Integrated Safeguards Data Sheet (Updated) Section I - Basic Information Date ISDS Prepared/Updated: 03/02/2004 A. Basic Project Data (from PDS) I.A.1. Project Statistics Country: INDONESIA Project ID: P076174 Project: Initiatives for Local Governance Reform Project Task Team Leader: Asmeen Khan Authorized to Appraise Date: December 18, 2003 IBRD Amount ($m): 41.82 Bank Approval: May 13, 2004 IDA Amount ($m): 21.00 Managing Unit: EASRD Sector: Power (20%); Irrigation and drainage (20%); Lending Instrument: Specific Investment Loan (SIL) General transportation sector (20%); Water supply Status: Lending (20%); Sub-national government administration (20%) Theme: Decentralization (P); Participation and civic engagement (P); Public expenditure, financial management and procurement (P); Other accountability/anti-corruption (P); Rural services and infrastructure (P) I.A.2. Project Objectives (From PDS): Since 2001, Indonesia has embarked on an ambitious decentralization process. This has resulted in resources, personnel and basic services being devolved to district governments (Kabupatens). On-going analytical studies by donors, non governmental organizations and the World Bank on Kabupaten governance indicate that: comprehension of procedures and regulations relating to new decentralized mandates at the Kabupaten level is limited, most public funds are being allocated for routine rather than development expenditures, though citizen satisfaction of public service delivery remains at the same level . However, the potential for misuse of public funds is increasing. Civil society and the local legislature though legally mandated under decentralization laws, are not actively involved in the preparation of development priorities and plans or reviewing expenditure outcomes; and poverty issues and programs are receiving limited investment support from constrained Kabupaten budgets. There are however a small, but growing number of Kabupatens who have initiated reform measures to address some of these highlighted problems. There is opportunity to build on these initiatives by providing incentives at the right level and establishing information fora which allow for negotiated decision-making between the executive, legislature, and civil society which should lead to better investment patterns. One way to achieve this is by investing in a process of civic participation in local governance, budget oversight and improved expenditure allocations which should lead to better targeted and quality investment. The development objective of the proposed Initiatives for Local Governance Reform Project is to secure improved governance linked to poverty alleviation through more effective and transparent budget and public expenditure management in 40 district governments selected on a competitive basis. The project would support poverty reduction linked to improvements in governance through capacity building interventions. By both ensuring that kabupaten budgets reflect the priorities of communities, as well as financing pro-poor infrastructure projects, the project would have a beneficial impact on the lives of poor communities in the participating kabupatens. The project would support a series of graduated reforms in public disclosure and civic participation in local budget planning, and execution, development of enhanced local poverty alleviation strategies, improvements in financial management and procurement and improvements in local revenue generation. Anti-corruption activities would be mainstreamed in all aspects of project execution. Investment support would also be provided to finance priority rural infrastructure 2 ISDS identified through participatory local government poverty alleviation strategies. I.A.3. Project Description (From PDS): 1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown): The proposed project will support advances in good governance initiatives at the district level through; (i) provision of specialized packages of technical assistance, general facilitation and capacity building to help broaden and deepen the reforms already underway in the relatively more progressive districts in the 9 ILGR provinces, or facilitate implementation of minimal reforms in other reform minded Kabupatens participating in this project; (ii) the project rewards good governance at the district level by providing incremental investment funds to kabupatens that complete a set of prescribed reforms in areas of public participation, transparency, financial management and procurement, as well as giving visible recognition of these reform initiative; and (iii) the project will disseminate the best good governance practices emerging from the districts so that the lessons learned can help to influence reforms in other kabupatens not participating directly in ILGR. The proposed project would provide support over a four year period (2004-2008), for the following three components; · Component A ­ Local Governance Reform · Component B ­ Pro-Poor Investment Funds · Component C ­ Implementation Support and Monitoring Component A: Local Governance Reform will support training and cross-learning, capacity building, equipment, and incremental operating costs for such items as legislative drafting, and information dissemination to enable 40 qualifying kabupatens to undertake key governance reforms over a 18-24 month period prior to entry into the investment phase of the program, as well as 24 qualifying kabupatens to undertake more advanced reforms during the investment phase. Sub-component activities under Component A include: (a) Strengthening strategic links with pro-poor local priorities- where capacity building support in the form of technical assistance and incremental operating costs, training and workshops will be provided to participating kabupatens to prepare a participatory poverty strategy and action plan; (b) enhancing participation in decision making process through support to existing and newly established multi-stakeholder forums- the project will support training, workshops and public consultation and dissemination of the PRSAP, and support for local legislation (perdas); and (c) reform of budget formulation and implementation execution practices and financial management reporting and accounting-will provide technical support, training surveys and some equipment related to establishing new and improved financial management, reporting and procurement processes at the Tabulate; and (d) strengthening accountability mechanisms through passage of enabling local legislation and regulations; support to the kabupaten working group on information disclosure and public participation to promote improved transparency and participation in kabupaten polices (renstra, perda process, budget realization report, audit reports, permits and user fees), budget planning and allocation (APBD); administrative reforms in budget execution that enhance financial controls in cash, revenues and expenditure management; and increased accountability for public expenditure through streamlined financial accounting and reporting. accountability (audit and Bupati's accountability speech-LPJ)and the local legal instruments (perdas, SKs). Activities to be financed include: training, inter-kabupaten networking, equipment, independent monitoring, and an e-government pilot in two kabupatens. Component B: Pro-Poor Investment will "reward" progress on good governance by providing finance for poverty focused development expenditures identified and prioritized through an enhanced kabupaten planning process. The pilot Kabupaten PRSP process has identified improvements in rural infrastructure 3 ISDS as one of the key priority for poor households. ILGR financing for pro-poor infrastructure would (a) support a key need identified in the PRSP process; (b) allow the Kabupaten opportunity to free up their constrained APBD for health and education expenditures; and (c) provide an in-road in procurement reform in a Key technical agency involved in the bulk of Kabupaten procurement. The component provides support for poverty-focused rural infrastructure ranging in size from 5-10 billion rupiah per year over 2-3 years, depending on the fiscal capacity, population and location of the kabupaten. These grants will finance kecamatan and kabupaten-level infrastructure of Rp 300 million upwards. The sub-projects are to be implemented by kabupaten dinas agencies through contractors using an enhanced public participation and consultation process. Activities to be financed include infrastructure sub-projects are presented in the table below. List of Eligible Kabupaten Sub-Projects under ILGR Eligible Sub-Projects In-eligible Sub-Projects Water Supply (includes civil work and complementary equipment) - Wells - Chemical water treatment systems - Water catchment/harvesting structures - Motor pumps and electric pumps - Ponds - Water supply systems (incl. for public building) - Water storage facilities - Spring improvement - Filtration systems. Energy (includes civil works and goods) - Electricity distribution systems - Generators Transportation (includes civil works only) - Roads (earth, laterite surfaced, gravel surfaced, - Improvement or rehabilitation of paved) national/provincial roads and structures) - Culverts - Bridges - Drifts - Vented causeways - Boat landings/docks - Cagle ferries - Inland waterways improvements Irrigation and Flood Protection (includes civil works only) - Small scale reservoirs - Motor pumps or electric pumps - Spillways - Canals and distribution systems - Diversion structures - Pumping station structures - Drainage structures - Flood protection structures/facilities Natural Resources Management (includes civil works only) Erosion protection structures and works around rivers (civil works) Community Buildings (includes civil works and complementary equipment) - Communal meeting locations - Administration buildings - Communal market areas, building and drainage - Police or army buildings 4 ISDS systems - Buildings for religious activities - Communal storage and stores - Building for commercial financial - Marketing facilities activities - Communal agricultural centers - Communal training centers Component C: Implementation Support and Monitoring will fund specialized technical, facilitation and/or monitoring support for the activities in Components A and B, at three geographic levels: · general facilitation support at the kabupaten level to assist stakeholder groups with the governance reform; · specialized technical assistance clustered at the regional level in procurement, financial management, transparency, public participation and participatory poverty analysis to assist kabupatens with implementing the reforms under components A, as well as in engineering design and safeguards compliance to assist kabupatens with implementation of infrastructure under component B; and · specialized technical support clustered at the central level for policy formulation, legal drafting, specialized areas of financial management, and public information. This component will also provide technical support at the central level for monitoring and overall reporting of governance outcomes under the project. Activities to be financed include technical assistance, facilitation, operational support, and monitoring and evaluation studies and surveys. I.A.4. Project Location: (Geographic location, information about the key environmental and social characteristics of the area and population likely to be affected, and proximity to any protected areas, or sites or critical natural habitats, or any other culturally or socially sensitive areas.) An initial list of 22 Kabupatens have been identified as potential "candidates" in the following 9 provinces (Gorontalo, North Sulawesi, South Sulawesi, Central, East and West Java, Yogjakarta, Banten, and West Sumatra). During project implementation the program would expand outwards from these initial 22 pilot kabupatens, and all kabupatens in the nine provinces would be eligible to apply for entry in the program. The project would select 40 Kabupatens from a total of 118 Kabuaptens based on their meeting project "entry criteria" on a first-come-first served basis. The project would provide facilitation, technical and training support to 40 Kabupatens in the nine provinces during the first year pre-investment phase; and support 26 out of the 40 Kabupatens during the investment phase of the project (years 2-4). All Kabupatens in these provinces would receive information through dissemination of best practice case studies , and participate in workshops and inter-Kabupaten cross visits. The potential for grant-based technical and capacity building support, development of enhanced local government revenue frameworks, national recognition and substantial development investment should provide Kabupatens with a strong incentive to institute reforms. There will be no large scale impacts, primarily because investments will not be of large enough scale, nor will they be located in sensitive areas. The minimum investment in each Kabupaten in any one year will be US$500,000, and the total investment in any Kabupaten will not exceed US$1.5 million annually (or $4.5 million over 3 years). Moreover, the project screening procedure will eliminate any projects that would have potential impacts significant enough to require ANDAL (full EA) under Indonesian regulations. Moderate impacts are possible, primarily those associated with new roads, construction of buildings, and small-scale infrastructure. A negative list will preclude funding of projects 5 ISDS that would involve pesticides, asbestos or other hazardous materials, commercial logging.. The pilot Districts selected for ILGR's preparation phase are largely homogenous in cultural and ethnic terms. There are two small indigenous groups. as defined by the Bank's OD 4.20 in ILGR's currently-targeted Kabupatens, the Kajang in South Sulawesi (Kabupaten Bulukumba) and the Badui in West Java (Kabupaten Lebak). The proposed safeguards framework for the project (see annex 12) provides a consultative framework for their informed consent to participate in the program if they so wish. ILGR intends to make an effort to involve, where appropriate, local customary institutions into project activities, especially those that seek to enhance civic and public participation. Particular efforts will be made to ensure that the traditional kinship-based nagari system of governance in West Sumatra is integrated into ILGR Districts in that province. B. Check Environmental Classification: B (Partial Assessment) Comments: The project operational manual will include a negative list to ensure that any activity that may adversely impact natural habitats is not financed. . Any market construction or rehabilitation would also include a plan for managing solid and liquid wastes. Design specifications would be included in the project operational manual. C. Safeguard Policies Triggered (from PDS) (click on for a detailed desciption or click on the policy number for a brief description) Policy Triggered Environmental Assessment (OP 4.01, BP 4.01, GP 4.01) Yes No Natural Habitats (OP 4.04, BP 4.04, GP 4.04) Yes No Forestry (OP 4.36, GP 4.36) Yes No Pest Management (OP 4.09) Yes No Cultural Property (OPN 11.03) Yes No Indigenous Peoples (OD 4.20) Yes No Involuntary Resettlement (OP/BP 4.12) Yes No Safety of Dams (OP 4.37, BP 4.37) Yes No Projects in International Waters (OP 7.50, BP 7.50, GP 7.50) Yes No Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60)* Yes No Section II - Key Safeguard Issues and Their Management D. Summary of Key Safeguard Issues. Please fill in all relevant questions. If information is not available, describe steps to be taken to obtain necessary data. II.D.1a. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts. There will be no large scale impacts, primarily because investments will not be of large enough scale, nor will they be located in sensitive areas. The minimum investment in each Kabupaten in any one year will be US$500,000, and the total investment in any Kabupaten will not exceed US$1.5 million annually (or $4.5 million over 3 years). Moreover, the project screening procedure will eliminate any projects that would have potential impacts significant enough to require ANDAL (full EA) under Indonesian regulations. Moderate impacts are possible, primarily those associated with new roads, construction of buildings, and small-scale infrastructure. A negative list will preclude funding of projects that would involve pesticides, 6 ISDS asbestos or other hazardous materials, commercial logging, etc. Key stakeholders are local government, local parliament, community members and specific interest groups such as women and indigenous people, and civic organizations (environmental NGOs etc.) 1. All project investments and reform initiatives will be defined by a process of public consultations in the Kabupaten, and the safeguard issues will be key part of the discussion and decisions.. 2. The facilitator will be trained in safeguard principles and procedures, including the use of a check-list. There will be a simple, user friendly safeguards section developed and incorporated in the overall project manual. 3. Potential Project Affected People would be part of the group that proposes the project. When they are not, there will be a special consultation process to obtain their views. The overall citizen participation processes should understand the rationale and consequences of the Bank's safeguard policies, so there is support. Investment proposals submitted will thus be pre-screened and meet safeguards requirements. 4. As part of project information dissemination, the project will work closely with local press, radio and strategic civil society networks. The project safeguard framework will be part of the overall dissemination package. II.D.1b. Describe any potential cumulative impacts due to application of more than one safeguard policy or due to multiple project component. NA II.D.1c Describe any potential long term impacts due to anticipated future activities in the project area. NA II.D.2. In light of 1, describe the proposed treatment of alternatives (if required) NA II.D.3. Describe arrangement for the borrower to address safeguard issues ILGRP is a demand driven project, executed by local level government. An overall environmental framework has been prepared and discussed with participating local governments, including environmental screening procedures; guidelines for preparation, review and implementation of subproject management plans or application of standard operating procedures to prevent adverse impacts; a policy framework for land acquisition and resettlement; guidelines for addressing the needs and requirements of indigenous peoples; and guidelines for consultation and disclosure. Alternative institutional arrangements for safeguards will be defined, to suit the range of capabilities that may be encountered, from kabupatens with functioning environmental management agencies (BAPEDALDA) or environmental committees, to kabupatens in which there is little or no capacity to address environmental issues. Because the main focus of the project is to improve local government's capacity to govern, the frameworks and guidelines above will be designed to facilitate development of kabupaten-specific safeguard procedures and implementation arrangements ­ they will include templates so that the local safeguards procedures can be prepared by the working groups and incorporated into the action plan that governs the Kabupaten's participation in ILGRP. This will also increase awareness of environmental and social issues and ownership of the 7 ISDS safeguards procedures. Facilitators will be trained in safeguards procedures, to enable them to assist in the development and implementation of the project safeguards screening and review. Environmental safeguards will also be built into standard contract temp-plates. II.D.4. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. Planning and Design Phase: The key mechanism for involving a range of public stakeholders are a series of public consultation meetings to be constituted at the kabupaten level. The meetings are intended to represent the broadest possible range of stakeholders including: - Civil Society organizations including local NGOs - Academics - Customary ethnic and/or religious leaders - The private sector (including professional associations) - People's organizations, especially those with a constituency amongst the poor (e.g. farmers or workers associations) Frequently referred to as Multi-stakeholder Forums, the intent is not to establish the Forums in accordance with any prescriptive formula, but rather to build upon existing pro-reform momentum, often utilizing pre-existing loose coalitions of civil society activists. Emphasis is placed on having the Forums broadly representative of the socio-economic realities at the local level. Emphasis is placed on having attendees broadly representative of difereent thrnic groups and minorities and a gender balance. Preparation Phase In practice, during the project preparation phase in 22 pilot kabupatens, the majority of stakeholder Forums, following up on a large-scale public meeting, have been divided for practical purposes has established two distinct "working groups" ­ one tasked with undertaking the Participatory Poverty Analysis (PPA) and the other forming a Transparency, Participation and Accountability (TPA) working group (although the names of the working groups vary from district to district). On average, each working group has 7-15 active members, with the PPA members supplemented by local government representatives, while the TPA generally consists of a higher proportion of NGO-based members. The PPA working group is responsible for carrying out community consultations at the sub-district (kecamatan) level that produces a "Poverty Reduction Strategy and Action Plan" for consideration during the annual district-based development planning mechanism (Rakorbang) and eventual endorsement by the local Planning Department and ratification by the district parliament. At the same time, the TPA working group assists with the drafting and socialization of a Perda (local regulation) that ensures a higher degree of participation and transparency in the annual planning, budgeting and public service delivery activities of local government. Future Implementation Moving beyond the development of the Poverty Reduction Strategy and Action Plan (PRSAP) and the local regulation on Transparency and Participation, the working groups may be assembled into a Multi-stakeholder Forum to reinforce public participation in annual development planning and budgeting 8 ISDS practices or they may help oversee implementation of the PRSAP, either in the context of a stakeholder Forum or specific issue-based working groups. Significant variation in terms of the nature of civic engagement can be expected from participating kabupatens. However, a degree of consistency will be attained by focusing public participation efforts on certain key benchmarks that are likely to include: · Public consultation and the endorsement of the Multu-stakeholder Forum (or a designated working group) with respect to the use of ILGR investment funds. It is anticipated that ILGR funds will target mainly pro-poor rural infrastructure; · A "Transparency Commission" comprised primarily of civil society leaders to provide independent monitoring of the implementation of the Perda on Transparency, Participation and Accountability; · Public consultation mechanisms (envisioned in some kabupatens as distinct and ongoing Working Groups) on specific issues deemed crucial to district-level poverty reduction; and, · Enhanced access to information as part of the financial management and procurement reform package. Disclosure of Safeguards The project social and environmental safeguards framework was sent by the national steering committee to all kabupatens participating in year 1 of ILGRP (22 pilot kabupatens). The framework will be presented by the project facilitators in a kabupaten public consultation meeting that would include ngos, village representatives and local government staff. Since project investments under component B will be identified during the budget planning and allocation process (during project implementation) the discussion focused on the general framework screening procedures and establishment of the Kabupaten safeguards committee. E. Safeguards Classification (select in SAP). Category is determined by the highest impact in any policy. Or on basis of cumulative impacts from multiple safeguards. Whenever an individual safeguard policy is triggered the provisions of that policy apply. [ ] S1. ­ Significant, cumulative and/or irreversible impacts; or significant technical and institutional risks in management of one or more safeguard areas [ ] S2. ­ One or more safeguard policies are triggered, but effects are limited in their impact and are technically and institutionally manageable [ ] S3. ­ No safeguard issues [X] SF. ­ Financial intermediary projects, social development funds, community driven development or similar projects which require a safeguard framework or programmatic approach to address safeguard issues. F. Disclosure Requirements Environmental Assessment/Analysis/Management Plan: Expected Actual Date of receipt by the Bank 11/7/2003 11/7/2003 Date of "in-country" disclosure 11/10/2003 11/10/2003 Date of submission to InfoShop 11/26/2003 11/26/2003 Date of distributing the Exec. Summary of the EA to the Executive Directors (For category A projects) 9 ISDS Resettlement Action Plan/Framework: Expected Actual Date of receipt by the Bank 11/7/2003 11/7/2003 Date of "in-country" disclosure 11/10/2003 11/10/2003 Date of submission to InfoShop 11/26/2003 11/26/2003 Indigenous Peoples Development Plan/Framework: Expected Actual Date of receipt by the Bank 11/7/2003 11/7/2003 Date of "in-country" disclosure 11/10/2003 11/10/2003 Date of submission to InfoShop 11/26/2003 11/26/2003 Pest Management Plan: Expected Actual Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop Dam Safety Management Plan: Expected Actual Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop If in-country disclosure of any of the above documents is not expected, please explain why. Signed and submitted by Name Date Task Team Leader: Asmeen Khan 12/29/03 Project Safeguards Specialists 1: Isono Sadoko/Person/World Bank Project Safeguards Specialists 2: Farida Zaituni/Person/World Bank Project Safeguards Specialists 3: Approved by: Name Date Regional Safeguards Coordinator: Glenn S. Morgan 02/24/04 Comments Note: Under the new guidelines, there is no need to have safeguards classification. However, a rating was typed for the purpose of submitting this ISDS in SAP. Sector Manager/Director Mark D. Wilson 02/24/04 Comments