The World Bank Social Safety Net Project (P167416) Additional Financing Appraisal Environmental and Social Review Summary Appraisal Stage (AF ESRS Appraisal Stage) Public Disclosure Date Prepared/Updated: 10/04/2024 | Report No: ESRSAFA842 Oct 04, 2024 Page 1 of 10 The World Bank Social Safety Net Project (P167416) I. BASIC INFORMATION A. Basic Operation Data Operation ID Product Operation Acronym Approval Fiscal Year P167416 Investment Project Financing (IPF) Social Safety Net Project 2019 Operation Name Social Safety Net Project Country/Region Code Beneficiary country/countries Region Practice Area (Lead) (borrower, recipient) Ecuador Ecuador LATIN AMERICA AND Social Protection & Jobs CARIBBEAN Borrower(s) Implementing Agency(ies) Estimated Appraisal Date Estimated Board Date Republic of Ecuador Ministry of Economic and Social 07-Oct-2024 25-Oct-2024 Inclusion (MIES), Ministry of Public Health (MoH), Social Registry Unit (SRU) Public Disclosure Estimated Decision Total Project Cost Review Date 30-Sep-2024 587,250,000.00 Proposed Development Objective To improve the equity, integration, and sustainability of selected social safety net programs, and in case of an eligible crisis or emergency, respond promptly and effectively to it. 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 The GoE has requested the Bank’s support to improve the equity, integration and sustainability of selected social assistance programs administered by MIES. D. Environmental and Social Overview Oct 04, 2024 Page 2 of 10 The World Bank Social Safety Net Project (P167416) D.1 Overview of Environmental and Social Project Settings The Project will operate at national scale, however, as defined by decree 1211, signed by the President in December 2020, 738 sub-national parroquias (parishes) have been prioritized based on a formula that identifies them as the most vulnerable. The vulnerability is defined by seven variables at the municipal level: prevalence of chronic childhood malnutrition (CCM) for children below 5 years of age; prevalence of poverty based on consumption; water access deficit; overcrowding; quantitative housing deficit; population projection of children under 5 years of age; and cantonal concentration of children under 5 years of age with CCM. In order to efficiently target the population, the Project will use a Results-Based Budgeting and cross-reference and monitor national ID databases with administrative databases from health and social service providers. The strategy is considered a key intervention in the GoE’s plan to protect the most vulnerable and to achieve the 2030 Sustainable Development Goals. This proposed AF aims to respond to the GoE’s request to support the government in three main activities: (i) the implementation of the national strategy ‘Ecuador Crece sin Desnutricion Crónica’ (Ecuador Grows without Chronic Malnutrition) by increasing the coverage of child services as a tool for the reduction of chronic child malnutrition (DCI for its Spanish acronym); (ii) the consolidation of a new institutional model (Modelo de Actualizacion Permanente, MAP) to make the social registry more dynamic and integrated with other large national administrative databases to improve targeting of social benefits and services (including child nutrition services), and (iii) technical support for the National Statistical Institute (INEC) for the collection of annual data on malnutrition. The GoE has also prioritized protecting the most vulnerable through the reduction of Chronic Child Malnutrition (DCI). The rationale and evidence behind this intervention is that interruptions in the health and care services, together with Public Disclosure reductions in family income could potentially increase the annual number of additional children falling into DCI by approximately 20,000 children, especially those who were more vulnerable before COVID-19. Moreover, the loss of livelihoods in poor households whose income depends on agriculture, especially rural and indigenous peoples settled in territories that are vulnerable to climate change, are more impacted by chronic malnutrition. The prevalence among the poorest (30 percent), rural (29 percent) and indigenous population is double that of the white, mestizo and Afro- Ecuadorian population. In the last eight years, the trend observed in children under 6 months old is also of serious concern since DCI has increased from 10 percent in 2012 to 22 percent in 2019. A similar trend is observed in children aged 6 to 12 months, where rates increased from 14 percent in 2006 to 22.7 percent in 2019. These trends may be a sign that essential health and nutrition care measures are not being adopted by households during the first year of life. On the other hand, interruptions in healthcare services (vaccines and checkups) and reductions in family income due to the effects of pandemics, climate change, among others, could push an estimated 20,000 additional children into a situation of DCI, particularly among the most vulnerable, over-represented by indigenous, afro, and Montubian communities. D.2 Overview of Borrower’s Institutional Capacity for Managing Environmental and Social Risks and Impacts The Borrower's institutional capacity has been gradually built since project effectiveness in 2019. The Ministry of Economic and Social Inclusion (MIES for its acronym in Spanish) and the Social Registry Unit (SRU), and more recently the Ministry of Health have coordinated and implemented various social risk management activities including the Labor Management Procedures, strengthening of the GRM, and rolling out aspects of the Stakeholder Engagement Plan. One of the challenges faced during implementation of the Parent Project was a high staff turnover in the PIU and difficulties in coordinating across multiple departments. The Project counts with a Social Specialist who has been building the institutional memory and capacity to manage ESF risks. The social specialist has also enhanced cooperation with social Oct 04, 2024 Page 3 of 10 The World Bank Social Safety Net Project (P167416) staff at partner agencies, the Social Registry and the Ministry of Health. However, constraints remain in terms of getting support from management in the ministries to managing social risks (the project does not involve any civil works and the environmental risks are low). Moreover, capacity needs to be continuously strengthened to now also include MIES' and MoH's cooperation with GADs (autonomous governments) and NGOs that will be providing technical assistance to select programs. II. SUMMARY OF ENVIRONMENTAL AND SOCIAL (ES) RISKS AND IMPACTS A. Environmental and Social Risk Classification (ESRC) Substantial A.1 Environmental Risk Rating Low The activities supported by the Project are not expected to have negative direct or indirect environmental impacts. No rehabilitation or construction of infrastructure or other actions having an impact on the environment will be financed through the project. The Project will be implemented at the national level over a heterogeneous geographical area, the overall risks and potential adverse environmental impacts are not considered significant. Substantial A.2 Social Risk Rating The Project supports various social protection programs benefiting some of the most vulnerable population groups in Ecuador. However, despite these positive social impacts, the Project's social risk rating is substantial due to the wide scope of project activities, institutions and beneficiaries, including Indigenous Peoples and vulnerable groups such as refugees from Venezuela, and due to challenges and delays in finalizing ESF documents committed under the Public Disclosure Environmental and Social Commitment Plan (ESCP). Implementation challenges resulted in a Moderately Unsatisfactory performance rating from May 2021 to April 2024. Key constraints affecting the risk rating include: i) high staff turnover at MIES, the main counterpart, affecting the continuity and effective integration of the social risk measures established by the project; ii) lack of reporting on the implementation of the grievance redress mechanism (GRM); delays in preparing the Indigenous Peoples Plan (IPP) that will provide additional measures to enhance the benefits to indigenous peoples; and iii) delays in preparing the action plan to manage sexual exploitation, abuse and harassment (SEA/SH). While E&S performance has been upgraded to Moderately Satisfactory due to progress over the past year, including approval of the Gender Action Plan, finalization and publishing of the Labor Management Procedures jointly elaborated and validated by the three implementing agencies: MIES, Ministry of Health (MoH) and the Social Registry Unit (URS), and strengthening of the GRM, the project’s social risks remain substantial. The AF includes activities on combating Childhood Malnutrition in the most vulnerable parishes identified by the URS, many of which include high levels of Indigenous Peoples. In this sense, finalizing and implementing the IPP, including a tailored outreach to indigenous families, will be critical for the AF's success and enhanced benefits to Indigenous Peoples. Efforts are also needed to ensure implementation and reporting of the GRM, especially at the zonal and district level offices, and finalizing and implementing the SEA/SH action plan. It should also be mentioned that due to the wide geographic and institutional coverage, the project activities will be carried out by civil servants of the three executing agencies and thus dependent on the PIU's management capacity of various actors within the three institutions at various levels. Several of the problems encountered in previous project periods were due to a lack of institutional management beyond the PIU level. In this regard, and with support from the Bank, the PIUs are identifying institutional barriers to overcome these drawbacks, processes that are underway with results expected to be visible during AF implementation. Oct 04, 2024 Page 4 of 10 The World Bank Social Safety Net Project (P167416) B. Environment and Social Standards (ESS) that Apply to the Activities Being Considered B.1 Relevance of Environmental and Social Standards ESS1 - Assessment and Management of Environmental and Social Risks and Impacts Relevant Ecuador continues to struggle to mitigate the impacts of a very tight fiscal situation, that was worsened by the COVID- 19 pandemic's economic impact, which plunged the economy into a recession in 2020 and pushed one million people into poverty. Underemployment and informality rose, particularly among women, youth, low-skilled workers, and migrants, reducing the labor income and therefore, total family incomes. Social protection measures helped to partially mitigate the shock on household income; however, other dimensions of well-being, including food security and access to health and education, were also negatively affected, with potential long-term impacts. Most recently, the GoE has prioritized protecting the most vulnerable through the reduction of Chronic Child Malnutrition (DCI). The rationale and evidence behind this intervention are that interruptions in the health and care services, together with reductions in family income, could potentially increase the annual number of additional children falling into DCI by approximately 20,000 children. Moreover, the loss of livelihoods in poor households whose income depends on agriculture, especially rural and indigenous peoples settled in territories that are vulnerable to climate change, are more impacted by chronic malnutrition. The Borrower prepared and disclosed a Social Assessment (SA) that has been adopted by MIES at the time of the parent project preparation. The SA identifies potential risks and opportunities for disadvantaged and vulnerable groups, particularly indigenous peoples, afro-descendants and women. It includes an Action Plan with specific measures to avoid, minimize or mitigate potential adverse impacts, as well as measures to Public Disclosure maximize project benefits. Some of the most salient issues identified in the social assessment are: (i) extremely poor populations entitled to receive cash transfers and services may fall in the 6% margin of error and be excluded (in some cases exacerbated by geography or ethnicity); (ii) some of the graduating individuals who may cease to receive the Human Development Bono (BDH) may slip into vulnerable conditions even if they have access to the Human Development Credit (CDH) and social services which means that it will be critical to ensure that the measures to reach the extreme poor are effective, particularly with regards to access to social services, understanding of rights and responsibilities, multicultural approaches to service provision, and robust grievance redress mechanisms; and (iii) labor management risks such as challenges in mobilization in the field to reach beneficiaries and potential exposure to SEA/SH. To manage specific social risks, a Stakeholder Engagement Plan, an Indigenous Peoples Planning Framework (IPPF) and Labor Management Procedures (LMP) have been prepared for the project. The IPPF (Marco de Politica de Pueblos Indigenas – MPPI in Spanish) includes mechanisms for engaging indigenous peoples effectively so that they can be empowered to contribute their knowledge in their identification of beneficiaries and to program implementation, particularly as it relates to chronic child malnutrition interventions. A more detailed Indigenous Peoples Plan (IPP) is being finalized to provide additional measures to enhance benefits to indigenous peoples. An SEA/SH action plan is also being finalized; it has been drafted in parallel with the finalized Gender Plan. MIES, the Social Registry and the Ministry of Public Health will continue to provide implementation support to ensure that environmental and social standards are applied effectively. Mitigation measures include increasing the capacity of MIES local teams to support households that are exiting the BDH program, strengthening the targeting capabilities of the Social Registry, and implementing the SEA/SH protocols and codes of conduct that are disseminated widely amongst direct and contracted project workers. GADs and NGOs that will provide technical assistance to MIES and MoH during implementation of the AF will adopt the ESF instruments that will be updated for the AF. Oct 04, 2024 Page 5 of 10 The World Bank Social Safety Net Project (P167416) ESS10 - Stakeholder Engagement and Information Disclosure Relevant The Parent Project has been under implementation since 2019 and has gone through various changes, including significant adjustments to respond to the COVID-19 pandemic. Stakeholder engagement, following the Stakeholder Engagement Plan prepared for the project, has focused on information sharing and dissemination and the implementing agencies are working to strengthen two-way communication channels and efforts. The technical norms for the Mision Ternura Program aimed at the integral children’s development, requires that the territorial technical coordinators establish family and community committees in which beneficiaries participating in the program must attend in order to receive services. Through these committees, beneficiary families are provided with information about the Program, presented with their rights and responsibilities, and provided with the opportunity to request additional information and ask questions. In 2021, in order to develop the National Strategy for Ecuador Grows without Malnutrition, (Estrategia Nacional Ecuador crece sin Desnutrición), government multi-stakeholders and experts in the field of malnutrition participated in consultative workshops to co-develop the strategy. Key stakeholders included: Ministries of Finance and Economy, Health, Social and Economic Inclusion, Education, Statistical Office, Ministry of Agriculture, UNICEF, PAHO, IADB, World Bank, CAF, Kings College London, and organizations with this expertise. During 2020, MIES disseminated information through audio messages to beneficiaries about COVID-19 prevention protocols measures and over 300,000 text messages on the care of elderly population. In 2021, close to 400,000 beneficiaries participated in awareness raising sessions on the adult care programs across the country. Stakeholders will continue to be engaged throughout project implementation with additional efforts to better engage with the most vulnerable stakeholders and parishes. As such, in addition to the expected stakeholders (including Ministry staff at the national and district level offices), indigenous authorities and populations, afro-Ecuadorians, and Montubian groups and organizations will play a more prominent role given their Public Disclosure disproportionate presence in the 738 most vulnerable parishes. Further, a new co-executing agency has been incorporated, the Ministry of Public Health which was reflected in the updated SEP as well as its related stakeholders (personnel hired through the project, and beneficiaries benefitting from the health services). Ongoing stakeholder engagement will continue, including for the SEP to be updated within 60 days of effectiveness of the AF and for its implementation. The SEP includes plans for how the programs and local staff will ensure the active participation of project beneficiaries and are responsible for monitoring project implementation at their level to ensure that the project is reaching its stated objectives and responding to any queries and/or grievances that may emerge. Local staff will also play an important coordination role amongst local level stakeholders. The existing grievance redress mechanism has been strengthened during the implementation of the parent project and the first AF; the implementing agencies will continue to strengthen engagement activities tailored to Indigenous Peoples and other vulnerable groups that may have difficulty accessing project benefits. In the case of Indigenous Peoples, each group has its own conflict resolution systems, which will need to be respected utilized in tandem with the institutionalized mechanisms. The SEP includes measures to ensure periodic dissemination of information on the GM system to project stakeholders. Special emphasis will be placed on the new components of the AF including refocusing investments on the prevention of childhood malnutrition, developing effective engagement and communication strategy on health conditionalities of cash transfers, and providing technical support to the Ministry of Public Health the implementation of the strategy to reduce malnutrition of pregnant women and children up to 24 months of age. The SEP will be updated within 60 days of effectiveness of the AF and will include provisions for GADs and NGOs that will provide technical assistance to MIES and MoH under the AF. ESS2 - Labor and Working Conditions Relevant Oct 04, 2024 Page 6 of 10 The World Bank Social Safety Net Project (P167416) The Social Assessment confirmed that the activities under the project are not expected to have any negative impacts related to labor and working conditions. The project primarily involves government staff from MIES and the Social Registry at the national, regional, and canton levels and has now integrated the Ministry of Public Health as a co- executing agency. The project already counts with Labor Management Procedures (LMP) jointly developed between MIES and the Social Registry and subsequently with the Ministry of Public Health when it was incorporated as a co- executing agency. The MoH has some previous experience with implementing an LMP as it has developed this instrument for the COVID-19 Emergency Response and Vaccination Project (P173773). The applicable national legal framework is aligned with the principles of ESS2 and International Labor Organization (ILO) standards on non- discrimination and working conditions. The government has the constitutional obligation to guarantee non- discrimination and adequate working conditions, including ensuring occupational health and safety, to its civil servants and direct workers. It also guarantees paid work to elderly individuals and the disabled, and constitutional provisions promote affirmative action promoting gender and ethnic equality. The LMP will be updated within 60 days of effectiveness of the AF and will include provisions for GADs and NGOs that will provide technical assistance to MIES and MoH under the AF. ESS3 - Resource Efficiency and Pollution Prevention and Management Not Currently Relevant The standard is not relevant as the Project will neither finance nor support any civil works activities thus no pollution prevention and management measures will apply. The Project will not be a significant user of energy, water or other natural resources. ESS4 - Community Health and Safety Relevant Public Disclosure This standard is relevant. The community health and safety risks are low to moderate and concerns the interactions between project workers and beneficiaries. There are no civil works related risks. During the first AF, measures were introduced to manage risks related to COVID-19, including prevention and mitigation protocols that were widely disseminated following WB General ESH guidelines and WHO COVID-19 prevention guidelines. In parallel with preparing the recently approved Gender Plan an SEA/SH Action Plan is being prepared for approval by the WB; this will be finalized within 60 days of effectiveness of the AF. ESS5 - Land Acquisition, Restrictions on Land Use and Involuntary Resettlement Not Currently Relevant The standard is not relevant as project activities will not require any land acquisition or involve any physical or economic displacement of individuals or communities. It is therefore not expected to generate any negative impact covered under ESS5. ESS6 - Biodiversity Conservation and Sustainable Management of Living Natural Not Currently Relevant Resources The standard is not relevant as the Project will neither finance nor support any civil works or other activities which would impact biodiversity. Furthermore, the Project does not involve any activities which involve the management or use of living natural resources. The IPF will finance the delivery of social services and improve the targeting mechanisms to reach the poor. As such, it is not expected to generate any negative impact on the Biodiversity Conservation and Living Natural Resources. Oct 04, 2024 Page 7 of 10 The World Bank Social Safety Net Project (P167416) ESS7 - Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Relevant Local Communities ESS7 applies to the project as a large segment of the beneficiaries are Indigenous Peoples, more so with an increased targeting of the 738 most vulnerable parishes. About one million, about 7%, of Ecuador’s population are indigenous. They are among the poorest population group in Ecuador and have some of the highest of chronic malnutrition among children. It is not expected that the project will have a negative impacts on Indigenous Peoples and none have been observed since effectiveness of the parent project. In contrast, the project will provide and tailor benefits to indigenous communities, particularly Amazonian and Sierra based communities, and includes indicators to measure project benefits to Indigenous Peoples. The IPPF that was prepared for the parent project reflects the requirements outlined in ESS 7, references national legislation (such as the Politica Nacional de Garantias - National Guarantee Policy), and follows the UN Guidelines on the Protection of Indigenous Peoples in Voluntary Isolation and the ILO 169 Convention that has been ratified by Ecuador. It includes the following measures to address the key challenges: 1. Awareness raising workshops with indigenous groups about the social protection project, the changes to be expected, and to collect feedback on the proposed approach in order to customize implementation to reflect feedback. 2. Information fairs for indigenous communities to sensitize beneficiaries about their rights and responsibilities as they relate to receiving cash transfers; 3. Identify specific actions to ensure a multicultural service delivery. The ESCP for the parent project reflected the agreement to hire a consultancy to prepare multiple Indigenous Peoples Plans for different groups. However, these plans were not developed which contributed to a Moderately Unsatisfactory performance rating. The lack of a social specialist, frequent staff turnover, the need to renew PIU staff contracts at the beginning of every calendar year and delays in the Ecuadorian national process to assign budget to the Project all impacted the ability to prepare the IPPs. Delays in the procurement process to launch the bid to select firms and an Public Disclosure initial lack of bidders also delayed the process. During the first AF a more streamlined approach to develop measures to enhance the benefits, and avoid adverse impacts, to Indigenous Peoples was agreed to. Instead of preparing multiple IPPs, it was agreed to prepare a consolidated plan to cover all regions and all relevant project activities. The preparation of the IPP is ongoing based on an assessment undertaken by a consultant firm, including consultations with representatives of Indigenous Peoples. Key challenges and needs identified include: (i) improved targeting of Indigenous Peoples, particularly those in areas of difficult access such as the Amazonia; (ii) working with experts to tailor messages related to combating child malnutrition that is culturally appropriate and effective; and (iii) communication and outreach challenges due to geography, culture, and at times, language. The completion of the IPP is included in the ESCP for the second AF with a provision to finalize the IPP within 60 days of effectiveness of the AF. ESS8 - Cultural Heritage Not Currently Relevant The Project will only finance the delivery of social services and improve the targeting mechanisms to reach the poor. In this context, it is not expected that there will be any possibility of directly or indirectly affecting tangible or intangible cultural heritage. ESS9 - Financial Intermediaries Not Currently Relevant The Project will not work with financial intermediaries thus will not apply ESS9. B.2 Legal Operational Policies that Apply Oct 04, 2024 Page 8 of 10 The World Bank Social Safety Net Project (P167416) OP 7.50 Operations on International Waterways OP 7.60 Operations in Disputed Areas B.3 Other Salient Features Use of Borrower Framework No N/A Use of Common Approach No N/A 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 implementation? An ESA, SEP, IPPF and LMP have been prepared for the parent project. An IPP and SEA/SH action plan are being prepared and will be finalized after approval of the second AF (within 60 days of effectiveness). The SEP and LMP will be updated within 60 days of effectiveness of the AF. The ESCP has been revised for the second AF to reflect these commitments. Public Disclosure III. CONTACT POINT World Bank Task Team Leader: Nelson Gutierrez Title: Senior Social Protection Specialist Email: ngutierrez1@worldbank.org TTL Contact: Laura Di Giorgio Job Title: Senior Economist Email: ldigiorgio@worldbank.org IV. FOR MORE INFORMATION CONTACT Oct 04, 2024 Page 9 of 10 The World Bank Social Safety Net Project (P167416) 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): Nelson Gutierrez, Laura Di Giorgio ADM Environmental Specialist: Silvia Fernanda Palomino Carranza ADM Social Specialist: Svend Jensby Public Disclosure Oct 04, 2024 Page 10 of 10