Page 1 INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE I. Basic Information Date prepared/updated: 06/19/2006 Report No.: AC2247 1. Basic Project Data Country: Albania Project ID: P096643 Project Name: Business Environment Reform and Institutional Strengthening Task Team Leader: Silvia Minotti Estimated Appraisal Date: March 31, 2006 Estimated Board Date: October 24, 2006 Managing Unit: ECSPF Lending Instrument: Technical Assistance Loan Sector: Other domestic and international trade (40%);General public administration sector (30%);Central government administration (30%) Theme: Regulation and competition policy (P);Infrastructure services for private sector development (P);Export development and competitiveness (P);Other accountability/anti- corruption (S) IBRD Amount (US$m.): 6.00 IDA Amount (US$m.): 5.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: BORROWER/RECIPIENT 0.54 0.54 Environmental Category: B - Partial Assessment Simplified Processing Simple [X] Repeater [] Is this project processed under OP 8.50 (Emergency Recovery) Yes [ ] No [X] 2. Project Objectives The proposed Business Environment Reform and Institutional Strengthening (BERIS) project will support the Government???s efforts to strengthen the public sector capacity to improve the business environment so as to attract investments and stimulate exports. In doing this, the project will also assist the Government in implementing selected parts of the European Partnership (EP) signed between the European Commission (EC) and the Government in December 2005, by addressing many of the priority areas identified by the EP. Project objectives are fully consistent with the Country Assistance Strategy (CAS), dated January 10, 2006, which outlines a holistic approach to sustainable economic growth, based on enhanced investment and robust exports. The overall objective of the BERIS is to assist the Government in: (i) facilitating business entry and operations in the formal economy; and (ii) strengthening the enterprise sector???s capability to increase exports towards regional and EU markets. Expected project outcomes would include: Page 2 ?? reduced costs, time and steps for businesses to comply with regulations affecting business entry and operations; ?? improved access to information on business regulations; and ?? increased accountability and transparency of public institutions. 3. Project Description The project consists of the following three components: (i) Facilitating business entry and operations. This component aims at addressing the Government???s weak capacity to establish and implement business friendly and pro- competitive regulatory regimes. The overall objective of the component is to remove administrative and regulatory barriers to entry and operations. This objective will be achieved through the following sub-components: (a) Improving quality of regulations affecting business entry and operations. This sub- component ??? which has been designed with FIAS support ??? will assist in strengthening the institutional framework and capacities necessary to improve in a systematic manner the quality of regulations affecting business activity.This will be done by: (a) building regulatory capacities and a regulatory management system in line- ministry and at the central level; (b) developing the capacity to improve the quality of new regulations, through the Regulatory Impact Assessment (RIA) , public consultation and complementary methods; (c) upgrading the quality of existing regulations. Partially via targeted reviews of regulation in selected areas/industries, and partially via improving the access to business-related laws and regulations in Albania; and; (d) developing and implementing a monitoring and evaluation (M&E) system for regulatory reforms. Finally, the sub-component will support small business surveys and two ARCSs which will be used to assess outcomes of the component. (b) Strengthening the institutional capacity to implement a sound competition policy regime. This sub-component aims at addressing the lack of healthy market competition by strengthening Albania???s capacity to implement an EU-compliant competition policy regime. This will be done by: (a) strengthening the capacity of the Competition Authority (CA) and the State-aid Unit (SaU) to implement a competition policy regime closer to the acquis communautaire; (b) increasing public awareness of competition policy issues, including the functioning of state-aid among relevant stakeholders; (c) providing training for relevant stakeholders (e.g., officials of selected line ministries, judges, lawyers, etc.) in competition policy, competition law and state-aid regime; and (d) strengthening the capacity of the Competition Policy Unit (CPU) of the Ministry of Economy, Trade and Energy (METE)to assess impact of regulations on market competition. (ii) Strengthening the enterprise sector???s capability to export to regional andEU markets: Strengthening the Metrology, Standardization, Testing and Quality (MSTQ) system. This component aims at addressing the enterprise sector???s difficulties in competing in domestic and foreign markets related to poor national MSTQ infrastructure and services. The overall objective of this component is to strengthen the enterprise sector ability to export towards EU markets by strengthening the capacity of the national MSTQ system to deliver EU-compatible services.This will be achieved through: (a) assisting in drafting and implementing a comprehensive medium-term strategy, including reviewing the institutional and legislative framework, to bring each of the MSTQ Page 3 institutions closer to EU requirements and to meet industry???s needs; (b) increasing the business sector awareness of the challenges and opportunities of competing in EU markets; (c) supporting privatization and consolidation of public food, veterinary and other laboratories to improve testing services for enterprises, (d) strengthening the capacity of the General Directorate of Metrology and Calibration (GDOMC), including modernizing the metrology infrastructure and, in particular, construction of a modern metrology laboratory, to perform basic measurements and calibrations services; (e) strengthening the capacity of the General Directorate of Standardization (GDOS), including improving standards system through the translation and adoption of most frequently used EU standards; and (f) strengthening the capacity of the Directorate of Accreditation (DOA). (iii) Project Coordination Support. This component aims at ensuring proper implementation and coordination of the project activities, including support for financial management, procurement, Monitoring&Evaluation (M&E) requirements. It will also support organization of periodic business surveys, integrated public information campaigns for the MSTQ system and competition policy, and building of a more effective public-private sector dialogue on reforms. The component will also assist in the dissemination of progress made by the Government in improving the business environment among the business community, policy makers and other relevant stakeholders. Key project beneficiaries would be public sector institutions involved in drafting business sector-related and in the delivery of public services (MSTQ institutions, CA, etc.) for businesses and regulations as well as domestic and foreign businesses. Consumer protection and business associations ??? although non-direct project beneficiaries ??? will continue to be involved during project implementation. 4. Project Location and salient physical characteristics relevant to the safeguard analysis The beneficiaries of the proposed project are located in Tirana and few (some MSTQ institutions) have presentation in different locations in Albania. The beneficiaries would include the Measurement, Standards, Testing and Quality institutions, including the General Directorate of Metrology and Calibration, the General Directorate of Standardization, the Directorate of Accreditation, Testing and Certification Laboratories. They would also include other public sector institutions such as the Competition Authority, State Aid Unit, the Ministry of Economy, Trade and Energy and others. 5. Environmental and Social Safeguards Specialists Mr Ronald N. Hoffer (ECSSD) Page 4 6. Safeguard Policies Triggered Yes No Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Cultural Property (OPN 11.03) X Indigenous Peoples (OP/BP 4.10) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: Due to the construction of the laboratory for the GDOMC, the project is classified as Category ???B??? (low risk, with a brief Environmental Management Plan, EMP).In compliance with Bank policies, the GDOMC has prepared and disclosed a basic EMP describing mitigation measures and standards for the construction of the metrology laboratory. The EMP ??? which was disclosed on March 31, 2006 - identifiesmitigation measures in the following areas: air pollution, earth erosion, water environment, noises, flora and fauna. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: NA 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. NA 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. The EMP prepared by the GDMOC has been reviewed and cleared by the Bank. According to the EMP, the construction of the labs will address safeguard policy issues (e.g., no lead-based painting will be used during construction). Costs of implementing these mitigation measures will be included in the cost of the design and construction of the labs and will be financed by the project. The project will also finance the services of an architechtural firm to ensure good quality design and close supervision of the construction of the metrology laboratories. It will also fund a local civil engineer to assist the GDOMC in the design and construction of the building. Page 5 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. Key stakeholders include the MSTQ institutions, all the businesses requiring MSTQ services and consumers of domestic and foreign goods and services . The EMP was disclosed on March 31, 2006 in Albania and all relevant information has been made available to the public. The EMP was sent to the Infoshop on March 31, 2006. Following the Bank's review of the EMP, some formal minor incorrecteness were identified. They have been addressed in a revised EMP which was cleared by the Bank and disclosed thereafter. B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other: Date of receipt by the Bank 03/31/2006 Date of "in-country" disclosure 04/19/2006 Date of submission to InfoShop 04/18/2006 For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors * If the project triggers the Pest Management and/or Cultural Property, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP. If in-country disclosure of any of the above documents is not expected, please explain why: NA C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting) OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) report? Yes If yes, then did the Regional Environment Unit or Sector Manager (SM) review and approve the EA report? Yes Are the cost and the accountabilities for the EMP incorporated in the credit/loan? Yes The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank's Infoshop? Yes Have relevant documents been disclosed in-country in a public place in a form and language that are understandable and accessible to project-affected groups and local NGOs? Yes All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities been prepared for the implementation of measures related to safeguard policies? Yes Page 6 Have costs related to safeguard policy measures been included in the project cost? Yes Does the Monitoring and Evaluation system of the project include the monitoring of safeguard impacts and measures related to safeguard policies? Yes Have satisfactory implementation arrangements been agreed with the borrower and the same been adequately reflected in the project legal documents? Yes D. Approvals Signed and submitted by: Name Date Task Team Leader: Ms Silvia Minotti 04/19/2006 Environmental Specialist: Ms Silvia Minotti 04/19/2006 Social Development Specialist Additional Environmental and/or Social Development Specialist(s): Approved by: Regional Safeguards Coordinator: Mr Ronald N. Hoffer 04/19/2006 Comments: Sector Manager: Mr Gerardo M. Corrochano 04/19/2006 Comments: