The World Bank Progestão Piauí: Public Sector Management Efficiency (P178663) Concept Environmental and Social Review Summary Concept Stage ( ESRS Concept Stage) Public Disclosure Date Prepared/Updated: 07/27/2022 | Report No: ESRSC02933 Aug 29, 2023 Page 1 of 15 The World Bank Progestão Piauí: Public Sector Management Efficiency (P178663) I. BASIC INFORMATION A. Basic Operation Data Operation ID Product Operation Acronym Approval Fiscal Year P178663 Investment Project Financing (IPF) Progestão Piauí 2024 Operation Name Progestão Piauí: Public Sector Management Efficiency Country/Region Code Beneficiary country/countries Region Practice Area (Lead) (borrower, recipient) Brazil Brazil LATIN AMERICA AND Social Protection & Jobs CARIBBEAN Borrower(s) Implementing Agency(ies) Estimated Appraisal Date Estimated Board Date State of Piauí Secretariat of Finance of Piauí 25-Oct-2022 03-Oct-2023 Estimated Concept Total Project Cost Review Date Public Disclosure 13-May-2022 55,000,000.00 Proposed Development Objective Improve efficiency in public resource management in selected departments of the State of Piauí. B. Is the operation being prepared in a Situation of Urgent Need of Assistance or Capacity Constraints, as per Bank IPF Policy, para. 12? No C. Summary Description of Proposed Project Activities Progestão Piauí is the fifth operation in a Series of Projects (SoP) under the Program designed to assist the Brazilian States to implement reforms to improve efficiency in public resource management. The objective of the Progestão Program, as stated in the Memorandum of Understanding between the National Secretariat of Treasury (Secretaria do Tesouro Nacional, STN) and the World Bank, is to develop the fiscal budget and asset management of the Brazilian governments through actions that aim at reducing and rationalizing public spending with long-term results to contribute to the fiscal sustainability of subnational entities. The Piaui Progestão project addresses five whole-of-government functions (human resource management, pensions, public investment management, asset management, and procurement) and three strategic sectors (health, education, and social assistance). These focus areas were selected Aug 29, 2023 Page 2 of 15 The World Bank Progestão Piauí: Public Sector Management Efficiency (P178663) applying the Progestão Program selectivity criteria: strategic alignment, implementation capacity, impact on beneficiaries, and alignment with World Bank corporate commitments. The Project will support investments mainly in management information systems and reforms for whole-of-government functions and in strategic sectors in the State of Piauí. The project scope and structure are aligned with the Progestão Program. Specific interventions in sectors were selected after consultation with government officials and based on their contributions to improvements in efficiency and implementation readiness. The project will support management systems in health, education, and social assistance management. The project will have three components. Component 1. Whole-of-Government Management Systems (US$36.8 million) Sub-Component 1.1: Human Resource Management. Activities include: (i) strategic workforce right- sizing of all State Secretariats and subsidiaries; ((i) strategic workforce right-sizing of selected agencies and departments; (ii) design and implementation of workforce right-sizing platform integrated with the human resources management system to identify core competencies of public officials and organizations’ adequate hiring needs; (iii) implementation of a personnel management dashboard, including dynamic distribution of the workforce, replacement alarms and automated reallocation documentation; (iv) development and implementation of a management analytics and artificial intelligence system for automated payroll audit to reduce errors and fraud; (v) automation of human resources management services and other processes identified through the strategic workforce planning; (vi) periodic staff surveys to assess reform implementation and support change management; (vii) communications and capacity building to support the rollout and implementation of new tools; and (viii) procurement of energy-efficient hardware to support the rollout and implementation of new tools. Sub-Component 1.2: Pensions. Activities include (i) design and implementation of pension management system functionalities t hat support auditing the pensions payroll and unifying management of benefit concession for all branches of government based on remuneration history and verification of actual contribution payments, including improvements in users‘ interface and access to services through the digital Public Disclosure platform; (ii) expansion and update of the pension record management information system to increase efficiency and enable operational, actuarial, and financial analyses to reduce costs and allow for better long term financial planning; (iii) procurement of energy-efficient hardware to support the implementation of these systems; and (iv) capacity building to support the deployment and implementation of new tools. Sub-Component 1.3: Public Procurement. Activities include: (i) development of a sustainable procurement strategy, which addresses environmental, climate and gender equality considerations as relevant, and an implementation plan to help embed sustainable procurement across the State's purchases; (ii) development and implementation of an integrated system for sustainable e-procurement, including the redesign and automation of key processes, and reviewing the regulatory framework and institutional arrangements to increase transparency; (iii) design and implementation of integrated dashboards with reliable data aligned to sustainability and gender equity practices; (iv) application of artificial intelligence using electronic invoices to identify and reduce fraud and corrupt practices; (v) design and implementation strategic sourcing methodology to help identify demand for goods and services across the government; (vi) capacity building program for officials working in procurement across the state; and (vi) procurement of energy-efficient hardware to support the deployment of these systems. Sub-Component 1.4: Public Investment Management and Budgeting. Activities include: (i) development and implementation of a public project management information system for State’s investments, integrating project preparation, screening and appraisal; (ii) preparation of a portfolio of technically appraised, implementation ready projects; (ii) preparation of a portfolio of technically appraised, implementation ready projects; (iii) design and implementation of a governance strategy to manage the project portfolio execution; (iv) design and implementation of sustainable budgeting systems and practices; (v) development and implementation of a management system for the transfer of resources from the State of Piaui to municipalities and organizations, allowing for digital monitoring of project preparation, implementation and accounting; (vii) capacity building for state and municipal government officials on sustainable public investment and expenditure management practices, to support the rollout and implementation of new tools; and (vii) periodic staff surveys to assess reform implementation and support change management. Sub- Aug 29, 2023 Page 3 of 15 The World Bank Progestão Piauí: Public Sector Management Efficiency (P178663) Component 1.5: Asset Management. Activities include (i) technical support to assess up-to-date information of real estate properties, including geospatial data, area, occupation rate, valuations and registry’s status; (ii) development and implementation of modules in the public asset management system that includes a climate risk assessment of real estate assets, strategy panels and information for decision making and fleet management; (iii) energy audits based on CCB methodology for selected government properties, focused on reducing energy consumption; (iv) development and implementation of a system for mapping costs of information and communication technologies (ICTs), including identification of synergies between government-to-government systems, interoperability, and a governance strategy for new acquisitions and maintenance; and (v) capacity building on asset management practices and support the rollout and implementation of new tools. Component 2. Management Systems in Strategic Sectors (US$16 million) Sub- Component 2.1: Health. Activities include (i) development of an expenditure review to identify cost structure and assess budgeting practices in the state’s hospitals; (ii) implementation of an information system to support budgeting and expenditure management in the state's health units; (iii) introduction of communication and capacity-building activities to support the rollout and implementation of new tools; and (iv) procurement of energy efficient hardware to support the rollout and implementation of new tools. Sub-Component 2.2: Education. Activities include (i) development and implementation of IT systems to improve management of transferred resources from the federal government, student enrollment and classroom formation, document monitoring, and other transactional tools of the Secretariat; (ii) design and implementation of a student's transport system; (iii) design and implementation of a school's meals system and (iii) capacity building to support the rollout and implementation of new tools. Sub-Component 2.3: Environment. Activities include:(i) the development/purchase of a MIS to support financial and budgetary management of state funds transferred to SUAS delivering benefits and services and its rollout to 224 municipalities; (ii) business process remodeling in the state level, registration in the management information system to increase efficiency and enable Public Disclosure operational and financial analysis, higher quality and integration of data, and monitoring and evaluation to substantially reduce duplication of efforts, processing work to consolidate and check information; and (iii) capacity building to support the implementation and deployment of the new tool. Component 3. Project and Change Management (US$2.2 million) Sub-Component 3.1: Project Management Unit. Activities include (i) project management, including procurement, financial management, and environmental and social risk management (staff, equipment, and operating costs); (ii) development and implementation of a grievance redress mechanism and management information system, in coordination with the Comptroller General (CGE) the institution mandated with this function; and (iii) communications and capacity building to support project management functions. Sub-Component 3.2: Change Management. Activities include (i) development of a transversal change management strategy encompassing incentives, processes, and skills; (ii) consulting services, studies, and surveys to support project implementation; (iii) carrying out process reviews before information systems are developed; (iv) just-in-time support, as needed and as agreed with the Bank, including advisory services to the Procuradoria and technical teams during implementation, and knowledge exchange activities; and (v) communications and capacity building to support the rollout and implementation of new tools. D. Environmental and Social Overview D.1 Overview of Environmental and Social Project Settings Located in the Northeastern region of Brazil, Piauí has an area of 251,755.5 sq.km - 1/3 of which lies within the Caatinga (thorny scrub), with the remainder encompassing Cerrado (tropical savannah), Mata dos Cocais (transitional palm forest) and Floresta Estacional Semidecidual (tropical semideciduous forest). Piauí has 43 protected areas covering 12.4% of its territory (13 under federal control, 16 under state control and 14 under municipal control). The extensive environmental capital is threatened by deforestation, drought, and other hydrological and meteorological climate change phenomena. Aug 29, 2023 Page 4 of 15 The World Bank Progestão Piauí: Public Sector Management Efficiency (P178663) Piaui has an estimated population of 3.3 million people. The urbanization rate (62.4%) is one of the lowest in the country and the demographic density is low (12.4 inhabitants/sq.km). The population growth rate in the last decade was 0.9% per year – below the country's (1.2% per year) – and the population is heavily concentrated in the capital city (26%). The state is amongst the poorest in the country (2019 average household per capita income equal to BRL 859, per capita GDP equaling half of the country's and HDI equaling to 0.693). In 2019, there were around 67.7 thousand state public servants in Piauí (57,500 in the executive, 6,100 in the legislative, and 3,900 in the judiciary). Their average monthly income was BRL 3,890 - nearly three times the average monthly income from people's main job among the employed population aged 14 or over (BRL 1,311). Nearly 2/3 of the working population had informal occupations and, before the outbreak of Covid-19, more than 43% of the state population lived below the poverty line and nearly 15% below the extreme poverty line. During 2020, 38.6% of the population benefited from cash transfer programs: they count for 460,397 out of 749,941 families enrolled in the unified cadaster for social protection programs in Piauí. Around 10% of them were family farmers, 2.5% belonged to traditional communities (quilombolas, artisanal fishery, extractive and self-declared indigenous peoples communities, among others) and the remaining were poor urban dwellers, who are highly dependent of public networks to have access to health and education services, justifying the concerns of the state government to enhance the efficiency of such services. Piaui has seen a steady improvement in health outcomes, largely driven by the expansion of universal health care system, with mortality rates for children under-five years falling from 89.6/1,000 births in 1990 to 23 in 2019. Female and male life expectancy increased from 71.8 to 80.3 years and rom 65.3 to 74.1 years, respectively, over the same period. Piaui’s ageing population has been accompanied by rapid increase in chronic-degenerative diseases. A high proportion of hospital admissions are associated with non-communicable diseases and state expenditures on health Public Disclosure peaked during the Covid-19 (16.5% of the State expenditures in 2020, falling back to 14.6% in 2021). Most of the population (89%) depends on the public health system and all of public high-complexity health care facilities (referral hospitals) are managed by the State government. Expenditures in the education sector represented 25.3% of the State total expenditures in 2021, but Piaui ranks 21st on the Basic Education Development Index (IDEB) among the Brazilian States. The State Secretariat of Environment (SEMAR) started a modernization project in May 2019 and launched an Environmental Management Information System and aspires to map a complete inventory of protected areas, in order to regulate forest concessions and certify areas for carbon credits, it lacks up to date information on deforested and at- risk areas and their location. The proposed operation will have statewide relevance and will focus on technical assistance. No site-specific interventions are expected, but some elements of the project would have positive effect across the state by improving the delivery of public services by the state. D.2 Overview of Borrower’s Institutional Capacity for Managing Environmental and Social Risks and Impacts The State of Piaui has recently completed the Pillars of Growth and Social Inclusion Project (P129342) under the safeguards operational policies and is preparing two new operations (the Piauí Health and Social Protection Development post-COVID-19 - P178567 and the Piauí Pillars of Growth and Social Inclusion II - P177474) under the ESF and prepared under the coordination of the State Secretariat of Planning (SEPLAN). The previous operation with the state has contributed to improving the state capacity to promote gender equity and the institutional capacity of the state’s Grievance Mechanism (the General Ombudsman Office). However, the Borrower has no previous experience with project implementation under the World Bank’s Environmental and Social Standards. Aug 29, 2023 Page 5 of 15 The World Bank Progestão Piauí: Public Sector Management Efficiency (P178663) Piaui’s Secretariat of Finance (SEFAZ) will lead project implementation. The project will leverage SEFAZ’s experience in managing externally financed operations, including one recent project with the Inter-American Development Bank (IADB). The State Secretariat of Administration (SEADPREV) will implement the majority of Component 1 products. The department responsible for pensions management (PIAUIPREV) and budgeting and planning (SEPLAN) will also implement part of this component. Component 2 will be implemented by the Secretariats of Health, Education and Environment. Component 3 will be implemented by SEFAZ. Project-specific implementing arrangements include: a Steering Committee, a Project Management Unit (PMU), and interagency agreements for implementation. The Steering Committee is a deliberative body comprising representatives of each agency participating in the Program. The representatives are the Secretaries or Deputy Secretaries appointed to the Committee by the State Governor. The Committee will be chaired by SEFAZ. The committee may temporarily invite agencies with direct or indirect involvement in the program to participate. The Committee will provide strategic guidance and oversight of the reforms and project implementation. It will be responsible for the overall policy coordination and policy guidelines, strategic guidance, set priorities, resolve conflicts, and ensure inter-agency collaboration where needed and monitor progress of the project. The Project Management Unit (PMU) will support project implementation and coordination with the participating secretariats. The PMU will be led by SEFAZ, which will have a coordinating role. SEFAZ will create the PMU by decree. The Project Manager will report to the Secretary of Finance. The primary responsibility of the PMU will be to oversee and ensure operational compliance with project operating procedures and World Bank policies, including the Environmental and Social Standards as it will be defined in the financing agreement and the Environmental and Social Commitment Plan (ESCP) The ESCP will include the designation of one staff member in the PMU who will be responsible for overall accountability with regards to the environmental and social performance of the project, detailed measures, actions, and completion dates. Public Disclosure SEFAZ will sign interagency agreements for cooperation with the sectoral secretariats, establishing the specific objectives, responsibilities, and timeframe for implementation of project activities. Participating agencies will designate a focal point responsible for project implementation and monitoring of progress. Hence, during project preparation, the Bank team will analyze and agree with the Borrower on the capacity building needs for ensuring that environmental and social risk management is conducted in a proportionate manner to the negligible project-related environmental and social risks and impacts. The capacity building strategy will be included in the ESCP. During project preparation the team will assess the capacity of the implementing agencies to carry out environmental and social risks management and propose a capacity building plan. II. SCREENING OF POTENTIAL ENVIRONMENTAL AND SOCIAL RISKS AND IMPACTS A. Environmental and Social Risk Classification (ESRC) Low A.1 Environmental Risk Rating Low The project will support only technical assistance (TA) activities to improve state government in the Governance, Health, Education and Environmental sectors services delivery and complement other initiatives at the state level to build and enhance institutional processes and capacities to appropriately scale existing electronic systems (both internal and external facing) and modernize and support governmental strategy and delivery. Project investments will not financing infrastructure civil works or other on-the-ground activities with potential environmental impacts and risks that need to be managed. No future construction of physical infrastructure investments, spatial plans, and natural resources management regulations is expected due to technical assistance activities supported by the project. Aug 29, 2023 Page 6 of 15 The World Bank Progestão Piauí: Public Sector Management Efficiency (P178663) Overall, the proposed activities do not present environmental complexity. Project activities will be implemented in an office environment and are not expected to endanger living natural resources. The project is not expected to pose a risk of environmental pollution and degradation of natural resources (air, soil, water). On the contrary, some of the technical activities will contribute for a more sustainable use of energy and raw materials and to reduce GHG emissions. It is not expected to affect biodiversity or habitats, either positively or negatively, directly or indirectly, or depend upon biodiversity for its success. The initial environmental risks and impacts assessment indicates that this technical assistance operation will not have large-scale, significant, and irreversible adverse direct impacts and/or downstream implications on society and the environment in the state, its potential adverse impacts on the environment are likely to be minimal or negligible. During the project preparation, the TA activities will be delineated more clearly and the Borrower will provide a more detailed description of the potential impacts and downstream effects of these activities and of the boundaries of the project. Working in the Environment sector, the Progestão project is expected to provide the opportunity to increase the Borrower’s capacity for improving governance of biodiversity and ecosystem services, while also simultaneously meeting other objectives, such as climate change mitigation. The project is expected to have a positive impact on the environment by strengthening SEMAR’s institutional capacity to manage effectively the state’s natural capital through: (i) the development and implementation of a sustainable public procurement strategy; (ii) accounting for climate issues in long term planning for government activities and encouraging green investments; (iii) reductions in consumables, travel time and energy consumption through the digitalization of public administration services; (iv) the implementation of new system modules for monitoring environmental licensing conditions; and (v) establishing a system to support a natural capital certification program. A.2 Social Risk Rating Low Public Disclosure Project activities are not expected to have adverse impacts on vulnerable and disadvantaged social groups – among which there are 83 quilombola communities (Afro-Brazilian descendants of runaway slaves) certified by the Palmares Cultural Foundation and dozens of peasant communities who use open lands for raising their livestocks and are collectively attached to geographically distinct habitats. It is not expected to have adverse impacts on Indigenous Peoples too. A few local communities in the state of Piauí have started a process of self-identification as members of a distinct indigenous social and cultural group (named in the Anthropological literature as “ethnogenesis” or “ethnic reemergence” or “ethnic ressurgence”) and are recognized by the State of Piauí Government as such (based only on the criterium of self-identification). However, to date, there is no evidence that these groups cumulatively possess the four characteristics described in ESS 7 (paragraph 8). On the contrary, the expected increased efficiency on public services in the different sectors may mostly bring co-benefits to vulnerable/disadvantaged social groups, families and individuals – those at the bottom of the income scale – who heavily rely on public services to have access to health and education. Thus, the implementation of a hospital management system in the high complexity facilities (regional and referral hospitals) would improve planning, budgeting, health services management, and support evidence-based decision making, leading to an improvement on public health service delivery. Furthermore, the implementation of management systems that support the optimization of school routines could significantly improve efficiency in school transport, record keeping, and movable property. The efficiency savings can increase time spent on pedagogical activities and be reinvested to improve teachers' working conditions and training, leading to better outcomes on learning achievements. These improvements in the managerial systems would neither require nor lead to downstream effects related with land acquisition and restrictions on land use. They are not expected to adversely affect the vested interests of existing public servants and would increase the sustainability of the state pension system. Finally, the improvements on the whole-of-government management systems (envisaged under Component 1) are expected to have positive outcomes at the state level in the medium and long run, including among others: Aug 29, 2023 Page 7 of 15 The World Bank Progestão Piauí: Public Sector Management Efficiency (P178663) reduced state fiscal deficit; increased fiscal transparency; improved delivery of good quality public services; and improved enabling environment for doing business. The social risks, adverse and positive impacts and downstream implications of project-supported activities will be further assessed during preparation. Opportunities to promote gender equity in the roaster of state public servants as well as to foster transparency, stakeholder/citizen engagement and social accountability in public management will be explored and included in project design. Thus, Subcomponent 1.1 Human Resource Management and 1.3 Public Investment Management and Budgeting will include periodic staff surveys to assess reform implementation and support change management and Subcomponent 1.1 and 1.2 Pensions will also include communications and capacity building activities to support the rollout and implementation of new tools. B. Relevance of Standards and Policies at Concept Stage B.1 Relevance of Environmental and Social Standards ESS1 - Assessment and Management of Environmental and Social Risks and Impacts Relevant The project will only finance technical assistance investments, including digital systems, digitalization, government process and procedures formulation, modeling of performance systems, and other studies focused on addressing fiscal imbalances, enhancing expenditure efficiency, and improving services delivery. Project activities are expected to bring minimal or no environmental and social risks or adverse impacts as there will be no construction works and the focus is on institutional capacity building. The project would support environmental innovation consisting of new or modified processes, techniques, systems, and products to provide accurate, accessible, timely, updated, and location- Public Disclosure specific information to avoid or reduce environmental harms and ensure compliance with environmental laws and regulations. The project will not support feasibility studies for future infrastructure investments as the project focus is on artificial intelligence and electronic systems for improvement of the governance capacity. The technology and information systems proposed under the project are well-established and understood and are expected to favor energy-efficient equipment. There is no indication that quantities of electronic waste (or e-waste) will experience an increase due to project activities. There is a potential for environmental gain and climate co-benefits arising from lower consumption of paper and energy and reduced travel for effective public management. These benefits will be analyzed during project preparation. These types of technical assistance do not easily lend themselves to detailed upfront environmental and social analysis during project preparation, as detailed planning is carried out as part of the technical assistance itself during implementation. Regarding the activities to be supported by subcomponent 1.2, the collection and assess of information to applicants to the public servants pension system, it is not expected that lack of information technology infrastructure (even in remote areas) would lead to the exclusion of any applicants. Nevertheless, during preparation this potential risk will be assessed. Consequently, during project implementation, the Borrower will undertake due diligence of the potential downstream implications of the project's outputs on environmental and social risk management, on disadvantaged and vulnerable social groups, and gender-related concerns to inform the subsequent risk classification. It is worth to highlight, however, that downstream activities are outside of the scope of the Project. It should also consider the labor and working conditions required for carrying out the Technical Assistance activities themselves. To promote the sustainable use of resources, including energy, and paper, the TA would, where financially and technically feasible, include requirements to address resources efficiency and e-waste management throughout the project life cycle. These guidelines will be included in the project's Environmental and Social Commitment Plan (ESCP). During project implementation, the terms of reference, work plans or other documents defining the scope and outputs of technical assistance activities will be drafted so that the Aug 29, 2023 Page 8 of 15 The World Bank Progestão Piauí: Public Sector Management Efficiency (P178663) advice and other support provided is consistent with ESSs 1-10, to ensure that the relevant documents will be aligned with the Standards. It is relevant to highlight that (a) the Borrower has shown a strong commitment to applying national and international best practices with the potential to mainstream environmental sustainability in the activities proposed under the Progestão and (b) Progestão’s Sub-Component 1.4: Public Investment Management and Budgeting will support among other activities the development and implementation of tools to support environmental and climate change risk assessment and project screening, improving the state capacity for the assessment and management of environmental and social risks related to its own activities. Following the World Bank Environmental and Social Framework, when designing and hiring technical assistance activities, the Borrower will: (i) apply environmental and social risk management measures as relevant and appropriate to the nature of the envisaged risks and impacts of the activities, (ii) promote broad stakeholder engagement and participation in a manner proportionate to the direct, diffuse and induced social and environmental impacts and downstream implications envisaged as potential outcomes of the activities; and (iii) ensure that the terms of reference, work plans or other documents defining the scope and outputs of these activities are drafted so that the final products of the technical assistance activities are consistent with the World Bank Environmental and Social Standards. During preparation, the Borrower will carry out an expeditious environmental and social assessment of the potential environmental and social risks associated with these technical assistance activities. This assessment will pay special attention to potential distributive impacts in disadvantaged and vulnerable social groups (such as the traditional and quilombola communities found in the state, among which some have recently been involved in processes of ethnogenesis or ethnic self-identification as Indigenous Peoples, although there is no evidence that they possess the four characteristics considered under ESS 7, paragraph 8). This assessment will also explore opportunities to promote gender equity in the roaster of state public servants as well as to foster transparency, stakeholder/citizen engagement Public Disclosure and social accountability in public management will be explored and included in project design. ESS10 - Stakeholder Engagement and Information Disclosure Relevant This standard is relevant. The key stakeholders of project activities are the state public servants whose conditions of work will be improved with the Technical Assistance and institutional capacity building provided with Project support. Other interested parties – as they will indirectly benefit from improvements made for the provision of state public services in key sectors – are the civil society and, particularly, the lowest income people and most disadvantaged and vulnerable social groups as they rely the most in the public service provision to get access to health and education. Considering the scope of project-supported activities and low level of social and environmental risk, the client will incorporate relevant comittments related to ESS 10 in the Environmental and Social Commitment Plan (ESCP). Thus, the ESCP will set commitments related with a) consultation with relevant stakeholders; b) the disclosure of project information to allow stakeholders to understand the purpose, nature, and scale of project activities, their duration, their potential downstream environmental and social implications; c) the operation of channels for receiving stakeholders feedback and for facilitating the resolution of concerns and grievances related to project activities that holds all the functionalities required under ESS 10 – including, inter alia: i) different ways in which users can submit their grievances (anonymously or not), ii) accessibility by disadvantaged and vulnerable social groups, iii) a log where grievances are registered in writing and maintained as a database and iv) transparency and publicly advertised procedures, setting out the length of time users can expect to wait for acknowledgment, response, and resolution of their grievances; and d) semiannually reporting to the Bank on the operation of the GRM and the stakeholder engagement activities carried out. These engagement strategies and the procedures for operating the Grievance Mechanism will be further detailed in the Project Operation Manual. During project preparation, the Bank team will assess the existing and operating system within the structure of the State Government (the Ombudsman Office under Aug 29, 2023 Page 9 of 15 The World Bank Progestão Piauí: Public Sector Management Efficiency (P178663) the State General Comptroller) to check if it holds the above functionalities and is suitable to be used as the Project’s GM, ideally so as to avoid the unnecessary duplication of structures. ESS2 - Labor and Working Conditions Relevant This standard is relevant. Some core functions of the project will be executed by civil servants who will remain subject to the terms and conditions of their existing public sector employment agreements. ESS2 will not apply to them, with the exception of the provisions related to the Protection of the Work Force and Occupational Health and Safety. Project activities will also require the hiring of full-time, part-time or temporary consultants, trainers, and others. The project is not expected to engage primary supply or community workers. The ESCP will include the following provisions that are core elements of Labor Management Procedures (LMP) that shall apply to project workers according to ESS 2: • Assurance that project workers directly engaged by the state government or through third- parties to work specifically in relation to the project and/or perform work related to core functions of the project (direct and contracted workers) will be hired based on principles of non-discrimination and equal opportunity, no- harassment, and freedom of association; • Assurance of adoption of appropriate occupational safety and health measures at the working places, considering an assessment of the potential risks associated with the tasks to be carried out and including special bio-safety protocols for protection against COVID-19 transmission as issued by the Ministry of Health, Secretariat of Labor and Employment Inspection (under the Ministry of Economy), the State Secretariat of Health, WHO, and the World Bank; • Development and adoption of a Code of Conduct for project workers (direct and contracted) including provisions related with the no acceptance of discriminatory behavior, disrespect for distinct cultural values and traditions, sexual harassment and sexual abuse and exploitation, among others. • Prohibition of child labor as well as forced labor; • Establishment and operation of a responsive GM to allow Public Disclosure workers to quickly inform management of labor issues and raise workplace concerns and labor-related matters without retaliation. This mechanism may use the same uptake channels of the project's overall GM, but follow separate avenues for the resolution of labor-related complaints. ESS3 - Resource Efficiency and Pollution Prevention and Management Relevant This standard is relevant. Based on the initial environmental and social assessment, it is not expected that the activities supported by the proposed TA IPF operation will pose a risk of environmental pollution and/or degradation of natural resources (air, soil, water), or generation of significant volumes of waste including e-waste. The proposed activities will not involve construction works/service operations that may lead to adverse impacts related to pollution and resource efficiency. There will be some activities related to the procurement of some ICT software and hardware to increase the existing performance of the government services system. Still, it is not expected to generate significantly more e-waste than would be the case in the absence of the project. On the contrary, some subcomponents are expected to bring positive impacts in terms of resource efficiency and pollution prevention and management. Thus, Subcomponents 1.1 Human Resource Management and 1.2 Pensions will support the procurement of energy efficient hardware to support the deployment of these systems. Furthermore, Subcomponent 1.5 Asset Management will also bring potential benefits with regards to resource efficiency and pollution prevention and management as it will promote the development and implementation of a comprehensive public asset management system that includes a climate risk assessment of real estate assets as well as the carrying out of energy audits based on CCB methodology for selected government properties, focused on reducing energy consumption or GHG emissions. Activities under Component 2 also have the potential of bringing positive impacts related to a more sustainable use of raw materials in consequence of the implementation of digital systems in the three selected Aug 29, 2023 Page 10 of 15 The World Bank Progestão Piauí: Public Sector Management Efficiency (P178663) sectors. Today, approximately 80 percent of State health units use paper-based records for monitoring health service provision and there are no information systems to support systematic control of the supply chain, costs, compliance and workforce allocation. Furthermore, the Secretariat of Education (Secretaria da Educação do Estado do Piaui, SEDUC) still uses paper-based tools and spread sheets to control resources transferred by the Federal Government and the new management systems are also expected to significantly improve efficiency in school transport, leading to the potential reduction of GHG emissions. Finally, SEMAR intends to digitalize paper-based government-to-business and government-to-citizen services dealing with environmental licensing, water grant certification, geospatial information, land surveillance, and licensing monitoring. Based on the preliminary screening, the project is not expected to generate significantly more e-waste than would be the case in the absence of the project. Even if the electronic servers were to be physically installed, which is not the plan, they would augment existing capacity not replace it. To promote the sustainable use of resources, including electronic material, the project would set out requirements to address resources efficiency and e-waste management throughout the project life cycle. Guidelines on management of e-waste should be considered as part of ESCP. During project implementation, the State Government should consider measures to promote efficient use of energy as well as avoid the generation of e-waste, including a focus, where relevant, on reuse, recycling, and recovering of e-waste in a manner that is safe for human health and the environment. Such measures will be discussed during project preparation to determine their relevance and, as appropriate, related measures may be specified in the ESCP. The Project Operational Manual will specify the environmental and social management procedures, including principles of sustainability as energy efficiency, reuse, recycle and recovery of e-waste, and transparency that is compliant with this ESS. ESS4 - Community Health and Safety Not Currently Relevant Public Disclosure This standard is not currently relevant. The project will only support technical assistance activities and is not expected to involve activities that may lead to direct or indirect adverse impacts on community health and safety from both routine and non-routine circumstances, or to community exposure to project-related traffic and road safety risks, disasters and hazardous materials. The project will not require the retaining of direct or contracted workers to provide security to safeguard its personnel and property. The project does not involve the construction of new dams and does not rely on the performance of any existing dams or dams under construction. Aiming to address potential downstream effects of the “implementation of a student’s transport system envisaged under Subcomponent 2.2 in a manner consistent with the requirements of ESS 4, anticipate and minimize risks and impacts that the provision of these services to community may have community health and safety, the design process will include reference to relevant environmental and social risks that would need to be considered in its implementation. This school transportation system consists of an information management system that optimizes variables such as school location, student addresses, travel time, road conditions, and type of transportation to organize routes in which students arrive at school on time, stay as little time as possible in the transportation, and are served safely according to the requirements of the Brazilian legislation on the issue (which include universal accessibility). The system also allows greater control in terms of quantity/quality and fleet maintenance, accountability of the state transfer to the municipalities. The ESCP will also incorporate requirements related with the adoption of the universal accessibility principle and technically and financially feasible traffic and road safety measures. During project implementation, the terms of reference, work plans or other documents defining the scope and outputs of technical assistance activities related to the electronic system of a student’s transport system will incorporate the community health and safety measures needed. Aug 29, 2023 Page 11 of 15 The World Bank Progestão Piauí: Public Sector Management Efficiency (P178663) ESS5 - Land Acquisition, Restrictions on Land Use and Involuntary Resettlement Not Currently Relevant This standard is not currently relevant. The technical assistance activities supported by the project will not require land acquisition or lead to restrictions on land use or land rights that may have adverse impacts related to involuntary resettlement. These activities are not expected to have downstream implications leading to such adverse impacts. The Asset Management sub-component refers exclusively to gather data on the real estate properties of the State Government, the development and implementation of a data system on real estate properties, energy audits and mapping of costs of information and communication technology - with no further on the ground actions related with downstream refurbishment of the public buildings. ESS6 - Biodiversity Conservation and Sustainable Management of Living Natural Relevant Resources This standard is relevant. The project will carry out studies and natural capital accounting assessment following the requirements of this ESS6 and will adopt a precautionary approach and apply adaptive management practices in the designing and implementation of the natural capital certification program. The project will not potentially affect biodiversity or habitats, either positively or negatively, directly or indirectly, or depend upon biodiversity for its success. The project does not intend to invest in the forest sector, will not support any forest related activities, or purchasing natural resources commodities, including food, timber, and fiber that are known to originate from areas where there is a risk of significant conversion or significant degradation of natural or critical habitats. The project will neither negatively, directly or indirectly affect biodiversity or natural habitats, nor depend upon the management of living natural resources for its success. The project is not anticipated to lead to any negative impact on living natural Public Disclosure resources, including native or non-native species. But by using resources (like paper, energy, and public offices) more efficiently, the project may directly contribute to the sustainable management of living natural resources. Overall the Project will indirectly contribute to the conservation and restoration of the Cerrado and Caatinga biome within the state of Piauí and may generate positive impacts on state protected areas by improving electronic systems modules for monitoring environmental licensing requirements and establishing a system to support a renewable natural capital certification program. The project will also support the design and implementation of electronic system and modeling tools of natural capital accounting and estimating the economic value of State protected areas ecosystem services. This would include carbon trade opportunities and (UN Programme on Reducing Emissions from Deforestation and Forest Degradation in Developing Countries) REDD market, supporting climate change mitigation. The expected establishment of digital government systems and a comprehensive procurement system by the Borrower would help reduce government processing time, paper consumption and establish verification processes and procedures to evaluate compliance with environment regulations for sustainable management of natural resources by and government agencies and their primary suppliers. In addition, it will establish verification processes and procedures to evaluate compliance with environment regulations for sustainable management of natural resources by the primary suppliers and government agencies. During project implementation, the terms of reference, work plans or other documents defining the scope and outputs of technical assistance activities will incorporate the ESS6 measures as needed. ESS7 - Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Not Currently Relevant Local Communities Aug 29, 2023 Page 12 of 15 The World Bank Progestão Piauí: Public Sector Management Efficiency (P178663) This standard is not currently relevant. There are a few local communities in the state of Piauí in recent years started a process of self-identification as members of a distinct indigenous social and cultural group and are recognized by the State Government as such (based only on the criterium of self-identification). They are: a) the population of the urban nuclei of Itacoatira, Tucuns and Colher de Pau (Municipality of Piripiri), whose inhabitants self-identify as the Tabajara People; b) the population of the rural communities of Canto da Várzea and Oiticica (Piripiri), who self-identify as the Tabajara Ipy People; c)the population of Aldeia Nazaré (Lagoa do São Francisco), who self-identify as the Tabajara Tapuio People; d) the population of Aldeia Serra Grande (Queimada Nova), who self-identify as the Cariri de Serra Grande People; and e) the population of the rural communities of Barra do Correntina (Bom Jesus), Morro d’Água (Baixa Grande do Ribeiro), Pirajá and Laranjeira (Currais), Sete Lagoas and Vão do Vico (Santa Filomena), who self- identify as the Gamela People. Nevertheless, there is no evidence that these groups cumulatively possess the characteristics of: (a) collective attachment to geographically distinct habitats, ancestral territories, or areas of seasonal use or occupational or to the natural rescources in these areas; and (b) customary cultural, economic, social, or political institutions that are distinct or separate from those of the mainstream society or culture; and (c) a distinct language or dialect different from the official language. There is also no evidence that (d) the members of these groups have lost collective attachment to distinct habitats or ancestral territories during their lifetime or (e) have established distinct communities in or near urban areas but still possess the characteristics mentioned in (a), (b) and (c) above. The expeditious assessment of potential environmental and social risks and impacts associated with project activities, to be conducted during project preparation, will pay special attention to distributive impacts over disadvantaged and vulnerable social groups (including these communities that self-identify as Indigenous Peoples) and propose measures to avoid or reduce adverse impacts as well as to ensure their equitable access to project benefits. The terms of reference, work plans or other documents defining the scope and outputs of technical assistance Public Disclosure activities will be drafted so that the advice and other support provided is consistent with ESSs 1-10, to ensure that the relevant documents will be aligned with the Standards. ESS8 - Cultural Heritage Relevant This standard is relevant. The project is not expected to include site-specific activities and technical activities to be supported are not expected to include, directly or indirectly, excavations, demolition, movement of earth, flooding, or other changes in the physical environment. However, as component 1 will support an asset management survey of state office buildings, the TOR for the building survey and measures to be included in the Environmental and Social Commitment Plan, the potential impacts of the survey and use strategy to be developed by the proposed technical assistance activities on any public buildings of cultural or historical value should be determined and mitigated. The Borrower will implement documentation and protection of historical, architectural assets in compliance with the requirements of this standard and in compliance with the guidelines defined by the National Institute for Historical and Cultural Heritage (IPHAN). The terms of reference, work plans or other documents defining the scope and outputs of technical assistance activities will be drafted so that the advice and other support provided is consistent with ESSs 1-10, to ensure that the relevant documents will be aligned with the Standards. ESS9 - Financial Intermediaries Not Currently Relevant This standard is not relevant. B.2 Legal Operational Policies that Apply Aug 29, 2023 Page 13 of 15 The World Bank Progestão Piauí: Public Sector Management Efficiency (P178663) OP 7.50 Operations on International Waterways No OP 7.60 Operations in Disputed Areas No B.3 Other Salient Features Use of Borrower Framework None. Use of Common Approach No None. C. Overview of Required Environmental and Social Risk Management Activities C.1 What Borrower environmental and social analyses, instruments, plans and/or frameworks are planned or required by Appraisal? III. CONTACT POINT World Bank Public Disclosure Task Team Leader: Rovane Battaglin Schwengber Title: Social Protection Specialist Email: rschwengber@worldbank.org TTL Contact: Sadia Aderonke Afolabi Job Title: Governance Specialist Email: safolabi1@worldbank.org IV. FOR MORE INFORMATION CONTACT The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects V. APPROVAL Task Team Leader(s): Rovane Battaglin Schwengber, Sadia Aderonke Afolabi Practice Manager (ENR/Social) Genevieve Connors Recommended on 27-Jul-2022 at 17:13:39 EDT ADM Environmental Specialist: Maria Bernadete Ribas Lange Aug 29, 2023 Page 14 of 15 The World Bank Progestão Piauí: Public Sector Management Efficiency (P178663) ADM Social Specialist: Alberto Coelho Gomes Costa Public Disclosure Aug 29, 2023 Page 15 of 15