THE REPUBLIC OF SOUTH SUDAN Republic of South Sudan Strengthening South Sudan Financial Sector- Project (3SF) (P179278) DRAFT Stakeholder Engagement Plan (SEP) 22 July 2023 1 Table of Contents Table of Contents.......................................................................................................................................... 2 List of Tables ................................................................................................................................................. 3 ABBREVIATIONS AND ACRONYMS ................................................................................................................ 4 1. INTRODUCTION ..................................................................................................................................... 6 1.1 Background ......................................................................................................................................... 6 1.2 Program Development Objective ....................................................................................................... 7 1.3 Program Components ......................................................................................................................... 7 1.4 Program Geographical Location ....................................................................................................... 10 1.5 Potential Environmental and Social Risks ......................................................................................... 10 1.6 Institutional Arrangements ............................................................................................................... 11 1.7 Objectives of the SEP ........................................................................................................................ 11 2. Regulations and Requirements ........................................................................................................... 11 3. Stakeholder Identification and Analysis ............................................................................................. 12 3.1 Disadvantaged / Vulnerable Individuals and Groups ....................................................................... 14 4. Stakeholder Engagement Program ..................................................................................................... 15 4.1 Preparation Stage: Summary of Previous Stakeholder Engagement Activities ................................ 15 4.2 Purpose and Timing of Stakeholder Engagement Program .............................................................. 16 4.3 Proposed Strategy for Information Disclosure ................................................................................. 17 4.4 Proposed Strategy for Consultation ................................................................................................. 21 4.5 Engagement with Disadvantaged and Vulnerable Groups ............................................................... 25 4.6 Timelines ........................................................................................................................................... 25 4.7 Review of Comments ........................................................................................................................ 25 5. Estimated Costs for SEP Implementation ........................................................................................... 25 6. Grievance Redress Mechanism (GRM) ............................................................................................... 27 6.1 Grievance Process ............................................................................................................................. 27 6.2 SEA/SH-related Grievances ............................................................................................................... 28 6.1 Monitoring ........................................................................................................................................ 29 6.2 World Bank Grievance Redress Service ............................................... Error! Bookmark not defined. 7. STAKEHOLDER ENGAGEMENT MONITORING AND EVALUATION....................................................... 30 7.1 Management Functions and Responsibilities ................................................................................... 30 7.2 Monitoring and Evaluation ............................................................................................................... 30 7.3 Reporting .......................................................................................................................................... 31 7.4 Reporting Back to Stakeholder Groups............................................................................................. 31 ANNEX 1: Grievance Form and Register ..................................................................................................... 32 2 Annex 2: Participants List Stakeholder Consultations ................................................................................ 34 List of Tables Table 1 Summary of Stakeholders Identification........................................................................................ 13 Table 2 Strategy for Information Disclosure ............................................................................................... 18 Table 3 Strategy for Consultation ............................................................................................................... 22 Table 4 Indicative Budget for implementation of SEP ................................................................................ 25 Table 5 Methods and frequency of reporting to stakeholders................................................................... 31 3 ABBREVIATIONS AND ACRONYMS AML Anti-Money Laundering BOSS Bank of South Sudan BSA Banking Supervision Application CBS Core Banking System CFT Counter-Terrorist Financing CoC Code of Conduct CSO Civil Society Organization E&S Environmental & Social ESCP Environmental and Social Commitment Plan ESF Environmental and Social Framework ESS Environmental and Social Standard FIU Financial Intelligence Unit FM Financial Management GBV Gender Based Violence GRM Grievance Redress Mechanism GRS Grievance Redress Service HR Human Resources HRD Human Resource Development IDA International Development Association IMF International Monetary Foundation M&E Monitoring & Evaluation ML Money Laundering OIP Other Interested Party PAP Project Affected Person PDO Program Development Objective PFM Public Financial Management PIU Project Implementation Unit RFP Request for Proposals SEA Sexual Exploitation and Abuse 4 SEP Stakeholder Engagement Plan SESA Strategic Environmental and Social Assessment SH Sexual Harassment SSIBF South Sudan Institute of Banking and Finance TA Technical Assistance TF Terrorist Financing TOR Terms of Reference UN United Nations WB World Bank 5 1. INTRODUCTION 1.1 Background The International Development Association (IDA) plans to finance the Strengthening South Sudan Financial Sector Project (P179278) to strengthen the South Sudan financial sector by developing a comprehensive and sequenced national financial sector strategy that will address identified key gaps in the sector. The banking sector, regulated by the Bank of South Sudan (BoSS), has undergone multiple shocks in recent years. The Covid-19 crisis, depreciation of the national currency, high inflation and the overall macroeconomic instability in South Sudan have significantly impacted the financial stability of the banking sector to the level that requires implementation of system-wide recovery and resolution measures. The development of the financial sector is a critical element of the growth trajectory, and the project will be working in collaboration with the government, regulators, private sector stakeholders and other development partners to drive this agenda. In addition to providing financial support, the project will bring strong technical oversight and inputs during project design and implementation which will help build the needed capacity in the central bank and provide requisite strategic and policy support to ensure sustainable development impacts beyond the project period. The main implementing agency will be the Bank of South Sudan (BOSS). The World Bank’s Environmental and Social Standard 101 recognizes the importance of open and transparent engagement with all Program stakeholders, based on the recognition that effective stakeholder engagement can improve E&S sustainability of Program activities, enhance Program acceptance, and implementation, and allow stakeholders to contribute to Program design. The key objectives of stakeholder engagement include a) an assessment of the level of interest and support of the Program by stakeholders to promote effective and inclusive engagement with all project-affected parties and b) to ensure that Program information on E&S risks and impacts is disclosed in a timely and understandable way. This Stakeholder Engagement Plan (SEP) outlines all stakeholder engagements for the Project activities in a systematic way. It defines legal and policy requirements in regard to stakeholder engagements, lists stakeholder engagements that have already been undertaken, provides a stakeholder analysis of all relevant project-affected parties, including members of vulnerable groups, and lays out the means of dissemination of information to different parties as well as means and ways to continue to consult different stakeholder groups throughout the Project lifespan. It also includes a Grievance Redress Mechanism (GRM), by which people affected through Project activities can bring their grievances and concerns to the project management’s attention, and which describes how those grievances and concerns will be considered and addressed. Furthermore, it contains a monitoring plan for the implementation of the SEP. 1 The World Bank, Environmental and Social Framework (ESF), 2018. 6 1.2 Program Development Objective The Program Development Objective (PDO) is to strengthen the institutional and supervisory capacity of the central bank and improve the efficiency of core financial sector infrastructure. 1.3 Program Components COMPONENT 1: DEVELOPING A FINANCIAL SECTOR DEVELOPMENT STRATEGY AND ROADMAP The objective of this component is to build strong foundations to accelerate the growth of the financial sector and enhance its stability by catalysing various policy reforms. In order to achieve this, the Project will support BoSS in developing a sound financial sector development strategy and roadmap. The Government of South Sudan (GoSS) has expressed an urgent need for a comprehensive and well sequenced national financial sector strategy that will enable the government to take a holistic view at the financial sector with the objectives to identify significant gaps, assess critical reforms, accelerate development of the sector. The strategy will be developed such that it builds consensus around key priorities with all relevant stakeholders. Having a robust financial sector is a key driver for economic development and requires a clear vision for the sector, as well as synchronized efforts from all key sectoral stakeholders. It is envisaged that the strategy will cover the banking and non-banking sectors, financial infrastructure. It will also set up a governance framework to managing the reform process. Specifically, the technical assistance will support: a. TA for sector diagnostic studies to provide the evidence-base for the strategy; b. Advisory services for the development of a Financial Sector Development Strategy (Medium-term) aimed at building stability, efficacy and inclusiveness, and a Reform Roadmap which will act as a detailed action plan for implementation; c. TA to develop a clear monitoring framework to assess implementation and impact on the ground; d. Training and exposure of BoSS staff on financial sector development issues, including on strategy development; e. Cost of consultation and sensitization workshops with sector stakeholders; f. TA for the development of a dissemination plan for the new Strategy. COMPONENT 2: INSTITUTIONAL STRENGTHENING OF THE CENTRAL BANK Subcomponent 2.1 Enhancing the Supervisory and Regulatory Oversight of BoSS BoSS still faces considerable challenges related to the adoption of an effective supervision framework of the financial sector and transition to Risk Based Supervision (RBS). The cornerstone for the transition to an effective RBS is the development and adoption of the legal and regulatory framework in accordance with the international practices that should also support the resolution of unviable/problem banks. The new legal framework should give BoSS adequate independence, resources, and tools to ensure long-term financial sector stability. Subsequently, BoSS must enhance the secondary regulation of the effective implementation of prudential requirements. Both, the new legal framework, and the secondary regulation will determine the reengineering of the supervisory processes and practices. Another critical aspect for the transition to effective RBS regime is the enhancement of the prudential and financial reporting framework. Although BoSS took some important actions in this direction by initiating 7 the transition to the new reporting system (Banking Supervision Application (BSA)), the transition is ongoing and not all reports have been migrated on the new platform. Additionally, not all banks are using the new reporting platform for prudential and financial reporting. The existing fragmentation of the reporting framework has a significant negative impact on capacity of BoSS to regulate and supervise the financial sector efficiently. Besides the legal framework and supervisory tools, BoSS needs considerable capacity building that will prepare the staff to implement the new supervisory approach. BoSS will gradually move from a reactive to a proactive way of supervising the financial sector. This will require the reengineering of the supervisory processes to transition them toward risk-oriented approach. To facilitate the reengineering of the supervisory processes it is strongly recommended to assess compliance with the “Basel Core Principles for effective banking supervisionâ€? that should help to identify the key priorities. The objective of this component is to provide appropriate capacity building in risk-based banking supervision and support the onboarding on BoSS supervision staff to the BSA to fully leverage the capabilities of the system and drive additional business value. This subcomponent will finance the following: I. Long term TA through a technical advisor to provide capacity building support in the development and implementation of a work plan to facilitate the transition from a compliance based to a risk based supervisory framework II. Technical Assistance to BoSS to develop and implement a timebound corrective and remedial action policy to address identified vulnerabilities (based on results of BCP Assessment) III. Capacity building/Training for on BSA functionalities Subcomponent 2.2: Supporting the Establishment of the South Sudan Institute of Banking and Finance (SSIBF) There is an immediate need not only to build the capacity of the staff of BoSS but also to create a pipeline of financial sector professionals and improve the skills available in the sector. There has been precedence in other countries (e.g., Egypt, Malaysia), where the establishment of similar Banking and Finance Institutes has contributed towards strengthening capacity within the sector. The SSIBF will be managed as an autonomous professional body under supervision of BoSS and its primary objective will be to facilitate continuous learning and develop professional competencies of BoSS staff and the financial industry through a process of training and professional development programs. The short-term mandate of the SSIBF will be on capacity building for BoSS staff (focusing on priority areas identified via the institutional skills assessment) but as the SSIBF develops, the curriculum will be expanded to accommodate demand from the wider financial services industry in South Sudan. To ensure the successful operation of the SSIBF, the Project will assist in developing a twinning arrangement/collaboration with a reputable regional banker’s training institute and/or an institution of higher education, which will enable the transfer of relevant operational knowledge between both institutions. This subcomponent will support the establishment of the SSIBF, and will finance the following: I. Consultancy to conduct an independent Human Resources Development (HRD) institutional assessment. The assessment intends to primarily look at staff competencies at BoSS, identify gaps in current training practices and provide recommendations for new training via the SSIBF; however, it will also more broadly examine various human resources policies at BoSS, including: (i) Recruitment policy that matches the short and long term skills requirement of BoSS; (ii) placement and mobility policy to ensure that there is adequate specialization and least disruption to key department functioning; and (iii) training and career development policy that is in line with 8 skills requirement, which is both sustainable and effective as well as safeguarding BoSS from excessive turnover of staff. A gender lens will be applied when examining these policies to ensure that women are well-represented at various levels withing the institution. II. Long term TA through an HR advisor to advise and develop a set of new HR policies based on the assessment and provide related capacity building support. III. Consultancy to conduct a broader market skills assessment to inform the medium-term curriculum of the SSIBF (while observing female professionals) IV. Capacity Building of BoSS staff (exposure visits to regional banking institutes) – including female staff members of BoSS V. TA and capacity building for the SSIBF (including development of the Institute’s charter, governance framework, internal processes, and phases of operationalization, as well as a business plan that includes a financial model that envisages sustainability of the Institute in the medium term. VI. Costs of upgrading the BoSS training center (furniture and basic IT infrastructure) VII. Sensitization workshops for the financial services industry to ensure their active participation in the SSIBF COMPONENT 3: SUPPORTING THE DEVELOPMENT AND MODERNIZATION OF KEY INFRASTRUCTURE FOR THE FINANCIAL SECTOR Subcomponent 3.1 Customization of the Core Banking System (CBS) Based on a request from BoSS, the World Bank carried out an assessment of the Core Banking System (CBS) to determine if it has the required capabilities to support the short- and long-term objectives of the institution in a sustainable manner. Given that BoSS is in the process of updating its current version 8.3 of its CBS to version 9 – Silverlake Symmetri CBS (CBS9), the assessment focused on the functional and technical capabilities of the newer version. CBS9 is a significant improvement over the current version; however, given that some modules and functionalities of the current CBS are not used by business users, due to insufficient consultation, customization, and user training, it is expected that the newer version will require proper support and customization to be fully utilized and directly respond to business needs. Therefore, the Project will support: I. Consultancy to review business requirements and mapping of CBS9 functionalities to BoSS departments II. TA to support gap analysis and development of business/technical specifications to support customization of CBS functionalities (including development of ToRs and Request for Proposals (RfPs), as necessary) III. Cost of CBS9 upgrade and customization based on identified business needs IV. Capacity building/Training on CBS 9 functionalities Subcomponent 3.2: Enhancing the Effectiveness of the Financial Intelligence Unit Restoring credibility and stability of the banking sector in South Sudan will not be possible without compliance with the international standards related to Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT). Currently, South Sudan is in the Financial Action Task Force (FATF) list of jurisdictions with strategic deficiencies (grey list), which significantly limits the capacity of the banks to participate in cross border correspondent banking relationships as they reassess the country's level of risk. This is a concern for the central bank as disruptions to capital flows have potential negative consequences on growth, financial inclusion, stability, and integrity of the financial system. The GoSS is committed to addressing deficiencies and have initiated a National Risk Assessment, with the support of the UN Economic Commission. The IMF is also providing support on strengthening the AML/CFT legal and 9 regulatory framework. However, there remains a need to strengthen the Financial Intelligence Unit (FIU), improve its capacity to collect, analyze and disseminate financial information, as well as promoting understanding of ML/TF risk understanding through outreach, training and awareness raising activities to relevant authorities and the private sector. Specifically, the Project will support: • IT consultant to identify business requirements (IT infrastructure) and develop customizations of the goAML application to strengthen financial analysis and data collection mechanisms within the FIU • Cost of customization of goAML application (goAML is provided to the country free-of-charge, but customization is an additional cost) • FIU staff training and capacity building to support AML/CFT certification, including exposure visits to other FIUs • Cost of office equipment and basic IT infrastructure for the FIU • Organization of trainings to build the capacity of domestic AML/CFT stakeholders COMPONENT 4: PROJECT MANAGEMENT AND COORDINATION This component will cover the costs of project management, implementation, and supervision including procurement and financial management activities and audits; preparation of annual work plans; implementation of environmental and social (E&S) monitoring; grievance redress mechanism (GRM); monitoring and evaluation (M&E) and reporting; and communications requirements. It will also support the operational costs of other implementation structures, such as the project steering committee and other coordination structures, as needed. Specifically, the project will provide additional capacity through hiring of a full-time project coordinator, sr. procurement specialist, financial management specialist, and an environmental and social specialist. It will also support the hiring of a technical advisor for BoSS to provide overall technical leadership and advice in the implementation of the project’s activities. 1.4 Program Geographical Location The BoSS is based in South Sudan’s capital Juba, and the project activities will mainly take place in Juba. 1.5 Potential Environmental and Social Risks The overall environmental risk for the Project is low. The Project is planned to be implemented sector wise and does not have a physical footprint. No rehabilitation or construction of new infrastructure or TA-type activities that result in negative environmental impacts will be financed through the project. However, the activities of the project may have downstream E&S impact/risk. Therefore, the TA activities, including capacity-building activities, will be undertaken in compliance with the World Bank’s Advisory Note on Technical Assistance and the ESF. For the impacts and risks associated with developing financial sector development strategy, roadmap and institutional framework, a systematic examination of environmental and social risks and impacts i.e., Strategic environmental and social assessment (SESA) will be prepared in consideration of the full range of environmental and social standards. Thus, considering the limited physical footprint of all the referenced activities the expected environmental, health and safety risks of the project are limited and small and can be easily mitigated through proper consideration of environmental and social objectives into the planning process. 10 The social risk rating for the Project is low. The potential social risks emanate from inadequate transparency and stakeholder communication and consultation. Eventhough the prevailing SEA/SH situation along with the conflict and volatility in South Sudan set the SEA/SH risk at high, the design of the Project does not involve SEA/SH risk, hence it is rated low. The capacity building initiatives will be limited to interactions between internal government staff and consultants in office buildings most of the time doing technical PFM with stakeholder engagement and sensitization happening through media and other online platforms of engagement and sensitization. 1.6 Institutional Arrangements The Project will be implemented by the Bank of South Sudan (BOSS). A Project Implementation Unit (PIU) will be established in the BOSS. It will include a Project Coordination, a Financial Management Specialist and an Environmental and Social Specialist. The Environmental and Social Specialist will be responsible for the implementation of this SEP, while the Programme Coordinator will have the overall responsibility for the implementation of the SEP and all E&S instruments. 1.7 Objectives of the SEP This Stakeholder Engagement Plan (SEP) aims at facilitating stakeholder engagement throughout the Project’s life cycle and across all Project components. The objectives of this SEP are: • To identify Project stakeholders, including members of vulnerable groups, their priorities, and concerns. • To identify strategies for information sharing and communication to stakeholders as well as consultation of stakeholders in ways that are meaningful and accessible throughout the Project cycle. • To specify procedures and methodologies for stakeholder consultations, documentation of the proceedings and strategies for feedback. • To establish an effective, transparent, and responsive grievance mechanism for the Project. • To develop a strategy for inclusive and meaningful stakeholder participation in the monitoring of project impacts, documenting, reporting and dissemination of results among the different stakeholders. 2. Regulations and Requirements Stakeholder engagement is an inclusive process conducted throughout the Project lifespan to support the development of strong, constructive, and responsive relationships that are important for successful management of the Project’s environmental and social risks. The World Bank’s Environmental and Social Framework (ESF) includes Environmental and Social Standard (ESS) 10, “Stakeholder Engagement and Information Disclosureâ€?, which recognizes “the importance of open and transparent engagement with the Program stakeholders as an essential element of good international practiceâ€?. ESS10 also provides that effective stakeholder engagement can significantly improve the environmental and social sustainability of Project, enhance Project acceptance, and make a significant contribution to successful Project design and implementation. The application of these standards, by focusing on the identification and management of environmental and social risks, will support recipients in their goal to reduce poverty and increase prosperity in a sustainable manner for the benefit of the environment and their citizens. The standards will: 11 a. support recipients in achieving good international practice relating to environmental and social sustainability. b. assist recipients in fulfilling their national and international environmental and social obligations. c. enhance non-discrimination, transparency, participation, accountability, and governance; and d. enhance the sustainable development outcomes of projects through ongoing stakeholder engagement. Stakeholder engagement is also provided for in the various forms of national legislation including the constitutions and legislation on environmental and social impact assessments and audits. The instruments unanimously advocate for meaningful involvement of project stakeholders in decisions that affect them, participatory planning, and trans-parent grievance management mechanisms. 3. Stakeholder Identification and Analysis The stakeholders of the Project are individuals or groups (parties) that can be affected by the Project outcomes, either directly or indirectly and both positively or negatively. Analysis of stakeholders therefore encompasses identification of the stakeholder groups that are likely to influence or be affected by the Project components either positively or negatively and organizing them according to the potential impacts on them. Stakeholders can be classified based on a) their roles and responsibilities in the Project; b) their influence/interest in the Project; c) whether they are direct or indirect beneficiaries; and d) whether they are vulnerable groups. In the case of this Project, BOSS will not be working directly with local communities, and all related stakeholder engagements will only take place at the national level. The stakeholders of the activities implemented by the BOSS mainly include different entities of the national government and the BOSS. Overall stakeholder groups at different stages of the Project, (i.e. preparation, implementation and closure) are presented in Table 1. Considering that stakeholders are likely to change during the Project, the stakeholder list will be revised and updated continuously to include new stakeholders with access to additional information. 12 Table 1 Summary of Stakeholders Identification Stakeholder Category Mandate/Role Interest Stakeholder Language Preferred Specific Department group needs notification needs Project- means (Emails, (accessibility, Affected Phone, Letters) large print, Party PAP/ daytime Other meetings) Interested Party OIP Regional/National level Creditors, depositors, shareholders Financial sector End beneficiary High OIP English, Website • none stakeholders / applicable banking local languages Insurance companies, venture Financial sector End beneficiaries High OIP English Emails, phone, • none capitalists, currency exchange stakeholders / Letters, website non-banking Private sector banks Financial End beneficiaries High PAP English Emails, phone, • none infrastructure letters, website institutions Financial, IT and HR Consultancy Contractors Contractors Medium OIP English Emails, phone, • none companies letters, website Financial advisers, loan officers, Financial sector Beneficiaries High PAP English and Emails, phone, • none financial analysis, stockbrokers, professionals other local letters, website accountants, auditors, insurance languages agents Central bank, retails and commercial Banking and Beneficiaries High PAP English Emails, phone, • none banks, credit unions, investment finance letters, website banks, brokerage firms, insurance institutes companies, mortgage companies 13 Stakeholder Category Mandate/Role Interest Stakeholder Language Preferred Specific Department group needs notification needs Project- means (Emails, (accessibility, Affected Phone, Letters) large print, Party PAP/ daytime Other meetings) Interested Party OIP Eastern and Southern Africa Anti- Anti-Money Medium OIP English Emails, phone, • none Monitoring Laundering Group Laundering and letters, website Counter- Terrorist Financing (AML/CFT) stakeholders UN Economic Commission UN Medium OIP English Meetings, Formal • none letter, email, phone International Monetary Fund (IMF) International Medium OIP English Meetings, Formal • none Organization letter, email, phone 3.1 Disadvantaged / Vulnerable Individuals and Groups The project does not cater directly for disadvantaged and vulnerable groups. The planned SESA will further analyse this situation and may provide recommendations based on such analysis. 14 4. Stakeholder Engagement Program Stakeholder engagement refers to the process of interacting and working with stakeholders identified as relevant to the Program to come up with new concepts, identify challenges and discrepancies and how to address issues that may rise. All this helps in the realization of stakeholder needs and expectations for effective implementation of Program components. The Stakeholder Engagement Plan (SEP) is used to formulate schedules, strategies and general plans to ensure there is effective, meaningful and inclusive participation of PAPs and OIPs, throughout the entire Project life cycle. It consists of planning on how consultations will take place, developing the layout and how issues raised will be addressed and responded to in a transparent, meaningful, timely and inclusive manner. The importance of this is to provide an effective outline of activities to be undertaken within a given timeframe to ensure effective stakeholder involvement and improve the Project’s sustainability and development benefits. The SEP outlines how consultations are to be carried out and the scope of work to be achieved. The SEP will be updated on a regular basis to promptly include new developments and issues that may arise. This may include the techniques to be used in the engagement of stakeholders to address stakeholder concerns and enhance Program ownership. The SEP describes the timing and methods of engagement with stakeholders throughout the Project as agreed between Bank and the GoSS, distinguishing between PAPs and OIPs. The SEP also describes the range and timing of information to be communicated to PAPs and OIPs, as well as the type of information to be sought from them. The SEP includes a description of the Project with its anticipated environmental and social impacts, as known at the time; a list of the stakeholder groups identified; the proposed stakeholder engagement program (including topics stakeholders will be engaged on, how stakeholders will be notified, the methods of engagement, list of information/documents that will be in the public domain, languages they will be available in, length of consultation period, and opportunities to comment); indication of resources required and the responsibilities for implementing stakeholder engagement activities; summary description of the grievance mechanism; and contact information and process for seeking further information. 4.1 Preparation Stage: Summary of Previous Stakeholder Engagement Activities Stakeholder consultations have been held during the project preparation phase. These include consultations with various departments within the BOSS, with the Financial Intelligence Unit (FIU), with the International Monetary Fund (IMF) and with the World Bank. Consultations were chaired by the Deputy Governor of the GOSS, between 19 and 23 of June 2023 (for a list of stakeholders see Annex 2). Other consultations were held between 29 August and 2 September 2022, which included government officials and sector stakeholders (see Annex 2), from 9 to 13th January 2023, including stakeholders from the Ministry of Finance and Planning and commercial banks (see Annex 2). During consultations it was emphasized that South Sudan has a small financial sector that is dominated by banks that have undergone multiple shocks in recent years. Key stakeholders therefore expressed a trust deficit vis-à-vis the banks. In turn, banks are often unwilling to lend due to the lack of adequate laws 15 to protect the lender and difficulties related to personal identification. Stakeholders pointed out that cleaning up the banking sector is important, but it is also important to implement laws and regulations. It is therefore required to enhance the capacity and resources of the Bank of South Sudan. The Project will include the enhancement of capacity and resources of the Bank. The IT systems are a crucial component for a functional banking system, which also needs improvement. The Project team responded that the IT system will also be addressed. In meetings with commercial banks, it was stated that the business is mostly focused on international organizations delivering aid and the oil and gas industry. What needs to be elevated are small and medium-sized businesses, local corporates, women’s entrepreneurship, etc… However, problematic is the lack of risk sharing partnerships, and the lack of land security for lending, as well as adequate financial sector regulations. The Project’s strategic inputs will aim to support a wider usage of the Banks. Other private financial institutions indicated that the trust in the formal financial market was low and that South Sudan has a cash-driven economy in which money ends up in informal markets, not formal markets. The Project will aim to enhance trust in the financial institutions through a variety of activities. Insurance companies indicated that regulation is currently at the state level, while it should be at the federal level. They proposed that the regulator should sit at the national level and then designate responsibilities to the state level. They further stated that there is local capacity for insurance in the country and that it could attract capacity. However, the trust in local insurances is very low. The three main issues for insurance companies are regulation, capacity (human resources), and risk transfer. There was also a lack of consultation of the industry in the formulation of the draft insurance law. During consultations participants also expressed the need to set up a governance structure for the strategy development process, involving dedicated committees at two levels: A High Level Steering Committee and a Technical Advisory Committee. The Steering Committee should provide overall guidance and decision-making, while the Technical Advisory Committee would provide technical inputs and guidance. The Project will set up both of the suggested bodies. Other comments pointed to the lack of capacity among professional staff in the sector and the need to build capacity across the sector. This includes BOSS staff as well as other professionals across all institutions. The Project will aim and address this gap. Stakeholders also pointed out the lack of capacity of the newly founded South Sudan Financial Intelligence Unit (FIU), as well as the importance of the unit for the integrity of the financial system in South Sudan. The Project will strengthen the FIU by improving its capacity to collect, analyze and disseminate financial information. It was further pointed out that the Project should be gender sensitive and ensure that women are included and benefit from the Project, as well as ensure that citizens are included through participatory mechanisms. Both aspects will be included in the Project design. 4.2 Purpose and Timing of Stakeholder Engagement Program BOSS will continue to disseminate all relevant Project information to the identified stakeholders and consult them on relevant topics. The objectives of information dissemination and consultations under the Program are: (a) understanding of the concerns of the different stakeholders in relation to the program; (b) reception of feedback and comments as well as grievances from all stakeholders on Project design and implementation; c) feedback on potential environmental and social risks and impacts and mitigation measures; (c) provision of regular information to stakeholders related to Project implementation progress and any other emerging issues throughout the Project lifespan and (d) provision of transparent and accountable mechanisms on all aspects of implementation. 16 To ensure this, a grievance redress mechanism (GRM) will be set up and implemented throughout the life cycle of this Project (see below). It is designed to allow all affected stakeholders to report on Project- related grievances or to provide comments and feedback. In addition, the ESCP and this SEP will be publicly disclosed to ensure that everyone is informed about social and environmental risks and respective mitigation measures. This section outlines some of the proposed methods of stakeholder engagement for the Project. Stakeholder engagement will be undertaken on a continuous basis to inform the PAPs and other members of the public about Project activities and plans and will employ appropriate strategies to ensure effective and meaningful disclosure of information. Different engagement methods are proposed and cover different needs of the stakeholders. 4.3 Proposed Strategy for Information Disclosure Information disclosure to all potential stakeholders will rely on the following key methods: correspondence by phone/mail; virtual meetings, letters, website https://mofp.gov.ss/, and email. Information will be disclosed in English. Contact details will be updated during program implementation. 17 Table 2 Strategy for Information Disclosure Time Table: Information to Methods of Target Stakeholders Messages/ Agenda locations / Responsibility be disclosed Communication dates PROJECT PREPARATION • Stakeholder Creditors, depositors, shareholders a.) Present the Project – Correspondence During project BOSS PIU Engagement Insurance companies, venture objectives, rationale, by phone/email preparation Plan (SEP) capitalists, currency exchange components, benefits, and Private sector banks beneficiaries, Informal Monthly Juba Financial, IT and HR Consultancy implementation Meetings (virtual) • Environmental companies arrangements. and Social Financial advisers, loan officers, Telephone Commitment financial analysis, b.) stockbrokers, Indicative implementation Plan (ESCP) accountants, auditors, insurance schedule and period, project Website agents contacts. Central bank, retails and commercial c.) banks, credit unions, investment banksd.) Describe Grievance Redress brokerage firms, insurance companies, Mechanism (GRM). mortgage companies e.) Eastern and Southern Africa Anti- f.)Present stakeholders identified Monitoring Laundering Group and described approach to UN Economic Commission stakeholder engagement. International Monetary Fund (IMF) g.) Sets out measures, actions, plans, and 1. General Project Creditors, depositors, shareholders • Email message to advise Correspondence During project BOSS PIU information Insurance companies, venture stakeholders of disclosure and by phone/email preparation and capitalists, currency exchange where to access the disclosed throughout Private sector banks documents. Informal Monthly implementation Financial, IT and HR Consultancy • Meetings (virtual) companies • Disclosure of Project Juba Financial advisers, loan officers, documentation Telephone financial analysis, stockbrokers, accountants, auditors, insurance Upload on agents websites 18 Time Table: Information to Methods of Target Stakeholders Messages/ Agenda locations / Responsibility be disclosed Communication dates Central bank, retails and commercial banks, credit unions, investment banks Email copies to brokerage firms, insurance companies, key individuals mortgage companies and organizations. Eastern and Southern Africa Anti- Monitoring Laundering Group UN Economic Commission International Monetary Fund (IMF) THROUGHOUT THE PROJECT 2. Quarterly, Private sector banks Quarterly reports Correspondence Throughout BOSS PIU annual progress Central bank, retails and commercial by phone/email Project reports banks, credit unions, investment banks General information on implementation brokerage firms, insurance companies, Project activities Informal Monthly mortgage companies Meetings (virtual) Juba Eastern and Southern Africa Anti- Updates to Program Monitoring Laundering Group instruments Telephone UN Economic Commission International Monetary Fund (IMF) Upload on websites Email copies to key individuals and organizations. 3. Information on Creditors, depositors, shareholders Access information for GRM Website Throughout BOSS PIU GRM Insurance companies, venture Project capitalists, currency exchange implementation Private sector banks Financial, IT and HR Consultancy Juba companies Financial advisers, loan officers, financial analysis, stock brokers, 19 Time Table: Information to Methods of Target Stakeholders Messages/ Agenda locations / Responsibility be disclosed Communication dates accountants, auditors, insurance agents Central bank, retails and commercial banks, credit unions, investment banks brokerage firms, insurance companies, mortgage companies 20 4.4 Proposed Strategy for Consultation This plan lays out the overall consultative processes of the project with its different stakeholders. The GRM will be another means of stakeholder engagement, as complaints received will be filed, assessed and responded to (see below). 21 Table 3 Strategy for Consultation Timetable: Topic of Suggested Method of Target Stakeholders Expected outcomes location and Responsibility Consultation consultation dates Project Preparation • Stakeholder Creditors, depositors, shareholders Inputs into Grievance Correspondence by One off activity BOSS PIU Engagement Plan Insurance companies, venture Redress Mechanism phone/email prior to project (SEP) capitalists, currency exchange (GRM). effectiveness Private sector banks Informal Monthly Meetings • Environmental Financial, IT and HR Consultancy h.) Inputs into (virtual) Juba and Social companies stakeholders’ Commitment Financial advisers, loan officers, identification and Telephone Plan (ESCP) financial analysis, stockbrokers, approach to accountants, auditors, insurance stakeholder agents engagement. Central bank, retails and commercial banks, credit unions, investment banks brokerage firms, insurance companies, mortgage companies 4. Final Project Insurance companies, venturei.) Inputs into Project Correspondence by One-off activity BOSS PIU design / overall capitalists, currency exchange design - objectives, phone/email one month after project activities Private sector banks rationale, effectiveness Financial, IT and HR Consultancy components, benefits Informal Monthly Meetings companies and beneficiaries, (virtual) Juba Financial advisers, loan officers, Implementation financial analysis, stockbrokers, arrangements. Telephone accountants, auditors, insurance agents j.) Inputs into indicative Central bank, retails and commercial implementation banks, credit unions, investment schedule and period, banks brokerage firms, insurance project contacts. companies, mortgage companies THROUGHOUT THE PROJECT 22 Timetable: Topic of Suggested Method of Target Stakeholders Expected outcomes location and Responsibility Consultation consultation dates 5. Overall Project Insurance companies, venture Inputs into One to one meeting, Throughout BOSS PIU activities capitalists, currency exchange Project activities Email, Project Private sector banks implementation Financial, IT and HR Consultancy Informal Monthly Meetings companies (virtual) Juba Financial advisers, loan officers, financial analysis, stockbrokers, Meetings (virtual) with Minimum accountants, auditors, insurance representative organizations frequency: agents quarterly with al Central bank, retails and commercial l groups banks, credit unions, investment banks brokerage firms, insurance companies, mortgage companies 6. SEP and GRM Insurance companies, venture Updates to Project Email, Throughout BOSS PIU capitalists, currency exchange E&S instruments Project Private sector banks Phone implementation Financial, IT and HR Consultancy Well-functioning GRM companies Meetings (virtual) with Juba Financial advisers, loan officers, representative organizations financial analysis, stockbrokers, Minimum accountants, auditors, insurance GRM frequency: agents quarterly with Central bank, retails and commercial all groups banks, credit unions, investment banks brokerage firms, insurance companies, mortgage companies 7. M&E Insurance companies, venture Inputs into monitoring Email, Throughout BOSS PIU capitalists, currency exchange and evaluation of Project Private sector banks Project Phone implementation Financial, IT and HR Consultancy companies 23 Timetable: Topic of Suggested Method of Target Stakeholders Expected outcomes location and Responsibility Consultation consultation dates Financial advisers, loan officers, Meetings (virtual) with Minimum financial analysis, stockbrokers, representative organizations frequency: accountants, auditors, insurance quarterly with agents GRM all groups Central bank, retails and commercial banks, credit unions, investment banks brokerage firms, insurance companies, mortgage companies 24 4.5 Engagement with Disadvantaged and Vulnerable Groups Since the Project activities will focus on the BOSS, the government and financial sector institutions, the Project will not be working directly with communities, no disadvantaged and vulnerable groups are expected to be engaged directly. 4.6 Timelines Information disclosure and consultations are especially relevant throughout the early stages of the Project, but also throughout the project lifespan. Project design has therefore been based on consultations. Activities under each component will include further wider consultations prior to their commencement to ensure transparency and accountability on project modalities, and to allow stakeholder voices to form the basis of the concrete design of every intervention and consultations will continue throughout the Project lifespan. 4.7 Review of Comments The PIU will compile all comments and inputs originating from the different consultations to ensure that the Project has general information on the perception of stakeholders and their concerns, and for the Project to remain on target. It will be the responsibility of all implementers to respond to comments and inputs, and to keep open a feedback line to the stakeholders. Training on environmental and social standards facilitated by WB will be provided soon after the Project becomes effective to ensure that all implementing staff are equipped with the necessary skills. 5. Estimated Costs for SEP Implementation The BOSS PIU will oversee managing and implementing the SEP. Adequate resources for the implementation of stakeholder engagements, including the GRM, will be covered by the budget assigned under the Project Management activities. The PIU will, as part of the preparation of annual workplans, allocate adequate budget to undertake the required stakeholder engagement and implement the GRM noting the need for human and material resources will be required to implement the plan at all levels. Table 4 Indicative Budget for implementation of SEP Stakeholder Engagement Activity Total Cost (USD) Social experts E&S Specialist (70% of time for implementation of SEP for 5 years) 140,000 Consultation and disclosure Consultation sessions and outreach 50,000 Grievance redress mechanism GRM tools 20,000 Dissemination of information on GRM 20,000 25 Stakeholder Engagement Activity Total Cost (USD) TOTAL 230,000 26 6. Grievance Redress Mechanism (GRM) The BOSS PIU will set up a GRM to provide a formal process for managing complaints from stakeholders as provided under ESS10. Grievances and concerns are bound to occur from the earliest or inception phase of the project. The GRM is to receive and facilitate resolution of affected stakeholders’ concerns and grievances related to the Project’s environmental and social performance. The GRM will be disclosed publicly during all Project phases. The purpose of the GRM is to put in place a simple and easily accessible systematic process for recording, processing and promptly resolving grievances and concerns raised during Program activities. The aim of the GRM is to achieve mutually agreed resolution of grievances raised by stakeholders and other parties. Grievances will be received, recorded/ documented, and addressed in a manner that is easily accessible, culturally appropriate and understandable to affected stakeholders. The Project’s environmental and social specialist will handle grievances in a consistent manner. He/she will be experienced and qualified to do so. The stakeholders will be informed about the GRM during the stakeholder consultation and disclosure activities (as per the above tables). The GRM will be communicated and made available to all affected stakeholders. The Specialist will be experienced and/or trained to seek solutions to complaints in a collaborative manner with the involvement of the affected stakeholders, taking into consideration methods of dispute resolution, and not impeding access to existing judicial or administrative mechanism available in the country for the resolution of disputes. Concerns will be addressed promptly, based on a transparent process that is readily accessible to all stakeholders and at no cost to them and with no retribution. Types and numbers of grievances received, and responses provided will be reported back to the stakeholders periodically (at least every six months). The Project will provide an option for anonymous grievances, including for workers’ grievances whereby the workers’ identity can be protected from their supervisor or any repercussions. 6.1 Grievance Process Any grievance related to the Project may be addressed using the two-step process below: Grievances arising out of the implementation of the project-related activities that cannot be resolved at activity level may be escalated to the BOSS PIU through an email address that will be provided or by any other available means to the aggrieved. If the grievance cannot be resolved at the PIU, it can be referred to the BOSS administration, which has its own escalation channels. The PIU will maintain a database of all incoming grievances and how they have been resolved. All incoming grievances will be acknowledged to the originator within 48 hours (24 hours’ notice for SEA/SH incidents) after they are received with an indication of a roadmap of when and how the grievance will be resolved. Monitoring of GRM: The PIU will also be responsible for documenting (recording), logging grievances received and addressed (both anonymous and non-anonymous and reporting on a regular to the Project Coordinator and to the World Bank). To ensure that the identity of anonymous complainants is protected, grievance logbooks and reports should not include identifying information on individuals. 27 Disclosure of GRM: The GRM will be disclosed as early as possible and maintained throughout the Project lifespan. It will be disclosed in English in an understandable format to all affected stakeholders, stating the following information: • Anyone can raise complaints, grievances, concerns, ask questions or make comments or suggestions related to the Project. • Anyone can contact the GRM using the email details provided. • The GRM is handled by the environmental and social specialist, who is responsible for receiving complaints, grievances, concerns, questions, comments, suggestions, and for responding to the person on an anonymous basis or via the Project’s website on an anonymous basis. • The Specialist will confirm receipt of the complaint, grievance, concern, question, comment, suggestion, either providing a preliminary answer or confirming the expected timing to provide an answer; and • By using the GRM, the complaint, grievance, concern, question, comment, suggestion with respect to Project development will be received by the PIU, which will respond to the complaint, grievance, concern, question, comment, suggestion and engage with the complainant and the Project’s other relevant parties to mitigate any complaint, grievance, concerns, or incorporate any comment, suggestion in the Project to the extent possible. 6.2 SEA/SH-related Grievances Given the sensitive nature of GBV complaints, all grievance uptake channels can be used to report on Sexual Exploitation and Abuse (SEA) and Sexual Harassment (SH)- related grievances. No grievance uptake mechanism can reject such grievances, and all personnel directly receiving grievances will be trained in the handling and processing of SEA/SH-related grievances. Information on relevant legislation will be delivered to survivors prior to any disclosure of case details. This will allow protect the survivor-centered approach from mandatory reporting. The GBV survivor has the freedom and right to report an incident to anyone: project staff, GBV case manager, local authorities. All recipients of the report should – with the survivor’s informed consent – report the case to one of the Project’s formal GRM. Furthermore, a survivor can ask someone else to act as a survivor advocate and report on her/his behalf. The grievance recipient will be responsible for the recording and registration of the complaint. A GRM operator cannot reject a SEA/SH complaint. At the same time, however, the project can only respond to a SEA/SH complaint if it is directed into the designated GRM channels. All recipient channels will be prepared to transfer the survivor to GBV referral services. Confidentiality: All grievance recipients and anyone handling the SEA/SH-related grievances must maintain absolute confidentiality regarding the case and in a survivor-cantered manner. Maintaining confidentiality means not disclosing any information at any time to any party without the informed consent of the person concerned. There are exceptions under distinct circumstances, for example a) if the survivor is an adult who threatens his or her own life or who is directly threatening the safety of others, in which case referrals to lifesaving services should be sought; b) if the survivor is a child and there are concerns for the child’s health and safety. The survivors need to be informed about these exceptions. 28 Informed Consent: The survivor can only give approval to the processing of a case when he or she has been fully informed about all relevant facts. The survivor must fully understand the consequences of actions when providing informed consent for a case to be taken up. Asking for consent means asking the permission of the survivor to share information about him/her with others (for instance, with referral services and/or IPs or PIU), and/or to undertake any action (for instance investigation of the case). Under no circumstances should the survivor be pressured to consent to any conversation, assessment, investigation, or other intervention with which she does not feel comfortable. A survivor can also at any time decide to stop consent. If a survivor does not consent to sharing information, then only non- identifying information can be released or reported on. In the case of children, informed consent is normally requested from a parent or legal guardian and the children. Awareness Raising: General awareness raising among staff in regard to SEA/SH will be conducted, and all staff is expected to sign Codes of Conducts (CoCs) with reference to SEA/SH. 6.1 Monitoring Effectiveness of the GRM should be monitored on a regular basis. This is important because it helps find solutions to challenges as they arise and dealing with them promptly. Some of the measures put in place for this include a quarterly report on the number of grievances received, those resolved and the ones outstanding to ensure there is a continuous flow of the project. This will be undertaken and reported to PIUs. As part of stakeholder engagement and consultation, involving the views of the stakeholders for whom the Grievance Mechanism is designed will be part of PIU monitoring. 29 7. STAKEHOLDER ENGAGEMENT MONITORING AND EVALUATION Inclusive and participatory monitoring and evaluation minimizes misconceptions and misunderstandings about the Project and maintain a positive perception about it. Stakeholder engagement monitoring involves collecting data, assessing the level of engagement, and using insights from the data collection to adjust strategies and tactics for engaging effectively with stakeholders. These will be responsibility of PIU. Monitoring will verify: i). The socio-economic and environmental impacts and risks of the Project. ii). Compliance and effectiveness of the SEP and application of the recommended standards, stakeholder engagement and implementation of the GRM. Annual reviews of the Project and the implementation of the E&S instruments will be conducted at the end of each year. The monitoring reports for E&S implementation will be prepared by the PIU and will be used as a monitoring and review tool to track effectiveness. In the review process, the PIU will play the lead role in coordinating the process with key stakeholders. 7.1 Management Functions and Responsibilities Adequate institutional arrangements, systems and resources will be put in place to monitor the implementation of the SEP. The main monitoring responsibilities will be with the BoSS PIU. This will be led by the PIU’s environmental and social specialist. The PIU project coordinator will be overall responsible for the implementation of the SEP, as well as for monitoring and inspections for compliance with the SEP. The Project’s M&E Plan will include monitoring indicators for the measurement of the performance of the SEP. The PIU will collect all reporting, as well as its own findings, and produce an overall environmental and social progress report, which will contain a distinct section of stakeholder engagement, and which will be provided to the World Bank. The project will follow a bi-annual reporting cycle. These reports will further be shared with all stakeholders, as defined in the SEP. The PIU, and especially the environmental and social specialist will receive training on the ESF by the World Bank. 7.2 Monitoring and Evaluation The Project will establish and maintain a database detailing public consultation, disclosure information and grievances collected throughout the Project lifespan, which will be available for public review on request. Stakeholder engagement shall be periodically evaluated by the PIU. The following indicators will be used for evaluation: i). Quarterly grievances received, speed of resolution and how they have been addressed; and ii). Level of involvement and participation of stakeholders. 30 7.3 Reporting The PIU will prepare and regularly avail important information on project status to stakeholders (based on information need) including Project implementation progress, actions on commitments made to various stakeholders and any new or corrected information since the previous report. Table 7 outlines some of the reports, target audience, method of correspondence and timelines. Table 5 Methods and frequency of reporting to stakeholders Reporting Party Reporting Method Stakeholder Reporting Frequency Information PIU • Official correspondence Insurance companies, • Project progress Bi-annual • venture • capitalists, • Correspondence by email or currency exchange • Workplans postal mail • Private sector banks • • Issues and • Website and social Financial advisers, loan changes • media officers, financial analysis, stockbrokers, accountants, auditors, insurance agents Central bank, retails and commercial banks, credit unions, investment banks brokerage firms, insurance companies, mortgage companies 7.4 Reporting Back to Stakeholder Groups Results of stakeholder engagements will be regularly reported back to the stakeholders. It will be the responsibility of the PIU to ensure that all relevant reporting is shared through the above defined public means. 31 ANNEX 1: Grievance Form and Register Reference No: ___________________ Details of Complainant: Full name: ____________________________________________ â?? I wish to raise my grievance anonymously â?? I request not to disclose my identity without my consent Contact __________________________________________________ â?? By Mail: Please provide mailing address: ______________________________________________________________________________ Gender of Complainant: Age of Complainant: â?? By Telephone: ______________________________________________ â?? By E-mail __________________________________________________ Preferred Communication: â?? local language, â?? English â?? One time incident/grievance Date ____/_____/ â?? Happened more than once (how many times) _________ â?? On-going (currently experiencing problem) Description of Incident or Grievance: Location of grievance: What happened: Where did it happen: Who did it happen to: What was the result of the event: What would you like to see happen to resolve the problem: 32 The grievance register will contain the following information (ideally in an excel file, or if at local level in a book) Type of Information Response Complaint/ Log number Reference document (s) Date complaint made Date complaint received Category of Grievance Method of Logging: Complaint name (state if anonymous) Location in which complained action took place Caller contacts for follow up Gender Age Parties against whom complaint is made (Unit/Agency etc) Nature of Complaint ["SEA/GBV"; "Timing of Payment"; "Amount of Payment"; "Inclusion or Issue regarding Project benefits" or create standard categories based on complaint type] Description of complaint Nature of feedback (describe)[In case issue type is GBV/SEA immediate referral to the GBV referral system] Verification and investigation (describe) Recommended action (describe) Timeline of Initial feedback (within 5 days) [investigate the claim within 5 working days, and share findings/feedback with relevant stakeholder] Status update (and justification if it is not expected to be resolved within the timeframe set out) Date Resolved 33 Annex 2: Participants List Stakeholder Consultations Table 6 Stakeholders consulted 19 July - 23 July 2023 - Table 7 Stakeholders consulted 29 August to 2 September 2022 34 Table 8 Stakeholders consulted 9-13 January 2023 35 36