The World Bank Lesotho Public Sector Foundations for Service Delivery (P174171) Concept Environmental and Social Review Summary Concept Stage (ESRS Concept Stage) Public Disclosure Date Prepared/Updated: 03/08/2023 | Report No: ESRSC03407 Mar 08, 2023 Page 1 of 9 The World Bank Lesotho Public Sector Foundations for Service Delivery (P174171) BASIC INFORMATION A. Basic Project Data Country Region Project ID Parent Project ID (if any) Lesotho EASTERN AND SOUTHERN P174171 AFRICA Project Name Lesotho Public Sector Foundations for Service Delivery Practice Area (Lead) Financing Instrument Estimated Appraisal Date Estimated Board Date Governance Investment Project 6/14/2023 9/28/2023 Financing Borrower(s) Implementing Agency(ies) Kingdom of Lesotho Ministry of Finance and Development Planning Proposed Development Objective Public Disclosure To strengthen the functioning of the public administration and increase the efficiency of selected administrative services Financing (in USD Million) Amount Total Project Cost 20.00 B. Is the project 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 [including overview of Country, Sectoral & Institutional Contexts and Relationship to CPF] The project will focus on improving information exchange between ministries and improve foundational public sector functions to operate efficiently, effectively, and securely. The project focuses on four critical areas: (i) expenditure management strengthening; (ii) wage bill and human resource management; (iii) shared digital government foundations; and (iv) reform coordination and implementation support. D. Environmental and Social Overview Mar 08, 2023 Page 2 of 9 The World Bank Lesotho Public Sector Foundations for Service Delivery (P174171) D.1. Detailed project location(s) and salient physical characteristics relevant to the E&S assessment [geographic, environmental, social] The Kingdom of Lesotho, is a relatively small, mountainous, lower-middle- income country located in Southern Africa. The population of Lesotho is 2.1 million and most of the inhabitants (58 percent) live in rural areas with informal business and subsistence farming remain major source of livelihoods. Lesotho’s youth comprise 39.6 percent of the total population while the elderly (aged 65 years and above) comprise 6.1 percent. Other key segments of the population are the elderly and disabled. The 2016 census estimates that 2.5 percent of the population live with disabilities, and that visual impairment and dementia are the most prevalent types of disability, with prevalence rates of 36.2 percent and 36.8 percent. The country is enclaved by the Republic of South Africa and the economy is therefore integrated with that of the Republic of South Africa from which it imports more than 90 percent of its goods and services. Owing to the proximity and interdependence of the two countries, Basotho reside in South Africa as migrant workers in the mines as well as in the formal, domestic and industrial sectors. With nominal Gross Domestic Product (GDP) per capita at US$1,091 in 2021, Lesotho is one of the poorest countries in the region. In 2017, 27.3 percent of Basotho lived below the international poverty line of US$1.90/day (in 2011 PPP terms), which increased to 30.1 percent in 2021 due to the COVID 19 pandemic. Poverty levels are higher among people living in rural areas, female-headed households, the less educated, large families and children, as well as the unemployed. Unemployment was at 23.9 percent in 2018 (43 percent among youth) and increased to 24.6 percent in 2021. Poverty persists particularly in the rural and mountain areas due to decline in remittances from South Africa Public Disclosure and declining agricultural output due to the recurrent climatic shocks including drought and floods. Rural and mountainous areas tend to face limited income opportunities, low human capital, low and inequitable access to basic services and infrastructure, and high vulnerability to climatic, environmental and economic shocks. Through the adoption of ICT Policy of 2005, Lesotho has made progress in ICT development. However, key social hindrances which may retard wider citizen participation and social inclusion, including limited ICT specialties amongst girls and women due to social construct and lack of role models, rising level of poverty, and inadequate involvement in decision-making levels in the sector present major challenges. The proposed project aims to address these challenges by focusing on improving information exchange between ministries and improve foundational public sector functions to operate efficiently, effectively, and securely. D. 2. Borrower’s Institutional Capacity The implementation arrangements for the proposed project will be built upon the existing structure and functions of the implementing arrangements of the recently closed projects, Public Financial Management Reform Project (P143197) and Public Sector Modernization Project (P152398). Both projects were processed under the World Bank Safeguard Policies and classified as EA Category C. The technical implementation of reforms financed by the project will be led by responsible Ministries, Departments, and Agencies (MDAs) and coordinated through technical working groups of directors. A Digital Governance for Service Delivery Steering Committee will be established, in line with its mandate to provide Ministerial oversight and coordination to the Government public sector modernization agenda. A Public Sector Digital Transformation Sub-Committee will be established and chaired at the Principal Secretary level to provide policy level oversight and coordination. The Ministry of Finance has limited experience with World Bank Environmental and Social Framework (ESF) and low capacity due to lack of E&S staffing. For this reason, although the project poses Low environmental and social risks, Mar 08, 2023 Page 3 of 9 The World Bank Lesotho Public Sector Foundations for Service Delivery (P174171) the Ministry of Finance will have to be supported by appropriate level of sensitization and capacity building intervention to enhance their knowledge and understanding of ESF/ESSs’ objectives and requirements throughout the project cycle. The Bank will provide targeted capacity building and support for environmental and social risk management to the Ministry of Finance and other implementing partners/Ministries, Departments and Agencies (MDAs) during project preparation and implementation stages. II. SCREENING OF POTENTIAL ENVIRONMENTAL AND SOCIAL (ES) RISKS AND IMPACTS A. Environmental and Social Risk Classification (ESRC) Low Environmental Risk Rating Low The project’s environmental risk rating is classified as Low due to the nature of the proposed interventions. The project does not support the development of any civil and/or rehabilitation works. The project will support procurement of ICT hardware. The repairs, servicing and end-of-life disposal of ICT equipment may result in ESS3 related environmental risks resulting from electronic waste (e-waste). If not managed properly and disposed of in an environmentally and safe manner, e-waste may cause risks to human health and the environment. However, as volume of e-waste will be insignificant, the environmental risk is rated Low. Overall, the project activities are not expected to have any significant adverse impact on the environment and human health. No long-term or irreversible adverse impacts are expected from project implementation. The potential adverse environmental impacts are Public Disclosure minimal and there are no significant adverse risks which are complex, diverse, sensitive or unprecedented. The environmental risk rating will be reviewed periodically throughout the project life cycle to ensure that it continues to accurately reflect the level of risk that the project presents. Social Risk Rating Low The Proposed project’s social risk rating is classified as Low at this stage. In the context of proposed activities, potential social risks may stem on three two areas: (i) Lack of engagement with local communities and other relevant stakeholders (including with most vulnerable and disadvantaged communities, marginalized groups, and women vulnerable and disadvantaged groups) and (ii) Inadequacies in ensuring their meaningful and genuine participation in decision-making processes of the project; and (iii) relatively limited capacity of PFMR Secretariat in handling ESF requirements, including in relation to requirements on establishing and maintaining a functioning project-level GRM; and . (iv)Digitalization of services poses risks associated with exclusion of vulnerable groups who have limited access to IT services such as elderly, poor. These potential risks will be assessed further during preparation, including through preparation of the project Stakeholder Engagement Plan which will, among others, identify and inform any outreach activities to be financed under the project. The project will not finance any civil works, and risks related to access to land, contractor workers and related GBV/SEA/SH are minimal to non-existent. Despite potential challenges in conducting stakeholder engagement activities, the project is expected to have positive impacts and positive developmental and social outcomes related to improved access to public services. B. Environment and Social Standards (ESSs) that Apply to the Activities Being Considered B.1. General Assessment Mar 08, 2023 Page 4 of 9 The World Bank Lesotho Public Sector Foundations for Service Delivery (P174171) ESS1 Assessment and Management of Environmental and Social Risks and Impacts Overview of the relevance of the Standard for the Project: The current proposed activities will not involve any civil works that could potentially result in significant and irreversible adverse environmental and social risks and impacts. Potential environmental risks are related to e-waste associated with repairs, servicing and end-of-life disposal of project financed ICT equipment. If not managed properly and disposed of in an environmentally and safe manner, e-waste may cause risks to human health and the environment. The repairs, servicing and end-of-life disposal of ICT equipment may result in ESS3 related environmental risks resulting from electronic wastes (e-wastes), hazardous waste and solid wastes if not managed appropriately. The equipment required, the associated cycle of replacement or upgrades, existing e-waste, waste management measures in project implementing entities, regulatory framework, and in-country capacities to manage end of life disposal of electronic equipment and parts will be analyzed during project preparation. To ensure the management of e-waste, an E-Waste Management Plan proportionate to the level of risk will be prepared by project effectiveness date. The E-Waste Management Plan will include simple guidelines on how to manage safe storage, collection, transport, and disposal of ICT equipment (end-of-life and during repairs) in accordance with the requirements of the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal to which Lesotho is signatory. ToRs for TA activities will take into account any downstream E&S aspects. Areas where “Use of Borrower Framework” is being considered: The Lesotho E&S framework is not being considered to be relied on in whole or in part. ESS10 Stakeholder Engagement and Information Disclosure Public Disclosure To increase the effectiveness of the project, the project will need to ensure that stakeholders (including vulnerable and disadvantaged communities, marginalized groups, and women) have genuine opportunities to participate in decision-making processes of the project. The project will aim to have an additional focus on activities aimed at improving access to public services by women in households where vulnerable people are present such as children, disabled or elderly people. To address this and in order to ensure that a comprehensive, coordinated and culturally appropriate approach is taken to stakeholder engagement and project disclosure, PFMR will prepare a Stakeholder Engagement Plan (SEP) which will contain a GRM prior to appraisal. The SEP will be proportional to the nature and scale of the project. The SEP will be developed and implemented to ensure that stakeholder engagement is conducted on the basis of timely, relevant, understandable and accessible information. It will lay out a strategy to identify and map key stakeholders and beneficiaries. At project preparation, an in-depth stakeholder analysis will be conducted to identify key stakeholders including vulnerable and disadvantaged groups such as elders, female stakeholders, and persons with disabilities. The SEP will also have to ensure that consultations are inclusive and accessible (format, languages and location), and will propose differentiated measures to effectively engage such groups. A grievance redress mechanism (GRM), as part of SEP, will be designed for the project during preparation to allow for feedback and complaints during implementation. When the project becomes effective and thus funds become available, PFMR will likely to recruit necessary staffing (part time or full time) to further strengthen the GRM design, including with establishing concrete procedures on handling suggestions and complaints from stakeholders. The timelines for establishing and strengthening GRM activities will be described in the ESCP. B.2. Specific Risks and Impacts Mar 08, 2023 Page 5 of 9 The World Bank Lesotho Public Sector Foundations for Service Delivery (P174171) A brief description of the potential environmental and social risks and impacts relevant to the Project. ESS2 Labor and Working Conditions ESS2 will be relevant to the project activities. Project work force will include direct workers and contracted workers to be recruited as part of PFMR. Community workers and primary supply workers will not be involved in the project. The project would primarily rely on consultants, and existing PFMR staff. The Recipient will prepare concise LMP (or reflect pertinent ESS2 requirements as part of ESCP) for the project outlining the expected number and type of workers, key gaps between national legislation and regulations that need to be addressed at the project level, as well as monitoring and supervision arrangements. Risks related to potential child and forced labor are minimal. Key aspects of the LMP pertaining to contracted workers (consultants) relate to adequate working conditions, as well as occupational health and safety (OSH) issues related to livelihoods component. ESS3 Resource Efficiency and Pollution Prevention and Management ESS3 is considered relevant to the Project. The project will support procurement of ICT hardware. This activity will potentially result in the generation of e-waste. It is important that implementing agencies involved, have systems to minimize and manage e-waste efficiently by disposing of in an environmentally appropriate manner. The E-Waste Management Plan will include applicable technical guidelines on how to manage e-waste including storage, collection, transport, reuse, recycling, and disposal in accordance with the requirements of the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal to which Lesotho is signatory. The project is not anticipated to be a significant emitter of greenhouse gases (GHGs). Public Disclosure The Project is not a potential significant user of energy and water. However, project activities will contribute to better resource efficiency through the procurement of energy efficient ICT equipment. ToRs for TA activities will take into account any downstream E&S aspects. ESS4 Community Health and Safety ESS4 is not relevant to the project. The E-waste and LMP plans will include applicable measures to address any potential community related OHS issues. ESS5 Land Acquisition, Restrictions on Land Use and Involuntary Resettlement ESS5 is not relevant to the Project. The project will not finance any civil works, and there are risks or impacts, such as economic or physical displacement, associated with ESS5. ESS6 Biodiversity Conservation and Sustainable Management of Living Natural Resources ESS6 is considered not relevant since the Project activities will not have any impact on biodiversity and living natural resources. Mar 08, 2023 Page 6 of 9 The World Bank Lesotho Public Sector Foundations for Service Delivery (P174171) ESS7 Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Local Communities ESS7 is not relevant to the Project as there are no groups in Lesotho meeting the criteria as set out in ESS7. ESS8 Cultural Heritage ESS8 is not relevant since the Project will not have any impact on tangible or intangible cultural heritage. ESS9 Financial Intermediaries ESS9 is not relevant to the Project for the suggested project activities. C. Legal Operational Policies that Apply OP 7.50 Projects on International Waterways No Public Disclosure OP 7.60 Projects in Disputed Areas No III. WORLD BANK ENVIRONMENTAL AND SOCIAL DUE DILIGENCE A. Is a common approach being considered? No Financing Partners None B. Proposed Measures, Actions and Timing (Borrower’s commitments) Actions to be completed prior to Bank Board Approval: Actions to be completed prior to World Bank Appraisal: • Prepare, consult upon and disclose the draft Environmental and Social Commitment Plan (ESCP) • Prepare, consult upon and disclose the draft Stakeholder Engagement Plan (SEP) Actions to be completed prior to World Bank Board Approval: • Prepare, consult upon and disclose the negotiated Environmental and Social Commitment Plan (ESCP) Actions to be completed prior to Effectiveness 1. Adoption of an E-Waste Management Plan Mar 08, 2023 Page 7 of 9 The World Bank Lesotho Public Sector Foundations for Service Delivery (P174171) 2. Adoption of Labor Management Procedures 3. Adoption of a Stakeholder Engagement Plan Possible issues to be addressed in the Borrower Environmental and Social Commitment Plan (ESCP): 1. Institutional arrangements for the management of applicable Environmental and Social Standards. 2. Preparation of E&S risk management instruments including E-Waste Management Plan, Stakeholder Engagement Plan and Labour Management Procedures. C. Timing Tentative target date for preparing the Appraisal Stage ESRS 01-Jun-2023 IV. CONTACT POINTS World Bank Contact: Marianne Carolina Caballero Parra Title: Senior Public Sector Specialist Telephone No: Email: mcaballeroparra@worldbank.org Contact: Raman V. Krishnan Title: Senior Digital Development Specialist Public Disclosure Telephone No: +1-202-473-2304 Email: rkrishnan7@worldbank.org Borrower/Client/Recipient Borrower: Kingdom of Lesotho Implementing Agency(ies) Implementing Agency: Ministry of Finance and Development Planning V. 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 VI. APPROVAL Task Team Leader(s): Raman V. Krishnan, Marianne Carolina Caballero Parra Practice Manager (ENR/Social) Africa Eshogba Olojoba Recommended on 08-Mar-2023 at 06:44:14 EST Mar 08, 2023 Page 8 of 9 The World Bank Lesotho Public Sector Foundations for Service Delivery (P174171) Safeguards Advisor ESSA Julia Bucknall (SAESSA) Cleared on 08-Mar-2023 at 11:11:40 EST Public Disclosure Mar 08, 2023 Page 9 of 9