E N V IR-0 N M E N T D E P A R T M EN T lP A P ERS - Paper No. 052 TOWARD ENVIRONMENTALLY AND SOCIALLY SUSTAINABLE DEVELOPMENT PARtTICIPATION SERIES. NGO EInnvolvement inW World Bank -Financed Social Fu,nds:. Lesson Learne Carmeni Malena May 1997 Enviroinmentally Sustainiable Development The World Bank Environment Department Papers -Participation Series 001 Participation in Education Nat J. Colletta Gillian Perkins 002 Participation in Water &Sanitation Gabrielle Watson *N. Vijay Jagannathan 003 Participation in Irrigation Ruth Meinzen-Dick Richard Reidinger - Andrew Manzardo 004 Participation in So.cial Funds Mary Schmidt. Alexandre Marc 006 Participation in Country Economic Dan R. Aronson and Sector Work Ellen Tynan 007 Designing Community Based Deepa Narayan Development 020 Participation in Andrew Norton Poverty Assessments Thomas Stephens 021 Participation and Indigeious Peoples Shelton H. Davis Lars T. Soeftestad 031 Participation Through -Tom Carroll Intermediary NGOs Mary Schmidt Tony Bebbington , . 049 . Participation in Forest Ajit Banerjee Management and Conservation Gabriel Campbell Maria Concepcion J. Cruz Shelton H. Davis Augusta Molnar 050 Toward STD/AIDS Awareness and Ernest Massiah Prevention in Plateau State, Nigeria: Findingsfrem a Participatory Rural Appraisal Copies are available from the World Bank's Environment Department, Social Policy & Resettlement Division. L~ Social Policy and Resettlement Division NGO ][nvolvement in WVorld Bank-Financed Social Funds: Lessons Learned Carmen Malena May 1997 Papers in this series are not formal publications of the World Bank. They are circulated to encourage thought and dis- cussion. The use and citation of this paper should take this into account. The views expressed are those of the authors and should not be attributed to the World Bank. Abstract The purpose of this paper is to review the paper identifies key issues and outlines involvement of nongovernmental organiza- lessons learned. It concludes that NGO tions (NGOs) in World Bank-financed social involvement can bring important potential funds (SFs). The paper is intended for Bank benefits to the achievement of social fund staff, social fund staff, borrowing govern- goals and makes a number of recommenda- ments and NGOs who collaborate or seek to tions for improved collaboration with NGOs. collaborate in social fund activities. The Contents Acknowledgments (iii) Executive Summary 1 1. Introduction 9 Social Funds 10 NGOs and CBOs 11 2. NGO Involvement in Social Funds 13 Potential Benefits and Risks of NGO Involvement in Social Funds 13 NGO Roles in the Design and Imp]Lementation of the Social Funds 14 NGO Roles in the Preparation and Implementation of Subprojects 21 Estimated Current Levels of NGO :[nvolvement in Social Funds 26 3. Key Issues and Lessons Learned 29 State-NGO Relations 29 Assessing NGOs 31 NGO Selection Criteria 32 NGO Capacity-Building 33 NGOs and Targeting the Poorest 34 Community Participation 35 Promoting Partnerships 39 Legal Issues 39 4. NGO Criticisms and Concerns 41 General Concerns 41 Specific Issues 44 - ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~i 5. Recommendations for Improved NGO Involvement in Social Funds 48 Recommendations for Social Funds 48 Recommendations for NGOs 49 Notes 51 Bibliography 54 Annexes 59 I. Summary Information on NGO Involvement in Selected World Bank-Financed Social Funds 59 II. Sample Checklist for Assessment of Local Level Organizations (Armenia Social Investment Fund) 61 III. Sample Project Implementation Manual for Use by Communities - Extracts (Zambia Social Recovery Project) 62 IV. Sample Gender Action Plan (Eritrean Community Development Fund) 67 V. Sample Implementation Agreement Between a Social Fund and Beneficiary Commnunity (Eritrean Community Development Fund) 69 VI. Sample Financing Agreement Between a Government and NGO 72 VII. Sample Bidding Documents (Gambia Public Works and Capacity Building Project and the Ethiopian Social Rehabilitation Fund) 76 VIII. Sample Works Contract (Ethiopia Social Rehabilitation Fund) 81 ii Acknowledgments This report was prepared by Carmen Mary Schmidt, Julie van Domelen, and Malena under the supervision of John D. Mark Woodward for their conmments and Clark, Senior NGO Specialist of the World assistance. From outside the Bank, valu- Bank's, NGO Group, (located in the Social able input was received from Jeff Brown, Policy Division of the Environment De- Wedex Ilungu, Gustavo Irias, Carlos partment). Detailed comments from Sarah Lacayo, Raul Lema, Joshua Lichtenstein, Adam, Soniya Carvalho and Najma Jose Maria Montabes, Diego Penaherrera, Siddiqi are gratefully acknowledged. The John Ruthrauff, Peter Sollis, and Michel author would also like to thank Jacob Voyer. The author thankfully acknowl- Bregman, Christopher Chamberlain, Alan edges Ivy-Maria Tompkins and Mary Dock, Laura Frigenti, Gita Gopal, Nandini McRae for editing and wordprocessing Gunewardena, Alexandre Marc, Mario this document. Marroquin, John Newman, Nigel Roberts, iii Executive SummcLry The purpose of this paper is to review the itself, but rather because of the potential involvement of nongovernmental organiza- benefits that NGO involvement can bring to tions (NGOs) in World Bank-financed social the achievement of social fund goals, such funds (SFs), to outline lessons learned imd as sustainable, demand-led development to make recommendations for improved and enhancing the active participation of collaboration with NGOs. The paper is poor communities. intended for Bank staff, social fund staff, borrowing governments and NGOs who Potential forms of NGO involvement collaborate or seek to collaborate in social include: fund activities. * seeking advice/ assistance from NGOs For the World Bank and borrowing govern- during the design of the social fund; ments, social funds represent an innovative * NGO participation in SF governance model for financing small-scale, demand- structures (e.g., representation on the driven and participatory development board); projects. For NGOs and community-based * NGO administration of a pilot phase; organizations (CBOs), social funds repre- sent one of the most promising mecha-- * contracting NGOs to provide training/ nisms for accessing World Bank funds in technical assistance to SF staff, commu- order to support community level develop- nities and/ or implementing agencies; ment activities. * NGOs involvement in the appraisal, The quality and skills of individual NCOs supervision, or monitoring of the SF; varies greatly and not all NGOs are appro- * NGOs transmitting information to priate candidates for participation in social communities (either formally or infor- funds. Those NGOs with suitable skills and mally); experience (such as ties to local commimi- a NGOs submitting subproject proposals ties, technical expertise and participatory (Or sisting c unitiesi preparn development skills), however, can play a (or assistng commumhes in preparmg number of important roles both during the and submitting subproject proposals); design and implementation of the social * NGOs as subproject implementors or fund itself and in the preparation, imple- financial intermediaries, and; mentation and evaluation of subprojects financed by the fund. NGO participation in * NGOS co-financing subprojects or social funds is not sought as an end in supporting complementary activities. Participation Series 1 NGO Involvement in WB-Financed Social Funds NGO involvement in social funds can * assisting communities in the prepara- potentially serve to: tion of subproject proposals; * promote pluralism (by enlarging the * facilitating subprojects that are highly pool of eligible subproject applicants dependent upon active community and implementors); participation; * provide alternative perspectives on * providing skills and services that are policy issues (for example, through lacking in the public and for-profit, NGO representation on the board); private sector (particularly in the fields * contribute local knowledge (NGOs with of human resource development, basic close community ties may be able to needs and micro-credit); provide valuable information on local * addressing issues related to subproject conditions and community needs, in sustainability (for example, by promot- particular, during the design of the ing community participation and/or subproject menu); helping to ensure adequate provisions * improve project design (NGOs with for staffing, equipment and long-term relevant operational experience can maintenance). provide useful tips on targeting strate- Some of the key risks associated with NGO gic subprojects, selection criteria, coor- dination among local actors, monitoring mechanisms, etc.); * limited NGO capacity; m extend project reach to poor and iso- * diversity in the levels of legitimacy and lated communities (in particular those competence of individual organizations; which lie beyond the scope of govern- weak or difficult NGO-State relations; ment programs and/or require assis- tance preparing subproject proposals); * the challenge of identifying and assess- * enhance community participation ing NGOs with relevant skills and (through processes of NGO intermedia- experience (for example, those with tion, social mobilization and participa- participatory skills and links with poor tory project planning and implementa- communities). tion), and; The extent of NGO involvement in indi- * contribute to subproject sustainability vidual social funds varies greatly. It is (as a result of improved community estimated that, on average, NGOs sponsor participation or by supporting subse- or implement between 15 and 20 percent of quent activities which complement or total SF-financed subprojects, and that reinforce the SF-financed subprojects). approximately fifteen percent of total social fund disbursements are channeled through NGOs have demonstrated specific com- NGOs. It is further estimated that NGOs parative strengths in: play an informal role (such as assisting * working with particularly poor and/or communities in identifying needs and remote communities; preparing subproject proposals) in as many as 45 to 50 percent of subprojects. These 2 Environrnent Department Papers Executive Summary informal roles are rarely officially recorded, sector and/or are open to working with however, and NGOs normally receive no NGOs. The Bank can also play an impor- financial compensation from the SF for the tant role in working with government on an assistance they provide to communities in ongoing basis to foster better understand- an informal capacity. ing of NGO roles and to create greater space for NGO activities and NGO-govern- The level of NGO involvement in a given ment collaboration. social fund is dependent upon a number of "supply-side" and demand-side" factors During the preparation of a social fund, it is including the capacity and skills of the important to begin with a realistic assess- NGO sector, the nature of NGO-state ment of existing NGO skills, experience and relations, and the policies and procedures capacity. Some factors that should be taken of the social fund itself (in particular, ty,pes into account in selecting individual NGO of eligible subprojects, emphasis on com- partners include: munity participation and the availability of funding for preinvestment activities). hcredibity -acceptable to both stake- Based on current evidence, it is not possible holders and govepment, legally consti- to ascertain whether "supply-side" or tuted, politcally neutral; demand-side" factors play a greater role in * representativity -community ties, determining levels of NGO involvement. accountable to members/beneficiaries, The situation varies from country to coun- gender equality; try and, in almost all cases, a variety of factors are at play. The evidence does, m governance-sound internal manage- however, suggest that: (i) SF expectations ment, transparency, financial account- regarding NGO roles do not always corre- ability, efficiency; spond with NGOs' own perceived roles and * competence -relevant skills and experi- comparative advantages; and (ii) a nurrLber ence, proven track record; and, of characteristics of SFs can be identified (both at the level of policy and procedure) * instittional capacityi-sufficient scale that may serve to limit NGO involvement of operatons, facilites, and equipment. or lead to an underutilization of existing It is important to point out, however, that selection criteria must be based on the Where NGO-state relations are difficult, specific NGO roles envisaged. For ex- NGO wariness to become involved in a ample, the characteristics of NGOs chosen social fund can be reduced through: earlIy to serve on the social fund board will differ NGO involvement in the design of the from those of an NGO selected to imple- social fund; ensuring autonomy and trans- ment a subproject. These distinctions are parency in the operation of the social fund; discussed further in section III.C. guarding against political patronage in the selection/approval of subprojects; assur- Soclal funds have a potentially important ances that there will be no government role to play in contributing to the institu- interference in internal NGO affairs; and, onal development and capacity-building by recruiting social fund managers and. of NGOs. This can be achieved, for ex- staff that have experience in the NGO ample, by providing direct training to Participation Series 3 NGO Involvement in WB-Financed Social Funds NGOs, devoting a portion of the core social ensure community acceptance or awareness fund budget to capacity-building activities, of the subproject. In situations where creating a "training" or "institutional community-level organization is strong, fair development" category of subprojects, and effective, the need for NGO intermedia- allowing a percentage of individual sub- tion may be less important. Not all com- project budgets to go towards capacity- munity-level organizations are representa- building purposes or by promoting partner- tive or democratic, however, and special ships between larger, stronger NGOs and measures may be necessary in order to smaller, weaker ones. Social funds can also ensure the effective participation of poor or play a role in disseminating information marginalized groups (including women, about successful NGO projects, thereby the landless, ethnic and religious minori- increasing levels of public and government ties, etc.). awareness and improving possibilities for replication. Experience has shown that successful and sustainable subprojects are frequently Promoting active community participation dependent not on any one actor but rather in subproject preparation, implementation on the coordinated effort of a number of and maintenance remains a key challenge actors. It is not always easy, however, to for social funds. Although social funds are establish operational partnerships and to commonly described as "demand-driven" coordinate relations between multiple and "participatory," there is growing actors. When selecting operational part- evidence that SFs may be less successful in ners, social funds should consider the promoting community-level participation specific skills and comparative advantages than was previously believed. A recent of different types of organizations (e.g., review of the BanKs SF portfolio, for ex- CBOs, NGOs, local government, private ample, found that only about one-third of sector firms), seek to promote "partner- SFs identify community development as a ships" among organizations with comple- project objective or invest in the capacity- mentary attributes and encourage coordina- building of community-level groups. tion among the full range of actors respon- (World Bank, March 1997). Although NGO sible for project sustainability. involvement does not, in and of itself, ensure participation and although not all Although NGOs have been broadly sup- NGOs are participatory, experience sug- portive of social funds as a mechanism for gests that given certain prerequisites (care- channeling multilateral resources to com- ful selection of NGO partners, appropriate munity-level development projects, they pro-participation" policies and proce- have raised certain concerns and criticisms - dures), NGOs can potentially play an both, at a general level regarding the basic important role in promoting effective concept and impact of social funds, and on community participation in SF-financed more specific issues, in particular, regard- activities. ing obstacles to effective NGO involvement in social funds (including insufficient Experience has shown that merely requir- mechanisms for dialogue between SFs and ing subproject proposals to be submitted by NGOs; lack of funding for preinvestment communities does not guarantee commu- activities; bureaucratic procedures and nity participation, nor does it necessarily delays; and, a lack of emphasis on income- 4 Environment Department Papers Executive Summary generating and "process-oriented" sub- example, as a consultant to the SF, a projects). board representative or a subproject sponsor) wiIL obviously require very A review of the strengths and weaknesses different sets of skilLs, capacity and of various aspects of social funds (both with experience. and without NGO involvement) suggests Assess NGO training/capacity-building that strong and diverse NGO involvement can help social funds become more effective S an sidw in which the instruments of poverty aleviation. In order SF mlght assst addressg these (for example, through an "institutional to achieve improved NGO collaboration in development" subproject category or social funds, the report makes the following core training events). recommendations. * Share all relevant project documenta- Recommendations for Social Funds. tion and consult with NGOs during X Establish clear policies and guidelines project design. concerning community participation in * Devise a strategy for communication social fund-financed subprojects. with NGOs (including, for example, • Establish clear policies and guidelines information-sharing sessions, the concmingNGOnvovemen idissemination of a SF newsletter, the conceiafngNd estabLishment of a "public information social fund. center', mechanisms for systematic * Early on during project design, conduct consultations on both operational and an NGO sector assessment in order to broader issues). (i) identify those NGOs that have links * Consider establshing a joint SF-NGO with poor communities, expertise in working group on operational issues. participatory development and a proven track record in relevant sectors; * Include NGO representatives in SF (ii) assess the overall potential for NGO study tours. (In Sri Lanka, for example, involvement in the social fund and; (iii) NGOs participated in visits to other identify NGO capacity-building needs. Asian social funds). (This assessment can be carried out * Include NGO representatives on the through interviews, field visits, benefi- board of the SF. ciary assessments, or in coordination with an umbrella organization.) * Use a pilot phase to test NGO capacity, * Based on social fund goals and the evaluate operational procedures, etc. findings of the NGO sector assessment, * Make efforts to demonstrate to govern- identify and elaborate potential roles ment officials the value/benefits of for NGOs throughout the project cycle. involving NGOs (particularly in situa- * Once potential roles for NGOs have tions where there is no history of been identified, establish selection government-NGO collaboration). criteria specific to each role. It is essen- * Establish an NGO database and use tial that selection criteria are task-, computerized management information specific, since different NGO roles (for systems to keep NGO-specific statistics Participation Series 5 NGO Involvement in WB-Financed Social Funds (in order to facilitate monitoring). tory approaches to development. * Offer technical seminars to participat- * Organize training for social fund staff ing NGOs on the preparation of sub- on community participation, social project proposals, procurement proce- mobilization, working with NGOs, etc. dures, etc. * Ask NGOs to organize field visits, * Develop appropriate, simplified docu- orientations for senior social fund staff. ments and implementation manuals. *Consider secondments or staff ex- * Adapt procurement and disbursement changes between social fund and procedures to facilitate NGO/commu- NGOs. nityv involvement. * Consider the appointmnent of an NGO * Where appropriate, make provisions liaison officer or the identification of for advance payments and altemative one staff member as the official NGO arrangements for NGOs and communi- contact. (Where NGOs play a multitude ties who are unable to secure bank of different roles, it may be preferable guarantees. to place emphasis on sensitizing all SF staff to NGO-related issues rather than * T ake steps to ensure timely and effi-aponignectctern) cient subproject processing mecha- nisms. In particular, aim to avoid * Assess overall NGO performance on an delays in subproject approvals and ongoing basis throughout the life of the disbursements. project cycle and share these findings with the NGO community, World Bank, * Assess (in collaboration with NGOs) n te rjc tkhles realistic resource requirements for ensuring effective community participa- Recommendations for NGOs (and/or NGO tion/ social mobilization. umbrella organizations) * Where appropriate, support the fund- * Elect representatives or form a commit- ing of preinvestment costs (related to tee to ensure regular communication subproject preparation). with the social fund. * Early on, establish (in collaboration Establsh contact with relevant gover- with NGOs) a methodology for system- ment and Bank staff early on and atic evaluation of NGO performance become involved in the design of the (through subproject evaluations, benefi- social fund (decisions such as which ciary assessments, etc.). activities will be included on the menu • Encourage NGOs, CBOs, local govern- of eligible subprojects, for example, are ments, private sector firms, and others key). to form operational partnerships. a Assist the social fund in identifying * Recruit staff who have worked in the potential NGO partners with relevant NGO sector or who understand and are skills and experience. respected by NGOs. * Learn as much as possible about the * Recruit staff with expertise in participa- project as a whole (overall goals, appli- 6 Environment Department Papers Executive Summary cation procedures, selection criteria, * Before taking on operational responsi- etc.) and not only NGO-specific issues. bilities, ensure your organization has all * Bring problems and concerns to the the required capacity and skills. If not, immediate attention of social fund consider choosing a partner with (and/or government or Bank staff. complementary skills. Suggest solutions and request a spe!Cific * Before becoming involved in the social time-frame for the resolution of prob- fund, consider potential implications lems. for your organization's current portfo- * Request relevant project documents ho, priorities and goals, political au- and propose mechanisms for ongoing tonomy and community ties. Weigh information-sharing. potential benefits and risks. c Share experiences and lessons learned * Establish clear policies and guidelines with other NGOs involved with the concerning community participation in social fund or working in similar sec- social fund-financed subprojects (in tors. collaboration with the government/ social fund). Participation Series 7 NGO Involvement in WB-Financed Social Funds 8 Environment Department Papers 1. Introduction NGO involvement in Bank-financed One of the most important and promising projects has increased significantly in recent mechanisms for World Bank-government- years. While the credibility and competence NGO collaboration are the numerous social of individual NGOs varies greatly and not fund-type projects financed by the World all NGOs possess knowledge and skills Bank. Since supporting the (now well- relevant to the Bank's work, experience has known) Bolivia Emergency Social Fund in shown that collaboration with NGOs 1986, the World Bank has channeled over (particularly those with direct community $1.3 billion to more than 30 social funds in ties and expertise in participatory develop- Latin America, Africa, Asia and, more ment) can contribute to the quality, recently, Eastern Europe. Social funds are sustainability and effectiveness of Bank- designed as rapid, demand-driven funding financed projects.' The Bank acknowledges mechanisms which channel resources to the potential benefits of working with community-level development projects NGOs and actively promotes increased according to a set of predetermined selec- NGO input into project identification, tion criteria. They do not implement design, implementation, monitoring and projects themselves, but finance subprojects evaluation.2 As the Bank places growing proposed by other public, private and emphasis on "demand-led" and "participa- voluntary (formal and informal) organiza- tory" development, the particularly valu- tions. able role that NGOs can play as intermedi- aries between the Bank and its ultimate Given that they are demand-driven, pro- "beneficiaries," helping to ensure that poor vide funding in the form of grants (as people themselves play an active role in opposed to loans) and finance small-scale shaping and implementing development projects in many of those sectors in which projects, becomes increasingly important. NGOs are most active (e.g., health, educa- As a result, the Bank aims, in particular, to tion, sanitation, micro-credit), social funds expand its relations with those NGOs that represent one of the most accessible forms work directly with poor communities or of World Bank financing for NGOs. At the that represent the interests and views of same time, because social funds are depen- poor people. As the Bank gains more dent upon other actors to design and experience in working with NGOs, it seeks implement the subprojects they finance, to extract lessons from these interactions because they target poor communities and to apply this leaming in order to (which often lie beyond the scope of gov- facilitate and enhance future collaboration. emient services) and because they seek to Participation Series 9 NGO Involvement in WB-Financed Social Funds promote active community participation, Bank-financed social funds. Throughout NGOs (particularly those that work directly the paper, a number of "boxes" provide with communities and have expertise in specific examples and case-studies. Sum- small-scale participatory projects) are mary information on NGO involvement in natural and valuable partners of social selected social funds as well as examples of funds. In addition to "using" NGOs in the NGO-related project documents, contracts implementation of SF-financed activities, a and selection criteria are included in the number of the more recent social funds annexes. recognize the intrinsic value of a strong local NGO sector and seek to support the Social Funds5 development and capacity-building of NGOs as an explicit project aim. While the specific objectives of individual SFs vary, social funds typically aim to: The purpose of this paper is to examine social funds as an example of World Bank- * mitigate the social costs of structural goverment-NGO collaboration, to assess adjustment reforms or respond to current levels of NGO involvement and to emergencies such as natural disasters seek lessons learned based on experience to or wars; date. The paper is based on a desk review of Bank and non-Bank documents regard- p rove the living conditions o f poor ing approximately 20 social funds.3 In ieople through the speedy provision of addition, the paper reflects the findings of basic economic and social services and/ two recent workshops which brought or; together NGO, social fund, government * promote decentralized service delivery and World Bank representatives to discuss by building local capacity and support- issues related to NGO involvement in social ing local (governmental and nongov- funds.4 Numerous NGO, social fund and ernmental) organizations that are Bank staff also generously contributed responsive to local needs (Carvalho, information through interviews and per- 1994). sonal communications. As mentioned above, SFs neither design This first section of the paper provides a nor implement individual subprojects general introduction and some brief back- themselves. Instead, they provide funding ground information about social funds and to a potentially wide range of partner NGOs. Section two outlines the various organizations (including community-based potential roles that NGOs can play in social organizations, NGOs, religious organiza- funds, the benefits and risks of such in- tions, private sector firms, local, regional volvement and the actual extent of NGO and central government agencies, etc.) on a involvement in Bank-financed social funds demand-driven basis. Key roles under- to date. Section three identifies a number of taken by the SF itself include promotional key issues and lessons learned, while activities (informing communities and section four outlines some of the principal potential operational partners about the criticisms and concerns voiced by NGOs. SF); designing the subproject menu (identi- Finally, section five provides recommenda- fying and defining which types of activities tions for improved NGO involvement in will be eligible for funding); appraising 10 Environment Department Papers Introduction subproject proposals for funding (based on income communities. Communities are predefined selection criteria); and supervis- normally expected to participate actively in ing the implementation of subprojects and project implementation and maintenance monitoring their effectiveness. and to share a portion of project costs. Social funds typically finance small-scale Particular strengths associated with social activities in the sectors of: funds include: rapid disbursement, flexibil- * health (e.g., construction and rehabilita- ity in responding to demand from a large tion of healhfcihiesandrovnumber of sectors and implementing etionohalth faciles and .printof agents, comnmunity participation and the distribution of resources to the poor. Some * education (e.g., construction and reha- identified weaknesses of social funds bilitation of schools and provision of include trade-offs between demand- teaching supplies); drivenness and targeting the poorest, trade- • water and sanitation (e.g., construction offs between rapid implementation and and rehabilitation of water supply capacity-building and limited capacity to facilities, sold waste disposal); address fundamental issues of poverty reduction and social development.7 * basic needs; 3 social programs; NGOs and CBOs • micro-credit/micro and small enter- The term NGO embraces a myriad of prise development; different types of organizations. At its X roads, and; broadest, it refers to any group or institu- * irrigation. tion that is independent from government and has value-based (humanitarian or cooperative) as opposed to profit-oriented Social funds are typically set up as autono- pe ) pp p mous institutions (either as an independent goals. For the purposes of this paper, a government institution that reports directly distinction is made between NGOs (inter- to the President or Prime Minister or, in mediary organizahons created to serve some cases, as a private nongovernmental others) and community-based organiza- institution) 6 The autonomy of social funds tions or CBOs (formal or informal local is considered essential in order to avoid associations formed to serve the interest of eand to faciltate fast and their own members or community). As efficient procurement and disbursement discussed below, both NGOs and CBOs procedures. Sucial funds normally recruit have important potential roles to play in staff from the private sector and are exempt social funds. Because social funds finance stf fro the prvt setradaeeep community-level developm!ent projects, from public sector salary caps. Most social l p there is by definition some form of interac- management systems aimed at ensuriing tion with a CBO (whether pre-existing or speed, and efficiency and ongoing access to created iTn the relation to the subproject up to date operational data. All social itself) in almost every case. One key role of funds operat datare. AR media- NGOs in SFs is to support CBOs or to fnisms plandi pioerity toarojtmectsinl- directly assist "communities" in organizing isms, and gSve priority to projects i low- Participation Series 1 NGO Involvement in WB-Financed Social Funds to prepare and implement subprojects. general strengths and weaknesses com- The legitimacy and quality of individual monly associated with the NGO sector at NGOs varies greatly, as do their particular large (Clark, 1991): development mandates and areas of exper- tise. For example, among NGOs working Strengths in the development field, a distinction can * Direct community links and proximity be made between operational NGOs - to target populations whose primary purpose is to design and implement development projects; and * Field-based development expertse advocacy NGOs - who concentrate their * Flexibility and innovation efforts at the policy level.8 Among opera- tional NGOs, some organizations empha- r a k size and excel in participatory approaches * Emphasis on sustainability (working directly with communities and * Cost-effectiveness. stressing local capacity-building), while others function in a more traditional service Weaknesses delivery mode (based on particular techni- cal skllHs or sectoral expertise). While L emphasis is usually placed on the role of skills NGOs as promoters of community partici- * Limited institutional capacity pation, there are a wide variety of potential roles that NGOs (with different skills and areas of expertise) can play in SFs. Given * Susceptibility to donor-driven agendas the enormous diversity that exists among e Limited coverage and small-scale individual NGOs, it is extremely difficult to interventions make generalizations about the sector as a whole. The following, however, are some * Isolation/lack of coordination 12 Environment Department Papers 2. NGO Involvemnent in Social Funds Potential Benefits and Risks of NGO Box 1 Involvement in Social Funds Benefits of NGO Involvement in the Honduras Social Investment Fund Not all NGOs are effective development "The benefits to the Honduras Social Investment practitioners, nor legitimate representatives Fund of NGO participation are several, namely: of the poor. In some countries only a NGO-executed subprojects mobilize more minority of existing NGOs may have technical and financial resources than subprojects relevant skills, capacity and experience. executed by private contractors; the government Experience has shown, however, that can expand social service delivery by contracting collaboration with such NGOs can bring NGOs, whereas private contractors do not provide such services; NGOs support the important potential benefits, during both normative and supervisory role of the state; the the design and implementation of social costs of NGO-executed subprojects are lower funds. Box 1 summarizes some of the than those of private contractors; NGOs imple- identified benefits of NGO participation in ment subprojects more efficiently and effectively than the traditional public sector; and NGOs help generate more employment in the productive sector. For NGOs, the benefits of participating in During social fund preparation, NGCs the social find are employment opportunities engaged in policy research and socio- generated by the new source of financing, economic advocacy activities can some- expansion of NGO activities and substantial economic activities can some- ~institutional strengthening." times provide valuable alternative perspec- tives on issues regarding poverty reduction Source: Vandever Webb et. al., 1995, p. 8. and social development strategies. NGOs that work directly with poor communities can be a valuable source of first-hand in the preparation and implementation of information about the needs and priorities SF-financed subprojects can promote of target populations (for example, provid- pluralism (by enlarging the pool of poten- ing useful input during the design of the tial project applicants and implementors). subproject menu). Including NGO repre- NGOs can also promote community partici- sentatives in consultations, planning activi- pation (through social mobilization and ties and decision-making processes cam participatory development techniques), help to strengthen civil society support for contribute specialized skills lacking in the the social fund (in addition to government public and private for-profit sectors (e.g., and private sector support). expertise in the delivery of micro-credit and alternative financial services for the poor), At the operational level, NGO involvement extend project reach (e.g., by assisting very Participation Series 13 NGO Involvement in WB-Financed Social Funds Box 2 The specific benefits that NGO involvement Limited NGO Involvement can bring to a SF depend largely upon the in Senegal's AGETIP nature of collaboration, the specific roles which NGOs are requested/allowed to play "In Senegal, NGOs have been excluded from the and the stage at which NGO involvement is AGETIP which has increased their opposition to sought. The following section describes a the govermnent and its programs. While the AGETP prgramhas eensuccssfu fro ~nvariety of the different roles that NGOs can AGETIP program has been successful from an efficiency and transparency viewpoint, it has potentially play both during the design and been far less successful at reaching the most implementation of the social fund itself and marginalized groups. The AGETIP works in the preparation and implementation of primarily through local governments, which are all part of the governing party (the opposition S u boycotted the 1990 municipal elections in protest these roles is provided in Box 3. against purported fraud in the 1988 national elections). It has limited contact with NGOs. As NGO Roles in the Design and a result, it is resented by many groups who perceive the program to be "of the system" Implementation of the Social Fund despite the transparent nature of its operations. By relying solely on government-linked organi- Box 3 zations for project proposals, the AGETIP has A Summary of potential limited its ability to reach out to groups and NGO Roles in Social Funds actors traditionally marginalized from state policy benefits." Design & Implementation of the Social Fund Source: Marc,1995, pp. 35-36. * Consulting with NGOs during design * Hiring NGOs as consultants * NGO participation in SF governance struc- poor communities in preparing subproject tures proposals) and enhance subproject * NGO cofinancing sustainability (by promoting participatory * NGO administration of a pilot phase approaches or by supporting subsequent * Contracting NGOs during the implementation activities which complement or reinforce of the SF (to provide training/ technical the SF-financed intervention).' Box 2 assistance to SF staff, to undertake subproject provides an example of some of the poten- appraisal, supervision, monitoring, etc.) tial disadvantages of failing to involve * Independent NGO studies/evaluations NGOs. Preparation and Implementation of SF-Financed Subprojects Some of the key risks associated with NGO - Communication/information-sharing involvement in social funds include: limited activities (formal or informal) NGO capacity; diversity in the levels of - Subproject applicant (or "requesting agency") legitimacy and competence of individual * Assisting communities in preparing sub- organizations; weak or difficult NGO-State project proposals (formally or informally) relations, and, the challenge of identifying * Implementing agency and assessing NGOs with relevant skills * Financial intermediary and experience (for example, those with * Subproject cofinancing/financing comple- participatory skills and links with poor mentary projects communities). These issues and others are * Training/technical assistance to communities discussed in section III of the paper. and/or implementing agencies 14 Environment Department Papers NGO Involvement in Social Funds Consulting with NGOs during design ensure that the sector is well-informed In recent years, the World Bank has placed about the social fund, helps to build broad- increased emphasis on broad-based stake- based support for the project and improves holder consultation during the identifica- the chances for effective NGO involvement tion and design of the projects and pro- during implementation.'0 The final report grams it supports. Such consultation is from a 1990 workshop on Poverty Allevia- particularly important in the case of social tion, Basic Social Services and Social Funds funds given their demand-driven nature in Central America, states that "local com- and the fact that they depend upon the munities and NGOs should from the active involvement of a wide number of beginning be associated with the planning different actors (to prepare and submit and setting up of social funds ... as this proposals, implement subprojects, ens-ure improves the structure of the social funds ongoing maintenance, etc.). and enables them to get into action quickly and efficiently" (World Bank, 1990, p. 24). NGOs can serve as important sources of Consultation with NGOs can take many information concerning local-level priorities different forms. It might involve, for and needs during the design of a social example, meeting informally with one or fund. NGOs that are engaged at the com- more NGOs to seek advice on a specific munity level can frequently provide first- issue, calling a more formal meeting/ hand information about existing social workshop to share information and seek conditions, levels of community organ iza- feedback from the NGO community at tion and realistic estimates of absorptive large, circulating draft project documents to capacity. Based on their own operational NGOs for their comment and/or establish- experience, NGOs can often provide tips on ing a joint "NGO Committee" to ensure identifying quality contracting at the local ongoing consultation and dialogue. Box 4 level, working through local banking describes steps taken to consult with NGOs systems, coordinating with local govern- during the preparation of the Jamaica Social ment and other community-based orgetni- Investment Fund. zations, targeting specific groups (the poorest, women, female-headed house- Broad-based consultation with NGOs in holds, etc.), and monitoring small-scale early stages does pose certain risks. For projects in difficult environments. They can example, the process may take time and offer advice as to what has and hasn't there is no guarantee that consensus will be worked in the past and what types of achieved, particularly in situations where activities stand to have the strongest pov- NGOs and the govemment hold highly erty reduction impact. This type of input divergent views or where there is no his- can be particularly helpful in identifying tory of NGO-State collaboration. In Guate- and prioritizing categories of eligible sub- mala, for example, attempts to involve projects, establishing selection criteria and NGOs in consultations during the design of defining operational procedures. In Mada- the SF proved extremely complex and time- gascar, for example, NGOs provided useful consuming (PACT, 1990). Box 5 describes input during the preparation of the social some difficulties encountered in Ecuador, fund Operational Manual. for example. The exercise may prove counterproductive if NGOs do not see Consultation with NGOs also serves to concrete results from their input. In coun- Participation Series 15 NGO Involvement in WB-Financed Social Funds Box 4 Consulting with NGOs in Jamaica The Jamaica Social Investment Fund (SIF) was approved by the Board of the World Bank in October 1996. From the earliest stages, the project team recognized the importance of a transpar- ent and participatory approach and sought mechanisms to ensure the active involvement of CBOs and NGOs, as well as the government and private sector. To this end, a workshop on Social Investment Funds and NGO Participation was held in Kingston in December 1995 (fi- nanced in part by a grant from the Fund for Innovative Approaches to Human and Social Devel- opment). This workshop was attended by representatives from 36 Jamaican NGOs and CBOs, the Managing Director (designate) and members of the JSIF Project Preparation Management Unit as well as World Bank project staff and resource persons. SF and NGO representatives from four other countries (Bolivia, Nicaragua, Zambia and Guyana) were invited as resource people to share their experiences concerning NGO involvement in SFs. The objectives of the workshop were to inform the Jamaican NGO/CBO community about the upcoming social fund; learn from previous experiences of NGO involvement in SFs in other countries, and; consult with the Jamaican NGO/CBO community regarding their participation in the design and implementation of the JSIF. The workshop was purposefully held early on in the project cycle in order to allow NGOs the opportunity to influence the preparation process. Principal themes of discussion included: potential roles for NGOs/CBOs in the design and implementation of the JSIF; mechanisms for ensuring effective community participation in subprojects; the comparative advantages and capacity-building needs of the NGO/CBO commu- nity, and; mechanisms for ensuring the sustainability of JSIF subprojects. Recommendations resulting from the workshop included the creation of an NGO/CBO advisory committee to ensure continued dialogue with the JSIF, the development of a comprehensive communication strategy, provisions for the JSIF to support strategic technical assistance to NGOs/CBOs and other community groups and NGO/CBO involvement in the definition of criteria to ensure the sustainability of subprojects. tries where the NGO community is highly what type of input is being sought, politicized or lacks cohesion, it may be what is and is not negotiable, what to difficult to identify legitimate intermediar- expect and not to expect, etc. ies and to avoid exacerbating tensions and In addition to one-off meetings/work- divisions between different NGO "fac- . . . . tions." NGOs may also have their own shops, consider establishing a joint NGO/SF committee to ensure system- agendas that do not necessarily reflect atic and ongoing consultation. community priorities. * Allow sufficient time. Achieving Recommendations agreement among a wide range of If consultations involve only a limited stakeholders may take time, but can number of NGOs, ensure mechanisms bring inportant benefits in the long- to keep the broader NGO community run. informed of key developments and * Consider engaging an NGO as a peer decisions. reviewer of the social fund. o Be clear and up-front with NGOs as to * Ensure that other key stakeholders 16 Environment Department Papers NGO Involvemrent in Social Funds (e.g., communities, local govemments, indicators. In Cambodia, for example, a private sector firms) are also consulted. locally-based international NGO was contracted to establish eligibility criteria for Hiring NGOs as consultants water and well projects. This NGO was Individual NGOs have frequently been chosen due to its combined technical exper- contracted to provide specific services tise and excellent understanding of local during the design of a social fund. These conditions. NGO staff were hired as con- might involve: conducting community sultants to prepare the Burundi social fund needs studies, household surveys, poverty which reportedly went a long way towards assessments and other targeting exercises, creating support for the fund among the or assisting in the development of sub- NGO community and facilitating collabora- project selection criteria or evaluation tion with NGOs during implementation. Box 5 Consulting with NGOs during Social Fund Design: Difficulties Encountered in Ecuador In 1989, the World Bank and the government of Ecuador began to discuss the creation of a social fund. From the outset NGO invo]Lvement was perceived as an important element. Al- though a significant number of NGOs were active in Ecuador at the time, the majority of these were young and small and there was little coordination among the sector as a whole. As a result, the World Bank undertook efforts to support the institutional development of NGOs during the preparation of the social fund in order to promote effective NGO participation once the fund became operational. This included a series of seminars on strategic planning techniques aimed at helping NGOs better coordinate among themselves, establish long-term goals and enhance their dialogue with the government. Although many NGOs were initially suspicious of goverrnent and hesitant to become involved, in the end, an NGO working group on participation in the social fuind was formed. The Bank also commissioned a local intermediary NGO to undertake an assessment of the NGO sector and provided funding for a trilateral government-NGO-Bank seminar to discuss potential NGO roles in the SF and appropriate operational arrangements. Prior to the finalization of the social fund, however, a change in government occurred and, as a result, a number of changes were made to the SF which generated resentment and confusion on the part of NGOs. Expectations had been raised and many NGOs were disappointed and disillu- sioned with the final design of the SF. Project staff point out that NGOs and the social fund did not share a common understanding of thie purpose of consultations. The social fund was most interested in technical inputs from NGOs (assistance in developing evaluation criteria, for ex- ample) while NGOs were mainly seeking to promote procedures and subproject categories that would facilitate their participation. In the end, neither group's expectations were satisfied. Although a significant number of "technically-oriented" NGOs have since participated in the SF, the involvement of those more "process-oriented" NGOs that participated in earlier discussions has been limited. These NGOs attribute their lack of involvement, in part, to the SF's focus on "infrastructure" projects and the fact that no reimbursement is available for project preparation costs. It is interesting to note that although CBOs were not involved in the process of social fund design (neither by social fund staff nor by NGOs) they have been active participants in subproject implementation. Participation Series 17 NGO Involvement in WB-Financed Social Funds NGOs can be cost-effective as consultants tation on the board of the social fund and often possess local language skills and (specifically in those cases where NGOs are valuable knowledge of local conditions. In expected to play an important role) in order some cases, NGOs may have specific skills to ensure broad stakeholder views and or experience (e.g., participatory research promote strong social fund-NGO relations. methods, understanding of indigenous Potential risks include government reluc- technologies) not found in the public or tance to include NGOs, differences and private for-profit sectors. The competence divisions among NGOs, the possible risk of and quality of individual NGOs varies creating diverging views and increased greatly however. Not all NGOs are profes- conflict among board members, the risk of sional or participatory and many local NGOs seeking to promote their own self- NGOs may have limited capacity and be interests (as opposed to those of poor unable to take on large-scale responsibili- communities) and the difficulty of identify- ties. ing an appropriate NGO representative (especially in cases where NGOs are di- Recommendations vided into political or ideological camps or e When hiring an NGO as a consultant where the sector is dominated by a few follow the rules and procedures out- powerful politicized or partisan personali- lined in Guidelines: Use of Consultants ties). Special care should be taken to ensure by World Bank Borrowers and by the a democratic and transparent process in World Bank as Executing Agency selecting NGO representatives to the board. (Washington: World Bank, 1981). Ideally, NGOs should be allowed to elect or nominate their own representatives (where * Carefully assess potential NGO part- possible through existing NGO associations ners to ensure suitability, relevant skills or umbrella organizations). and experience (e.g., technical exper- tise, local knowledge, community ties, The majority of those social funds reviewed participatory skills and adequate capac- have NGO representatives on their board, ity). Tips on assessing NGO capacity and a smaller number have named NGOs are outlined in section III.B. to subproject selection committees. While * Establish clear selection criteria and these experiences have generally been ensure maximum transparency in judged favorably by both social funds and selecting NGO consultants. NGOs, in a few cases NGOs have com- plained that their presence on the social Take recauionsto gurd aginstfund board iS merely symbolic and that potential conflict of interest (such as thy bare d fromcetin acti ties engaing n NO todeveop elecion they are excluded from certain activities engaging an NGO to develop selection and decision-making procedures. In other criteria thater may. wish toapplyforcases, NGOs have not been invited to sit on funds later on). the board but rather to "advise" the board. NGO participation in social.und In the case of Sri Lanka, for example, an Ngoveartci stion iuso NGO Advisory Committee was established. NGOs felt, however, that they lacked real Most Bank staff, SF staff and NGO repre- authority and influence in this capacity and sentatives interviewed felt that it is impor- have since been granted representation on tant and beneficial to have NGO represen- the board of the fund. 18 Environment Department Papers NGO Involvement in Social Funds Recommendations NGO administration of a pilot phase * Work through NGO umbrella orgeniza- A growing number of more recent social tions (where they exist) in identifying funds have employed a pilot phase in order NGO representatives. to identify obstacles and test operational . Be aware of and sensitive to existiig mechanisms and procedures. Particularly divisions among NGOs (or groups of in situations where the social fund office is NGOs) and avoid exacerbating these. not yet fully in place, NGOs can play an important role in designing, supervising, * Where feasible (where a sufficient level implementing and evaluating pilot sub- of coordination amongst NGOs exists) projects. In the case of the Armenia social consider allowing NGOs to elect or fund, an international NGO with local nominate their own representative(s) to linkages, was selected to administer the the board. This may reduce the danger pilot phase. It has since continued to of the SF being perceived as selecting undertake capacity-building activities with "favorites" and can serve to promote local NGOs in parallel with the main phase more effective representation and of the project. See Box 6. In the case of the information-sharing among the broader proposed Palestinian NGO Project, an NGO NGO community. (or group of NGOs) will be selected * Take steps to ensure that the board through a process of international competi- enjoys maximum political autonomy. tive bidding to manage the entire fund. See Box 7. . Ensure that NGO representatives are granted the same status as other board Contracting NGOs during the members. implementation of the socialfund * Take precautions to guard against In a number of countries, social funds have potential conflict of interest (such as contracted NGOs to appraise, supervise involving an executing NGO in project and monitor subprojects or to provide approval). training and/or technical assistance to social fund staff. Khadiagala (1995) points NGO cofinancing out that subproject supervision is often a Most social funds mobilize support from a weak link in social fund operations due to number of multilateral and bilateral donors. limited staff resources. Sub-contracting In some cases, larger international NGC)s such responsibilities to qualified NGOs can have participated as cofinanciers. In Bo- allow social funds to ensure adequate livia, for example, Save the Children dc- supervision while controlling administra- nated funds to the Emergency Social Fund. tive costs. In Egypt, for example, the social In the case of Honduras, the head of the fund successfully bundles together sets of social fund traveled to Washington to seek projects and contracts out their supervision financial support from the international to NGOs (Khadiagala, 1995, p. 19). Box 8 NGO community. Such participation, describes various responsibilities contracted although rare, can serve to strengthen the out to international NGOs in Guinea. In Bank's (and borrowing governments') other cases, NGOs have been contracted by relations with international NGOs and to social funds to monitor subproject imple- promote donor coordination and mutual mentation, undertake participatory evalua- learning. tions of subproject impact or train social Participation Series 19 NGO Involvement in WB-Financed Social Funds Box 6 An NGO as an Administrator of a Pilot Phase in Armenia I The Armenia Social Investment Fund (one of a limited number of World Bank "Participation I Flagship" projects) began operations in February 1996. The preparation of the ASIF included a i pilot phase, jointly administered by the Armenia Assembly of America (AAA) and a small govern- mental unit. The AAA is a Washington-based NGO which supports development projects in Armenia and promotes public understanding and awareness of Armenian issues in the U.S. The pilot phase, during which 13 pilot subprojects were implemented, proved extremely useful in testing methods and procedures to encourage community and small contractors participation. The pilot flagged potential problems and provided information about local capacity and needs. Be- cause of lack of credibility of city councils and local governments (still operating in a very top down fashion inherited from the Soviet Union) and "high levels of learned dependency and distrust of Government" among the local population, it was decided during the pilot that sub- projects should be managed by subproject committees directly chosen by the beneficiaries and worki-ng in collaboration with local governments. The pilot also helped in developing procurement procedures that would promote the participation of comnmunities and small contractors and served to test different mechanisms for community financial contribution. Based on these and other findings, project staff were able to foresee problems, obstacles and opportunities and modify the idesign of the social fund accordingly. At the time it was implementing the pilot phase, the AAA iwas also the designated coordinating body of NGOs which helped in providing information about the ASIF to the NGO community. The AAA representative in Yerevan is now a Board member of Lhe ASI'F which helps in ensuring continuity between the pilot and the main phase of the project. fund staff in such techniques. Although Recommendations on-ily a ii-mited number of NGOs may be * Ensure clear terms of reference for able to fulfill these functions, and careful contracted NGOs. assessment is required, NGOs' often unique combination of technical and "so- * Ensure a thorough assessment of NGO cial" skills (e.g., the ability to work with capacity, track record, financial/mana- grassroots organizations, to interact effec- gerial skills, etc. (tips on assessing Lively with local communities and to pro- NGOs are outlined in section III.B.). mote social mobilization) can make them * Make provisions for regular communi- particularly well-suited for such tasks."1 In cation and close coordination with such cases, NGOs are obviously not se- NGOs contracted to perform key social lected on the basis of "political representat- fund functions. ivity" (as in the case of namning a candidate to the board) nor as civil society "stakehold- Independent NGO studieslevaluations ers" 'as may be the case in consulting with +GOs during design) but simply on the NGOs have carried out a number of inde- basis of the specific skills, capacities and pendent studies concerning the effective- expertise that they possess and the com- ness and impact of Bank-financed social Vetitive advantages they offer over other funds, some of which are described in Box potential contractors. 9. Although these studies are sometimes potential contractors. critical of social fund operations and their 20 Environment Department Papers NGO Involvement in Social Funds Box 7 NGO Roles in the Preparation and Palestinian NGO Project Implementation of Subprojects This project, currently under preparation, is Communication/Information-sharing expected to become operational in FY97. The activities project design resembles that of a social fund, however, the project is unique in that it would NGOs can play an important role m ensur- be financed using IBRD surplus and net ing that communities are well informed income. Project funds will not pass through about social fund operations. In most government channels and will not be repaicl. cases, this "promotional" role is undertaken Although the Palestinian Authority has been informally, by NGOs sharing information closely consulted during design, has included about social fund operations with the the project in its list of core priorities and will communities with which they work. Al- sit on the project's Governance Committee though no statistics are available concern- (along with donors, NGOs and other repre- ing the extent to which NGOs are respon- sentatives), its role in the project is secondary. sible for informing communities about SF It will neither receive project funds nor participate directly in project implementation. oportunties, there is eneral agreement The project, which will channel grants to that NGOs have made a significant contri- NGOs for poverty reduction activities, will be bution in this area in a number of countries. managed by an NGO, selected through a The role of NGOs in spreading news about process of international competitive bidding. social fund activities can be particularly The managing NGO (or NGOs) will be beneficial when they are in contact with responsible for managing the fund and otherwise isolated, poorly informed com- approving and monitoring grants. The munities. There is, however, a risk of Governance Committee, made up of NGO, NGOs disseminating inaccurate informa- donor, goverrnent and other representatives tion and/or raising undue expectations as will establish policy, oversee the project and to what types of activities are eligible for seek to ensure coordination and complement- social fund support. In some cases, NGOs arity with other goverment and donor- sponsored activities. may also be concentrated in urban areas and not necessarily have a presence in those communities that are poorest or most impact, they can be a source of valuable remote. feedback, thoughtful analysis and construc- tive advice. In recent years, a growing Recommendatons number of country and regional-level * In order to avoid misinformation, consultations have provided opportunities ensure that NGOs have up-to-date and for NGOs to share their views and findings accurate information about the SF (for with social fund and Bank staff. A descrip- example, by disseminating a SF fact tion of one such workshop held recently in sheet or newsletter, holding informa- Honduras is included in Box 10. Plans are tion workshops, speaking at NGO- currently underway to hold a global work- organized events, etc.). shop on the subject of social funds (involv- Seek advice from local NGOs on the ing a broad range of donors, government most effective ways to disseminate officials, SF staff and NGOs) at the World information directly to communities Bank in the spring of 1997. (e.g., popular radio programs, village Participation Series 21 NGO Involvement in WB-Financed Social Funds Box 8 Box 9 Contracting International NGOs NGO Assessments of Social Funds as Intermediaries in Guinea In recent years, NGOs have devoted consid- Initially Guinea's Socio-Economic Develop- erable time and effort to evaluating and ment Program was conceived as a fast commenting on social funds. For example, in disbursing SF along the lines of the Bolivian April 1995, FICONG (a network of Latin model. In the first 18 months of operation, American NGOs supported by the World ho,wever, only four subprojects were Bank's Economic Development Institute) approved, largely due to the weak capacity devoted a special issue of its journal, Pobreza of local NGOs and CBOs and their limited Urbana y Desarollo, to the subject of social ability to prepare acceptable project propos- funds in Latin America. NGO members of als. As a result, the Guinean fund aban- the NGO-World Bank Committee (the official doned the initial idea of a fast-disbursing forum for Bank-NGO dialogue) have recently operation and focused on a slower process identified social funds as a subject of priority of improving the quality of project subnis- interest and have sponsored independent sions and seeking ways to build NGO evaluations of social funds in Chile, Guate- capacity. At the same time, the social fund mala, Honduras, Peru and Sri Lanka. The itself lacked the capacity to provide ad- Center for Democratic Education (a Washing- equate assistance in the preparation of ton-based NGO) and CIDECA (Consejo de subproject proposals and to ensure timely Investigaciones para el Desarrollo de approval. (On average, there was a delay of Centroamerica) have recently conducted nine months between subproject application studies on social funds in El Salvador and and approval, and delays of up to 20 Guatemala respectively. In February 1996 the months before project implementation). In Protestant Association for Cooperation in order to achieve faster, more flexible and Development (EZE) in Germany organized efficient project preparation and approval, an international symposium to discuss the social fund introduced a system of structural adjustment policy and SFs in Latin contracting out certain responsibilities to a America (with a focus on Honduras). A limited number of international NGOs (the number of key issues raised by these NGOs two most important being the Adventist and others are described in Part IV. Refer- Development and Relief Agency, ADRA, ences for these various studies are included and the Centre Canadien d'Etudes et de in the bibliography. Cooperation Internationale, CECI). A "standing offer" for a given amount was established with these organizations ($1 M worth of subprojects in the case of CECI, for meetings, strategic locations for placing example) who then acted as intermediaries posters and handing out brochures, in identifying communities, providing etc.). support and assistance in subproject prepa- Where appropriate, consider contract- ration and approval as well as ensuring ongoing maintenance and supervision (in ing NGOs to take formal responsibility collaboration with communities). Interme- for aspects of social fund promotion. diary NGOs could claim approximately 12% of total subproject cost for these services. Subproject applicant Over 50% of total subproject funds were (or "requesting agency") disbursed in this manner. As a general rule, in order to promote Source: Voyer, 1995 maximum "beneficiary ownership," it is 22 Environment Department Papers NGO Involvement in Social Funds Box 10 Regional Seminar on NGO Involvement in Central American Social Funds In November 1995, a seminar on the subject of "NGO Involvement in Central American Social Funds" was held in Roatan, Honduras. The seminar was attended by Honduran government officials, staff members from social funds in Honduras, Nicaragua, Guatemala, El Salvador and Panama, NGO leaders from each of those five countries (as well as from Costa Rica and Belize) and representatives from the World Bank, IDB, KfW and Ruta Social. Topics of discussion included: * mechanisms for improved SF-NGO collaboration. * potential roles for NGOs in the SF project cycle and NGO partnerships with other organiza- tions (e.g., local government, private sector firms). * the role of NGOs and the SF in promoting effective community participation and local capacity-building. * recommendations for improving the sustainability of SF-financed projects. In order to improve SF-NGO Collaboration, it was recommended that: * subproject sustainability is. depende:nt upon effective community participation and ensuring adequate measures for ongoing maintenance and support. * more emphasis should be placed on social impact assessments. * in order to achieve genuine commrunity participation, there is a need for a clearer under- standing of the concept of "participation" as well as more resources and better tools to promote and measure participation throughout the project cycle. The Seminar concluded: * SFs should maintain an NGO databaLse. * joint SF-NGO committees should be created at the country level. * in-country seminars and workshops for SFs and NGOs (on operational issues and broader questions such as participation, poverty reduction, etc.) should be organized on an ongoing basis. desirable that subproject proposals be tion) involve more than one community, submitted by beneficiaries themselves or by other actors such as NGOs, local govern- that level of organization in closest proxim- ments and private sector firms may play ity to ultimate users/beneficiaries. A the role of subproject applicant-normally number of social funds only allow commu- on the condition that they provide evidence nity-based organizations (CBOs) or cornmu- of community endorsement and involve- nities themselves to submit subproject ment. proposals. Where communities (or CB0s) lack the capacity, however, to prepare amd In such cases, social funds can be an impor- submit proposals, or where subprojects tant source of financing for local NGOs, (such as credit programs or road construc- allowing them to broaden and diversify Participation Series 23 NGO Involvement in WB-Financed Social Funds their funding base, expand their experience, firms. (For more on NGOs and community improve the quality of their interventions participation, see section III.F.). and increase their level of interaction and influence with government. The involve- Recommendations ment of NGOs as subproject applicants * Regardless of the applicant, all sub- offers a number of potential benefits to the project proposals should require evi- SF. Allowing NGOs to apply for subproject dence of community participation and funding can promote pluralism by expand- endorsement (prior to approval). ing the pool of potential applicants and * Where a number of different actors are ensuring that funds are not continually egible subproject applicants, take into channeled to a small number of pohitically consideration that the same procedures, connected contractors. In some sectors, NGOs may be the only existing institutions criteria, communication strategies, etc. with required skills and experience. In the may not work equally well with each case f Honuras,for eample NGOsweredifferent group (e.g., the information case of Honduras, for example, NGOs were and technical assistance needs of CBOs, virtually the only organizations with exper- NGOs and private sector firms are tise in microenterprise development. NGOs carried out 80% of urban informal likely to differ). sector credit projects and 90% of rural credit * Offer training to NGOs (and other programs. Without their participation, the potential applicants) on SF procedures, social fund would have been unable to how to prepare subproject proposals, undertake these programs. etc. 9 Assess the comparative strengths and Evidence also suggests that NGO involve- weaknesses of different types of sub- ment as subproject applicants may, in some project applicants (e.g., communities, cases, contribute to improved targeting, NGOs, local government, private community participation and project sector) and try to promote complemen- sustainability. While NGOs are not always tary forms of collaboration and partner- present in the poorest regions of a country, ship. it is sometimes the case that they do have links with poor or isolated communities Assisting communities in preparing sub- that lie outside the scope of government project proposals (formally or informally) structures and services. In the case of Probably the most significant contribution Bolivia, for example, social fund staff that NGOs currently make to social funds is indicate that "the main reason for the the assistance they provide to communities involvement of NGOs within the scope of (both formally or informally) in preparing SF's work was to reach areas where the and submitting subproject proposals. State had no presence." (Lema, 1995) Under some social funds, NGOs that Although the evidence is mixed, experience support communities in preparing and has also shown that, generally speaking, implementing subprojects may be formally NGO applicants are more likely to empha- recognized as subproject "sponsors" and size community participation and invest may be eligible to claim some percentage of more effort towards ensuring the long-term total project cost to cover their time and sustainability of subprojects than for expenses. In most cases, however, NGOs example the private sector, or for-profit 24 Environrment Department Papers NGO Involvement in Social Funds provide assistance to communities on an agencies, the social fund should foresee informal basis - meaning that they receive potential difficulties and make appro- no payment for these services and the social priate provisions (such as ensuring fund may not even be aware of their in- timely disbursements and advance volvement. Such intervention on the part payments). of NGOs can be particularly important in NGOs, CBOs (and other potential the case of very poor communities that lack implementing agencies) are frequently the required capacity and skllHs to prepare a unfamiliar with Bank procurement proposal on their own and, in situations procedures. In order to address this where social funds lack the necessary staff, problem, social funds should consider to be able to provide such support. (Issues organizing workshops (for NGOs and related to the current lack of funding for other potential supplementing agen- these "preinvestment activities" are dis- cies) on the Bank's procurement proce- cussed in section IV. B.) dures and make provisions for ongoing Recommendation access to technical assistance as re- quired. In addition, social funds should NGOs often face serious resource con- use simplified procurement instructions straints and the time and energy they and bidding documents and ensure that invest in assisting communities to prepare these are made available in local social fund proposals (even as formal languages. sponsors) is often borne at their own cost. Where this is a common practice, social Financial intermediary funds should consider mechanisms for In Panama, for example, NGOs' principal compensating NGOs for these services. official participation in social fund-financed subprojects has been as subproject "adrmin- ImplementingAgency istrators." In this role, NGOs act as a When NGOs act as subproject applicant, financial intermediary on behalf of the they normally also undertake the role of community. Deposits are made into the implementing agency. Similarly, other NGO's bank account and the NGO in turn subproject applicants (such as commuaities handles payments to contractors executing or municipalities) may contract an NGO to the work. For these services, the NGO fulfill this role. Common responsibilities of receives a payment of 3% of the project the implementing agency include: collect- budget (or up to 10% if their role involves ing the community contribution; tendering providing technical assistance). NGOs and evaluating bids; contracting and niak- have acted as "administrators" in approxi- ing payments to the subproject contractor, mately 20% of SF projects. While NGOs supplier and supervisor; monitoring have expressed interest in playing a greater progress and; reporting problems to the SF. role in subproject design and execution, the SF questions NGOs' technical capacity to Recommendations execute (mainly infrastructure) projects * NGOs frequently have very limited and, for the moment, NGO involvement capital reserves and may have difficulty remains largely limited to a role of financial in securing bank guarantees. Where intermediation. NGOs are acting as implementing Participation Series 25 NGO Involvement in WB-Financed Social Funds Subproject cofinancingl activities such as the fostering of new complementary projects attitudes, conflict resolution, developing In some cases NGOs have supplemented problem solving techniques, etc. In such social fund financing with resources from circumstances, requiring a mix of "social" their own budget when carrying out com- and operational skills, NGOs may have munity-level projects. They have also certain comparative advantages over other sometimes chosen to undertake indepen- more technically-oriented private sector dent complementary projects in communi- contractors. ties receiving social fund funding (for example, supporting the capacity-building Recommendations of CBOs, funding equipment or delivering * Use a pilot phase to identify key train- services which complement SF-financed ing/technical assistance needs of infrastructure subprojects). Such actions potential subproject applicants and can help to enhance the integration and implementors. sustainability of social fund-financed * Take into account the skills mix, com- subprojects. parative advantages and local accept- ITrainingltechnical assistance to communi- ability of various organizations in ties and/or implementing agencies selecting trainers/providers of technical assistance. NGOs are sometimes contracted by the social fund to train or provide technical - Consider including an "institutional assistance to communities (and/or imple- development" or "capacity-building" menting agencies) to enhance subproject category on the subproject menu. implementation or maintenance. The Fond Estimated Current Levels of d'Appui au D6veloppement Communau- Involvement Level f taire in Comores, for example, contracted NGO Involvement in Social Funds an international NGO (Center Canadian andintEduational NCO Cooperonteranadiana) The extent of NGO involvement in indi- d'Education et Coop6ration International) vidual social funds varies greatly. Some to coordinate technical assistance to com- munities. The success of the Armenian basic information about the level of NGO social fund pilot phase was attributed in involvement in a selected number of Bank- part to the significant amount of support financed social funds is included in Annex and technical assistance provided by the I. These figures are based on statistical administrating NGO (Armenian Assembly information from social fund reports, of America) to contractors and implement- operational files or, in some cases, estimates ing agencies. As the capacity of the social by social fund staff. Because the specific fund to provide individualized technical nature of NGO collaboration varies and assistance during the main phase of the social fund records do not always contain project will be more limited, one of the NGO-specific information, it is very diffi- recommendations of the pilot phase was to cult to compare levels of NGO involvement subcontract these "technical assistance" in different social funds or to provide an roles to NGOs. It was pointed out that the estimate of overall NGO collaboration. type of technical assistance required is not Bearing in mind these limitations, the simply task-oriented, but may involve following are some general findings regard- 26 Environment Department Papers NGO Involvement in Social Funds ing the level of NGO involvement in social implementing agency, financial inter- funds to date. mediary, etc.) exact levels of disburse- ments to NGOs are difficult to deter- * A majority of social funds have in- mine. volved at least some level of consulta- tionwithNGOsdurig deign hase. *By far the most common role played by tion with NGOs during design phases. NGOs is to assist communities (or In approximately one third of the social community-based organizations) in the funds reviewed, this consultation could design and implementation of sub- be described as significant (i.e., ongoing projects. In some cases, NGOs are consultation with a considerable num- formally recognized as subproject ber of NGOs resulting in some identifi- fsponsors" and may claim a certain able impact). percentage (usually between 5-15%) of * A majority of the social funds reviewed total project costs to cover their ex- have NGO representatives (in a few penses and services. Much more cases nominated, but more commonly frequently, however, NGOs provide appointed) on their board. assistance to communities on an infor- * It is estimated that, on average, NGOs mal basis and, therefore, receive no sponsor or implement between 15 and official recognition or financial compen- 20% of total subprojects (the remainder sation for these services. It is estimated being sponsored or implemented b{ that NGOs provide some form of comrnmunity groups, local governments informal assistance in as many as 45- or private sector firms). Levels of NGO 50% of social fund-financed subprojects. involvement vary enormously among * As would be expected, NGO involve- individual social funds, however, ment is highest in the sectors of health, ranging from near zero (in the case of education, community development those social funds that require sub- and micro-credit. It is lowest in eco- project proposals be submitted by nomic infrastructure and public works community members or local govern- projects. ment) to close to 100% (in the case of those funds that classify all non-state NGOs have demonstrated specific com- actors including CBOs, existing or parative strengths in: (i) working with created, as NGOs). particularly poor and/or remote communi- * It can be estimated that, on average, ties "where the added expense (of extra approximately fifteen percent of total transport costs, time and energy) cuts into social fund disbursements are chan- the profit margins of for-profit businesses" neled through NGOs (the remainder (Parish, 1996; Lema 1995); (ii) facilitating being channeled directly to communi- subprojects that are highly dependent upon ties or through public or private for- active community participation; (iii) provid- profit intermediaries). Again, the ing skills and services that are lacking in numbers vary greatly among individual the public and for-profit, private sector social funds, ranging from near zero to (particularly in the fields of human resource close to 100 percent. Due to the wile development, basic needs and micro- variety of different roles played by credit), and; (iv) addressing issues related NGOs (e.g., subproject applicant, to subproject sustainability (e.g., by pro- Participation Series 27 NGO Involvement in WB-Financed Social Funds moting community participation and by Based on current evidence, it is impossible focusing more attention on provisions for to ascertain whether "supply-side" or staffing, equipment and long-term mainte- "demand-side" factors play a greater role in nance). (Presidencia de la Republica del determining levels of NGO involvement. Ecuador, 1996.) The situation varies from country to coun- try and, in almost all cases, a variety of The level of NGO involvement in a given factors are at play. The evidence does, social fund is dependent upon a number of however, suggest that: (i) SF expectations different "supply-side" and demand-side" regarding NGO roles (focusing, for ex- factors. As a result, it is impossible to ample, on service delivery and technical dictate any "ideal" level of NGO involve- input) do not always correspond with ment in social funds generally. In situa- NGOs' own perceived roles and compara- tions where community-level organization tive advantages (e.g., collaborating with the is strong (such as Eritrea, for example) the fund as "development partners" and justification or need for NGO intermedia- concentrating on community participation), tion may be limited. In other countries, and; (ii) a number of characteristics of SFs where the need is strong, NGO involve- can be identified (both at the level of policy ment may be restricted due to poor NGO- and procedures) that serve to limit NGO state relations or weak NGO capacity and involvement or lead to an underutilization skills. Finally, characteristics of the fund of existing NGO capacity. Some key issues itself (including the objectives of the SF, the regarding NGO involvement in social types of activities financed and appropriate funds, including operational obstacles and policies and procedures to facilitate NGO recommendations for overcoming these, are involvement) play an important role in discussed in the following sections. determining the extent of NGO involve- ment. 28 Environment Department Papers 3. Key Issues and Lessons Learned State-NGO Relations consultations between NGOs and the government during the preparation of the A key factor influencing NGO involvement social fund proved conflictual and, in both in a social fund is the nature of relations cases, led to significant project delays. between NGOs and the State. State-NGO Social fund staff should be sensitive to the relations vary enormously from country to danger of creating or exacerbating divisions country and from government to govern- among NGOs. For example, care should be ment. In some cases, government and taken not to work exclusively with "pro- NGOs may share similar goals and work; government" NGOs while marginalising closely with one another. In other situa- more radical (or critical) NGOs, who may tions, however, relations between NGOs have valuable skills or alternative perspec- and the State may be characterized by tives to offer. indifference, distrust, suspicion or outright hostility. Generally speaking, the initial Establishing a healthy working relationship decision to establish a social fund is depen- with NGOs may prove more difficult in dent upon at least a minimal level of will- situations where the political situation is ingness on the part of government to work highly polarized. Low levels of NGO with communities and NGOs (and vice involvement in the Nicaragua social fund, versa)."2 for example, may in part be attributable to the fact that a majority of NGOs were more In some cases, social funds have served to closely associated to the previous improve relations or to stimulate dialogue Sandinista government than the country's between government, donors and NGOs, current regime. One Nicaraguan NGO who previously had little contact with one representative has observed that "there is another. In Bolivia, for example, the intro- mutual distrust between the government duction of the Emergency Social Fund, in and NGOs, and the SF has not generated conjunction with encouragement from spaces for dialogue and understanding." donors, provided the impetus for setting (ALOP, 1996, p. 15) In countries where aside mutual suspicions and establishing a there is no tradition of NGO-State collabo- dialogue between the government and ration, NGOs may have fears about losing NGOs. A similar process took place in their autonomy, becoming tools of political Zambia through the Social Action Progr.am patronage or being perceived as "agents of and the subsequent Social Recovery Pro* the State." Under such circumstances, gram (as described in Box 11). In other ensuring the political independence of the cases, such as Guatemala and Ecuador, fund becomes crucial. Establishing the Participation Series 29 NGO Involvement in WB-Financed Social Funds Box 11 Interaction with NGOs in the Preparation of the Zambia Social Recovery Project From the earliest stages, the Zambia Social Recovery Project emphasized the active involvement of CBOs and NGOs. The decision to promote interaction with these groups was based on fairly positive government-NGO relations, characterized by pragmatic collaboration, and the fact that NGOs clearly represented the greatest capacity on the ground to achieve goals of rapid social action. The Bank's initial identification mission consisted largely of staff with an NGO focus (including consultants involved with the Bolivia ESF and others who had worked with NGOs and social action programs in several countries). During this mission, meetings were held with a number of NGOs and NGO umbrella organizations and an overview of NGO activities in Zambia was prepared. To maintain momentum, one consultant stayed on in Zambia for a further two months, allowing him to maintain contacts with NGOs, dispel misinformation and give increased attention to potential operational obstacles, etc. Contacts with NGOs were broadened during the pre-appraisal mission when sectoral experts met with local NGOs active in health, education, nutrition and food security. The TM also organized a meeting of all larger NGOs in a more formal forum than previous individual meetings. This meeting started with some sharp NGO criticisms of the Bank-financed structural adjustment program, but eventually progressed to discussing details of the project in a productive manner. Throughout project preparation, ongoing meetings were held with NGOs to share information about the project's progress and to seek input regarding the subproject menu, the appraisal guide, etc. Particular attention was paid to developing innovative and flexible procurement procedures that would facilitate working with CBOs and NGOs. The experience of the Social Recovery Project has served to facilitate subsequent collaboration between the Bank, government and NGOs. For example, NGOs have since provided input towards Zambia's Country Economic Memorandum and participated in a Bank-financed Participatory Poverty Assessment. autonomy of funds has not always been parency in the operation of the social fund; easy, particularly where governments guarding against political patronage in the prefer to maintain control over funds for selection/ approval of subprojects; provid- political purposes or fear that implement- ing assurances that there will be no govern- ing agencies (such as NGOs) will claim ment interference in internal NGO affairs, credit for benefits resulting from social fund and; by recruiting social fund managers activities. Box 12 describes some of the and staff that are open to working with problems experienced in the early years of NGOs and have some knowledge and the National Development Trust Fund in experience with the sector. The Bank can Sri Lanka, due to fragile NGO-State rela- also play an important role in working with tions and difficulties in establishing the government on an ongoing basis to foster fund as a politically autonomous body. better understanding of NGO roles and to create greater space for NGO activities and NGO wariness to become involved in a NGO-government collaboration. Project social fund can be reduced through early staff should be aware that, in some cases, NGO involvement in the design of the poor NGO-State relations may make NGO social fund; ensuring autonomy and trans- collaboration in a social fund unfeasible. In 30 Environment Department Papers Key Issues and Lessons Learned situations were relations between the State participate in the SF. In the case of Sri and civil society are particularly problem- Lanka (see Box 12), the capacity of NGOs to atic, the viability of a social fund mecha- absorb funds and implement subprojects nism itself may be questionable. was less than initially assumed by the social fund. This prevented the fund from achiev- Assessing NGOs ing its projected goals in the first years of operation and resulted in some small When designing a social fund, it is impor- organizations receiving much larger tant to begin with a realistic assessment of amounts of money than they could effec- existing NGO capacity. As mentioned tively manage (Smillie et. al., 1994). above, NGO capacity in some countries is limited and only a minority of active orga- Initially, a simple overview of the number nizations may possess the specific skills, of organizations active in relevant sectors, qualities or scale of operations necessary to along with an estimate of their current Box 12 The Political Autonomy of Social Funds -Lessons Learned in Sri Lanka The experience of the National Development Trust Fund or NDTF (formerly known as the Janasaviya Trust Fund) in Sri Lanka provides some important lessons regarding the challenges of working in a context of difficult NGO-state relations and the importance of ensuring the political autonomy of social funds. At the time of the creation of the fund in 1991, extreme civil unrest had wrecked havoc on the social fabric of the country and NGO-state relations were marked by tension and mutual mistrusL. Although the government at the time acknowledged the need for NGO participation in the implementation of the project, its actions vis-a-vis NGOs (including a politicalLy motivated invesLigation of alLeged NGO malpractices, unrelated to the fund but launched shortly after its creation) served only to undermine already fragile relations. NGO wariness to become involved in the fund was further exacerbated when it became clear that, despite the fund's parastatal status, the president's role as patron of the fund and the appointment of a managing director with close links to the president, left little room for political autonomy. As a result, many of the country's NGOs (including two of the country's largest and most experienced NGOs-initially expected to disburse over two thirds of credit funds) elected not to participate in the fund. This proved extremely detrimental to the timely start-up of the fund, particularly given that overall NGO capacity to absorb funds and implement production- oriented poverty alleviation activities was not nearly as strong as initially assumed. The fund adopted an alternative strategy of working with local government officials but, due to their limited capacity, levels of disbursement and subproject implementation remained low. Despite these significant difficulties in the early years of the fund, the situation has improved over the past two years. With the election of a n,ew government in late 1994, the name of the fund was changed to the National Development Trust Fund (an indication of its new-found political autonomy) and steps were taken to adcdress previous criticisms of political patronage. Subse- quent to a midterm review in May 1995, a number of management changes were introduced, contributing to the development of the capacity of the NDTF and resulting in improved rela- tions and more effective collaboration between the fund and NGOs. Recent evaluations of the fund have shown significant development impact on the ground, in particular, in the areas of nutrition and women's participation. Participation Series 31 NGO Involvement in WB-Financed Social Funds budget, their capacity for expansion and Some key characteristics of participa- their willingness to participate in the pro- tory organizations are listed in Box 13. gram will provide a good approximation of overall NGO capacity. At a later stage Where NGOs collaborate with the SF in a during design, this can be followed up by a number of different ways, selection criteria more detailed assessment of individual should be tailored to the specific role or NGO capacity based on specific roles. Such task at hand. For example, when selecting assessments can be carried out through questionnaires, interviews, field visits, beneficiary assessments, working through Box 13 an umbrella organization, etc. In Armenia, Characteristics of Intermediaries for example, a study was undertaken to that Support Participation assess the institutional capacity of local level organizations (including village / Participation as an institutional objective. councils, parents' committees and women's I Field presence. groups) to propose and implement sub- projects. (A list of the specific organiza- 1 Staff incentives and training which tional characteristics assessed is included in support participation. Annex II.) A separate assessment was I Iterative planning in consultation with conducted to identify NGOs (and other local commrunities. institutions) with the capacity to deliver / Bottom-up accountability mechanisms. training and technical assistance in the Contribution of cash, labor, raw material areas of community development, partici- or local facilties by local communities pation, and environmental awareness in the which makes the communities clients of subproject cycle. the intermediary. NGO Selection Criteria Horizontal and vertical linkages to other institutions. Some factors that should be taken into I The agency has prior experience in the account in selecting NGO partners include: community where the subproject is to be implemented and is aware of local condi- * credibility -acceptable to both stake- tions. holders and government, legally consti- The community/beneficiaries have a tuted, politically neutral; positive perception of the agency. * representativity-community ties, ac- I The agency and its personnel have keen countable to members/beneficiaries, understanding of and sensitivity to issues gender equality; concerning women and minorities and * governance -sound internal manage- towards the environment. ment, transparency, financial account- I The philosophy of the agency on commu- ability, efficiency; nity participation is reflected in other * competence -relevant skills and experi- projects it has undertaken, and the strat- ence, proven track record; egy for participation in the present pro- ence, proven ~~~~~~~~posal is in line with the fund's strategy. * institutional capacity-sufficient scale of operations, facilities and equipment. Source: Schmidt and Marc, 1995. p. 25. 32 Environment Department Papers Key Issues and Lessons Learned (or approving nominations for) NGOs to sit In many countries, NGOs are numerous on the board, factors such as political and diverse, and individual organizations credibility, representativity, a significant possess greatly varying levels of legitimacy, membership and strong links with fellow competency and capacity. In this sense, NGOs are important, while other factors establishing some basic eligibility require- (related to specific operational skills, for ments for NGO participation in the social example) are less relevant. In the case of fund can be very useful. Care should be NGOs that are working with communities taken, however, to ensure that such criteria but not handling funds, selection criteria do not inadvertently exclude smaller, should focus on community ties and par- younger or less formal, but competent ticipatory expertise. They need not include organizations. For example, requirements financial management skills. Similarly, for a certain number of permanent staff and where NGOs are contracted in a narrow, proven management capacity will favor technical capacity (e.g., to undertake simple larger organizations with professional staff. service delivery or provide specialized Smaller, local NGOs may have less capacity technical assistance), selection criteria and require technical assistance, but possess should focus on the specific required stronger grassroots links and prove more operational skills and capacity, rather than effective and sustainable in the long-term. any broader requirements related to Similarly, while establishing a minimum representativity, internal governance, etc. requirement of two years experience will help to weed out "gold rush" NGOs that Some social funds have adopted general emerge in direct response to the availability "prequalification" requirements for NGOs. of funds, a phenomenon experienced by a In Honduras, for example, the social fund number of social funds, it also runs the risk maintains lists of NGOs that are "pre- of creating a monopoly of established NGOs qualified" to act as subproject executors. In and blocking the development of new order to be eligible for the Social Partic:ipa- organizations. tion Program of the Honduran social fimd, NGOs must: be legally registered; have a NGO Capacity-Building minimum of two years' professional experi- ence; employ at least three permanent Social funds have a potentially important professional staff; supply positive financial role to play in contributing to the institu- statements for past two years; and, provide tional development and capacity-building of community references. NGOs participating NGOs. This can be undertaken in a number in the microcredit component of the Sri of ways -by providing direct training to Lanka social fund are required to meet; the NGOs, devoting a portion of the core social following criteria: two years' experience in fund budget to capacity-building activities, providing credit to the poor; a proven creating a "training" or "institutional devel- recovery rate of at least 70%; utilize a wide opment" category of subprojects, allowing a range of the rate of interest to ensure percentage of individual subproject budgets sustainability; adequate accounting and to go towards capacity-building purposes or financial systems; and, a minimum of three by promoting partnerships between larger, months' experience in mobilizing and stronger NGOs and smaller, weaker ones.'3 training beneficiaries through field officers and/or credit animators. In Honduras, a survey of NGOs participat- Participation Series 33 NGO Involvement in WB-Financed Social Funds ing in the social fund found that 34% had points out, "Many programs simply cannot been involved in training/capacity-building be implemented based on existing institu- activities and 24% had benefited from the tions... In particular, local intermediary purchase of new equipment. (Irias, 1995). organizations such as NGOs ... are still very Since 1992, NGOs in Bolivia have received weak in much of Sub-Saharan Africa. training in social fund procedures and Capacity building efforts should be concen- technical advice during design and imple- trated at this level if poverty is to be effec- mentation. In Ecuador, the Bank sponsored tively reduced" (Marc et. al., 1995, p. 12). strategic planning and institutional devel- opment sessions for NGOs parallel to the A recent conference bringing together preparation of the social fund (See Box 5). donors, government representatives, NGOs In Guatemala, Cambodia and Madagascar, and social fund staff from across Central proposals for NGO capacity-building are America identified NGO and CBO capacity- eligible for funding under "institutional building as an important SF goal, espe- development" and "training" subproject cially regarding those specific roles (such as categories. In Jamaica, an "organizational social mobilization and community organi- strengthening" subproject category has zation) that neither the public nor the for- been created to provide training and techni- profit private sector are well equipped to cal assistance to subproject applicants and fulfill (Ruta Social, 1995). implementing agencies. This category is expected to represent approximately 13% of NGOs and Targeting the Poorest the total number of subprojects. Virtually all social funds utilize a poverty A certain number of social funds acknowl- targeting strategy and aim to channel edge NGO and CBO capacity-building as a resources to those in greatest need. Despite valid objective of the social fund and have these efforts, most social funds face a trade introduced measures specifically for that off between goals of "demand-drivenness" purpose. Other social funds (particularly and reaching the poorest. While social those established as "emergency" funds or funds succeed, on the whole, in channeling under strong pressure for rapid disburse- resources to poor communities, evidence ment) have sought to take advantage of suggests that they are less successful in NGO capacity where it exists but have not reaching very poor communities and in adopted the mandate of supporting the ensuring that benefits reach the poorest development of the NGO sector as an end members of those communities where in itself. While NGO and CBO capacity- subprojects are implemented. NGOs can building may not be a priority in every potentially play an important role in facili- case, it cannot be denied that the long-term tating the participation of poor people in impact of social funds is ultimately depen- subproject planning and implementation dent upon the ability of communities and and in assisting very poor communities to local-level institutions to organize, make prepare subproject proposals. In Zambia, decisions and undertake collective action. for example, where strong emphasis is If such capacity does not exist, it must be placed on communities preparing their own nurtured and supported, in order for the projects, the social fund has been successful social fund approach to succeed. As a in extending benefits to large numbers of recent World Bank review of social funds relatively poor communities, but has had 34 Environment Department Papers Key Issues and Lessons Learned more limited success in reaching very poor Bank's SF portfolio, for example, found that and chronically poor populations. The only about one-third of SFs identify com- second phase of the program plans to focus munity development as a project objective specifically on these groups, drawing niore or invest in the capacity-building of com- heavily on the facilitation/mobilization munity-level groups. (World Bank, March skills of NGOs. In Peru it was similarly 1997) found that the poorest communities lacked the resources and confidence to prepare While social funds have had considerable subproject proposals. A special fund is success in promoting community participa- currently being set up for NGOs to help tion, they have not always found them- such communities prepare proposals. selves adequately equipped to face the real challenges and operational costs that It should be noted that not all NGOs work participatory development can entail. In directly with poor people and even those particular, social funds have had to face the whose work is focused on poor communi- trade-offs between goals of community ties may not reach the poorest of poor or participation and capacity-building on the have a presence in the most remote or least one hand and rapid disbursement and low developed regions of the country. In order "overhead" costs on the other.14 Factors to extend reach to populations that are such as insufficient emphasis on subproject chronically poor, isolated or difficult or identification and preparation, unduly dangerous to reach, some social funds (for complex application procedures, inad- example, in Honduras, Guatemala and equate funding for pre-investment activities Bolivia) have provided incentives to NGOs and participatory processes, lack of effec- to establish a presence in these areas or tive mechanisms for ensuring community offered subsidies to cover the extra costs participation, and limited capacity for entailed by traveling to remote areas, etc. follow-up and monitoring have been cited as obstacles to genuine community partici- Community Participation pation in social fund-financed subprojects. Key characteristics of the social fund model NGOs and community participation are that funding is demand-driven and NGO involvement in SF activities does not communities are meant to be actively necessarily ensure community participation involved in the design and implementation nor will NGO involvement, in and of itself, of subprojects. Active community partici- serve to overcome the shortcomings listed pation is considered essential in order to above. Evidence regarding the link be- ensure that subprojects respond to genuine tween NGO involvement and improved need and that beneficiaries feel sufficient community participation is mixed and "ownership" over the project to ensure its warrants further research. Experience to long-term maintenance and sustainability. date suggests that: (i) only a subset of Although social funds are cornmonly NGOs are "participatory" (i.e., collabora- described as "demand-driven" and "partici- tion with "technical" or "private sector- patory", there is growing evidence that SFs oriented" NGOs is unlikely to bring en- have been less successful in achieving hanced participation) and; (ii) NGOs are genuine community participation than was only likely to succeed in promoting partici- previously believed. A recent review of the pation if SF policies and procedures explic- Participation Series 35 NGO Involvement in WB-Financed Social Funds itly acknowledge and facilitate community cornmunity acceptance or awareness of the participation goals (e.g., by allowing ad- subproject. In El Salvador, for example, equate flexibility, time and financial sup- although social fund statistics show that port). Where these conditions are taken almost 70% of projects were solicited di- into account, NGOs can prove valuable rectly by communities, a recent indepen- partners in working with communities and dent evaluation found that frequently only CBOs to ensure effective community a handful of influential cornmunity mem- participation. bers were involved in preparing the pro- posal.)5 It was further found that proposals Working directly with communities were sometimes based on "induced de- Experience has shown that merely requir- mand" by private contractors.16 A number ing proposals to be submitted by communi- of facilities, financed by the social fund ties does not guarantee community partici- within the last three years, were already pation, nor does it necessarily ensure found to be in a state of disrepair, indicat- Box 14 Difficulties in Ensuring Genuine Community Participation in El Salvador Despite statistics which show that the vast majority of subprojects funded by the El Salvador social fund are solicited directly by communities, a recent independent evaluation of the SF (carried out in 1995 by the Center for Democratic Education) found little evidence of genuine community participation in most subprojects. The study reports that "in the majority of cases, there was little or no participation beyond applying for the project (and) in most of the sample projects one person was responsible for applying for the project, regardless of who the formal solicitante was according to SF records...In only two cases did the project request seem to come out of a broader needs assessment process" (Lichtenstein, 1995, p.20). The study also notes a phenomenon of "induced demand," whereby private contractors in El Salvador were known to approach communities with proposals for projects in their particular area of sectoral expertise. Once approval from a commu- nity official was received, the contractor would develop and implement the project with no further community input. The study states that "this phenomenon appears to have created a two-fold process wherein a small group of private contractors are able to implement many FIS projects one after the other, which simultaneously cuts short any real community participation in deciding what the priority needs are", and, "by giving the private sector, who may be motivated purely by profit incentive, the liaison role between the FIS and communities, both the flow of information and the demand-driven mechanism of project allocation has been distorted". A number of projects visited were found to have design flaws resulting from a lack of beneficiary participation in project design. These included, for example, health clinics with no washing facilities, schools with kitchens much too small to prepare meals for hundreds of children and classroom facilities that were too small for children in older grades. Although communities were meant to form committees for ongoing maintenance of facilities and receive training from the SF, the study found that, in reality, this rarely happened. In some cases, facilities less than three years old were found to be in poor or declining condition. Recommendations of the study include requiring an open community meeting before project requests can be submitted and introducing mechanisms for improved coordination with local governments. Source: Lichtenstein, 1995. 36 Environment Department Papers Key Issues and Lessons Learned ing a lack of local ownership over the ine community participation. In Nicaragua, projects. See Box 14. for example, the social fund requires a letter of commitment from the community signed Working through CBOs by at least 50 people. In Armenia, commu- Even working through established CBOs nities applying to the pilot social fund were does not always ensure that poor or required to obtain the approval of 50% of marginalized members of the community community members (either by petition or participate. There is no guarantee that attendance at a village meeting). In Zam- CBOs are governed in a democratic fashion, bia, the Social Recovery Project requires nor that they represent the interests of all that communities cover 25% of subproject community members. In particular, groups wielding less power at the local level, such as women, the landless and ethnic or Box 15 religious minorities may be excluded. In Strong COmmUnitY Paicipation in Entrea Sri Lanka, for example, where Rural Devel- opment Societies and Death Benevolent In February 1996 the board of the World Societies were frequently selected as imple- Bank approved a credit of $17.5 million to menting agencies of subprojects, an inde- help finance the $50 million Eritrean Com- pendent review found that these groups are munity Development Fund (ECDF). Eritrea almost exclusively dominated by local elite is considered particularly well-suited to this and are unlikely to serve the interests of the type of project because it has a long tradition community as a whole. (Liyanage, 19'95). of community participation and local investment in infrastructure and services. Its people have a strong sense of nationhood, Ensuring popular participation is obviously a well organized community structure and much easier in situations where CBOs are strong ownership of national development capable, representative and democratic or programs. In each community, a council of where there is a strong tradition of collec- elders (Baitos) is responsible for decisions tive action and community self-help. Dur- concerning collective welfare. The Eritrean ing the pilot phase of the Eritrea Corammu- govermment has already delegated a wide nity Development Fund, for example, it range of power and responsibilities to the was found that communities already pos- Baitos. During the pilot phase of the ECDF sessed high levels of "social capital" and project, committees of Baitos acted as the main liaison between local commnunities and were able to develop project proposals with tecn administration.mInitionct ver htl xeaupr. Pret. tf the central administration. In addition to very little external support. Project staff funding projects in the areas of social and attribute low levels of "intermediary NGO" economic infrastructure, environmental involvement in this fund to the fact that, conservation, employment creation and unlike situations where community organi- micro-credit, some ECDF funds have been zation is weak and NGO intermediation is set aside for training staff and community necessary to ensure participation, the need leaders, in order to even out differences in for outside facilitation and communilty the capacity of individual villages and mobihzation in this case was minimal. See ensure a minimum level of quality of imple- Box 15. mentation in all participating communities. Social funds haveutihzedanumbSource: Adapted from World Bank News, Social funds have utilized a number of Vol. XV, No. 9, March 7, 1996, pp. 34. mechanisms to promote and ensure genu- Participation Series 37 NGO Involvement in WB-Financed Social Funds costs.17 Although cost-sharing cannot be tion are more prevalent in recent social equated with community participation, the funds (those approved within the past two SRP has found compliance with this re- years). In Jamaica, the British Overseas quirement to be a fairly effective indicator Development Agency is contributing to the of genuine community commitment to the social fund by providing a social develop- subproject. In addition to this, all commu- ment specialist with expertise in participa- nity members are expected to attend a tory development who will provide train- preliminary subproject workshop, during ing to NGOs, CBOs, and line ministries in which local social fund officers attempt to participatory techniques for needs assess- ensure that all affected parties (including ment and project identification. In addition poor and marginalized groups) are given a to enhancing participation in SF-financed voice. NGO sponsors from outside the subprojects, it is hoped that this initiative community are required to provide evi- will have a broader impact by strengthen- dence that (i) communities have been ing the participatory skills of the country's consulted; (ii) the proposed project meets a development practitioners and policy priority community need; (iii) the project makers more generally. Some measures will be "owned" by the community rather introduced to promote community partici- than the NGO, and; (iv) the community has pation in Argentina's new social fund are agreed to maintain the project after its described in Box 16. completion.18 In order to facilitate effective conmmunity participation, the Zambia SRP Special measures may be required to ensure has also used simplified project documents equitable gender participation in SF-fi- and developed "user-friendly" implementa- nanced activities at the local level. In tion manuals specifically for use by com- Zambia, for example, it was found that munities. Some sample extracts from these while "women make considerable labor documents are included in Annex III. contributions towards project implementa- Measures to promote community participa- tion, they rarely take part in decision- Box 16 The Argentina Participatory Social Investment Fund In Argentina, the Participatory Social Investment Fund (FOPAR) is currently in its first year of operations. This fund has introduced a number of innovative mechanisms to promote effective targeting and community participation. Only the poorest regions of the country have access to the fund. NGOs sit on "participatory provincial councils" that determine which communities are eligible. The menu of subproject categories was initially defined based on consultation with selected target communities, using participatory techniques including focus group interviews, etc. Significant emphasis has been placed on capacity-building type subprojects, including projects to support community-based organizations. FOPAR has also adopted a participatory approach to subproject selection. Each subproject proposal received is subjected to a technical evaluation. Those proposals that pass the technical screen are then submitted to the provincial councils for approval. In this way, local NGOs (who participate in provincial councils) are included in sub- project prioritization and approval. Every project must have a "nucleo de beneficiaries" (NUB) which becomes the official project beneficiary. NUB's can then sub-contract NGOs, universities, or professionals as "technical support organizations." 38 Environment Department Papers Key Issues and Lessons Learned making processes" (Milimo and Njobvu, partnerships between NGOs (with expertise March 1993, p. 53) and "the assessment in the former) and private sector firms team has not found an instance where a (with construction, or engineering exper- project was funded which is in agreement tise, etc.). Similarly, examples of commu- to women's identified priority needs" nity groups, NGOs and municipalities (Milimo et. al., April 1994, p. 2). Efforts; working together are also rare.19 In El should be made to identify CBOs and Salvador, for example, where most funds NGOs with female membership and leader- are channeled directly to communities, local ship. Guidelines and indicators of commu- governments have expressed resentment at nity endorsement and participation should having their authority bypassed.20 In other stipulate and show participation by both cases, social fund staff report NGOs being men and women. Gender sensitivity reluctant to collaborate with private sector training for social fund staff, subprojects firms or local government, preferring to applicants and implementing agencies "keep the project for themselves." The should also be considered. The Gender recently passed Popular Participation Law Action Plan for Eritrea Community Devel- in Bolivia is an interesting mrodel which opment Fund is included in Annex IV. may serve to improve coordination among various actors at the local level. See Box 17. Promoting Partnerships When selecting operational partners, social Almost a decade of social fund experience funds should consider the specific skills has shown that successful and sustaineable and comparative advantages of different subprojects are frequently dependent rnot types of organizations, seek to promote on any one actor but rather on the cootdi- "partnerships" among organizations with nated effort of a number of actors. For complementary attributes and encourage example, a school construction subproject, coordination among the full range of actors might involve the intervention of an NGO responsible for project sustainability.21 to assist the community in assessing their Given their role as "intermediaries," NGOs needs, identifying the project and prep ar- have, in some cases, been able to play an ing a proposal; the services of a private important role in bringing together various contractor to undertake works, supervise actors to establish effective operational construction or provide technical advice; partnerships. A 1990 Bank report on the donation of land or approval to con- Central American social funds, for example, struct from local government, the formLation points out that, "Given their ability to work of a parents' committee to ensure mainte- closely with municipal and village develop- nance, and; line ministry support in train- ment committees, cooperatives and other ing and appointing a teacher and providing organizations, NGOs can constitute an supplies. efficient vehicle to execute and coordinate projects at the local level." (World Bank, In reality, however, it is not always easy to 1990, p. 33) establish operational partnerships and to coordinate relations between multiple Legal Issues actors. Although subproject implementa- tion often requires a mix of both social and Some social funds have faced difficulties in technical skills, it is rare, for example, to see working with NGOs or CBOs that are not Participation Series 39 NGO Involvement in WB-Financed Social Funds Box 17 ing agencies. Because project sponsors do Bolivia's Popular Participation Law not handle funds, there is no need for them to be legally registered. It is hoped that In 1993 the Government of Bolivia passed a these arrangements will facilitate and new Popular Participation Law. This law simplify the participation of "informal" essentially introduced a policy of decentraliza- community-based organizations (such as tion-by transferring resources and responsi- parents' associations and sports clubs) as bilities from the central government to munici- subproject sponsors. pal governments. Under the Popular Partici- pation Law, municipalities are granted funds The Guatemalan social fund has adopted (on a per capita basis) which they can use to the unique approach of supporting the contract goods and services to meet the ,. . .e specific needs of their community (mainly in creation of social fund enterprises the sectors of health and education). As a (Empresas del Fondo de Inversion Social). result of this reform, municipal governments These are existing formal or informal have become the principal users of the Bolivia community-level organizations (such as Social Investment Fund. NGOs must now women's groups, water users groups or increasingly coordinate with municipalities parents' associations) that are granted legal and gain their approval when requesting status during the life of the project. In social fund financing. Within this new context, order to receive legal status the group NGOs are expected to function less as inde- simply has to elect an executive board, pendent implementing agencies and more as register with the local municipalty's Civil consultants responding to community de- Registry and have a project approved by mand. Social fund staff who did not always the social fund. Once project implementa- feel that they had adequate means to assess individual NGOs, see potential benefits to the tion is completed, the group can either new system whereby communities themselves dissolve or apply under a different law for will play a greater role in selecting those permanent status. Supporting the capacity- NGOs with whom they wish to collaborate. building of these groups and facilitating their transformation into permanent bodies has been recognized as one of the most legally constituted bodies. In Armenia, for valuable contributions of the social fund. example, due to long and cumbersome While some NGOs have criticized this bureaucratic procedures, most NGOs and approach as an attempt to side-line existing CBOs are informal and non-registered, organizations (Parish, 1996, p. 19), others making it impossible for them to sign a have proposed establishing a joint SF-NGO formal contract or open a bank account. To program to provide ongoing support to get around this problem during the pilot these groups. (See Box 18 in Chapter IV) phase of the social fund, community-based implementing agencies were sometimes A sample implementation agreement "registered" by village councils for the between a social fund and beneficiary duration of project implementation. The community, a model financing agreement legality of this procedure was found to be between the government and an NGO, doubtful however. The Jamaica social fund sample bidding documents and a simplified has been designed in such a way that all works contract are included in Annexes V- funds are disbursed directly to implement- VIII. 40 Environment Department Papers 4. NGO Criticismis and Concerns Regarding Social Funds Although NGOs have been broadly sup- and the Bank (and have been acknowl- portive of social funds as a mechanism for edged in Bank studies and project docu- channeling multilateral resources to coin- ments). munity-level development projects, they have raised certain concerns and criti- General Concerns cisms -both at a general level, regardirng the basic concept and impact of social The limited role of socialfund funds, and on more specific issues, particu- Because social funds were initially intro- larly regarding obstacles to effective NGO duced to mitigate the negative social conse- involvement in social funds. Although this quences of structural adjustment programs, section is entitled "NGO Criticisms/Con- some NGOs (without denying the potential cerns," many of the concerns listed here are benefits of social funds) have tended to shared by governments, social fund staff Box 18 Supporting Community-Based Organizations in Guatemala In Guatemala, where lack of access to primnary education is a serious problem, the social fund received a large number of requests to support primary school projects. In the department of San Marcos, for example, 45 communities received financing for "Temporary Teacher Employment" projects. Local "education committees" of these comnmunities were transformed into social fund enterprises (SFEs) and immediately began the process of identifying an eligible local schoolteacher. Some projects also involved funding for school construction and equipment. A private sector firm specializing in education consulting services was contracted by the SF to provide training and technical assistance to these local SFEs in basic bookkeeping, issuing checks and receipts, preparing monthly progress reports, teachers' time-sheets, students attendance records, etc. In most cases the training took place over a period of several days with several monthly one-day follow-up visits (spending the morning with the teacher and the afternoon with the executive of the SFE). Al- though most SFE members in San Marcosl have very little formal education and many are illiterate, they have proved extremely capable at managing their projects and their schools. The 45 SFEs have now formed two municipal level associations that have jointly presented another proposal to the SF for the provision of books and teaching materials. The 45 schools in San Marcos are serving over 3000 primary students and, as of November 1995, the drop-out rate was zero percent. After one year of SF funding, the majority of the schools are now receiving ongoing financial support from the Ministry of Education. Source: Roblero, 1995. Participation Series 41 NGO Involvement in WB-Financed Social Funds perceive them as a mechanisms for "dam- and line ministries are weak and strategies age control," aimed at securing political for ensuring long-term social investment support for adjustment reforms rather than are lacking. A number of social funds are addressing the real underlying causes of currently being transformed into perma- structural poverty. NGOs argue that social nent institutions. This development does funds play a useful but limited role and not, however, preclude the need for a must be implemented in the context of a broader, national-level social development broader poverty reduction strategy and an strategy and underlines the need for im- environment of economic reform that proved coordination between SFs and line supports rather than penalizes the poor. ministries. In the case of Honduras, for They argue that SFs should not be consid- example, one NGO study has identified a ered as a substitute for national social "displacement effect," pointing out that development programs, and care must be parallel to the operation of the social fund, taken to ensure that they do not allow budgets of both the education and health governments to abandon their responsibili- line ministries have declined significantly ties in areas of social development and (cut by close to 50% and 26% respectively poverty reduction or to postpone the since 1980). This raises doubts as to what implementation of longer-term, more far- extent the SF is having a positive "demon- reaching programs (Pobreza Urbana y stration effect" on line ministries and Desarollo, 1995; Irias, 1995). concerns as to whether and how investment in these key sectors will be maintained once Linkages to line ministries the SF comes to an end. (Freiberg-Straub, NGOs point out that the sectoral activities 1995.) financed by social funds normally fall within the responsibility of existing line Socialfjunds and participation ministries. Factors preventing existing line A number of NGO accounts22 report that ministries from achieving results as rapidly social funds lack: and efficiently as social funds are well- * a clear conceptual understanding of known (bureaucratic inefficiency, lack of popular participahon; specialized skills and resources, vulnerabil- ity to political patronage, etc.) but difficult * genuine commitment to participatory to address in the short-term. Social funds, development; established as autonomous institutions * the institutional culture required for outside of existing government structures, promoting participation, and; succeed in by-passing these limitations in the short-term but what role do they play in * operational procedures to support addressing these limitations in the medium participation in subprojects. to long-term? In theory, SFs can promote public sector efficiency by providing mod- Despite their stated flexibility, NGOs els of effective demand-driven service charge that social funds are often domi- delivery and transferring skills, mecha- nated by a "technical/engineering" bias nisms and lessons learned to line minis- and lack the expertise and institutional tries. NGOs point out, however, that in culture necessary for achieving participa- many countries the linkages between SFs tory social development. In addition to a 42 Environment Department Papers NGO Criticisms and Concerns general lack of understanding of the social Reaching the poorest mobilization process, pressure on social NGOs have noted a trade-off between funds to disburse rapidly to a large number social fund goals of "demand-drivenness" of subprojects jeopardizes participatory and reaching the poorest. Very poor goals. communities (and the poorest members of wealthier communities) frequently lack the In order to respond to criticisms of insuffi- capacity to voice their "demands" and, as a cient levels of participation in social fund result, have less access to social funds than projects in Honduras, the SF introduced in communities and groups that are better off May 1995 a new category of projects under and better organized. In order to address the Social Participation Program. Some this concern, NGOs argue that greater NGOs have been critical of this new pro- emphasis must be placed on: (i) supporting gram, however, claiming that funds are genuine processes of participation whereby insufficient and that more emphasis is still all members of the community (including placed on the "engineering" aspects of those in greatest need) participate and, (ii) these projects than the "participation" providing assistance to very poor commu- aspects. For these reasons, only a limited nities in identifying needs and preparing number of NGOs have participated in lthe subproject proposals. Some NGOs cur- program. A preliminary evaluation under- rently undertake these tasks at their own taken by the SF itself found that the SF expense. They point out, however, that if "lacked the institutional culture necessary SFs are genuinely committed to reaching to adequately undertake these types of the poorest then increased effort and re- projects" (Irias, 1995, p. 12). sources must be devoted to "creating demand" among such groups. NGOs also point out a failure, on the part of social funds, to acknowledge and meet Sustainability of subprojects the costs that ensuring genuine commumity NGOs have questioned the sustainability of participation can imply. They stress the social fund-financed subprojects, particu- need to finance processes as well as prod- larly due to low levels of genuine commu- ucts and to monitor and evaluate intangible nity participation and a lack of adequate as well as concrete outputs. Particularniyprcahnndalkofdeut probelems citedoinclude outpusoialfunfaiure coordination with line ministries to ensure to provide funding for preinveshment ongoing support and/or maintenance. activites (such as informaion-sharing, Reports from El Salvador, for example, acommuityes(s m iization-ad arin, state that there is insufficient coordination pcipatoy needsiasemnts, etc.), with line ministries to ensure the ongoing participatory needs assessments, etc.),fnnigecsaytmitinewaih insufficient monitoring of the social impacts financing necessary to maintain new facili- of sbproectsand mphsis n quntit- tes supported by the social fund (currently tv taprgjects rat than ql ate r t. there are no line items in ministerial bud- Aive .rep s eatier the Guana socil. gets for infrastructure maintenance). For ,, representativ fromtheGuyanasthe moment, neither the ministries, nor the fund admits that, "The agency is con- stranedby onorimpratves hic stess communities, have sufficient funds to instrumental goals over process-oriented ensure adequate maintenance (Lichtenstein intrumentand de-emphasize the need for and Jones, 1995). The level of coordination activities an nde analysize with line ministries varies, however, from social planning and analysis." Participation Series 43 NGO Involvement in WB-Financed Social Funds country to country. In Peru, for example, representatives agreed that creating in- an ex-post evaluation of over 500 sub- creased opportunity for dialogue concern- projects found that more than 80% were ing both operational issues (such as ob- staffed and equipped to operate as planned stacles to NGO collaboration) and broader with arrangements made with line minis- development issues (such as participation tries to cover recurrent costs. (Ishrat and poverty reduction) was a priority. Husain, September 1996, Memo). Several concrete actions, (including the organization of seminars and information- Social fund attitudes towards sharing sessions, the formation of a joint working with NGOs SF-NGO committee and the creation of In many cases, social funds have no clear country and/or regional-level networks of policy on working with NGOs and no NGOs working with SFs) were proposed in defined organizational strategy for promot- order to meet this goal. (See Box 5 for a ing collaboration. In some cases, NGOs more detailed description of this workshop have reported meeting with indifference, and its recommendations). arrogance or unresponsiveness on the part of social fund staff, and the organizational Funding "preinvestment" activities culture of some funds has been described as As has been mentioned, social funds vary not being very "NGO-friendly".23 In in their practices regarding the financing of Panama, one NGO interviewed reported subproject preparation costs. In Ecuador, that "The social fund is better than it used El Salvador and Panama, for example, no to be .. but its ideology still seems to be that financing is available to cover costs associ- it knows better than everyone else ... it ated with project preparation. Many NGOs doesn't take into account the perspectives view this practice as a deterrent to partici- and experiences of NGOs that have been patory development and an obstacle to working in the field" (Villalba, 1995, p. 23). their collaboration in subprojects. They A number of the recommendations listed in question the fact that social funds are Section V, such as adopting clear policies willing to pay for material inputs and labor and guidelines on working with NGOs, costs during implementation, but are not recruiting staff with NGO or grassroots prepared to fund costs related to participa- development experience and providing tory needs assessments, project prepara- appropriate training for social fund staff tion, community mobilization and social may contribute to alleviating such prob- organization. Some NGOs see this reluc- lems.24 tance on the part of social funds to invest in "process-oriented" preparation costs as Specific Issues evidence that social funds either lack genuine commnitment to participatory Mechanisms for dialogue development or do not understand its One of the principal conclusions of a 1995 practical implications. workshop on NGO Involvement in Central American Social Funds was the pressing NGOs point out that participatory project need for better communication and infor- preparation can imply a considerable mation-sharing between social funds and investment in terms of time and money. NGOs. Social fund, NGO and government NGOs in Panama, for example, estimate 44 Environment Department Papers NGO Criticisms and Concerns that "proper" participatory subproject: with sophisticated information manage- preparation requires an investment of three ment systems, NGOs participating in social to six months and between 10-15,000 funds have complained of complicated Balboas. NGOs are often willing to under- procedures and long delays in subproject take these tasks at their own expense, given approval and disbursement. In Guatemala, the important potential benefits for commu- for example, one international NGO inter- nities, but in doing so, they sometimes have viewed, reported waiting almost a year the impression that they are "subsidizing" before being informed that their proposal the social fund. Because the resources of had been rejected. Another CBO reported local NGOs are often extremely limited, the having to make approximately 50 trips to time and money they devote towards the SF headquarters (2.5 hours away) in order preparation of social fund-related sub- to finalize a school fencing project (Parish, projects can represent an important invest- 1996, p. 17). Similarly, NGOs in Bolivia ment on their part and, in some cases, have reported long administrative proce- diversion from their own projects ancl dures and delays in receiving funds as a activities.' "major difficulty" in working with the social fund. Cases of delays in disburse- For this reason, some social funds do ment leading to canceled training pro- provide reimbursement for project prepara- grams, NGO staff going unpaid and benefi- tion costs and most do allow NGOs to claim ciaries not receiving loans in time to plant an overhead fee for their involvemen t in seasonal crops have been reported in a subproject implementation. In Nicaragua, number of countries. In a number of cases, for example, subproject applicants can NGOs, having worked with communities to receive reimbursement up to a maximum of prepare a subproject proposal, have felt $30,000 for project preparation costs. In obliged to fund the project themselves Guatemala up to 10% of total project cost when the proposal is rejected or delayed, in can be claimed for preparation expenses, order to maintain their credibility with but only if the project is approved. In communities. Due to such difficulties, Zambia, intermediary NGOs can claiim several NGOs interviewed (in particular, overhead fees of up to 10% of total sub- international NGOs with access to alterna- project cost, but only for costs incurred after tive sources of financing) stated that they project approval (even though a lack of would not seek further collaboration with funding for preinvestment activities has social funds -preferring other faster, more been cited as a possible deterrent to thor- flexible and less cumbersome sources of ough project preparation and appraisal). financing. The Jamaica social fund is currently explor- ing the possibility of establishing a small NGOs have also cited excessive compart- (donor-supported) project preparation fund mentalization of social funds, a lack of which, if implemented, would make grants internal coordination, lack of clarity in to NGOs to help cover the costs of prepar- subproject selection criteria and approval ing subproject proposals. procedures, and cumbersome reporting requirements as obstacles to efficient col- Cumbersome Bureaucracy/Delays laboration. In the case of one social fund, Although donors characterize social funds for example, participating NGOs were as efficient and fast-disbursing mechanisms asked to submit monitoring sheets listing Participation Series 45 NGO Involvement in WB-Financed Social Funds the name of every subproject beneficiary on the usual requirements for collateral or a monthly basis. For some organizations bank guarantees). Social funds have also serving over 25,000 beneficiaries this sometimes adopted alternative procure- workload was impossible. ment procedures which allow for greater flexibility while maintaining requirements In many cases, social funds have taken of fairness, efficiency and transparency. steps to address such problems. Many of Similarly, the decision may be made to the earlier social funds concentrated heavily have procurement carried out alternatively on promotion activities in the initial stages by communities, implementing agencies or of implementation and were unprepared to the SF itself, depending on local conditions cope with large numbers of proposals once and levels of capacity. they began to arrive. More recent funds have learned from past experience and Types of projects seem less plagued by delays in subproject Social funds tend to favor simple infrastruc- approval. While bureaucratic procedures ture-type projects involving "clean" imple- and paperwork cannot be avoided, many of mentation and tangible, measurable out- the newer social funds have stream-lined puts. Some NGOs have described this as a application forms, developed simplified "mechanical engineer's version of develop- contracts and project documentation and ment" and criticize SFs for "overemphasiz- introduced special measures for larger ing construction at the expense of human NGOs sponsoring multiple subprojects. In development." (Parish, 1996, p. 15) In Guatemala, for example, an NGO support- particular, they point out the danger of ing similar projects in more than one social funds' schools without ensuring community, is allowed to submit one adequate provisions for teachers; support- .Ugroup proposal" rather than several ing the construction of health centers separate ones. without ensuring the training and employ- ment of health workers, or overlooking Regarding disbursement, delays are some- other pressing needs in the social and times related to blockages at the central human development sectors. NGOs per- treasury level. Where possible, stipulating ceive a bias on the part of social fund staff "in-kind" government contributions and/or who, perhaps due to a lack of expertise in restricting local counterpart funding to social and participatory development, place community contributions can serve to greater emphasis on the installation of alleviate this problem. The use of a Special infrastructure than on more "human- Account (an account, usually in a commer- oriented" investments and processes. cial bank, into which the World Bank advances funds) and, in some cases, Simpli- Some SFs have addressed such issues by fied Special Account Procedures can help to expanding subproject menus and placing facilitate timely disbursement particularly increased emphasis on training and service in the case of large numbers of scattered or activities. During the preparation of the remote subprojects. When dealing with Jamaica Social Investment Fund, for ex- NGOs, CBOs or communities with limited ample, a participatory study was under- capital reserves, SFs should also consider taken to examine urban poverty and vio- provisions for advance payments (and, lence and to determine how the social fund where necessary, consider alternatives to 46 Environment Department Papers NGO Criticisms and Concerns could best address these pressing social 1996) While some social funds support issues. In addition to the more traditional micro-credit and microenterprise develop- infrastructure projects, the subproject mrrenu ment activities, these represent a small now includes a category of subprojects for percentage of total funding and are nor- the provision of services such as career mally not favored as priority areas for guidance and job placement; skills training; social fund investment (based on the argu- conflict resolution; drug abuse counseli:ng, ment that SFs are not well-suited for such and; parenting and family life education. activities and that they are better imple- This "social services" category is expected mented by agencies with different skills to represent approximately twenty percent and procedures). of total subprojects. Other examples of increased emphasis on human develop.- In some cases, the limited spectrum of ment include activities such as the training activities funded by social funds is a con- of nurses and midwives in Honduras and straint to NGO involvement. In Nicaragua, Nicaragua. for example, only six (of a total of 26) project categories are considered to have NGO evaluations of social funds also call "potential" for NGO involvement. These for increased emphasis on income-generat- are mainly in the areas of education, skills ing projects and stress the importance of training and community development, etc. these activities in achieving sustainable Together these six categories represent only poverty reduction. (CIDECA, 1996; Parish, 7% of total subprojects. Participation Series 47 5. Recommendations for Improved NGO Collaboration in Social Funds A review of the strengths and weaknesses * Once potential roles for NGOs have of various aspects of social funds (both with been identified, establish selection and without NGO involvement) suggests criteria specific to each role. It is essen- that strong and diverse NGO investment tial that selection criteria are task- can help social funds become more effective specific, since different NGO roles (for instruments of poverty alleviation. In order example, as a consultant to the SF, a to achieve improved NGO collaboration in board representative or a subproject social funds, the report makes the following sponsor) will obviously require very recommendations. different sets of skills, capacity and experience. Recommendations for Social Funds Assess NGO training/capacity-building * Establish clear policies and guidelines needs and consider ways in which the concerning community participation in SF might assist in addressing these (for social fund-financed subprojects. example, through an "institutional Establish clear polcies and guidelines development" subproject category or concerning NGO involvement in the core training events). social fund. * Share all relevant project documenta- tion and consult with NGOs during * Early on during project design, conduct proj design. on NGO sector assessment in order to project design. (i) identify those NGOs that have links * Devise a strategy for communication with poor communities, expertise in with NGOs (including, for example, participatory development and a information-sharing sessions, the proven track record in relevant sectors; dissemination of a SF newsletter, the (ii) assess the overall potential for NGO establishment of a "public information involvement in the social fund and; (iii) center," mechanisms for systematic identify NGO capacity-building needs. consultations on both operational and (This assessment can be carried out broader issues). through interviews, field visits, benefi- * Consider establishing a joint SF-NGO ciary assessments, or in coordination working group on operational issues. with an umbrella organization.) Include NGO representatives in SF * Based on social fund goals and the study tours. (In Sri Lanka, for example, findings of the NGO sector assessment, NGOs participated in visits to other identify and elaborate potential roles Asian social funds). for NGOs throughout the project cycle. 48 Environment Department Papers Recommendations for Improved NGO Collaboration in SF * Include NGO representatives on the with NGOs) a methodology for system- board of the SF. atic evaluation of NGO performance * Use a pilot phase to test NGO capaIcity, 0 A (through subproject evaluations, benefi- evaluate operational procedures, etc. ciary assessments, etc.). IEncourage NGOs, CBOs, local govern- * Make efforts to demonstrate to govern- . E N ment officials the value/benefits o1~ ments, private sector firms, and others ment officials the vallue/benefits of . 7 5 ~to form operational partnerships. involving NGOs (particularly in situa- tions where there is no history of * Recruit staff who have worked in the government-NGO collaboration). NGO sector or who understand and are • Establish an NGO database and use respected by NGOs. computerized management infornmation * Recruit staff with expertise in participa- systems to keep NGO-specific statistics tory approaches to development. (in order to facilitate monitoring). - Organize training for social fund staff e Offer technical seminars to participat- on community participation, social ing NGOs on the preparation of suib- mobilization, working with NGOs, etc. project proposals, procurement proce- . A N dures, etc. E*Ask NGOs to organize field visits, orientations for senior social fund staff. D Develop appropriate, simplified dhocu- Consider secondments or staff ex- ments and implementation manual .s. changes between social fund and * Adapt procurement and disbursement NGOs. procedures to facilitate NGO/commu- Consider the appointment of an NGO nit~~~~~~~~~ involvement.ltmntofanNG nity involvement. liaison officer or the identification of * Where appropriate, make provisions one staff member as the official NGO for advance payments and alternative contact. (Where NGOs play a multitude arrangements for NGOs and communi- of different roles, it may be preferable ties who are unable to secure bank to place emphasis on sensitizing all SF guarantees. staff to NGO-related issues rather than * Take steps to ensure timely and ejffi- appointing one contact person). cient subproject processing mecha- * Assess overall NGO performance on an nisms. In particular, aim to avoid ongoing basis throughout the life of the delays in subproject approvals and project cycle and share these findings disbursements. with the NGO comnnunity, World Bank, * Assess (in collaboration with NG,Os) and other project stakeholders. realistic resource requirements for ensuring effective community participa- Recommendations for NGOs tion/social mobilization. (and/or NGO umbrella organizations) * Where appropriate, support the fund- a Elect representatives or form a commit- ing of preinvestment costs (related to tee to ensure regular communication subproject preparation). with the social fund. * Early on, establish (in collaboration * Establish contact with relevant govern- Participation Series 49 NGO Involvement in WB-Financed Social Funds ment and Bank staff early on and * Request relevant project documents become involved in the design of the social and propose mechanisms for ongoing fund (decisions such as which activities information-sharing. will be included on the menu of eligible * Share experiences and lessons leamed subprojects, for example, are key). with other NGOs involved with the * Assist the social fund in identifying social fund or working in similar sec- potential NGO partners with relevant tors. skills and experience. * Before taking on operational responsi- * Learn as much as possible about the bilities, ensure your organization has all project as a whole (overall goals, appli- the required capacity and skills. If not, cation procedures, selection criteria, consider choosing a partner with etc.) and not only NGO-specific issues. complementary skills. * Bring problems and concerns to the * Before becoming involved in the social immediate attention of social fund fund, consider potential implications (and/or government or Bank staff). for your organization's current portfo- Suggest solutions and request a specific ho, priorities and goals, political au- time-frame for the resolution of prob- tonomy and community ties. Weigh lems. potential benefits and risks. 50 Environment Department Papers Notes 1 For a more detailed discussion of Bank-NGO 6 In Africa, for example, many "AGETIP"-type collaboration, see T. Carroll et all., Participation projects are established as private non-govern- through Intermediary NGOs, ENV Department mental institutions. See Box 2 for a brief Paper No.031. Washington: World Bank, description of the Senegal AGETIP. February 1995 and C. Malena, Working with NGOs: A Practical Guide to Operational 7See Khadiagala, 1995 for a more detailed Collaboration between the World Bank and discussion of the strengths and weaknesses of NGOs. Washington: World Bank, OPR, March, social funds. 1995. -It is important to note that these two catego- 2World Bank Policy (Opertional Directive ries are not mutually exclusive, as a growing 14.70) states that "staff are encouraged when- number of NGOs engage simultaneously in ever apropriate to involve NGOs, particularly operational and advocacy-oriented activities. local NGOs, in Bank-supported activities". 9 The Egypt social fund, for example, is cur- 3 The review indcluded social fund projects in rently exploring mechanisms to allocate respon- Bolivia, Cambodia, Ecuador, Egypt, El Salva- sibility for the ongoing operation and mainte- dor, Eritrea, Guatemala, Guinee, Guyana, nance of SF-financed faclities and services to Honduras, Madagascar, Nicaragua, Panama, local NGOs (which would act as local level Peru, Sri Lanka, and Zambia. Information on "operation and maintenance units"). more recent social fund projects in Argentina, Armenia, Jamaica and Palestine was also 10 In Bolivia, for example, where there was little collected. NGO input in the design of the Social Invest- ment Fund, less than 10 percent of subprojects 4These workshops took place in Honduras in involved NGOs. On the other hand, NGOs November 1995 and Jamaica in December 1995. participated actively in the design of another national social fund, El Fondo de Desarollo -'Social Funds (SFs) are also referred to as Campesino, and now execute almost 50 percent Social Investment Funds, Social Emergency of the projects it finances. Although there may Funds or Socio-economic Development Funds. be a number of explanations for higher levels of Social Action Programs (SAPs), more common NGO involvement in the FDC, fund representa- in Sub-Saharan Africa, resemble SFs in some tives cite NGO involvement during design as a respects. Although they finance similar activi- key factor. ties, SAPs do not share SF characteristics of "demand-drivenness" (SAPs assume responsi- "Projects undertaken directly by CBOs or bility for identifying sub-projects) and political local, small-scale NGOs may require higher automomy (SAPs are normally located witlin a levels of monitoring/ supervision. line minsitry and are subject to regular bureau- cratic procedures). Participation Series 51 NGO Involvement in WB-Financed Social Funds 12 In some cases, governments may be reluctant 17 VVhile most SFs require some form of cost- to involve NGOs for fear that beneficiaries will sharing (normally ranging from 5 to 20 percent), attribute "credit" for subprojects to NGO this percentage is above the average. intermediaries rather than to the same state. Indeed, in a number of cases, NGOs have been 1s Zambia: Social Recovery Project, reported to pass off SF-financed subprojects as Microprojects Unit Application Form, their own, downplaying the ultimate source of Section G. funding. In Zambia, for example, it was found that "Transparency, especially regarding fund 19 In Zambia, it was noted that "Some CBOs sources has been regrettably lacking on the part have been very successful in obtaining the of some implementing agencies. Consequently cooperation of other agencies working in their beneficiaries are going around thinking that the communities. Those in the Gwembe and money being used is a kind donation from the Siavonga districts, for example, have received a NGO or part of the divine gift from God considerable amount of assistance from their through the church. Credit for the assistance respective councils and local businessmen... has been laid at the wrong door and not on the Many project implementing agencies have, ultimate donors." (Milimo and Njobvu, March however, attempted to go it alone. Chances of 1993, pp.45-46.) sustainability seem higher when other related organisations are involved". (Milimo et al, 13 This approach has been employed by the November 1993, p.6.) Egypt social fund, for example, which provides training to "clusters" of NGOs made up of one 20 In at least one case, however, the mayor (of large NGO and several smaller ones. Metapan) took the initiative of hiring a pro- moter and engineer to work together with 14 "By minimizing community involvement, communities under his jurisdiction in applying FHIS was able to spend money quickly, but the for SF projects. consequences have been a number of finished subprojects that are either not working for lack 21 Under the Enterprise Development Program of resources to cover operational costs, or are of the Egypt social fund, for example, banks falling into disrepair because the subproject and NGOs play complementary roles in provid- beneficiaries have not assumed the responsibil- ing small enterprises with a package of credit ity to undertake maintenance." (World Bank, and technical assistance. "The EDP in effect Honduras: Third Social Investment Fund Project. acts as a successful wholesale small business StaffAppraisal Report. Report No.14181-HO, support and finance agency, delivering loans to June 16, 1995.) small businesses through banks and delivering business services through NGOs." (World Similarly, the first beneficiary assessment Bank, Arab Republic of Egypt: Second Social Fund study of the Zambia: Social Recovery Project for Development Project: Staff Appraisal Report (carried out in 1993) noted that "With the DRAFT. MN2HR, Report No.15267-EGT. exception of only two cases, all the projects Washington: World Bank, February 1996, p.3.) surveyed have been conceived and initiated by one or two prominent personalities in the area". 2 See, for example, ALOP, 1996; CIDECA, 1996; (Milimo and Njobvu, March 1993, p.23). Davis Villalba, 1995; Irias, 1995; Lichtenstein and Jones, 1995; Pobreza Urbana y Desarollo, 16 The prevalence of subproject proposals being 1995; Smnillie, et al, 1994. initiated by private contractors (rather than communities or NGOs) has similarly been 23 See, for example, Smillie, et al., 1994. reported in a number of other countries. 52 Environmnent Department Papers Notes 24 In Egypt, "Involving staff (NGOs and reli- Bank, 1996, Annex 8, p.l.) gious leaders) who have worked with beneficia- ries, has demonstrated success in designing and 25 Because many local NGOs are almost entirely implementing subprojects. Familiarity with the dependent on donor funding for their opera- cultural millieu and the ability to communicate tional budgets, it is not often the case that they with the poor are assets which allow the fund to can easily use "their own resources" to cover operate more effectively. Fund staff receive subproject preparation activities and costs. training in participatory intervention methods Most donor funds are project-specific and in order to enable them to become more cannot be used to cover any activities or costs reponsive to the needs of beneficiaries". (World other than those for which they were given. Participation Series 53 Bibliography Armenian Assembly of America, 1995. Clark, John, 1991. Democratizing Develop Armenia Social Investment Fund ment: The Role of Voluntary Organiza Project: Pilot Phase Observations and tions. Earthscan Publications, London. Lessons Learned, Mimeo. Consejo de Investigaciones para el Asociacion Latinoamericana de Desarollo de Centroamerica, 1996. Organizaciones de Promocion (ALOP), Organizaciones Comunales y Fondos de June 8-10, 1996. Spring Meeting of the Compensacion Social: Informe de LAC NGO Working Group of the Investigacion. Guatemala. World Bank: Proceedings. Montelimar, Nicaragua. Davis Villalba, Enriqueta, Noviembre 1995. Panama: La Perspectiva de las ONGs Barrios, Javier, Noviembre 1995. Panama: para Mejorar su Participacion en los La Perspectiva del FES para Mejorar la Proyectos Financiados por el FES. Participacion de las ONGs. Ponencia Ponencia preparada para el Primer preparada para el Primer Seminario Seminario Centroamericano Fondos de Centroamericano Fondos de Inversion Inversion Social y Organizaciones No Social y Organizaciones No Gubernamentales, Roatan, Honduras. Gubemamentales. Roatan, Honduras. Eritrean Community Development Fund, Carvalho, Soniya, 1995. Egypt Social Fund: December 1995. Operational Manual. Performance Monitoring, Mimeo. Asmara. Poverty and Social Policy Department, World Bank, Washington, D.C. Fondo de Inversion Social de El Salvador, (Noviembre 1995). La Perspectiva del Carvalho, Soniya, 1994. Social Funds Fondo de Inversion Social para Mejorar Guidelines for Design and Implementa la Participacion de las ONGs. Ponencia tion. HRO Working Paper No. 34. preparada para el Primer Seminario World Bank, Washington, D.C. Centroamericano Fondos de Inversion Social y Organizaciones No Chase, Robert, 1993. Getting the Job Done: Gubemamentales, Roatan, Honduras. The Zambia Social Recovery Project as a Pragmatic, Flexible Approach to Opera Honduras: La Perspectiva del FHIS para tional Collaboration between the World mejorar la participacion de las ONGs. Bank and NGOs, Mimeo. Ponencia preparada para el Primer 54 Enviromnent Department Papers Bibliography Seminario Centroamericano Fondos de Programme, Loan Proposal (GY-47). Inversion Social y Organizaciones No Washington, D.C. Gubernamentales. Fondo Hondureno de Inversion Social, Roatan, Honcluras. Irias, Gustavo Adolfo, Noviembre 1995. Noviembre 1995. Honduras: La Perspectiva de las ONGs para Mejorar su Participacion en los Fondos de Inversion Social en America Proyectos Financiados por el FIRS. Latina. Pobreza Urbana y Desarrollo, Ponencia preparada para el Primer Ano 4, No. 9. Abril, 1995. Seminario Centroamericano Fondos de Inversion Social y Organizaciones No Freiberg-Straub, Jorg (ed.), December 1995. Gu bernamentales. Roatan, Honduras. World Bank Policy and Poverty Reduc tion-Structural Adjustment Policy and Irias, Gustavo, 1995. Seguimiento a los Social Investment Funds in Latin Casos Nacionales de Fondos de Inver America: Honduras. (Consultation sion Social: Fondo Hondureno de paper of "Fighting Poverty Through Inversion Social. Asociacion Self-Help".) Working Group (corn Latinoamericana de Organizaciones de posed of government and non- Promocion (ALOP). governmental institutions). Jorgensen, Steen et. al. (eds.), 1992. Glaessner, Philip et. al, 1994. Poverty Bolivia's Answer to Poverty, Economic Alleviation and Social Investment Crisis and Adjustment: The Emergency Funds: The Latin American Experience. Social Fund. World Bank Regional and World Bank Discussion Paper No. 261. Sectoral Studies. World Bank, Washing World Bank, Washington, D.C. ton,D.C. Gopal, Gita, 1995. Procurement and tDis- Khadiagala, Lynn S., January 1995. Social bursement Manual for Projects with Funds: Strengths, Weaknesses and Community Participation. World Bank Conditions for Success. ESP Discussion Discussion Paper No. 312. World Bank, Paper No. 52. World Bank, Washing Washington, D.C. ton, D.C. Hodson, Roland, 1995. Elephant Loose in Lacayo, Carlos, December 1995. Perspec the Jungle: The World Bank and NGOs tive of Nicaragua's Social Investment in Sri Lanka. Mimeo. Emergency Fund for Improving NGO Participation. Paper presented to the Ilunga, Wedex, December 1995. The Zam Jamaica SF Workshop on NGO Involve bia Social Recovery Project: The Per ment. Kingston, Jamaica. spective of the Social Fund on NGO Participation. Paper presented to the Lema, Raul, December 1995. The Bolivian Jamaica SF Workshop on NGO Involve SIF Experience with NGOs. Paper ment. Kingston, Jamaica. presented to the Jamaica SF Workshop on NGO Involvement. Kingston, Inter-American Development Bank (IDB). Jamaica. Guyana: Social Impact Amelioration Participation Series 55 NGO Involvement in WB-Financed Social Funds Lichtenstein, Joshua and Richard Jones, Social Recovery Project. Lusaka, 1995. El Salvador's Social Investment Zambia. Fund: Its Role in Development and Poverty Alleviation. Center for Demo- Molinedo Buckley, Sergio, Noviembre 1995. cratic Education, Washington DC. Guatemala: La Perspectiva de las ONGs para Mejorar su Participacion en los Liyanage, Sumanasiri, 1995. The Perfor- Proyectos Financiados por el mance of the Janasaviya Trust Fund in FONAPAZ. Ponencia preparada para Sri Lanka: Preliminary Observations. el Primer Seminario Centroamericano Draft. JTF Research Project. Fondos de Inversion Social y Organizaciones No Gubernamentales. MacDonald, Charles and Peter Sollis, Roatan, Honduras. October 1994. Mexico: Fondos Municipales de Solidaridad. Final Naur, Maja, July 1994. Social and Institu Report. tional Aspects of a Social Fund Project in Cambodia. Report presented to the Marc, Alexandre et. al., 1995. Social Action World Bank. Washington, D.C. Programs and Social Funds: A Review of Design and Implementation in Sub- Nkandu, Patrick, December 1995. The Saharan Africa. World Bank Discussion Zambia Social Recovery Project: The Paper No. 274. Africa Technical Depart NGO Perspective. Paper presented to ment, World Bank. Washington, D.C. the Jamaica SF Workshop on NGO Involvement. Kingston, Jamaica. Mena Guerrero, Rolando, Noviembre 1995. El Salvador: La Perspectiva de las PACT, August 1990. Steps Toward a Social ONGs para Mejorar su Participacion en Investment Fund: Negotiations Involv los Proyectos Financiados por el FIS. ing NGOs, Government of Guatemala Ponencia preparada para el Primer and the World Bank. Washington, D.C. Seminario Centroamericano Fondos de Inversion Social y Organizaciones No Parish, Lael, 1996. Guatemala's Social Gubernamentales. Roatan, Honduras. Investment Fund: Its Relationship with NGOs and Poverty Alleviation. Center Milimo, J.T. et al., March 1993. Beneficiary for Democratic Education. Washington, Assessment Study Phase 1: Zambia: D.C. Social Recovery Project. Lusaka, Zambia. Parish, Lael and Susan Kolp, 1994. Guatemala's Social Funds: A Research Milimo, J.T. et al., November 1993. Benefi Report and Guide for Practitioners. ciary Assessment Study Phase II: Center for Democratic Education. Zambia: Social Recovery Project. Washington, D.C. Lusaka, Zambia. Presidencia de la Republica del Ecuador, Milimo, J.T. et al., April 1994. Beneficiary April 1996. Fondo de Inversion Social Assessment Study Phase III: Zambia: de Emergencia, Solicitantes y Ejecutores de Subproyectos 1993-1996. 56 Environment Department Papers Bibliography Documento de Trabajo No. 1. Quito: Soloranzo, Eduardo. NGOs Perspective to FISE, Desarrollo y Autogestion. Improve their Participation in Projects Financed by Social Investment Funds in Ruta Social y el FIHS II, Noviembre, 1995. Nicaragua. Paper presented to the Primer Seminario Centroamericano Jamaica SF Workshop on NGO Involve Fondos de Inversion Social y ment, Kingston, December 1995. Organizaciones No Gubemamentales: Memoria. Roatan, Honduras. Vandever Webb, Anna Kathryn et al., 1995. The Participation of Nongovernmental Santiago Robledo Robero, Otilio, November Organizations in Poverty Alleviation: A 1995. Participacion y Autogestion en la Case Study of the Honduras Social Educacion: Una Experiencia en Guate Investment Fund Project. World Bank mala por las Empresas del Fondo de Discussion Paper No. 295. World Bank, Inversion Social. Mimeo. Guatemala, Washington, D.C. Schmidt, Mary and Alexandre Marc, 1995. Voyer, Michel, March 1995. Guinee: Project Participation in Social Funds. d'Appui au Developpement Socio- Enviromnent Department Paper No. 4. economique: Micro-projects de World Bank, Washington, D.C. D6veloppement Socio-6conomique. Approche Participative ONG-Entites Schneider, Pablo, Noviembre 1995. Gu[ate Publiques-Populations, Bilan 1990-1995. mala: La Perspectiva del FIS para Mejorar la Participacion de las ONGs. World Bank, February 1996. Arab Republic Ponencia preparada para el Primer of Egypt: Second Social Fund for Devel Seminario Centroamericano Fondos de opment Project: Draft Staff Appraisal Inversion Social y Organizaciones No Report, No. 15267-EGT. World Bank, Gubemamentales. Roatan, Honduras. Washington, D.C. Segarra, Monique, March 1994. LessorLs World Bank, September 1995. Armenia: Learned from NGO Involvement in the Social Investment Fund Project, Staff Preparation of the Ecuador Social Appraisal Report. World Bank,. Investment Fund. Mimeo. Washington, D.C. Smillie, Ian et al., September 1994. Joint World Bank, April 1995. Cambodia: Social Evaluation Mission of the Governmnent Fund Project: Draft. Operational of Sri Lanka/UNDP/World Bank to Manual. Washington, D.C. Evaluate Poverty Alleviation through the Janasaviya Trust Fund. World Bank, May 1995. Cambodia: Social Investment Fund, Staff Appraisal Sollis, Peter, 1991. Multi-lateral Agencies Report, No. 14010-KH. World Bank, and NGOs in the Context of Policy Washington, D.C. Reform, Paper presented to the Confer ence on Changing U.S. and Multilateral World Bank, January 1996. Eritrea: Com Policy toward Central America. munity Development Fund Project: Washington, D.C. Participation Series 57 NGO Involvement in WB-Financed Social Funds Staff Appraisal Report No. 14937-ER. Funds within the Consultative Group World Bank, Washington, D.C. Framework. Report No. 8922-LAC. World Bank, Washington, D.C. World Bank, March 1997. Portfolio Im provement Program: Review of the World Bank, September 1990. Socio-Eco Social Funds Portfolio. World Bank, nomic Development Funds: An Opera Washington, D.C. tional Guideline. Africa Technical Department, World Bank, Washington, World Bank, 1990. Social Investment in D.C. Guatemala, El Salvador and Honduras: Workshop on Poverty Alleviation, Basic Social Services and Social Investment 58 Environment Department Papers Annex I: Summary Information on NGO Involvement in Selected WB-Financed Social Funds - NG -sector i:NGO articipatior in % SFt udsi c an- Gapacit 0; Social Fund0-00:00 ( t;;; ;t::000 ;0lsize ;and000 0 0 SF-financed ativities neled through NGOs bilding Other remarks chg:EEEEEE:VggEE: EEEE:E: . R . -£1aracteristics) HWXL E EEgL EEEL bLLEE EE SL LEELLRkS aci6tivities . i::Bolivia Social -i i i ie L i ii Approx. 520 active Approx. 9% of subprojects Approx. 10% of total Some NGO Lower NGO involve-ment Investment: f und, t: i: t:t: tt l:t;0NGOs in the implementecl by NGOs. subproject funds training in SF in the current fund than country (including (Under Second Emergency channeled through procedures in the previous * 80 international Social Fund, NGOs sponsored NGOs. provided. Emergency Fund due to *i; ; t 4-- ;; t:0;00 --7% of subprojects, CBOs, 7% more rigid preparation, *;;i;i;0;00000000 t; i;;;0i00j iand religiousF organizations, bidding & evaluation ...... i - .13%) requirements. Cambodia - Social - During the piilot phase, Approx. F-4hund Xof the Kingdom00-: ti 15% of subprojects have of_.c ,- z.. .a o . sF "sponsors", mnst of which are -;g v,.-wanmoMb a: wr;W\sj ISFK NGOs. Project staff estimate less, - ':S:S: ;: 5 :;::if fijUiSii :- :S: 5:::rdi 9larger numbers of "informal sponsors". Ecuador Fondo de Approx. 120% of subprojects Only 6% of subprojects I:ilnversion 6acial de iii-ii:- sponsored by NGOs. (Majority implemented by NGOs Emergencia, 1993i;4iiti il9 i; 90 t of these are in education and (85% by local private sanitation). An additional 30% contractors). sponsored by CBOs. (45% by line ministries, 10% by municipalitie s). Egypt SSocial Fund fordd:: NGO involvement in Approx. Approx. 33% of total .Develoment . . 1991 25% of total subprojects subproject funds (:0tPhase ilI fromn- 199G)3 tt; 0 t implemented during Phase I. disbursed through NGOs (including 75% of "community in Phase I. .... ... - : - -: :X0 :development" and 45% of ."enterprise dievelopment" subproiects'] El Salvador Fondo deqi Approx. 700 NGOs NGO involvement in Approx. Approx. 9% of total Administrative costs Inversion Social, 1990- and CBOs in the 7% of subprojects. Local subproject funds considerably higher 1Indirect World Bank country including government involvement in disbursed through than other SFs 4 (of these approx. Approx. 9%, 70% undertaken NGOs. (possibly due to strong financing only). 170 officially directly by communities. emphasis on registered NGOs) . supervision). Enittea.Communlity fj0: Very strong Virtually all subprojects Some ECDF Development NFund,l community-level community-sponsored, mainly funds set 1I996 $50t million rPilot organization. through Bai"os (community aside for the Relatively few level council of elders) training of pase in peratio formal NGOs. staff and 0since 1993).ig:ggtg;SEQlX:j:Q : - X :: community leaders. Guatemala Fondo de Approx. 250 Approx. 15q6 of subprojects 112 NGOs in SF SInversion ;Social,X -;00 t; ;-040-"active" NGOs in implemented by NGOs. registry. the country. Remaining 85% undertaken directly by C(BOs (Empresas del Fondo). Guinre itProjet d'Appu0 Relatively weak Approx. 76% of subprojects Approx. 50% of funds au Developperrient and inexperienced involve NGC) facilitation or channeled through intl. So :l-EonmI i . local NGO sector. implementation. Approx. 62% NGO intermediaries, implemented by local NGOs working in collabo-ration ii 19E 9 ii0, i: i ii i 000 ii 0 t i 9 ii p i t; ti and CBOs (the remainder by with local NGO (50%) local government) and local govt (50%) ______:::::_N_6____:___,___e_g_ subproject implementors 1 Information as of November 1995. (Lema, 1995) 2 Jorgensen, 1992; World Bank, Bolivia, Second ESF Project Completion Report, 1992, p. 28. 3 Information as of July 1995. (Carvalho, 1995; World Bank, Arab Republic of Egypt Second Social Fund for Development Project: Staff Appraisal Report, 1996). 4 Fondo de Inversion Social de El Salvador, 1995; Mena Guerrero, 1995. Schneider, 1995. 6 Voyer, 1995. Participation Series 59 NGO Involvement in WB-Financed Social Funds NGO sector NGO participation in % SF furnds chan- Capacity- Social Fund (size and: SFfinanced activities neled through- -building Other rernarks characteristics) NGOs- activities- Guyana Social Impact Limited NGO Little or no NGO involvement. Seventeen SIMAP field Amelioration Program capacity. offices work directly (SIMAP)- 1988. with CBOs. Honduras Social Approx. 700 NGOs NGOs execute Approx. 15% of Approx. 19% of total Investment Fund I and in the country (of total subprojects (compared to subproject funds ii 1990 7 which, 400 officially 57% by private contractors and disbursed through registered and 16% by local government). NGOs. approx. 100 that are 50% of "basic needs" (school ."capable and desks) and "micro-credit" active"). subprojects implemented by NGOs. Madagascar FID I An estimated 700 SF staff estimate NGO NGO capacity- NGO subproject (componernt of NGOs (including 50 involvement in 80% of building eligible applicants allowed to SECALINE project) international) and subprojects. under "SME claim Approx. 10% 4,000 CBOs in the Development' overhead costs. (fID II from 1996) country. A majority subproject category. Insufficient NGO of NGOs have capacity viewed as limited capacity and potential obstacle in experience. the implementation of FID II (aiming to disburse $10 M. in first :_________________________ -_____._____-______________v_ year) Nicaragua Fondo de Approx. 200 active Approx. 10% of subprojects Approx. 8% of Although NGO Inversion Social de formal and 70 executed by NGOs subproject funds involvement remains Emetrencia, FiSE, informal NGOs in channeled through limited, it has the country. (85% NGOs increased steadily from t~V. based in Managua). '91 to'95. Current levels considered to be 50% of "potential NGO involvemenf' (based on subproject types). Panama Fondo de Approx. 250 NGOs NGO involvement in Approx. Subproject proposals Emergencia Social in the country. Less 20% of subprojects (80 NGOs) submitted only by (FES), 1990.9 than 20, however, as "administrators" (i.e.: communities. with significant financial intermediaries, no capacity. direct involvement in project implementation) Peru FONCODES NGO involvement in approx. Approx. 18% of One identified problem (World Bank funding 15% of subprojects. subproject funds has been the since 1993). channeled through emergence of a large NGOs. number of "gold rush" NGOs in response to E________________ available funding. Sri Lanka Nationat Relatively weak. All activities carried out in In 1994, 72 partner Project initially Development Trust Most NGOs collaboration with "partner organizations hindered by poor NGO- Fund, 1991 {formierly ~"welfare" (v. organizations" (including pre- received capacity- govemment relations. knon a th1 -e "development') existing and created NGOs building grants known as the oriented and CBOs). totaling Rs, 122 M. Janasaviya Trust (of which 14% for Fund). beneficiary trg). Zambia Social Relatively strong Strong emphasis on Increased emphasis Strong community Recovery Project, NGO sector. Some community sponsorship and on NGO capacity- participation. 1991.10 history of NGO- implementation. Approx. 10% building foreseen in government of subprojects are NGO SRP iI. collaboration. sponsored or implemented. Some form of NGO involvement estimated in 38% I of subproiects. 7 Fondo Hondureno de Inversion Social, 1995; Irias, 1995, 1995a; VandeverWebb, 1995. 8 Data based on period from February 1991 to August 1995. (Lacayo, 1995; Soloranzo, 1995) 9 Barrios, 1995; Davis Villalba, 1995. 10 llungu, 1995; Milimo, 1993,1993a, 1994. 60 Environment Department Papers Annex II: Sample Checklist for Assessment of Local Level Organizations (Armenia Social Investment Fund) The study will focus on a sample of the including their ability to mobilize local activities and capacities of various local resources and, and ability to account for level organizations in the target districts. use of those resources; These organizations include village coun- a their relationship or collaboration with cils, NGOS, parents' committees, women's other lal level organizations; committees, and other groups. Both regis- other local level organizations; tered and non-registered groups or * their relationship to community mem- organisations will be assessed. The follow- bers; how they are perceived by com- ing aspects of local level organizations will munity members; be studied: 0 the quality of their leadership and * the existence of local-level organiza- accountability to local membership or tions and classification of their initia- community members; tives and activities; * existence of specific procedures for * whether the organizations have the beneficiary input and influence; necessary structures and administrative systems to deliver basic social and w service delivery can be expanded economic services to the community; without overextending the organiza- tion; * whether these structures and system are consistent with the ASIF approach * the poor and vulnerable are among the to the microprojects; beneficiaries of their activities; * whether they have the required person- * they have a monitoring process to nel with relevant skills, knowledge to know when progress and objectives are identify and implement microprojects; being met. * whether these personnel have a vision Source: World Bank, Armenia Social Invest- that is consistent with the ASIF ap- ment fund Project: Staff Appraisal Report, proach to microprojects; No. 14655-AM. Washington: World Bank, - . . . ~~~~~~~September 1995 (Annex F). * their access to financial resources, Participation Series 61 Annex III: Sample Project Implementation Manual for Use by Communities-Extracts (Zambia Social Recovery Project) Government of the Republic of Zambia Microprojects Unit National Commission for Development Planning for use by Project Communities 62 Environment Department Papers Annex III Table of Contents Volume I Volume II Chapter Chapter Official Project Details Introduction Preface 2 Exercise 1 How to use the Manual 3 Plans 2 The Main Players 4 Tools 3 The Project Begins 5 Bricks 4 The Project and the Community 6 Cement, Concrete, Mortar and Plaster 5 Organization 7 Ventilated Improved Pit Latrines 6 Banking 8 Siting 7 Financing 9 Setting Out 8 Project Budget 10 Foundation 9 Plannning 11 Floor 10 Procurement 12 Walls 11 Labour 13 Doors, Windows and Lintels 12 Transport 14 Roof 13 Stores Management 15 Finishing 14 Reporting 16 Electrical and Plumbing 15 Legal Implications 17 Drains 16 Project Cancellation 18 Rehabilitation 17 Formation of Maintenance Committee 19 Wells 18 Completion 20 Roads Index 21 A-Z of Tips Visitors and Comments 22 Glossary of Technical Terms 23 Index Participation Series 63 NGO Involvement in WB-Financed Social Funds Preface This book is written for the Project Committee and Your Community. It contains information to help you make your project successful. Purpose of the Book It answers questions you may have R..O. UN&VS SOMETIk3RC. A%J sets out the procedures you T , Wki WAS must follow r: _XACTLY- - gives you advice and sug- gestions gives information you will be told but which you may need to remind yourselves about later. VJH&T A $MA.T~ \ 1'p ,,/S /' IIImplementation of a project is not easy. 14;L?JOc Many projects have had problems. The _ ^ a e ! 5 way in which other communities solved f _ their problems may help YOU. -A ?r=ULttSS What are these? This book will tell you. t't Y/ 1~WI4 w=K t)r I w \ ~ 'DE ThC J. F. U. LUSAKA P DC -rTZ; INEO PROCEDUQZ I X4 ' PI=CCE DUPE 3 q The Microprojects Unit has its own PUCEDCRD 4. 4 particular ways of doing things: PROCE{DUJ & \ Iprocedures." you must follow these procedures. riCEDUI j What are these? How should you 10U MUST FOLLOW ThiS> follow them? ()CED=E$ AlKSTRX This book will tell you. K - 64 Environment Department Papers Annex III Buildings costot_ huge sums of money. You must - c build yours to last. BUILT How can you _E make buildings _XH_ that will last? K-4A ) This book will tell WILL UE you. Too What does that mean ? A successful project achieves what is set out to do - within the agreed time - within the agreed cost is built to a high standard accounts fully for its expenditure - makes the community proud of its achievement ti; hi=D A LO C-, a. BUT ZMD Where does the money come from? rbcro AEP . The money belongs to the Govern- OVER ZAMEA ment of Zambia. It has either been given to the Government by different donors like the European Union or the money may be a loan from the 6 World Bank. All loans have to be paid back. The smaller the loan the better. Every ngwee must be well spent for Zam- bia. Not one ngwee must be wasted. Many people will help you if you ask them. The Microprojects Unit in Lusaka will send your project funds. But when there Is no one around to ask, read this book. Good luck with your project! Participation Series 65 NGO Involvement in WB-Financed Social Funds What kind of Book is this? It is a Reference Book in 2 volumes. What information does it contain? Volume 1 is about: 1 MPU procedures 2 Organization of the project 3 Project implementation 4 Suggestions on how to do things Volume 2 is about: 1 Technical matters 2 Each stage of building Who is the Book for? 1 This Book is mainly for the Project Committee. 2 The Supervisor and Foreman may find some sections useful. 3 Anyone in the community can read it if he/she wants to. Keep it always available for reference. How to read this Book? Do not try to read this Book all in one go. Select one topic at a time. Finding your way about this Book: There are two sections which can help you find information you want quickly. 1 The Contents are at the beginning. They list the main topics in each chapter. 2 The Index tells you where to find all references to a subject. It is at the end of each volume. It is in alphabetical order. For example: If you want to find out about the Treasurer's work, look up T in the Index of Volume 1. 66 Environment Department Papers Annex IV: Sample Gender Action Plan (Eritrean Community Development Fund) Background vices, and to support women's participation in credit and income-generating programs. Eighty percent of Eritrean women live in rural areas. Many of them have limited Objectives of the Gender Action Plan access to education and health services, and even lower employment and income gener- In line with the objectives of the ating opportunities. Although the present Government's policy and the Fund's man- civil code, approved by the Provisional date, the ECDF has developed a Gender Government immediately after liberat:ion, Action Plan to ensure that women benefit guarantees them basic rights, especially equally from ECDF-financed activities, and concerning land ownership, marriage, and plan, an active role in identification, design, divorce, it will take time to bring about and management of sub-projects. The plan changes at the level of the communities, not only gives special attention to maximiz- most of which continue to follow patriar- ing benefits to poor women but also identi- chal customary laws and traditions. Ihe fies any potential negative consequences for Government has recently ratified a Conven- women and proposes mitigatory measures. tion on the elimination of All Forms of Discrimination against Women (CEDAW), Key Elements of the Gender Action which aims to establish the framework< to Plan accelerate progress in strengthening tlhe legal and social status of women. A key The key elements of the Gender Action element in the Government developrrment Plan, are summarized in the following strategy is to improve the access of girls tables: and women to education and MCH ser- Objectives Measures Comments A. Institutional Aspects Strengthening the Staff in Central and sub-Offices will be trained Workshops can be organized in capacity of the ECDF to in analytical methods that ensure special collaboration with NUEW. respond effectively to the attention to the role of women in subprojects special needs and role of on women beneficiaries. The ECDF will community women. collaborate with local women's groups and agencies concerned with issues relating to poor women (including the National Union of Eritrean Women). Participation Series 67 NGO Involvement in WB-Financed Social Funds Objectives Measures Comments Monitoring and supervi- The monitoring and supervision procedures Indicators to assess the impact of sion of impact of ECDF will include a focus on women's participation Fund's activities on women have activities on community and benefits, and mesaures to avoid negative been included in the MIS. women. impact on women. Analysis and reports on ECDF activities will contain gender disaggre- gated information. B. Women's Participation in the Subproject Cycle To increase and (i) ECDF will ensure that women are ad- Measures to promote the involve- strengthen the participa- equately represented in the community ment of community women will tion of women in ECDF's subproject committees, and that each special- be a major component of the activities. ized community sub-committee (including the ECDF's outreach, promotion, and micro-credit committees), contain at least one community training programs. woman representative; (ii) ECDF will ensure Special criteria and indicators to that women are among the direct beneficiaries idientify potential negative of the subproject activities, with particular consequences for women will be attention to women-heads of households; (iii) included in subproject appraisal. ECDF will ensure during the subproject Beneficiary impact studies and appraisal that the subproject proposals will participative assessments will respond to expressed needs by women in the include a special focus on the role community, and that any potentially negative of and benefits to community consequences for women have been identified women. and mitigatory actions designed; and (iv) ECDF will ensure that women participate as part of the community's involvement in subproject implementation, monitoring, supervision, and maintenance. Training to support (i) Training will be provided for women to The selection of women for women's participation. give them the skills and confidence to partici- training and community facili- pate in community subproject activities; (ii) tator roles will not depend on Attention will be given to include women formal qualifications, but rather a among those selected and trained as commu- high profile in the community, nity facilitators. and practical experience (for example, it would be kept in running home-based micro- enterprises). Where needed, skills training can be supplemented by literacy training. To increase poor or a Encourage income-generating activities for The ECDF contains a mnicro-credit disadvantaged women's women, offer training in the basic skills component to support income- access and control over needed to succeed in these activities, and generation; skills training for economic assets. promote labor-saving technologies and women has been included in methods. Project design; the Research Fund will be used to identify labor- saving technologies. Source: World Bank, Eritrea Community Development Fund Project: Staff Appraisal Report No. 14937-ER, January 1996 (Annex N). 68 Environment Department Papers Annex V: Sample Implementation Agreement Between a Social Fund and Beneficiary Community (ERITREA: Community Development Fund) L. Agreement This agreement has been entered today _ between the Eritrean Community Development Fund (hereinafter referred to as the "Fund") and Village/Community Development Committee (hereinafter called the Implementing Agency) for the construction of_ (hereinafter referred to as the Project). The total cost of the Project is Birr The Fund has agreed to contribute an amount of being % of the project costs ==___________Birr. The Implementing Agency shall contribute an amount of being % of the total cost of the project, consisting of: a. Cash Contribution: b. Contribution in Materials: 1. 2. 3. 4. c. Contribution in Labor Birr d. Other Birr The Implementing Agency shall deposit the cash amount (if any) in the ECDF Bank AACC No. within _____ weeks after signrng of this Financing Agreement. II. Procurement Mark the preferred option: 1/2 1: The Implementing Agency will procure goods, works and services as specified below and in accordance with the procedures stipulated below. (The ECDF shall advise the IA on procurement procedures to be applied in accordance with the Operational Manual.) Participation Series 69 NGO Involvement in WB-Financed Social Funds Goods/Works/Services Procurement Method or: 2. The Implementing Agency authorizes the ECDF to act on its behalf in all matters related to project implementation. The ECDF will inform the IA of all procurements effected on its behalf. III. Responsibilities and Obligations of the IA The IA will implement the project in accordance with the Operational Manual of ECDF. Upon request of the IA the project officer of ECDF shall advise the IA on appropriate implementing procedures; The IA will perform and supervise all the works described in this Agreement to the satisfaction of ECDF. The IA will ensure that the community provides its contribution, as detailed in Schedule 1. The IA will provide operating and maintenance costs in the manner agreed with ECDF and specified in Supplement 4. IV. Responsibilities and Obligations of ECDF ECDF is obligated to carry out the monitoring and technical supervision of the works, so that the amounts, costs and quality of the works correspond to the technical specifications and budget agreed to by both. V. Hand Over and Acceptance of Works Upon completion of the work, the project will be handed over to the Community Committee in the presence of the parties and others concerned. If the work has been executed by a contractor, the work will be reviewed by ECDF and if found satisfactory, 50% of the retention amount as stated in the contract will be paid. After 12 months, if the work is found to be satisfactory, the remaining 50% of the retention moneys may be paid by ECDF upon authorization from the Community Committee. VI. Variation to Financing Agreement Any change to the terms of the Agreement shall be made in writing and with the consent of both parties. VII. Termination or Dissolution of Contract ECDF can terminate the Agreement any time during the Project with reasonable justification. ECDF must pay the Contractor and IA for the amount of accomplished works and reimburse the losses incurred due to the liquidation of Agreement as required under the laws of Eritrea. 70 Environment Department Papers Annex V ECDF can stop and suspend the work when it becomes evident that the IA is not performing its work satisfactorily as per the terms of the Agreement and can demand the reimbursement of its payments. Failure by the IA to fulfill any of its obligations would constitute grounds for suspension of ECDF's obligations and responsibilities under this agreement. VIII. Dispute Resolution Both parties will make every, effort to resolve any dispute o difference of opinion through mutual negotiation. If such negotiations do not resolve the dispute, the parties will resort to arbitration to settle conflicts between the parties to the Contract outside the judicial system. IX. Final Article The duration of this Agreement is from _ to date of the signing of the agreement date of the signing Hand Over This Agreement consists of all the Schedules; and attached documents which include: (i) the technical specifications contained in Supplement 1; (ii) the tender documents contained in Supplement 2 (if applicable); (iii) the TOR of the Supervisor as stated in Supplement 3 (if applicable); (iv) arrangements as to operating and maintenance costs. This Agreement is govemed by he Laws of Eritrea. Legal address of the parties of the Agreement Eritrean Conimunity Development Fund address IA address The Agreement is signed by the following authorized individuals: On behalf of ECDF General Manager name signature Seal On behalf of IA _ Head of IA name signature Seal Source: Eritrean Community Development Fund, Operational Manual, Asmara, December 1995, (Annex VII). Participation Series 71 Annex VI: Sample Financing Agreement Between a Government and NGO Financing Agreement between a Government and NGO AGREEMENT dated between the -(Country) hereinafter referred to as the Government) party of the first part, and (abbreviated name of NGO concerned), party of the second part. WHEREAS: (a) by Development Credit Agreement no . ........... of ........... (date) concluded between them and the (the Association), the Association granted to the _ _ on the terms and conditions set forth in the Development Credit Agreement, a credit in various currencies in an amount equivalent to SDR3.8 million (three million eight hundred thousand Special Drawing Rights) to help finance grassroots development initiatives as described in Annex 2 to the Development Credit Agree- ment; (b) under the terms of the Development Credit Agreement the agreed to contribute its financial assistance to the (name of the Fund) whose implemen- tation is capable of improving the living conditions of the most disadvantaged segments of the popu- lation; (c) the _ _ (name of NGO concerned) has prepared a grassroots development project described in Annex 1 to the present agreement (name of the Project) (hereinafter referred to as the Project), which the Government finds acceptable and has requested the Government's financial assistance for execution of the said Project; (d) (None) (e) consequent upon the foregoing, the Government has agreed inter alia to provide financial assistance to (name of NGO) on the= and conditions set forth hereinafter. NOW THEREFORE, the parties to the present Agreement hereby agree as follows: 72 Environment Department Papers Annex VI Article I DEFINITIONS 1.1 The term "financial assistance" designates a sum of money granted by the Government to (name of NGO), pursuant to the provisions of Article 2 of the present Agreement, by way of contribution by the Government to the financing of the Project. 1.2 The acronym GDIP described in Annex I to Development Credit Agreement no . ......... referred to in the preamble of the present Agreement. Article 2 FINANCING 2.1. The Government agrees to contribute to the financing required for execution of the Project by granting financial assistance to (name of NGO) in the amount of 2.2 This amount will be disbursed by the government in tranches, each equivalent to CFAF- by deposit into an account opened in the name of _ _ (name of NGO) in a banking institution where (n,ame of NGO) keeps its usual accounts. The first tranche will be disbursed promptly after signature of the present Agreement. 2.3 Each subsequent tranche will be clisbursed only after the Director of the Fund has received from __(name of NGO) all necessary accounting documents (such as order notes, in- voices, contracts, equipment delivery notices, etc.) vouching that the amounts already disbursed have indeed been used for the needs of execution of the Project. 2.4 The amount of the financial assistance duly disbursed by the Government is not reimbursable by (name of NGO) except in the cases referred to in Article _. of the present Agreement. 2-5 In the event that under the Development Credit Agreement, the right of the Government to effect withdrawals from the Credit Account is temporarily of definitively suspended, for whatever reason, disbursement of the financial assistance will be similarly and simultaneously suspended for the same period or definitively, as the case may be. Article 3 EXECUTION OF THE PROJECT 3.1 (name of NGO) shall execute the Project with all due diligence and efficiency, applying appropriate administrative, financial and technical management methods; shall inform the Government promptly of any circumstance that would hinder or be likely to hinder the execution of the Project, and shall maintain necessary documentation and accounts giving a fair picture of all expenditures related to the Project. 3.2 (name of NGO) shall: (a) purchase goods and services whose Participation Series 73 NGO Involvement in WB-Financed Social Funds estimated cost is less than _ _ directly on the market, at reasonable prices and in accordance with its usual procedures; (b) ensure that the goods and services financed by the financial assistance whose estimated cost is equal to or greater than __ are purchased at reasonable prices, obtained following consultation of at least three suppliers of good repute and with due regard to all pertinent factors, such as delivery periods, efficiency and reliability of the goods in question, availability of after-sales service and required spare parts, and the qualifications and competence of the staff respon- sible for providing after-sales service, and (c) ensure that all the goods and services financed by the financial assistance are used exclusively for the execution of the Project. 3.3 (name of NGO) expressly recognizes that the Association's repre- sentatives have the right to inspect the goods and services referred to in paragraph above, either alone or jointly with the representatives of the Government. To that end the said representatives shall have free access to the work sites, works, plants, and structures forming part of the project and to all documents relating to the management of the Project. 3.4 Without prejudice to the provisions of paragraph 3.3 above, _ _ (name of NGO) shall promptly furnish the Government or IDA with all information that the Government or the Association may wish to receive concerning the execution of the Project, the management and financial situation of (name of NGO) and the benefits that could accrue to the local population upon completion of the Project. 3.5 Subject to the provisions of Article 2.4 above, the Government may suspend or terminate the right of (name of NGO) to withdraw the undisbursed amounts of the financial assistance if (name of NGO) shall fail to comply with any of the obligations incum- bent upon it by virtue of the present Agreement. If (name of NGO) shall fail to remedy any such deficiency within 60 days after it has been so notified by the Government, with copy to the Association for information, the Government may require (name of NGO) to reimburse all sums already withdrawn by (name of NGO) by virtue of the present Agreement unless (name of NGO) demonstrates to the satisfaction of the Government that the said sums have already been used for the needs of the Project. 3.6 (name of NGO) shall furnish to the Government: (a) not later than _ of each year*', a progress report on the Project execution works, the reasons for any delay that has occurred in execution of the Project and all measures taken or to be taken to remedy it and to ensure completion of the Project on schedule, and (b) three months after completion of the Project, a project completion report describing the activities executed under the Project and the measures taken to ensure that they are managed property. Article 4 MISCELLANEOUS PROVISIONS 4.1 All notifications or requests that are required to be or that may be made by or to either of the parties by virtue of the present Agreement shall be made in writing. Such notification or request shall be deemed to have been duly made when delivered into the hands of or by letter to the party to which it is to be made, at the address of such party specified below or to any other address that such party shall have notified to the party making the said notification or request. 74 Environment Department Papers Annex VI For the Government For (name of NGO) (address) (address) 4.2 All measures that are required to be or that may be taken and all documents that are required to be or that may be signed by virtue of the present Agreement shall be signed on behalf of the Gov- ernment by and on behalf of (name of NGO) by (title of person empowered to sign). 4.3 The present Agreement has been signed in in --- originals. COUNTRY (Name of NGO) By By (title) (title) Source: World Bank, Socio-Economic Development Funds: An Operational Guidelines, Washington: World Bank, AFT, September 1990 (Annex 5). The frequency of this report shall be determined in light of the nature of each project. Participation Series 75 Annex VII: Sample Bidding Documents (Gambia and Ethiopia) Gambia Public Works and Capacity Building Project and the Ethiopian Social Rehabilitation Fund INSTRUCTION TO BIDDERS 1. DESCRIPTION OF WORKS 1.1 The works to be executed under this contract include construction of and _and are hereinafter referred to as "The Works". 2. COST OF BIDDING 2.1. The bidder shall bear all Costs associated with the preparation and submission of his tender = and the hereinafter referred to as 'The EMPLOYER' will in no case be responsible or liable for these costs, regardless of the conduct or outcome of the bidding process. 3. ELIGIBILITY AND QUALIFICATION REQUIREMENTS 3.1. This invitation to tender is open to all domestic bidders that shall provide evidence satisfactory to the Employer of their eligibility and of their capability and adequacy of resources to carry out the contract effectively. 4. SITE VISIT 4.1. The bidder is advised to visit and examine the site of works and its surroundings and obtain for himself on his own responsibility all information that may be necessary for preparing the tender and entering into a contract. The costs of visiting the site shall be at bidder's own expense. 5. CONTENT OF TENDERING DOCUMENTS 5.1 The set of tender documents issued for the purpose of tendering includes the following: 76 Enviromnent Department Papers Annex VII 1) Instruction to Bidders 2) Special Condition of Contract 3) Technical Specification 4) Bill of Quantities 5) Form of Agreement 6) Drawings 5.2 The bidder is expected to examine carefully all instructions, conditions, forms, terms, specifications, and drawings in the tendering documents. Failure to comply with the requirements of tender submission will be at the bidder's own risk. 6. CLARIFICATION OF TENDERING DOCUMENTS 6.1 A prospective bidder requiring any clarification of the tender documents may notify the Employer in writing or by cable at the Employer's address indicated in the invitation to tender. The Employer will respond in writing or by cable to any request for clarification which he receives earlier than 15 days prior to the deadline for the subrnission of bids. Written copies of the Employer's response (including a description of the inquiry but without identifying its source) will be sent to all Prospective bidders who have purchased the tender documents. 7. AMENDMENTS TO BIDDING DOCUMENTS 7.1 At any time prior to the cleadline for submission of tenders, the Employer may, for any reason, whether at his own initiation or in response to a clarification requested by a prospective bidder, modify the tender documents by the issuance of an Addendum. 7.2 The Addendum will be sent in writing or by cable to all prospective bidders who have purchased the tender documents and will be binding upon them. Bidders shall promptly acknowl- edge receipt thereof by cable to the Employer. 8. LANGUAGE OF TENDER 8.1 The tender prepared by the bidder and all correspondence and documents relating to the bid exchanged by the bidder and the Employer shall be written either in English or local lan- guages. Supporting documents and printed literature furnished by the bidder with the tender may also be in the same language. 9. DOCUMENTS COMPRISING THE TENDER 9.1 The tender to be prepare d by the bidder shall comprise the following: The Form of Tender and Appendix thereto; the Tender Security, the Bill of Quantities, the information on Eligibility and Qualification and any other material required to be completed and submitted in accordance with the Instruction to Bidders embodied in these bidding documents. 10. TENDER PRICE 10.1 The rates and prices quoted by the bidder shall be fixed for the duration of the con- tract and shall not be subject to adjustment on any account except as otherwise provided in the conditions of contract. Participation Series 77 NGO Involvement in WB-Financed Social Funds 11. TENDER VALIDITY 11.1 Bids shall remain valId and open for acceptance for a period of_ days after the date of tender opening prescribed in Clause 16. 12. TENDER SECURITY 12.1 The bidder shall furnish, as part of his bid, a tender security of 2% of the Contract amount in the amount of Birr in the form of a certified check, a bank draft, an irrevocable letter of credit or a guarantee from the Commercial Bank of Ethiopia. The tender bond shall be valid for 30 days beyond the validity of tender. 12.2 Any tender not accompanied by an acceptable tender security will be rejected by the Employer as non-responsive. 12.3 The tender, securities of unsuccessful bidders will be returned as promptly as possible but not later than 30 days after the expiration of the period of bid validity prescribed by the Employer. 12.4 The tender securities of the successful bidder will be discharged when the bidder has signed the Agreement and fumished the required performance security. 13. FORMAT AND SIGNING OF TENDER 13.1 The bidder shall prepare one original and two copies of the documents comprising the tender as described in subclause 9.1 of these Instructions to bidders, bound with the volume contain- ing the Form of Tender, and clearly marked 'ORIGINAL' and 'COPY' as appropriate. In the event of any discrepancy between these documents, the original shall prevail. 13.2 The original and copies of the tender shall be typed or written in indelible ink and shall be signed by person or persons duly authorized to bind the bidder to the contract. Proof of authorization shall be furnished in the form of a written power-of-attorney, which shall accompany the bid. All pages of the bid where entries or amendments have been made shall be initialled by the person or persons signing the bid. 14. SEALING AND MARKING OF TENDER 14.1 The bidder shall seal the original and each copy of the bid in a separate envelope, duly marking the envelopes as 'ORIGINAL' and 'COPY' as appropriate, and forward both to the Employer. 14.2 The envelopes containing the original and the copy a) be addressed to b) bear the following identification i) Bid for ii) Ref. No. iii) Name of Sub-project iv) The words 'DO NOT OPEN BEFORE' 78 Environment Department Papers Annex VII 15. DEADLINE FOR SUBMISSION OF TENDER 15.1 Bids must be received by the Employer at the address specified above no latter than . Any bid received by the Employer after the will be returned unopened to the bidder. 16. TENDER OPENING AND EVALUATION 16.1 The Employer will open the bids, in the presence of all bidders or their duly autho- rized representative who choose to attend, at __ the following location . The bidders' representatives who are present shall sign a register evidencing their attendance. 16.2 Prior to the detailed evaluation of bids, the name of the bidder and total amount of each bid, and of any alternative bids if they have been requested or permitted, should be read aloud and recorded when opened. The Employer should ascertain whether the bids meet the eligibility requirements have been properly signed; are accompanied by the required securities; are substantially responsive to the bidding documents; have any material errors in computation; and are otherwise generally in order. 16.3 If a bid is not substantially responsive, i.e., it contains material deviations from or reservations to the terms, conditions and specifications in the bidding documents, it should not be considered further. The bidder should nol: be permitted to correct or withdraw material deviations or reservations once bids have been opened. 17. AWARD OF CONTRACT 17.1 The Employer will award the contract to the bidder whose bid has been determined to be substantially responsive to the bidding documents as stated above, and who has offered the lowest Evaluated Bid Price, provided further that the bidder has the capability and resources to carry out the contract effectively. 17.2 Prior to the expiration of the period of the bid validity prescribed by the Employer, the Employer will notify the successful bidder in writing that his bid has been accepted. This "Letter of Acceptance" shall name the sum of which the Employer will pay to the contractor in consideration of the execution, completion and maintenance of the works by the contractor as prescribed by the contract (hereinafter and in the condition of contract called "The Contract Price"). 17.3 Upon furnishing by the successful bidder of a performance security in accordance with the provision of clause 17.6, the Employer will promptly notify other bidders that their bids have been unsuccessful. 17.4 At the same time that Enmployer notifies the successful bidder that his bid has been accepted, the Employer will also send the bidder the Form of Agreement provided in the bidding documents, incorporating all agreements between the parties. 17.5 Within 15 days of receipt of the Form of Agreement, the successful bidder shall sign the Form and return to the Employer. Participation Series 79 NGO Involvement in WB-Financed Social Funds 17.6 Within 30 days of receipt of the notification of award for the Employer, the successful bidder shall furnish to the Employer a performance security form of a bank guarantee in an amount of 10% of the contract price. 17.7 The Employer may reject all bids. All bids should not be rejected and new bids invited on the same specifications solely for the purpose of obtaining lower prices, except in cases where the lowest evaluated bid exceeds the cost estimates by a substantial amount. Rejection of all bids is also justified when bids are not substantially responsive or there is lack of effective competi- tion. If all bids are rejected the Employer should review the causes justifying the rejection and con- sider making either revisions in the specifications or modifications in the sub-project or both before inviting new bids. Source: Gopal, Gita, Bank Financed Projects with Community Participation: A Manual for Designing Procurement and Disbursement Mechanisms. Washington, World Bank, AFTCB, 1995. (Annex D) 80 Environment Department Papers Annex VIII: Sample Works Contract (Ethiopian Social Rehabilitation Fund) Samrkple Works Contract Contract No. awarded following the request for proposals of 199, concerning the sub-project designated as: Signed on: Recorded on: It is hereby agreed, BETWEEN: The Ethiopian Social Rehabilitation Fund as one party and herein- after referred to as the 'Fund', AND: _represented by , acting in the capacity of hereinafter referred to as the 'Contractor,' as the other party, as follows: Article 1: PURPOSE OF THE CONTRACT This contract is for execution of works of broken down into _ _ separate tasks, each having an individual price calculated on the basis of one unit of the corresponding quan- tity, in accordance with the price list attached hereto. Article 2: LOCATION OF WORKS The works described under Article 1 shall be performed in the region(s) of: Article 3: AMOUNT OF CONTRACT The amount of the contract, exclusive of taxes, as stated in the approximate breakdown, is the sum of: Birr on the basis of prices as of 199- The prices given in the price list have been evaluated taking into account the cost prices of labor, including taxes, [total cost of the supplies delivered to the work site], the sales cost of work site equipment, including provisions for depreciation, as well as work site installation expenses, overhead and miscellaneous costs of the works, operating burdens, hazards and benefits. Participation Series 81 NGO Involvement in WB-Financed Social Funds The total amount of the contract, including taxes, is Article, 4: ORGANIZATION AND DURAT1ON OF THE WORKS The works shall be performed in accordance with the breakdown into tasks described under Article 1. For each of these tasks, performance shall be entrusted to a set number of teams composed of laborers and workers of various skills. The composition and number of teams needed, depending on the amount of work and the projected output, are shown in the annexes to this document (organization chart). (The bidder is invited to inspect the chart. modify it if necessary and complete it in order to furnish a specific detailed organization plan for the works.) While being based on an average number of _ _ days worked per month, this contract shall be concluded within a completion period of _ _ months, counting from the date of the service order fixing the beginning date of the works in question. The expected date of completion of the works is ,1989, or any other date mutu- ally agreed upon by the Fund and the Contractor. Article 5: PENALTIES FOR LATE DELIVERY In the event of a delay in execution of the works in relation to the time periods fixed in the service order, the Contractor is subject to a penalty of one one-thousandth of the amount of the works or- dered per day of delay, except in the case of force majeure. in which case the Fund will evaluate the additional time to be allowed and so inform the contractor. Article 6: SETTLEMENT AND SCHEDULE OF PAYMENTS Monthly invoices shall be prepared on the basis of progress of the works. The invoices will clearly state the amount of the works done during the month in question, as well as the cumulative amount of the works done as of the last day of that month. These amounts of work are calculated with reference to the prices in the price list, by multiplying these prices by the quantities actually executed, after inspection by the engineer assigned by the Fund. The payments shall be made through a bank check under the responsibility of the financial officer of the Fund upon presentation of the invoices prepared by the Engineer/PO and accompanied by works progress statements, certified by the Engineer/PO. The time of payment shall not exceed thirty (30) days counting from the approval of the Contractor's monthly invoice by officials of the Engineer/PO. Article 7: UPDATING AND REVISION The contract does not provide for updating or revision of prices, in view of the time periods given for completion of the works. 82 Environment Department Papers Annex VIII Article 8: MOBILIZATION ADVANCE UPON START-UP OF THE WORKS A fully bonded mobilization advance not exceeding 20 percent of the amount of the contract will be granted to the Contractor, at the time of issuance of the service order. Article 9: LIABILITY OF THE CONTRACTCR The Contractor is directly and personally liable to the Fund, for proper execution and quality of the works. The Contractor agrees to furnish to the engineer assigned by the Fund all information, sched- ules, calculations and supporting documentation that may be requested of it. Article 10: CONTROL OF THE WORKS The works are placed under the control of the engineer assigned by the Fund. The Contractor must defer to all written or verbal orders from the engineer, and the Contractor is responsible for stating any reservations within a period of ten (10) working days. Article 11: LABOR - HEALTH The Contractor is subject, in the employmernt of labor, to regulations under current law at the time the works are performed and, in particular, Artide 12: DISPUTES AND LITIGATION If, over the course of the works, problems arise between the Fund and the Contractor, the problem shall be resolved by mutual dialogue. If the Contractor does not accept this decision, each of the parties, that is, the Fund on one hand and t]he Contractor on the other, agrees to proceed for arbitra- tion in accordance with current regulation in Ethiopia. Article 13: CONTRACT DOCUMENTS The four documents listed below, which the Contractor has full knowledge of, contain all the condi- tions and terms of this contract: - The present draft contract; - The Bill of Quantities; - Bidding documents including any plans. Article 14: The present contract shall take effect when signed by both parties. Approved: City of 1989 The Contractor The General Manager of the Fund Source: Gopal, Gita, Bank-Financed Projects Twith Community Participation: A Manual for Designing Procurement and Disbursement Mechanisms, Washington: World Bank, AFTCB, 1995 (Annex D). 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