The World Bank Implementation Status & Results Report Justice for Business Project (P167247) Justice for Business Project (P167247) EUROPE AND CENTRAL ASIA | Croatia | Governance Global Practice | IBRD/IDA | Investment Project Financing | FY 2020 | Seq No: 4 | ARCHIVED on 31-Dec-2021 | ISR48960 | Implementing Agencies: Republic of Croatia, Ministry of Justice and Public Administration (MoJPA), Ministry of Physical Planning, Construction and State Assets (MoPPCSA), Ministry of Economy and Sustainable Development (MoESD) Key Dates Key Project Dates Bank Approval Date: 31-Mar-2020 Effectiveness Date: 29-Jun-2020 Planned Mid Term Review Date: 01-Dec-2022 Actual Mid-Term Review Date: Original Closing Date: 30-Jun-2025 Revised Closing Date: 30-Jun-2025 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project Development Objective is to improve the business regulatory procedures and justice service standards for businesses andcitizens. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Reducing the administrative burden for businesses to interact with government Improving justice services for businesses and citizens Project Management and Technical Assistance Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Substantial Substantial Implementation Status and Key Decisions The procurement process for the contract of the first phase of the Zagreb Municipal Civil Court rehabilitation was completed and the awarded firm will be announced in December 2021. Works will start in early 2022. Achievement of DLIs #3b and 5 was verified and corresponding disbursements carried out over EUR 4 million. A Grievance Redress Mechanism has been established for the Project and is accessible in the following link:https://mpu.gov.hr/istaknute- teme/projekti/projekti-ostalo/projekti-financirani-iz-zajmova-medjunarodnih-financijskih-institucija/poziv-na-javno-savjetovanje/21598. 12/31/2021 Page 1 of 12 The World Bank Implementation Status & Results Report Justice for Business Project (P167247) Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Substantial Substantial Substantial Macroeconomic Moderate Substantial Substantial Sector Strategies and Policies Substantial Substantial Substantial Technical Design of Project or Program Substantial Substantial Substantial Institutional Capacity for Implementation and Substantial Substantial Substantial Sustainability Fiduciary Moderate Moderate Moderate Environment and Social Moderate Moderate Moderate Stakeholders Moderate Moderate Moderate Other -- -- -- Overall Substantial Substantial Substantial Results PDO Indicators by Objectives / Outcomes Improvement of business regulatory procedures IN01061013 ►Time and number of procedures to register an LLC (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 5.78 days and 3 5.78 days and 3 Additional 20% procedures (court procedures (court 19.5 days and 7 reduction (30% of registry, tax registry, tax Value procedures to start an baseline) in the time administration, pension administration, LLC and procedures for fund and bank) to start pension fund and registering LLCs an LLC. bank) to start an LLC. Date 31-Dec-2019 28-Feb-2021 16-Dec-2021 30-Dec-2022 Measured as percentage reduction in time and the number of procedures. Since the Doing Business Report was cancelled, the team will rely on alternative data sources, such as the information provided by Comments: the Ministry of Economy and Sustainable Development. Moreover, the WB team is also hiring a Consultant to provide an independent third party review and verify this information. IN01061015 ►Percentage of licenses with information on licensing requirements published online (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 12/31/2021 Page 2 of 12 The World Bank Implementation Status & Results Report Justice for Business Project (P167247) 0 percent licensed 0 percent licensed 0 percent licensed activities with online activities with online activities with online Value 75% information on licensing information on licensing information on requirements requirements licensing requirements Date 31-Dec-2019 25-Jun-2021 16-Dec-2021 31-Dec-2022 Comments: Number of licenses that can be applied for and obtained online IN01061017 ►Number of procedures to obtain a construction and a use permit (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Additional 20% 15% reduction in the reduction (35% from 15% reduction in the 22 procedures to obtain number of procedures the baseline) in the number of procedures to Value a construction permit and to obtain a number of procedures obtain a construction and a use permit construction and a use to obtain a a use permit. permit. construction and a use permit Date 31-Dec-2019 25-Jun-2021 16-Dec-2021 31-Dec-2022 Since the Doing Business Report was cancelled, the team will rely on alternative data sources, such as the information provided by the Ministry of Construction, Physical Planning and State Assets. The WB Comments: team is hiring a Consultant to provide an independent third party review and verify this information. Improvement of justice service standards for businesses and citizens IN01061014 ►Disposition time for the issuance of judicial decisions in cases before commercial courts (DLI 6) (Text, Custom, PBC) Baseline Actual (Previous) Actual (Current) End Target 240 days (25% 320 days Value 241 days 284.00 reduction) Date 31-Dec-2019 31-May-2021 31-Oct-2021 31-Dec-2023 The disposition time is measured from January 1 to December 31. MOJPA will notify the Bank of the progress against the baseline and the target results in the first quarter of 2022. The current value of 284 is based on the calculation of the court’s performance and includes performance data for the Summer months (June, July, and August). The calculation does not include performance data for the last quarter 0f Comments: 2021, which is known to produce very high clearance rates across the judiciary. This is the main reason for the difference between the previous ISR and the current one. If commercial courts retain disposition times at this level by the end of this year (2021), the first milestone will be completely met. IN01061016 ►Court users’ and stakeholders’ satisfaction with respect to service delivery in the four selected courts (citizen engagement indicator) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Terms of Reference Terms of Reference for for Court Users' 20% increase in user Court Users' Survey are TBD (The baseline will Survey are currently in and stakeholder currently in preparation be set by the results of a preparation and satisfaction from the Value and surveys will be survey to be conducted survey/s will be baseline in the four conducted by the end of after loan effectiveness) conducted by the end court facilities where 2021. (The baseline will of 2021. (The baseline renovation is done be set by the results of a will be set by the 12/31/2021 Page 3 of 12 The World Bank Implementation Status & Results Report Justice for Business Project (P167247) survey to be conducted results of a survey/s to by the end of 2021). be conducted by the end of 2021). Date 31-Dec-2019 25-Jun-2021 16-Dec-2021 31-Dec-2024 Measured through a survey as court users’ and stakeholders’ satisfaction with respect to the quality of justice service delivery in the four selected courts. It is expected first survey/s to be conducted during Comments: 2022 that would inform the baseline. Intermediate Results Indicators by Components 1.1. Removing regulatory barriers for market entry and operation IN01061021 ►Implementation of a single digital window for LLCs (DLI 1) (Text, Custom, PBC) Baseline Actual (Previous) Actual (Current) End Target A single digital window, which can be accessed from different entry points, is the only system for the completion of all A single digital window A single digital window the formalities required The single digital window that offers online that offers online by the 5 agencies Value for LLCs is not business registration for business registration (Commercial Court operational LLCs is operational and for LLCs is operational Registry, Tax in use. and in use. Administration, Statistics, Pension and Health Insurance) to start an LLC and registration of at least five types of changes. Date 31-Dec-2019 25-Jun-2021 16-Dec-2021 31-Dec-2022 First, milestone has been achieved. Currently, the verification process is underway. Comments: IN01061028 ►Number of changes for LLCs that are digitalized through the single digital window (e.g. change in address, name, directors, voluntary liquidation) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 5.00 Date 31-Dec-2019 25-Jun-2021 16-Dec-2021 31-Dec-2022 Key changes for LLCs that can be registered online. Expected by the end of 2022 and the team will report Comments: against the progress in the second ISR next year. IN01061029 ►Percentage of new LLCs disaggregated by gender (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target 12/31/2021 Page 4 of 12 The World Bank Implementation Status & Results Report Justice for Business Project (P167247) Value 0.00 0.00 0.00 100.00 Date 31-Dec-2019 25-Jun-2021 16-Dec-2021 31-Dec-2022 LLCs disaggregated by gender. Expected only in year 3 of the project. Comments: IN01061030 ►Beneficiary satisfaction with business registration services offered through single digital window(citizen engagement indicator) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 60.00 Date 31-Dec-2019 25-Jun-2021 16-Dec-2021 31-Dec-2022 Satisfaction survey on business registration services. It is expected that single digital window will offer Comments: survey feature by the end of 2022. IN01061032 ►Beneficiary satisfaction with the online information licensing platform (citizen engagement indicator) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 60.00 Date 31-Dec-2019 25-Jun-2021 16-Dec-2021 31-Dec-2022 Satisfaction survey on licensing online informational platform is expected in Year 4. Comments: IN01061033 ►Licensing requirements are published online, and selected licenses are digitalized (DLI 2) (Text, Custom, PBC) Baseline Actual (Previous) Actual (Current) End Target An online informational portal with licensing There is no online requirements is There is no online There is no online informational licensing operational informational licensing informational licensing portal; 0 licenses Value portal; 0 licenses portal; 0 licenses published Licensing for 15 published published online/digitalized business activities is online/digitalized online/digitalized digitalized and transactional Date 31-Dec-2019 25-Jun-2021 16-Jun-2021 30-Dec-2022 Licensing requirements are published online and the number of licenses that can be applied for and Comments: obtained online. New licensing (information) portal is expected to be published in 2022. 1.2. Simplifying construction permitting and improving market functioning in the construction sector IN01061022 ►Simplifying construction permitting (DLI 3a) (Text, Custom, PBC) Baseline Actual (Previous) Actual (Current) End Target 12/31/2021 Page 5 of 12 The World Bank Implementation Status & Results Report Justice for Business Project (P167247) a. E-Dozvola platform is a. E-Dozvola platform fully operational in is fully operational in E-Dozvola platform Croatia, including in City Croatia, including in reflects simplified of Zagreb. City of Zagreb. construction permitting E-Dozvola platform is not b. Construction b. Construction procedures and is operational in the city of permitting procedures permitting procedures Value upgraded to include Zagreb have been simplified by have been simplified the “E-Construction the ministry in charge of by the ministry in Logbook” and construction by charge of construction issuance of the use introducing the e- by introducing the e- permit Conference module in e- Conference module in Dozvola platform. e-Dozvola platform. Date 31-Dec-2019 25-Jun-2021 21-Dec-2021 31-Dec-2022 Based on the publicly available information, and the information provided by the Ministry of Construction, Physical Planning and State Assets, the E-Dozvola platform is operational both at the national level and at level of the City of Zagreb. Moreover, based on the same information as above, simplification of building Comments: controls procedures has been accomplished despite the lack of an Action Plan, primarily thanks to a new functionality offered through the e-Dozvola platform, which is known as the e-Conference module. The WB team is hiring a Consultant to provide an independent third party review and verify this information. IN01061025 ►Simplifying requirements for the provision of professional services in the construction sector (DLI 3b) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target One (1) requirement (mandatory One (1) requirement professional chamber (mandatory professional membership is chamber membership is abolished) for each of abolished) for each of the At least one the two professions 0 requirements are two professions (works requirement for each (works manager and simplified in the provision manager and site of the 4 additional Value site manager) in the of professional services manager) in the professions in the construction in the construction sector construction construction sector is sector is simplified. sector is simplified. simplified The withdrawal Currently, withdrawal procedure was application is being completed in October processed. and mil. 1 EUR disbursed. Date 31-Dec-2019 25-Jun-2021 21-Dec-2021 30-Dec-2022 First has been achieved and verified. One (1) requirement (mandatory professional chamber membership is abolished) for each of the two professions (works manager and site manager) in the construction Comments: sector is simplified. Currently, withdrawal application is being processed. 2.1. Expanding the use of electronic services in the justice sector IN01061018 ►Increased uptake of e-Justice tools: a) First instance courts (misdemeanor depts. within municipal and administrative courts) that are integrated in ICMS; b) Courts using e-communication system (DLI4) (Text, Custom, PBC) Baseline Actual (Previous) Actual (Current) End Target (I milestone): E- Four Administrative Misdemeanor a. All (34) Municipal communication with 19 Courts and the High departments within Courts are integrated in municipal courts Administrative Court municipal courts and ICMS (e-File), including Value (achieved) and for are integrated in ICMS; administrative courts are its misdemeanor misdemeanour courts and at least nine not integrated in the departments, two including High additional municipal ICMS Municipal Misdemeanor Misdemeanour Court courts use the e- 12/31/2021 Page 6 of 12 The World Bank Implementation Status & Results Report Justice for Business Project (P167247) All commercial courts (9) courts and Municipal using ICMS (verified communication system integrated in ICMS Criminal court in Zagreb. and pending (2021). b. 31 Municipal court use disbursement) All commercial courts e-communication use e-communication platform. All (II milestone): E- with lawyers, courts misdemeanor communication with experts and bankruptcy departments (within the additional 9 municipal trustees. municipal courts), two courts (achieved) and Municipal Misdemeanor four administrative 2 municipal courts use e- courts (Zagreb and Split) courts and High communication system. and Municipal Criminal Administrative Court court in Zagreb do not using ICMS (achieved use e-communication pending confirmation portal due to insufficient and verification). legal basis governing criminal and misdemeanor proceedings. Date 31-Dec-2019 31-Mar-2021 31-Oct-2021 31-Dec-2021 (I milestone): E-communication with 19 municipal courts (achieved) and for misdemeanour courts including High Misdemeanour Court using ICMS (verified and pending disbursement) Comments: (II milestone): E-communication with additional 9 municipal courts (achieved) and four administrative courts and High Administrative Court using ICMS (achieved pending confirmation and verification). IN01061024 ►Percentage of e-briefs in total number of commercial courts briefs (communication of the courts with parties to the proceedings) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 2.59 53.55 53.55 45.00 Date 31-Dec-2019 31-Mar-2021 16-Dec-2021 31-Dec-2024 The methodology and indicators for collection and monitoring of justice IT data are currently under revision by the MoJPA IT Department, which prevented obtaining data on "Percentage of e-briefs in total number of commercial courts briefs (communication of the courts with parties to the proceedings)" at the Comments: moment. It is expected that MoJ will provide relevant updates very soon and ISR will be updated accordingly. 2.2. Improving efficiency of dispute resolution in municipal and commercial courts IN01061019 ►Reduction of court backlog of cases older than 10 years (DLI 5) (Text, Custom, PBC) Baseline Actual (Previous) Actual (Current) End Target 30% reduction with Value 9131 cases 9763 cases 8,983 cases respect to the baseline Date 31-Dec-2019 31-May-2021 31-Oct-2021 31-Dec-2022 (I Milestone): Verified (77,2% achievement-8426 cases) and partially disbursed (3,088 mil.) upon evidence and report presented by the MoJPA and courts at the end of 2020. Evidence and report presented by the MoJPA informed of expected progress towards full achievement of Comments: the first milestone, at the end of 2021. At the moment, number of pending for more than 10 years in the system is 8,983 cases IN01061027 12/31/2021 Page 7 of 12 The World Bank Implementation Status & Results Report Justice for Business Project (P167247) ►Percentage of cases older than 10 years against the total number of unresolved/pending cases (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 2.55 3.10 2.48 1.50 Date 31-Dec-2019 31-May-2021 31-Oct-2021 31-Dec-2024 Percentage of cases older than 10 years against the total number of unresolved/pending cases. The data reported in Previous column refers to the period January-May 2021, which is not comparable to Comments: baseline/target measured annually. 2.3. Rehabilitation and upgrading of selected court facilities IN01061026 ►Improvement in energy efficiency certificate grade (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Zagreb – Energy Efficiency Certificate: Zagreb - Energy Zagreb - Energy C Zagreb - Energy Efficiency Certificate: F Efficiency Certificate: F Efficiency Certificate: F Varazdin – Energy Varazdin - Energy Varazdin - Energy Efficiency Certificate: Varazdin - Energy Efficiency Certificate: F Efficiency Certificate: F C Efficiency Certificate: F Value Kutina - Energy Kutina - Energy Kutina – Energy Kutina - Energy Efficiency Certificate: F Efficiency Certificate: F Efficiency Certificate: Efficiency Certificate: F C Vinkovci - Energy Vinkovci - Energy Vinkovci - Energy Efficiency Certificate: F Efficiency Certificate: F Vinkovci – Energy Efficiency Certificate: F Efficiency Certificate: C Date 31-Dec-2019 25-Jun-2021 16-Dec-2021 31-Dec-2024 Improved energy efficiency through reduced primary energy, heating, cooling and water consumption Comments: following reconstruction of courts. IN01061031 ►User satisfaction with the witness and victims vulnerable user-friendly spaces in the Zagreb Municipal Court (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Terms of Reference Terms of Reference for for Court Users' Court Users' Survey are Survey are currently in currently in preparation preparation, surveys TBD (A baseline survey and survey will be are expected to be 30% increase in user will be carried out after Value conducted by the end of conducted in the first satisfaction from the effectiveness to 2021. (The baseline will semester of 2022 in all baseline determine the baseline.) be set by the results of a (four) locations. The survey to be conducted results of the surveys by the end of 2021). will inform the baseline. Date 31-Dec-2019 25-Jun-2021 16-Dec-2021 31-Dec-2024 12/31/2021 Page 8 of 12 The World Bank Implementation Status & Results Report Justice for Business Project (P167247) Satisfaction survey on the witness and victims vulnerable user-friendly spaces in the Zagreb Municipal Court. It is expected first survey to be conducted in the first semester of 2022 that would inform the Comments: baseline. 2.4. Strengthening Public Investment Management practices in the judiciary IN01061020 ►Rollout of the investment and facility management application for the judiciary (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Investment and facility The Government management application decided to implement Investment and facility for the judiciary has not this facility management application been developed / rolled management tool Investment and facility for the judiciary has not out yet. Technical across all sectors, so management been rolled out. specifications prepared the procurement has Value application for the for procurement process been postponed until judiciary has been Technical specifications and tender specifications for other rolled out prepared for documentation will be sectors are finalized procurement process published for public and ready to publish consultation in for e-consultation and September 2021. tendering procedure. Date 31-Dec-2019 25-Jun-2021 16-Dec-2021 31-Dec-2023 Investment and facility management application for the judiciary has not been developed / rolled out yet. Technical specifications are prepared for procurement process and pending final decision on procurement of the application across all sectors. This delay is due to the recent transfer of competence for Comments: procurement of these services from the MoJPA to Central State Office for Digital Society, which are in charge for digitization of the public sector. Citizen Engagement IN01061023 ►Number of outreach events organized (citizen engagement indicator) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 4.00 Date 31-Dec-2019 25-Jun-2021 31-Oct-2021 31-Dec-2023 Citizen engagement events organized (for instance, focus groups, court open days and workshops at select court sites). Participants will be surveyed regarding their satisfaction with the effectiveness of the Comments: citizen engagement process. Expected only in year 3 of the project. Performance-Based Conditions IN01061034 ►PBC 1 Implementation of a single digital window for LLCs (DLI 1) (Text, Output, 11,030,000.00, 0.00%) Baseline Actual (Previous) Actual (Current) 5 years 12/31/2021 Page 9 of 12 The World Bank Implementation Status & Results Report Justice for Business Project (P167247) A single digital window A single digital window The single digital window that offers online that offers online business Value -- for LLCs is not operational business registration for registration for LLCs is LLCs is operational. operational and in use. Date -- 25-Jun-2021 16-Dec-2021 -- IN01061035 ►PBC 2 Licensing requirements are published online, and selected licenses are digitalized (DLI 2) (Text, Output, 5,515,000.00, 5%) Baseline Actual (Previous) Actual (Current) 5 years There is no online There is no online There is no online informational licensing informational licensing informational licensing Value portal; 0 licenses published portal; 0 licenses portal; 0 licenses -- online/digitalized published published online/digitalized online/digitalized Date -- 25-Jun-2021 16-Jun-2021 -- IN01061036 ►PBC 3 Simplifying construction permitting (DLI 3a) (Text, Output, 11,030,000.00, 0.00%) Baseline Actual (Previous) Actual (Current) 5 years a. E-Dozvola platform is a. E-Dozvola platform is fully operational in Croatia, fully operational in including in City of Zagreb. E-Dozvola platform is not Croatia, including in City b. Construction permitting operational in the city of of Zagreb. b. procedures have been Value -- Zagreb Construction permitting simplified by the ministry procedures have been in charge of construction simplified by the ministry by introducing the e- in charge of construction. Conference module in e- Dozvola platform. Date -- 25-Jun-2021 21-Dec-2021 -- IN01061037 ►PBC 4 Increased uptake of e-Justice tools: a) First instance courts (misdemeanor depts. within municipal and administrative courts) that are integrated in ICMS; b) Courts using e-communication system (DLI4) (Text, Output, 5,515,000.00, 0.00%) Baseline Actual (Previous) Actual (Current) 5 years Value Misdemeanor departments a. All (34) Municipal (i) All (34) Municipal -- within municipal courts and Courts are integrated in Courts are integrated in administrative courts are ICMS (e-File), including ICMS (e-File), including its not integrated in the ICMS its misdemeanor misdemeanor All commercial courts (9) departments, two departments, two integrated in ICMS Municipal Misdemeanor Municipal Misdemeanor courts and Municipal courts and Municipal All commercial courts use Criminal court in Zagreb. Criminal court in Zagreb. e-communication with 12/31/2021 Page 10 of 12 The World Bank Implementation Status & Results Report Justice for Business Project (P167247) lawyers, courts experts and b. 31 Municipal court use (ii) 31 Municipal courts bankruptcy trustees. e-communication use e-communication platform. All platform 2 municipal courts use e- misdemeanor (iii) All (4) Administrative communication system. departments (within the Courts and High municipal courts), two Administrative Court are Municipal Misdemeanor integrated in ICMS (e-File) courts (Zagreb and Split) and Municipal Criminal court in Zagreb do not use e-communication portal due to insufficient legal basis governing criminal and misdemeanor proceedings. Date -- 31-Mar-2021 31-Oct-2021 -- IN01061038 ►PBC 5 Reduction of court backlog of cases older than 10 years (DLI 5) (Text, Output, 11,030,000.00, 0.00%) Baseline Actual (Previous) Actual (Current) 5 years 20% reduction with Value 9131 cases 9763 cases 8,983 cases respect to the baseline Date -- 31-May-2021 31-Oct-2021 -- IN01061039 ►PBC 6 Disposition time for the issuance of judicial decisions in cases before commercial courts (DLI 6) (Text, Output, 11,030,000.00, 10%) Baseline Actual (Previous) Actual (Current) 5 years 320 days Value 307 days 284.00 -- Date -- 31-May-2021 31-Oct-2021 -- Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P167247 IBRD-90570 Effective USD 110.30 110.30 0.00 6.51 104.14 5.9% Key Dates (by loan) 12/31/2021 Page 11 of 12 The World Bank Implementation Status & Results Report Justice for Business Project (P167247) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P167247 IBRD-90570 Effective 31-Mar-2020 15-Apr-2020 29-Jun-2020 30-Jun-2025 30-Jun-2025 Cumulative Disbursements PBC Disbursement Achievement Disbursed amount in Disbursement % PBC ID PBC Type Description Coc PBC Amount Status Coc for PBC Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 12/31/2021 Page 12 of 12