The World Bank Economic Recovery and Transformation Project (P171997) Concept Environmental and Social Review Summary Concept Stage (ESRS Concept Stage) Public Disclosure Date Prepared/Updated: 04/05/2021 | Report No: ESRSC01978 Apr 06, 2021 Page 1 of 13 The World Bank Economic Recovery and Transformation Project (P171997) BASIC INFORMATION A. Basic Project Data Country Region Project ID Parent Project ID (if any) Liberia AFRICA WEST P171997 Project Name Economic Recovery and Transformation Project Practice Area (Lead) Financing Instrument Estimated Appraisal Date Estimated Board Date Finance, Competitiveness Investment Project 7/13/2021 10/12/2021 and Innovation Financing Borrower(s) Implementing Agency(ies) Ministry of Finance and Ministry of Commerce and Development Planning Industry Proposed Development Objective To improve the investment climate, strengthen firm capabilities, expand financial access and help formal MSMEs Public Disclosure recover from the impact of the COVID-19 pandemic. 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 supports the Government's objective of fostering jobs and economic transformation (JET) while helping firms adjust to the impact of COVID through better market functioning and improved firm capabilities. In doing so the project support six of the ten building blocks in the WBG JET framework as a complement to other activities covering macroeconomic stability, infrastructure and human capital. The project also supports considerable capacity building at the institution level to carry out reforms and for project implementation. The five components are : (1) Business environment reforms and institution capacity building; (2) Enhancing the ecosystem supporting firm capabilities and competitiveness ; (3) Expanding Access to Finance; (4) Program Implementation, Capacity Building and Coordination; and (5) Contingency Emergency Response Component . Apr 06, 2021 Page 2 of 13 The World Bank Economic Recovery and Transformation Project (P171997) D. Environmental and Social Overview D.1. Detailed project location(s) and salient physical characteristics relevant to the E&S assessment [geographic, environmental, social] One-quarter of the country’s 4.8 million people live in the capital city – Monrovia & in surrounding of Greater Monrovia, with fragility, poverty and informality, and are extremely vulnerable to floods which are predicted to become more frequent and intense with climate change. In Monrovia, existing critical infrastructure and assets, such as 30 km of major roads , 35% of schools and 14% of hospitals are currently located in a flood risk zone. As of 2014, 104sq.km of built-up area in the metropolitan region was located in the flood risk zone, increasing at an average annual rate of 0.37% between the years 1975 and 2014. As projected, one-meter rise in sea level by end of century will place almost 230,000 people at risk causing the loss of 2,150 sq. km. of coastal land and infrastructures valued at US$250 million for the country. Liberia’s government and population were not prepared to face the economic crisis due to the COVID-19 impacts. 90% of Liberian population works in the informal sector and suffers from high levels of poverty, food insecurity, and has high levels of illiteracy. In rural areas 70%, while in urban areas 43% live below the poverty line. Around 83% people live on less than $1.25 per day. This leaves Liberians very vulnerable to even minor economic shocks. Low agricultural output, combined with high poverty prevalence, contributes to food insecurity. The majority of the food- poor live in urban areas. Chronic malnutrition stands at 32%, one of the highest rates in the world. The households will continue to experience economic shocks for a long time coupled with high risk for women and girls. People with disabilities account for 14% of the population and are said to live in extreme poverty. These populations face cultural, logistic, and physical barriers in accessing economic, social, cultural, medical, and educational services and Public Disclosure opportunities. COVID-19 gives rise to problems for persons in this group. Liberia, a post-conflict country, is particularly vulnerable to unrest and instability. Already before the COVID-19 crisis, the economy was under strain as a result of difficult macroeconomic reforms. Liberia is rich in biodiversity and living natural resources on one hand and on the other hand it is highly vulnerable to environmental degradation and the effects of climate change. There are about 20 Key Biodiversity Areas (KBA) including Important Bird and Biodiversity Areas (IBAs) of international interest. The rich biodiversity is threatened by land degradation, over-exploitation of resources through excessive harvesting or hunting, introduction of exotic species and ineffective institutional arrangements. Environmental degradation is mainly caused by uncontrolled logging, fuel wood harvesting, cultivation of annual and perennial non-timber crops, encroachment by human settlement, and unsustainable mineral and sand mining activities. The coastline includes many of its most densely populated and economically vibrant areas (e.g. the capital city of Monrovia and major port city of Buchanan), as well as numerous informal settlements composed of extremely poor households with little ability to either minimize their exposure to natural disasters or cope with the effects of environmental shocks (e.g. West Point in Monrovia). The communities most vulnerable to the effects of climate change are also the ones the most prone to suffer from economic impacts of COVID-19, thus exacerbating their vulnerabilities. Liberia's significant strides toward economic growth, skills development, educational parity, and greater protections for women's rights and inclusion have not translated to equal opportunities for women. The salient social characteristic associated with this project have to do with economic opportunities and opening broader opportunities for people in formal business sector to fight with the challenges for entrepreneurial and start up in post COVID-19 phase in urban or mainly in greater Monrovia. D. 2. Borrower’s Institutional Capacity Apr 06, 2021 Page 3 of 13 The World Bank Economic Recovery and Transformation Project (P171997) The Ministry of Commerce and Industry (MOCI) and the Ministry of Finance and Development Planning (MFDP) will take joint responsibility in ensuring effective implementation of this project. The MFDP will manage and administer the MSME Fund/Facility under sub-component 3.1 with oversight by a committee of MFDP, MOCI and Central Bank of Liberia (CBL). To ensure appropriate E&S due diligence, the MFDP will recruit qualified one Environment and Social Officer or engage the services of an E&S consultant who will ensure that beneficiary PFIs comply with the requirements of ESS 9 including developing and implementing an Environmental and Social Management System (ESMS). There will be a Project Implementation Unit (PIU) within the MOCI to manage Components 1 and 2 (C. I and C. II). The PIU will coordinate project implementation, including organizing regular Project Steering Committee meetings and the Private Sector Working Group. The PIU will work collaboratively with MFDP and other agencies under the project to ensure consistent and regular flow of information between internal and external audiences. The PIU will comprise Coordinator/Director, key technical staff, Fiduciary Specialists who will be responsible for all financial management and procurement related activities under the project, and Environmental and Social Officers to support, monitor and report on the project’s environmental and social commitments. The E&S Officers will thus ensure that project implementation aligns with the requirements of the ESF, and in particular the ESCP. It is envisaged that the project will procure the services of a Fund Manager to manage day to day operation of the technical assistance facility, including fiduciary aspects, screening of eligible beneficiaries, management of vendors and service providers, Entrepreneurs and ESOs. The Fund Manager will report to the PIU at MOCI which will provide oversight and supervision of the operationalization of the facility according to rules and guidelines established. The Fund Manager’s recommendations of eligible beneficiaries will be reviewed by the PIU. The experience of MOCI in implementation of Bank funded project including the use of World Bank Environmental Public Disclosure and Social Framework (ESF) is very limited and inadequate. Financial Institutions (FIs) in Liberia have inadequate experience applying Environmental and Social Management Systems (ESMS) to the standard required by the World Bank. Liberia’s weak institutional capacities limit the quality of its public service delivery. Moreover, most counties, outside the Capital, have remained inaccessible due to very bad conditions of the roads, limiting the Project’s ability to provide close implementation support and monitoring of Project execution. The Project will invest in the institutional strengthening of MOCI and MFDP and other line agencies, as well as rely on consulting services to complement the limitations in capacity at early stages of project implementation. The PIU will be responsible for the preparation and implementation of all components of the proposed projects as well as the preparation, implementation and monitoring of relevant E&S instruments to mitigate expected risks and impacts and improve on benefits where necessary. Given the limited personnel capacity of the implementing agencies, the Bank will provide intensive support including providing tailored trainings on environmental and social risk management during project preparation and implementation. The full capacity of the PIU would be assessed during project preparation and enhanced as necessary. The Project, as part of capacity building interventions, will support sensitization and training of prospective PFIs on ESMS. The requirement of ESMS will be a condition for selection and disbursement of funds to PFIs. II. SCREENING OF POTENTIAL ENVIRONMENTAL AND SOCIAL (ES) RISKS AND IMPACTS A. Environmental and Social Risk Classification (ESRC) Moderate Apr 06, 2021 Page 4 of 13 The World Bank Economic Recovery and Transformation Project (P171997) Environmental Risk Rating Moderate Considering the potential risks and impacts, sensitivity of the receiving environment, the scale of project and borrower’s capacity to manage the risks and impacts, the environmental risk rating of the project is Moderate. The project is expected to achieve considerable beneficial environmental impacts because of the emphasis on supporting activities and enterprises that promote positive environmental measures. The Project targets formal enterprises, approximately 85% of them are concentrated in the Capital town, Monrovia, and thereby the risk of depleting Key Biodiversity Areas is low. However, the Component 2 includes provision of grant to entrepreneurs and ESOs in support of commercial activities which remain nebulous at this stage of project preparation. Also, specificity of businesses to be supported under the MSME Facility of sub-component 3 including their line of business, production technologies, processes, etc. are not known at this stage. Some of these activities might potentially cause adverse environmental risks and impacts including waste generation (solid, liquid, hazardous waste); greenhouse gas emissions, air pollution, water contamination, noise, dust, occupational and community health and safety risks etc. The activities supported in component 3 on increasing digital services are anticipated to marginally increase electronic waste with low to moderate adverse environmental impacts. Given the scale at which project activities will be implemented, the potential adverse risks and impacts on the environment are unlikely to be significant. The adverse impacts can be easily predicted with readily available mitigations. The project will minimize these risks and impacts by supporting activities and enterprises that are less damaging to the environment including those that use sound technologies with zero or minimum environmental footprint. Additionally, only sub-projects that are screened with potential adverse environmental risks and impacts between low and moderate will be supported The implementing agencies (MOCI and MFDP) lack experience in the use of World Bank ESF and there is a general lack of experienced Environmental Specialists within the institutions. Public Disclosure Social Risk Rating Moderate Based on the project scope, scale of activities and country context, the Social Risk Rating is Moderate. The likely social risks associated with the project will include: i) risks due to land taking, restriction on the land use due to the components C.2.1 and C.3.1; ii) women vulnerability to Sexual Exploitation and Abuse (SEA) and Sexual Harassment (SH) mainly by authorities in return for official businesses permits/transactions, etc. iii) low participation of women and vulnerable in the project due to lack of opportunities for them in the sector, iv) less opportunities may exclude women and vulnerable and widening the inequality gap that has been further deepened by conflict and pandemics such Ebola and COVID-19, v) possibilities of the project tumbling to ‘elite capture’ in which its resources will be directed to benefit few individuals favored by authorities and, vi) emergence of social conflict resulting from favoritism and lack of transparency and dissemination of eligibility criteria. In addition, the low client capacity, fragile country condition and unknown project locations of the sub-project are main concerns. However, the project proposes attention to benefit women entrepreneurs and mangers to reduce gender gap. The proposed automation, training and capacity building, improvement of regulatory environments, support for national single window for automation of business licenses, continuous consultations, effective and functional GRM may reduce bureaucratic involvement with applicants, SEA/H, and address issue of low participation of women and vulnerable, elite capture and emergence of social conflicts, etc. The improving business environment will also increase extra opportunities for traditionally excluded in the society and open the door of opportunities for the people and contribute to the economy of the country. If the subproject will require small pieces of land for permanent or temporary use to support component 2.1 and 3.1, the PIU shall use E&S screening tool to identify risks and impacts and prepare RAP/Management plan to compensate the losses due to the project. The project will also develop a stakeholder engagement plan (SEP) to include project affected people, vulnerable people, other interested in the project to collect their feedback on the project components for improvements in Apr 06, 2021 Page 5 of 13 The World Bank Economic Recovery and Transformation Project (P171997) design and continuous improvements of implementation and project outcome. The project will also require COVID- 19 related training and protocol to avoid the spread of the cases at various levels. B. Environment and Social Standards (ESSs) that Apply to the Activities Being Considered B.1. General Assessment ESS1 Assessment and Management of Environmental and Social Risks and Impacts Overview of the relevance of the Standard for the Project: The project will provide direct support to start ups and businesses to support recovery and expansion, lending to revive business and other related project activities. Specific interventions and their locations are not identified at this stage. However, the activities might present E&S risks and impacts including generation of solid, liquid and hazardous waste, noise, dust, air pollution, water contamination, GHG emissions, occupational and community health and safety etc. The siting of start-ups or expansion of existing enterprises could result in land clearing and some degree of habitat and biodiversity losses even though they are not expected to be significant. The operationalization of enterprises may result in production of obnoxious substances that are harmful to the environment and human health. The project will also support digitalization of financial services which may marginally increase the use of mobile phones and other electronic devises with low to moderate environmental risks and impacts. Component 3 proposes to enhance the capacity of local financial institutions (FIs) to lend profitably to MSMEs and objectively measure outcomes. FIs benefiting from the Project will be expected to comply with the requirements of the ESF including demonstrating capacity on Environmental and Social Management System (ESMS) to effectively Public Disclosure manage potential E&S risks and impacts that may be associated with sub-projects or interventions they finance. This will involve screening of sub-projects against exclusions in the Project’s legal agreement. Social risks could include potential legal issues related to Sexual Exploitation and Abuse and Sexual Harassments (SEA/SH), poor supervision of men and women working conditions, risks of spread of communicable diseases including spread of COVID-19, failure to protect the labor force and failure to comply with the labor standards of non- discrimination, child and forced labor. Other anticipated impacts include the exclusion of vulnerable groups in stakeholder consultations as well as the decision making process relating to project activities; insufficient coordination with different stakeholders associated with different projects, including the different public utilities, private sector, local communities, etc.; non-use of local resident qualified manpower for the employment generated through the project beneficiaries’ activities; risks of poor labor management and working conditions which could potentially escalate social conflicts, increase burden on and competition for public service provisions while also increasing the risks of gender-based violence. Given that the specific scope and location of project activities, including subproject investments are not known during project preparation, the Borrower prior to appraisal will develop, consult upon and disclose an Environmental and Social Management Framework (ESMF) to adequately provide guidelines on processes and procedures to follow to identify, assess and manage environmental and social risks and their impacts on the project activities and sub- projects, once the details are known and site(s) confirmed before commencement of implementation on the ground. The ESMF will include a screening tool which will be applied to all known sites and project activities to determine the specific E&S instruments to prepare e.g. ESIA, ESMP, RAP/ARAP etc. before commencement of the sub-project activities. The screening tool will be applied to start-ups and enterprises such that those with substantial or high E&S risks and impacts may trigger a review of the Project’s E&S risk classification before they could be funded. The ESMF Apr 06, 2021 Page 6 of 13 The World Bank Economic Recovery and Transformation Project (P171997) will incorporate details of processes to be followed by the MFDP to ensure PFI’s compliance with ESS 9. A sample Terms of Reference (TOR) for the preparation of ESMS among PFIs and an exclusion list will be included in the ESMF. The ESMF is needed to guide activities that will be directly implemented by the MOCI and its agencies e.g. the grant component for startups and COVID-19 recovery support under component 2. The ESMF will contain guidelines and checklist for screening sub-projects managed by the MOCI. Similarly, the ESMF will clearly detail procedures and processes which the MFDP (under sub-component 3.1) could follow to ensure that the PFIs comply with ESS 9 and have adequate ESMS in place. There will be a need for the Social Specialist of the PIU to conduct due diligence to ensure that lands being used for MSME activities were properly acquired without encumbrance. In place of the RPF, the project will use the E&S screening tool included in the ESMF to screen and identify potential E&S issues including those related to land acquisition and land use. Depending on the outcome of the due diligence, an appropriate site-specific instrument(s) may be required. The project will also develop a stakeholder engagement plan (SEP) to include project affected people, vulnerable people, other interested in the project to collect their feedback on the project components for improvements in design and continuous improvements of implementation. An Environmental and Social Commitment Plan (ESCP) will be developed to establish the environmental and social obligations the borrower (the Government of Liberia, through the Ministry of Finance and Development Planning and the Ministry of Industry and Commerce) will have to meet. Areas where “Use of Borrower Framework” is being considered: Public Disclosure The borrower’s E&S framework shall NOT be used for this project. ESS10 Stakeholder Engagement and Information Disclosure Project planning and implementation will have SEP at its core. Early stakeholder identification, mapping and analysis to determine their level of interest and influence will be determined and subsequent plan to engage the stakeholders will be developed. Procedures and mechanisms for information disclosure and grievance redress are to be developed by the borrower. The safeguards team constituted for PIU will conduct multiple consultations with different stakeholders, including proposed project beneficiaries, to identify gaps and solutions for various group of beneficiaries. Consultations will mainly be held with Government counterparts including CSOs & NGOs working in the field of skill development, entrepreneurship and project related activities. The consultations will focus specifically on the various project components with a focus on their constraints for improving productivity, benefits and drawbacks of existing programs. The components of the project all have different type and categories of stakeholders that might be directly or indirectly affected. As part of the project preparation, the MOIC would initiate preliminary consultations about the project with key institutional stakeholders, local authorities and communities in the beneficiary counties. Ahead of project appraisal, the MOIC will consolidate the outcome of these consultation into a Stakeholder Engagement Plan (SEP) to be implemented throughout the project life. The SEP will be prepared as a part of the ESCP and will be updated proportionately to the nature and scale of project during implementation. The different groups of stakeholder include individuals or groups to benefit from the project (i) Internal stakeholders (internal project and management staff), national stakeholders (regulatory entities, local authorities, relevant line ministries, CBL and financial institutions) and local stakeholders, project target groups, commercial establishments) and interested parties and MSMEs). Apr 06, 2021 Page 7 of 13 The World Bank Economic Recovery and Transformation Project (P171997) Given the prevailing COVID-19 pandemic situation and the need for physical distancing and other measures, future stakeholder engagements need to follow COVID-19 protocols and instead of face-to-face contact, technology and media (online meetings, radio and local TV broadcasts, web-based information sharing, mobile platform and SMS) will be used. If face-to-face interaction is necessary for consultation, required distancing protocols will be followed. The project implementation manual will include the protocol for physical distancing and measures related to COVID. Various channels of communication will be used and broadcast so that maximum beneficiaries can come under the purview of information sharing and raising of concerns. Stakeholder engagement and disclosure of information plans/actions will be implemented and will be closely monitored through a development of a Stakeholder Engagement Plan (SEP), which will be a living document and will be updated throughout the project implementation. The SEP will identify and analyze the affected people, other interested parties and people with vulnerability and outline the characteristics, influences and interests of the relevant stakeholder groups (such as unemployed youth and women, local businesses, relevant government agencies, relevant CSOs & NGOs) and timing, and methods of engagement. The plan will also indicate places for consultation meeting and expected time. A project level Grievance Redress Mechanism (GRM) will be established through which issues and concerns can be raised about the project. The GRM will also have special provisions for Sexual Exploitation and Abuse/Sexual Harassment (SEA/SH) related complaints (survivor-centric approach, confidentiality, staffed by people with appropriate special training and identified service providers). The project GRM will also use various channels (including Internet, SMS, Web-based forms, email, etc.) for submission of complaints and concerns. A Grievance Redress Committee (GRC) will be setup to receive, record, address, communicate and advice on issues raised by anyone in a timely manner and without any cost. Periodic reports on GRM issues will be updated and reported to the World Bank Task team. The SEP is not part of the ESCP, but we are requesting the client, as an action point in the ESCP, to continuously update the SEP when Public Disclosure necessary, during project implementation. B.2. Specific Risks and Impacts A brief description of the potential environmental and social risks and impacts relevant to the Project. ESS2 Labor and Working Conditions Direct and contracted workers under the project will include technical consultants, entrepreneurs, FIs, and business service providers. Primary supply workers are also expected to be involved in project activities. The Project’s wide range of activities could involve suppliers who, on an ongoing basis, directly supply to project goods and materials, Community workers are not expected to be part of the project. The implementing agency will prepare Labor Management Procedures (LMP). The Procedures will set out the way project workers will be managed in accordance with the requirements of Liberian national laws and ESS2. The procedure will include requirements for: occupational health and safety, including for COVID19 prevention, working conditions and terms of employment; non- discrimination and equal opportunity; worker’s organizations; child labor and minimum age; forced labor; grievance mechanisms; maintenance of training records and documentation and reporting of occupational accidents, safe transport conditions, diseases and incidents, emergency prevention and remedies for injuries, disability and disease. The FIs that will be involved will be required to comply with ESS2 requirements. The quantification of the labor force to be employed by the project is not possible at this early stage of the project preparation process, but it will be estimated during the appraisal ESRS. Labor influx is not anticipated as the project is likely to use local contractors and local labor. OHS risks will be associated with terms and conditions of employment Apr 06, 2021 Page 8 of 13 The World Bank Economic Recovery and Transformation Project (P171997) and the protection of the labor force. Risk may include the exploitation of workers, which include migrant workers, child labor, discrimination and sexual harassment. The project will include provisions for prohibiting all forms of child labor, discrimination, harassment and sexual abuse and exploitation through Codes of Conduct to be signed by all workers or consultants directly recruited by the project or by a Third Party under the project. Other risk includes OHS risk related to the transmission and contagion of COVID19 during the implementation of project activities. OHS measures will identify and address potential hazards to workers, technical consultants and entrepreneurs to develop preventive and protective measures to avoid COVID19 transmission. ESS3 Resource Efficiency and Pollution Prevention and Management Support to start-ups and entrepreneurs presents an opportunity to build better using environmentally friendly materials and incorporation of renewable energy sources. In providing support, the project will prioritize proposals which incorporate technologies that efficiently use water, energy and raw materials. The project places emphasis on digitization of business services and given the inadequate and intermittent electricity supply in Liberia, the project will explore the use of solar and other renewable sources to power digital devises and other business operations. In cases where these activities involve handling, storage, and disposal of batteries, they will be done in accordance with national regulations and Good International Industrial Practice (GIIP). This will be especially useful in remote and difficult to reach areas that have historically suffered from inadequate grid power. Some of the enterprises to be supported may involve activities that generate waste and emit greenhouse gases and other obnoxious fumes. The digitization of financial services is expected to increase the use of electronic equipment which may marginally Public Disclosure increase electronic waste. The potential environmental risks and impacts from electronic waste will range from low to moderate. The project will seek to reduce, reuse and recycle waste as much as possible and depending on the screening result, a waste management plan (WMP)may be prepared for a sub-project either as a standalone document or incorporated in the Environmental and Social Management Plan (ESMP). Any hazardous waste that is generated by the project activities will be handled and disposed in accordance with the national regulations and GIIP. The ESMF will identify and assess all these risks and impacts and provide mitigations for them. ESS4 Community Health and Safety The GBV/ SEA/H risk assessment of the project indicated that the project is a Moderate Risk. The project plans to reduce gender gap and provide opportunities for women for training/work skills development in close proximity of males therefore raise concerns for GBV/ SEA. These activities are likely to expose women to authorities and project’s worker who have higher propensity to exploit women. Furthermore, the project activities are likely to bring people into close proximity and are likely to increase in person interactions. These risks will be mitigated by adhering to physical distancing, mask wearing and hand washing practices; consistent awareness raising on COVID-19 issues and; maintenance of WHO guidelines during project preparation and implementation phases. In addition, GBV/SEA/H risks will be managed by: i)increasing awareness on SEA/H issues, ii) requiring the signing and adhering to Code of Conduct (CoC) as mandatory for implementation staffs and public authorities associated with the project, iii) regularly sensitizing, briefings/training/workshop to educate people about consequences/disciplinary action for violating the CoC and committing GBV/SEA/H. To avoid any such happening, the Ministry of Industry and Commerce shall develop mitigation measures/management plan in consultation with Ministry of Gender, Children and Social Protection and work with specialized organizations to manage risks, i.e. GBV service providers as required and recommended. Apr 06, 2021 Page 9 of 13 The World Bank Economic Recovery and Transformation Project (P171997) Project GRM will include specific provisions to address issues related to SEA/SH. All Project workers including beneficiaries will undergo sensitization building measures as well as training related to GBV/SEA/SH. Further information on project interventions, plan, locations, etc. will be required to conduct comprehensive GBV risks assessment and develop a GBV action plan, if required. Monrovia and its surrounding areas and other counties are prone to flooding. The project will ensure that businesses to be supported are not in waterways and that necessary structural measures are incorporated in their design to better adapt to flooding and other climate and geophysical hazards. Following the Liberian civil war, the security situation in the country has tremendously improved especially for the major cities which host approximately 85% of the formal businesses which will be targeted by the Project. At this stage, the project is not expected to undertake interventions in remote areas which may present some security risks. When Project details and locations are determined and they present security risk, the project will prepare a security risk assessment and management plan as necessary ESS5 Land Acquisition, Restrictions on Land Use and Involuntary Resettlement The project may require land acquisition, cause restrictions to the land use or involuntary resettlement under component 2 and 3, particularly for the component on the direct support to start up and business to support for recovery and expansion of the business and lending to revive the existing business bases. The project shall conduct site specific E&S screening of the activities under components 2 and 3 and for related risks and impacts. If a project activity is identified to be considered under ESS 5, then the MOIC will develop RAP/ARAP as and when required and implemented prior to initiating activities on the land to be used for project or most preferably land transaction Public Disclosure through willing buyers and sellers shall be done. The ESMF will contain an E&S screening tool which will be used to identify risks and impacts including those related to land acquisition and use. The screening tool will be useful to MOCI, MFDP and PFI. For instance, the PFIs as part of their ESMS may adopt the screening tool to identify risks and impacts associated with sub-projects they fund. ESS6 Biodiversity Conservation and Sustainable Management of Living Natural Resources This ESS is not relevant at this stage of project preparation as targeted businesses, approximately 85% of them are in the capital town, Monrovia, in developed environments where impacts on biodiversity and living natural resources are unlikely. The relevance of this standard will be further assessed in the ESMF. ESS7 Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Local Communities The project area does not have population of Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Local Communities/ ethnic minority meeting the criteria mentioned in ESS 7, thus currently not relevant. ESS8 Cultural Heritage This ESS is not relevant at this stage of project preparation. However, the ESMF will include a checklist and mitigation measures including per chance procedures in case this ESS becomes relevant. Apr 06, 2021 Page 10 of 13 The World Bank Economic Recovery and Transformation Project (P171997) ESS9 Financial Intermediaries The project proposes to use financial institutions (FIs) to lend profitably to MSMEs and objectively measure outcomes. The FIs will be expected to have in place an ESMS which will guide them in the identification, assessment, management and monitoring of environmental and social risks and impacts associated with sub-projects and activities they will fund. Project activities with substantial and high E&S risks and impacts will not be funded by the FIs until the Project’s E&S risks classification is reviewed and upgraded to allow for the funding of such activities. The ESMF will include provisions of an ESMS including monitoring of effectiveness of the system during project implementation. Also, the ESMF will include a TOR for the preparation of ESMS which could be adopted by prospective PFIs. The MFDP will engage the services of a qualified E&S Officer to oversee PFIs’ compliance with ESS 9 including the development and implementation of ESMS. B.3 Other Relevant Project Risks The project is likely to be implemented where COVID-19 pandemic situation may exist. Thus, there is a need for the project to be implemented under specific protocols. Physical / social distancing has been implemented by the government though given the adverse impact on national economy, the government has recently opened offices, markets and malls, and public transport system urging everyone to follow COVID-19 protocols. The pandemic has already given rise to the price hike of essentials, travel restriction, social tension etc. In this emerged situations, training and skill development interventions need to be designed keeping WHO and Government guidelines in mind. The Project will prepare and disclose the ESMF specifying the following: Public Disclosure i) the procedures and processes the MFDP will follow to ensure that PFIs comply with ESS 9; ii) ESMS as a prerequisite for selection and disbursement of Project funds to PFIs; iii) Project support in building capacity of MFDP and PFIs in ESMS. The Project plans to use part of the Project Preparation Advance (PPA) to sensitize and train prospective PFIs on the ESMS ahead of project effectiveness. The ESMF will incorporate a TOR for preparation of ESMS to guide MFDP and prospective PFIs. C. Legal Operational Policies that Apply OP 7.50 Projects on International Waterways No 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 No financing partner is involved in the project Apr 06, 2021 Page 11 of 13 The World Bank Economic Recovery and Transformation Project (P171997) B. Proposed Measures, Actions and Timing (Borrower’s commitments) Actions to be completed prior to Bank Board Approval: • Preparation and disclosure of Environmental and Social Commitment Plan (ESCP); • Preparation, consultation and disclosure of an Environmental and Social Management Framework (ESMF) inclusive of Labor Management Procedures (LMP) and GBV risks assessment; • Preparation, consultations and disclosure of the Stakeholder Engagement Plan (SEP); • Institutional Capacity Assessment and Institutional Capacity Strengthening Plan; Possible issues to be addressed in the Borrower Environmental and Social Commitment Plan (ESCP): • Updating and Implementation of the Stakeholder Engagement Plan (SEP) • Preparing and Implementation of Environmental and Social Management Plans (and associated sub-plans including Health and Safety Plan, and Waste Management Plan) as may be required for sub-projects • Preparation, consultation, disclosure and implementation of ESIA and other site-specific E&S instruments e.g. RAP/ARAP as may be required for sub-projects and activities; • Institutional Capacity Strengthening for MOCI, MFDP and other implementing agencies; • Implementation of Labor Management Plan; • Acquisition of applicable statutory permits; • Implementation of the GRM. Public Disclosure C. Timing Tentative target date for preparing the Appraisal Stage ESRS 18-May-2021 IV. CONTACT POINTS World Bank Contact: Eric David Manes Title: Senior Economist Telephone No: +1-202-473-2418 Email: emanes@worldbank.org Contact: Kiyotaka Tanaka Title: Financial Sector Specialist Telephone No: +1-202-458-4101 Email: ktanaka@worldbank.org Borrower/Client/Recipient Borrower: Ministry of Finance and Development Planning Implementing Agency(ies) Implementing Agency: Ministry of Commerce and Industry V. FOR MORE INFORMATION CONTACT Apr 06, 2021 Page 12 of 13 The World Bank Economic Recovery and Transformation Project (P171997) 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): Eric David Manes, Kiyotaka Tanaka Practice Manager (ENR/Social) Senait Nigiru Assefa Recommended on 05-Apr-2021 at 14:13:37 GMT-04:00 Safeguards Advisor ESSA Nathalie S. Munzberg (SAESSA) Cleared on 05-Apr-2021 at 20:42:26 GMT-04:00 Public Disclosure Apr 06, 2021 Page 13 of 13