81552 PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Project Name Pacific Catastrophe Risk Assessment and Financing Initiative SOPAC Project Region Pacific Islands Sector Environment Project ID P132449 Recipient: Secretariat of the Pacific Community – Applied Geoscience and Technology Division Executing Agency: Applied Geoscience and Technology Division Contact: Mosese Sikivou Title: Deputy Director, Disaster Reduction Program Telephone No.: Email: mosese@sopac.org Environment Category [ ] A [] B Non-transferred [X] C [ ] FI [ ] TBD (to be determined) Date PID Prepared September 18, 2013 Date of Appraisal June 22, 2013 Authorization Date of Board Approval September 20, 2013 (VP Authorized Approval) Country and Sector Background 1. Pacific Islands are highly exposed to adverse natural events (including tropical cyclones, earthquakes, volcanic eruptions, and tsunamis), which can result in disasters affecting their entire economic, human, and physical environment and impact their long-term development agenda. From 1950 to 2009, storm and earthquake damage cost the Pacific Island Countries (PICs) an estimated US$7.2 billion (World Bank 2010). 2. Significant disaster losses are a regular occurrence in the Pacific region. Every year on average, Pacific island countries (PICs) experience damage caused by natural disasters estimated at US$284 million, or 1.7 percent of the regional GDP. It is estimated that, in percent of their national GDP, Vanuatu and Tonga experience the largest annual average disaster losses with 6.6 and 4.4 percent, respectively (see Figure 1). Figure 1. Estimated Average Annual Losses for PICs, as percentage of national GDP Source: PCRAFI (2011) 1 3. In addition to the frequent losses, the region is also prone to severe catastrophic events that can set a countries development progress back for years, unless resource can be found quickly for disaster assistance and recovery. For example the 8.1 magnitude earthquake followed by a tsunami that hit the Solomon Islands in April 2007, caused losses estimated at 95 percent of the government budget. More recently, the tsunami that hit the Independent of Samoa in September 2009 generated damage and losses in excess of US$120 million, that is 22 percent of GDP. Catastrophe risk modeling techniques developed the Pacific Catastrophe Risk Assessment and Financing Initiative (PCRAFI) Phase 2, a precursor to this project, were used to estimate economic losses during major disaster years. Using these models it is estimated that major disasters occurring once every 250 years would generate losses well in excess of 50 percent of national GDP for most of the Pacific islands (see Figure 2). Figure 2. Estimated 75-year loss and 250-year loss, as percentage of national GDP Source: PCRAFI (2011) 4. Pacific Island countries have national disaster management agencies that are responsible for disaster preparedness and post disaster emergency response. However, most of these agencies lack the capacity and tools to use information technology, such as geo-information systems and existing data and information to estimate the severity and extent of a disaster. Initial disaster response is largely dependent on situation reports from the affected areas, which are often not standardized, highly subjective and cost valuable time. For example, it took more than 4 weeks to obtain a credible assessment of the level of building damage sustained by the 2007 earthquake and tsunami in Gizo, Solomon Islands. After larger disasters most countries depend fully on aerial reconnaissance surveys provided by neighboring donor countries to obtain an overview of the level of damage. The inability to do rapid assessments slows post-disaster donor financing. 5. Pacific island countries have access to tropical cyclone forecasts, provided by one of the responsible meteorological centers in the Pacific region. These forecasts provide information on the strength, position and movement of the storm, forecasts of potential tracks and wind-speeds. However, there is no further information on potential impacts, number of people and infrastructure potentially exposed to the event, or any other information, which could help disaster managers in a more targeted preparation and response to the event. 6. Financing for disaster relief and recovery immediately after a catastrophic event is also a major issue. First, liquidity in Pacific Island countries’ government budgets is extremely limited and insufficient to cover government current expenditures in a disaster situation. Some of them, 2 like the Republic of Marshall Islands (RMI) and Solomon Islands, have an annual budget allocation to help cover these costs. Others, like the Kingdom of Tonga and the Republic of Vanuatu, have set up national reserve funds. But this type of liquidity support also very limited and seldom provided by donors. Second, the release of donor funding for disaster recovery is normally dependent on the completion of a post disaster needs assessment. This can sometimes take months to complete, slowing the flow of funds needed for early recovery activities. Finding alternative approaches to preparing post disaster needs assessments more rapidly would help alleviate this problem. 7. The disproportionate impact of natural disasters on the poor has been well documented (UNISDR, 2009c). Disasters severely impact households and livelihoods, resulting in additional people falling into poverty. Natural disasters tend to have a greater impact on the poor as their ability to recover and reconstruct after a major disaster is often limited, further diminishing their ability to increase resilience to disasters. This cycle is often referred to as the “disaster risk– poverty nexus”. Poor people often settle in high risk areas (for example, inundation zones), rely on agricultural labor, reside in houses that cannot resist any disaster impact, and lose income opportunities, and are therefore particularly vulnerable to disasters. Following a disaster, the poor and vulnerable population often has only limited options to reconstruct according to disaster resistant standards. Disaster impacts can also be disproportionate by gender. In many countries vulnerable to natural disasters, traditional gender roles and disparities can make either men or women more vulnerable to the effects of the disaster. By providing governments with more financial flexibility, and better ex ante financial and DRM planning tools this project would contribute to relieving pressure on the poorer segments of the population because they tend to be the more vulnerable in natural disaster situations. Project Development Objective 8. The objective of this project is to provide Pacific Island Countries (PICs) with an upgraded disaster and climate risk information platform and enhance their capacity to use it and to develop an associated series of risk management applications for enhanced disaster risk reduction, risk management, risk adjusted development planning, and risk financing decisions. Project Description 9. This Project will support Phase 3 of the Pacific Catastrophe Risk Assessment and Financing Initiative to further develop the Pacific Risk Information System (PacRIS). The GIS platform will be used as the database infrastructure to develop selected applications for better disaster risk reduction and risk management. It is proposed that this Project, the SPC-SOPAC executed part of PCRAFI Phase 3, will support the following four components: (i) Strengthening of the Pacific Risk Information System. (ii) Institutional capacity building on disaster and climate risk financing. (iii) Rapid disaster impact estimation. (iv) Project Management. Other applications could be added and developed over time if additional financing is available. Component 1. Strengthening of the Pacific Risk Information System (PACRIS) 3 10. The recent World Bank flagship report Natural Hazards, Unnatural Disasters: The Economics of Effective Prevention report highlights the importance of open data in the process of effective Disaster Risk Management. Few countries collect critical hazard and risk data and fewer still have the means to readily access and share that data. The Pacific Risk Information System has been set up at SPC-SOPAC under the PCRAFI. It houses the most comprehensive historical catalogue of earthquakes and tropical cyclones, database of geo-referenced fixed assets, and probabilistic analyses and mapping of risk carried out to date. It uses open source GIS tools to make these data and risk analysis products available for public use. Phase 3 of the PCRAFI will further build and refine the Pacific Risk Information System by (i) strengthening the capacity of technical agencies at national and regional level in its use and maintenance (ii) strengthening the risk information and underlying data, and providing analytics on additional hazards and future risks, (iii) strengthening the data-sharing platform at SPC-SOPAC in order to achieve expanded reach and allow access of PCRAFI data and information to the wider Pacific community and beyond. The data and models of the Pacific Risk Information System will evolve to suit the needs of its applications. Therefore, the applications will drive the System’s evolution and management. 11. The component would finance consultants, travel, workshops and in country training, data collection, satellite imagery and limited office and computer equipment. Component 2. Institutional Capacity Building on Disaster and Climate Risk Financing. 12. This component will offer institutional capacity building on disaster and climate risk financing to the PICs with a specific focus on the five participating in the Pacific Catastrophe Risk Pilot, namely the Independent State of Samoa, Kingdom of Tonga, the Republic of the Marshall Islands, Solomon Islands and the Republic of Vanuatu. Others may be added based on demand and available resources. Technical assistance will be provided to the ministries of finance of the PICs to fine tune their financial strategy against natural disasters. Country-specific tools and analyses on disaster risk financing will be developed to help the PICs assess their fiscal exposure to natural disasters and take informed decisions for their financial management, including domestic reserves, contingent credit and catastrophe risk insurance. This component will focus on public financial management of natural disasters specifically post-disaster budget execution process and accounting for expenditures. It will provide recommendations to ensure timely and efficient post-disaster budget (re)allocation for early recovery, for example through national disaster funds and payouts from the Pacific Catastrophe Risk Insurance Pilot. The advice given will include arrangements for improving gender equity in the distribution of funds for post-disaster reconstruction. The way in which funds are allocated for post-disaster recovery and reconstruction programs can generate positive impacts for both men and women or (if programed without an awareness of their gender-differentiated impacts) may indeed result in the exclusion of women beneficiaries. In the development of such programs it will be important for policy makers to be aware, for example, that distributing all cash payments for food to heads of households in a culture where heads of household are men could result in women being disadvantaged in the disaster recovery period. 13. This component would finance consultants, travel, workshops, and data collection. Component 3. Rapid Disaster Impact Estimation 4 14. The aim of this component is to provide disaster managers and first responders with tools and information to quickly gain an overview shortly before and following a disaster on the areas and population affected and the likely severity of the event in terms of potential fatalities, injuries and building, infrastructure and crop damage. This would provide vital information in a timely fashion for a more targeted response and deployment of field teams. The component would build on the information and tools developed under PCRAFI Phase 2, such as the exposure data sets for population, crops and structures. Several complementary components would need to be developed or customized, including the analytical platform for calculating the damages according to a set of vulnerability or damage functions. Additionally, it would be important to explore institutional partnerships for the provision of post-event hazard footprints and the practicalities of data and information exchange. The application would need to be tailored to and fully-integrated into national response processes and procedures, this includes the assessment and development of required technical capacity. In addition to developing the data and applications in PacRIS, a key function of SPC-SOPAC will be to provide updated data and post disaster assessment information to the risk modeling consulting company or other contractors. SPC/SOPAC will develop and agree on a protocol that will facilitate the sharing of damage assessment information as an event develops and shortly after the event occurs. This will allow the modeled rapid damage assessments to be carried out, verified and calibrated. It will also enable the sharing of more detailed post disaster assessment information as it becomes available. 15. This component would finance consultants, travel, workshops, data collection, and post disaster surveys. Component 4. Project Management 16. This component would cover project management costs including monitoring and evaluation, hiring of a financial management specialist, and an annual audit. 3. Financing 17. The Pacific Catastrophe Risk Assessment and Financing Initiative SOPAC Project will be financed by grant funds in the amount of USD 1.17 million. This includes US$0.3 million from the Pacific Disaster Risk Financing and Insurance (PDRFI) Multi-donor trust fund (MDTF) and US$0.87 million from the GFDRR/EU-ACP Natural Disaster Risk Reduction Program Single Donor Trust Fund. A summary of project cost is provided in the table below. 4. Implementation 18. This project will be implemented by SPC-SOPAC on the basis of the agreed work program as specified in an operations manual, and be monitored through 6 monthly Project progress reports. 19. he coordination and strategic oversight over the project implementation will be provided through the following established mechanisms: (i) the PCRAFI Steering Committee comprising representatives of countries, SPC-SOPAC, ADB and the World Bank, (ii) the Governing Council of the SPC comprising representatives of Pacific islands member countries and territories 5 (PICTs), (iii) other governing bodies, such as the Pacific DRM platform comprising PICTs representatives, donors and partners and (iv) the SPC-SOPAC Division Meeting to whom the Disaster Reduction Programme of SPC-SOPAC directly reports in terms of work-program implementation. The Disaster Reduction Program of the Secretariat of the Pacific Community, Applied Geoscience and Technology Division (SPC-SOPAC) will implement the Project. The Deputy Director of the Disaster Reduction Program will act as Project Director supervising project implementation on a part time basis and ensure that the project is integrated with other SPC- SOPAC activities. It is expected that other SPC-SOPAC staff will work on the project as needed under the direction of the Project Director. 5. Safeguard Policies (including public consultation) The Project is rated as environment category C. Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) [] [X] Natural Habitats (OP/BP 4.04) [] [X] Pest Management (OP 4.09) [] [X] Indigenous Peoples (OP/BP 4.10) [] [X] Physical Cultural Resources (OP/BP 4.11) [] [X] Involuntary Resettlement (OP/BP 4.12) [] [X] Forests (OP/BP 4.36) [] [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] 6. Contact point at World Bank and Recipient World Bank Contact: Iain Shuker Title: Task Team Leader Tel: +1 202 4735519 Email: ishuker@worldbank.org Recipient: Secretariat of the Pacific Community – Applied Geoscience and Technology Division Contact: Mosese Sikivou Title: Deputy Director, Disaster Reduction Program Tel: Email: mosese@sopac.org 7. For more information contact: The InfoShop * By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas 6 The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-4500 Fax: (202) 522-1500 Email: pic@worldbank.org Web: http://www.worldbank.org/infoshop 7