INTEGRATED SAFEGUARDS DATA SHEET APPRAISAL STAGE Report No.: ISDSA187 Public Disclosure Copy Date ISDS Prepared/Updated: 21-Feb-2012 I. BASIC INFORMATION 1. Basic Project Data Country: Kiribati Project ID: P126324 Project Name: KI: Telecommunications and ICT Development Project (P126324) Task Team Leader: Natasha Beschorner Estimated Appraisal Date: 01-May-2012 Estimated Board Date: 06-Jul-2012 Managing Unit: TWICT Lending Instrument: Technical Assistance Loan Sector: Telecommunications (100%) Theme: Regulation and competition policy (75%), Infrastructure services for private sector development (25%) Financing (In USD Million) Financing Source Amount BORROWER/RECIPIENT 0.00 International Development Association (IDA) 4.00 Pacific Regional Infrastructure Facility Trust Fund 1.10 Total 5.10 Environmental Category: C - Not Required Is this a Repeater project? No 2. Project Objectives The proposed development objective is: to increase access to telecommunications in Kiribati. 3. Project Description Public Disclosure Copy The proposed Project is a Technical Assistance program, covering a five-year program of support to the Ministry of Communications, Transport and Tourism Development (MCTTD) and the Telecommunications Authority of Kiribati (TAK). The Project focuses on the enabling environment for telecommunications and ICT service provision and on the institutional development of the MCTTD and TAK. Further, through support for enabling infrastructure in the Outer Islands, the Project will increase the availability of telecommunications infrastructure and enable the more widespread application of ICT services supporting improvements in economic and social development. Specifically, the Project will support the: (a) transfer of policy-making, legal, regulatory, and technical expertise to help develop fully-functional oversight institutions for the ICT sector; (b) transition from a monopolistic to a liberalized telecommunications market, including strategic options for the incumbent service provider, Telecom Services Kiribati Ltd (TSKL); and (c) design and implementation of a sustainable connectivity program for the Outer Islands. Proposed Project Components. 1. Component 1. ICT Policy and Legal Support (MCTTD). US$ 1.2 million. The Project will provide assistance to MCTTD in the following areas: (a) ICT policy review and coordination: including (i) updating sector policy in line with industry developments and Government objectives, including second-generation reforms and application of ICT in other sectors, and monitoring ICT sector development; (ii) supporting the preparation of legislation and regulations necessary to give effect to Government policy; and (iii) leading the Government#s work on international agreements related to telecommunications; and (b) TSKL transformation: in coordination with the MFED, identifying and implementing options for restructuring TSKL which may include the introduction of an equity investor or other strategic partner for TSKL; this will entail contracting a transaction/financial advisor. 2. Component 2. ICT Regulatory Support US$1.2 million. This envisages a medium term program of technical assistance and capacity- building (including on the job and formal training) for the TAK in the following areas: (a) New market entry: assist in the design and conduct of a selection process for new telecommunications service provider(s) that will permit a second operator to offer mobile services, to be undertaken in coordination with the MCTTD; (b) General regulatory support: technical assistance and capacity-building for the TAK to regulate a competitive market with multiple operators, consistent with the new legal and regulatory framework, including (but not limited to) assistance in the following areas: # issuing licenses and other authorizations, monitoring compliance and enforcing sector legislation and regulatory instruments; # establishing and regulating the technical aspects of the wholesale access regime, including the interconnection regime; # regulating competition; limiting anti-competitive behaviour; # in coordination with the MCTTD, drafting regulations, rules and other subordinate instruments as needed for the effective management and implementation of ICT sector legislation, including consumer protection and consumer codes of practice; # resolving disputes between operators, and between operators and users of telecommunications services; # allocating, assigning and supervising radio spectrum, numbering, and other technical regulation matters (including development of a Page 1 of 4 spectrum management and monitoring system through procurement of specialized equipment and software). 3. Component 3. Outer Islands Connectivity US$2.0 million. This will finance: (a) Phase 1: Technical assistance to MCTTD and TAK for: (i) development of an appropriate Outer Islands connectivity policy and strategy, including technical and financial feasibility analysis, and stakeholder consultations; (ii) identification, analysis and evaluation of possible coverage extension projects and possible financing/risk-sharing mechanism (such projects might include voice and/or data; broadband/backbone infrastructure and/or access facilities); (iii) development of the necessary regulatory instruments, instructions and practical procedures to Public Disclosure Copy implement the regulatory regime (including legislative and licensing obligations) in relation to Outer Islands coverage; (iv) preparation of project documentation, selection process for identifying and contracting with an operator for the supply of specified services; and ongoing monitoring and audit of the service being subsidised, possibly including specialised equipment and software; and (v) design and implementation of awareness- raising and training programs for Outer Islands communities on the use of telecommunications and ICT services to improve livelihoods. (b) Phase 2: Outer Islands connectivity subsidy. Based on the above strategy, the Project is expected to finance a subsidy for Outer Islands communications service provision, to be bid competitively, led by the private sector. The implementation of Component 3(b) will depend on the extent of commercial rollout and connectivity gaps, as noted above, and the identification of Outer Islands sub-projects that require subsidization. If Component 3(b) goes ahead, based on the findings of the policy/strategy developed under 3(a), then the Project will also provide the TAK with implementation support. The detailed project description in Annex 2 sets out the methodology for the least cost subsidy model which has been developed to assess possible subsidy scenarios regarding the costs of providing telecommunications services throughout Kiribati, including in the Outer Islands. 4. Component 4. Project Management US$0.6 million. This will finance the inputs needed to support the effective administration of the Project. Overall Project administration will be handled by the central Fiduciary Management Unit (FMU) within the Ministry of Finance and Economic Development (MFED). This Project will procure and finance the incremental services needed to handle the administrative tasks specific to this operation, including: (a) Project management consultants, including: Procurement specialist, Financial Management specialist, international procurement specialist and communications specialist (it is envisaged that the communications specialist will be located with the MCTTD); (b) Computer and office equipment for Project management; (c) External audit; and (d) Incremental operating costs. 4. Project location and salient physical characteristics relevant to the safeguard analysis (if known) The primary location for the project is the main population centre of Tarawa. The project may include a subsidy component for outer islands connectivity (component 3 (b)) to be determined in the course of project implementation based on needs assessment. 5. Environmental and Social Safeguards Specialists Maria Fernanda Miralles Gasparini (SEGOM) Gerardo F. Parco (EASPS) 6. Safeguard Policies Triggered? Explanation (Optional) Environmental Assessment OP/BP 4.01 Yes The Project mainly involves policy and regulatory support and technical assistance Public Disclosure Copy to the Government of Kiribati to improve the reliability and affordability of telecommunications services. Component 3 may involve subsidies for provision of connectivity in outer islands, which would either finance maintenance of existing networks or minimal civil works. The infrastructure which may potentially be constructed consists typically of communications dishes or towers. These structures occupy a very small area composed of a dish or tower sitting on a concrete base. A small room adjacent to the dish or tower houses the ancillary electronic equipment. OP 4.01 is triggered by this project because of the potential impacts of these infrastructure. The construction activities involved in the establishment of these structures are very minimal, the impacts of which are predictable, easy to mitigate, and short term. An Environmental Code of Practice (ECOP) will be drafted by the MCTTD to mitigate any likely impacts of the construction. This ECOP will be part of the contract for any infrastructure investment and will form part of the contractual obligations of the winning bidder. This ECOP will be disclosed locally and in the InfoShop. Natural Habitats OP/BP 4.04 No The infrastructure which may potentially be financed in this project has a very small footprint and will not have significant impact on any natural habitat. Forests OP/BP 4.36 No There will be no impact on forests. Pest Management OP 4.09 No No pesticides will be used in this project Physical Cultural Resources OP/BP 4.11 No There will be no impact on PCR. Indigenous Peoples OP/BP 4.10 No The people affected by the Project are from a single cultural group. They are not considered to be Indigenous People according to OP 4.10. Page 2 of 4 Involuntary Resettlement OP/BP 4.12 Yes The Project mainly involves policy and regulatory support and technical assistance to the Government of Kiribati to improve the reliability and affordability of telecommunications services. Component 3 may involve subsidies for provision of connectivity in outer islands, which would either finance maintenance of existing networks or minimal civil works. If any land acquisition is needed this would be done in full consultation and agreement with Outer Island communities who would Public Disclosure Copy have expressed interest in the service (and civil works) in the first place. To address land acquisition, MCTTD has prepared a Compensation Framework that details the procedures for land acquisition and compensation in line with Kiribati laws and the World Bank#s OP 4.12. If voluntary land donations occur, these should be carefully documented. Safety of Dams OP/BP 4.37 No Not applicable. Projects on International Waterways OP/BP No Not applicable. 7.50 Projects in Disputed Areas OP/BP 7.60 No Not applicable. II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: The proposed project will have very minor, if any, impacts on the environment, land and on people. The project mainly consists of policy and regulatory support and technical assistance to the Government of Kiribati to improve the reliability and affordability of telecommunications services. However, Component 3 may involve subsidies for provision of connectivity in outer islands, which would either finance maintenance of existing networks or minimal civil works. These works are expected to be small, such as installing communication towers or satellite dishes and will require very little construction and land. Therefore the safeguard issues are considered to be small. The Government of Kiribati has prepared an Environmental Code of Practice (ECOP) and a Compensation Framework (CF) to inform the process of any construction and land acquisition that is required under Component 3 of this project. These documents provide procedures to ensure that any environment or social impacts are properly avoided or mitigated. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: Improved connectivity throughout Kiribati is expected to help Kiribati citizens to have greater access to information and provide improved communications facilities to the Outer Islands. Improved connectivity may support economic activities e.g. tourism, and improved service delivery e.g. health and education. Social benefits are expected to be positive. There are no significant long term environmental impacts related to the telecommunications infrastructure. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. Not applicable. Public Disclosure Copy 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. The recipient has prepared an ECOP (Environmental Code of Practice) and Compensation Framework (CF) which were disclosed in country on February 17, 2012. These documents are specific to Component 3 of this project as it is the only component potentially involving civil works. Implementation of the ECOP and the CF will be the responsibility of the service provider granted the subsidy to install the backbone/broadband infrastructure and MCTTD (working with MELAD). The Government has limited institutional capacity for implementation of World Bank environmental and social safeguards policies. The local agency in-charge of environmental matters is the Ministry of Environment, Lands and Agricultural Development (MELAD). They have full time staff who regulate and monitors activities with potential environmental impacts. The Government of Kiribati has passed regulations which mandate environmental assessment for projects with potential impacts on the environment. The Government also has existing institutional capacity for addressing land acquisition, particularly if done at a small scale. They are able to identify affected people and pay compensation payments, and a grievance mechanism that allows people to file complaints at courts is in place throughout the country. This is particularly the case when land acquisition is led by MELAD. However, these systems can be overburdened and slow. Meanwhile MCTTD is working on land acquisition in two World Bank projects. It is important that they get implementation support from the World Bank, as well as service providers and MELAD, as needed, to ensure any land acquisition impacts are promptly mitigated. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. The key stakeholders of the project are TAK, TSKL, other potential service providers, and all the people of Kiribati who would benefit from improved access to telecommunication services. Given the uncertainty of Component 3 activities at this stage, consultations on the ECOP and CF have been limited to relevant government ministries, service providers and Outer Islands representatives. The ECOP and CF were disclosed in Tarawa on February 17, 2012 and are available at . Once subprojects under Component 3 are clear, further consultations directly with the affected people will be conducted. These consultations will be the responsibility of the service provider, MCTTD and TAK. B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 17-Feb-2012 Page 3 of 4 Date of "in-country" disclosure 17-Feb-2012 Date of submission to InfoShop 21-Feb-2012 For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors Resettlement Action Plan/Framework/Policy Process Public Disclosure Copy Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 17-Feb-2012 Date of "in-country" disclosure 17-Feb-2012 Date of submission to InfoShop 21-Feb-2012 Technical Assistance Project For a TA project which will finance the preparation of a specific safeguards instrument, please indicate type of document disclosed, if any. Documents to be disclosed: Environmental Code of Practice (ECOP), Compensation Framework (CF). If the project triggers the Pest Management and/or Physical Cultural Resources policies, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP. If in-country disclosure of any of the above documents is not expected, please explain why: C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting) OP/BP/GP 4.01 - Environment Assessment Are the cost and the accountabilities for the EMP incorporated in the credit/loan? Yes [ ] No [ ] NA [ ] OP/BP 4.12 - Involuntary Resettlement If yes, then did the Regional unit responsible for safeguards or Sector Manager review the Yes [ ] No [ ] NA [ ] plan? The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank's Infoshop? Yes [ ] No [ ] NA [ ] Have relevant documents been disclosed in-country in a public place in a form and language Yes [ ] No [ ] NA [ ] that are understandable and accessible to project-affected groups and local NGOs? All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities been prepared for Yes [ ] No [ ] NA [ ] the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included in the project cost? Yes [ ] No [ ] NA [ ] Public Disclosure Copy Does the Monitoring and Evaluation system of the project include the monitoring of safeguard Yes [ ] No [ ] NA [ ] impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed with the borrower and the same Yes [ ] No [ ] NA [ ] been adequately reflected in the project legal documents? III. APPROVALS Task Team Leader: Natasha Beschorner Approved By: Sector Manager: Name Doyle Gallegos (SM) Date: 22-Feb-2012 Page 4 of 4