The World Bank ADDITIONAL FINANCING FOR STRENGTHEN ETHIOPIA’S ADAPTIVE SAFETY NET PROJECT (P176997) Additional Financing Appraisal Environmental and Social Review Summary Appraisal Stage (AF ESRS Appraisal Stage) Public Disclosure Date Prepared/Updated: 07/26/2021 | Report No: ESRSAFA227 Jul 26, 2021 Page 1 of 11 The World Bank ADDITIONAL FINANCING FOR STRENGTHEN ETHIOPIA’S ADAPTIVE SAFETY NET PROJECT (P176997) BASIC INFORMATION A. Basic Project Data Country Region Borrower(s) Implementing Agency(ies) Ethiopia AFRICA EAST Federal Democratic Ministry of Agriculture Republic of Ethiopia Project ID Project Name P176997 ADDITIONAL FINANCING FOR STRENGTHEN ETHIOPIA’S ADAPTIVE SAFETY NET PROJECT Parent Project ID (if any) Parent Project Name P172479 Strengthen Ethiopia’s Adaptive Safety Net Practice Area (Lead) Financing Instrument Estimated Appraisal Date Estimated Board Date Social Protection & Jobs Investment Project 8/6/2021 9/3/2021 Financing Public Disclosure Proposed Development Objective The Project development objectives are (a) to expand geographic coverage and enhance service delivery of Ethiopia’s adaptive rural safety net to improve the well-being of extremely poor and vulnerable households in drought prone communities, and (b) in case of an Eligible Early Response Financing Event (“Eligible ERF Event”), respond promptly and effectively to it. Financing (in USD Million) Amount Current Financing 0.00 Proposed Additional Financing 0.00 Total Proposed Financing 0.00 B. Is the project being prepared in a Situation of Urgent Need of Assistance or Capacity Constraints, as per Bank IPF Policy, para. 12? Yes Jul 26, 2021 Page 2 of 11 The World Bank ADDITIONAL FINANCING FOR STRENGTHEN ETHIOPIA’S ADAPTIVE SAFETY NET PROJECT (P176997) C. Summary Description of Proposed Project [including overview of Country, Sectoral & Institutional Contexts and Relationship to CPF] The proposed project would be an Investment Project Financing with an estimated one third of the Bank credit allocated to Performance Based Indicators (PBC). The proposed project will support the fifth phase of the Government of Ethiopia’s Productive Safety Net Program (PSNP). This phase of support will build on experiences and lessons learned from early phases of implementation and will seek to make key enhancements to the program under three components. Component 1: Adaptive Productive Safety Net. This component focuses on the delivery of safety net operations for core program clients. It includes: the delivery of core transfers; the implementation of the public works sub-projects by which most beneficiaries earn their safety net benefits; services for children between 1 and 5 years old; and, complementary livelihood services to enable PSNP beneficiaries to enhance and diversify their incomes. The component aims to address environmental degradation, mitigate the negative impacts of climate change, and support poor households’ adaptation to climate change. Component 2: Improve Shock Responsiveness of the Rural Safety Net. This component will support the expansion of PSNP to additional drought-prone woredas, invest in underlying systems to deliver timely and adequate assistance to households affected by drought shocks, and finance vertical and horizontal expansion of transfers in case of emergency (drought). The Component will enhance PSNP capacity to function as an integrated shock responsive social safety net, building on the Government of Ethiopia’s decision to consolidate the operational management of humanitarian food assistance and PSNP under the Food Security Coordination Directorate in the Ministry of Public Disclosure Agriculture. This component also includes an Early Response Financing (ERF) Contingent Emergency Response Component (CERC) which will facilitate an early response to emerging food insecurity crises, to be financed through the Crisis Response Window (CRW). Component 3: Systems, Capacity Development, and Program Management Support. Activities in this component aim to consolidate several important initiatives to build systems under previous phases of the PSNP. This will enhance service delivery in the areas of payments, information for operations, and program dynamism and responsiveness to beneficiaries, including taking advantage of technology to improve the program’s efficiency and governance. This component will also provide institutional support to GoE to improve overall program management. It will finance the program management budgets at the federal and subnational levels. Financing will be provided for planning, implementation, and technical oversight of program activities such as implementation of safeguards requirements and financial, commodity, and procurement management. Support will also be provided for systems assessments, audits, pilots, and impact evaluations. D. Environmental and Social Overview D.1. Detailed project location(s) and salient physical characteristics relevant to the E&S assessment [geographic, environmental, social] Ethiopia depends principally on agriculture both for its economic growth and food security. Some 80% live in rural areas with agriculture (crop production and animal husbandry) as the main source of livelihood. The government has Jul 26, 2021 Page 3 of 11 The World Bank ADDITIONAL FINANCING FOR STRENGTHEN ETHIOPIA’S ADAPTIVE SAFETY NET PROJECT (P176997) developed a Climate Resilient Green Economy (CRGE) strategy in support of the GTP. The vision of the CRGE is to achieve middle-income status by 2025 in a climate-resilient green economy. The services provided by natural resources including agriculture and livestock play a critical role for the livelihood of the majority of Ethiopia’s population. Agriculture is the key pillar of the economy and the most important source of growth. Agricultural production is mostly rain-fed and dominated by small-scale farmers and enterprises that contribute some 90% of agricultural production. Although much of the agriculture remains at subsistence level, smallholders provide a large part of traded commodities, including for exports and about 70% of the raw material requirements of agro-based domestic industries. Agriculture, which is the critical element of economic growth and food security of the country, relies on sustainable management of land and water. The country, however, was experiencing low and declining agricultural productivity, persistent food insecurity, and rural poverty largely attributed to land degradation. It was estimated that by the mid- 1980s some 27 million ha or almost 50 percent of the Ethiopian highlands, which makes up about 45 percent of the total land area, was significantly eroded. Of this 14 million ha was seriously eroded and over 2 million ha were beyond reclamation. It was estimated that some 30,000 ha were being lost annually as a result of soil erosion, representing over 1.5 billion tons of soil removed annually by a variety of land degradation processes. Since 2005 crop yields have been rising steadily, as various government watershed rehabilitation programs - including the PSNP Public Works program - have been implemented, and fertilizer and improved seeds have been made available to farmers. The incidence of food shortages decreased from 31% in 2005 to 10% in 2016. Nonetheless crop Public Disclosure yields are still low by continental standards, millions of Ethiopians still face land degradation, and due to the pressure on land many farms are now below the size considered sufficient for sustainable smallholder farming. Thus there is still much to be done to improve the productivity of the natural resource base; many smallholder farmers still need income support. The PSNP5/SEASN woredas are located in Tigray, Amhara, Afar, SNNP, Oromiya, Somali regions, and in the rural parts of Dire Dawa and Harage Administrations. Given the current conflict, AF resources will not be used in Tigray. The environmental characteristics of these areas in which PSNP5 is being implemented are most usefully demarcated by altitude, rather than administrative boundaries. The rural population of the highlands are for the most part smallholder farmers engaged in mixed settled farming; in the lowlands (principally Afar and Somali regions, and parts of SNNPR and Oromiya) they are principally pastoralists or semi-pastoralists that also fall under the underserved communities . Direct beneficiaries of the Additional Financing will be vulnerable households affected by drought shocks who are included in the program on a temporary basis. This category of beneficiaries was already defined in the parent project. The SEASN PAD states that direct program beneficiaries of the broader SEASN operation include the eight million people targeted as core beneficiaries by the PSNP, and households temporarily included as a result of a drought shock. This AF will finance temporary support to an additional 1.2 million beneficiaries. As indicated above, beneficiaries of the Additional Financing will be targeted using established community-based methods in districts where the PSNP is already delivering core transfers. The AF will continue strengthening the existing Grievance Redress Mechanism to address complaints of targeted households. The Kebele Appeals Committees (KAC) are mandated for hearing and addressing complaints regarding Jul 26, 2021 Page 4 of 11 The World Bank ADDITIONAL FINANCING FOR STRENGTHEN ETHIOPIA’S ADAPTIVE SAFETY NET PROJECT (P176997) the delivery of support to program affected parties including targeting and transfers at local level .The annual GRM review will continue to be carried out to review and integrate recommendations to improve functionality of the mechanism. D. 2. Borrower’s Institutional Capacity The SEASN is implemented through Government systems with relevant line ministries responsible for delivering services related to their mandates. Overall coordination and management of the project is the responsibility of the Food Security Coordination Directorate (FSCD) of the Ministry of Agriculture. The FSCD coordinates all aspects of the SEASN, ensures timely transfer of resources to regions and coordinates and oversees the on-farm and off-farm livelihood related services under the program. The FSCD social development unit will be responsible for coordinating and overseeing the planning, implementation and monitoring of the social management instruments and work in close collaboration with Women, Children and Youth Affairs Directorate of MoA , Ministry of Labor and Social Affairs (MoLSA), and Natural Resources Management Directorate (NRMD) to address social issues under the AF. Other key stakeholders include: • The Ministry of Labor and Social Affairs, which under the parent project was taking on an increasing role in the Permanent Direct Support component, will be signatory to a tripartite MoU that includes FSCD and Ministry of Health for the joint coordination, implementation and monitoring of linkages for the program’s social services component. • The Public Works Coordination Unit (PWCU) in the Natural Resources Directorate (NRMD) of the Ministry of Agriculture, which will coordinate and support the public works component. Public Disclosure • The Livelihoods Coordination Unit (LCU) in the FSCD will coordinate and support the Livelihoods component. • The Ministry of Finance will be responsible for overall financial management and reporting and is responsible for the channeling of SEASN resources to the implementing agencies at federal and regional levels. It also commissions the audits of the cash resources for the parent project. • The National Disaster Risk Management Commission within the Ministry of Peace and Security which has overall responsibility for the inter-sectoral coordination of Disaster Risk Management activities including the consolidation and dissemination of early warning information Under SEASN the federal entities concerned with the activities of potential environmental and social concern are:  The NRMD, in which the Public Works Coordination Unit (PWCU) will be responsible for overseeing and supporting the Public Works sub-component, including the implementation of E&S Standards;  The LCU in the FSCD, which will be responsible for overseeing and supporting the implementation of E&S Standards for the Livelihoods sub-component;  MoLSA will work closely with FSCD in monitoring and reporting on the implementation of Environment and Social Standards at the community level (child labor, OHS, and GBV/SEA) The Public Work Coordination Unit(PWCU) of the NRMD was responsible for environmental and social safeguards management for the Public Works sub-component since 2005 under the previous World Bank safeguards architecture, and now takes responsibility for meeting the Bank’s E&S Standards under SEASN with active engagement and coordination lead by FSCD that also oversees the additional social standards. Orientations are being provided to the staff based on the ESMF, and more extensive training will be facilitated as per the ESMF. The PWCU originally included two staff qualified in environmental risk management, which was increased to three for SEASN, while the FSCD social development specialist positions were increased to two, and a Gender/GBV focal person was assigned based on assessment during preparation of the parent project. The E & S specialists for the program Jul 26, 2021 Page 5 of 11 The World Bank ADDITIONAL FINANCING FOR STRENGTHEN ETHIOPIA’S ADAPTIVE SAFETY NET PROJECT (P176997) including the national level social development specialist , targeting and GRM specialist and gender and GBV focal persons who will work closely with regional assigned gender and social developments experts as well as woreda level Social development experts to oversee the activities of the additional financing. The staffing requirements are set out in detail in the Parent SEASN Environmental & Social Commitment Plan (ESCP). The parent project became effective in March 2021. According to its first ISR, the implementation of the project was rated satisfactory, and the environmental and social risk management was also rated as satisfactory. The implementing agencies have assigned qualified environmental and social management specialists at different levels, and training on the SEASN ESMF is being rolled out. There is no additional staffing anticipated for the AF, but it important to fast-track and finalize the assignment of staffs and the roll out of the ESMF training for the frontline workers who will be involved in the distribution and management for the AF cash transfer. As the cash transfer will be largely for drought prone, low capacity woredas, it is important to build environmental and social management capacity in those woredas to properly manage any potential risks in the distribution and management of the cash transfer. II. SUMMARY OF ENVIRONMENTAL AND SOCIAL (ES) RISKS AND IMPACTS A. Environmental and Social Risk Classification (ESRC) Substantial Environmental Risk Rating Low Public Disclosure The AF finances only cash transfers without any on-the-ground activity with potential negative environmental risks or impacts. The cash transfer is for shock response in drought affected areas with hardly any savings for investment by the beneficiary households to get involved in the implementation of activities potentially affecting the environment. Under the World Bank’s Environmental & Social Framework (ESF) the environmental risk of the AF is low. Given that the environmental risk of the AF is low, the client is not expected to develop an environmental risk management instrument. Social Risk Rating Substantial Under the World Bank’s ESF the social risk of the project is assessed as Substantial. The potential impacts could be related to social exclusion from benefits, sexual exploitation and abuse related to targeting, the delivery of transfers and reallocation of caseload. The capacity of program implementers also needs strengthening to apply the ESF standards. This assessment of the potential for Substantial negative social impacts takes place within the context of developments in recent years in Ethiopia that have seen an increased level of political turmoil, including a significant rise in social unrest and inter-ethnic conflict. B. Environment and Social Standards (ESSs) that Apply to the Activities Being Considered B.1. General Assessment ESS1 Assessment and Management of Environmental and Social Risks and Impacts Overview of the relevance of the Standard for the Project: Jul 26, 2021 Page 6 of 11 The World Bank ADDITIONAL FINANCING FOR STRENGTHEN ETHIOPIA’S ADAPTIVE SAFETY NET PROJECT (P176997) The AF finances only cash transfers without any on-the-ground activity with potential negative environmental risks or impacts. However, the cash transfer could give rise to negative social impacts, such as (i) social hardship due to delayed transfers; (ii) social conflict arising from inequity due to poor performance, or state capture, of the targeting procedure; (iii) social conflict or unrest due to geographic reallocation of, rearrangement of, or reductions in, the case-load; (iv) social conflict due to variations in transfer amounts or food baskets provided by different agencies within the same area; (v) adverse impacts on historically underserved traditional communities caused by the delivery of inappropriate transfers or related services, and (vi) lack of consideration for vulnerable groups in the payment process. (vii) GBV/SEA risks. The risk rating for GBV/SEA for the AF is moderate, considering that the proper targeting, transfer and protection measures to be taken with the parent project GBV action plan implementation. Furthermore, the enhanced social assessment and consultation and related social development plan has been developed as part of the ESMF. The borrower has also developed an SEP, a Gender and GBV action plan, and a GRM guide for the parent project which will be applied for the AF. Last but not least, the Borrower has developed an Environmental & Social Commitment Plan (ESCP) for the parent project, setting out the measures and actions required for the project to achieve compliance with the Bank’s ESF. For the AF, the borrower has prepared the ESCP incorporating key commitments pertinent to the AF. ESS10 Stakeholder Engagement and Information Disclosure There are two types of stakeholders concerned with the Project:  Project-affected parties: principally the communities targeted as PSNP-beneficiary communities that include vulnerable groups; Public Disclosure  Other interested parties: these include neighboring communities, concerned government staff (federal and local), NGOs involved in PSNP implementation support, and Development Partners supporting the project. Summary of the SEP During the parent project preparation, the Borrower developed a Stakeholder Engagement Plan (SEP), in accordance with the provisions of ESS10. Taking into account the large-scale directly affected population (approximately 8 million), and the fact that the project will extend support to ‘new’, drought prone, woredas, the SEP pays particular attention to:  historically underserved traditional communities affected, to ensure that services provided will be appropriate;  especially vulnerable and disadvantaged groups, including the elderly, persons with disabilities, female- headed households, orphans and vulnerable children.  neighboring communities that might be directly or indirectly affected by the project.  Implementation of a grievance mechanism to address questions from beneficiaries and non-beneficiaries and resolve potential conflicts The parent project SEP has been updated to address specific issues related to the AF. B.2. Specific Risks and Impacts A brief description of the potential environmental and social risks and impacts relevant to the Project. ESS2 Labor and Working Conditions Jul 26, 2021 Page 7 of 11 The World Bank ADDITIONAL FINANCING FOR STRENGTHEN ETHIOPIA’S ADAPTIVE SAFETY NET PROJECT (P176997) ESS2 applies to the AF principally in respect of the supervisors or workers who are employed directly by the local government office to support the distribution and management of cash transfers. Where government civil servants are working in connection with the AF, they will remain subject to the terms and conditions of their existing public sector employment agreement or arrangement. ESS2 applies to civil servants only in respect of provisions for protecting the work force. The Borrower has prepared a Labor Management Procedures (LMP) for the parent project proportional to the activities, risks and impacts, setting out detailed procedures to ensure compliance with the standards of ESS2 for all labor categories involved. This will be applicable to the AF. The parent project ESMF includes an Occupational Health & Safety Plan, which requires that all required measures for health and safety are effective on site, including labor management, the exclusion of child labor, exemption of pregnant women throughout the entire pregnancy, the provision of first-aid boxes and the reporting of accidents and injuries. The parent project ESMF also contains a detailed procedure for the Grievance Redress Mechanism, in order to ensure that work-place concerns can be voiced, complaints made about problems arising, and that such issues be expeditiously addressed. All these requirements will be applicable to the AF. ESS3 Resource Efficiency and Pollution Prevention and Management The AF supports only cash transfer to drought affected people in SEASN Public Disclosure ESS4 Community Health and Safety ESS4 is relevant to provisions for gender-based violence (GBV). The borrower conducted a GBV Risk Assessment and a GBV Action Plan with a specific focus on the relationship between PW beneficiaries and group leaders, and other related issues. The main findings include potential SEA risks linked to sexual favors for registration, domestic violence in some areas due to disagreement between spouses on how to use program transfer, lack of procedure for complaints related to GBV/SEA, awareness gap on GBV/SEA and implementation capacity of the borrower. The GBV action plan prepared for the parent project will be applied to mitigate the identified risks. The additional financing will be allocated to PSNP operational areas affected by drought. In the case of Tigray, given the current conflict ,the AF resources will not be used there. Whenever there is potential to engage in high risk areas with possibility of conflict, site specific risk assessment and safety management measures will be prepared to mitigate the related safety risks for the workers and the community . The operation under the AF shall be implemented in safe areas and no major involvement of security personnel is foreseen. However, in case of significant deterioration of security in a given geographical area, the project will conduct a succinct assessment of risks and safety management measures and submit to the Bank as included in the ESCP. Specific to the project activities and use of security personnel, in food woredas/districts, safety and security of both the warehouses and food distribution points (local level stores) will be managed by fulltime locally hired staff, security guards. For the cash transfer activities, project-specific security services (military, national police) could be required to accompany the local casher while transporting cash to payment sites. As stated in the ESCP, in case of use Jul 26, 2021 Page 8 of 11 The World Bank ADDITIONAL FINANCING FOR STRENGTHEN ETHIOPIA’S ADAPTIVE SAFETY NET PROJECT (P176997) of these additional, project-specific security services (military, national police), the project is required to ensure the signing of a formal agreement, including clauses on compliance with a code of conduct as stated in the ESCP. ESS5 Land Acquisition, Restrictions on Land Use and Involuntary Resettlement The AF will not involve land acquisition or restriction of access as it will only finance cash transfer. ESS6 Biodiversity Conservation and Sustainable Management of Living Natural Resources The AF will not involve any on-ground activities with potential impacts on biodiversity as it will only finance cash transfer. ESS7 Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Local Communities It has been determined that some of the people resident in the project areas meet the criteria of ESS7. In mid-2018, based on the assumption that all PSNP woredas in Afar and Somali regions are regarded as meeting the Bank safeguards category ‘indigenous peoples’, it was estimated that 2.5 million of PSNP beneficiaries, represented by an estimated 0.5 million households, fell into that category. The woredas in Afar, Somali, some part of Southern Nations and Nationalities and People (SNNP) and Oromia regions Public Disclosure cover underserved, pastoralist communities. Some of these pastoralist communities are vulnerable to chronic food insecurity and a home to historically underserved groups. To address the needs of underserved communities, the Enhanced Social Assessment and Consultation(ESAC) and related Social Development Plan have been prepared. The outcome of the ESAC has been incorporated into various aspects of the PSNPV design and implementation guidelines . The findings on social issues and challenges on historically underserved (pastoral ) and other communities include: • Limited access to Muslim friendly financial services • Remote nature of pastoralist communities and limited access to social services • Exclusion of newcomers in Afar and Somali who may not belong to the extended family lineage or even the clan which controls the territory • Increased unmet demand in pastoral areas for livelihoods support services • The type of food transfer is not appropriate to the food habit of the pastoral communities • Risk of mismanagement or misuse of transfer in households , • Potential inaccessibility of payment and food distribution centers for vulnerable groups • Inclusion and exclusion Error and lack of trust for the GRM In order to address the issues identified by the ESAC, the parent project integrated measures such as a plan to work with financial service providers to develop Muslim friendly financial services, contribute to the improvement of social services in pastoral areas by constructing/renovating structures which provides social services using PW labour, improving accountability and capacity in pastoral areas for implementing the project’s targeting criteria, develop a single delivery system, which combines Humanitarian Food Assistance ,conduct GRM annual reviews and the project will roll out its livelihood strengthening as well as transfer activities in the pastoral regions by facilitating Jul 26, 2021 Page 9 of 11 The World Bank ADDITIONAL FINANCING FOR STRENGTHEN ETHIOPIA’S ADAPTIVE SAFETY NET PROJECT (P176997) consultations as part of the annual planning process and contextualizing it to the need and realities of the area. Furthermore the GRM ,targeting and Gender and Social development guidelines have been developed and included in the PIM that also address additional recommendations and activities in the social development plan. These will be implemented to address issues under the AF. ESS8 Cultural Heritage The AF will not involve any on-ground activities with potential impacts on cultural heritage as it will only finance cash transfer. ESS9 Financial Intermediaries No financial intermediaries are expected to feature in the AF C. Legal Operational Policies that Apply OP 7.50 Projects on International Waterways Yes OP 7.60 Projects in Disputed Areas No Public Disclosure B.3. Reliance on Borrower’s policy, legal and institutional framework, relevant to the Project risks and impacts Is this project being prepared for use of Borrower Framework? No Areas where “Use of Borrower Framework” is being considered: The Borrower Framework is not being considered IV. CONTACT POINTS World Bank Contact: Michael Mutemi Munavu Title: Senior Social Protection Specialist Telephone No: 5358+2403 / 256-414-302403 Email: mmunavu@worldbank.org Contact: Abu Yadetta Hateu Title: Senior Social Protection Specialist Telephone No: 5358+6144 / 251-11-517-6144 Email: ahateu@worldbank.org Borrower/Client/Recipient Jul 26, 2021 Page 10 of 11 The World Bank ADDITIONAL FINANCING FOR STRENGTHEN ETHIOPIA’S ADAPTIVE SAFETY NET PROJECT (P176997) Borrower: Federal Democratic Republic of Ethiopia Implementing Agency(ies) Implementing Agency: Ministry of Agriculture V. FOR MORE INFORMATION CONTACT The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects VI. APPROVAL Task Team Leader(s): Abu Yadetta Hateu, Michael Mutemi Munavu Practice Manager (ENR/Social) Iain G. Shuker Cleared on 22-Jul-2021 at 19:13:40 GMT-04:00 Public Disclosure Jul 26, 2021 Page 11 of 11