grant Agreement; (f) control over assets created under the project; (g) preparation and timely submission of IFRs; and (h) timely submission of audit reports and project financial statements to the World Bank. The arrangements that will govern the project’s FM are detailed in the following paragraphs. 9. Budget and counterpart financing. The World Bank funds will be provided to the GoI under IBRD loan terms and it will be released by the GoI to the GoM according to agreed financing norms between the center and the state. The GoM will provide 100 percent funding (central and state share) for the project in the yearly state budget at the beginning of each financial year based on the budget estimates (Annual Work Plan [AWP]) provided by the MBMA. The budget utilization will be monitored by the GoM and any additional demand for the budget during the financial year will be met through a provision by way of supplementary demand in the month of September. The GoM has opened a separate budget head for the project in the state budget and a budget provision has been made to finance project activities of FY2017–2018. 10. Fund flow (GoM to the MBMA). The MBMA will open a separate bank account for the project. The MBMA will receive a sanction order from the GoM after the annual budget is approved by the GoM to draw funds from the budget into the project bank account. The payments will be made by the MBMA for the following key project activities: (a) village grants to the VNRMC for plan preparation and implementation of schemes under Subcomponents 2A and 2B of the project according to terms and conditions stipulated in the Village Grant Agreement between the MBMA and participating VNRMCs; (b) innovative grants, goods, consulting, non-consulting, and training under Component 1 of the project; and (c) incremental operating costs under Component 3 of the project. The village grants under Subcomponents 2A and 2B will be considered for World Bank financing/disbursements and will be reported in the IFR when the grant funds are released by the DPMUs to participating VNRMCs. The payment, accounting, financial controls, and reporting at the VNRMC on the use of funds will be detailed in the Community Operations Manual. The accounting system and IFR formats are designed to obtain information from the MBMA on village grants disbursed to the VNRMC and underlying expenditures incurred by the VNRMC. The innovative grants under Subcomponent 1A will be released through innovative grant agreements signed with the institutions that will come forward with their proposals, which will be evaluated according to established selection criteria and following World Bank procurement procedures. The payment to the institutions will be made according to the payment schedule specified in the innovative grant agreements against specific outputs. The amounts will be considered for bank disbursement and will be reported in the IFR when the amounts are released by the MBMA to the institutions. 42 11. Fund flow and financial monitoring for community-led activities. The DPMU and participating VNRMCs will open separate bank accounts to receive funds under the project. The funds will be transferred from the MBMA bank account into the DPMU bank account, which in turn will transfer the funds to participating VNRMCs initially for preparation of plans and subsequently for implementation of plans. The CNRMP will be prepared by the VNRMC with the support of the BPMU which will be approved by the Deputy Commissioner of the district and subsequently by the MBMA. The withdrawal of funds will be made by the VNRMC initially for the preparation of plans and subsequently for implementation of plans according to terms and conditions stipulated in the Village Grant Agreement. There will be a proper segregation of duties on the FM functions relating to procurement, payment, and accounting among the elected members of the VNRMC. The VNRMC will maintain a cash book/register and supporting documents for the payment made from the bank account. Such financial records will be kept for subsequent audit and verification. The VNRMC will submit a utilization certificate to the DPMU within one month from the end of each half-year ending September 30 and March 31, which will be endorsed by the DPMU and subsequently forwarded to the MBMA. The monitoring on end use of funds and compliance with the terms and conditions of the Village Grant Agreement will continue to be undertaken by the MBMA with the support of the DPMU on an ongoing basis. A COM is being developed which will govern the operating procedures on the use and monitoring of grant funds. 12. Finance staff and training. The finance wing of the MBMA is presently headed by an Officer on Special Duty (finance) and supported by accounting professionals specifically recruited by the MBMA for the IFAD project. The MBMA has nominated a Finance Manager exclusively for the project. It has been agreed with the MBMA that requisite finance staff will be hired at the SPMU and DPMU to manage accounting and financial reporting functions of the project. Provision for staff costs has been made in the project budget. Sufficient training will be provided to the finance staff on FM, World Bank disbursement policies and procedures, and use of the Client Connection website. 13. Accounting. The MBMA from April 2017 maintains books of accounts in a computerized accounting system and it has an FM manual to guide the staff on accounting and internal control principles. The accounting system will be used for the project and chart of accounts will be appropriately developed to classify project expenditures based on project components/major activities. 14. Financial reporting. The reporting framework for the project will consist of an IFR. The format of the IFR is attached to the Disbursement Letter. It will provide information on the sources and uses of funds according to disbursement categories and project components (Components 1, 2, and 3). The IFR will be prepared by the MBMA from its underlying accounting records, ledger accounts, and expenditure statements generated from the accounting system. The IFR will be submitted by the MBMA to the World Bank through the Controller of Aid, Accounts, and Audit within 45 days from the end of each calendar semester. To maintain cash flow of the project, the MBMA is allowed to submit out-of-turn IFRs as and when substantial expenditures are incurred under the project. The IFR will form the basis of disbursement from the World Bank to the GoI and GoM. 43 Table 3.1. Expenditure Eligible for Disbursement Component Eligible Expenditure Conditions for Eligibility of World Bank Disbursement Subcomponents 2A Village grants will be released to the First tranche. The funds will be released to and 2B of the project VNRMC in three tranches. The the VNRMC for preparation of CNRM plans. (village grants) MBMA will release funds to the The Village Grant Agreement providing broad DPMU, which in turn will transfer the framework on the use of funds will be signed funds to the VNRMCs for between the MBMA and participating community-led activities. The funds VNRMCs. transferred by the DPMU to the Second tranche. The funds will be released to VNRMCs will be treated as eligible the VNRMC for implementation of CNRM amounts for disbursements and it will plans. The CNRM plan will include activities be reported in the IFR. The funds that that will be distinct and identifiable, and remain unspent at the end of the results will be measurable. The Village Grant project period in the VNRMC bank Agreement will detail the terms and accounts would be refunded to the conditions on the use of funds for community- World Bank. Monitoring the end use led activities. of funds and compliance with the Third tranche. The funds will be released to terms and conditions of the Village the VNRMC upon fulfillment of conditions Grant Agreement will be undertaken and payment schedule specified in the Village by the MBMA with the support of the Grant Agreement. The verification of outputs DPMU on an ongoing basis. will be carried out by the MBMA with the support of DPMU. FM aspects to be considered. (i) The DPMU and VNRMC will open separate bank accounts to receive funds under the project. (ii) The CNRM plan will be prepared by the VNRMC with the support of the DPMU which will be approved by Deputy Commissioner of the district and subsequently by the MBMA. The DPMU and Deputy Commissioner at the districts will ensure that activities included in the CNRM plan do not include any activities that are presently financed or will be financed during the project period from any other government scheme. (iii) The MBMA will transfer the funds directly from its bank account into the bank account of the DPMU, which in turn will transfer the funds into the bank account of the VNRMC. (iv)Proper segregation of duties (that is, procurement, payment, and accounting) among the elected members of the VNRMC. (v) Payment will be made by the VNRMC only for the activities specified in the CNRM plan. The funds drawn and spent by the VNRMC from the bank account for the activities other than the ones listed in the CNRM plan will be considered ineligible and will be refunded to the World Bank. (vi) The VNRMC will maintain a cash book/register and supporting documents to 44 Component Eligible Expenditure Conditions for Eligibility of World Bank Disbursement record financial transactions. Such records will be kept for audit and verification. (vii) Utilization certificate on the use of funds will be submitted by the VNRMC to the DPMU every six months, which will be forwarded to the MBMA. (viii) The MBMA will record names of the DPMUs in its accounting system under respective account codes predefined for the project. (ix) The MBMA will maintain disbursement records for each disbursement made to the VNRMC through the DPMU and Utilization Certificates received from the VNRMC. (x) The MBMA will provide a complete list of the DPMUs and VNRMCs that have availed grants under the project in the IFR. Component 1, Expenditure incurred and paid on Expenditure should be duly approved Subcomponent 2C, activities relating to procurement of according to MBMA delegation of authority, and Component 3 of goods, training, and consulting/non- evidenced by supporting documentation, be the project (goods, consulting services and program incurred for the project, and be recorded in the consulting, non- management costs. accounting system under account codes consulting, training, predefined for the project. The expenses and incremental should not have been claimed from any other operating costs, other sources. than innovative grants) Component 1A of the The amounts will be considered for (i) The institutions will come forward with the project (innovative World Bank disbursement and will be proposals which will be evaluated by the grants) reported in the IFR when grant funds MBMA according to established selection will be released by the MBMA to the criteria and following World Bank institutions/individuals. procurement procedures. (ii)Innovative grant agreement will be signed between the MBMA and the institutions. (iii)The payments to the institutions will be made by the MBMA according to the payment schedule specified in the innovative grant agreement against specific outputs. (iv)The MBMA will record names of institutions in its accounting system under respective account codes predefined for the project. (v)The MBMA will maintain disbursement records for each disbursement made to the institutions. 15. Internal audit. The MBMA will hire full-time audit officers in the SPMU to carry out internal audit of the project. Adequate provision for the staff costs has been made in the project budget. Alternatively, an internal audit firm following World Bank procurement procedures will be hired by the MBMA for carrying out the internal audit. The internal audit will focus mainly on (a) quality of maintenance of financial records at the SPMU, DPMUs, and VNRMCs; (b) payment, financial reporting, and procurement functions at the SPMU, DPMUs, and VNRMCs; and (c) disbursement and reconciliation functions at the SPMU, DPMU, and VNRMCs for the community 45 led activities. The selection of VNRMCs will be carried such that all VNRMCs are covered for internal audit during the lifetime of the project. The audit reports along with the corrective actions adopted by the project to address control weaknesses will be shared with the World Bank. 16. External audit. The statutory audit of the MBMA according to the India Companies Act is presently conducted by an external audit firm appointed by the CAG. To obtain fiduciary assurance for this project, it has been agreed with the MBMA that the entity audit will also cover project transactions and a separate schedule reporting financial activities of the project will be provided along with entity audit report and financial statements. The entity audit report will be shared with the World Bank within nine months from the end of each fiscal year. Table 3.2. External Audit Details Implementing Agency Audit Report Auditor Due Date MBMA Entity audit report (providing Private Auditor December 31 of financial information on use of appointed by the CAG each year project funds as a separate schedule) 17. Retroactive financing. Payments made by the MBMA during the one-year period before the signing of legal agreements for contracts awarded following World Bank procurement procedures will be eligible for retroactive financing. The limit for retroactive financing is US$8 million. The MBMA will submit a separate IFR to claim such expenditures. 18. Public disclosure. Annual audit reports and project financial statements will be disclosed by the MBMA on its official website. Procurement 19. Procurement for the MCLLMP will be carried out in accordance with the World Bank’s Procurement Regulations for Borrowers for Goods, Works, Non-Consulting and Consulting Services, dated July 1, 2016, and applicable to Investment Project Financing (IPF), hereinafter referred to as ‘Regulations’, and the provisions stipulated in the Legal Agreements. The project will be subject to the World Bank’s Anticorruption Guidelines, dated July 1, 2016. According to the requirement of the Regulations, a PPSD has been developed. A Procurement Plan has been prepared based on the PPSD, which sets out the selection methods and arrangements to be followed by the borrower during project implementation in the procurement of goods, works, and non- consulting and consulting services financed by the World Bank. The Procurement Plan will be updated annually, or as required, to reflect actual project implementation needs. The project will use the STEP system for all its procurement activities. The COM and project Procurement Manual—describing the procurement procedures to be followed at the state, district, and community levels—have been prepared and will be adopted after approval from the World Bank. Specific Procurement Objectives (a) To achieve the PDO together with value for money, transparency, and integrity (b) Ensuring timely and efficient availability of materials/goods/works/non-consulting services and consultants, and training, in line with the Procurement Plan (or the 46 updated Procurement Plan) within budget and on time, and in compliance with the Procurement Regulation for IPF Borrowers of the World Bank (c) Effective contract management (d) Effective and efficient handling of procurement-related complaints (e) Disclosure of procurement information Procurement Result Indicators (a) Percentage of the SPMU and DPMU procurements that adhere to estimated costs (+/- 10 percent) (b) Percentage adherence to procurement cycle time (procurement cycle time is time taken from the date of invitation of bids to the date of contract award) (c) Percentage purchase orders/contracts with adherence to stipulated payment terms (d) Disclosure of procurement information, including, but not limited to, opportunities/formats and checklists/contract award notices/procurement post review reports, complaint handling mechanism, and so on, on the project website (e) Number of villages/communities who have received at least one training in procurement as the first step to build procurement capacity 20. Summary from the PPSD. The project’s total value is US$60 million, of which procurement cost is approximately the equivalent of US$39.86 million. Extensive risk and market analysis has been carried out with particular focus on best-fit and appropriate delivery models for top-down centralized procurement and bottom-up, demand-driven, participatory community-led procurements. Based on the market experience and studying the experiences in other World Bank- financed projects, the project has also decided to implement Government e-Marketplace (GeM) and framework agreements for various goods and works procurement items. Because procurement is small in value and dispersed, procurement that would attract international competition is not envisaged. 21. The PPSD recognizes that while the procurement decision-making process and primary responsibility for the successful implementation of the project will rest with the MBMA, given that the MCLLMP is primarily a decentralized and community-driven project, the support and close involvement of districts and traditional village institutions at the village level, such as village councils, will be critical. All community-driven procurement will follow the procedures outlined in the procurement chapter of the COM and will be governed by the provisions of paragraphs 6.9 and 6.10 of Annex XII of the Regulations. 22. Based on the PPSD, the Procurement Plan has been prepared to set out the selection methods to be followed by the borrower during project implementation in the procurement of goods, works, and non-consulting and consulting services financed by the World Bank. The Procurement Profile under the project is shown in table 3.3. 47 Table 3.3. Procurement Profile Under the Project Approximate Estimated Procurement Cost/Duration Category Description Level Section Methods and Market Approach Options US$0.1 million Minor civil works such as office Duration: 6–36 months Works repairs and refurbishment Request for Bids (RFB) -National Request for Quotation (RFQ)- National Service vehicles, computers and US$3.24 million SPMU accessories, office equipment, Duration: 6–36 months Goods and cameras, GIS and geospatial RFB-National, RFQ-National, Non- applications, satellite imagery, IT GeM; a few may be Direct Consulting equipment and accessories, Selection (DS) Services printing services for IEC, and so on Consultancy to support need-based US$9.79 million studies and technical assistance, Duration: 6–60 months baseline survey, M&E, GIS, and QCBS, LCS, FBS, CQS, a few geo-spatial consultancies, internal may be DS audit, MIS development, Consultancy communications and outreach, individual technical experts to support the SPMU, research activities, capacity-building activities, and so on Computers and accessories, US$1.53 million cameras, office equipment, Duration: 6–36 months DPMU Goods printing services for IEC, and so RFB-National, RFQ-National, including on GeM; a few may be DS procurement for US$0.2 million BPMU Minor repairs to office buildings Works Duration: 6–60 months RFQ- and so on National, GeM, a few maybe DS US$0.2 million Duration: Implementation period of Agricultural items and equipment Community Led Goods a CNRM plan is 6 months and so on approximately RFQ-National; a few may be DS US$24.80 million Duration: Implementation period of Minor civil works including Works a CNRM plan is 6 months repairs of existing structures approximately RFQ-National; a few may be DS Note: QCBS = Quality- and Cost-Based Selection; LCS = Least-Cost Selection; FBS = Selection Under a Fixed Budget; CQS = Selection Based on the Consultants’ Qualification. Table 3.4. Procurement and Contract Approaches Attribute Selected Arrangement Best and Final Offer No Negotiations No 23. Client capability assessment. The project will be implemented, monitored, and coordinated by the MBMA. The Procurement Cell will be housed within the SPMU and will be 48 headed by the Additional Project Director (Administration)assisted by two Deputy Project Directors (one each for Garo Hills and Khasi/Jaintia Hills), who in turn will report to the Project Director, SPMU. The Procurement Cell will be supported by a Procurement Expert and will be responsible for day-to-day procurement functions (such as procurement planning and implementation of centralized procurement, approving and monitoring Procurement Plans for decentralized procurement, coordination with decentralized procuring entities at various levels and with technical cells and various line departments, contract administration and management, reporting and coordinating with the World Bank, identifying capacity-building/training needs for project staff and officials and conducting procurement trainings, implementation of procurement risk mitigation action plan, and so on).An assessment of client capacity has been carried out; given the lack of prior exposure to World Bank procurement procedures, high-volume, low-value decentralized procurements, lack of procurement complaint handling protocol, multiple procurement implementing entities, and so on, the procurement capacity of the client is assessed to be inadequate and limited. 24. The unmitigated procurement risk rating for the project is High; the residual risk after considering proposed mitigation measures is Substantial. The MBMA has no prior experience with World Bank-financed projects. Major risks are related to staff capacity and turnover, lack of adherence to agreed procedures during implementation, unrealistic cost estimates, delays in procurement decision making, delays in procurement and contract implementation, suppliers’/consultants’/bidders’ interest and participation given the remote location of Meghalaya, risk of inadequate monitoring of compliance with agreed fiduciary processes in CDD subprojects, disputes and poor procurement record keeping at district and sub-district levels that has the potential to undermine any audit exercise that may be conducted, external interference in procurement process, and so on. Additionally, for community procurement, although the amount per transaction is expected to be small and subprojects scattered, the volume of transactions has the potential for substantial risk. 25. It is anticipated that experience gained by the MBMA in implementing the IBDLP of the GoM and IFAD-funded Meghalaya LAMP will accelerate the procurement decision making and will help in timely availability of funding and other clearances required for the project. SPMU staff identified by the MBMA to handle procurement under the project have received training in procurement procedures in World Bank-financed projects. Monitoring of the Procurement Plan through STEP will also mitigate the risk of delays in procurement. The risk of noncompliance due to difference in state procurement procedures, IFAD-funded Meghalaya LAMP, and World Bank procurement procedures is likely to be mitigated through periodic updates of the project Procurement Manual, as required, which will include, among others, all procurement processes, decision making, and safe upkeep and management of records; describe roles and responsibilities for procurement and so on; provide guidelines for procurement implementation and contract management under the project; and serve as a tool for quality and internal control. Similarly, the procurement chapter of the COM prepared by the MBMA will serve as a tool and guide to communities to implement their procurements according to agreed arrangements and additionally, training will be provided to members of the community on finance and procurement. The risk of less participation in centralized procurement/selection process due to locational remoteness of Meghalaya may be overcome by giving adequate publicity, providing clarifications during pre- bid/pre-proposal conference, and so on. The risk of irregularities/corruption and interference in procurement can be mitigated by setting up internal systems as well as an operational procurement 49 complaint handling system to the satisfaction of the World Bank, disclosure of procurement information, code of ethics for staff, internal and external audits, and so on. Additional risk mitigation measures would include regular contract monitoring and contract management training to mitigate the risk of delays in implementation of scattered, low value, decentralized procurement. 26. Procurement training. Key staff may be sent for trainings at the Indian Institute of Management (IIM) Lucknow. The project could also avail of the free Massive Open Online Course on public procurement (www.procurementlearning.org) offered by the World Bank as well as the paid Professional Diploma in Public Procurement course delivered through the Charter of Public Procurement Studies. 27. Procurement planning. For each contract to be financed by the loan, the various selection methods/arrangements and market approach options to be used, estimated costs, prior review requirements, and time frame will be reflected in the Procurement Plan. The capacity-building plan will also be reflected in the Procurement Plan. The Procurement Plan, as agreed, will be uploaded in STEP. Based on discussions between the World Bank and MBMA, the project has evolved and has committed to respective time frames for processing the procurement requirements at various stages. 28. STEP. The project will implement STEP, a World Bank procurement planning and tracking system, which would provide data on procurement activities, provide an audit trail, and establish meaningful and measurable benchmarks. Training on STEP has been provided to staff nominated by the MBMA. 29. e-Procurement. The MBMA is not presently using e-procurement. Procurement using the National Informatics Center portal shall be adopted as and when the project builds the capacity to do so in line with GO FEG.25/2014 dated February 7, 2014, issued by the Finance Department of the GoM. 30. Advance contracting with retroactive financing. For effective project implementation and effective start-up, the project has initiated advance contracting which is likely to include, but may not be limited to, critical consultancies envisaged under the project, namely, consultancy for baseline survey, study identifying drivers of deforestation, and study on impact of mining. 31. Record keeping. All records pertaining to award of tenders/selection of consultants, including tender notification/advertisement, register pertaining to sale and receipt of bids, bid/proposal opening minutes, bid/technical and financial evaluation reports and all correspondence pertaining to bid evaluation, communication sent to/with the World Bank in the process, bid securities, and approval of invitation/evaluation of bids/proposals would be maintained by respective implementing agencies for any post review requirements. 32. Disclosure of procurement information. The following documents shall be disclosed on the project website (a)Procurement Plan and updates,(b) an invitation for bids for goods and works for all contracts,(c) request for EOI for selection/hiring of consulting services,(d) contract awards of goods and works procured following international and national procedures,(e) a list of contracts/purchase orders placed following RFQ procedures on a quarterly basis,(f) a list of contracts following DS/Single-Source Selection on a quarterly basis,(g) a monthly financial and 50 physical progress report of all contracts, and (h) an action taken report on the complaints received on a quarterly basis. 33. The following details shall be published on the United Nations Development Bank and the World Bank external website through STEP: (a) an invitation for bids for procurement of goods and works using Open International procedures, (b) contract award details of all procurement of goods and works using Open International procedure, and (c) a list of contracts/purchase orders placed following Direct Contracting procedures on a quarterly basis. Further, the MBMA will also publish on the project website any information required under the provisions of ‘suo moto’ disclosure as specified by the Right to Information Act. 34. Contract management. The Procurement Cell under the SPMU of the MBMA will be responsible for overall procurement and contract management. The Procurement Cell will be ably assisted by a multiskilled project management team, engaged to provide overall implementation support and monitoring to ensure that the intended benefits and outcomes of contracts under the project are achieved on time, within the estimated cost, adhering to health and safety requirements, avoiding and managing complaints and disputes that may arise effectively and fairly, and ensuring that timely payments are made to suppliers/vendors/contractors/consultants contracted under the project by various implementing and sub-implementing agencies. 35. Complaint handling mechanism. A complaint handling mechanism to address any procurement-related complaints received by the project will be developed and implemented by the SPMU to the satisfaction of the World Bank. Upon receipt of complaints, immediate action would be initiated to acknowledge the complaint and to redress it within a reasonable timeframe. All complaints will be addressed at levels higher than the level at which the procurement process was undertaken or the decision was taken. Any complaint received will also be forwarded to the World Bank for information, and the World Bank would be kept informed after the complaint is redressed. Table 3.5. Procurement Thresholds and Prior Review Thresholds Procurement Approaches and Methods Thresholds (US$ equivalent) Open International (Goods, IT, and non-consulting >3 million services) Open National (Goods, IT, and Non-consulting >100,000 and up to 3 million Services) RFQ - National (Goods/Works) Up to 100,000 Open International (Works) >40 million Open National (Works) >100,000 and up to 40 million DS No threshold but with prior agreement based on justification; For goods/works/non-consulting services: As per paragraphs 6.8–6.10 of the Regulations For consultants: As per paragraphs 7.13–7.15 of the Regulations Framework Agreement For goods/works/non-consulting services: As per paragraphs 6.57–6.59 of the Regulations For consultants: As per paragraph 7.33 of the Regulations Shortlist of National Consultants Up to 800,000 51 36. World Bank review of procurement. The World Bank will prior review the following contracts: (a) Works. All contracts more than US$10 million equivalent (b) Goods and non-consulting services. All contracts more than US$2 million equivalent (c) Consultancy services (firms). All contracts more than US$1 million equivalent (d) Consultancy services (Individual Consultants). All contracts more than US$0.3 million equivalent 37. Above-monetary thresholds are based on current procurement risk rating (namely Substantial) of the project and are for the initial 18 months’ project implementation period. These will be modified if the procurement risk rating of the project changes in future. If any procurement package has different risk rating than that for the project, the review thresholds will be modified accordingly. Even for large-value post review cases, the inputs of the World Bank on technical specifications/terms of references will be obtained by the project. The Procurement Plan will list review requirements for each of the packages and will be subsequently updated annually (or at any other time if required) and will reflect any change in prior review thresholds. The prior review thresholds will be mutually reviewed during project implementation and modified based on the risk assessment. 38. In the case of contracts subject to prior review, the implementing agency shall seek the World Bank’s no-objection before granting/agreeing to (a) an extension of the stipulated time for performance of a contract that either increases the contract price or has an impact on the planned completion of the project; (b) any substantial modification of the scope of works, goods, non- consulting services, or consulting services, other significant changes to the terms and conditions of the contract; (c) any variation order or amendment (except in cases of extreme urgency) which singly or combined with all variation orders or amendments previously issued, increase the original contract amount by more than 15 percent; and (d) the proposed termination of the contract. 39. Procurement methods and thresholds for community procurement. Goods, works, and services will be procured at the community level using the procurement methods and corresponding prior review thresholds described in the Procurement Chapter of the COM applicable to the MCLLMP and governed by the principles contained in paragraphs 6.9 and 6.10 of Section XII of the Procurement Regulations. Community procurement will be in line with the approved CNRM and AWPs. 40. Conditions for RFBs- National Procurement Procedure Conditions. In accordance with paragraph 5.3 of the Procurement Regulations, when approaching the national market (as specified in the Procurement Plan tables in STEP), the country’s own procurement procedures updated from time to time may be used, as elaborated here: (a) Only the model procurement documents agreed with the World Bank (and as amended for time to time) shall be used for bidding. 52 (b) Invitations to bid shall be advertised in at least one widely circulated national daily newspaper (or on a widely used website or electronic portal with free national and international access along with an abridged version of the said advertisement published in a widely circulated national daily, among others, giving the website/electronic portal details from which the details of the invitation to bid can be downloaded), at least 30 days before the deadline for the submission of bids. (c) No special preferences will be accorded to any bidder either for price or for other terms and conditions when competing with foreign bidders, state-owned enterprises, small-scale enterprises, or enterprises from any given state. (d) Extension of bid validity shall not be allowed with reference to contracts subject to World Bank prior review without the prior concurrence of the World Bank (i) for the first request for extension if it is longer than four weeks and (ii) for all subsequent requests for extension irrespective of the period (such concurrence will be considered by the World Bank only in cases of force majeure and circumstances beyond the control of the purchaser/employer). (e) Rebidding shall not be carried out with reference to contracts subject to World Bank prior review without the prior concurrence of the World Bank. The system of rejecting bids outside a predetermined margin or ‘bracket’ of prices shall not be used in the project. (f) Rate contracts entered into by the Directorate General of Supplies and Disposals (DG&SD) will not be acceptable as a substitute for national competition procedures without incorporation of right to audit and fraud corruption clauses. DG&SD contracts and its new version will be acceptable; however, for any procurement under the Shopping procedures, the World Bank has allowed use of the GoI’s GeM (www.gem.gov.in)instead of Shopping/RFQ according to the following details:  Use of GeM will be allowed instead of shopping up to US$30,000 in catalog mode (namely, any available item could be selected by borrowers).  Use of GeM will be allowed instead of shopping up to US$100,000, provided there are at least three suppliers for the item on GeM and the purchaser uses RFQ (mini competition or bidding among suppliers) feature on GeM to discover the final price. In both these cases, borrowers will record their assessment on reasonableness of price. Also, GeM is not to be used instead of National Competitive Procurement. (g) No negotiations are conducted even with the lowest evaluated responsive bidders. (h) Two or three envelope system will not be used [except when using e-Procurement system assessed and agreed by the Bank]. 41. When other national procurement arrangements other than national open competitive procurement arrangements are applied by the borrower, such arrangements shall be subject to paragraph 5.5 of the Procurement Regulations. 53 42. Oversight and monitoring by the World Bank. All contracts not covered under prior review by the World Bank will be subject to post review during implementation support missions and/or special post review missions, including missions by consultants hired by the World Bank. The World Bank may conduct, at any time, Independent Procurement Reviews of all the contracts financed under the loan. High-risk procurements, if any, will be identified for increased procurement and contract management support and indicated in the Procurement Plan. The World Bank team will provide additional due diligence and independent review of the contract performance of such identified procurements. 43. Procurement review by the SPMU. The SPMU will establish internal prior review thresholds that will be reflected in the Procurement Manual for the project and the Procurement chapter of the COM prepared by the MBMA. Additionally, the SPMU will conduct independent procurement post review for district- and sub-district level procurements according to the terms of reference and reporting requirements satisfactory to the World Bank. 44. Frequency of procurement supervision. The World Bank will normally carry out implementation support missions, including review and support on procurement, on a semiannual basis. Mission frequency may be increased or decreased based on the procurement performance of the project. Environmental and Social (including Safeguards) 45. Environmental risks and impacts. The project will support village communities for preparation of CNRM plan, and its implementation which would include investments in (a) soil and water conservation measures; (b) soil fertility improvements and composting activities; (c) community water management and spring-shed catchment treatment; (d) forest nurseries, afforestation, and regeneration of natural forests; and (e) rehabilitation of lands affected by shifting cultivation and mining. The project is expected to be environmentally positive; there is the potential for project works or activities to cause unintended negative impacts, albeit, minor/small scale unless carefully designed and implemented. The main safeguards-related risks associated with the project's site-specific investments within this context include (a) the need to ensure survival of young trees in areas where afforestation is being implemented as the current scenario indicates that survival rate is low; (b) careful selection of tree species to ensure there is no replacement of the natural forests with incompatible exotic or invasive species; (c) adequate protection around the spring catchment to ensure that the pristine water quality of the landscapes is maintained and no untreated wastewater or changing land use leads to degradation of water bodies; (d) avoiding any improper siting of soil and water conservation works may cause drainage and erosion problems resulting in soil particles being transported to drainage networks, affecting the quality of natural water systems; and (e) temporary adverse impacts may also be caused due to inferior construction methods or other practices leading to long-term slope instability, siltation in water bodies. There could also be impacts on sensitive habitats through increased noise and disturbance, improper waste disposal, or accidental forest fires. Mitigation measures for each of these anticipated impacts have been listed for the design and implementation phase of these activities, and these will be applied as needed by the community. There may also be environmental impacts of several interrelated interventions, such as the incremental increase in water availability may change land-use/agriculture patterns. Following restoration in the quality of landscapes and increased soil productivity, induced impacts could be (a) increase in unplanned ecotourism 54 activities in natural and cultural heritage sites and pristine landscapes; (b) impacts on downstream communities if there is propagation in small-scale irrigation schemes from the restored water sources; and (c) restoration of soil fertility and improved productivity may incentivize additional forest clearing, or demand for rural feeder roads. The measures for addressing these impacts are specified in the EMF. 46. The EMF. The EMF was prepared based on relevant documents including Project Implementation Plans, national- and state-level legislations pertaining to the proposed project activities, applicable safeguard policies of the World Bank, and extensive field consultations with the village communities, government departments/institutes, and expert resource persons. The main purpose of the EMF is to provide a transparent framework with clear accountability for managing environment effects and risks associated with the operation phase of the project, outlining the criteria and procedures that the project should follow to help ensure compliance with the World Bank’s, as well as national and state environmental policies and standards. It also identifies the institutional roles and responsibilities, capacity-building, and budget requirements to effectively implement environmental mitigation measures. Specific to the project activities, the EMF includes (a) criteria and procedures for screening of project investments on the basis of their potential environmental impacts and benefits; (b) a list of ineligible activities for the proposed project and ecologically sensitive areas/critical natural habitats where project investments should not be implemented; (c) screening against regulatory compliances, if required; (d) mitigation measures and environmental guidelines for environmental risks/concerns for each of the major typology of project investments that may be identified through screening; and (e) proposed institutional and implementation arrangements for supervision, training, monitoring, audit, and consultation in the implementation of the EMF. 47. Institutional arrangements for implementation of the EMF. The EMF details the following institutional arrangements for effective management of the potential issues through appropriate mitigation measures: (a) The overall responsibility of the EMF implementation lies with the SPMU in the MBMA, which contains a full-time Environmental Manager for supporting the EMF implementation, monitoring, reporting, and documentation throughout the project. (b) The selected DPMUs will hire/designate an Assistant Environmental Manager at the district level for integration of safeguard requirements into each CNRM plan and implementation of mitigation measures and guidelines. The officers will undergo suggested training for orienting themselves and for familiarizing with the project’s environmental safeguard issues, challenges, mitigation and other requirements of monitoring and reporting. The MBMA will hire these positions within a year of project effectiveness. (c) At the village level, a facilitator will be trained in the overall aspects of environmental management, they will be identified by the VNRMC to undergo training and will be hired by the VNRMC based on the need and level of support on environmental safeguards. The block offices may also provide additional experts for technical support to the environment facilitator. 55 48. The EMF provides the design and a detailed schedule for capacity building and training on environmental safeguards for project functionaries and the beneficiaries. The bulk of the trainings and sensitization to the project and preparation of plans (which includes the environmental management aspects) to all project beneficiaries will be carried out as part of Subcomponent 1B by technical training institutes instituted under the project. Environmental monitoring indicators have also been suggested as part of the EMF which would be monitored regularly through an internal MIS and external monitoring (audit). Social Safeguards Management 49. Meghalaya has diverse communities interwoven into three main indigenous groups, enhancing their uniqueness which is emphasized in their sociocultural norms and practices. The three distinct tribal groups are those of the Khasis, the Jaintias (Pnars), and the Garos (and their subtribes and other minor tribes)—in all consisting of 17 Scheduled Tribe groups. The uniqueness of each tribe across Meghalaya, along with the topographies across the state, is expected to have its implications on the project. Therefore, an SA and extensive stakeholder consultations were held, with the objective of preparing the SMF and the IPDP, relying on OP/BP 4.10. The SA of the project assessed key socioeconomic factors that require consideration; likely impacts of the project interventions on the community in terms of access to land, forest, and water; and resultant loss of their livelihood within subproject interventions. It also identified and analyzed the issues of social exclusion pertaining to vulnerable groups including women, in participating along with the project benefits. It further examined traditional and regulatory framework governing ownership and management rights of land, forest, and water for enhanced natural resource regime. Finally, in-depth consultations were conducted in good faith to seek broad community support for the project. 50. The SMF identifies anticipated impacts/risks and provides mitigation strategies toward addressing the World Bank’s requirements on social safeguards triggered by the project (OP/BP 4.10). It includes a gender strategy which will ensure participation and inclusion of women in the entire project. The SMF also provides a Labor Standard Plan to address health and safety concerns of laborers. It provides an effective communication and consultation plan applicable across the project’s phases. It also lays down the social accountability mechanism which includes social audit; and a description of the GRM and citizen’s feedback. It further describes the M&E system for the social development parameters of the project, contextualized within the overall M&E plan of the project. Finally, it provides a detailed capacity-building plan and budget for implementation of the project’s social safeguards-related activities. 51. Impact on land. Under the traditional practice of land management, community-owned land or ‘public’ land is free to use for all, wherein no individual has propriety over it. However, of late, there has been increasing privatization of traditionally held community land by the village councils. Due to privatization, there is loss in access to land resulting in growing landlessness, adversely affecting the socioeconomic conditions of the rural community. The extent of this practice and its impact is undetermined, because the state does not have proper land records, nor has there been a cadastral survey. The project’s interventions in terms of legal documentation of ownership patterns, institution strengthening, awareness, and capacity building is expected to mitigate this risk to a great extent. 56 52. Impact on gender. Although Meghalaya has a matrilineal society, wherein, the youngest daughter of the family is the ‘custodian’ of the property, women have no role in taking decisions over management of the resource. During the assessment, it was found that women’s representation in political bodies was abysmal. In most villages, women were not allowed to be a part of the self-governing bodies in the villages. The project aims at building women’s capacity, providing equal opportunities and overall, enhancing their participation in collective decision making in NRM. 53. Health-related impact: The assessment revealed that the health conditions among women and children have been steadily declining. The National Health and Family Survey- 4 indicates that Meghalaya has the highest number of ‘stunting, wasting, and underweight’ children in the age group of 0 to 5 years. The underlying factor for decline in nutritional intake may perhaps be the transition of agriculture from traditional use of land for personal food production to intensified land use for production of cash crops and mono-cultivation. To address this issue, project investment will focus on convergence with other schemes which promote nutritional value, livelihood, and income-generation activities. 54. A stakeholder consultation and disclosure of safeguards document. In accordance with the World Bank’s operational policies, stakeholder consultations in 27 villages were conducted across the three regions of Meghalaya, namely the Khasi Hills, Garo Hills, and the Jaintia Hills. The primary survey covered critical socioeconomic aspects of the intended project beneficiaries. These aspects include demographic information (family size, sex ratio, literacy/education levels, population by caste, tribe, religion, gender, age groups, and vulnerable groups); socioeconomic and production systems; sources of income; patterns of social organization and leadership; women’s economic activities and income; ancestral property provisions and customs; levels of health and nutrition; and so on. 55. Additionally, three regional level consultations were held from March 28 to March 30, 2017, to discuss all aspects of the project before the appraisal. These consultations form part of the free, prior-informed consultation requirements according to OP 4.10 of the World Bank. The feedback from the consultations was duly incorporated in the document. The consultations particularly brought out rising concerns over declining share of common property resources and increase in privately owned natural resources (particularly land), which in turn, is giving rise to landlessness and has broader implications for poverty and socioeconomic dynamics in the state. Project interventions will address the communities’ concerns pertaining to complex management and ownership issues regarding natural resources through legal documentation of land ownership, strengthening of institutions and other measures. 56. GRM. A GRM for the project has been established at all four levels, that is, village, block, district, and state levels. These will be supported by complaint handling mechanisms at the PMUs. At the village level, a Committee set up for grievance redressal would be headed either by the village headman or an appointed individual. Complaints will be referred to the appellate authority if affected persons are not satisfied with the resolution. All beneficiaries will be informed about how to register grievances, as well as about the existing mechanisms in place. NGOs/CBOs would also facilitate the people’s access to the said GRMs. Furthermore, a mobile-based feedback system will be developed to capture and feed data into the MIS of the PMU. 57 57. Citizens feedback. A citizens’ feedback mechanism will be established to determine the success of the project. Data will be collected at different project phases using citizen report cards and scorecards to acquire feedback on performance and citizen’s recommendation for improvement. Additionally, a separate website will be designed for the project for publishing notices, news and project documents, and so on. The website will also have an option for seeking feedback or comments from the public regarding the project. 58. Social audit. There is a provision for a social audit every six months at every project village. The Social Audit Committee has to be socially inclusive and must uphold principles of transparency, accountability, equity, and social responsibility. This can be achieved through representation from women’s groups, elected representatives, traditional institutions, youth, and vulnerable communities. 59. M&E. A Social Monitoring Plan will be integrated with the planning, operation, and maintenance phase of the project on time. Workflow of the subproject scheme cycle will be accordingly designed to track progress of activities on a ‘real-time’ basis using mobile application and geo-tagging. Quarterly and biannual progress reports will cover compliance of social safeguards issues for developing of NRM plans, implementation, screening, and classification of activities. Monitoring and Evaluation 60. Objective. M&E in the MCLLMP is primarily (a) a tool for results-based management and to ensure that data and information of the progress of the project—or lack of progress—toward achievement of the outcomes under the PDO feed into management, that is, the SPMU and that corrective measures can be taken on time if necessary; (b) a framework for accountability of progress toward local, regional, and national objectives in management of natural resources in Meghalaya and between participating institutions; under this framework, demand-side social accountability of project interventions will also be captured through an citizen engagement indicator (a corporate requirement); (c) an approach to monitor performance of different landscapes to ensure a certain level of coherence; (d) a platform for communication of results of the project and benefits delivered to local people, institutions, and the environment; and (e) to meet the World Bank’s routine reporting requirements, that is, the six monthly progress report, ISR which is developed for each country and publicly disclosable, and data and information requirements for the MTR of the project. 61. Context and capacity. The M&E capacity has been assessed to be low at local and regional levels as well as at the level of participating institutions. Signs of inadequate capacity include (but not limited to) M&E not being linked to budgeting and planning in the government sector including local level planning and not being used for evidence-informed decision making. In more technical terms, signs of low-capacity field-level data not being validated, incomplete data sets, missing information, inconsistent reporting, and data and information are delivered but not reported. 62. Design of Results Framework. The main instrument for M&E is the Results Framework (annex 1). It consists of the PDO statement and four PDO indicators and five intermediate indicators. It includes two corporate results indicators. Included in the Results Framework is also the required corporate indicator on citizen engagement and a dedicated gender indicator. It is 58 formulated as a perception indicator on the satisfaction with application of the landscape approach. It captures the demand-side social accountability of the project. It is further disaggregated by gender and thus also captures the gender aspect of the project. All indicators do not have baselines, however reasonable targets as well as frequency for data collection, data sources, and progress values of indicators and responsibilities for data collections are indicated in the results framework. Baselines for the indicators will be established based on the baseline survey to be carried out during the first year of the project. Furthermore, in the Results Framework there is a column for definition of indicators and link to PDO and link between the PDO and intermediate indicators. 63. Data sources. Targeted technical assistance will be provided under Component 3 to strengthen the M&E capacity. Sources of data include perception survey (citizen engagement and gender), field survey, skills and institutional assessment, and review of key documents. 64. M&E arrangements and activities. The SPMU will have the overall coordinating role of the M&E function and will hire an M&E Manager—and a team of analysts and assistants—who will ensure that data and information from all landscapes and institutions are produced and collected on time and is of sufficient and necessary quality. The SPMU M&E Manager will be assisted by Deputy M&E Managers at the DPMUs. The PIU will have the overall coordinating role of the M&E function and will hire an M&E Specialist who will ensure that data and information from all landscapes and institutions are produced and collected on time and of sufficient and necessary quality. The frequency of data collection is annual. The M&E activities will (a) generate information on progress of the project, (b) analyze and aggregate data generated at local regional and local levels, and (c) document and disseminate key lessons to all stakeholders in Meghalaya together with the communication function of the SPMU. The project will place special emphasis on mapping of project interventions and results through geocoding of activities and overlay with key indicators. This information will be accessible through platforms along the lines of the Mapping for Results initiative. Also, learning evaluation will be part of the evaluation with the aim of improving the project’s design and performance. These are essential for trying to understand why a program works or does not, and what other factors (internal and external) are at work during a project’s life. Learning evaluation is especially important in community engagement and behavior change projects as such interventions are often complex and therefore require careful monitoring of processes to respond to emergent properties and any unexpected outcomes. 65. Citizen engagement. The project explicitly seeks to support engagement of stakeholders and beneficiaries through consultative processes, engagement, and capacity building in integrated landscape planning, management, and feedback mechanisms to elaborate and adjust the natural resources management approach. Feedback mechanisms will be developed in the project design to ensure transparency, accountability, and learning as well as a continuous dialogue with local level beneficiaries and other stakeholders. Particular attention will be given during implementation to the capacity of the local structures to close the feedback loop and report on action taken in this regards. The specific elements of the framework for citizen engagement include (a) support to engagement of rural communities and households in planning and management; (b) support to community engagement in determining local investment in land and watersheds; (c) support to a feedback mechanism from stakeholders and beneficiaries to be designed to process concerns and questions from beneficiaries and other stakeholders at different levels, with a view to resolving these concerns and questions; and (d) specific third-party monitoring of project activities will be supported three times during project implementation(in the first year, at midterm and at 59 completion) to ensure transparency and feedback on these activities. The protocol and mechanisms for elements of this citizen engagement framework will be detailed in the COM. Table 3.6. Citizen Engagement Framework Relevant Citizen Engagement Citizen Engagement Results and Contribution to PDO Activities Approach to Management The PDO is supported by citizen  Feedback mechanism  Share of target beneficiaries engagement as across landscapes (third- with rating ‘Satisfied’ or  An integrative tool for social party monitoring) and above on process and impact accountability toward rural closing of the feedback of project interventions households and communities loop through fora for (disaggregated by sex) across the targeted landscapes engagement (focus group  Data source: Field-based and range of interventions and discussions) perception survey based on a  As a means to provide a voice  Capacity building of local sample in all landscapes and engage with local actors and government structures in implemented by a third party ultimate beneficiaries to ensure landscape management that local and regional (agriculture, irrigation, institutional capacity in planning agroforestry and so on) and implementation and local and delivery of improvements, responding to interventions to take local problems, demands, and account of feedback needs. Role of Partners (if applicable): Not applicable 60 Annex 4: Implementation Support Plan INDIA: Meghalaya Community-Led Landscape Management Project (MCLLMP) Strategy and Approach for Implementation Support 1. The strategy for implementation support will include formal supervision visits, including field visits to the targeted village landscapes, related blocks and districts, state headquarters and providing support to the implementing agency(MBMA), the MBDA, and the GoM. 2. Implementation support plan. Special focus will be placed on the following: (a) Supporting the strengthening of traditional village institutions such as village councils, implementing agency, that is, the MBMA, and overarching policy and guidelines institution, that is, the MBDA, and monitoring their performance (b) Carrying out proper assessments of project activities and results and possibly engaging experts in the areas of forest, water resources, soil, governance, information communication and climate-change adaptation, CDD and community forest enterprises, procurement and financial culture, communication, outreach, knowledge- sharing strategies, and participatory M&E (c) Ensuring that service providers effectively deliver the content of technical assistance to recipients of subproject funding (d) Monitoring the development implementation and performance of community nature- based business (e) Reviewing the process and results of capacity-building activities and technical assistance activities, including the effectiveness of service providers; (f) Monitoring the process and content of technical assistance that service providers deliver to community-based organizations; (g) Monitoring the performance of the various multi-stakeholder landscape platforms at village council, block, and state level; (h) Implementing a proactive communication and consultation strategy that requires stakeholder engagement; and (i) Monitoring overall project implementation and performance, including its results indicators. 3. Fiduciary requirements and inputs. The FM implementation support plan will be based on risk. The FM Specialist will participate in the implementation support missions, as appropriate. The mission will involve review of the FM arrangements at the MBMA, including field visits to the DPMUs and VNRMCs to ensure that FM arrangements are understood and appropriately followed by the institutions. As implementation progresses and capacity is strengthened within the 61 MBMA, the team will rely on the FM reports and audit reports provided by the MBMA. The FM issues identified during the implementation support missions and arising through audit will be appropriately dealt with by the MBMA for a satisfactory closure. Review and monitoring of procurement activities, as guided by the Procurement Plan, will be undertaken to ensure compliance with World Bank procurement policies and procedures. The World Bank’s procurement team will also participate in implementation support missions. 4. Environmental and social safeguards. Implementation support will include supervision of social and environmental safeguards management at the village, block, district, and state levels, including implementation of the EMF and SMF, process framework, and provision of training and guidance to the MBMA and stakeholder departments of GoM, service providers, and project beneficiaries. As part of regular implementation support missions, audits and reviews will be undertaken to assess how the project manages social and environmental concerns, including through adequate staffing and monitoring. The project will prepare a communication and public consultation action plan and will support the development of an adjusted GRM. This will also primarily focus and involve engagement with stakeholders, including farmer-based organizations and local communities. The COM will detail procedures, management plans, and checklists to further support environmental and social safeguard implementation requirements. Adequate staffing for environmental and social safeguards management will be ensured in the project. Implementation Support Plan 5. The main focus of implementation support is summarized in table 4.1. The FM and Procurement Implementation Support Plan will be based on the FM and procurement risk identified during the project preparation phase. The FM Specialist will participate in the implementation support missions to review the project’s FM arrangements agreed with the MBMA on accounting, financial reporting, audit, and internal controls practiced in the SPMU, DPMU, and participating VPMUs and provide requisite professional advice to improve these areas. Other fiduciary activities will include review of financial monitoring reports, audit reports, financial statements, and Management Letter to ensure that the project funds provided are used for the intended purposes. Procurement implementation support will include (a) reviewing procurement documents and providing timely response/no-objection, (b) providing detailed guidance on the World Bank’s Procurement Regulations to the project staff,(c) monitoring procurement progress against the detailed Procurement Plan,(d)conducting review of contract management activities, and (e) identifying the capacity-building/training needs for project staff on procurement processing and providing training, if required. Table 4.1. Implementation Support Plan Resource Estimate Time Focus Skills Needed Staff Weeks/Year First 12  Project effectiveness and  Environment Specialist US$150,000 months implementation start-up  Social Development Specialist  Capacity building of community,  Community Development green facilitators on developing Specialist CNRM plans  Agriculture Specialist  Forestry Specialist 62 Resource Estimate Time Focus Skills Needed Staff Weeks/Year  Capacity building of community,  FM Specialist project implementing agency,  Procurement Specialist stakeholder departments on  M&E Specialist procurement, finance, environment,  ICT Specialist and social aspects of the project  Communication Specialist  Development of first 25 CNRM  Program Management Specialist plans and start of implementation  Project Administrative Support  Development of MIS and IT platform for CNRM plans and monitoring  Completion of ongoing consultancies and bringing recommendations for informed decision support on design, M&E, and policy 12–48  Implementation of planned Same as above US$150,000 months activities  Review of annual work plan, budget and cross-checking links between planning, budgeting, and results  Conducting of implementation support missions  Conducting of MTR  Strengthening MIS/IT and M&E  M&E of ongoing activities  Procurement and process reviews FM field reviews, and audit review  Safeguard implementation support and compliance  Technical experts on demand support  Project management, implementation support, and supervision Table 4.2. Required Skill Mix for Implementation Support Skills Needed Number of Staff Number of Comments Weeks per Year Trips per Year Senior Environmental Specialist 12 3 Delhi based Senior NRM Specialist 8 2 Washington, DC based Lead Watershed Management Specialist 4 1 Washington, DC based Senior Forestry Specialist/Landscape 4 1 Washington, DC based Senior Agriculture Specialist 4 1 Delhi based Senior Community Development specialist 4 2 Delhi based Senior Governance Specialist 4 2 Delhi based Financial Management Specialist 4 2 Delhi based Procurement Specialist 6 2 Delhi based Environmental Specialist 6 3 Delhi based Social Safeguard Specialist 6 3 Delhi based ICT Specialist 6 3 Delhi based 63 Communication Specialist 4 2 Delhi based M&E Specialist 6 3 Delhi based Legal 2 2 Delhi based Operations 6 2 Washington, DC based Project Administrative Support 8 2 Delhi based 64 Annex: 5: Economic Analysis INDIA: Meghalaya Community-Led Landscape Management Project (MCLLMP) 1. Data and prices. For the economic analysis, prices have been calculated using standard conversion factors for exported agricultural commodities and imported inputs to correct distortions because of taxation, public subsidies, and other market imperfections. For non-exported/imported traded commodities, local prices have been considered. The economic cost of labor has been assumed to be equal to the minimum wage rate approved by the GoM at INR 189 for unskilled labor, at which the labor is also available for all government-sponsored schemes that account for opportunity cost of unemployment. As most of the commodities produced in Meghalaya are consumed within the country, average national prices for the last five years have been considered to overcome any distortion due to subsidies available to the northeastern states. For calculation of economic net present value (ENPV), the discount rate of 6 percent recommended by the World Bank11 is used, which is also the average rate of growth of GDP in India. 2. Economic cost. Beneficiaries’ contributions are considered and any grant for landscape- based activities such as forestry, agriculture, and water management are deducted. The nonrecurring investment cost in the project is 82.62 percent of the investment cost in Component 1 and 2, that is, US$52.05million. Nonrecurring investment in horticulture and forestry to be made by the beneficiary from their own sources will be US$0.9million. Recurrent investment on Component 3 of the project will be US$7.95 million. The phasing of the project cost is assumed to be between Year 1 and Year 5. 3. Economic benefits. The economic benefits included in the project economic analysis are related to (a) improving crop productivity by 10 percent; (b) increasing horticulture productivity by an estimated 10 percent, which is captured by the incremental net benefits of crop models calculated in the financial analysis but valued at economic cost; (c) converting 19 percent open forests (approximately 12,000 ha) in villages with 10 percent crown density to 40 percent crown density; and (d) converting 20 percent of cultivable wasteland in villages into agroforestry and 10 percent of cultivable wasteland into horticulture with improved package of agronomic practices. For estimating benefits from forestry, a highly conservative approach is adopted with incremental biomass of 6 MT per ha per year whereas studies conducted by North Eastern Hill University have estimated production of 260 MT over a period of 10 years in Sal forests, that is, an average productivity of 26 MT per ha per year. 4. Economic benefits stemming from the project’s GHG mitigation and carbon sequestration potential. The GHG emission mitigation potential and carbon sequestration potential for a range of project activities was calculated with the EX-ACT. The resulting net CO2 sequestration is 3,508,376 tons over a period of 20 years. Annually, a net sequestration of 175,419 tons is estimated for the MCLLMP. 5. Economic benefits stemming from soil and water conservation measures. To reduce soil erosion and conservation of in situ water, various measures are proposed. Meghalaya is prone to heavy intensity rains. Mawsynramand Cherrapunji get the highest rainfall in the world. Heavy World Bank. 2015. “Technical Note on Discounting Costs and Benefits in Economic Analysis of World Bank 11 Projects.” 65 rainfall results in high soil erosion, leaching of nutrients, and loss of agriculture productivity. Measure for soil and water conservation will help in avoiding such economic and environmental losses. 6. Time period. The economic analysis was conducted over a 10-year period reflecting the full lifetime of most of the costs and benefits. Only the benefits stemming from forestry production could occur over a longer period because forest trees can remain productive up to 50 years. Results and Sensitivity Analysis 7. Results. Based on the above assumptions, the economic analysis of the project yields an ENPV of benefits of US$46.12 million and an economic internal rate of return (EIRR) of 38.09 percent. The results may be under estimated because several potential project benefits have not been quantified. These relate, in particular, to environmental benefits related to conservation, maintained biodiversity, ecological functions and related values of maintained forest resources and improved watershed management, increased on-site productivity due to improved soil conditions, decreased variability and vulnerability due to adverse weather events in agricultural production, increased availability and production of forest and agroforestry products, increased food security and nutrition benefits, and reduced maintenance cost and restoration cost due to reduced sedimentation of constructed water bodies. 8. Sensitivity analysis. Table 5.1 demonstrates that the results are robust against changes to key variables. Table 5.1. Results for Changes to Key Variables Change in Project Change in Project ENPV @ 6% discounting EIRR Cost (%) Benefit (US$,millions) (US$,million) 0 0 46.12 38.09 +5 0 41.34 31.98 +10 0 38.81 29.26 +5 −5 36.62 28.99 +10 −10 29.36 23.60 66 Annex 6: GHG Balance Accounting INDIA: Meghalaya Community-Led Landscape Management Project (MCLLMP) Mandate 1. The World Bank Environment Strategy (2012), adopted a corporate mandate to account for the GHG emissions for investment lending. The quantification of GHG emissions is an important step in managing and ultimately reducing emissions, because it provides an understanding of the project’s GHG mitigation potential. Further, the Paris Agreement also mandates reporting of assumptions and methodological approaches, including those for estimating and accounting for anthropogenic GHG emissions to achieve the goals of Article 2 of the Agreement. Accounting Methodology 2. The World Bank has adopted EX-ACT, developed by the Food and Agriculture Organization of the UN in 2010, to estimate the impact of agricultural investment lending on GHG emissions and carbon sequestration in the project area. EX-ACT is a land-based appraisal system that allows the assessment of a project’s net carbon balance, defined as the net balance of CO2- equivalent GHG that is emitted or sequestered because of project implementation compared to a with-project or without-project scenario. EX-ACT captures project activities in five modules: land- use change, crop production, livestock and grassland, land degradation, inputs, and investment. EX-ACT estimates the carbon stock changes (emissions or sinks), expressed in equivalent tons of CO2 per hectare per year. GHG Balance 3. The GHG balance estimated for the MCLLMP in Meghalaya is presented in table 6.1. It can be observed that the project interventions under the MCLLMP leads to a negative GHG balance. This indicates that the project interventions will lead to a net CO2 sequestration of 3,508,376 tons over a period of 20 years. Annually, a net CO2 sequestration of 175,419 tons is estimated for the MCLLMP. Table 6.1. GHG Benefits of Project Activities under the MCLLMP in Meghalaya GHG benefits During the Entire Project GHG Benefits Per Year (tCO2eq/year) Period of 20 years (tCO2)eq Project activities Without- Without- With- With-Project Net Carbon Net Carbon Project Project Project Scenario Balance Balance Scenario Scenario Scenario Agriculture Annual −320,780 −320,780 −16,039 −16,039 Perennial −252,542 −549,013 −296,471 −12,627 −27,451 −14,824 Rice 213,187.5 209,485.0 −3,702.0 10,659.0 10,474.0 −185.0 Land-Use Changes Afforestation −3,145,120 −3,145,120 −157,256 −157,256 67 Other Land-Use Changes −14,369 −78,712 −64,343 −718 −3,936 −3,217 (Agroforestry) Inputs and Investments Fertilizer, pesticides and 1,387 2,648 1,261 69 132 63 energy Total Net Total (tCO2eq) −52,337 −3,560,712 −3,508,376 −2,617 −178,037 −175,419 Per hectare (tCO2eq/ha) −3.00 −177.00 −174.00 −0.13 −8.87 −8.70 Notes: (a) Estimates include proposed interventions for all seasons. (b) Total project period is considered to be 20 years—which includes 5 years of implementation phase and 15 years of capitalization phase of the project. (c) The Tier 1 method is adopted due to lack of data on emission and sequestration coefficients for all the crops and resilience interventions. However, the monitoring phase could adopt the Tier 2 method of EX-ACT. (d) Per hectare equivalent was calculated for a total reporting area of 38,273 ha. Area by category with the project: Afforestation of degraded forests = 12,000 ha Agroforestry (fuelwood) = 2,739 ha Annual crops (maize, millets, pulses, wheat, oilseeds) = 1,461 ha Rice = 2,785 ha Annual crops (spices, tubers, pineapple, strawberry) = 5,109 ha Perennial crops - Horticulture fruit trees (citrus, banana, papaya, temperate fruits) = 4,154 ha 68 Annex 7: Map of Project Area INDIA: Meghalaya Community Led Landscape Management Project (MCLLMP) 69 90°E 91°E 92°E INDIA MEGHALAYA STATE 26°N 26°N 26°N Nongpoh Resubelpara Ri-Bhoi North Garo Hills West G aro Hills Rongieng Mawshynrut Rongram East G aro Hills West K hasi Hills SHILLONG Mairang West Jaintia Hills Williamnagar Laskein Tura Nongstoin Ampati Jowai South West Garo Hills Mawkyrwat East K hasi Hills Khliehriat Chokpot South Garo Hills South West Khasi Hills Amlarem East Jaintia Hills Cherrapunji Barengapara Ranikor Mynkre Baghmara 25°N 25°N 90°E 91°E VERY HIGH PRIORITY AREAS SELECTED CITIES AND TOWNS BLOCK BOUNDARIES MAJOR ROADS DISTRICT CAPITALS DISTRICT BOUNDARIES IBRD 43439 | JANUARY 2018 This map was produced by the Cartography Unit of the World Bank HIGHWAYS STATE CAPITAL STATE BOUNDARIES Group. The boundaries, colors, denominations and any other 0 25 50 Kilometers information shown on this map do not imply, on the part of the World Bank Group, any judgment on the legal status of any INTERNATIONAL BOUNDARIES territory, or any endorsement or acceptance of such boundaries.