Documentof The World Bank FOR OFFICIAL USEONLY ReportNo: T7676 TECHNICAL ANNEX ONA PROPOSED CREDIT INTHE AMOUNT OF SDR3.3 MILLION (USD 5.0 MILLIONEQUIVALENT) TO BOSNIA AND HERZEGOVINA FORAN AVIAN INFLUENZA PREPAREDNESSPROJECT UNDERTHE G OBAL PROGRAMFOR AVIAN INFLUENZA AND HUMANPA JDEh C PREPAREDNESSAND RESPONSE(GPAI) FORELIGIBLE COUNTRIES UNDERTHE HORIZONTAL APL May 29,2007 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. I t s contents may not otherwise be disclosedwithout World Bank authorization. CURRENCY EQUIVALENTS (Exchange RateEffective, May 29,2007) Currency Unit = Konvertible Mark KM1.46 = US$l US$1.51 = SDRl FISCAL YEAR January 1 - December31 ABBREVIATIONS AND ACRONYMS AI Avian Influenza NCB National Competitive Bidding AIPP Avian Influenza PreparednessProject NGO Non Governmentalorganization APL Adaptable ProgramLoan BiH Bosnia and Herzegovina OIE World Organization for Animal Health PFD ProgramFramework Document CQ Selectionbased on consultants' PHI Public Health Institute qualifications PPE PersonalProtective Equipment CF Counterpart Financing CP Contingency Plan P O M Project OperationalManual EA Environmental Assessment QCBS Quality and Cost BasedSelection EC EuropeanCommission EMP Environmental ManagementPlan ERA Emergency Recovery Assistance ERL Emergency Recovery Loan RS Republika Srpska FA0 Food and Agricultural Organization State Bosnia and Herzegovina FBiH Federationof Bosnia and Herzegovina svo State Veterinary Office GDP Gross Domestic Product GPAI Global Programfor Avian Influenza and HumanPandemic Preparednessand Response TF Trust Fund H5N1 Influenza A virus of H5N1type UNDP United Nations DevelopmentProgram ICB International Competitive Bidding ILI Influenza-like illness USAID U S Agency for International Development MAWMF Ministry of Agriculture, Water WG Inter-sectoral working group Managementand Forestry M C A Ministry of Civil Affairs WP Work Program MoFTER Ministryof Foreign Trade andEconomic WB World Bank Relations MoE Ministry o f Environment WHO World Health Organization M o H Ministry of Health M&E Monitoring and Evaluation MoF Ministry of Finance Vice President: Shigeo Katsu Country ManagerDirector: Orsalia Kalantzopoulos Sector Manager: Marjory-Anne Bromhead Task Team Leader: David A. Bontemoo BOSNIA AND HERZEGOVINA Avian Influenza PreparednessProject FOROFFICIAL USE ONLY CONTENTS Page A. STRATEGIC CONTEXT AND RATIONALE ................................................................................. ............11 I. Countly andSector Background and Global. Regional and National Dimensions...................................... ii 2. Rationalefor Bank involvement.................................................................................................................... 12 B. PROJECT DESCRIPTION ............................................................................................................................ 13 1. Lending Instrument ....................................................................................................................................... 13 2. Project Development Objectives..... ............ ................ ..................14 3. Project Components...................................................................................................................................... 14 4. Lessons learned and rejected in theproject design..................................................................................... 17 C. IMPLEMENTATION ..................................................................................................................................... 18 1. Partnership arrangements ............................................................................................................................ 18 2. Institutional and implementation arrangements ............ .......................................... 19 3. Monitoring and evaluation of outcornes/results............................................................................................ 20 4. Sustainability........ ....................................... 20 5. Critical risks andpossible controversial aspects...................................................... ......21 6. Credit Conditions.......................................................................................................................................... 22 D . APPRAISAL SUMMARY .............................................................................................................................. 23 1. Economic analysis......................................................................................................................................... 23 2. Technical ..........24 3. Social............................................................................................................................................................. 25 4. Fiduciary ..................................... 25 5. Environment.................................................................................................................................................. 26 6. Safeguard Policies .................................... 27 7. Policy Exceptions & Readiness............................................................................................................ Appendix 1: ResultsFrameworkand Monitoring ................................................................................................. 29 Appendix 2a: Detailed Project Description ............................................................................................................ 39 Appendix 2b: Culling and CompensationProcedures .......................................................................................... 49 Appendix 2c: Implementation Arrangements ......................................................................................................... 53 Appendix 3: Project Costs and Financing Arrangements .................................................................................... 57 Appendix 4: Procurement Arrangements ............................................................................................................. 59 This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. Its contents may not be otherwise disclosed without World Bank authorization. Appendix 5: Financial Management Arrangements ............................................................................................ 63 Appendix 6: Environmentaland Social Issues ....................................................................................................... 71 Appendix 7: Organization of the Veterinary Services and the Health Care System in BIH ............................. 73 Appendix 8: Project Preparation and Supervision ................................................................................................ 77 Appendix 9: Documentsin the Project File ............................................................................................................ 79 Appendix 10: Statement of Loans and Credits ...................................................................................................... 83 Appendix 11: Country at a Glance .......................................................................................................................... 85 Annex 12: Map IBRD33375R ................................................................................................................................. 87 BOSNIA AND HERZEGOVINA AVIAN INFLUENZA PREPAREDNESSPROJECT (AIPP) TECHNICAL ANNEX EUROPE AND CENTRAL ASIA ECSSD Date: May 29, 2007 Team Leader: David A. Bontempo Country Director: Orsalia Kalantzopoulos Sectors: General agriculture, fishingand forestry Sector Manager: Marjory-Anne Bromhead sector (50%); Health (50%) Themes: Natural disaster management (P); Other communicable diseases (P); Rural policies and institutions (S); Other environment and natural resources management (S) Project ID: P100415 Environmental screening category: Partial Assessment LendingInstrument: Emergency Recovery Loan Project Financing Data [ ] Loan [x ] Credit [IGrant [ 3Guarantee [ ] Other: For Loans/Credits/Others: Total Bank financing (US$m.): 5.OO Proposedterms: Proposedterms (IDA): Standard Credit Modified Terms: 20 years to maturity; 10 years Source Local Foreign Total BORROWER 1.2 0.2 1.4 IDA 1.1 3 -9 5 -0 Total: 2.3 4.1 6.4 Borrower: MinistryofFinance and Treasury Trg. BiHl, 71000 Sarajevo, Bosnia and Herzegovina Responsible Agency: Ministryo f Foreign Trade and Economic Relations at state level; and: Federation Ministry o f Agriculture, Ministryof Agriculture, Water Resources Water Management and Forestry and Forestry Sarajevo Republic o f Srpska Bosniaand Herzegovina Banja Luka Bosnia and Herzegovina Federation Ministryo f Health Ministry o f Health and Social Welfare Sarajevo Banja Luka Bosnia and Herzegovina Republic o f Srpska Bosnia and Herzegovina Does the project depart from the CAS in content or other significant respects? Re$ PADA.3 [ ]Yes [XINO Does the project require any exceptions from Bank policies? Re$ PAD D.7 [ ]Yes [XINO Have these been approved by Bank management? ]Yes [ IN0 - Is approval for any policy exception sought from the Board? [ ]Yes [XINO Does the project include any critical risks rated "substantial" or "high"? Re$ PAD C.5 [XIYes [ ] N o Does the project meet the Regional criteria for readiness for implementation? Re$ PAD D.7 [XIYes [ ] N o Project development objective The overall objective o f the Project is to minimize the threat posed to humans and the poultry industry by the Highly Pathogenic Avian Influenza (HPAI) infection and other zoonoses, by enhancing both animal and human health infectious disease response and control capacities. To achieve this, three areas will be supported by the project: (i)prevention, (ii)preparedness and planning; and (iii)response and containment. Achieving these goals will contribute to diminishing the burden o f disease and loss o f productivity, limiting the regional spread o f HPAI, and enhancing economic and social prospects at the national, regional, and global levels. Project description[Details can befound in Appendices 2 and 2a] Inaddition to the Bank and government co-financing described below, various other international organizations-including the European Commission(EC), World Health Organization(WHO), United States Agency for InternationalDevelopment (USAID), UnitedNations Children's Fund(UNICEF)-are active in assisting the Government o f Bosnia and Herzegovina to address the threat o f Avian Influenza. The Project has been designed in close cooperation with these organizations to leverage the maximum financing possible and to avoid duplication o f efforts. The complementary activities o f these organizations are briefly explained below. However, the exact levels o f financing of these donor activities is not presented, as this i s not considered direct cofinancing o f the Bank-funded project (in all descriptions, IDA totalplus the Counterpart Financing (CF) is equal to total Componentjnancing). Component 1: Strategic Communications and Public Information - US $0.20 million Financing IDA Credit Proceeds IDA Credit: US$0.20 million FBiH: US$O. 11million RS US$0.09 million It is of critical importance that all sectors o f society are properly informed about the risks from HPAI, in order that proper protective measures can be taken, and, as importantly, to reduce the risk o f unwarranted fear about the disease (e.g., unnecessarily reducing consumption o f poultry products). This component would provide support for a broad range o f information and communication activities, to increase the attention and commitment o f government, private sector, and civil society organizations, and to raise awareness, knowledge and understanding among the general population about the risk and potential impact o f the disease. Implementation o f the first phase o f the communications strategy has already been completed, through UNICEF's Sarajevo office. Bank financing would implement subsequent phases. Component 2: Animal Health Protectionand DiseasePrevention and Control -U S $2.98 million Financing IDA CreditProceeds Gov't. o f Bosnia and Herzegovina US$0.25 million FBiH: US$1.62 million FBiH US$O.17 million RS US$0.84 million RS US$O.10 million IDA Credit: US$2.46million The most effective way to reduce the threat from HPA, to both the economic sustainability o f domestic poultry production and human health is to prevent the disease from establishing itself in domestic poultry. This component would support implementation o f disease prevention and control strategies at national and entity levels to address short, medium and long-term needs. Areas for support are based on detailed assessments o f (i)the epidemiological status o f HPAI in Bosnia-Herzegovina; (ii)the capacity o f the State Veterinary Office (SVO) to cope with a highly pathogenic avian influenza (HPAI) epidemic, including surveillance and diagnostic capacity at the national and entity levels; and (iii)the vulnerability o f the poultry industry to newly emerging infectious diseases. Implementationo f the Animal Health component will be assisted by the EC's Twinning Arrangement (financed by the Government o f the Federal Republic o f Germany) with the SVO to provide technical assistance on institutional aspects o f the veterinary sector, particularly in food safety, inspections, and support to laboratories. The EC will also finance a feasibility study on large-scale animal waste disposal Component 3: Human Health Protection, and DiseasePrevention and Control -US $1.98 million Financing IDA Credit Proceeds Gov't. o f Bosnia and Herzegovina US$0.22million PBiH: US$0.98 million FBiH US$O.10 million RS US$0.98 million RS US$O.lO million IDA Credit: US$1.96million At present, there have been no human cases o f HPAI infection reported in BiH. However, it is likely that at some point in the future, suspected or confirmed cases will occur, and rapid and coordinated interventions will be necessary. Under this component, the project will (a) help enhance the coordination and planning o f human health related activities, (b) strengthen the capacity o f investigation teams and virology laboratories in both entities, (c) help BiH rapidlyjoin the European Influenza Surveillance Network, (d) help develop the capacity of hospitals to adequately and safely isolate and treat (suspected) human cases and, (e) finance the procurement o f seasonal flu vaccines and anti-viral drugs. Particular attention will be paid to capacity building and the training o f staff at the various levels o f the health system. This component contains support to the Ministryo f Civil Affairs at the State level, to enhance their capacity to fulfill their mandate to coordinate human health policy and response for all of Bosnia- Herzegovina. One o f the most crucial activities for preparedness in the Human Health sector is the finalization o f a National Contingency Plan (CP), which integrates the CPs already prepared by each Entity. Most importantly the National CP will define a clear `Chain o f Command' in the event o f a large-scale outbreak affecting human health. WHO is leading this effort, through a series o f workshops undertaken in June 2006. The final CP, integratingthe two Entity-level plans has been completed, and is awaiting parliamentary ratification; the AIPP will provide financingfor operationalizationofthis plan. WHO has also recently completed an assessment of laboratories throughout BiH, which will form the basis for the technicalplanningfor the upgrade of laboratories under the Project. In addition, WHO, with EC support, is working to strengthenthe overall surveillancesystem for seasonal flu, which will also helpwith faster identificationof any unusual flu strains which might arise. Component 4: Poultry Culling Compensation Scheme-US $0.75 million Financing IDA CreditProceeds FBiH US$O.lOmillion FBiH US$0.3 1 million RS US$O.lO million RS US$0.24 million IDA Credit: US$0.55 million Experience from world HPAI outbreaks has clearly shown that individuals are more likely to report sick animals if they have credible assurances from government that they will be compensated inthe event that their animals must be killed to prevent further spread of disease. Therefore, in order to provide sufficient incentive for early reporting by citizens of sick animals, and hence timely response by government authorities, within this component funds for compensation will be provided. As evidenced by the experience from the culling campaign (that followed the AI occurrence in wild birds in February 2006), the compensation procedure prescribed and elaborated in the CP for AI ensures timely, efficient and transparent compensation paymentto farmers. Component 5: Implementation Support, and Monitoring and Evaluation (M&E)-US $0.45 million Financing Gov't. o f BosniaandHerzegovina US$O.12 million FBiH US$O.15 million RS US$O.15 million IDA Credit: US$0.03million One of the key characteristics of the HPAI threat is the difficulty in predicting the course the pandemic will take. An important feature of the project, therefore, will be the flexibility to adapt to a changing situation with the ability to reallocate funds between components and categories, and possibly draw up new activities. The component would support costs associatedwith projectmanagement and coordination. It would comprise two sub-components: (i)ImplementationSupport to the Technical Support Group inthe Ministry of ForeignTrade and EconomicRelations;and (ii) Monitoring and Evaluation(M&E). Which safeguardpoliciesare triggered, ifany? Re$ PAD 0.6,Appendix 8 Only the EnvironmentalAssessment safeguard is triggeredby the Project. Sincethe Project is being processed under emergency procedures and is assessedas a B-categoryproject, a waiver was requested and grantedto permit preparation of the EnvironmentalManagementPlan (EMP) after Appraisal. The EMP has been finalized and disseminated. Formaladoption o fthe EMP is a conditionfor Effectiveness. Significant, non-standardconditions, if any, for: Re$ PAD C.7 Boardpresentation: There are no Conditionsfor BoardPresentation. Bosnia-Herzegovina(BiH) fulfills the eligibility criteria requirementsfor borrowingunder the GlobalProgramfor Avian Influenza(GPAI). Specifically, BiH should be considered, according to the GPAI Program document, as one o f the "countriesat risk, with no outbreak,or that are at an early stage of an outbreak", government commitment and appropriate plan o f early detection and rapid response, including appropriate implementation and monitoring arrangements that the international agencies and donor community, including the Bank, could support." (World Bank ReportNumber 34386 -Program Framework Documentfor the GPAI,December 5,2005, page 14) Loadcredit effectiveness: No non-standard conditions. Covenantsapplicable toproject implementation: Conditionsof Effectiveness: (i) Establishment by the Recipient o f the Technical Support Group in a manner and with the composition and terms o f reference satisfactory to the Association; (ii) The Annual Work Program for the first year o f the implementation o f the Project, satisfactory to the Association, has been prepared and adopted by the Recipient and each Entity; (iii) The Project Operational Manual, EMPand the FMManuals, each satisfactory to the Association, have been adopted by the Recipient and each Entity; (iv) A Project Agreementhas been executed on behalf o f the Association and an Entity,on terms and conditions satisfactory to the Association; and (v) A Subsidiary Agreement has been executed on behalfof the Recipient and the Entity concerned, on terms and conditions satisfactory to the Association. Conditions of Disbursement: (i) a Project Agreement between the Association and the Entity responsible for implementing Part 2 or Part 3 o f the Project, as the case may be, has been executed, on terms and conditions satisfactory to the Association; (ii) a Subsidiary Agreement between the Recipient and such Entity has been executed, on terms and conditions satisfactory to the Association; (iii) An opinion has been furnished to the Association stating that such Project Agreement and Subsidiary Agreement have been duly authorized or ratified by the parties thereto and are legally binding upon them in accordance with their respective terms; (iv) For expenditures under Component 4, adoption by the Recipient and each Entity of the Poultry Culling Compensation Scheme Manual, satisfactory to the Association; and (v) Retroactive Financing under Categories 2 and 4, up to an equivalent of SDR 100,000 (vi) The Federation o f Bosnia and Herzegovina has opened a Project Account with an initial deposit equivalent to US$0.02 million. (vii) The Republika Srpska has opened a Project Account with an initial deposit equivalent to US $0.015 million A. STRATEGIC CONTEXT AND RATIONALE 1. Country and Sector Backgroundand Global, Regionaland National Dimensions (a) Country and Sector Background 1. Bosnia and Herzegovina has made remarkable progress in post-conflict reconstruction, social integration and state building since the end of the 1992-95 war. However, the economy stands at only 70% of its prewar level. The business environment is not as investor-friendly as it needs to be to attract the levels of investment required for sustained economic growth. Some 50% of the 4.1 million population is at or near the poverty level. The lack of employment opportunities is a major factor limiting the resettlementof refugeesand internally displaced persons. 2. The composition of GDP appears to have changed markedly in the post-war period. According to official statistics, the share of agriculture has declined significantly while the share of services has increased. While the overall trends follow a similar direction in both entities, there are notable differences. The primary production sector (agriculture, fisheries and forestry) has remained an important sector in Republika Srpska (RS) at 20 percent of GDP, but has dropped to less than 10 percent in the Federation of Bosnia and Herzegovina (FBIH). Agricultural Gross Domestic Product (AGDP) makes up about 14% of the country's overall GDP. It is estimated that 18% of the population is employed in agriculture. 3. The poultry industry represents one of the main agriculture sub sectors, and production currently falls just short of meeting the national market demand for its products. It is estimated that BIH has around 32 million broilers (estimated annual production capacity), 1 million laying hens, and approximately 1 million animals raised in back yards. Annual production capacity for the industry is 10 kg of meat and 120 eggs per capita (annual consumption in BiH is 14 kg of poultry meat and 180 eggs per capita). The total annual production of poultry meat for 2004 is estimated at approximately 43,000 tons, and for the same year production of eggs was around 450 million. Average market price for poultry meat i s US$2 per kg, and the price of an egg i s US$O.O8. Commercial poultry farming is largely organized as industrial production, primarily involved in the production of eggs and fresh/frozen chicken meat and processed meat products. The commercial poultry plants are enclosed operations which use modern equipment and technologies. Other poultry are raised on small household farms limited to a few chickens and/or other domestic birds. (b) International Dimension 4. East Asia is the region most affected by HPAI to date, with Cambodia, China, Indonesia, Thailand, and Vietnam all reporting human infections. The number of countries affected by HPAI in East Asia has increased and now includes Cambodia, China, Indonesia, Japan, Lao PDR, Mongolia, South Korea, Thailand, and Vietnam. The geographical spread of HPAI, the human dimension and the potential enormous social and economic impact are unprecedented. Despite control measures the disease continues to spread, causing further economic losses and threatening the livelihoods of hundreds of millions of poor livestock farmers, jeopardizing smallholder entrepreneurship and commercial poultry production, and seriously impeding regional and international trade, and market opportunities. With outbreaks rapidly spreading in other regions such as Europe and Central Asia (ECA) and Africa, there is a growing realization that the international community faces several transnational challenges that do not emanate directly from the policies o f individual states. Correspondingly, these challenges cannot be countered solely by the actions of individual states, because they present a threat to the entire world. An important emerging transnational threat is the spread of infectious diseases across national borders, which has the 11 potential to undermine countries' stability, security, economic development, human capital accumulation, and not least, the welfare o f the population. (e) Regional and National Dimension 5. Until recently, avian flu outbreaks were limited to Southeast Asia. In July 2005, outbreaks were registered in domestic poultry and fowl in seven regions o f Russia. Four months later, outbreaks in poultry o f HPAI H5N1were reported in four regions o f Kazakhstan. Since 2005, outbreaks o f avian flu have occurred in many countries outside East Asia. After crossing from China into Russia and Kazakhstan, outbreaks were reported in Albania, Azerbaijan, Austria, Bosnia and Herzegovina, Bulgaria, Cyprus, Croatia, France, Greece, Germany, Italy, India, Iran, Romania, Serbia, Slovenia, Switzerland, Turkey, and Ukraine. Seasonal migration o f birds contributes to transmission o f new strain variations to different geographical regions. In October 2005, H5Nl was reported among migrating swans in Croatia, which lies on the northern border o f Bosnia and Herzegovina. 6. On February 16, 2006, four swans from Pliva Lake in Jajce Municipality were brought to the Reference Laboratory o f the BiH State Veterinary Office (Poultry Center o f Sarajevo Veterinarian Faculty) for testing. Two o f the four swans tested positive in preliminary serologic tests; necropsy findings for these two swans indicated the presence o f AI. State authorities subsequently mounted a coordinated and thorough response to what was in essence a real-time emergency simulation. The preparation mission o f March/April2006 was presented with substantial detail on this response, and noted that implementation o f the veterinary control measures elaborated in the Contingency Plans (CP) appear to have successfully halted any further spread o f the infection. In particular, the CP's clear "chain o f command" rules allowed local authorities to act with confidence. In addition, on March 9, 2006, a case o f AI was confirmed in a rooster inthe municipality o f Bajina Basta (Serbia). As a consequence, the nearby community o f Bratunac in BiH was declared an endangered area, and measures were instituted as prescribed by the CP. The infection also appears to have been halted in this area. No new cases have been reported since then. 7. The emergence o f outbreaks in neighboring countries has had a negative impact on both poultry production and consumption in BIH. Based on data from large-scale traders, poultry consumption appears to have fallen by about 30-40 percent after the recent cases emerged in Croatia and Romania. Official production fell by more than 50% in mid-2006, with some o f the major producers almost fully halting production'. The decline in production and consumption have been accompanied by a drop in market prices o f about 10 percent, while farm-gate prices o f chicken declined from 2.3 KM/kgto 1.4 - 1.5 KM/kg. (d) Organizational Structure of the Health Care and Veterinary Systems (please refer to Appendix 9) 2. Rationale for Bank Involvement 8. HPAI control programs require a multi-disciplinary approach to integrate technical, social, economic, political, policy, and regulatory issues in addressing a complex problem. Working in a collaborative manner with other agencies (WHO, UNDP, UNICEF, EC, USAID), the Bank is well-placed to apply the evidence and lessons learned from international best practice in the various regions to help ensure that BiH's emergency preparedness plans and capacities are ready for the H P A I challenge. The Bank has a strong comparative advantage in providing integrator skills and multi-sectoral perspectives, I As poultry production needs to be plannedinsuch a way that 36 days old chickenare available daily, the production chain cannot be stopped instantly. Therefore, the real extent ofthe reduction can be seen only with a two-month delay, time required to completethe fullproduction cycle. 12 and in addressing the institutional dimensions of the response to such emergencies. It can also bring extensive experience and skills in analyzingand addressingthe social and economic impact. Importantly, the Bank has a long recordin BiH in bringingtogether the relevant ministries, government agencies, and the donor community, and inhelpingensure high levelpolitical coordination. 9. Given the Bank's work with local and internationalpartners in BiH and at the international level to address both preparedness and outbreaks and to assist with institutional assessments, the Bank can assist Bosnia and Herzegovina in leveraging additional resources from other international and bilateral agencies. In addition to its financial role, the technical assistance provided by the Bank has been important in similar global or regional emergency situations such as SARS, Tsunami relief, and HIV/AIDS. The Bank's national and regional support will be closely linked with the activities of FAO, WHO, OIE and the EU, and the proposed project is fully consistent with, and draws heavily on the global strategies proposedby FA0 and WHO. B. PROJECT DESCRIPTION 1. Lending Instrument 10. The project is to be supported by a Credit from the InternationalDevelopmentAssociation (IDA) of US$5 million equivalent. In addition, the Bank is working on helpingto mobilize additionalresources from bilateral and international agencies. Activities under the IDA-financed project will complement activities supported by other international partners and donor agencies (EC, UNDP, UNICEF, USAID, and WHO) and help ensure the availability o f adequate resources to fund the priority investments and technicalassistance which BIH has identifiedas critical needs in implementingits response to HPAI. The Project is supported by the Bank-financed Global Program for Avian Influenza Control and Human Pandemic Preparednessand Response(GPAI) approved by the Bank's Boardon February 9,2006. 11. As per the GPAI, a country will qualify for support under the GPAI when it demonstrates its commitment and readiness to implement early detection and rapid response measures appropriate to the specific country conditions. A country request for assistance would be eligible for financing under the GPAIwhen it meetsthe following eligibility criteria: (i) For countriesinendemicsituationwhere new human infectionsare beingdetected, it hasprepared and is implementingan HPAIControl Strategy; (ii)For newly infectedcountrieswith an activeoutbreak of avian flu among poultry, but no human infections, the existence of an appropriate program of rapid response, detection and containment measures, including appropriate implementation and monitoring arrangements that the international agencies and donor community, includingthe Bank, could support. (iii)For countries at risk,with no outbreak, or that are at an early stage of an outbreak, government commitment and appropriate plan of early detection and rapid response, including appropriate implementationand monitoring arrangements that the international agencies and donor community, includingthe Bank, could support. (iv)For countries with very low income levels and very low capacity circumstances, including LICUS countries, special criteria and waivers would apply if a full-blown human pandemic were to materialize, to ensurethat assistancewould be available if and when needed, even ifthe country itself would hardly be able to generate or mobilize any effective AI response, to safeguard the global- public-goodnature ofthe global avian influenzaobjective. 13 12. The joint BanWWHOAJNICEF pre-Appraisal mission o f MarcWApril 2006 made an assessment o f the readiness o f BiH to proceed with a program of support under the GPAI. It concluded that BiH meets the eligibility criteria as per (iii)above. The level o f commitment o f BIH is high: (i)a letter requesting the Bank's assistance was received on February 24, 2006; (ii)draft assessment plans and preparedness plans on the response to an avian influenza pandemic were prepared by the Government prior to the appraisal mission; and (iii)appropriate implementation and monitoring arrangements have been discussed and agreed. 13. ProjectCharacteristics. The financial assistance under the project will be provided as a Credit. The Credit is being processed as an emergency investment operation usingprocedures under OP 8.50 - Emergency Recover Loan (ERL), and it meets all applicable Bank policies, practices and standards as discussed below. 2. ProjectDevelopmentObjectives 14. The overall development objective is to minimize the threat posed to humans and the poultry industry by HPAI infection and other zoonoses, by enhancing both animal and human health infectious disease response and control capacities. To achieve this, three areas will be supported by the project: (i) prevention, (ii)preparedness and planning; and (iii)response and containment. 3. ProjectComponents 15. The project would finance activities under five components: (i)Strategic Communications and Public Information; (ii) Animal Health Protection, and Disease Prevention and Control; (iii)Human Health Protection, and Disease Prevention and Control; (iv) Poultry Culling Compensation Scheme; and (v) Implementation Support, and Monitoring and Evaluation (M&E). Even though the activities are organized by sectoral components, the project strongly endorses an integrated national plan that ensures common objectives across sectors for dealing with the avian flu issue. Component I:Strategic CommunicationsandPublic Information -US$0.20million Financing IDA CreditProceeds IDA Credit: US$0.20 million FBiH: US$O.11 million RS US$0.09 million 16. Building on the work initiated by the Entity Public Health Institutes with the support o f UNICEF, several communications interventions will be financed, chief among them the further development and implementation o f the already drafted communication strategy. The draft strategy includes, inter alia, improved communications strategies between and across government agencies (National Communication Plan); protocols for coordination of the outbreak and crisis communication for professionals (veterinarians, human health medical personnel, inspections, civil protection, state border service, etc); materials and targeted training for educators; capacity building in communication techniques for health workers, teachers and media professionals; and, at the community level, awareness raising and communication for behavior change activities through all appropriate communications channels. While it is crucial that each sector involved in public awareness and communications work under an overall strategy and broader framework, the actual implementation o f communication and public information activities will necessarily be carried out sectorally with a core set o f common objectives (more details are included in Annex 2A). UNICEF took the lead role in implementation o f the first phase o f the communications strategy, with financing from USAID in the amount o f US$0.21 million. IDA financing would complement the planned UNICEFLJSAID interventions, especially after the first year of implementation. Three sub-components are foreseen: 14 Developing basic communication materials; Developing and testing messages and materials to be used in the event of a pandemic or emerging infectious disease outbreak; and 0 Developing training courses in communications methodology for veterinary staff as well as for health workers at the local levels. Component2: Animal Health Protection, and DiseasePrevention and Control US $2.98 million - Financing I D A Credit Proceeds Gov't. of Bosnia andHerzegovina US$0.25 million FBiH: US$1.62 million FBiH US$O.17 million RS US$0.84 million RS US$O. 10 million IDA Credit: US$2.46 million 17. The most effective way to reduce the threat from HPAI to both economic sustainability of domestic poultry production, and human health, is to prevent the disease from establishing itself in domestic poultry. This component will provide support to the implementation of disease prevention and control strategies established at national and entity levels to address short, medium and long-term needs. Areas for support are based on detailed assessments of: (i) epidemiological status of HPAI in BIH; (ii) the the capacity of the State Veterinary Office (SVO) to cope with highly pathogenic avian influenza (HPAI) epidemic, including surveillance and diagnostic capacity at the national and entity levels; and (iii)the vulnerability of the poultry industry to new emerging infectious diseases. 18. The component would have four sub-components: Enhancing HPAI prevention and preparedness capability; 0 Strengthening of Veterinary Services, disease surveillance, diagnostic capacity and applied research; 0 Strengthening HPAI control programs and outbreak containment plans as well as capacities to implement those plans; and 0 Improving bio-security in poultry production and trade, and isolating its potentially adverse effects on other aspects of people's lives. 19. The European Commission is actively providing support to animal health objectives through a twinning program with the SVO. This program is under implementation, initially during 2007-2009 to support capacity building with the SVO in the areas of legislative reform, food safety, phytosanitary regime, inspections, and laboratory upgrading. Component3: Human Health Protection, and DiseasePrevention and Control US $1.98 million - Financing I D A Credit Proceeds Gov't. of Bosniaand Herzegovina US$0.22 million FBiH: US$0.98 million FBiH US$O.10 million RS US$0.98 million RS US$O.lO million IDA Credit: US$1.96 million 20. ' Both Entities have developed contingency plans. With the aim to further improve planning and coordination, the project will (a) help conduct simulation exercises, (b) support the revision of the plans and (c) support the preparation of social distancing plans and clean-out plans for hospitals. The surveillance system will be strengthened through: (i)the training and equipping of investigation teams, 15 (ii) the equipping of 1 virology laboratory in RS and two in the FBiH (one for virus typology in Sarajevo, and one for virus identification in Mostar); and (iii)the strengthening of the communicable diseases monitoring and reporting system. It is expected that all these efforts will result in BiH joining the European Influenza Surveillance Network. To help reduce the risk of a genetic recombination/ mutation of the virus, the project will support the immunization against seasonal influenza of populations at high risk. The capacity of the health sector to adequately isolate and treat suspected or confirmed human cases of avian flu will also be strengthened. Particular efforts will be made to train health staff at different levels of the health system, improve their knowledge of infection control measures and facilitate the adoption of the most appropriate attitudes and behaviors so they can both protect themselves and effectively take care of their patients. The interventions supported under the Project will be based on BIH's epidemiological and programmatic needs, and well-assessed options for meeting them. The interventions will be grouped inthree sub-components: 0 Enhancing public health program planning and coordination; 0 Strengthening of the national public health surveillance system; and 0 Strengthening health system response capacity. 21. The European Commission (EC) has allocated US$l80,000 equivalent from its ongoing project, being implemented with WHO support, to continue strengthening the surveillance systems in the human health sector. In addition, for the period 2007-2009, the EC will contribute EUR 500,000 to strengthen the overall human health laboratory system. This support will be complementary to the laboratory upgrades provided under the AIPP. Component 4: Support to the BiH Poultry Culling Compensation Scheme -US $0.75 million Financing IDA CreditProceeds FBiH US$O. 10 million FBiH US$0.31 RS US$O.lO million RS US$0.24 IDA Credit: US$0.55 million 22. Experience from world HPAI outbreaks has clearly shown that individuals are more likely to report sick animals ifthey have credible assurances from government that they will be compensated inthe event that their animals must be killed to prevent further spread of disease. As evidenced by the experience from the culling campaign that had followed AI occurrence inwild birds in February 2006, the compensation procedure prescribed and elaborated in the CP for A I ensures timely, efficient and transparent compensation payment to the farmers. The CP contains the necessary forms and instructions for personnel and institutions involved in culling, and ensures reimbursement of the farmers within a timeframe of 7-10 days post-animal depopulation. The only factor that can compromise the effectiveness of the existing compensation procedure, and thereby decrease the incentive for farmers to participate in A I control efforts, is the limited budget available for this purpose. Currently, compensation costs related to animal disease outbreaks are covered from the emergency fund (entity level budgets). Compensation costs on the scale of that needed for the A I outbreak.experienced in February 2006 can be easily covered by the government. However, if AI would occur in an area close to large-scale poultry farms, the available budget under the current culling arrangements would not come even close to covering the resulting expenses. Therefore, in order to provide sufficient incentive for early reporting by owners of sick animals, and hence enable a timely response by government authorities, funds for compensation will be provided within this component. A mechanism for the mobilization of these funds will need to be agreed as a condition of disbursement (under the Animal Health Component), as well as distribution of the responsibility for repayment among national and entity governments. 16 Component 5: Implementation Support andMonitoring and Evaluation (M&E) -U S $0.45 million Financing Gov't. of Bosnia and Herzegovina US$0.12 million FBiH US$O.15 million RS US$O. 15 million IDA Credit: US$0.03 million 23. One of the key characteristics of the HPAI threat is the difficulty in predicting the course the pandemic will take. An important feature of the project, therefore, will be the flexibility to adapt to a changing situation with the ability to reallocate funds betweencomponents and categories, and potentially to draw up new activities. The component would support costs associated with project management and coordination. It would comprise two sub-components: 0 Implementation Support to the Technical Support Group and PIU/PCU Monitoring and Evaluation(M&E). 4. LessonsLearned and Reflectedin the Project Design 24. Relevant lessons for the design of the proposed project have been drawn from implementation of projects in the agricultural and health sectors in Bosnia and Herzegovina. They have also been drawn from the design of previous World BanWIDA and FAO-supported emergency recovery projects. These include the Vietnam Avian Influenza Emergency Recovery Project, which was the first Bank-financed project in response to the Avian Influenza. In addition, lessons have been drawn from the design of the Kyrgyz Republic A I project, which was the first country-specific project drawing from the GPAI, as well as projects currently under implementation in Turkey, Azerbaijan, Armenia, Georgia, and Albania. 25. Lessons learned indicate that project success depends to a large extent on the speed of the response provided. Particularly when dealing with smallholders' production systems, a speedy, efficient and transparent distribution of suitable key inputs is clearly a major factor in limiting the impact of a crisis and hastening recovery. A performance audit of some of the emergency projects supported by the Bank in various regions drew the following general lessons: (i)emergency projects should avoid policy conditionality; (ii)project design must be simple and take into account a realistic assessment of the existing Borrower's capacity and other stakeholders capacity; (iii)a speedy project processing and approval are crucial to provide a prompt response and a substantial contribution to project success; (iv) procurement arrangements need to be flexible and should be finalized at an early stage; (v) mitigation and prevention measures should be included in the design to minimize impacts of a possible recurrence of the disaster; and (vi) realistic assessments should be made of counterparts' absorption capacity, as well as o f the effective communications and coordination mechanisms among all relevant stakeholders. 26. The main recommendations arising from the first 18-month implementation period of the Vietnam Avian InfluenzaEmergency Recovery Project are: (a) Preparednessis a key factor. While Vietnam had a national strategy document to control avian influenza in the domestic poultry population, it was not clearly understood and shared by all relevant agencies and stakeholders, and some aspects of the response were lagging behind. (b) A two-pronged strategy is recommended. This should include: (i)the control of avian influenza at the source in high-risk regions (through aggressive measures including culling, movement control and vaccination campaigns for poultry and ducks); and (ii)simultaneously 17 prepared short and medium-term measures to minimize the risks to humans and prepare for an eventual pandemic. High level government commitment is of the essence. For implementation arrangements, it is important to have a coordination structure that is empowered with multi-sectoral responsibilities, along with full-time project coordinators to implement activities in a "crisis situation". Moreover, this level o f coordination would foster effective integrated national response, including all technical ministries in charge o f agriculture/animal health and human health, as well as other relevant sectors, at the national and sub-national level, in case o f a human epidemic. HPAI Control Strategy and PreparednessPlans need to be linked to the broader agenda of regulatory and institutionalreforms. In particular, a revised "compensation framework" is an essential element to obtain real cooperation from affected stakeholders (farmers/producers) and to ensure the efficacy o f the surveillance and diagnosis mechanisms. Other long-term reforms include the restructuring o f the poultry industry and the development o f food safety regulations. Technical, scientific and operationalcapacity of the relevant participating agencies, and in particular National Veterinary Services, should be strengthened. The AI crisis highlighted several weaknesses in the animal health as well as public health services systems, including: poor surveillance at the local level, weak diagnostic capacity, lack o f epidemiological expertise and information system, and inadequate operating budget to bear the additional costs o f physical and human cost to contain the spread o f the disease. Control strategies must include awareness raising and public information campaigns. It is extremely important to raise awareness in the public and private sectors from the initial moments, and to strengthen effective coordination mechanisms for the implementation o f the necessary technical responses, involving the Government, the donor community, the private sector and the civil society. Regional collaboration is critical. Attention should be given to support the integration o f each country to a regional and global framework for the control o f HPAI, and more broadly o f all trans-boundary animal diseases and other emerging infectious diseases, to increase cost- effectiveness and ensure the harmonization o f activities and responses. Some important lessons learned from the response to the HIV/AIDS epidemic2 are incorporated in the design o fthe proposed project. They include: I e The need for high level political commitment and leadership is key. 0 A comprehensive multi-sectoral approach is needed. e Monitoring and evaluation is critical in the scaling-up o f a national response. e Stakeholders at the country and international levels, are important in dealing with the AI threat. 0 Building a strong fiduciary architecture is essential. C. IMPLEMENTATION 1. PartnershipArrangements 28, The Bank and the international community can play a key role in the response to Avian Influenza, especially at the country level where there is a need to develop an overall framework to guide national action plans that can be the basis for government and donor support. Such a framework should address 2World Bank.2005. Committing to Results: Improvingthe Effectivenessof HIViAIDS Assistance.An OED Evaluationo fthe World Bank's Assistance for HIViAIDS Control. Washington, D.C. 18 both animal and public health aspects as well as economic impact. Many o f the investments needed to address this disease are core public health and animal health functions that are considered "global public goods", thus, necessitating a global and regional response with support from the international community. Such partnership arrangements have been developed in BIH with the technical agencies as well as with bilateral agencies. Several meetings were organized prior to and during appraisal to briefthe international partners on the Bank's plans to work with the Government in the design of a country-specific project and to confirm their interest in participating in the financing o f the project. 29. BIH is receiving support on the technical content of an Avian Influenza response from key technical agencies. International agencies and donors have been active through a Task Force established in BIH for coordinated support of AI. The European Commission (EC) has allocated US $180,000 equivalent from its ongoing project, being implemented with WHO support, to continue strengthening the surveillance systems in the human health sector. In addition, the EC has allocated EUR 500,000 for the 2007-2009, to assist with provision o f biosafety equipment for human health laboratories and hospitals. UNICEF has been working closely with the Inter-Sectoral Committee to design a draft communications strategy. As importantly, UNICEF support for AI communications was funded by USAID in the amount o f US $0.20 million. These activities are now nearly completed, and have delivered a wide range o f communications tools to enhance the overall government response. UNDP has expressed its interest to collaborate by making available US $100,000 to support AI activities. The aim o f the IDA-fundedProject i s to support an integrated response to AI with all international partners contributing and supporting BIH's preparedness and control program. Further work inthis regard will continue prior to effectiveness and during implementation to ensure complementarity o f all such grant financing from international partners. 2. Institutionaland ImplementationArrangements 30. Because o f the inter-sectoral nature o f this project and potential for an AI outbreak or human pandemic that is national in scope, it is critical that both animal and human health experts, as well as communications specialists, work together closely at national and entity levels to perform the day-to-day tasks o f implementing the Project. Implementation o f the Project will be undertaken by a Technical Support Group (TSG) consisting o f technical advisors who are representatives o f the State Veterinary Office (SVO)3 in the Ministry o f Foreign Trade and Economic Relations, Ministry o f Civil Affairs, FBiH and RS Ministries o f Agriculture (Veterinarian Services), FBiH and RS Ministries o f Health, and consultants for communications and monitoring and evaluation. 3 1. The representative o f SVO on the TSG will be a permanent civil servant and will serve as Project Coordinator, reporting to the Minister o f MoFTER. The TSG will report to the Council o f Ministers through MoFTER. The TSG government representatives will be responsible for coordinating with and reporting to their relevant government departments, to guide and monitor implementation o f activities in their respective areas. The TSG will be responsible for monitoring and evaluation, the preparation o f annual work programs and budgets, preparation o f TORSand specifications for goods and works bidding documents, and preparation o f quarterly and annual progress reports. 32. Procurement, financial management and financial reporting services for the project will be provided by the PIU Forestry and Agriculture in Sarajevo, and by the Health Sector PCU in Banja Luka. More details on the implementation arrangements are provided in Appendix 2c. SVO has the mandate to coordinate veterinary services on behalf ofthe Entity Ministriesof Agriculture, Water Management and Forestry. 19 33 . Overall responsibility for overseeing and coordinating institutional and implementation arrangements will be vested with the Minister o f Foreign Trade and Economic Relations (MoFTER) on behalf o f Council o f minister^.^ 34. At the cantonal and municipalities levels, implementation would be the direct responsibility of each cantonal/municipal veterinary/health authority. Small coordination units should be established at the local level comprising officials from healthheterinary services to work under the supervision and guidance o f the entity ministries. 35. To facilitate the management and implementation o f the Project, a Project Operational Manual (POM) satisfactory to the Association is to be prepared by the TSG as a Condition o f Effectiveness. 3. Monitoringand Evaluation of OutcornesDtesults 36. M&E activities related to the project will be the responsibilityo fTechnical Support Group (TSG) supported by the PIU/PCU. These activities could be carried out by the regular staff o f the agencies (with technical assistance from the project) or by contracting out these functions with specialized agenciedinstitutes when appropriate. 37. Monitoring project progress and the achievement o f objectives will entail a process o f continuously and systematically reviewing the various project implementation activities. The objectives o f the M&E activities are to: (i)measure input, output and outcome indicators (see Appendix 1); (ii) provide information regularly on progress toward achieving results and facilitating reporting to the government and IDA; (iii) alert government authorities and the international partners to actual or potential problems in implementation so that adjustments can be made; (iv) determine whether the relevant stakeholders are responding as expected and intended by the project; (v) provide a process whereby the implementation agencies can reflect and improve on their performance; and (vi) enable the project to make necessary changes should the situation evolve. 38. The results of relevant M&E activities will be reflected in the quarterly and annual progress reports. A section o f the progress reports will be devoted to issues identified during project implementation and the strategies and actions to be taken to resolve such issues that affect progress. 4. Sustainability 39. Critical to the sustainability o f the Project will be the continuous ownership o f this initiative by the various stakeholders, coupled with strong political support and the availability o f an adequate flow of financial resources to carry out project activities. In addition, institutional sustainability would be ensured by: (i)strengtheningo f programs to maintain public awareness o f the threat o f avian influenza and other rapidly spreading infectious diseases; (ii)sustained surveillance and prevention and control activities, particularly in high risk regions; (iii)strengthened country capacity to manage at national and local levels the risk factors associated with the spread of avian influenza and other infectious diseases; and (iv) effectiveness o f programs to control the spread o f avian influenza from birds to the general population. 4An inter-sectoralCrisis Committee was establishedinNovember 2005 under the chairmanshipof the MoFTER to overseethe HPAI control and containmenteffort andto provide generalpolicies and guidance for avian influenza control. An Inter-SectoralWorking Group (ISWG) was establishedby the MoFTERto provide technical responseto the AI outbreak in February 2006, and led project preparationfor the BiH. Boththe Crisis Committee andthe ISWG may continue to function as circumstanceswarrant. However, neither would have a role in implementation of the Project. 20 5. CriticalRisks and PossibleControversialAspects Risk Rating MitigationMeasure FromOutputsto Objective Decline inpolitical commitment to addressing S Continuingsupport for inter-sectoralcollaboration Avian Influenzaand the threat of a Global through informationexchanges and dialogue and InfluenzaPandemic. operationalization of the Technical Support Group, which is to provide liaisonwith the BiH and entity implementingagencies. Project implementing agencies do not have S Adequate implementationarrangementsare being sufficient authority, leadership, and capacity to put in place as a pre-conditionof Bank financing; take leadingrole in Avian Influenza prevention careful monitoringof leadership and project and control. management duringproject implementation; technical assistance and training. Inadequateor lack of multi-sectoraland intra- S The TSG will inter alia, ensure coordination and Entity participation linkages across relevant agenciesand international partners. Inaddition, an inter-sectoralworking group was establishedby the Chair ofthe Committee as the counterpartteam to work with the Bank and other donors in project design and will continueto play a role if needed duringproject implementation,. Low cantonal/municipalitylevelcommitment S Implementationmechanisms explicitly address the meansthat strong central commitment does not link betweenthe requiredcentralized decision translate into action on the ground. making (the principle of `direct chain of command') with the needed local-level implementation, communicationstrategies will include local-levelimplementingactors as targets; capacity building includes periphery. From Componentsto Outputs Controllingthe spread of the pandemic may M Project will support advocacy and coalition expose the governmentto criticism for the buildingto sensitize key groups includingpolicy curtailment of civil rights due to the adoption of makers and the media. This will be complemented quarantines and other related measures. by carefully designed communicationcampaignsto build support for the project amongthe wider population. Inadequateinstitutionalcapacity to managethe S Capacity building and institutional development is project. one of the project's key objectives. Financialresourcesnot accessible in a timely M Procurementand financial management manner, weak procurement management arrangements will be handled by experiencedstaff whichwill receive support from consultants. Lack oftimely and predictable access to expert M Project activities are beingdesignedwith assistance advice andtechnical support from leadingmultilateral agencies such as FA0 and WHO. Arrangements inplace for provision of expert resources(OIEIWHOIFAO) during implementation. Low priority given to public accountabilityand M Publicationof audit results and achievements; transparency in program management transparency in decision and resource allocation. OverallRiskRating: S RiskRating- H(High Risk), S (SubstantialRisk), M(Modest Risk), N(Negligible or Low Risk) 21 PossibleControversialAspects 40. The Project will support the implementation o f immediate term responses to a global influenza pandemic -- the classic "social distancing measures"-- such as quarantine, bans on mass gatherings, and travel restrictions that may be politically and socially controversial. This means that dialogue and compromises are needed among different stakeholders, backed by a well-designed communication strategy. A high degree o f political commitment to preventing and controlling the spread o f infectious diseases such as a global influenza pandemic would be needed for managing controversies that will undoubtedly arise. 6. Credit Conditions 41. The key conditions needed to minimize the risksto the Project would be addressed by the country meeting the eligibility requirements for entering the Global APL. Specific provisions have been developed to meet the standard requirements covering organizational and staffing arrangements, as well management, procurement and financial management arrangements. These have been addressed during appraisal and were confirmed prior to Negotiations. Conditions of Effectiveness for the project would be: (a) Establishment by the Recipient o f the TSG in a manner and with the composition and terms o f reference satisfactory to the Association; (b) The Annual Work Program for the first year o f the implementation o f the Project, satisfactory to the Association, has been prepared and adopted by the Recipient and each Entity; (c) the Project Operational Manual, the EMP, and the FM Manuals, all satisfactory to the Association, have been adopted by the Recipient and each Entity (d) a Project Agreement has been executed on behalf o f the Association and each Entity, on terms and conditions satisfactory to the Association; (e) for each Entity, a Subsidiary Agreement has been executed on behalf o f the Recipient and the Entity concerned, on terms and conditions satisfactory to the Association. 42. Conditions of Disbursement comprise: (i)execution o f a Project Agreement between the Association and the Entity; (ii)execution o f a Subsidiary Agreement between the Recipient and the Entity;(iii)for expenditures under Component 4, adoption by the Recipient and each Entityo fthe Poultry Culling Compensation Scheme Manual; (iv) provisions for Retroactive Financing under components 1, 2, 3, and 5; and (v) the opening o f Project Accounts (for the Federation o f Bosnia and Herzegovina, the initial deposit is to be equivalent to US $0.02 million; for Republika Srpska, the initial deposit is to be equivalent to US $0.015 million). 43. Financial Covenants. The Federation PIU in the Ministry o f Agriculture and the RS PCU established in the Ministry o f Health will maintain financial management systems acceptable to the Bank. The project financial statements, summary reports and the designated account will be audited by independent auditors acceptable to the Bank on terms o f reference acceptable to the Bank. The annual audited statements and audit report will be provided to the Bank within six months o f the end o f each fiscal year. 44. The audits will be conducted in accordance with International Standards on Auditing (ISA) as issued by the IFAC and on terms of reference acceptable to the Bank. 45. The PIU and PCU will appoint an acceptable firm o f auditors under terms o f reference acceptable to the Bank to carry out operational review o f the compensation payment system as part o f the annual audit when compensation claims have been made. 22 D. APPRAISAL SUMMARY 1. EconomicAnalysis 46. The poultry industry in BH is relatively small. Overall 2004 production amounted to 24.5 million kilograms. Of that, about half is produced by large commercial poultry farmers and the rest by individuals, mainly subsistence farmers (Table 1). Exports have been negligible, largely because o f lack of veterinary certification. 47. Poultry accounts for a relatively small part of households' consumption. In 2004, overall consumption o f poultry amounted to 38.2 million kilograms, domestic production meeting 64 percent o f consumption needs and imports accounting for the rest. One-half o f imports originated from Croatia. Overall poultry consumption amounted to about 1.3 percent o f GDP, 3 percent o f total food expenditures and slightly over 1 percent o f overall household consumption. Together with the consumption o f eggs and processed poultry products, consumption of poultry and poultry-related products amounted to about KM350 million in 2004, equivalent to 2.6 percent o f GDP and 2.1 percent the overall household consumption. Table 1. BH: Poultry Productionand Consumption,2004 I' Million of Million kg chicken Production 17.1 24.5 large farmers *' 8.1 11.7 own-use 5.8 8.4 informal sector 3.2 4.4 Exports 0.0 0.0 Imports 9.3 13.7 officially registered 6.1 9.3 informal sector 3.2 4.4 Informal sector 6.3 8.7 ConsumDtion 26.3 38.2 1/ Exportsare negligible 21 Includes registeredmarket-orientedproduction EconomicImpactAnalysis 48. The economic analysis considers the short-term financial benefits and costs o f the project and the associated program under a with-project and without-project scenarios. The analysis should be considered as setting only the lower bound on the potential economic benefits that would accrue. The analysis does not attempt to quantify the costs and benefits preventingthe spread o f the virus to humans. 49. The analysis considers two events. One is sporadic outbreak o f disease, as occurred in early 2006, and the other is a catastrophic outbreak. Table 2 lists the key assumptions o f the analysis. The probability o f a sporadic outbreak is assumed equal to 100 percent without a project, constant every year, while the probability of a catastrophic outbreak is assumed to increase from 40 percent to 50 percent over time. Both the probabilities o f sporadic and catastrophic outbreaks are assumed to be smaller and declining under the with-project scenario. Further, it is assumed that a sporadic outbreak will cause 5 percent o f poultry to perish, while a catastrophic event will result in a 25 percent death rate. 23 Table 2. Assumptions for the EconomicAnalysis Year Year Year Without Project Sporadic containedoutbreaks 100% 100% 100% Widespreadoutbreak 40% 45% 50% With Project Continuedsporadic contained outbreaks 90% 85% 80% Widespreadoutbreak 38% 30% 30% Percent of stock lost during sporadic containedoutbreaks 5yo Percent of stock lost during catastroDhic outbreaks 25% 50. Under these assumptions, the Net Present Value (NPV) o f the project using a discount rate o f 10 percent is $0.3 million. The IRR for this project is unique and equal to 25 percent. 5 1, As indicated above, the project presents the lower bound o f benefits to society. The estimated economic benefitswould be substantially larger ifthe costs and benefits o f averting human hospitalization are taken into account. For example, were an outbreak o f avian flu to result in human infection, the cost o f hospitalization and possibly death would be substantial. 2. Technical 52. Animal Health. Successful implementation o f the project depends on a phased multi- disciplinary strategy based on a sound epidemiological approach to control H P A I outbreaks. This strategy has to take into consideration the range o f epizootic and epidemiological scenarios that exist or may arise in BiH, as well as the different poultry production systems within the country, and different levels o f incidence (ranging from high incidence with variable flock outbreaks, through low frequency disease outbreaks with partial flock immunity, to sporadic outbreaks). A balanced combination o f appropriate disease control options, tailored to the specific characteristics and needs o f BiH, i s therefore essential for the achievement o f the project objectives. 53. Key technical issues being addressed by the project include: (i) capacity o f the public and private veterinary services; (ii)adequate regulatory and incentive framework (including sub-laws); (iii) regulations and protocols in accordance with OIE standards and guidelines); (iv) adequate laboratory facilities and staff capabilities; (v) harmonization o f disease information systems to improve BiH's capacity to participate in the World Animal Health Information System (WAHIS) o f the OIE; (vi) bio- security measures; (vii) minimizing contact between potential infected wild birds and domestic poultry; and (viii) coordinating among public agencies and with the private sector to improve long-term planning for infectious disease control. 54. Human Health. So far, no human HPAI cases in humans have been reported in BiH. However, the existence o f free-ranging poultry in backyards and close contact between human and poultry put BiH at relatively high risk o f transmission o f the virus to humans. The assessments carried out show that the capacity o f the MOHs, Public Health Institutes (PHIS)and other stakeholders to: (i)rapidly and accurately detect HPAI cases in humans; (ii)adequately isolate and treat suspected or confirmed cases o f AI in humans; and (iii)protect from the AI virus and other communicable diseases both populations at high risks and the general population is still relatively limited. 24 55. First, the chain o f command is insufficiently defined, which could lead to many problems and delays, even in case of a limited crisis. Second, while investigationteams do exist at the Entity level PHIs, and cantonal and regionalPHIs, their capacity to quickly and effectively investigateand respondto local outbreaks appearstoo limited. Third, althoughefforts are beingmade by both Entities,the ability of health services to effectively isolate and treat suspicious or confirmed AI human cases is at present extremely limited. This is even true at the level of tertiary hospitals, where appropriately organized and equipped isolationrooms do not exist at present. Fourth, the investigationteams as well as laboratory and medicalpersonnel lack protective equipment and clothingand the current stocks of antiviral drugs appear too limited. Fifth, health services will rapidly become unable to cope with an explosive increase of the number of patients. 56. In such a context, priority needsto be given to: (i)the strengthening o fthe capacity of Entity and local investigation teams through training and the provision of necessary equipment, notably personal protective equipment; (ii)the creation of isolation rooms in hospitals, for effective isolation of the first cases of HPAI in humans; (iii) the training of health workers in infection control measures; and (iv) the preparation of plans to "clean out" hospitals in case o f a severe outbreak and the identification of culturally and socially appropriate social distancingmeasures in case of a pandemic. In parallel, actions should be taken to help: (a) strengthen the system for the surveillance of communicablediseases and help BIH become part o f the European Influenza Surveillance network; and (b) build-up adequate human microbiologyand virology laboratorycapacity in each Entity. 3. Social 57. Although there are several large and a number of medium-size commercial poultry producers, , about 25% o fpoultry are kept by smallholders intheir backyards and managedby women with the help o f children. Such families are disproportionately likely to be inthe lower income quintiles. 58. The central roles of women and children in managing backyard poultry have important implications for the project: Given the involvement of children managing domestic birds (feeding, egg collection, herding geese and ducks, etc.), awareness and educational efforts need to ensure that children are effectively targeted and reached with appropriatelydesigned messages,through the schools. 0 Reaching women with critical AI awareness messages and information will, similarly, require specific targeting and utilization of suitable dissemination and outreach channels. School-age childrencan bring leafletsto their mothers. In the event of culling, compensation will needto be providedto women owners, and the project will ensurethat mechanismsare in place to ensurethis. 4. Fiduciary 59. The financial management arrangements of the project are acceptable to the Bank. The overall FM risk for the project is moderate except for the Poultry Culling Compensation Scheme that is consideredto be highrisk. However adequate mitigationmeasuresand internal controls are requiredprior to the disbursementof funds and some of the key controls are includedbelow (appendix 5). The financial management arrangements of the Federation PIU in Ministry of Agriculture and the RS PCU established in the Ministry of Health have been assessed and continuously monitored as part of project supervision, and have been found to deliver high quality fiduciary services to the projects.They have both established and maintained good financial management system for the implementationof the Bank financedprojects. The financial management systems will be expanded to support the proposed project and additional 25 expertise in financial management will be engaged and financed under this project. The internal control and fund flow arrangements are yet to be finalized for the cash grants/Poultry Culling Compensation Scheme component, but the basic control procedures for the existing compensation system for Avian Influenza described in 2005 is a valuable basis for finalizing the procedures with the added complication with additional sources of financing for the compensation from this project. The flow of funds under the cash grantsPoultry Culling Compensation Scheme sub-component will only begin after appropriate internalcontrol and fund flow procedureshave been documented in the financial manual that will be part of the Project Operational Manual and after the Bank has assessed the internal control arrangements as satisfactory. Appropriate flow of fund mechanisms is a condition of disbursement. Detailed financial management arrangementsare described in Appendix 5. 60. Procurement. The capacity of the PIUPCU to conduct procurement under Bank guidelines has been assessed as satisfactory under the Forestry/Agriculture and Health Projects, respectively.. Procurement functions will be strengthened by the recruitment of an additional procurement specialist to be responsible for procurement under this project in the PIU and PCU. Activities to be financed from the Credit shall be undertaken in accordance with the procedures set forth in the Bank "Guidelines - Procurement under IBRD Loans and IDA Credits" dated May 2004 (the Procurement Guidelines). Similarly, the selection and employment of consultants' services shall be governed by the "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004 (the Consultant Guidelines). Details on procurement arrangements are provided in Annex 4. The procurement plan will be finalized during Appraisal. 5. Environment Environmental assessment Environmental Category PI 61. The two safeguard issues which pertain to the Project are those of environmental assessment for methods to be deployed for disposal of culled poultry and of mitigating the negative impacts of mandated culling of poultry on small scale backyard poultry producers. A delay in the completion and disclosure of the Environmental Assessment from the normal appraisal stage has been approved, instead making this a condition of disbursement for Component 2 - Animal Health, and Component 3 - Human Health. The draft EMP has been completed, with the public consultation held on July 20, 2006 in Sarajevo. Following this, the EMP was finalized in end-September 2006. Nevertheless,prior to Effectiveness, evidence of the adoption of the EMP by the Recipient and each Entity needs to be provided to the Association. Activities under the proposed project are not expected to generate any significant adverse environmental effect, as a large part of the project is geared to support prevention activities. Overall, the project would have positive environmental and social impacts. The primary potential environmental risks can be grouped into three categories: (a) Inadvertent human exposure and spread of the virus due to: improper culling and disposal of dead birds (wild birds, sick and dead birds from backyard and commercial poultries); lack of, or improper use of personal protection equipment (PPE); improper disposal of farm waste (i.e., bedding, manure, washings, etc. during and/or after an outbreak); and inadequate lab biosafety protocols. (b) Inadvertent release of chemicals in the environment from unsatisfactory decontamination procedures (for personnel, poultry sheds, and transport vehicles, etc.). (c) Release of chemicals and infectious agents into the environment from inadequate laboratory and medical facility waste management. 26 62. Building capacity for collection and testing of Avian Influenza virus. The Project's investments in facilities, equipment, and training for laboratories will improve the effectiveness and safety over existing avian influenza handling and testing procedures by meeting international standards established by OIE. Upgrading for laboratories will include provision of appropriate facilities and training for waste management and for bio-safety level 2 and 3 operations. Medical waste generated in health care facilities will be managed using existing guidelines in BiH, which have been found satisfactory under previous projects. The Project would also support updating these guidelines, training of health care workers to manage medical waste following these guidelines, and, as appropriate, purchase of equipment for the proper handling and disposal of medical waste in participating facilities. These provisions would be included inthe Project Operational Manualto be prepared prior to effectiveness. 63. Overall, the Project will assist the government to develop a strategy for managing future emerging and re-emerging zoonotic and infectious diseases outbreaks. As such, the project would improve environmental and social safeguards, in two areas: (i)mainstreaming environmental safeguards into protocols and procedures for the culling and disposal of animals during an outbreak, in particular by adopting OIE standards in these areas, and improving bio-medical waste management systems in health facilities and laboratories; and (ii)development of policies on compensation for poultry farmers affected by future outbreaks. 6. Safeguard Policies SafeguardPolicies Triggered by the Project Yes No Environmental Assessment (OP/BP/GP 4.01) [XI [ I Natural Habitats (OP/BP 4.04) [I [XI Pest Management (OP 4.09) [I [XI Cultural Property (OPN 11.03, being revised as OP 4.11) [I [XI Involuntary Resettlement (OP/BP 4.12) [I [XI Indigenous Peoples(OD 4.20, being revised as OP 4.10) [[II [XI Forests (OP/BP 4.36) [XI Safety of Dams (OP/BP 4.37) [I [XI Projects in Disputed Areas (OP/BP/GP 7.60) [I [XI Projects on International Waterways (OP/BP/GP 7.50) [I [XI 64. Since the Project is assessed as a B-category project, an Environmental Management Plan (EMP) would be implemented with project support (see project components). The EMP addresses safe culling practices, and disposal of carcasses, laboratory wastes, and medical waste. This EMP also covers the clean up of animal wastes of culled poultry by the local public veterinary services and minor civil works supportedunder the Project. 7. Policy Exceptions& Readiness 65. The only policy exception requested has been with regard to the waiver of the completion of the EA and EMP per para. 12 of OP 4.01. As noted above, evidence of the adoption of the EMP is a condition for Effectiveness. The project meets the regional criteria for readinessfor implementation. 27 28 Appendix 1: ResultsFrameworkand Monitoring BOSNIA AND HERZEGOVINA: Avian InfluenzaPreparednessProject ProjectDevelopment Outcome Indicators Use of Outcome Information 0bjective The overallobjective of the Project With regardto awareness of HPAIthreat and YR1 - gauge effectiveness of i s to minimizethe threat posedto how to prevent it: government HPAI strategy humans and the poultry industry Behavior changes among key veterinary YR2 - determine ifgovernment by the HPAI infectionand other and public healthpersonnel HPAI strategy needs to be changed zoonoses, by enhancingboth Improvedpublic awareness of how to YR3 - mainstream lessons learned animal and humanhealth prevent spread increases, and behavior from HPAI strategy into animal infectiousdisease response and changes. health and public health systems. control capacities. With regardto HPAI outbreaks among poultry: Governmentculls birds at the infection points following internationalbest practice Government providestimely compensationto farmers for culledbirds With regardto HPAI outbreaks among humans: Infectiondiagnosedand contained Patientsreceive effectivetreatment for HPAI infection IntermediateOutcome IntermediateOutcomeIndicator(*) Use of Intermediate (One per Component) Outcome Monitoring Component 1: Target population 50% percent o f at-riskpopulation YR1-YR3. No change in behavior informedabout public healthrisks practicingsafe handlingprocedures with indicates needto review media and and proceduresassociatedwith respectto poultry and poultry meat. messages. HPAI. Component 2.A: Nationalpolicy Relevant legislation- for registrationof YRl-YR2: Identify gaps and needs framework definedand national poultry farms, biosafety, and surveillance for additional support. Determine if strategy developedto prevent, and monitoring - includingall necessary plans needto be changed. control, and eradicate HPAI sub-laws, regulation,protocols and amongthe animal population. guidelines, preparedand adopted Component 2.B: Animal disease 0 Laboratoryequipment and materials are YR1-YR3: Verify compliance with surveillance and diagnostic procured, distributedand installed; procedure and identify needs for capacities strengthenedand Staff is trainedin surveillance and changes and training trainingof the veterinary services diagnostic methods; designed and completed. 0 Reportingand reactiontime for suspected YR1-YR2: Identify gaps and needs cases of AI is reducedto the minimally for additionalsupport. Determine if acceptable levels; plans need to be changed. 75% average monitoringcoverage in at- risk areas. Component 2.C: Outbreak 0 Outbreak Containment Planconforms YRl-YR2: Identify gaps and needs Containment Planpreparedand with the guidelines of FAO/OIE and for additionalsupport. Determine if activated as neededin responseto GPAI; plans needto be changed. AI outbreaks Chain of command and coordination arrangements in placeand functional. Emergency suppliesprocuredand 29 IntermediateOutcome IntermediateOutcomeIndicator(*) Use of Intermediate (One per Component) OutcomeMonitoring available at strategic locations inthe field; Ifappropriate,ringvaccination around infectedareas completed;. Culling, disposal and disinfection activitiescompleted as needed; Compensationprovidedto poultry owners rapidly and transparently. (in conjunction with Component4) Component 3.A: Better managed Chain of commandand coordination YR1-YR2: Identify gaps and needs public health agencies through arrangementsinplace and functional for additional support. Determineif improvedplanning and Detailedresponseplanprepared, plans need to be changed coordination includinga detailed implementation plan for social distancing YR2-YR3: Reviewand evaluate Simulationexercise conducted each year planand modify as necessary and report producedand disseminatedto all stakeholders. YW-YR3: Resultsof simulation exercises and actual investigationof outbreaks usedto identifyneed for information,training and equipment Component 3.B: Strengthened Notificationof Influenzalike syndromes YR1-YR2: identificationo f gaps and surveillance of influenza-like improvedand early warning system needs for additionalsuppodtraining. illnesses functioning. X personneltrained in influenza YE-YR3: Assess needto revise the surveillance and control strategy for alert, investigationof outbreaks and response. National Influenza Laboratory At least one laboratory able to type and YRI-YR3 Inability to achievebio- (NIL) safely collects, manipulates subtype influenzaviruses and at least at safety levels indicates needto and tests HPAI specimens. bio-safetylevel2 each entity. review investment, staffing, protocolsandprocedures Timely transmittal of specimens to Maximum5 days elapse between YRl-YR3: Verify compliance with the UK referencelaboratory collectionand transmittal of specimens to procedure and identify needs for referencelaboratories for confirmation. changes and training Nationaland regional teams able to investigateand respondto At least one team in each Entity able to influenza outbreaks properlyrespondto outbreak within 24 YRl-YR3: Verify capacity to hours after notification/alert. respondto suspected outbreaks. Identify needs for trainingand additional support. Component 3.C: Publichealth Staffguidelines for immunizationagainst YR2-YR3: Assess guidelines to system respondsto suspected or bothseasonal flu and HPAIcompleted ensure sufficientimmunization actual HPAI cases in humans and disseminated coverage of populations at risk. 100 percent o f PHI, hospital, and PHC YRl-YR3: Review procedures and service personnel vaccinated against modify to meet targets seasonal influenza. 30 percent o f populationat high risk YR1-YR3: Review proceduresand vaccinated against seasonal influenza modify to meet targets 30 IntermediateOutcome IntermediateOutcomeIndicator(*) Use of Intermediate (One per Component) OutcomeMonitoring 2000 units of anti-viral drugs stockpiled YR2-YR3: Reviewprocurementand in each Entity and operational plan to storage procedures rapidly procure anti-viral drugs completed Y2: Reviewplanand modify as necessary Isolation rooms established and adequately equipped in at least 2 YR2-YR3: Assess progress in Hospitals in each Entity with staff trained establishing rooms and revise (andor re-trained). Safety measures well procedures if objectives not met know and PPE available. Prepare hospital clean out plans in cases of serious YR2-YR3: Assess guidelines and outbreaks or pandemic. dissemination methods Guidelines on the use of antiviral and on Y2-YR3 Assess capacity of hospital isolation and care produced and staff to isolate and treat first cases of disseminatedto staff. patients. Identify alternative strategies 50 percent of staff in Entity, cantonal and RS hospitals knowinghow to protect Y2-YR3 Assess capacity o f hospital themselves andpatients against the HPAI, use staff to isolate and treat first cases of anti-viral drugs and adequately treat patient patients. Identify alternative options with HPAI. to take care of large numbers of patients in case of large outbreaks or a pandemic. Component 4: Poultry Culling Inthe event of outbreak, timely Compensationprocedures subject to CompensationScheme compensationprovidedto all farmers regular updating, basedon results of operational, includingagreed whose animals are culled each compensation event proceduresfor compensationof both small-scaleproducers ("backyard"), and large-scale commercialproducers Component 5.A: Coordination Progress reports, financial monitoring, Y 1- Review comprehensiveness and management of project procurement and disbursementreports, and timeliness of reports and make activitiescarriedout as planned. audits, management and financialreports adjustments as required prepared and submittedperiodically. Component 5.B: Baseline developedfor monitoringand Y 1-Y2 Assess quality of data Coordinationand management of evaluating Project impact six months after collected through M&E activities projectM&E activities carried out Credit effectiveness. and define what program in a professionalmanner, as Methodologydefined and monitoringand adjustments are needed. planned. evaluation periodicallyundertaken. NOTE: Should any disease outbreak occur (avian flu or another communicable disease), the response o f the health system will be examined, both for results monitoring and to ensure that lessons learned will inform further implementation o f this operation. 31 t-- I/ m4- d 3s 9E0 C5 v) M ol 1 mi- M M f U 5-a, x +-' 0 M IA a Et d 0 0 0 I.a, a c.-YVJ VJ I m I M 00 Appendix 2a: Detailed Project Description BOSNIA AND HERZEGOVINA: Avian Influenza PreparednessProject 1. The project would finance activities under five components: (i)Strategic communications and public information; (ii)animal health protection and disease prevention and control; (iii)human health protection and disease prevention and control; (iv) poultry culling compensation scheme; and (v) implementation support, monitoring and evaluation. It should be emphasized that even though the activities are organized by sectoral components, the Project calls for, and strongly endorses an integrated national plan that ensure common objectives across sectors for dealing with the threat of HPAI. In addition to the Bank and government co-financing described below, various other international organizations -- including the European Commission (EC), World Health Organization (WHO), United States Agency for International Development (USAID), UnitedNations Children's Fund (UNICEF) - are active in assisting the Government o f Bosnia-Herzegovina to address the threat o f Avian Influenza. The Project has been designed in close cooperation with these organizations, to leverage the maximum financing possible, and to avoid duplication o f efforts. With the exception o f UNICEF, the exact level o f financing o f these donor activities is not presented, as this is not considered direct cofinancing o f the Bank-funded Project, COMPONENT1: STRATEGIC COMMUNICATION AND PUBLICINFORMATION -US$0.20 million Financing IDA Credit Proceeds IDA Credit: US$0.20 million FBiH: US$O. 11 million RS US$0.09 million 2. It is o f critical importance that all sectors o f society are properly informed about the risks from HPAI, in order that proper protective measures can be taken, and, as importantly, to reduce the risk o f unwarranted fear about the disease (e.g. unnecessarily reducing consumption o f poultry products). This component would provide support for a broad range o f information and communication activities, to increase the attention and commitment o f government, private sector, and civil society organizations, and to raise awareness, knowledge and understanding among the general population about the risk and potential impact o f the disease. 3. Building on the work initiated by the EntityPublic Health Institutes with the support o f UNICEF, numerous communications interventions will be financed, chief among them the further development and implementation o f the already drafted communication strategy. The draft strategy includes, inter alia: improved communications strategies between and across government agencies (National Communication Plan); protocols for coordination o f the outbreak and crisis communication for professionals (veterinarians, human health doctors, inspections, civil protection, state border service, etc); materials and targeted training for educators; capacity building in communication techniques for health workers, teachers and media professionals; and, at the community level, awareness raising and communication for behavior change activities through all appropriate communications channels. A local Communications Specialist will be hired to work in the Technical Support Group to coordinate activities under this component. He/she will be assisted by short-term consultants to be engaged as needed to address specific communications issues. In order to assist with the above tasks, three types o f activities are being considered for financing: 39 0 Developing basic communication materials, including developing and testing messages and materials to be used inthe event of a pandemic or emerging infectious disease outbreak; Developing training courses in communications methodology for veterinary staff as well as for health workers at the cantonal and municipal levels; and 0 Collaboration among stakeholders, including state level authorities such as the Ministry of Foreign Trade and Economic Relations, the Ministry of Civil Affairs, the Ministry of Security, as well as veterinary and public health authorities at the state, entity and municipality levels. A. DevelopingBasic CommunicationMaterials 4. Activities to be supported would include developing and testing messages and materials to be used in the event of a pandemic or emerging infectious disease outbreak, and further enhancing the infrastructure to disseminate information at the state and local levels and between the public and private sectors. Communication activities will support cost effective and sustainable methods such as marketing of "handwashing" through various channels through the delivery of handwashing messages via mass media, counseling, schools, etc. Communication materials would be integrated into Avian Flu specific interventions as well as ongoing outreach activities of ministries and sectors, especially ministries of health, education, agriculture, security and transport. Specifically, support would be provided for: (i)the development and distribution of basic communication materials (such as question and answer sheets and fact sheets) on influenza, influenza vaccine, antiviral agents, and other relevant topics; (ii)general preventive measures such as "do's'' and "don't's" for the general public. Support would also be provided for information and communication activities to increase the attention and commitment of government, private sector, and civil society organizations, and to raise awareness, knowledge and understanding among the general population about the risk and potential impact of the pandemic and to develop multi- sectoral strategies to address it. B. DevelopingTraining Courses in CommunicationsMethodology 5. This sub-component would support the development and implementation of training courses in communications methodology for veterinary staff as well as health workers at the State and local levels. It will include the preparation and dissemination of information materials, and the provision of communications and information equipment for use at the state and local levels. Specifically, support would be provided for (i)information and guidelines for health care providers; (ii)training modules (web- based, printed, and video); (iii)presentations, slide sets, videos, and documentaries; (iv) and symposia on surveillance, treatment and prophylaxis. In addition, support would be provided to strengthen networks of communication offices, as well as mechanisms to increase coordination and consistency of messages among risk communication managers. Training would be provided under this sub-component for spoke- persons from priority sectors in managing the media, partnering with the electronic and print media with a view to highlighting the national response, as well as accurately reporting on the monitoring, preparedness, containment and mitigation plans, as the case may be. The Ministry of Education and relevant partners will participate inthe development of educational materials to be used in schools. C. Collaborationwith Stakeholders 6. The multi-dimensional problems associated with HPAI infection necessitate collaboration from a wide range of stakeholders within each country, which has to be supported by broad communications and information campaigns to improve public awareness. The major stakeholders include various ministries (Finance, Agriculture, Health, Transport, veterinary services, national research institutions and diagnostic laboratories), NGOs and civil society organizations, private sector companies and associations (e.g. large poultry producers, farmers' associations, veterinarians and farmer involvement at the grass roots level). 40 The sub-component would support activities designed to improve the effective coordination and collaboration among these stakeholders. COMPONENT 2. ANIMAL HEALTH PROTECTION AND DISEASEPREVENTION AND CONTROL - - us $2.98 million Financing IDA Credit Proceeds Gov't. of Bosnia and Herzegovina US$0.25 million FBiH: US$1.62 million FBiH USO.17 million RS US$0.84 million RS US$O. 10 million IDA Credit: US$2.46 million 7. The project would support a program to develop and implement HPAI prevention, containment, control, and eradication activities in the livestock sector, specific to the needs o f BiH in the short, medium and longer term. These activities reflect an assessment o f the particular risks, conditions, constraints, needs and possibilities in the country, including a rapid assessment o f the veterinary services. Government contribution to this Component will consist primarily in o f consumables (e.g. personal protective equipment and supplies), minor goods, running costs o f various reporting systems, and in-kind staff costs. A. EnhancingHPAI Preparednessand PreventionCapability (US $0.31 million) 8. Al: Strengthening the National Policy and Regulatory Environment. The project will support activities aimed at improving the policy, legal and regulatory framework that governs the national capability to implement the recommended disease detection, control, prevention, containment, and eradication measures in a uniform and effective way and in accordance with OIE standards and guidelines. The project includes support for a detailed review o f current policies and the existing legal and regulatory environment and for the drafting, as may be warranted, o f legal amendments, regulations and implementation guidelines and manuals. Staff o f the Ministries o f Agriculture, SVO, and other concerned agencies will, in topical working groups and with support by international experts on veterinary laws and regulations, review the relevant laws and regulations governing animal disease control and will draft the necessary legislative amendments, regulations and implementation guidelines. Particular emphasis will be placed on regulations concerning the control o f notifiable diseases, the delineation o f the respective responsibilities o f the veterinary authorities, private veterinary service providers and farm owners. Specific areas o f emphasis are: 0 Development o f legislation establishing a national program for registration o f poultry farms. Data related to farm location, type o f production and capacity (number o f animals, production output) will be necessary for planning, implementation and evaluation o f AI preparedness and control activities. This information will also be necessary for efficient indemnification o f losses incurred from the destruction o f livestock. 0 Development o f legislation regarding biosafety requirements/conditions necessary for establishing and maintaining poultry farms. The capacity of relevant agencies should be increased to provide extension services/education to producers in support o f biosafety requirements. Development o f legislation mandating surveillance activities. This legislative framework will need to incorporate equitable solutions for distributing costs and responsibilities for surveillance between government and producers. 41 B. Strengthening of Veterinary Services, Diagnostic Capacity, Applied Research, and Disease Surveillance(US $2.3 million) 9. B1: Strengthening Veterinary Services and Diagnostic and Applied Research Capacity. There are wide divergences in the capacities o f the individual animal health laboratories within the country. None o f the laboratories have an appropriate biosafety environment for handling AI agents. The short term goals for the system include developing appropriate capacities and biosafety levels (BSL) in regional laboratories involved in routine monitoringlscreening for AI. An evaluation o f capacities and procedures in existing laboratories, to include biosafety protocols, will precede the determination o f the specific steps that will be required to develop laboratory capacities. 10. The longer-term goal is to upgrade all laboratories to at least Biosafety Level 2 and, depending on the overall financing that becomes available, to establish one BSL 3 lab, which could handle not only HPAI, but any other highly pathogenic organisms which need to be tested. Project financing will provide, inter alia: civil works for rehabilitation and modernization o f the National Animal Health Laboratories network (likely to focus on 5-7 labs); crucial diagnostic equipment; waste decontamination and disposal equipment; refrigerators and microbiological cabinets; computers and software; and basic laboratory furnishings. Additional support for laboratories would be provided under the proposed IDA-financed Agriculture and Rural Development Project. 11. B2: Strengthening Animal Disease Information Systems. The effectiveness o f an AI control program will dependent upon the establishment o f a well functioning surveillance system, fed by valid data collected in the field. This surveillance system should permit rational allocation o f resources, creation o f alternative actions, and objective evaluation o f activities performed. Surveillance programs should be differentiated between wild and domestic birds and further delineated within the domestic population between free-range and commercial poultry. In order to achieve optimization o f surveillance efforts, risk areas (wild bird habitat) must be expanded and a scientifically based sampling scheme must be developed for domestic poultry. This will require assistance in obtaining sampling equipment, developing arrangements for sample transportation, obtaining personal protective equipment and training local staff. 12. Support will be provided for basic equipment, training, surveillance, and integrated reporting systems, for improved monitoring o f wild bird migration and "resting" points. This activity will be coordinated with technical professionals from the biological sciences, with training focused on disease recognition, safe handling o f potentially infected wild birds, and public communications. C. StrengtheningHPAI Control and Outbreak Containment Capacity (US $0.30 million) 13. Project support will be made available for the implementation o f H P A I outbreak containment actions, as set forth in the draft national action plan and to be further specified in the final plan and associated implementation guidelines and manuals. The national action plan specifies the responsibilities and functions o f a National Disease Crisis Coordination Center (NDCCC). It also defines the composition and responsibilities o f Local Disease Crisis Coordination Committees (LDCCCs) that will be formed and trained now, and activated inany location where an outbreak is suspected andor confirmed. 14. The project will finance and support activities related to the implementation o f the plan, including, inter alia, technical assistance and training for enhanced emergency response, outbreak control, data collection and interpretation, early warning systems, and basic epidemiology, as well as equipment such as personal protective equipment for field and laboratory epidemiological staff, culling equipment, and disinfection sprayers. In addition, a specific unit for epidemiological communications will be established. 42 D. ImprovingBiosecurityin Poultry Production and Trade (US $0.07 million) 15. Support will be provided for a training program on farm biosecurity practices. This training will be primarily oriented towards smallholder operations, as larger commercial farms generally have quite good biosecurity. However, large operations will also be targeted, particularly where they are nearby to significant poultry populations in "backyards". COMPONENT 3: HUMAN HEALTH PROTECTION AND DISEASEPREVENTION AND CONTROL - us $1.98 million Financing IDA Credit Proceeds Gov't. of Bosniaand Herzegovina US$0.22 million FBiH: US$0.98 million FBiH US$O.10 million RS US$0.98 million RS US$O.lO million IDA Credit: US$1.96 million 16. This component would support a program to further plan and implement preparedness, and improve surveillance and prevention as well as response and containment activities in the human health sector in the short, medium and longer term. 17. On the basis o f the country's epidemiological needs and assessment of the particular conditions, constraints, needs and possibilities in BiH, initial support under the project will concentrate on a few essential areas. These will include the further refinement o f the contingency preparedness plans and the establishment o f a clear chain o f command and coordination mechanisms, the rapid strengthening o f capacities in intervention epidemiology (including simulation exercises), the expansion o f seasonal flu vaccinations, and the strengthening o f the health sector capacity to isolate and adequately treat a few suspected or confirmed cases o f AI in humans. In parallel, the project will help plan and support the strengthening o f the surveillance system for communicable diseases and o f laboratory capacity as well as o f the capacity o f the health sector to prevent the spread o f the AI virus among humans and to protect groups at high risk. Finally the project would also support efforts to prepare for social distancing and other interventions measures in case o f a pandemic. 18. Activities to be supported under the project would be grouped in three sub-components: (a) enhancing public health program planning and coordination; (b) strengthening o f public health surveillance system; and (c) strengthening health system response capacity. Government contribution to this Component would consist primarily o f laboratory and hospital consumables (e.g. personal protective equipment and supplies), minor goods, and in-kindstaff costs. A. EnhancingPublic HealthProgramPlanningand Coordination (US $0.13 million) 19. Legal aspects regarding communicable diseases (including highly pathogenic infections) are covered by the Laws on the protection of the population from infectious diseases, which were adopted in 1995 in RS and May 2005 in FBiH. Current institutional arrangements for addressing Avian Influenza in Humans in BiHparallel the organization o f the health system and responsibilities lie with the entities. 20. Inthe past year, both Entities have made significant efforts to plan and coordinate activities. The RS Preparedness Plan was adopted by the Government in October 2005. The FBiH "preparedness plan for expected emergence o f the Pandemic Influenza" has been revised in February 2006, and has now been approved by the Federation Government. In any case, these plans have now been superseded by the creation o f a National Contingency Plan, produced through a series o f multi-stakeholder workshops 43 sponsored by WHO. The National CP contains clear chain o f command and individual responsibilities and (b) the measures to ensure coordination between stakeholders working on animal and human health in MOHs and between MOHsAPHS and other actors within the health sector. The National CP i s not yet formally ratified by the full BiH Parliament; this is expected to be completed by mid-2007. The sub- component would support the following three activities: 22. Al: Refining Plans and Strengthening the Chain of Command. As noted, the WHO has sponsored a series o f workshops which have led to an integrated National Contingency Plan (CP), which addresses the shortcomings noted above. To help prepare all stakeholders to better cope with outbreaks and ensure that individual responsibilities and procedures to be followed are well known, the project would finance the conducting o f simulation exercises at the State, Entity and local levels, once the new National CP is approved. 23. A2: Review and Amendments of Laws and Bylaws. The project would finance technical support to review and prepare necessary amendments to current laws and bylaws. More specifically, assistance will be given for the review and/or preparation of, inter alia: (i)statutory provisions regarding quarantine laws and how they apply in a public health emergency, (ii)laws and procedures for closing businesses and schools and suspending public meetings during a declared state o f emergency, (iii) medical volunteer licensure, liability and compensation for retired and non medical volunteers; and (iv) worker's compensation laws as they apply to heath care and other essential workers. 24. A3: Social Distancing. The project would support the development o f a detailed implementation plan for so-called "social distancing" measures to be activated in case o f an epidemic. Social distancing measures will typically be activated on advice from health professionals and institutions, although they will not be the enforcing agencies. The implementation plan will have therefore to explicitly define institutional responsibilities for activation and enforcement o f social distancing measures and for inter-agency and inter-ministerial coordination. Training will also be provided to "enforcement agents" such as the police and military in safe, efficient implementation o f social distancing measures in ways that do not induce panic. Additional preventive actions that will complement social distancing (such as personal hygiene promotion through various communication channels, including hand-washing and proper cooking, and distribution and use o f masks) will also be supported. 25. A4: Clean Out Plans for Hospitals (Preparing for Coping with Severe Outbreaks and a Pandemic). The project will also support the preparation o f plans and measures to be implemented in case o f larger outbreaks or a pandemic. While a full-scale pandemic will rapidly overwhelm hospital capacity, there is a need to prepare hospital "clean-out'' plans to help create a buffer for localized outbreaks. Specifically, the project will support the preparation o f plans to reorganize and clean out infectious clinics and other departments in hospitals to make them able to cope with an increase o f suspected or confirmed AI cases. The plans will necessarily include measures to evacuate hospitals o f non acute cases through, for instance, the canceling o f elective procedures or finding alternative accommodation for non-emergency admissions. B. StrengtheningNational Public Health Surveillance Systems (US $0.95 million) 26. At this point in time, there is no national surveillance system for communicable diseases. The surveillance systems in place at the Entity level are based on routine health facilities reports for 62 diseases, which are compiled and analyzed by the hygiene and epidemiological departments o f the IPHs'. 'See the WHO report titled "assessment ofthe national surveillancesystemfor communicable diseases" and dated September2004. A new assessment of the national laboratory capacity will be conductedby WHO inJune 2006. 44 Except in the case o f suspected or confirmed outbreaks, reports are sent weekly to the intermediary level (regional or cantonal PHIS) and monthly to the Entity level. No specific surveillance system i s in place for influenza and influenza-like (ILI) illness and BiH is not part o f the European Influenza Surveillance network. 27. Investigationand response teams exist at the Entity level (2 in RS in Banja Luka and Doboj and 1 in FBiH) and additional capacity can be mobilized at regional or cantonal level. These teams, however, lack protective personal equipment, spraying devices and disinfectant. Efforts to train staff in intervention epidemiology have already started and recently (2005), 24 epidemiologists attended the EPIET course organized by WHO with EU financial support. However, there is an obvious need to further build-up capacity in intervention epidemiology and to train and/or retrain investigation and response teams. 28. There i s no national or Entity Influenza Laboratory and or no capacity in the health sector for typing and sub-typingo f influenza virus strains. As indicated in the 2004 report on laboratory capacity in BiH6,the capacity o f existing microbiology and virology laboratories need to be significantly improved before the country can be considered to have an effective communicable diseases surveillance system. Basic facilities and good expertise exists in the country. However, the existing laboratory capacity is highly fragmented and the lack o f training and investment in the past 15 years have left the laboratories operating at a level far below EU standards and the minimum bio-safety level 2 required for manipulating highly pathogenic viruses. Three interventions are planned. 29. B1: Improvementof Capacity in InterventionEpidemiology. The project will first strengthen the capacity to investigate and respond to outbreaks, including: (a) investigation and collection o f specimens in areas where AI in birds or poultry are reported, (b) safely and rapidly transport o f specimens to laboratories (including to the UK reference laboratory) for diagnostic testing and virus sub-typing and confirmation o f results and, (c) outbreak investigation and containment measures in areas with suspected or confirmed human cases. To this end and building on activities supported by WHO (with financing from EC), the project will support the Public Health Institute and regional/cantonal epidemiological investigation and response teams through: (a) the re-training o f staff, (b) the provision o f personal protective gears and other equipment and consumables (sprayers, disinfectants), the provision o f materials and bio-safety boxes for the collection and transport o f samples and, (c) communications equipment. 30. B2: Strengthening the Surveillance of Influenza and Communicable Diseases. In parallel with activities listed in B 1 above, the project will complement the EU/WHO current efforts and pilot project aiming at the strengthening o f the communicable diseases surveillance system. In particular, the project will provide part o f the necessary IT equipment (computers, servers, software) and will contribute to the building o f capacity for reporting and analysis o f epidemiological data. In this framework, particular attention will have to be paid to the active surveillance o f influenza with a view to help BIH rapidlyjoin the European Influenza Surveillance network. 31. B3: Strengthening the Laboratory Capacity. The project will contribute to building the laboratory capacity and network. More specifically, the project will contribute to efforts towards upgrading two laboratories (1 in each Entity) to bio-safety level 2 and make them able to type and sub- type influenza virus strains. In addition, the Project will assist with upgradingthe laboratory in the PHI in Mostar, to enable it to provide virus identification capacity. To this end, the project will finance part of the necessary studies, limited civil works and equipment as well as kits, reagents and other consumables and personal protective equipment (PPE) for laboratory staff. The project will also finance training and 6Laboratory capacity inBiH-April 2004- (Ray Sandersand BernardusGanter) 45 retraining o f laboratory staff. If needed, the project would also finance appropriate sterilization equipment and incinerators for the management and disposal o f contaminated lab materials. C. StrengtheningHealth Care ResponseCapacity (US $0.9 million) 32. At this point in time, the BIH health sy,stem appears relatively unprepared to immediately and adequately respond to even a limited outbreak, not talking o f coping with a pandemic. Seasonal influenza vaccination remains limited and MOHs have only very limited stocks o f anti-viral drugs (only 400 and 1000 antiviral treatments are available in respectively RS and the FBiH). 33. While the hospitals where the first AI suspected or confirmed human cases would be hospitalized have been identified, these facilities are not ready to appropriately and safely taking care o f highly infectious patients. Isolation rooms need to be established and properly equipped and health workers from these facilities need to be trained or re-trained in many areas and to be provided with personal protective equipment. Three types o f intervention are proposed: 34. C1: EmergencyMeasures. Under the project, assistance will rapidly be provided to ensure that optimal medical care to AI suspected or confirmed human cases can be offered and to provide essential services to the community in case o f a pandemic. Towards this aim, the project will provide support for the: (a) establishment o f isolation capacity in the hospitals and infectious clinics that have been already identified (Banja Luka and Foca for RS; Sarajevo and Tuzla for the FBiH); (b) equipment o f the isolation rooms; (c) emergency stocks o f medicines and consumables, (d) protective equipment for health workers and; (e) training and retraining o f staff. In addition, an enhanced triage capacity will be supported for the Clinical Center in Mostar. 35. In case o f a declared influenza pandemic, this sub-component will finance emergency imports identified as necessary under a well-defined preparedness and response program to be prepared as part o f project implementation. These imports are likely to include: (i)pharmaceuticals and vaccines, (ii) medical supplies and equipment, (iii)communication equipment, supplies and information campaigns, (iv) food and water containers, and (v) protective clothing. Particular attention will be paid to the definition o f measures towards the protection o f health care workers and to ensure that they will be willing and can continue to be at work in a pandemic situation (including protection and compensation measures for the risks involved). 36. C2: Vaccination. This sub-component will help expand regular seasonal flu vaccination for targeted priority groups' (as defined in the contingency plan). In view o f financial constraints as well as the anticipated limited quantities o f seasonal flu vaccines available on the international market, the project will more specifically focus on the immunization o f the most at risk populations (poultry farmers and veterinarians) and o f health care workers. It would also finance the development o f a detailed logistical (procurement and distribution) plan for mass vaccination should an HPAIvaccine become available. 37. C3: Anti-Viral Drugs: Under this sub-component, the project will finance the stockpiling on anti-viral drugs (Oseltamivir or others). It is plan to help increase buffer stocks o f Tamiflu up to 3000 treatments for the Federation and to 1000 treatments for RS. 7 Including poultry farmers, veterinarians, health staff and persons with chronic disorders of the pulmonary and cardio-vascularsystems andor chronic metabolic and immunologic disorders. To all the extent possible, vaccines will also be provided for the immunization of children below 5 and persons over 65 years of age 46 COMPONENT4: POULTRY CULLINGCOMPENSATION SCHEME -US$0.75 million Financing IDA Credit Proceeds FBiH US$O.10 million FBiH US$0.31 RS US$O.10 million RS US$0.24 IDA Credit: US$0.55 million 38. Early detection and reporting as well as rapid response depend critically on the incentives for poultry owners to report very quickly any sick and dead poultry to their veterinarians. Without adequate compensation arrangements in place, poultry owners have no incentive to do so, but must fear that their animals will be destroyed and they lose this valuable capital. 39. The June 2002 Veterinary Law in BiH confirms the right o f farmers to compensation for the elimination o f contagious animals, and determines the procedures for culling and compensation. The value o f culled animals is determined by Entity Veterinary Services, according to the damage appraisal list prepared by the appraisal commission. In the case o f Avian Influenza, the commission also confirms the number o f culled poultry. These procedures have been successfully employed for the recent outbreak o f HPAI in Jajce and Jezero. 40. In the event of further HPAI outbreaks in BiH, the Project will provide support for culling and elimination o f infected and at-risk poultry, with compensation to farmers and commercial poultry producers based on the existing legal framework and the AI contingency plan. The order for culling and compensation will determine in advance the compensation value by type o f poultry (rather than requiring a commission to determine the value on a case-by-case basis). Accurate lists will be kept o f all poultry culled, so that the culling committee can calculate the compensation that will go to each poultry owner. Strict requirements will apply to recording, reporting and verification o f poultry culling, compensation claims and payments. 41. Bosnia-Herzegovina's current capacity to compensate farmers for culled animals will be enhanced by the provision o f US $0.55 million from the Project. This will be split evenly between the Entities, with each Entity provided matching funds o f US $0.1 million. Access to the Bank portion o f these funds will be conditional on the modalities for operating the Fund being approved by IDA. Key parameters guidingthis effort are provided in Appendix 2b. COMPONENT5: IMPLEMENTATION SUPPORTAND MONITORING EVALUATION AND - U S $0.45 million Financing Gov't. of Bosnia and Herzegovina US$O. 12 million FBiH US$O.15 million RS US$O. 15 million IDA Credit: US$0.03 million A. ImplementationSupport 42. This sub-component would support costs associated with project management and coordination, including costs associated with the Technical Support Group to be established to support project coordination and management, and costs associated with the PIU/PCU for procurement and financial management services. An inter-sectoral Crisis Committee was established in November 2005 under the chairmanship o f the Minister o f Foreign Trade and Economic Relations (MoFTER) to oversee the HPAI control and containment effort and to provide general policies and guidance for avian influenza control. This Committee will operate as needed in the event of further AI outbreaks to ensure coordination and 47 linkages across relevant agencies and with international partners. Implementation arrangements are discussed in Annex 2c below. B. Monitoring and Evaluation(M&E) 43. B1: Training. This sub-component would support training in monitoring and evaluation at all administrative levels, mid-term evaluation workshop, and development of an action plan for M&E and replication of successful models. It would support the following activities: Training in M&E; 0 Implementation of baseline studies; 0 Mid-Term evaluation of the project; On-going part'icipatory monitoring and evaluation; and 0 Final project evaluation. 44. B2: ProjectMonitoring and Impact Evaluation.Support would be providedto develop project monitoring and impact evaluation assessments. Two types of M&Eare envisaged: 45. B2(i): Monitoring of project implementation. This is a function of the TSG, which would collect relevant data from line ministries and other implementation agencies and then compile them into quarterly progress reports focusing on status of physical implementation by component, use of project funds (based on data provided by the PIUPCU) and monitoring indicators. Specific surveys can be conducted to obtain data for this purpose. Annual expenditure reviews would be conducted to assess government commitment to strengthen the public health functions as measured by budgetary allocations and their distribution by activity. 46. BZ(ii): Impact evaluation. The aim of evaluation is to find out whether the interventions are effective or the program is having the desired impact. The evaluation will include both quantitative and qualitative aspects and be conducted on a yearly basis. The quantitative aspects will rely on new information systems and surveys implemented as part of the various components of the project, currently existing data sources, and primary evaluative data collection efforts. The goal of the qualitative aspect of the evaluation will be to document perceptions of program managers, staff, patients, and local and national leaders. Qualitative information will be collected using site-visit interviews, focus groups, and respondentsurveys. 48 Appendix 2b: Cullingand CompensationProcedures BOSNIA AND HERZEGOVINA: Avian InfluenzaPreparednessProject Table 1: 2004 Production and Consumption o f poultry in BH/l Million of chicken Million kg Production 13.9 20.1 officiaV2 8.1 11.7 own-use 5.8 8.4 Imports 6.1 9.3 Informal sector/3 6.3 8.7 Consumption 26.3 38.2 /1 Exports are negligible /2 Includes registered market-oriented production 13 Includes unofficial domestic production and unregistered imports PoultryCullingCompensationScheme 1. Early detection and reporting, as well as rapid response, depend critically on the incentives for poultry owners to report very quickly any sick or dead poultry to veterinarians. Without adequate compensation arrangements in place, poultry owners have no incentiveto do this, and will fear that with the destruction oftheir animals they will lose this valuable capital. 2. The June 2002 Veterinary Law in BiH confirms the right of farmers to compensation for the elimination of contagious animals, and determines the procedures for culling and compensation. The value of culled animals is determined by Entity Veterinary Services, accordingto the damage appraisal list prepared by the Appraisal Commission. In the case of Avian Influenza, the Commission also confirms the number of culled poultry. These procedures have been successfully employed for the February2006 outbreak of HPAI in Jajce andJezero. 3. In the event of further HPAI outbreaks in BiH, the Project will provide support for culling and elimination of infected and at-risk poultry, with compensation to farmers and commercial poultry producers based on the existing legal framework and the AI contingency plan. The order for culling and compensation will determine in advance the compensation value by type of poultry (rather than requiring a commission to determine the value on a case-by-case basis). Accurate lists will be kept of all poultry culled, so that the culling committee can calculate the compensation that will go to each poultry owner. Strict requirements will apply to recording, reporting and verification of poultry culling, compensation claims and payments. 4. The Poultry Culling Compensation Scheme will be financed by an IDA credit of US$0.55 million, conditionalon IDA'Sapprovalof the modalities for operating the Fund.-In addition, each Entity would contribute US $0.10 million, as part of the regular emergency fund allocation provided to the animal health sector. Village and BackyardPoultryCulling 5. Compensation for AI-infected poultry in Jajce and Jezero followed the procedures provided by the contingency plan. In future cases of AI, the same approach should be taken. After official confirmation of an outbreak, the State Veterinary Office authorizes the local veterinary stations to undertake necessary measuresfor control of the disease. First an inventory of all poultry is done within a radius of 3 km. Then, the actual culling is undertaken. After the culling, the owner and assessor sign a 49 form defined in the Contingency Plan (Form 6 in Annex IV) in three copies. One copy is kept by the owner, one copy is submitted to the Entity Ministry of Agriculture, and the third copy is submitted to the Technical Support Group. Pre-numbered forms will be given to the Local Disease Crisis Coordination Committees (LDCCCs)' based on the inventory of poultry in the at-risk region. The signed Form 6 will be the basis for payment of farmers. The payments will be made with cash transfers through the municipal treasury systems. After culling, owners to be compensated in each municipality and the amounts to be paidwill be announcedina public place. CommercialPoultry Culling 6. At commercial poultry enterprises and other large producers the culling will be conducted in the presence of the owner by a team designated by the LDCCC. All will sign a form (in 3 copies) listing the culled birds. One copy of the form will be kept by the owner of the commercialenterprise; a secondcopy will be kept at the entity Ministry of Agricultureand the third will be sent to the TSG. The compensation paymentsto commercial poultry enterprises will be made through bank wire transfers. The forms will be pre-numbered. Database and Forms 7. Forms will be printed, pre-numberedand kept with the Technical Support Group. The TSG will keep the database ofthe forms sent to each municipality,owner and commercialproducers. CompensationPayments 8. The parametersfor payments will includethe following: 0 Compensation to farmers will made be in cash through transfers to the respective municipalities;farmers will receive the compensation amounts from the municipality cashier. Appropriate procedures for supervising and verifying payments are specified by the Contingency Planfor AI and will be undertaken by the PIU/PCUat the direction of the TSG. Full details regardingthese procedureswill be addressedinthe ProjectOperationalManual. For small farmers, compensationper bird will be 100percent of the marketpriceofthe laying hens as reportedby the entity agriculture statistical directorate/orcompetent authority during the month preceding that in which the culling took place. 0 For commercial producers, compensation will be provided by bank transfer. Compensation will be for reasonable replacement cost, Le., for birds less than 3 months old at the cost of one-day-old chicks, and for birds older than 3 months at the cost of 3-month-old birds, as reported by the entity agriculture statistical directorate/or competent authority during the month precedingthat in which the culling took place . 9. Ifand when an HPAI outbreak occurs, the Entity Ministry of Agriculture will issue an ordinance for the use of funds for compensationincludingthe parametersof compensationamounts. These amounts will be posted in a public place in the municipality. I t is strongly recommendedthat the parameters for compensation are coordinated by both entities. 8The projectproposesusingthe exact same form definedinthe BIhContingencyPlan- Annex IV:Form6 50 Flow of Funds 10. Procedureson flow o f funds should minimizedelay but ensure maximumtransparency. As stated above, compensation payments will be made through: (i) wire transfers to municipalities which will pay in cash for the compensationamounts to the farmers, and (ii) wire transfers to the accounts of commercial poultryproducers. 11. The State Veterinary Office, through the Technical Support Group, will verify that forms are complete, and on the basis of Form6 andthe farmers payinglists, will direct the PIUPCUto prepare the withdrawal application with the necessary supporting documents for submission by the Ministry of Agriculture to the State MoF to the Association for reimbursement, with instructions in the withdrawal applicationto transfer the payment directly to the Entity MOA. 12. The Entity MOA then transfers the funds to the municipality treasury, which processes the payments to the owners. On payment of the compensation, the owner signs a payment receipt form, copies of which are forwardedby the municipality to the Entity MOA,Entity MoF and the PIU/PCU. After the completionofthe payments, the municipalitywill submit payment lists to the TSG. 13. The PIU and PCU providethe TSG with reports on the payments on a quarterly basis, as part of the regular financial management reporting. A Poultry Culling Compensation Scheme database for each Entity will be maintained by the respective PIU/PCU to facilitate record keeping, claim verification, payment facilitation, monitoringand auditing. 14. Further detail regarding flow of funds under the Poultry Culling Compensation Scheme can be found in Appendix 6 on FinancialManagement. These procedures will be fully elaborated in the Project Operational Manual. 15. Basedon the law, the payment should be completedwithin 30 days. However, it would be highly desirable for compensation to be completed in a shorter time span, for example, no longer then seven days. After the HPAI outbreak inJajce and Jezero, bothEntitieswere able to compensate farmers within sevendays of culling. 16. Table 2 below illustratesthe funds required to compensate farmers, both commercial and non- commercial (Le,, backyard or village, for personal consumption) if x percent of all poultry in the state were lost to AI culling, given a price of 10 KM per free range (backyard) chicken and 5 KM for commercial poultry and assuming a compensation scheme of 100% reimbursement for non-commercial farmers and 50% reimbursement for commercialfarmers. 51 Table 2: Funds required to secure percentage of State poultry stock, by type of farmer Total Value ( I O Kh4 non- Total # of poultry commercial; 5 Value Value Value Value Value Type of farmer (millions) commercial) O f 1% O f 2% O f 3% O f4% O f 5% Non-commercial 5.8 58.0 0.580 1.160 1.740 2.320 2.900 Registeredcommercial 8.1 40.5 0.405 0.810 1.215 1.620 2.025 Total 13.9 98.5 0.985 1.970 2.955 3.940 4.925 Total Value in USD ($6.20 non- commercial) Non-commerciaL 5.8 36.0 0.360 0.719 1.079 1.438 1.798 Total 0.611 1.221 1.832 2.443 3.054 52 Appendix 2c: Implementation Arrangements BOSNIA AND HERZEGOVINA: Avian Influenza PreparednessProject TechnicalSupport Group 1. Implementationofthe Projectwill be undertakenby a Technical Support Group (TSG) consisting of technical advisors who are representatives o f the State Veterinary Office (SVO) in the Ministry of ForeignTrade and EconomicRelations', Ministry of Civil Affairs, FBiH and RS Ministries of Agriculture (VeterinarianServices), FBiHand RS Ministrieso f Health,a full-time consultantfor communications and a part-timemonitoring and evaluationconsultant (see organizationalchart below). SVO has the mandate to coordinate veterinary services on behalf o f the Entity Ministries of Agriculture, Water Management and Forestry. The representative of SVO on the TSG will be a permanent civil servant and will serve as ProjectCoordinator, reportingto the Minister of MoFTER. The Project Coordinator will be supported by one full-time administrative assistant. The Administrative Assistant could be a civil servant, but would more likely be a short-termcontracted position. The Terms of Reference (TOR) would include assistance with office management, record-keeping,correspondence, drafting of minutes of meetings, translations and interpretation, and general organizational matters. The TSG will report on project implementation progress to the Council of Ministers through MoFTER. The TSG government representatives will be responsible for coordinatingwith and reporting to their relevant government departments, to guide and monitor implementationof activities in their respective areas. Except for the Project Coordinator and the communications specialist, the TSG members will serve on a part-time basis, retainingtheir regular civil service positionsandresponsibilitiesintheir home agencies. 2. To facilitate the management and implementationof the Project, a Project Operational Manual (POM) is to be prepared by the TSG as a Condition of Effectiveness. The TSG will operate as a virtual office, with daily communications via telephone, fax and e-mail, and will meet regularly on a schedule and in locations to be specified in the POM. The TSG will be responsible for preparationo f annual work programs and budgets, preparationof TORSand specifications for goods and works bidding documents, monitoringand evaluationof project activities, and preparing quarterly and annual progress reports to the Association. The TSG shall take decisions on the basis of consensus. The detailed procedures governing the functioningof the TSG will be described in the POM. Local LevelImplementation 3. At the cantonal and municipalities levels, implementationwould be the direct responsibility o f each cantonal/municipalveterinary/healthauthority. Small coordination units should be established at the local level comprising officials from healthheterinary services to work under the supervision and guidance of the entity ministries. PIUand PCU 4. Procurement, financial management and financial reporting services for the project will be providedby the PIU Forestry and Agriculture in Sarajevo, and by the Health Sector PCU in Banja Luka. For procurement, the PIU and PCU will prepare bidding documents or requests for proposals based on technical specificationsor TORSprovided by the TSG, conduct tenders, organize evaluation committees, and processpayments to consultants and contractors after acceptance and approvalof the goods, works or services by the TSG. TSG members or specialists identifiedby the TSG will be invited by the PIU and 9 It is notedthat when the plannedstate-levelMinistryfor Agricultureand RuralDevelopment(exact legal name TBD) is created, the SVO will move from MoFTERto this new ministry. 53 PCU to participate in proposal and bid evaluations. Further details regarding project procurement arrangements are found in Appendix 5 below. 5. The PIU and PCU will be responsible for financial management under the Project. They will be responsible for ensuring that each Entity establishes and maintains: (i)adequate accounting systems and procedures; (ii)flow-of-funds mechanismsfacilitating timely disbursement of funds and timely payments for goods, works and services; (iii)regular reporting on the use of funds; and (iv) appropriate arrangements for regular financial audits. The PIU and PCU will prepare quarterly financial monitoring reports to the TSG and the Association. These responsibilities are described further in Appendix 6 (Financial Management Arrangements) below, and will be described in detail inthe manuals of financial procedures and summarized in the Financing Agreement. The PIU and PCU have experience with financial management under Bank-financed projects and have established sound internal control mechanisms on the application and use of funds. Operatingcosts 6. Most of the operating costs of the TSG, PIU and PCU will be provided by the Entities as part of the counterpart contribution to project funding. Operating costs may include (i)maintenance and operation of equipment and vehicles procured or used for the management of the Project; (ii)staff salaries; (iii)travel costs and per diems; (iv) consumable office supplies; (v) communication, printing and publications; (vi) costs of translation and interpretation; (vii) bank charges; and other miscellaneous costs as may be agreed. Poultry Culling CompensationScheme 7. Both the TSG and the PIU/PCU as well as government at the municipal, entity and State levels will be involved in administration and reporting on payments under the Poultry Culling Compensation Scheme that are financed from the Credit proceeds. Access to proceeds from the IDA credit for eligible Compensationpayments will operate under the following procedures: (a) In the event of an AI outbreak and culling of poultry, local veterinary services officials provide compensation application forms and instructions to owners (b) Copies of the forms are provided by vet services to the owner, the Entity MOAand SVO (c) SVO through the TSG directs the PIU/PCU to prepare the withdrawal application with necessary supporting documents for submittal by the Entity MOAto the State MoF to the Association for reimbursement, with instructions inthe withdrawal application to transfer the payment directly to the Entity MOA. (d) The Entity MOAtransfers the funds to the municipality treasury, which processesthe paymentsto the owners (e) On payment of the compensation, the owner signs a payment receipt form, copies of which are forwarded by the municipality to the Entity MOA,Entity MoF and the PIU/PCU. The PIU and PCU provide the TSG with reports on the payments on a quarterly basis, as part of the regular financial management reporting. (f) A Poultry Culling Compensation Scheme database for each Entity will be maintained by the respective PIU/PCU to facilitate record keeping, claim verification, payment facilitation, monitoring and auditing. (g) Operation of the Poultry Culling Compensation Scheme will be monitored and evaluated by the TSG as part of the overall project M&E arrangements 54 8. Further details on the Poultry Culling Compensation Scheme are provided in Appendix 2b. In addition, the internal financial control procedures and flow-of-funds arrangements to be implemented by the PIUand PCU will be incorporatedinto the financial management section o f the POM. ProjectImplementationArrangements Solid Lines indicate Reporting Responsibilities Dashed Lines indicated Functional Coordination Responsibilities Council of Ministers b MoFTER PT Tech Advisor Communications *For purposes of simplicity, organizational "boxes" are not presented for each governmental authority: this chart assumes that all members of the Technical Support Group continue to fulfill their normal reporting responsibilities to their relevant minist eriallgovernmental authorities In addition to the above implementation structures, the natiodl Crisis Committee (ad hoc body) will provide political leadership as necessary Compensation Fund activities will be coordinated through entlbyldget structures, as at present 55 56 Appendix 3: Project Costs and Financing Arrangements BOSNIA AND HERZEGOVINA: Avian Influenza Preparedness Project US $6.4 million (Note: Component totals below for Components 2 and 3 do not precisely match the totals in the preceding text. Because of their larger size, and the likelihood that it is under these components where contingencies will be required, this table subtracts a portion o f the total component cost (approximately 15%), and places it in the Contingencies allocation.) COMPONENTS Local Foreign Total 1. Strategic Communications and PublicInformation 1.A Capacity Building 0.06 0.03 0.09 2.B Informationand Communication Services 0.23 0.09 0.32 Sub Total 0.29 0.12 0.41 ~ 2. Animal HealthProtection, and Disease Prevention and Control 2.A Enhancing HPAI Prevention and Preparedness 0.06 0.40 0.46 2.B Strengthening Disease Surveillance 0.42 1.27 1.69 2.C Strengthening HPAI Control Programs 0.09 0.16 0.25 2.D Improving Bio-security in Poultry Production 0.05 0.01 0.06 Sub Total 0.62 1.84 2.46 3. Human Health Protection and Disease Prevention and Control 3.A Enhancing Public Health Program Planning 0.10 0.14 0.24 3 .B Strengthening of Health Surveillance Systems 0.11 0.60 0.71 3 .C Strengthening Health System Response Capacity 0.08 0.65 0.73 Sub Total 0.29 1.39 1.68 4. Poultry Culling Compensation Scheme 0.75 0.00 0.75 5. Implementation Support and Monitoring & Evaluation 5.A Project Management 0.20 0.00 0.20 5.B Monitoring and Evaluation 0.10 0.00 0.10 Sub-Total 0.30 0.00 0.30 Total Base Costs 5.6 Physical Contingencies 0.30 0.10 0.4 Price Contingencies 0.20 0.20 0.4 TOTAL PROJECT COSTS 2.75 3.65 6.4 57 Total project costs have been estimated at approximately US$6.4 million, of which US $5.0 million (78.1% of total project costs) would be financed by an International Development Association (IDA) Credit. The Government would finance approximatelyUS $1.4 million(21.9%). 58 Appendix 4: Procurement Arrangements BOSNIA AND HERZEGOVINA: Avian Influenza PreparednessProject 1. As described in OP 8.50 for Emergency Recovery Assistance (ERA), in addition to emergency assistance, the Bank may support operations for preventionand mitigation in countries prone to specific types of emergencies. Such operations could assist in: (a) developinga national strategy, (b) establishing an adequate institutional and regulatory framework, (c) carrying out studies of vulnerability and risk assessment, (d) reinforcingvulnerablestructures, and (e) acquiringhazard-reductiontechnology. 2. Given the threat that HPAI may pose to the economic and social fabric o f the country, as well as to the health of the population because o f the risk of an influenzapandemic, the proposed Project would be financedthrough a Credit to be approved following ERA procedures. A. Procurement 3. Procurement under the Project will be carried out in accordance with the Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004, and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004, and with the provisions stipulated in the Legal Agreement. Agreements covering procurement methods, thresholds, and other conditionality will be consistent with ERA assistanceguidelines and determined for the Kyrgyz Republic according to its capacity and experience with Bank procurement. 4. The activities covered under the Projectwill be implementedon the basis of annual work plans to allow for needed flexibility in adjusting activities to account for in-country experience and the lessons from implementation by other countries participating in the multi-country GPAI. Accordingly, the following approach to procurementwill be adopted. 5. ImplementingAgency Assessment. The Bank has carriedout a procurement capacity assessment of the PIU for the World Bank-fundedForest Development and ConservationProject (FBiH), and the PCU for the World Bank-fundedHealth Sector Enhancement Project (RS) which will be responsible for fiduciary tasks, including procurement, and found them satisfactory. Procurement staff in the PIU are experienced with procurement following World Bank guideless, including with all the procurement methods to be included under the Project. The same qualified staff will be responsible for procurement under this Project. However, given the country conditions, the Project has been classified in category "C", signifyinghigh risk (A low, B medium, and C high risk). The annual Procurement Plan (PP) would define thresholds for prior review appropriate to the category; these thresholds would be determined so as to minimizeprior review as appropriate to the level o f risk. 6. Procurement Plan. A Procurement Plan (PP) covering the initial 12 month period of Project implementation will be prepared by Negotiations. The updated PP for each subsequent year will be submitted to the Bank for approval before the end of the previous year and would use a pre-defined standard format which would list as a minimum: (i) goods and services to be procured during the following calendar year, (ii) their value; (iii) the method of procurement; and (iv) the timetable for carryingout the procurement. At the time o f approvingthe annual work program, the Bank would agree on the consistency with the application of the Bank procurement guidelines to the specific procurement lots expected duringthe year and their methods of procurement. Ifneeded, the plan could be revised and re-submitted. A format for a typical PP would be agreedat Negotiations. 59 7 . Procurement Methods and Thresholds. The Credit Agreement would define the appropriate methods and thresholds for International Competitive Bidding (ICB), National Competitive Bidding (NCB), Limited International Bidding (LIB), or Shopping in accordance with ERA guidelines. Thresholds for project procurement methods and prior review requirements have been indicated on the basis o f the Bank's assessment o f the capacity o f the PIU which will be responsible for procurement, the estimated risks o f corruption in BiH, and the country's capacity o f construction and manufacturing industries. I I I I Quality and Cost Based >us$200,000 Selection (QCBS) for (International shortlist) Consultant Services