Documentof The World Bank FOR OFFICIALUSEONLY ReportNo: 44059-MN I PROJECTAPPRAISAL DOCUMENT ONA PROPOSEDCREDITINTHEAMOUNT OF SDR 2.07 MILLION (US3.7 MILLIONEQUIVALENT) AND A PROPOSEDGRANTINTHE AMOUNT OF SDR 1.03 MILLION (US1.3 MILLIONEQUIVALENT) TO MONGOLIA FOR A ENHANCEDJUSTICE SECTOR SERVICESPROJECT June 6,2008 LegalVice Presidency East Asia and Pacific and SouthAsia IT h i s document has a restricted distribution and mav be used bv reckients onlv in theI CURRENCYEQUIVALENTS (ExchangeRateEffectiveMarch2008) CurrencyUnit = MNT MNT 1180 = US$l US$ = SDRl FISCALYEAR January 1 - December31 ABBREVIATIONSAND ACRONYMS CAS Country Assistance Strategy CEA Court EnforcementAgency CQS Consultants' Qualifications DA DesignatedAccounts DANIDA DanishInternationalAid Agency EA EnvironmentalAssessment EGSPRS Economic Growth Supportand PovertyReductionStrategy ERR EconomicRateof Return ESA Environmentaland SocialAssessment FA FinancingAgreement FM FinancialManagement FMR Financial ManagementandReporting F M S FinancialManagement System GCC GeneralCouncil of Courts GDP Gross Domestic Product GOM Governmentof Mongolia GTZ GermanAgency for TechnicalCooperation ICB InternationalCompetitiveBidding ICR ImplementationCompletionReport ICT Information And CommunicationsTechnology IDA InternationalDevelopmentAssociation JA Judicial Archives JICA JapaneseInternationalCooperationAgency LCS Least-CostSelection LIL Learningand InnovationLoan LJRP Legal andJudicial ReformProject LNA LegalNeeds Assessment MIS ManagementInformation System MOJHA Ministry of Justice andHomeAffaires MECS Ministry of Education, Culture and Science MOF Ministry of Finance M&E Monitoring and Evaluation MTR Mid-Term Review NCB National CompetitiveBidding MGO Non-governmentalOrganization NLC National Legal Center PDO ProjectDevelopmentObjective FOR OFFICIAL USEONLY PFMM ProjectFinancial Management Manual PHRD JapanPolicy and HumanResources Development Fund PlU ProjectImplementationUnit PIS Public Information System PM Project Management PSC Project Steering Committee QBS Quality-Based Selection QCBS Quality and Cost Based Selection SA Social Assessment sc SupremeCourt of Mongolia SOE Statementof Expenditures TOR Terms of Reference WA Withdrawal Application UIN UnifiedLegalandJudicialInformation Network UNDP UnitedNations Development Programme USAID U.S. Agency for International Development ~ Vice President: James W. Adams Country Director: DavidR.Dollar Country Program Coordinator Nancy J. Cooke Country Manager Arshad M.Sayed Sr. Country Officer Christopher Finch Sector Manager: Anthony G.Toft Task Team Leader: RobertM.Buergenthal This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. MONGOLIA ENHANCED JUSTICE SECTOR SERVICES PROJECT - MONGOLIA PROJECT DATA SHEET EAST ASIA AND PACIFIC LEGES Date: June 6, 2008 Team Leader: Robert Buergenthal Country Director: DavidR.Dollar Sectors: Law andjustice (100%) Sector ManagedDirector: Anthony G. Toft Themes: Judicial and other disputeresolution mechanisms (P);Other rule of law (S);Legal services (S);Personal and property rights (S) Project ID: P101446 Environmental screening category: Not Required Lending Instrument: Specific Investment Loan Project FinancingData [ ] Loan [XICredit [ ] Grant [ ] Guarantee [XIOther: PHRD Grant For Loans/Credits/Others: Total Bank financing (US$m.): 5.00 Proposedterms: Financing Plan (US$m) Source Local Foreign Total RECIPIENT 1.oo 0.00 1.oo International Development Association 5.00 0.00 5.00 (IDA) JAPAN: Ministry of Finance - PHRD 0.95 0.00 0.95 Grants Total: 6.95 0.00 6.95 ~ _ _ _ _ ~ ~ Borrower: Mongolia Mongolia Responsible Agency: MinistryofJustice andHome AffairdSupremeCourt Mongolia i FY 9 10 11 12 13 Annual 0.50 2.10 2.30 0.70 0.35 Cumulative 0.50 2.60 4.90 5.60 5.95 Re$ PAD IKG. Have these been approved by Bank management? I s approval for any policy exception sought from the Board? [ ]Yes [XINO Does the project include any critical risks rated "substantial" or "high"? Re$ PAD I I AE. [XIYes [ ] N o Does the project meet the Regional criteria for readiness for implementation? Re$ PAD IKG. [XIYes [ ] N o Project development objective Re$ PAD II.C., TechnicalAnnex 3 The project's development objective i s to support Mongolianjustice sector institutions enhance their efficiency, transparency and accountability through capacity improvements. Project description[one-sentence summary of each component] Re$ PAD II.D., Technical Annex 4 Component 1: Enhancing Public Legal Education on the Justice Sector - US$0.5 million (US$250,000 IDA; US$250,000 Japan PHRD Co-financing Grant) The proposed Project will support the development o fcomprehensive legal educationreform program and the implementation o f a national public information strategy. The proposedProject will also support the development o fa special bilingual legal informationprogram for the Kazakh speaking population o fthe BayanUlgiiAimag. Component 2: Increasing Transparency through Improved Access to Legal Information - US$1.4 million (US$1.26m IDA; US$O.15mJapan PHRD Co-financing Grant) The proposed Project will improve access to legal informationby implementingnationaljustice sector information and networking strategies for both the Supreme Court and MOJHA's Court Enforcement Agency. Component 3: EnhancingJudicial Operations, Enforcement and Monitoringo f Court Decisions - US$4.79 million (US$3.34m IDA; US$0.45 mJapan PHRD Co-financing Grant; and US$ 1.OmGoM) The proposed Projectwill strengthen and modernize the Court Enforcement Agency and also contribute to the construction o f a new Supreme Court facility. *. 11 Component 4: Project Management - US$0.25 million (US$O.15m IDA; US$O.10 m Japan PHRD Co-financing Grant) The Project ImplementationUnit(PIU) established under the LJRPwill be strengthened to enable it to ensure quality implementation,management, monitoring and evaluation and supervision of all proposed Project activities under each component. Which safeguard policies are triggered, ifany? Re$ PAD IKF., TechnicalAnnex 10 The Bank's Safeguard Policies on Environmental Assessment (OP 4.01) and Indigenous Peoples (OP 4.10) apply. OP 4.01 i s triggeredsince the Project i s expected to finance the refurbishingo f one buildingand a few new constructions. There will be no land acquisition under this Project. With respect to OP 4.10: IndigenousPeoples, an IndigenousPeoples Plan (IPP) has been drafted to extend basic principles established inthe Legal and Judicial ReformProject through awareness campaigns inthe Kazakh language speakingAimag o f Bayan Ulgii Aimag. A social assessmentand local consultations have beenundertaken, and results indicate that these groups practice economic and social traditions similar to o f the Khalk (Mongolian) majority. Significant, non-standard conditions, if any, for: Re$ PAD III.F. Boardpresentation: NIA Loadcredit effectiveness: Adoption o f a Project Financial Management Manua and financia management system, acceptable to the Association; The recruitment and appointment o fthe PIUProject Coordinator, the Procurement Officer and FinancialManagement Officer, all with qualifications and experience and terms o f reference acceptable to the Association; Completion o f an interim Project baseline survey under terms o f reference acceptable to the Association; Approval o fthe PHRD Grant and the entering into a PHRD Grant Agreement between the Recipient and the Association acting as Administrator o fthe PHRD Grant. Covenants applicable to project implementation: Throughout project implementation, maintain the Project SteeringCommittee established under the LJRPfor general oversight andpolicy coordinationwith Terms o fReference (TORS)and membership satisfactory to the Association; Throughout project implementation, maintain the PIU headedby a Project Coordinator and assigned with competent personnel and consultants inadequate numbers including a procurement and financial management specialists, and other specialists as required, all with qualifications, experience and terms o f reference satisfactory to the Association, and responsible to oversee the day-to-day management and implementation o f all project activities; The Recipient will carry out the Project inaccordance with a Project ImplementationPlanand a Procurement Plan satisfactory to the Associaton; By January 31,2009 establish a selection criteria acceptable to the Association andprovide a list o f Court Enforcement Agency offices whose facilities are proposed to be refurbished or ... 111 constructed under the project; By June 30,2009, complete a Project baseline survey underterms o freference satisfactory to the Association; Followingthe completion of each infrastructure improvement under the project, provide annual budget hnding sufficient to ensure future maintenance costs, operating expenses for new facilities and IT networking systems, and the provision of sufficient personnel to ensure the sustainability o f all capital improvements; Completion o f a mid-term review by June 1,2010, and the implementationo f findings o fthe review, all satisfactory to the Association; Maintain a financial management system satisfactory to the Association; and Annual audits o f Project accounts by an independent auditor acceptable to the Association underterms ofreference approved by the Association. The first audit report to be furnishedto the Association by June 30,2009. I iv MONGOLIA EnhancedJustice Sector Services Project CONTENTS Page I STRATEGICCONTEXTANDRATIONALE . ................................................................. 1 A. Country and sector issues.................................................................................................... 1 B. Rationale for Bank involvement ......................................................................................... 6 C. Higher level objectives to which the project contributes .................................................... 8 I1 . PROJECTDESCRIPTION ............................................................................................. 9 A. Lending instrument ............................................................................................................. 9 B. Lessonslearned and reflectedinthe project design.......................................................... 11 C. Alternatives considered and reasons for rejection ............................................................ 12 111 . IMPLEMENTATION .................................................................................................... 13 A. Partnership arrangements (if applicable) .......................................................................... 13 B. Sustainability..................................................................................................................... 14 C. Critical risks and possible controversial aspects............................................................... 15 D. Loadcredit conditions and covenants............................................................................... 15 IV. APPRAISALSUMMARY ............................................................................................. 17 A. Economic and financial analyses...................................................................................... 17 B. Technical........................................................................................................................... 18 C. Fiduciary ........................................................................................................................... 19 D. Social................................................................................................................................. 20 E. Environment...................................................................................................................... 20 F . Safeguard policies.,........................................................................................................... 21 G. Policy Exceptions and Readiness...................................................................................... 21 Annex 1:Country and Sectoror ProgramBackground ......................................................... 22 Annex 3: ResultsFrameworkandMonitoring ........................................................................ 28 Annex 4: DetailedProjectDescription ...................................................................................... 34 Annex 5: ProjectCosts ............................................................................................................... 41 Annex 6: Implementation Arrangements ................................................................................. 43 Annex 7: Financial Management and DisbursementArrangements ..................................... 44 Annex 8: Procurement Arrangements ...................................................................................... 51 Annex 9: Economic and Financial Analysis ............................................................................. 55 Annex 10: Safeguard Policy Issues ............................................................................................ 58 Annex 11:Project Preparation and Supervision ..................................................................... 61 Annex 12: Documentsinthe Project File ................................................................................. 63 Annex 13: Statement of Loans and Credits .............................................................................. 64 Annex 15: Maps IBRD33449R .................................................................................................. 68 I. STRATEGICCONTEXTANDRATIONALE A. Countryand sector issues 1. JusticeSectorModernizationProgram 1. The modern Mongolianlegal system began to take shape following the dissolution of the Soviet Union in 1990. After amending the constitution in 1990to permit national elections, on January 13, 1992the Parliament o f Mongolia (ZkhHurul) adopted a new constitution. This constitution initiated Mongolia's justice reformmodernization efforts through its boldeffort to undertake a full political and economic transition from a socialist state to one reflecting modem Romano-Germanic legal practices and a market economy. 2. Followingthe adoption of the new constitution, numerous legal acts were promulgated without due regard to legal harmonization, a comprehensive modernizationplan,funding, institutional capacity, or humancapital. As a consequence, the Mongoliangovernment decidedin 1997that amorecomprehensive approach to justice sector reform andmodernizationwas required given that hundreds of laws and administrative regulations had beenpassedor issued since 1992.' Subsequently the Ikh Hural adopted a Legal ReformProgramin 1998 which provided the basic direction of activities to be undertaken to ensure the development of a "humane civil society" through the "creation of the legalbasis andfavorable environment for economic development". 3. Beginning in 1999, with funds from the DanishInternational Development Agency (DANIDA), theWorld Bank supported the preparation of the Mongolia LegalNeeds Assessment (LNA)basedon the premise thatjustice sector reformmustbe designed by the country itself. The LNA reflecteda coordinated effort by a working group comprised of representatives from Mongolia's executive, legislative, judiciary branchesand civil society to assess the needs for justice sector reform inMongolia. Six specific areas were identifiedby the working group to achieve the Plan's objectives in a coordinated andeffectivemanner: 0 Legislative drafting: development and coordination; Judicial and criminaljustice reform; Legalprofession: improvement of legal education andbar development; 0 Legal scholarship: development of materials andresearch databases; 0 Public awareness: dissemination of legal information; Coordination andharmonizationof Internationaltreaties. 4. Based on the LNA, the UnitedStates Agency The Justice Sector Strategic Plan adopted by Parliament on May 4, 2004 for InternationalDevelopment (USAID) assistedthe (Resolution No. 2000/39) stressed six core Mongolian Government to prepare a "Justice System values for development: Strategic Plan" which was subsequentlyadopted by Independence the Mongolian Parliament on May 4,2000 (Resolution Accountability 2000/39). This Planoutlined thirty key principles and Responsiveness contained 103 different tasks assigned to different Fairness institutions comprising thejustice sector to support Accessibility andstrengthenan independentjudiciary as part of Effectiveness Mongolia's development strategy to implement I t i s estimated that over 400 laws and 3000 administrative regulationshave been passedor issued since 1992. 1 comprehensive political, legal and economic reforms. The Planalso fostered the political, economic and decision-making independenceof thejudiciary as afundamental value by providingfor the establishment of an oversight mechanismon wrongful decisions madeby the executive through the creation of a court specializing inthe adjudication of administrative cases. To enhance accessibility to, and transparency of, thejustice system; the Planalso focused on the need to improve interaction with the public. Legal education, awarenesscampaigns andthe legalprofession are also discussedas strategic principles to ensure effectiveness, transparency and good governance inthejustice system. 5. The MongolianMinistry of Justice and Home Affairs (MOJHA) andthejudiciary have led efforts to meet the Strategic Plan's objective with assistance from several donors including the World Bank,United States Agency for InternationalDevelopment (USAID), United NationsDevelopment Programme (UNDP), Japanese InternationalCooperation Agency (JICA), German Agency for Technical Cooperation (GTZ), and internationalNGOs including Hanns-Seidel Foundation, Open Society, andthe Asia Foundation. 6. The implementationof this Strategic Planwas reviewedby MOJHA in September2006 to determine those tasks that were completed and those that were not. The Ministry concluded that sixty tasks were "completed", seventeen tasks "mostly completed" and that twenty-six tasks had "no result". Some of the tasks successfully completed include the creation of the administrative court system, enhancing the capacity of the General Council of Courts (GCC), establishing the National Legal Center (NLC), the adoption of a outcome-basedbudget management, the implementationof case management software, the establishment of a Judicial Disciplinary Committee, and the creation of a Special InvestigativeUnitto investigate corruption allegations againstjustice sector officials. The review also cited public perception studies which identified the highcost ofjustice, poor accessibility to thejustice system, andperceived favoritism by thejustice sector of companies andthose with political power. Respondentsto these studies also identifiedthe slow pace ofjustice, complexity of laws and time- consuming court proceedings as elements of the "high cost ofjustice." Similarly aWorld Bankreport' also found that civil society leadersperceive low levels of professionalism and a lack of transparency within thejustice sector. Inkeepingwith its own practice of setting goals and tasks to address the weaknesses of thejustice sector, the Ministry's review exercise identified 21development objectives. Includedinthis list are: Introductionof best managementtools and processes; Improvementof case flow management; To further strengthenthe Judicial Disciplinary Committee and ethics rules; To improve the use of court statistics andrecords management; To strengthen the NLC as an effective institution for continuing legal education; To further strengthenlaw school programs; To strengthencommunication with the public; To strengthenthe capacity of courts andotherjustice sector agencies. 7. MOJHA established a separate independent working group to evaluate the impact of World BankLegalandJudicial ReformProject (LJRP)(Cr 3595-MOG) and offer recommendations for future assistancein2007. The working group commented on the importance of comprehensive public and legal education and the needto continue to improve boththe IT andphysical infrastructures of the Supreme Court and the Court Enforcement Agency. Concurrently in2007, the Zkh Hural also completed the preparation of a "Millennium DevelopmentGoals-Based National Development Strategy" (NDS) in which the concepts of law, justice andhumanrightsfigure prominently. Most notably the NDS lists The EnablingEnvironmentfor SocialAccountability inMongolia (Report No.32584-MN, July 29,2006) 2 strengtheninggovernment institutions andimproving the legal environment to ensure transparency and accessibility of public services. Inresponseto bothinitiatives, the justice sector will soon initiate activities under the leadership of MOJHA to prepare a new Strategic Planfor the years 2009-2012 in order to meet all new proposed development actions and effectively channel and coordinate new donor activities. 2. RemainingModernizationChallenges 8. Mongolia has made great strides modernizingitsjustice sector. According to a recent comprehensive governance background note3regardingpolitical and civil freedoms and constraints on the executive, governance inMongolia was found to be better than incomparator countries. Nevertheless, in order to meet its own operational goals and address increasingpublic expectations and a negative public perception ofjustice, MOJHA has identified several critical areas which require increased attention and rapid action. (a) Strengtheningeducation and training of the general public, students andjustice sectorprofess wnals. 9. Through the World Bank's LJRP, Mongolia established the NationalLegalCenter (NLC). The Center's mandatei s to contribute to the development of a new legal framework, conduct researchon justice sector institutions, to support the systematization andharmonizationof laws, and to conduct professional trainingfor legalprofessionals, civil servants andmembers of civil society. To assist the NLC inmeetingits mandate, several donors, including the World Bank, have been working to develop pilot programs to determine the best way to supportjustice sector education. At all levels, Mongolian education institutions are able to provide only limitedprograms to strengthen knowledge and capacity with respect to the new legal system, citizens' rights, and professional obligations. 10. In2005, the government of Mongolia approved a "Master Education Planfor 2006 through 2015". As a first step, the government recently initiated a new twelve year educational system in accordance with internationalpractices. The Master Education Planseeks to improve educational programs not only for students, but also for adults through bothformal and non-formal education. This Planis viewed widely as awelcome step inorder to improve instructor qualifications, the quality andthe content of course curricula, and to strengthen teaching methodologies. 11. Under the LJRP, pilot activities were financed inthree law schools of Otgontenger University, ShikhihutugUniversity andNational University Law School to improve course curricula, textbooks, and teacher trainingmaterials. One hundred-twenty legal and academic expertsjointly prepared a total of 31 syllabi and 14coursebooks and instructor manuals in an effort to encourage not only academic involvement inthe draftingprocess, but also demonstrate the value of contemporary training materials andtechniques. Other donors--such as USAID--have also beeninvolved in the development of clinical programs in order to further enrich practical trainingprovided to law students. The remainingsixteen law schools were only able to participate informally inthis processthrough the provision of comments on working drafts of syllabi. (b) Increasingaccess to laws and legal information 12. Justice Sector investments ininformation and communications technology (ICT) has a lasting impact on the manner inwhich courts andother justice sector agencies interact with the citizens they serve. ICT systemsfacilitate the publication of accurate and extensive information on court decisions and OverseasDevelopmentInstitute 2008 (workingdraft) 3 operations; create a common and searchableelectronic knowledgebase for judges; andprotect the integrity ofjustice sector processes andrecords, among other things. While achieving these goals requires commitment andactions by thejustice sector to modify internal processes andpolicies, ICT investments significantly simplifyand ease the processby which this information i s madeavailable inthe future. These ICT investments inthejustice sector are consistent with Mongolia's "Vision until2010 for the ICT sector of Mongolia" passedby Parliament inFebruary 2000. The objective of this Vision is to "build a community basedon knowledge and mentalcapacity and improve the living standards of the people." 13. National laws are officially promulgated by the Mongolian Parliament andbecome effective ten days after its publication unlessprovided otherwise. Distribution methods include use of the national mediaincluding print,radio andtelevision and the State BulletinTorriin Medeelel. With World Bank assistance, MOJHA, through the NLC, establishedthe UnifiedLegal andJudicial Information Network (UIN).The UINis comprisedof two separatewebsites.The first website, Legalinfo (www.legalinfo.mn) contains information on the legalframework of Mongolia including laws, presidential decrees, and resolutions of parliament, ministerialorders, administrative resolutions and local Aimag4 resolutions, internationaltreaties, and commentaries written by Supreme Courtjustices. It also permits users to conduct content-sensitive searches. The secondwebsite, Judgeinfo (www.judgeinfo.mn), maintainedby the General Council of Courts (GCC), andbasedon information provided by the case management software financed by USAID, provides basic information such as thejudicial structure, location of courts andbriefs about individual courts as well as the GCC, Judicial Disciplinary Committee, Judicial Professional Committee and the Supreme Court ResearchCenter. The website also contains GCC decisions and resolutions, SupremeCourt commentaries and decisions, detailed information for the public such as requirements and templates for filing petitions and claims, a detaileddescription of stamp fees and weekly trial schedules. More importantly, Judgeinfo allows the public to searcha database of criminal, civil and administrative cases. 14. The World Bank has also assistedMOJHA implement the Standardization of Public Administrative Regulations Project with financing provided by an Institutional Development Fundgrant.5 Under this project the Ministry has collected, reviewed andharmonized public administrative regulations issued by government ministries and agenciesandposted 829 valid andregisteredregulations on the UIN inanewly createddatabase. The grant hasalsoprovided technical assistanceto aworking group to develop a more transparent and effective regulatoryframework for administrative regulations; and in carrying out apublic awareness campaign to improve access to the new administrative regulations framework. 15. The Court Enforcement Agency andthejudiciary bothlack a comprehensive information managementsystem to track all archives andrecords, as well as, the ability to produce necessary managementinformation inorder to ensurethe availability of information and to informjustice sector users and the general public. Each court maintains its own records andfiling system. In accordancewith a law passedinJanuary 2008, all civil court records datedprior to 2007 should be transferred to the SupremeCourt archives and courts should only maintainrecords for the 2008 calendar year. Inthe future, records are to be transferred every calendar year to the SupremeCourt archives. However, currently there i s little space inthe Supreme Court archives and no capacity to absorb the volume of records requiredby law to be transferred. Court Enforcement Agency officials manually record statistics of the number of cases received from claimants and the total amount of awards enforced. At present, the information systemmaintained by the Court Enforcement Agency uses rudimentary software without the benefit of a centralized and sharedinformation network. As such, despite the existence of Judgeinfo neither the Mongoliais comprisedof 21 Provinces(Aimags). TF 056065 was approvedonNovember30,2005 for US$295,000. The Grantis scheduledto closeJanuary 2009. 4 judiciary nor the Court Enforcement Agency can review the performance of its institutions inreal time nor can they improve oversight andplanning. (c) Improving theresponsivenessand service delivery of thejustice sector 16. One of the key functions of the rule of law i s to maintain order and to coordinate behavior and transactions among citizens. This goal i s achieved by enhancing the certainty andpredictability between citizens andbetween citizens and government. Economic development i s greatly facilitated by certainty andpredictability becausemarkets benefit from the rule of law inpredictable contracts andthe protection of property. When laws or justice sector institutions become inefficient, unreliable and expensive, then economic development and commercial transactions are negatively affected and citizens and economic entities will resort to other dispute resolution techniques. A strongjustice sector requires, at a minimum, appropriate facilities, trained staff, and access to complete and current legal information.6 An effective justice sector andrule of law also requires effective andconsistent enforcement for all citizens. The Investment Climate Assessment and Trade Integration Study 20077 noted that firms that resort to courts to resolve disputes consider the courts to be serious impediments to doing business inMongolia. 17. InMongolia, thejudiciary issuesjudgments while enforcement istheresponsibilityofthe executive branch through MOJHA andits specialized Court Enforcement Agency. The buildinghousing the SupremeCourt since 1996was originally constructed as an office building. Although the LJRP funded the renovationof one floor, and the Supreme Court subsequentlyrenovated two additional floors from its own budget, the buildingremains inadequate and still has numerous deficiencies. Similarly, the condition of most regionalfacilities housingthe Court Enforcement Agency detracts significantly from their ability to function effectively. 18. In2005-2006 theCourtEnforcementAgency enforcedciviljudgments totaling approximately U S S O million dollars. In2007, the combined civil, criminal and administrative caseloadtotaled 51,154. Of this total, the Court Enforcement Agency received25,134 civiljudgments but only enforced 12,581 of these, meeting only 50 percent of its caseload. It i s important to note that included inthis caseloadare a highpercentageof particularly complex economic, child support, andpaternity judgments. Statistics collected offer evidence of the propensity of the Court Enforcement Agency to enforce only the highest andmost visiblejudgments. This is inlarge measuredue to a lack of humanandinstitutionalresourcesor effective tools to meet their mandate.InBulgan Aimag, for example, five court enforcement agents serve a populationof 61,085 and an area of 48,700 km2.In2007, these agents were asked to enforce 599 civil judgments usingonly public transportation without any IT support or modern communicationtools. 19. The facilities of the Court Enforcement Agency lack adequatespace for either staff or system users. They are generally unsuitable to store case files or records; are inappropriate to house and properly auction confiscated items, are inlocations not easily accessibleto the public; have unsafe and unhealthy working conditions; and cannot support the information and technology equipment requiredto create a national communicationnetwork. Of the twenty-five current Court Enforcement Agency facilities, MOJHA has identified fourteen offices that are locatedin"condemned" buildingsinneed of urgent upgrades. See generally, B. Tamanaha, (2007). A Concise Guide to theRule of Law. St John's University School of Law. http://ssm.com/abstract=1012O5 1 World Bank (2007): Promoting Investmentand Job Creation: an Investment Climateand TradeIntegration Study. Report. No. 41036. 5 B. Rationale for Bank involvement 20. Mongolia's economy has grown rapidly inrecent years driven by the miningand commodities sector. The growth inthis sector presentsboth an opportunity andrisk.Inorder to mitigate the potential negative affects of a "natural resource curse" and address potential rent seeking activities, the legal and regulatory framework for the efficient administration of these sectors requires highly skilled and professional administrative andjustice sector institutions.8 New administrative courts have contributed to administrative enforcement and access to information9; however thejustice sector faces considerable deficiencies ineffectiveness, transparency and good governance. Public trust inthe judiciary, while improving, still lags behind other public sector institutions. Transparency of court decisions through public disclosure has only partly improvedthroughthe publicationof Supreme Court decisions. The Government of Mongolia i s cognizant of the urgent need to enhancepublic awarenessand legal education, strengthen and modernize itsjustice sector, and foster transparency and good governance throughout the sector. 21. Since 2001, MOJHA and thejudiciary have been implementing the LJW, a Learning and InnovationCredit (LIL),to assist the Mongolianjustice sector protect the rights of individuals and improve transparency ingovernment decisions. The project development objective of the LJRP was to enhancepublic trust and confidence inthe legal system as a whole, andthejudiciary inparticular, through the design and testing of new tools and systems that promote better access to legalinformation, the creation of specialized courts and an improved legal education andprofession. It was designedto build the capacity of the Mongolianjustice sector, pilot new initiatives, buildconsensusamong stakeholders, andpermit the government to evaluate future options to mainstreamthe learningandresults of the project. Under the project Mongolia established an Administrative Court system to enable citizens a prompt and effective way to redressunfair administrative actions taken by executive branch agencies; supported improved transparency and good governanceby providing public access to legislation and SupremeCourt decisions via the UINmanagedby the NLC; provided advancedlegal researchfor representativesfrom throughout the justice sector and coordinationand effective legal training for lawyers, judges and the general public by consolidating these activities inthe newly established NLC; and worked to begin improving legal education by preparingand applying standardmodem law school syllabi and teaching techniques on apilot basis intwo private and onepublic law school inthe Mongolian capital, Ulaanbaatar. 22. Although case management at the Aimag court level has improved though limited IT links, there are no direct links betweenregional Aimag courts or between these courts and the SupremeCourt. Court archives areneither centralized nor readily available to the public. While the Mongolianjudiciary has madegreat strides inrecent years, judicial administrative skills and specialized knowledge i s unevenly developed. Inthe area of environmental protection and enforcement, for example, judges lack adequate knowledge andcapacity to meet national and internationalstandards.10Facilities and technical capacity remains low and inneed of further modernizationand integrationwith the Supreme Court and GCC. By the same token, the Court Enforcement Agency under MOJHA must be modernized to meet its institutional objectives andto contribute to enhancing public trust in thejustice sector. See generally, Mongolia Quarterly, the World Bank, February, 2008. See also, (UNDP 2005)Economicand Ecological Vulnerabilities and Human Security in Mongolia. See generally, M.Russell-Einhorn,J. Lubbersand V. Milor, (2002) StrengtheningAccess to Information and Public Participation in Transition Countries-LatviaAs A Case Study in Administrative Law Reform. loSee Mongolia, SilentSteppe: TheIllegal Wildlife Trade Crisis,July 2006. See alsoMongolia Room to Roam? The Threatto Khulan (WildAss)from Human Intrusion, September 2006. http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES~ASTASIAPACI~CEXT~ONGOLIAEXTN/O,,c ontentMDK:21173187-pagePK:141137-piPK: 141127-theSitePK:327708,OO.html 6 23. Despite the progress achieved through the LJRP, Mongolia's justice sector faces several challenges. The poor, rural, and vulnerable find thejustice systemdifficult to understand and access. As indicatedinthe Mongolia Poverty Assessment11, strengthening institutions, improving implementation, encouraging greater efficacy and improving transparencyremain crucial for the Mongolianpublic and justice sectors. Moreover, the poor, particularly inrural areas, lack sufficient knowledge to access court services. Although arecent survey demonstratedthat full automation of the Mongolia's courts, random case assignments andpublic terminals have halvedthe number of Mongolians who believe that courts are corrupt12; public opinion towards thejudiciary remains relatively unfavorable despite efforts to improve user services and address incidences of corruption. A greater focus on improvingpublic understanding of thejustice sector i s a statedpriority of the current government as a means to promote greater transparency and improve service and accountability to alljustice sectors users. 24. Public awareness of thejudicial systemandnew legalinformation tools also remains low. As a result, public legal education i s paramount to improve good governance inMongolia. Recent surveys supported by USAIDand the Asia Foundation13 report a widespread lack of public understandingof Mongolia's new legal systemand the role of both thejudiciary and executive inthe administration of justice. A World Bank project impact assessment of the LJRP also suggests that the public andjustice sector would benefit greatly from targeted legal education programs designed to provide both general and specific information at all levels of the educational cycle including continuing legal and professional education. 25. Duringaconsultative processledby MOJHA in2007, the Mongoliangovernment formally reviewedthe impact of the LJRP with key stakeholder agencies, thejudiciary, legal professionals, and civil society representativesawarding it a score of 98.32% of 100%.The greatest impact identified was the Bank's support for buildingacrucial court infrastructure to support the creation of anew administrative court system and buildthe NationalLegal Center. Inreviewing lessonslearned, participants also reaffirmedtheir commitment tojustice sector reformwhile also stressing the needto further expand and enhance the application of tools to provide access to legal information; mainstream the mechanisms and processesto empower citizens; enhance and strengthen enforcement ofjudicial decisions; foster public legal education; and ensurethat gains are sustainable. The World Bank also undertook its own review of the lessons learned and impact evaluation of the activities under the LJRP project. The findings are set forth inthe Report on the Impact EvaluationStudy of Legal and Judicial ReformProject, December 2007. The Report's findings were discussed with Justice Sector institutions in meetings held in Ulaanbaatar inFebruary-March2008, and this exchange further assisted inthe design and definition of the proposed Project's objectives andcomponents. Basedupon these two processes, the proposed Project reflects a sharedvision of the executive, judiciary and civil society; buildsupon the lessonslearned duringthe LJRP; and scales-upthose activities identified duringimplementation as essentialfor the efficient administration of thejustice sector. While the greater balance of the Project focuses on crucial infrastructure which bothMOJHA's consultative process and the Bank's independent impact review identified as the Bank's value added and comparative advantage, the Project also supports activities that complement other donor and NGO programs to strengthen thejustice sector. 26. The Government of Mongolia and the World Bank have had a longengagement on issues relating to good governance and thejustice sector. The objective of the Governance Assistance Project (Grant No. H222-MOG) i s to assist the government by (i) improving the efficiency and effectiveness of governanceprocessesinthe managementof public finances, (ii) promoting transparency and Report 35660-MN, April 13,2006. l2Transparency International, (2007) Global Corruption Report, 2007. p xi. l3For further information see: Mongolia: Trends in Corruption 2008.The Asia Foundation; and (mimeo) Trend Lines in Public Perception of Judicial SystemAdministration in Mongolia, Sant Maral, 2007. 7 accountability inthe performance of public sector function; and (iii) the investment climate in fostering Mongolia. The LJRPhas produced positive results instrengthening thejustice sector through innovative approachesthat promote transparency, good governance, the protectionof citizens' rights, and the modernizationof the legaleducation for future generations of lawyers andjudges inMongolia. Through its support of the proposed Project, the World Bank i s uniquely placed to assist the Government of Mongolia inits efforts to buildupon and institutionalize the lessonsof the LJRP, as well as ensure that linkages are strengthenedwith the complementary activities of other international organizations, donors andcivil society. C. Higher levelobjectives to which the project contributes 27. The LJRP was specifically designed to buildthe capacity of the Mongolianjustice sector, pilot new initiatives, buildconsensus among stakeholders, andpermit the government to evaluate future options for a new project to mainstreamthe learningandresults of the project. As such, the 2005 IDA ProgressReport of the EGSPRS(Report No. 33580, September 19,2005) identifies governance and legal reforms as a continuingkey development focus for Mongolia. 28. The EGSPRSnotes that the implementationof the administrative court system was a positive step taken to address perceptions of corruption inthe government and current surveys demonstrate that the public perceives these courts to be fast and effective meansto obtain redress from government actions andto combat corruption. Moreover, working with thejudicialbranch, MOJHA, academia and civil society, the LJRP has focused on transparency inthe sector andempoweringthe citizens of Mongolia by providing access to legal information through the UIN. 29. The proposedProjectwill scale-upthe mainactivitiesof the LJRPto enhancethe pilot activities which have demonstratedpositive results, andto introduce complementary activities reflectinglessons learned concerning the entire justice sector. The proposed Project will also enhance public legal education by supportingcomprehensive legaleducation reform andthe development of a nationalpublic information strategy in coordination with other international organizations and NGOs. Additionally, the Project will strengthenthe capacity of thejudiciary, by working through the Supreme Court and GCC, andthe executive branch, through MOJHA andits specialized agencies, to enhance their individual and complementary mandates under the 1992Constitution. 30. The proposed Project will also work to improve the transparency andefficiency ofjustice sector institutions by improving transparency through increased access to legalinformation andby improvements to judicial operations and the enforcement and monitoring of court decisions. The Project i s fully consistent with the goveinment strategy for thejustice sector and with the World Bank's Mongolia 2004 Country Assistance Strategy (CAS) and the forthcoming Country Partnership Strategy (2009). Lastly, the proposed Project will support the implementationof the IkhHural's 2007 "Millennium Development Goals-BasedNational DevelopmentStrategy" inwhich the concepts of law, justice andhumanrightsfigure prominently. The proposed Project will assist inthis sharedobjective by supporting the Strategy's goals of strengthening government institutions and improving the legal environment to ensuretransparency and accessibility of public services. 8 11. PROJECTDESCRIPTION A. Lendinginstrument 31. The proposed Project will bejointly financed by a Special Investment Credit and Grantfrom IDA and aproposedco financing Grant from the JapanPolicy and HumanResourcesDevelopment Fund (PHRD). Counterpart funds will include government funds. B. Project development objective andkey indicators 32. The project's development objective is to enhance the efficiency, transparency and accountability ofjustice sector institutions. The following areas will be supported under the proposed Project: (i)Enhancing public legal education on thejustice sector; (ii) Increasing transparency through improved access to legal information; and (iii) Enhancingjudicial operations, enforcement and monitoring of court decisions. The key indicators which will be usedto measure success are: (i) Information on enforcement of court decisions is available and sharedbetween the Court Enforcement Agency and the General Council of Courts; (ii) Discrepancies between statistical informationprovided by Court Enforcement Agency and General Council of Courts i s shared andreduced; (iii) Improvement in level of court decisions enforced. C. Projectcomponents Component 1:EnhancingPublicLegalEducationonthe JusticeSector US$0.5 million - 33. (US$250,000 IDA; US$250,000 JapanPHRD Co-financing Grant) 34. The proposed Project will support the development of comprehensive legal education reform programand the implementationof a national public information strategy to complement the work of other donors and NGOs. These programs will provide general information concerning recent developments inthe Mongolianjustice sector. Additionally, this component will highlight the new practicalinformationandpublic resources available for consultation to encourageimproved knowledge and more widespread use of these new tools. 35. Early indications from an impact assessment carried out under the LJRP are that the Mongolian public would benefit greatly from additional general and targeted legal education programs. Other surveys andresearchdemonstratethat the public lacks basic knowledgewith respectto Mongolia's new legal systemand the role ofjustice sector institutions within boththejudiciary andexecutive. Such misinformation leads to negative perceptions and limited use ofjustice sector institutions to prevent and solve disputes. Given the rapid proliferation of privatelaw schools andthe absence of a comprehensive regulationand quality control strategy for the legal education system, discussions were held with the Legal Standing Committee of Parliament, the SupremeCourt, the GCC, the Ministryof Justice and Home Affairs, a law school working group, and with representatives of civil society to determine how the proposed Bank project could best support new efforts to create andreform national legal education standards, certification programs and licensingpractices. 36. The proposedProject will also support the development andimplementationof a special bilingual legalinformationprogramfor the Kazakh speaking population of the Bayan-Ulgii Aimag. 9 Component2: IncreasingTransparencythroughImprovedAccessto LegalInformation US$1.4 - million (US$1.26m IDA; US$O.lSmJapan PHRD Co-financing Grant) 37. The proposed Project will improve access to legalinformationby implementingnationaljustice sector information and networkingstrategiesfor both the Supreme Court andMOJHA's Court Enforcement Agency. 38. Regional Aimag courts and court enforcement offices are not connected ina single ITnetwork to the SupremeCourt or MOJHA; nor are they connectedto each other. As aresult,there i s little information sharing or knowledgeacquisitionbetween Mongolianjustice sector institutions or with the public. Through the LJRP, Mongolians, for the first time, gained the ability to fully access laws, administrative regulations, SupremeCourt decisions andConstitutionalCourt decisions through the UIN. This new access to information is an importantbut only partial step given that regional courts andcourt enforcement agency offices lack the requiredIT infrastructure to easily access these tools. Specific project activities under this component will include developing ajoint nationaljustice sector information strategy to improve information sharingbetween thejudiciary andthe Ministry of Justice. It will also define ways inwhich relevant information will be sharedamongstjustice sector institutions and with the general public. The proposed Project will also provide improved IT networking and capacity buildingfor thejudiciary andMOJHA to enablebothjustice sector institutions to better utilize new technologies. Additionally, the proposed project will support thejudiciary's efforts to complete its national case managementintegrationby automating and linkingall of Mongolia's regional Aimag courts with the Supreme Court, ensuring more efficient planningandmonitoring systems, providingjudges with access to judicial decisions, and bolsteringtransparency and good governance. 39. Oldjudicial andenforcement casefile archives are currently housed inregional courts rather than centralized inthe SupremeCourt as stipulated by law andinternationalstandards. As such, they cannot be followed, easily inspected or transparency ensured. Court statistics are currently compiled by the GCC, but are not readily accessibleto the public or available on a real-time basis tojustice sector institutionsfor planning and oversight purposes. Moreover, the Court Enforcement Agency of MOJHA has no centralized computer database which would allow the Agency or the public to monitor court enforcement andrelated activities. The proposed Project will establish a centraljudicial archive and public information systemby providing ITequipment and improving management capacity. Component3: EnhancingJudicial Operations,Enforcementand Monitoringof Court Decisions - US$4.79 million (US$3.34m IDA: US$0.45m Japan PHRD Co-financing Grant; and US$l.Om GoM) 40. The transparent, effective andprompt enforcement of courtjudgments contributes to improved public trust ofjustice sector institutions. Efficient monitoring and enforcement of courtjudgments i s also crucial for the effective administrationofjustice, the certainty of contractual obligations, and the protectionof vulnerable populations including poor women and children. 41. The proposed Project will strengthen andmodernize the Court Enforcement Agency. Although partially self-financed, many regional offices of the Agency are inextremely poor physical condition and lack the most basic operational tools. Furthermore, given the absence of a modem IT infrastructure, the Agency maintains only manual processes andpaper documentation. It has no formal databases, systems, or processes to respond to effectively enforce alljudgments or address complaints concerning enforcement. This component would provide financing for site surveys and the refurbishment or construction of select ruralAimag Court Enforcement Agency offices. Additionally, the proposed Project will support the creation of a nationwideIT network to assistthe Agency to effectively document, enforce 10 andmonitor court decisions andprovideadequateandmodem tools andequipment to be able to implement its mandate. Lastly, the Project will include training for Court Enforcement Agency staff on the new systems and tools, as well as, additional topics developed following the conduct of a study conducted under the Project to identify methodologies to improvepractices andprocedures to be carried out under the Project. 42. To contribute to improved transparency and respect for thejudiciary, the Project will also contribute to the construction of anew SupremeCourt facility. The current buildinghousing the Supreme Court since 1996was constructed as an office buildingand while partially renovated remains inadequate. Current deficiencies include a shortage of court rooms and court space; and no IT network with regional courts, inadequate public access to the review of court records: andno ability to exhibitjustice sector information. The proposed Project will assist the SupremeCourt achieve international standardsand best practices by not only improving facilities andIT infrastructure, but also through improvements to public information services, the creation of a national court archive, and the enhancement of strategic planning andadministrative oversight. These improvements to the court facilities will improvenot only the efficiency of court operations, but also the transparency and accessibility of the public to improved services. Component4: ProjectManagement US$0.25 million - (US$O.15mIDA; US$O.10m Japan PHRD Co-financing Grant) 43. Under this component the Proposed Project ImplementationUnit (PIU) established under the LJRP will be strengthenedto enable it to ensure quality implementation, management, monitoring and supervision of all proposed Project activities under each component. Specialized consultants will be selected inorder to provide the requiredexpertise, support, andmanagedof proposed Project activities. The PIUwill also managemonitoring and evaluation activities including the preparation and distribution of both an interim and full baseline survey. The Project's financial audit will also be contracted under this component. The PIUwill be housed inMOJHA. D. Lessonslearned andreflectedinthe projectdesign 44. The World Bankwas one of the first internationalorganizations to support Mongolia's efforts to modernize itsjustice sector. As a result, the World Bankhas learned many lessonsinMongolia with respectto working onjustice sector reform that have influenced not only the selection of activities to be supported under this project, but also their sequencing, implementation andmonitoring. The following points illustrate how lessonslearned from the LJRPhave been taken into consideration inthe development of this new Project: Proactive and robust public information dissemination campaigns carried out in both urban and rural Mongolia are crucial to achieving all project goals and also improving public knowledge, perception and increasing public utilization of Mongolia's justice sector. For this reason, public dissemination campaigns are central project components: 0 The Banks assistance has demonstrated that offering a combination of professional judicial training and infrastructure enhancement can, in a relatively short period of time, provide a viable foundation for the physical and human capacity of the justice sector. It i s on this foundation that the new project builds, utilizing models of training and civil work procurement derived from the LegalandJudicial ReformProject; 11 The efficiency of justice sector service delivery requires consistent service standards in enforcement supported by administrative arrangements such as readily available transportation, vehicles, andmodern communicationequipment; The use of a LIL-supported pilot project to identify the most effective techniques to improve legal education in Mongolia demonstrated the importance of a cross sector participatory approach as the best means to develop a legal education curriculum which approachedinternational standards. It will be important to evaluate the early application of the new pilot curricula and then to scale upthe successfulresults of the pilot under Project Component One; and The project demonstrated the importance of working with an effective Mongolian cross-ministry advisory group with the specific task of providing policy guidance and project oversight and another specifically focusing on the content, direction and evaluation of the education materials developed under the project. The proposed Project will increasethe oversight and contributions of the Project Steering Committee established under the LJRP through enhanced membership, regular meetings andthe distribution of formal meeting minutes. E. Alternativesconsidered andreasons for rejection 45. Given the broad scope of the requestsfor justice sector assistance, the project team evaluated the results of the LJRP LILprior to the preparation of this proposed Project and engaged inextensive consultations withjustice sector representatives, government officials, internationaldonors, and civil society. This researchled the team to consider andreject two programmatic alternatives: (i) a central focus on public legal education and (ii) exclusive support for the Court Enforcement Agency. 46. A central focus on legaleducation was rejectedgiven the nature andextent of the work being undertaken by other internationaldonors and civil society, as well as careful consideration of the Bank`s comparative advantages. Following these consultations and discussions, the project team remains convinced that legal education, while crucial inMongolia, should be viewed inthe context of both local andinternationalefforts. Currently, several donors andNGOs are providinggeneral andtargeted legal education programs. However, no donor i s able or prepared to support bothcomprehensive reform of legal education and a targetednationalpublic information strategy. Given the extent of current and planned training activities, it was decided that the Bank would be best suited to scale-up its pilot law school programand to facilitate comprehensive legal education reform. Interms of a national public information strategy, the Bank's experience providingtargeted programs to support the development of the administrative court systemhas provided valuable experience which will allow a better use of resourcesand tested methodologies to complement the work of other institutions. For this reason, the team decided that it should focus on specific knowledge areas, vulnerable populations and skills development to support the efficiency and transparency ofjustice sector institutions and consistent with the Project's development objective under Project Component One. 47. Providing exclusive support to the Court Enforcement Agency was strongly considered by the Bankproject team due to limitedresources.Given the focus of the LJRPon thejudiciary, the Bankteam weighed the importance of enforcement in developing an efficient andrespectedjustice sector against the relative strength of thejudiciary. However, following researchconducted by several subject-matter consultants, the team recognized that increasingtransparency and improvingjustice sector operations would require assistance to boththejudiciary and the Court Enforcement Agency inorder to achieve project objectives. Although this decision required that difficult choices be made with respect to providing support for infrastructure improvements to regional Court Enforcement Agency offices, it was recognized that apoor communicationandinformation infrastructure currently negatively hinders both thejudiciary and Court Enforcement Agency. Moreover, due to its central role inthe administration, 12 management, and training ofjudicial sector staff, the absence of a Supreme Court facility able to meet bothlocal and internationalstandards concerning the transparentmanagementof information, archives andrealtime statistics has strongly andnegatively affectedpublic confidence in, anduse of, the formal judicial system. As aresult, the team concluded that enhancingjudicial operations andimprovingthe enforcement of court decisions would be mutually reinforcing and abalanced approachwould more likely achieve project objectives. 111. IMPLEMENTATION A. Partnershiparrangements(ifapplicable) 48. The proposed IDA Project, pendingapproval of aJapanesePHRD, will be complemented with additionalfunds under a Co-financing Grant. Government counterpart funds will include the provision of land, staff time, and office support for the PIU. 49. Duringprojectpreparation, discussions were heldwith other relevant donor agencies andcivil society representativesto ensure consistency with their programs and identify areas for long-term collaboration. It was agreedthat uponproject effectiveness, and thereafter on an annual basis, the World Bankwill host aninternational donors andcivil society meetinginorder to determine the development of mutually reinforcing activities for the Mongolianjustice sector. Inthe area of legal education, the PIU will involve local NGOs currently providing legal education programs inan education working group. With respectto the design of ITnetworking and software, the project team has consulted bothUSAIDand GTZwhich has worked inthis field with thejustice sector to ensure the compatibility of plans andthat the design of future programs ensuresnot only compatibility but also its expansion. B. Institutionalandimplementationarrangements 50. The overall implementationstructure utilized under the LJRPremains appropriate. In discussions with alljustice sector institutions, it was determined that MOJHA i s best able to provide both physical andlogistical support to the PIU.To further enhance activity coordination and sequencing, the PIUwill be overseenby a Project Steering Committee (PSC). 51. ThePSC will focus exclusively onproviding overall guidance, support andcoordinationfor effective project implementation. The membership of the Steering Committee will be comprised of representativesfrom MOJHA; Supreme Court; General Council of Courts; the Ministryof Finance; the Ministry of Education, Culture and Science; Court Enforcement Agency; and the National Legal Center. Additional members may be added at the request of amajority of PSC members. The PSC will operate under formal terms of reference (TORS)acceptableto the Association, and the PIUProject coordinator will serve as the PSC Secretary. It i s also proposed that the PSC meet at least twice a year for formal PIU briefings and that a special meetingcould be held following requestsby any Committee member. Meeting minutes will beprepared by the ProjectCoordinator and shared with all participating members and the Association. 52. The PIUwill manage the day-to-day management and implementation of all project activities, including the preparation of annualproject implementationplans, progress reports, annual financial managementreports, project completion reports, monitoring and evaluation reports. The PIUwill also overseeproject implementationincluding all financial management, procurement, disbursement, organizational, public information dissemination, and training activities. 13 C. Monitoringand evaluation of outcomeshesults 53. Project monitoring and evaluation will be overseenby a Project Steering Committee (PSC) with assistance from the Ministry of Justice and Home Affairs (MOJHA) andthe General Council of Courts (GCC). 54. The PIUwill be responsible for the conduct of bothan initial project baseline prior to effectiveness and a subsequentfull baselineby no later than September 30,2009 all under terms of reference satisfactory to the Association. This approach will permit the collection of existing statistical data and also the conduct of new researchto ensurethat a comprehensive monitoring andevaluation plan can be established early inproject implementation. The PSC will determine which data will require that new researchbe undertaken and which can beprovidedby members of the Steering Committee on an annualbasis. The PIUwill continue to monitor andcompile key monitoring andevaluation information anddata throughout project implementationandreport on all project indicators inits annual reports to the World Bank. The collection of this data will be usednot only to monitor intermediate outcomes and project outcome indicators, but also assist the PSC create andunify data collection tools inboththe Court Enforcement Agency as well as the GCC. Inthis manner, monitoring and evaluation will be fully incorporated into project design activities rather thanbe perceived by participating institutions or be implemented by the PIUas a process limited to implementationof this Proposedproject. Project results will be sharednot only with thejustice sector but also with the general public via aproject website, project newsletter, newspaperarticles, and dissemination duringpublic events. D. Sustainability 55. Project development has beenbasedon the experience and lessons learned acquired duringthe implementationof the LJRP. One achievement has been the institutionalization of a dedicated project unit inMOJHA with acapacity to managedonor funded projects andcoordinate a strategic programinthe justice sector. As a result, project preparation has been highly collaborativeandreflects a broad consensus amongstjustice sector institutions and the donor community about the best way to scale-up the results of pilot activities and the activities to be supported by the World Bank. 56. With the assistance of the WRP, a new national administrative court system was established and the NLC created. Both institutions are fully sustainable given that sufficient humanand financial resourceshave been incorporated into the nationalbudget and their institutional mandatesfully incorporated into the formal Mongolianjustice sector. Under this proposed Project: (a) loan conditionality will require that all infrastructure improvements including future maintenance and operating expensesfor facilities andIT networking systems will be incorporated into future budget allocations to bothMOJHA and thejudiciary; (b) the proposed Project includes the provision of funding to ensurethat the necessaryin-house capacity can be developed throughout implementationinboth the judiciary and Court Enforcement Agency to ensure that proper humanresource policies, trainingand maintenance routines are fully incorporated into the standard operating practices of all participating institutions; and (c) to contribute to the sustainability of improvements in legal education, the proposed Project will support the continuationof both planningand expert working groups to garner extensive nationalparticipation and the development of broad consensusprior to the formal standardization of new educationalreforms. 14 E. Criticalrisksand possiblecontroversialaspects Risks RiskMitigationMeasures RiskRatingwith Mitigation To project development objective Government transitions and Periodic engagement of M electoral cycles. stakeholders, civil society, private sector, donors. Infrastructureenhancements Sequencing of capacity building, M dilute overall sector capacity and training, and analytical activities. efficiency gains. Improved public legal education. Wide and inclusive project information dissemination. Loss/dilution of project support Inclusive andbroad government M and sustained commitment of membershipinthe Project countemart funds. Steering Committee To component results Policy fragmentation in legal The Ministry of Education, education. Culture and Science, which has the mandate for policy determination for all higher level education is included as a member of the Steering Committee Capacity to implementICT based ICT infrastructure and capacity court enforcement and reporting improvements rolled out in and recording processes. parallel with national training L strategy Access to internet limited by Monitoring of ICT strategy environmental and/or market implementation dialogue with factors. businesssector Selective capacity improvements Selection of refurbishment sites due to limited project funding based on criteria acceptable to results ininconsistent levels of IDA. service delivery. Strategic capacity improvements MOJHA to lead donor distorted by other donor coordination activities inthe financing. justice sector Overall risk rating I F. Loadcreditconditionsandcovenants 57. The following are the main conditions of effectiveness, disbursementsand main dated covenants to be agreed upon: 15 58. The additional conditions of effectiveness consist of the following: a) The recruitment and appointment of the PIUProject Coordinator, the Procurement Officer and Financial Management Officer, all with qualifications and experience and terms of reference acceptableto the Association; b) The PIU's Financial Management Officer and Procurement Officer have completed a training course on financial management and procurement, respectively, in a manner and substance acceptableto the Association; c) The update of the Project Manual and the Financial Management Manual in a manner acceptableto the Association; d) Completion of an initial Project baseline survey, under terms of reference acceptable to the Association, on the existing relevant data onjudicial cases and court enforcement activities which may contribute to the monitoring andevaluation of the Project. 59. There are two conditions of disbursement which apply to the funds earmarked for the Supreme Court Facilities and the Court Enforcement Agency facilities, respectively, Le.: a) Furnishto the Association evidence of allocation of suitable land by the relevant Recipient's authorities, architectural design and construction drawings, detailed construction costs and budget, sources of funding, and time-bound construction implementation plan, all acceptable to the Association; and b) Adopt the procedures and selection criteria for the refurbishing of Court Enforcement Agencies. 60. The main dated covenants are as follows: Throughout project implementation, maintain the Project Steering Committee established under the LJRP for general oversight and policy coordination with Terms of Reference (TORS)andmembership satisfactory to the Association; Throughout project implementation, maintain the PIU headed by a Project Coordinator and assigned with competent personnel and consultants in adequate numbers including a procurement and financial management specialists, and other specialists as required, all with qualifications, experience and terms of reference satisfactory to the Association, and responsible to oversee the day-to-day management and implementation of all project activities; The Recipient will carry out the Project in accordance with an Annual Project ImplementationPlanto be prepared by no later than August 15 of each year (commencing on August 15, 2009) identifying activities by component and sub-component and their related expenditures and financing sources, and submit those plans for approval to the Steering Committee; and a Procurement Plansatisfactory to the Association; By February 28, 2009 establish a selection criteria acceptable to the Association and provide a list of Court Enforcement Agency offices whose facilities are proposed to be refurbishedor constructed under the project; By September 30, 2009, complete a follow-up Project baseline survey under terms of reference satisfactory to the Association; Following the completion of each infrastructure improvement under the project, provide annual budget funding sufficient to ensure future maintenance costs, operating expenses for 16 new facilities and IT networking systems, and the provision of sufficient personnelto ensure the sustainabilityof all capitalimprovements; g) Completionof a mid-termreview by September 30, 2010, and the implementationof findings of the review, all satisfactory to the Association; h) Maintainafinancial managementsystemsatisfactory to theAssociation; i)AnnualauditsofProjectaccountsbyanindependentauditoracceptabletotheAssociation underterms of reference approvedby the Association; j) The Recipientundertakesto usepublicly ownedlandfor the constructionor refurbishing of courts andcourt enforcement agency facilities. IV. APPRAISAL SUMMARY A. Economic and financial analyses 61. The public's perception of the Mongolianjudiciary i s extremely low. Inrecent studies of government institutions, the justice sector i s cited as the fifth most corrupt area, closely followed by the police and prosecutors. Doing Business corroborates this information, showing that as of January 2008, corruption was seen as a major constraint to businesses in49.5 1percent polled. Nevertheless, the initial indications from the Legal and Judicial Reform Project are that caseloads are increasingwithin the courts, which could correlate to infrastructureimprovements which have ledto increased prestige, efficiency and transparency. 62. The further development of legal information networks within the court enforcement agencies and thejudiciary under Project Component Two will allow for even greater optimization of human resources, as well as an increased ability to collect and monitor case data. T h i s will increase overall transparency and decrease the room for human error inhandling data. Moreover, due to poor infrastructure and limitedresources initial data show that the Court Enforcement Agency pursues enforcement of a smaller number of cases with higher monetary value (e.g., commercial cases, bank failure) rather than a large volume of cases with lower monetary values, such as paternity cases. There i s considerable anecdotal information that the vast majority of these cases pending at the Aimags involve paternity suits, family matters or other small claims. Consideringthe vast territory of Mongolia, fierce weather conditions, and the limited tools at the disposal of the court enforcement agents ineach Aimag, the overall productivity gains will beused to increase enforcement on outstanding cases. 63. Infrastructure shortcomings also affect the core duties of thejudiciary. Although these investments may not be easily measured interms o f short-termeconomic gains, they are intended to produce greater efficiency and transparency inthe courts over the long-term. The Project will contribute to the cost of a new Supreme Court facility and the GoM will provide land for the new court, valued at US$1.O million dollars. The final design and estimated budget for the facility will be prepared by the GCC as a condition o f disbursement to ensure that it meets Project objectives and i s determined to be acceptable to the Association. Moreover, given that numerous design possibilities are consistent with the project development objectives and have been discussed with the GCC including maintaining some Court operations intheir current facilities and/or constructing a partial facility ready for future expansion, efficiency and transparency gains will be dependent on the final design selected. 17 B. Technical 64. Project design closely follows the lessonslearnedthrough the implementation of the LJRP.The proposedProject will: 0 Ensure full participation and ownership by Mongolianjustice sector institutions to ensure that project activitiesare recipient driven; Build upon lessons learned during the implementation of the WRP including best practices concerning the planning, design, implementation and sustainability of infrastructure improvements; Incorporatemonitoringandevaluationtools into initialprojecteffectiveness activities; 0 Maintain an active engagement with international donors and civil society representatives engagedinefforts to support the modernizationof the MongolianJustice Sector. 65. Mongolianownership and participation inProject activities will be ensuredthrough the establishment of a Project Steering Committee comprised of representatives from all participatingjustice sector institutions, individualproject component working groups, regular donor and civil society meetings, and efforts to inform and educatethe generalpublic onjustice sector institutionmandatesand modernization efforts. The informationand feedback provided during these consultations will be usedto make initialproject programmingjudgments and midstream adjustments on implementation activities to ensurebotheffective implementation and long-term sustainability. 66. International best practices innew IT and facility planning; design and implementation will be combined with local consultation activities to ensurethat improvements undertaken reflect current and planned localpractices. Due to Mongolia's rapidly modernizing legal framework and the corresponding evolution injustice sector institutions application and practices associatedwith this framework, final improvements will reflect the important balancebetween international best practice standards and locallegal practices. Trainingprovidedthroughout project implementation will demonstratethe comparative practices of other countries and the standards which are being applied to ensurethe proper application of new management and informationgathering tools. 67. With respectto the renovation or construction of new court enforcement facilities, the proposed Project will adopt bothlocalbuildingcode requirements and international bestpractice design and facility management standards. The design of the buildings will reflect not only operational imperatives, but also the ability to incorporate future modifications to reflect changes inlocallaw or practices.Thesedesigns andtheir implementation will beevaluatedby international infrastructure specialists. This approachwill ensurethe sustainability of improvements well beyondproject completion. 68. The new ITinfrastructure and functional capacity will follow local ITstructures and be fully compatible with existing automation systems and management software. Efforts will also beundertakento ensurethat IT staff are fully trained inthe managementof the new systems and bestpractices to ensure its maintenance, security and ability to meet future needs. 18 69. Effectivemonitoringand evaluation (M&E) will be establishedfrom project inception to further assistMongolianjustice sector officials guide project development and implementation. Lessons learned during the LJRPhavebeenfully incorporated into project design and the application of new tools during project effectiveness will further encouragethe consideration of survey datathroughout project implementation. The PIUwill prepareboth an interim and a final baseline surveyto assist with M&Eactivities. The informationgatheredfrom these activities will beusedto adjust initial information campaigns and meet the expectationsof bothjustice sector officials, users and the generalpublic. Additionally, the use of M&Efindings will be incorporatedinto PSC meetings to encourageregular reflection on project activity results and their impact beyond project completion. 70. Duringimplementation of the LJRP, an active and regular engagement of international donors and civil society ensuredthat comparative advantages could be applied by all to support a national development strategy. This practice will be continued and expanded during this proposedProject to support the inclusionof bothexisting andnew civil society organizations duringinitial design, implementation andreporting activities. Resultsgatheredduring M&E activities will be shared to encouragethe complementary development of mutually reinforcing targetedactivities. C. Fiduciary 71. FinancialManagement. An assessment of the adequacy of the financial management system of the proposedProject was carried out inMarch 2008. The assessment, basedon guidelines issuedby Financial Management Sector Board on November 3,2005, has concluded that the proposedProject meets the minimumBank financial managementrequirements as stipulated inBP/OP 10.02. The Mongolia Country SystemAssessment of December 2005 recommendsthat, until some weaknesses are resolved, the Bank should continue to rely on designated accounts at designatedcommercial banks andprivate sector auditors for financial managementof its portfolio inMongolia. The Financial Management Assessment concluded that the overall financial managementrisk i s high and, therefore, appropriate steps to address and mitigate these risks will be taken both by project effectiveness and throughout implementation includingthe contracting of a new financial officer and the implementation of a financial management systemacceptableto the Association. 72. Procurement. A procurement capacity assessment of the implementing agencies was updatedinMarch2008. The assessment has concluded that the overall risk of the procurement processi s average. MOJHA and its agencies involved, as well as, the GCC and Supreme Court have allocated adequateresources, including experienced staff, to implement the proposed Project. Needs for strengtheningthe procurement capacity of the PIUhavebeen identified, and an action planwas discussedand agreedduringthe assessment. This includes training workshops, the preparation and dissemination of sampleprocurement documents and a staffing plan for project implementation. A procurement plan for the entire project has been discussed and agreedwith World Bank team. 19 D. Social 73. The activities included inproposed Project are generally similar to those included inthe URPand areunlikely to generate adverse social impacts. With respect to OP 4.12, Involuntary Resettlement, screening measureshave been taken inthe preparation and processing of the proposed Project to ensure that land acquisition and resettlement-related impacts do not occur. Refurbishedfacilities of the Enforcement Agency will entail works in existing buildings and should there be a need to construct new facilities such work will be undertaken on sites neither causing resettlement nor land acquisition. With respect to OP 4.10, IndigenousPeoples, extensive research has been undertaken duringproject preparation throughout the Bayan-Ulgii Aimag to prepare a special plan fully reflecting local needs, as well as, the full incorporation of the Aimag into all national legal education activities. 74. Indigenous Peoples. A project sub-component has been drafted to extend basic principles established inthe WRP through awareness campaigns inthe Kazakh language speaking Aimag of Bayan-Ulgii. A social assessment and local consultations havebeen undertaken, and results indicate that the Kazakh minority group practices economic and social traditions similar to the Khalk (Mongolian) majority. However, many residents speak a distinctive language. The Project, therefore, includes a separate sub-component ensuring equitable treatment, benefit and representation o f the Kazakhs o f Bayan-Ulgii Aimag via its outreach and communications design. Towards meeting the objectives of developing ethnic specific legal education, a simple Indigenous Peoples Planhas been developed based on Social Assessment Findings (December 2007) and consultations carried out with the affected Kazakh populations. (March 2008). E. Environment 75. The proposed Project has been assigned an EA category `C' inthe World Bank's classification system and, as a result, a full Environmental Impact Assessment under Bank guidelines or Mongolian laws i s not triggered. It was agreed duringthe PCNSafeguards Review Meeting that the proposed Project will use the same environment guidelines including inthe biddingdocuments of the LJRP and that the guidelines would bereviewed and adopted for the proposed Project and referenced inAnnex 10of the PAD. Since the potential environmental impacts will be highly localized in Aimag locations selected inthe future using a standard selection criteria, environmental concerns can be addressedthrough mitigation measures including compliance with all permit regulations and good construction practices. Construction contracts will include covenants regarding the need to ensure proper waste management and disposal of debris, proper waste water management treatment, heating and fuel system assembly, appropriate dust and noise control measures, and adherence to design standards established by MOJHA. These standards will be ensured through the proper acquisition of local permits, supervision of constructions sites by both contractors and members of the PIU. Inthis manner, the proposed Project has been carefully designed and monitoring and supervision of implementation will ensure attention to any potential adverse impacts. 20 F. Safeguardpolicies SafeguardPolicies Triggered by the Project Yes No EnvironmentalAssessment (OPBP 4.01) [XI [ I Natural Habitats (OPBP 4.04) [ I [XI PestManagement (OP4.09) [I XI PhysicalCulturalResources(OPBP 4.11) 11 [x 1 InvoluntaryResettlement (OPBP 4.12) 11 [x 1 IndigenousPeoples (OPBP 4.10) X I [ I Forests (OPBP 4.36) [I [x 1 Safety of Dams (OPBP 4.37) [I [XI Projects inDisputedAreas (OPBP 7.60)* [ I [x 1 ProjectsonInternationalWaterways (OPBP7.50) [I [XI The proposedProject is categorized as an EnvironmentalRisk Category C project.Applicable safeguard policies for the proposed Project are: IndigenousPeoples (OPBP 4.10) and EnvironmentAssessment (OPBP4.01). G. Policy ExceptionsandReadiness 76. The proposedProjecti s consistentwith all applicableBankpoliciesandwill notrequireany exceptions.The Projectmeets the Regionalrequirementsfor readiness. * By supporting theproposedproject, the Bank does not intend toprejudice thefinal determination of theparties' claims on the disputedareas 21 Annex 1: Country and Sector or Program Background MONGOLIA: EnhancedJustice Sector Services Project Mongolia - 1. MongolianLegalTradition 77. Mongolia's modemlegal system is derived from one of the richest legal traditions inthe world. Datingback to 1208, with the Great Zasag Law, Chinggis Khaancodified the generalprinciplesof the tribes falling under hisrule andunified the formal and informal practices of the nomadic tribes of Central Asia datingback to the Third Century. Inso doing, he helpedto create alegal systemwhich developed throughout the history of the world's largest geographicalempire. This first phaseof Mongolia's legal systemwould developa host of innovationsandpractices that have shapedcenturiesof legal traditions including the establishmentof courts, the conduct of trials, freedomof practice for four major religions, protectionsfor local and customarylegal traditions, and a host of norms relating to the administrationof state and localjurisdiction. The Zasag Law further ledto the Laws of the Great Yuan Empirewhich further codified the importanceof law, introducessanctions for the violations of law, and creates the notion that the drafting and issuance of laws i s not merely to ensure the maintenanceof power but also to ensure societal order. 78. Fromthe Sixteenthto the NineteenthCentury, this richlegal tradition resulted in the Mongolian-Oirat Laws of 1640andalso the KhalkhJuramLaw of 1709 which further strengthened legal traditionsby creatingnorms in what would now be termed administrative, civil, criminal and family law. With the dissolutionof the Mongol Empire in the eighteenthcentury these practices ledto the Mongol Cayajinbicig (Collection of Mongolian Laws) which was adoptedby the Manchudynasty in 1789 and governedwhat was referredto as Outer Mongolia. While efforts to further codify a new legal system featuringideas from throughout world continueduntil 1915, the RussianRevolution of 1917hada rapid impacton theMongolianlegal system. 79. Mongolian legal scholars oftenrefer to the Socialist period of 1921-1990as a secondphasein Mongolia's legal development.Prior to the promulgation of the socialist constitutionin 1924, several constitutionalacts precededits formal adoption, andfollowing its adoption, numerouslegal codes were adoptedby the Ardyn Huralto regulateMongolia inaccordance with SovietLaw. As such, this collection of legislation, amongst other things, createda proletariandictatorship, eliminatedprivateproperty titles, and sought to introduce the principlesof socialismand communisminto all walks of Mongolian life. Some Mongolianlegal scholars also identify positive aspects of this Constitution,althoughnot necessarilyits implementation,inparticularthe declarationof numerous civil freedoms including that of religion, education,and discrimination. The subsequent constitutionof 1940resulted innumerousnew legal codes includingCriminal, Civil, Land, and Hunting and Fishing Codes. In 1960, a new constitution beganto provide greater liberty with respect to social andeconomicrights and improved personal protection.Despite the proliferationof constitutions, acts and laws during this period Mongolian scholars point to a phaseof increasingeconomic, political andsocialhardship.14 2. The Mongolian Justice Sector 80. Although the executiveand legislative branches of government are crucial to the establishment of the rule of law, the institutions which comprisethejustice sector are responsiblefor making the legal systemwork. Together the institutions which comprise thejustice sector including thejudiciary, the ministry ofjustice, law enforcementbodies, prosecutionservices, bar andjudges associations,legal educationinstitutionsand non-governmentalorganizationsinvolvedinthe sector must effectively 14S. Narangerel. Legal System of Mongolia. 2004. 22 implement their mandates to maintainthe rule of law. An appropriate and modem legal framework i s also requiredto set the foundation of a country's legal system. 15 (a) Judiciary 81. InMongolia, thejudiciary consistsoffirst instanceSoumCourts, Inter-Soumcourts andDistrict courts. There are currently thirty-seven courts of first instance which reflect the size and geographic location of eachjurisdiction. While some large Soums have their own courts, other smaller districts share an Inter-SoumCourt. Ulaanbaatar, Mongolia's capital, has eight district courts. Threejudges sit en banc for the civil law proceedings of these courts while criminal procedures are heardbefore a singlejudge. Thejurisdiction of these courts includes all cases and disputes inthe first instance. There are also twenty- one provincial (or Aimag) courts and a Capital City Court which serve as courts of appeal inboth civil andcriminal litigation. For the most part, district courts adjudicate routine criminal and civil cases, while more serious cases, such as murder, rape, and grand larceny, are referred to the provincial courts. Provincial courts also serve as the appeals court for lower court decisions. A seventeenmember Supreme Court is the court of final appeal andhears appeals from lower courts and cases involving alleged misconduct by high-levelofficials. The ConstitutionalCourt, with four full time and five part time justices, has solejurisdiction over constitutionalquestions. 82. In2007, therewereatotalof429judges and883courtstafffor atotalof 1,312judicial sector employees. In2007, first instance courts court managed41,878 civil claims and rendered decisions in 30,699 cases. This statistic representsan 11.8 percent total caseloadincrease over 2006 and nearly 10 percent increaseover 2005. With respect to criminal cases, in2007 the first instance courts managed 6,876 cases andrenderedjudgments in5,831 cases. 83. Mongolia established an Administrative Court system in 2004 with the assistance of the World Bankthrough the LJWwhich includedrenovatingelevenof twenty-one court buildings.These courts hear mattersrelatedto public law not considered to be constitutionallaw. By early 2007, these courts heard approximately 2,400 cases primarily inthe areas of land ownership and possessiondisputes, taxation andtax matters, government civil service and administrative complaints, employment related cases, andmininglicenses. The number of claims in2007 representsa 37.1 percent increase over 2006. 16 84. The General Council of Courts (GCC) i s an administrative body chaired by the President of Supreme Court andmanagedby an executive director. The Council is comprised of fourteen members from thejustice sector: one nominated by parliament, one by the president, ten from the courts, the minister ofjustice and the prosecutor general. The Council's duties include establishing the location of courts, personnel and budget management, selection and promotion ofjudges and disciplinary actions. (b) Legal Profession 85. The legalprofession inMongolia includesjudges, prosecutors and lawyers, eachgroup possessingits own rules, standards, and requirements. For this reason, inMongolia the word "lawyer" i s broadly defined. Since 2004, however, by law only those who pass a certificationexam are eligible to work as a lawyer or judge. There are approximately 7,000 certifiedlawyers inMongolia while the total numberof law graduatesremains unknown. Additionally, there are approximately 260 certifiednotaries inMongoliawho arerequiredby law to certify the authenticity of documents andtransactions. Additionally, there are an additional 360 uncertified notary Soum government employees. See generally, B.Tamanaha, (2007). A Concise Guide to the Rule ofLaw. St John's UniversitySchool of Law. l6Statisticsprovidedby MongolianGeneralCouncilof Courts, March2008 23 86. Recent studies conducted by the Asia Foundationrelated to perceptions of corruption trends in the judiciary on the one handidentify judges, prosecutors and lawyers as amongst the ten most corruption affected areas. However, when askedto identify to whom they actually paid a bribe, only 5.8 percent of those surveyed identifiedjudges. Since the inception of these studies in 2006, doctors, teachers and clerks have competed for the top positions on the bribery lists. 17Similarly, the USAIDsponsoredJudicial ReformProject conducted its fourth public perception survey which found that those surveyed believed that judges are generally honest and fair in deciding cases, that decisions are basedon case facts andthat the decisions can be understood by the parties. At the same time, the public's confidence inthejudiciary decreasedin2007 andthere was an increaseinthe number of respondentswho believed that the courts are too complicated, judgments take too long, and that they would not be treatedfairly. 18 (c) ExecutiveBranchJustice Sector Institutions 87. The Ministry of Justice and Home Affairs (MOJHA) is one of Mongolia's most influential ministries. The Ministry has an extremely broad mandate which includes the development of legalpolicy, legislative drafting, systematization and harmonizationof laws, legal information dissemination, crime prevention, policing, criminal investigations, legal assistance, national archives, enforcement of court decisions, maintenance of nationalregistries, naturalizationandimmigration services, border and security services, intellectual property protection, and the maintenance of relations between the executive, legislative andjudicial branch. The Ministry carries out this work through its nine Agencies including Court Enforcement, Civil Registry, Border Control, National Archives, National Legal Center, Immigration and Nationalization, Police, a nationalforensic lab, and a specialized employee hospital. 88. The Court Enforcement Agency i s tasked with the enforcement of both civil andcriminal judgments. There are currently 167 agents throughout Mongolia who enforce all courtjudgments not otherwise voluntarily executedby the parties. Court enforcement Agents are required to seize goods from debtors which inMongolia often includes livestock and other bulky items which must then be transported to, and stored in, local enforcement offices for auction. These agents often face physical violence and are hamperedby extremely largejurisdictional areas, extremely poor offices facilities, a lack of vehicles, and no basic IT equipment or moderncommunicationtools. Court enforcement agents enter into contracts with claimants ranging from 0.5 percent to 10percent of the amount of finaljudgment to be enforced. These contracts pay for officer fees, expenses related to the enforcement, and contingencies not otherwise provide by MOJHA. In2007, the Court Enforcement Agency received 25,134 cases for enforcement, a 20 percent increase over 2005.19 With respect to parties to a dispute, enforcing contracts i s bothtime consuming and expensive inMongolia but better than inother post Soviet Countries such as Poland. In fact, perception surveys of Mongolianfirms find that respondentsbelieve that courts are effective contract enforcers but they generally do not use the courts to settle disputes.20 The World Bank's DoingBusiness reported that in2005 Mongoliaranked 40 of 170nations inenforcing contracts. Enforcing an average contract involved 25 procedures and 314 enforcement days. InDoingBusiness 2008 it was reported that in2007 Mongolia ranked 27 of 178nations inenforcingcontracts, amarkedimprovement. However, in contrast to 2005, enforcing an average contract now involves 32 procedures and 314 enforcement days. A study under terms of reference satisfactory to the Association will be conducted underComponent Three of the Project to analyzepossible ways to streamline these procedures while maintaining the integrity and transparency of the process. '7 Asia Foundation.Mongolia: Trendsin Corruption. 2007. '8 Trend linesin Public Perception of Judicial SystemAdministration in Mongolia, Sant Maral, 2007 l9MOJHA 2o Gregg, A. (2008) "Formal Institutionsand Social Ties, Contract EnforcementinMongolia". Pitt Political Review. 24 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies MONGOLIA: Enhanced Justice Sector Services Project Mongolia - 89. Itshould benotedthat the proposedProject will rely heavily on substantial experience from projects andprograms that are financed from other domestic andinternationalsources. The most important of these are presentedbelow. Projectsfinance4 by other internationalagencies, ong!ng(January, N7) Sector Theme SectorIssues Source ProjectName Status Time- frame Agriculture1 Increase productivity and ADB Agriculture Ongoing Since 2000 RWal profitability of agricultural Sector Development producers Development Program (US$17 millioniloan) Agriculture1 Support sectorcompetitiveness ADB Agriculture and Proposed n/a Rural throughimprovementof livestock Rural Development productsas well as processingand Development marketability Project Rural Improvelivelihoodsofrural EC Animal Health Ongoing 2007-2012 Developmend populationliving on livestockby andLivestock AnimalHealth1 establishing aproductiveand Marketing Marketing marketorientedlivestocksector Agriculture/ Increasingthe supply of dairy FA0 Dairy Ongoing Untilmid- Dairy productsinMongoliaby reducing Development 2007 production post-harvestlossesandre-stocking Project Pasture Risk Reducepoverty sustainably among FAD RuralPoverty Ongoing 2003-2011 Managemend vulnerable families who live inan Reduction Rural environment with increasingly Programme Development degradednaturalresources of4 (US$14.8 Aimags (Arhangai,Bulgan,Khenti, millioniloan) andHuvsgul) Pasture Risk Strengthenself-relianceof herders SDC GreenGold Ongoing 2004-2008 Management to improvetheir livelihoodsthrough Pasture moreproductiveand sustainableuse Ecosystem of pasture land Management Program Natural Mitigaterisks to biodiversityand UNDPI Sustainable Ongoing 2002-2007 Resource support long-termconservationand Netherlands Grassland Managemend sustainableuse of biodiversityinthe Management PastureRisk grasslands ofEasternMongolia (US$3.1 Management (Bayanhongor, Uvurhangai, million) Selenge) PastureRisk To developriskmanagement USAIDI GobiForage Ongoing 2004- 2008 Management technologiesto providedroughtand Mercy winter disasterearlywarningto corps improverural business inthe livestocksectorofthe Gobiregion insix Aimags (Gobi-Altai, Bayanhongor, Uvurhangai, Umnugovi,Dundgovi, and Govisumber) 25 Sector-Specific P jects financed by other internationa pencies (Mar I2008)" Sector Theme Sector Issues Source Project Name Status Time- frame LegalEducation ImproveLaw School's legalcapacity NGO OpenAcademy Ongoing Since 2001 andpracticalexperienceamongst students. LegalEducation Increase public awareness on Netherlands/ Mongolian Ongoing April 2006- environmentallegislation The Asia NaturalCapital 2009 Foundation Conservation & Environmental security Environment/ Strengthenimplementationof game World Bank, Wildlife Ongoing Since 2004 Wildlife animallegislation Netherlands Conservation Conservation PublicLegal SupportingAccess to JusticeProject NGO OpenSociety Ongoing Since 2005 Awareness of UNDP, one componentrelatedto legaladviceto vulnerable, poor and marginalpeople LegalAwareness Assess consequencesof StreetLaw NGO StreetLaw Ongoing Since 2003 of Juveniles projectimplementedby Open Societv Civil and Components: Government GuaranteeLegal Economic - improveconformity of civil of Germany/ EnvironmentOf Legislation legislation; GTZ StableEconomic - improveproceduresto adopt laws Development andregulations - developmethodsofmonitoring laws andcivil activities ImprovePublic Components: JICA LegalReform Legalawareness - improvemanifests of courtsand andAid September and BuildBar courtdecisions; + Association - establishmediationsystemin Capacity Mongolia, - Build capacity of MongolianBar Association CourtReform Components: USAIDI Mongolian 2008-June andLegalSector - improvelawyers' qualification Mercy Corps JudicialReform Strengthening system; Program 2008 - automatecourts andprosecutors' offices; legalawareness Administrative Support developmentof democratic Hanns Support and Ongoing 2001-2009 Sector legislationsysteminMongolianand Seidel Advice on Legal form qualifiedeffectiveunits & Administrative Sectors HumanRights Components: United Legaland Closed July 2002- - strengthenrelevantauthorities' Nations JudicialReform December capacityto provideequalityand reducepoverty; - build capacity of civil society; - improveaccountability system amongpublic StrengthenLegal [mprovepublic trust onjudicial World Bank Legaland andJudicial sector by providing opportunityto JudicialReform April 2008 accessto legalinformation,establish administrativecourts inMongolia andenhancelegaleducation 21Source: Ministry of Justice and HomeAffairs (March 2008) 26 ProjectsfinancedbyWs rldBank, ongoing (January, 2 - Sector Theme SectorIssues Boardapproval/ _ _ -Rai closing - IP Rural development Piloting improvedrural July 01,20021 S livelihoods strategies Project I(SLPI), December 31, PO67770 2007 I- InsurancePastoral Risk Reduceimpact of livestock May 26,20051 Management mortality for herders June 30,2010 t Private sector Develop intermediateterm Active June 28,20051 lendingmarket for private April 30,2010 sector Private sector Increasethe coverage and Active June 6,20061 use of relevant ICT services March 31,2012 among the ruralpopulation PO92965 EducationBural Enhancequality educationin RuralEducation and Active May 23,20061 development ruralprimary schools Development (READ), February29,2012 PO96328 EnergyBural Increase accessto electricity Renewable Energy for Active December 19, development andimprove reliability and RuralAccess (REAP), 20061 affordability of electricity PO99321 December 31, services among herders and 2011 inoff-grid soum centers Projectsfinanced by .Id Bank, completed(2001-201 - Sector Theme Sector Issues ProjectName Status Boardapproval/ Out SUS closing com tain e abil ity Financial sector FinancialSector Closed April 20,20001 S L Adjustment Project, September 30, PO68071 2004 - Privatesector1 Supportdevelopmentof PrivateSector Closed IMay 25, 19991 I S L Financial sector private enterprises and Development Credit I August 31,2004 financial sector (PSDC). PO49789 27 Annex 3: Results Framework and Monitoring MONGOLIA: Enhanced Justice Sector Services Project Mongolia - Results Framework 90. Inresponseto the 2007 MillenniumDevelopment Goals-BasedNational Development Strategy (NDS) preparedby the Zkh Hurd, the Justice Sector will prepare a new Strategic Planfor the years 2009- 2012. The Government of Mongolia i s also currently implementing a "Master EducationPlan" (2006- 2015) which will require adjustmentsfollowing the implementationof a new twelve year educational system. Regular project monitoringof the implementationof these strategic plans will be undertaken in conjunction with project objectives by the Project Steering Committee (PSC) incoordinationwith MOJHA, the GCC, Ministry of Finance, National Legal Center, the Supreme Court and the Ministry of Education, Culture and Science. (MECS). EachPSC meetingwill include review of project indicators to allow participating institutions to reflect uponthe implementationof both the institutional strategic plans and project objectives. 91. Interms of institutional arrangements, the PIUwill monitor andcompile key monitoringand evaluation information and data throughout project implementationandreport on all project indicators in its annual reports. The PIUwill be responsible for the conduct of initialbaseline preparation activities which will be submitted to the PSC prior to project effectiveness. The development of this baseline will assist MOJHA incorporate results into its new Strategic Planand assist planningactivities with other internationaldonors. The Monitoring and Evaluation (M&E)of project impact and outcome will be based on a set of quantitative, qualitative and output indicators shown inthe chart below. Progresson meeting the M&Etargets will also be monitored duringproject supervision. A full follow-up baseline survey will be carried out followingproject effectiveness andbefore implementationof any other project activities. Prior to implementation, the PSC will determine which data will require that new researchbe undertaken andwhich canbeprovided by members of the PSC on an annual basis. 92. Both the PSC and the PIUwill seek guidance and assistancefrom one or more independent local survey firms to assistinthe design of monitoring and evaluation activities, as well as, the required surveys andpre-test tools. The collection of this data will be usednot only to monitor intermediate outcomes and project outcome indicators, but also assist the PSC create and unify data collection tools in boththe MOJHA Court Enforcement Agency as well as the GCC. Inthis manner, monitoring and evaluation will be fully incorporated into project design activities rather thanbeperceived by participating institutions or be implemented by the PIUas a process limited to implementation of this proposed Project. Project results will be sharednot only with the justice sector but also with the general public. 93. Throughout project implementation, the PIUwill also carry out safeguardmonitoring including special attention to the requirements of the Kazakh-speaking population of Bayan-Ulgii Aimag to ensure that they receive culturally appropriate opportunities to participate in, and benefit from, Project activities and to ensure that any adversesocial impacts are identified and mitigated. Arrangements for monitoring safeguard screening activities andproject implementation are incorporated into the overall M&Eprogram 28 PDO Project Outcome Indicators Use of Project Outcome Information (i)Information on enforcementof To stimulate discussionduring court decisionsi s availableand activity designand implementation sharedbetweenthe Court andprovide baselineinformation Enhance the efficiency, transparency EnforcementAgency and the and evaluation tools for project and accountability of justice sector GeneralCouncil of Courts evaluation. institutions (ii)Discrepanciesbetweenstatistical information providedby Court EnforcementAgency and General Council of Courts i s shared and reduced. (iii) Improvementinlevel of court decisions enforced. Intermediate Outcomes Intermediate Outcome Use of Intermediate Indicators Outcome Monitoring Component 1: Enhancingpublic *Number of law schools which meet Y1: Successfuldefinition of new legal education on the justice sector. new national certification standards national legal education standards; Numberof professorsmeetingnew (a) Comprehensivelegal education national qualification standards; Y2-3: Correlation between reform. *Improvement instudent exam preliminary and post testing of (b) National public information scores on new standard courses; professorsand students; strategy. Improvement inlevel of knowledge concerningjustice sector Y3-4: User feedback and satisfaction institution functions and availability surveys. of knowledge information tools by users. Component2: Increasing Increase in the number of courts Y2-3: The increaseduseof new Transparency through improved and court enforcementagency network tools and information will accessto legal information offices connectedto national fiber be usedto modify court enforcement optic network; agency and court management Numberof regional courts practices; applying new national archival management standards and practices; Y2: Effective legal information Numberof users accessingpublic systems shouldleadto significant legalinformation systems increasein access to and use of legal Percentageof users who are able to informationwhich will be monitored find information sought onjustice through user surveys. sector institutions and enforcement process. 29 Component3: Enhancingjudicial Total number of court Y1:The successful application of operations, enforcement and enforcement agency offices new court enforcement location monitoringof court decisions. renovated; criteria and design standardswill be *Supreme court facilities applied to other offices; (a) Justice sector support constructed; infrastructure. *Percent of judicial archives stored Y4: The correlationbetween the (b) Court strategic planning and innew national archives; efficient use o f renovated and new administrative improvement. *New strategic planning and buildings will be measuredto adjust (c) Court enforcement capacity administrative techniques adopted design standards, networking tools, enhancement byjudiciary; datamanagement systems and *An increase inthe number of cases administrative practices, if required; enforced. Y3: Iftargets for case enforcement have not improved in new facilities, additional training, management techniques or other measureswill be adopted. Component4: Project management *Skilled team members demonstrate Y1-4: Performance targets and measurableprogress implementing evaluation techniques will be project components and activities. appliedto determine skill set, additional training or other measures to be taken. 30 Annex 4: Detailed Project Description MONGOLIA: EnhancedJustice Sector Services Project Mongolia - 94. The proposed project i s specifically designed to scale-up the main activities of the World Bank Legal andJudicial Reform (LJRP), to enhancethe pilot areas which have demonstratedpositive results, andto introducecomplementary activities reflectinglessonslearned throughout thejustice sector. To this end the Project's development objective i s to enhance the efficiency, transparency and accountability of justice sector institutions.Prompt and efSective enforcement ofjudicial decisions will be strengthened; transparent information on processing of court cases will be enhanced; justice sector officials will have efSective andprompt information on court decisions and nationallegislation; citizens inbothrural and urban areas throughout Mongolia will have improved access to legal information a new general of legal professionals will receive a modem legal education; and the Ministry of Justice andHome Affairs (MOJHA) and selected specialized agencieswill be strengthenedby providing modem technologies, adequate facilities andequipment, and through new trainingof its officials. 95. The proposed Project will strengthen the capacity of thejudiciary, by working through the SupremeCourt andGeneral Council of Courts, andthe executive branch, through the MOJHA andits specialized Court Enforcement Agency, to enhance their individual and complementary mandates envisagedinthe 1992Constitution. The project components are: Component One: Enhancing Public Legal Education on the Justice Sector ($500,000) (US$250,000IDA; US$250,000Japan PHRD Co-$naming Grant) 96. There are nineteen law schools and law centers inMongolia; five are public andfourteen are private. In 2007 there were 5,602 students enrolled inMongolian law schools. In2001, the government adoptedpilot a national standards but there were not approved by the National StandardCommitteeuntil 2007.Moreover, these standardsdo not provide for the detailed regulation of all legal education institutions only those which provided a national legalbachelors degree. The degrees of doctor inlaw (LL.M,PhD)arenotyet regulatedbynationalstandards. 97. The government also established a nationallegal exam in2004 which must be passedto qualify for admission to the "legal profession" although those who do not qualify can still practice as either legal advisors or business lawyers. Mongolian professional bodies such as the MongolianBar Association offer only limitedtraining programs after law school. As a result, a recent study of legal education in Mongolia concluded that curricula should focus morebroadly between a liberal education andthe content that i s requiredto establish the knowledge, skills and attitudes requiredfor a successful professional life. T h i s study also noted that given the absence of formal teacher trainingprograms that greater emphasis should also be placed on addressingthis shortcoming. Numerous donors have also provided training assistance for the members of thejustice sector including prosecutors,judges, legal professionals, notaries andcourt enforcement officers. At the same time, the NationalLegal Center (NLC) has attempted to meet nationaldemand by offering approximately 80 courses in2007 usinggovernment funds to improve both capacity andperformance. However, evidence from alljustice sector institutions provides clear evidence that training andprofessional capacity has not developed as rapidly as required to service both their institutionsandthe public. 98. Earlyindications from an impact assessmentcarriedout under the LJRP are that the Mongolian public would benefit greatly from both general and targeted legal education programs. Other surveys and researchdemonstrate that the public lacks basic knowledgewith respect to Mongolia's new legal system andthe role ofjustice sector institutionswithin both thejudiciary andexecutive. Such misinformation 34 leads to negative perceptions and a limited use ofjustice sector institutions to prevent and solve disputes. Given the rapidproliferation of private law schools and the absence of a comprehensive regulation and quality control strategy for the legal education system, discussions were held with the Legal Standing Committee of parliament, the supremecourt, the GCC, MOJHA, a law school working group, and with representatives of civil society to determine how best the proposed Bank project could support new efforts to create and reform nationallegaleducation standards, certification programs and licensing practices. 99. To address these shortcomings, the proposed Project will support the development of a comprehensive legal education reform programand the implementationof a national public information strategy. These programs will provide general information concerning the recent positive developments in the Mongolianjustice sector. Additionally, the programs will highlightthe new practical information and public resources available for consultation to encourageimproved knowledgeand more widespread use of these new tools. This comprehensive legaleducation reformprogram includes attention to the Kazakh population living inbay an-UlgiiAimag since there are language considerations whereby the ruraland typically poorer and vulnerable segmentsof the Kazakhpopulation do not speak the language of the majority group as indicatedina social assessmentthat was conducted. Inthis context, the proposed Project will also support the development and implementationof a special bilingual legal information programfor the Kazakh speakingpopulation of the Bayan -Ulgii Aimag. 100. The component will finance the following activities: (i) Comprehensive legal education reform in law schools to improve legal education syllabi and assist legal education institutionsmeet bothnational and internationalstandards. National strategy on legal education. The proposed Project will assist develop a national legal education strategy given that there i s currently no national consensus on the role of law schools, teaching standards or teaching materials despite efforts by MOJHA to establish such standards. Although national standards have been produced with respect to the "Bachelor" of law degree which establishes basic credits, courses, electives, and library holdings; there are no standardsconcerning further graduate studies at the LLMor PhDlevel and only limited adherence to, and enforcement of, the Bachelor standards. As a result, much work remains to develop not only the standards and their enforcement, but also the supporting regulations concerning course materials, continuing education requirements for law professors, professor training and certification exams. This component will assist national law schools meet the new national certification standards and also assist improve the quality of legal education throughout Mongolia. Student training materials. There are a total of 48 required course offerings in the nineteen Mongolian law schools. Through the LJRP pilot program, three law schools were able to develop 31 new syllabi and prepare 14 course materials which have been shared with all national law schools. The proposed Project will continue to support legal education development by completing the preparation of all 48 course syllabi, developing training materials for all remaining courses, and assisting to develop elective courses and specialized clinics. Using the methodology and framework developed under the LJRP, MOJHA will expand its standards working group and also establish separate working groups to work on legal materials. International representation to share standards from throughout the world will assist these working groups undertake their mandates. Inconjunction with this work, the proposed Project will also develop training materials for professors and expose them to modem teaching methodologies through the development of a training of trainers program. 35 (ii) nationalpublicinformationstrategytoimprovepublicknowledgeandtransparencyconcerning A Mongolia's new legal system, citizen rights andopportunities, andlegal standardsandresponsibility. a) A national public information strategy will be developed to provide focused information for poor and vulnerable rural and urban populations in addition to special programs for women and children. Strategies will focus on the administrative court system developed under the LJRP and its mandates concerning land, licensing, taxes, governmental decision making and the enforcement of wildlife andpreservation laws and regulations. Additionally, the strategy will provide information concerning the role of thejudiciary and executive regardingboth the division of labor and standards of practice. Lastly, the proposed Project will provide information concerning the access to legal information programs being undertaken throughout the justice sector during project implementation. The proposed Project will develop activities duringSoumNadams (community festivals throughout implementation and develop innovative strategic supply information distribution techniques. Further use will be made of national and community radio. Lastly, the creation of a MEDLEG (meaning `knowledge' inMongolian) nomadic library which will visit Soums to share legal information and provide referral services in conjunction with the work of other international organizations. b) The proposed Project will also support the development and implementation of a special bilingual legal information program for the Kazakh speaking population of the Bayan- Ulgii Aimag as outlined inAnnex 10. Component Two: Increasing Transuarencv through ImvrovedAccess to Legal Information ($1.41 million) (US$I.26m IDA; US$O.l5mJapan PHRD Co-financing Grant) 101. The proposed Project will increase transparency and improve access to legal information by implementingnationaljustice sector information and networking strategiesfor boththe Mongolian Supreme Court and the Court Enforcement Agency. Through the LJRP, Mongolians, for the first time, have the ability to fully access laws, administrative regulations, supreme court decisions and constitutional court decisions through the UnifiedInformation Network (UIN)maintainedby the National Legal Center. This new access to information i s an important but only partial step given that regional courts and court enforcement agency offices outside the capital, Ulaanbaatar, lack the requiredIT infrastructure to easily access these tools. Public awareness and education activities have been testedfor the public usingthe UINas the anchor of a nationwide effort to promote transparency andaccess to legislation andjudicial decisions but limited inscope. 102. Government ministries and key institutions inUlaanbaatar are connected to the UINand the JudgeInfo database via fiber optic networks. However, regional courts,justice sector agencies and educational institutions do not have easy access to this network due to limitedconnectivity to the internet. The simple lack of access to legal andjudicial information, especially inthe Aimag's far from the capital, have preventedcitizens from accessinginformation, negatively affect the quality ofjudicial decisions in the Aimag courts, andfacilitate corruption. The implementationof thejudiciary wide network linkingall Aimag courts to the Mongolian Supreme Court and the UINwill allow judges and court personnel throughout Mongolia easy access to the UINand information bases on Mongolian laws and regulations. Furthermore, the implementationof public access kiosks inthe Aimag courts will also allow public access to these legal information sources, as well as other information relatedto the functioning of thejudiciary 36 Judiciary 103. USAIDfinanced the development of acasemanagementsystemfor thejudiciary, implemented on a court-by-court basis. Due to the stand-alonenature of the implementation, information from individual courts i s not easily aggregatednor transferred between courts. This systemunfortunately does not allow for reasonablemanagementoversight, nor does it allow for the timely collection and aggregation of information on court systemperformance. Two major enhancementsto this systemare proposed in this Project. The first is to upgrade the systemfrom a stand-alone individual court application to a networked information system across all courts so that case information can easily be transferred from lower courts to appellate courts andperformance and case status data can routinely be queried or transferred ina timely manner. The secondmajor enhancement i s to update this systemto capture the court decisions as soon as they are made. The decisions can thenberoutinely dispatched to the central decision database inthe Supreme Court in a timely manner. Information collected from the system such as case statistics and docket information can easily be publishedon the internet and made available at the public kiosks thereby improving the transparency and accountability of thejudiciary. Inthis manner, the Project will support thejudiciary's efforts to complete its national case management integrationby automating and linking all of Mongolia's regional Aimag courts with the supreme court, ensuring more efficient planning and monitoring systems, providingjudges with access to judicial decisions, and enhancing transparency and good governance. Court Enforcement Agency 104. Incontrasttothejudiciary, theMOJHACourtEnforcementAgency lacksanationalworkflow and case management system for the enforcement of civil, administrative and family court. As aresult, it i s not possible to easily track a case fromjudicial decision to point it i s filed with an Agency office for enforcement through to its conclusion. A proposed tracking systemlinked to the central offices in Ulaanbaatar would allow Agency managementto monitor performance of remote offices, as well as provide an effective means to review and monitor individual cases where complaints have beenfiled. The systemwould also accurately collect statistics andreport ina timely fashion on the performance of the service. Modules of the system could also provide for the automated generation andpublication (on the internet) of seizedproperty for auction as well as the revenues generatedper itempost-auction. This together with the routine publication of enforcement statistics would be a major step forward towards creating further efficiency and transparency inthe enforcement service. 105. Rulesfor the presentation of court records, files andstatistical information are neither clear nor i s informationreadily accessibleto the public through real time public information centers or a national judicial archive. At present, each institutionproduces only public annual reports which provide often conflicting or incomplete information. Localinstitutionsprovide no information to the public and, as a consequence, justice sector officials are not able to effectively monitor their work or that of other similar institutions. Public surveys clearly demonstrate that this lack of information causes the public to view the entire justice sector with suspicion and to identify this lack of information as evidence of inefficiency and corruption. 106. The component will finance the following activities: (i)Anationaljusticesectorinformationnetworkingstrategyandsystems Regional Mongolian Aimag courts and MOJHA Court Enforcement Agency offices are not connected in a single IT network to the supreme court or MOJHA; nor are they connected to each other. As a result, there i s little information sharing or knowledge acquisition between 37 Mongolianjustice sector institutions or with the public. Specific project activities will include developing ajoint nationaljustice sector strategy to improve information sharingbetween the judiciary and MOJHA to define ways in which relevant information will be shared amongst justice sector institutions and with the general public. The proposed Project will also provide improved IT fiber optic networking connections and offer capacity building training for the judiciary and MOJHA to enable both justice sector institutions to better utilize new technologies. (ii)Creationofacentralizedjudicialarchiveandpublicinformationsystem. Old judicial court files and archives are currently housed in regional courts rather than centralized in the supreme court as stipulated by Mongolian law and international As such, they cannot be followed, easily inspected or transparency ensured. Court statistics are currently compiled by the General Council of Courts, but are not readily accessibleto the public or available on a real-time basis to justice sector institutions. Moreover, the Court Enforcement Agency has no centralized computer database which would allow the Agency or the public to monitor court enforcement and related activities. The proposed Project will create a new central judicial archive and public information system by providing IT equipment andtrainingto improve managementcapacity. Component Three: Enhancing Judicial Overations, Enforcement and Monitoring of Court Decisions lUS$4.79 million) (US$3.34mIDA: US$0.45mJapan PHRD Co-financing Grant: and US$ I.Om GoM) Supreme Court 107. The renovationofjudicial facilities and the provision of basic supplies and infrastructure has been aprimaryobjective of bothWorld Bank and USAIDassistanceto the Mongolianjustice sector. Surveys conducted ofjustice sector officials and the general public inMongolia demonstrates that World Bankinvestment inadministrative court facilities hashad apositiveeffect notonly on the image of those courts, but also of the courts of first instance. According to an ancient Mongolian anecdote now applied to many of the newly refurbished court buildings,people now "clean their boots" before entering renovated rural courts. Inaddition to improving a the public image of the judiciary, the renovations completed under the LJRPproject have improved the efficiency of these courts, permittedthe separation of all threejurisdictions of Mongolian courts and has provided the first steps toward improvingpublic knowledge, information and transparency of thejustice sector. Inthis manner, there is a clear link between improved infrastructure and the proposed Project's development objective i s to assist Mongolian justice sector institutions provide enhancedpublic service. 108. The Mongolian Supreme Court suffers from a shortageof space for court rooms and court procedures and has no suitable space to archive national court records as requiredby law nor can space be easily created. Moreover, the current computer server roomwas createdfrom an office space, and, as a result, has poor environmental controls and storage space making it inadequatefor the anticipated national court network which would be operatedby, and housed in, the supreme court. Lastly, there i s inadequate space for public access to either view court records and for exhibiting court andjustice sector information. At present, the supreme court has no IT network with regional courts, inadequate public access to the review of court records; and no ability to exhibitjustice sector information. The proposed Project will assist the supremecourt achieve international standards andbest practices by not only improving facilities and ITinfrastructure, but also through improvements to public information services, 22Court RecordsAssessment Manual, World Bank, Legal Vice Presidency, November2002. 38 and the enhancement of strategic planningand administrative oversight. These improvements to the court facilities will improve not only the efficiency of court operations, but also to the transparency and accessibility of the public to improved services. Inso doing, these improvements will also contribute to an improved transparency andrespect for thejudiciary. Court Enforcement Agency 109. The transparent, effective andprompt enforcement of courtjudgments contributes to improved public trust ofjustice sector institutions. Efficient monitoring and enforcement of courtjudgments i s also crucial for the effective administration ofjustice, the certainty of contractual obligations, and the protection of vulnerable populations including poor women and children. While new facilities cannot guaranteean effectivejudiciary or court enforcement service, minimumstandardsmust be met to accommodate automation, ensure efficient operations, facilitate public access, increase security, assist improve institutional independence, and demonstrate a more effective use of new technologies, systems and practices designed to improve transparency and access to information. 110. The proposedProject will strengthenandmodernize the Ministry of Justice andHome Affairs (MOJHA) Court Enforcement Agency. Although partially self-financed, many regional offices of the Agency are inextremely poor condition andlack the most basic operational tools. Furthermore, given the absence of a modern IT infrastructure, the Agency maintains only manualprocessesandpaper documentation andhas no formal databases, systems, or processesto respond to effectively enforce all judgments or address complaints concerning enforcement. The proposed Project would provide financing for site surveys and the refurbishment or construction of select ruralAimag Agency offices. Additionally, the proposed Project will support the creation of a nationwide IT network to assist the Agency to effectively document, enforce and monitor court decisions. The proposed Project will also include the financing of necessarytools such as computers, software and equipment. (i) JusticeSectorSupportInfrastructure The proposed Project will contribute to the development of Supreme Court facilities. The current building housingthe supreme court since 1996 was originally constructed as an office building, and while partially renovated, remains inadequate. Given that the current facility would not structurally be able to accommodate additional floors, the best recourse to address the limitations of the current facility i s to build a new, larger facility, especially designed and constructed to reflect internationalbest practices and to serve the long-term needs of the Mongolian judiciary and general public. The new facilities would provide a public information center, new central archive, and house the new nationaljudicial information network to create a one stop legal service center for information, knowledge and understanding of Mongolia's legal andjudicial system. (ii) Court Strategic Planningand Administrative Improvement Capacity buildingactivities to improve strategic planning and administrative of thejudiciary and General Council of Courts will accompany all improvements to facilities and infrastructure. Training will be provided inthe use of new infrastructure and management tools; new archival systems; data management and export to national database; application of analytical and case tracking databases; administrative planning and budget management best practices at both the central and regional level for court administrators to optimize operational processes; and communication techniques and tools to improve access to information and transparency to make the law more accessible to the Mongolian people. 39 (iii) CourtEnforcementCapacityEnhancement a) Refurbishment of court enforcement agency in selectedAimags Following the development of review criteria at least 10 regional court enforcement offices will be selected for renovation and construction. Given the poor conditions of many facilities, expert assistance will be provided both in the development of the review criteria and selection process. The proposed Project will support the development of new facilities that meet infrastructure standards reflecting the needs of the Court Enforcement Agency including public information facilities, confiscated supply and auction storage space, IT infrastructure capacity, improved security for officers and more efficient and effective working and operational capacity. All work will be implemented in accordance with a single design reflecting nationaldesign guidelines andbuildingstandards. b) Training on Enforcement systemfor court enforcement agency staff The proposed Project will support bothdirect and trainingof trainerprograms to improve the operations, speed and accuracy of court enforcement operations. Capacity building activities will focus on techniques to improve court enforcement activities including training on new IT networks and case management software. Trainingwill focus on improving knowledge about Mongolia's new legal system and how best to strengthen client satisfaction by managing through improved client relations and management. c) Provision of Basic Tools Support the provision of basic tools and equipment required for the effective, timely and efficient operations of the Court Enforcement Agency. Component Four:Proiect Management ($250,000) (US$O.lSm IDA; US$O.lO m Japan PHRD Co-financing Grant) 111. Under this component the PIUestablished under the LJRP will be strengthenedto enable it to ensure quality implementation, management, monitoring and supervision of all project activities under each component. Specialized consultants will be selectedinorder to provide the requiredexpertise and support for project activities. The PIUwill behousedinthe MOJHA which will provide office space. The Project will provide supplies, internet service, IT infrastructure and communication support to the PIU. 40 Annex 5: Project Costs MONGOLIA: EnhancedJustice Sector Services Project 112. The total Project costs have been estimated at US6.95 million, includes the project base costs of US4.15 million, and furthermore are inclusive of price contingencies of US$559,460 (8 percent of project base costs) and taxes (US$289,845). Physical contingencies have been estimated at 9percent for civil works and equipment. Priceescalation i s basedon a projectednationalinflation rate of 14.4 and foreign inflation of 2.5 percent. The amount of the government's contribution accountsfor US$l.O million (13.4 percent of total costs), thus the total project costs subjectedto donors' funding i s US5.95 million, including US$5.00millionof IDA Credit and Grant and an additional US$950,000 of parallel financing from a PHRDCo-financing Grant. All costs are inMarch2008 constant prices, with the exchangerate of MNT 1,180 per US dollar. The foreign exchangeportion andtaxes represent respectively percent and42.3 and 5.9 percent of the total project costs, respectively. Local Foreign Total ProjectCostBy Componentand/or Activity us $million US $million US $million 1.EnhancingPublicLegalEducation on the Justice Sector ComprehensiveLegalEducationReforminLaw Schools 0.20 0.00 0.20 NationalPublic InformationStrategy 0.10 0.20 0.30 2. IncreasingTransparencythrough ImprovedAccess to Legal Information Fiber Optic Connectionsfor Courts andEnforcement 0.96 0.96 Agencies Creationof a CentralizedJudicialArchive andPublic 0.05 0.40 0.45 InformationSystem 3. EnhancingJudicialOperations,Enforcement, andMonitoring of Court Decisions Justice Sector Support Infrastructure 1.15 2.14 3.29 Court Strategic PlanningandAdministrativeImprovement 0.10 0.00 0.10 Court EnforcementCapacity Enhancement 1.40 0.00 1.40 4. Project Management 0.25 0.00 0.25 Total Project Costs' 4.01 2.94 6.95 Total Financing Required 3.01 2.94 5.95 Note on Total Project Costs: Identifiable taxes and duties are US$0.29 milli0n.2~ Physical contingencies are estimated at US$383,400, of which US$192,600 i s foreign costs and US$190,800 local. Total price contingencies are estimated at US$176,060, of which US$168,560 i s local and the remainder foreign. 23 Activities financedunder IDA Grant funds and PHRDCo-Financinggrant are generally exempt fromtax under Mongolianlaw andtherefore are not imputedinthe table above. Costs for activitiesfinancedunderthe IDA Credit, alsoindicatedabove, are inclusiveof taxes. 41 Project Cost by Category and Source (inUS$) To-Financing ProposalJapan Policy and HumanResourceDevelopment ** Not BankFinanced. 42 Annex 6: Implementation Arrangements MONGOLIA: EnhancedJustice Sector Services Project 113. The overall implementationstructure utilizedunder the LJRPremains appropriate. In discussions with alljustice sector institutions, it was determined that the Ministryof Justice and Home Affairs (MOJHA) i s best able to provide bothphysical and logistical support to a PIU. As a result, MOJHA will assume full responsibility for financial management, procurement andmonitoring and evaluation of the proposed Project. Project implementationwill also be the responsibility of MOJHA however the assistance of the General Council of Courts (GCC) and supreme court will be requiredto ensure effective implementation. 114. To further enhance activity coordinationand sequencing, the PIUwill be overseenby aProject Steering Committee (PSC). The PSC will provide overall guidance, support andcoordinationfor effective project implementation. Steering Committee membership will be comprised of representatives from the Ministry of Justice and Home Affairs; Supreme Court; General Council of Courts; the Ministry of Education, Culture and Science; Ministry of Finance; Court Enforcement Agency; and the National Legal Center. Additional members may be added at the request of amajority of Steering Committee members. It i s also proposed that the Steering Committee meet at least twice a year for formal PIU briefings and that a special meetingcould be held following requestsby any Committee member. Meeting minutes will be completed following eachminute by the Project Coordinator and sharedwith all participating members and the Association. 115. OJHA will appoint and maintainthroughout Project implementationa PIUProjectCoordinator with qualifications, experience and terms of reference acceptableto the Association which will continue to sit inMOJHA providedoffice space. The Project Coordinator, in addition to hisfunctions on project implementation, will serve as the PSC Secretary. Additionally, the Project Coordinator will be assistedby a technical team comprised of afinancial specialist, procurement specialist, and three technical officers, out of which one will be responsible to supervise and coordinate the implementation of the special bilingual legal information programfor the Kazakh speakingpopulation of the Bayan-Ulgii Aimag under Project Component One. All PIUtechnical team members will be appointed andmaintainthroughout Project implementationwith qualifications, experience, terms, and conditions acceptableto the Association. The PIUwill oversee the day-to-day managementand implementationof all project activities, including the preparation of annual project implementationplans, progress reports, annual financial managementreports, project completionreports, and monitoring and evaluation reports. The PIUwill also overseeproject implementationincluding allprocurement, disbursement, organizational and trainingactivities, as well as facilitate communication with internationaldonors and civil society representativesthroughout project implementation. 116. Representativesof eachof the participatingproject Ministries andAgencies will be assignedby the Steering Committee to ad hoc technical working groups duringthe project to facilitate activities and to assist coordinate and implement project tasks. The establishment anddissolution of these groups will remain the responsibility of the Steering Committee to ensuretheir effectiveness. 43 Annex 7: Financial Management and Disbursement Arrangements MONGOLIA:MN EnhancedJustice Sector Services Project - ExecutiveSummary 117. The FinancialManagement team has conducted an assessmentof the adequacy of project financial management systemof the Mongolia EnhancedJustice Sector ServicesProject (EJSSP). The assessment, basedon guidelines issuedby FinancialManagement Sector Board on November 3, 2005, has concluded that the project meets the minimumWorld Bankfinancial managementrequirements, as stipulated inBP/OP 10.02, subject to the satisfactory resolution of the issues listed inparagraph#28. 118. Fundingsourcesfor the project includeIDA credidgrant, grant fromJapanese government (PHRD) andcounterpart funds from the Government of Mongolia (GoM). IDA credidgrant and PHRD grantproceedswill flow from the IDA into project Designated Account (DA). The DA will be established at commercial banks acceptableto the IDA and managedby a Project ImplementationUnit (PIU) within the Ministry of Justice andHomeAffairs (MOJHA). Counterpart funds will be usedto finance Supreme Court infrastructure andprovision of government landfor new facilities. Audit arrangements 119. The GoM through MOF will appoint an independent external auditor, acceptableto the IDA, no later than March 31,2009, to conduct an annual audit of the project financial statements, inaccordance with InternationalStandards on Auditingand Mongolianlaws andregulations, under terms of reference satisfactory to the IDA. The audit will be financed from the proceeds of the credit and grant. 120. The audit will cover all IDAfunds andcounterpart funds. The auditors will: (a) express an opinion on the annual financial statements; (b) determine whether the Designated Accounts and Operating Accounts have (i) been correctly accountedfor, and (ii) usedinaccordancewith the financing been agreements; and (c) determine the adequacy of supporting documents andcontrols surrounding the use of Statementof Expenditures (SOEs) as a basisfor disbursement. The auditors will also furnish a separate Management Letter, which will (a) identify any material weakness in accounting and internal controls at all level; (b)report on the degree of compliance with financial covenants of the Credit and Grant Agreements; and (c) communicate matters that have come to the attention of the auditors which might have a significant impact on the project implementation. 121. The annual audit report of the project will be due to the Bank within six months after the end of each calendar year. This requirement will be stipulated in the financing andgrant agreements. 122. The responsible entity and timingfor audits are summarized below: Component Submittedby Due date Consolidated project financial PIU June 30 after each calendar year statementsincluding all sources of project funds 44 FinancialManagement and ReportingArrangements Implementation Entity 123. EJSSPwill be managedby the Project ImplementationUnit (PIU) established within MOJHA. A Project Steering Committee with representation from MOJHA, the SupremeCourt (SC), General Council of Courts (GCC), National Legal Center, Ministryof Finance, and the Ministry of Educationand Science (MECS) will be establishedto provide overall oversight andcoordinationof the Project's activities. The Steering Committee will meet at least twice a year and additional meetings may be called as needed. 124. The PIUwill be incharge of the day-to-day management and implementation of allproject activities, including a) preparation of annualproject implementationplans, procurement plans, progress reports, annual financial managementreports, andproject completionreports, etc; b) project implementationincluding procurement, financial management and disbursement, and c) project monitoring and evaluation. 125. The PIUwill be responsible for overall coordination of the fiduciary aspects of the project including financial management, accounting, and audit. With regard to FinancialManagement, it will be responsiblefor the following: Designing and establishing a computerized financial management system including assigning chart of accounts; Maintaining up-to-date accounting records andledgers as well as asset management; Preparing an annual project financial planandbudget with monthly and quarterly details; Recordingtransactions for all project activities; Managingand maintainingDA and its replenishment; Preparing monthly bankreconciliation statements in a timely manner; Preparing SOEs, withdrawal applications and supporting documentation; Ensuringthat aproper internalcontrol system is inplace to achieve accountability at alllevel; Preparing financial statements on quarterly and annual basis and submitting to the IDA; Updating Project Financial Management Manual (FMM) and taking actions to make sure the manualcan be strictly followed; Assistingexternal auditors in conducting project audit and submitting audit reports to the IDA in line with Credit Agreement; Keeping all accounting forms and supporting documents with accuracy, and Other financial managementtasks under the project. Staffing and training 126. Adequate project financial management staff with educational background and work experience commensuratewith the work they are expected to performi s one of the factors critical to the successful implementationof project financial management.Based on the findings of IDA'Slatest FM review on previous project, the performance of the project financial officer of LJRP was not satisfactory and requires improvement for this new project. Inorder to minimize project financial management risk, the FMteam therefore recommended that PIUshouldhire a qualified financial officer with advanced education degree infinance and at least five years working experience, who will be responsible for maintaining the financial management system of the proposed project. The recruitmentshould be completed before project effectiveness andthe C V shouldbe submitted to the IDA for review prior to hiring. The IDAwill providenecessarytechnical support to projectfinancial officer once he/sheis recruited. 45 127. To ensure the financial officer to be recruitedwill have good understandingof IDA'Spolicy and requirements as well as project specific financial managementprocedures and guidances, the IDA will provide FMtraining to the newly recruitedfinancial officer before project effectiveness. 128. To strengthenfinancial managementcapacity and maintain consistent quality of accounting work, the task team has requestedthe project finnaical management manual (FMM)usedby the on-going L J W to be revised and adaptedfor the new project. The FMMwill provide detailed guidelines on financial management, internal controls, accounting procedures,funds flow arrangement, withdrawal application procedures, asset management, reporting and auditing arrangement. The FMteam will review andprovidefeedback to the PIUonce the draft i s received and the FMMwill be finalized beforeproject effectiveness. This FMMshould be periodically updated basedon significant changes inproject implementation andfinancial managementpractices. Fundsflow and DisbursementArrangement 129. The PIUwill maintain two US dollar designated accounts (DAs) at commercialbanks, on terms andconditions satisfactory to the IDA. One DA is for the IDA credivgrant and another is for the PHRD grant. The credivgrant andPHRDgrant proceedswill flow from the IDA to the DAs. The DAswill disburse against all eligible project expenditures. The authorized allocation of DAswill be discussedand determined between the IDA and the Recipientduringproject negotiationand specified inthe Disbursement Letter. 130. The PIUwill prepare the withdrawal applications (WAS). The WASwill be signedand approved by authorizedrepresentativesfrom MOF andPIU.Flow of funds i s as follows: Figure1 ProposedEJSSPFundsFlow I World,Bank .1 0' \L J/ DA for IDA DA for PHRD 4 \1 I Contractors and Suppliers I 131. Furtheradvance will be made from DAsto an operatingaccount (OA) to be openedat a commercialbank acceptableto the IDA and managedby the PIU. The OA i s used to finance small expenditures related to incremental operating cost and training. The OA i s maintainedinMongolian Tugrug, andthe maximumceiling of OA should be limited to equivalent to US$lO,OOO. Usesof the advances should be reported andreconciled with the DAs on a monthly basis. The OA outstanding 46 balance should be reported as a separate item in the DA reconciliation statement that i s submittedtogether with the DA withdrawal applications. 132. Four Disbursement methods: reimbursement, advance, direct payment and special commitments will all be available to the project. The SOElimits will be set upinline with procurement post review threshold, as follows: (i) all contracts for civil works estimated to cost the equivalent of $150,000 or less: (ii) contractsforgoodsestimatedtocosttheequivalentofUSD50,000orless;(iii) all consultant contracts estimated to cost USD 100,000 (fm)/ US$50,000(individual) or less. 133. The proceedsof the IDA credit/grant andPHRD Grant would be disbursedagainst eligible expenditures as specified inthe legal agreementsas shown inthe table below: ExpenditureCategory 134. The PIUwill retain disbursement supporting documents till one year after the receipt of the last audit report. These documents will be made available for review by the auditors and IDA supervision missions. Ifthe auditors or the IDA find any disbursementsare notjustified by supporting documentation or are made for ineligible expenditures, the IDA may withhold further deposits to the DAs until the Recipient has: (a) provided the accepted supporting documents; b) refundedthe amount involved to the IDA; or (b) submitted evidence of other eligible expenditures that offset the ineligible expenditures. 135. Retroactive financing may be applied for consultants' services under the Project. The expenditures incurred after May 1,2008, and within one year before the signingdate of the Financing Agreement would be retroactively financed by the IDA financing. The ceiling amount for retroactive financing under this project would be up to US$80,000 equivalent intotal. Accounting Policies and Procedures 136. Since the PIUwill preparefinancial statementson a modified cashbasis, the IDA encourages the adoption of formats laid out inthe InternationalPublic Sector Accounting Standards (IPSAS) - Financial Reporting under the Modified CashBasis of Accounting in order to monitor and fully reflect the receivable and payables in the financial statements. 137. Inorder to properly maintainprojectbooks, appropriate accounting systemwill be set upat the PIUandhandledby financial officer. Consistent with IPSASrequirements, the financial statementswill include the following: 47 Projectbalance sheet 0 Statement of receipts and expenditures 0 Designated account statement Notes to the financial statements 138. As PIUwill centrally manageandhandle the project financial management, they will be responsible for recordingthe project accounts, preparingwhole project financial statements andretaining all documentation supporting SOE disbursements as well as processing the withdrawal applications duringthe life of the project. As implementing agencies, the supremecourt, GCC, MECS andMOJHA will be responsible for providing all eligible and sufficient supporting documents against the payments for respective components that madeby DA. 139. The existing computerized accounting software which was developed by the project accountant of LJRP could not generaterequiredproject financial information. Therefore, the IDA recommended that a new accounting software be obtained that would be compatible with the structure and needs of the project. The FMteam will closely work with the PIUinprocuring sufficient new accounting software. Risk Ratingand Mitigating Measures 140. The following risks with corresponding mitigating measures have been identified duringthe assessment. Risk RiskRating RiskMitigatingMeasures RiskRating Condition of Incorporatedinto Project Design After Negotiations, Mitigating Board or Measures Effectiveness Inherent Risk Country level High Maintain ring-fenced control for Moderate the project. Entity Level High The PIU will change from the Moderate project. Projectlevel High Detailmanualand sufficient Moderate internal controls will be inplaced to monitor financial management of the project. Withdrawal applicationswill require sign-offs from Ministry of Finance Control Risk Budgeting Moderate Project annualplan, which is Moderate consistentwith the timing of project activities will be prepared, reviewed and monitoredby the PIU. Accounting High a) The PIUwill updatethe Moderate a) Conditions of 48 existingfinancial management effectiveness manual, whichwill require IDA review. 1) A capable financial officer b) Conditionof with qualificationand effectiveness experiencewill be recruited. ) The IDA will providefinancial c) Conditionof managementtrainingto the effectiveness newly recruitedfinancial officer. .) Test andinstallthe new accountingsoftware at the PIU InternalControl High a) Proper authorization for Substantial payment request and segregationof duties will be definedandincludedinthe FMmanual. b) The IDA will reviewinternal controlsduring supervision mission. c) IDA'Sno objectionfor significantactivities d) Audits by external independentaudit firmwill be conductedon annualbasis. FundsFlow Moderate ) Goodarrangementwill be in Moderate place for flow of project funds (See flow of funds below). ) Appropriateapprovalsfor withdrawal applicationsby representativesfromMOFand PIU. ) Relatedservice standards will be set up and documentedin FMmanualto makethe reviewingprocessand funds deliverymore efficient. Financial High ) The PIUwill adoptproper Substantial Reporting formats and contents of project financialreports. ) The IDA will reviewthe FMRsregularly. Auditing Moderate . Appoint an independent Moderate auditingfirmacceptedto the IDA with proper terms of reference. 141. Therefore, the overall FMrisk-rating of this project at the appraisal stage, taking account of the planned mitigating measures, i s Substantial. The FMteam will closely monitor the project FMrisk duringprojectimplementation 49 Financial ReportingArrangement 142. The PIUwill prepare InterimFinancialReports (IFRs) for the project inaccordance with agreed formats. The IFRs will be submittedto the IDA within 45 days after the end of eachquarter. The IFRs shall include butnot be not limited to (a) Descriptionof Project Progress; (b) Project Balance Sheet; (c) Sourcesand Uses of Fundsby Disbursement Components; (d) Uses of Fundsby Project Activities; and (e) Output Monitoring Report. 143. Although the proposed project will use the contents andformat of the financial reporting used previously by the on-going LJRP, the PIUneed to revise the content, format andreporting period according to project design and cost structure of the proposednew project. The draftof revised IFR format will be submitted to the IDA for review and comments. 144. InternalControl and InternalAuditing 145. The task team recommended that the Project Coordinator should regularly monitor the financial reportingprocessand the performance of financial officer to ensure the financial officer could fulfill hisker responsibilities in accordance with adoptedprocedures and guidances. The internal control arrangements including segregation of duties within the project should be documented inthe financial managementmanual. 146. There i s no formal internal audit unitwithin the PIU. Inorder to mitigate the risks inthe areaof internal control, regular oversight by MOJHA and Project Steering Committee, IDA'Speriodic supervision andyearly external audits will serve as the mechanismto ensure that financial management systemcould be functioning appropriately. Financial ManagementAction Plan 147. The following time-bound actions are proposed: Action Responsible CompletionDate person 1. A capablefinancial officer with qualificationand PIU Beforeproject experience will berecruited. effectiveness 2. Financial managementmanualwill be revised PIU Before project andissuedto all relevant staff effectiveness 148. The supervision strategy for this project i s basedon its FMriskrating, which will be evaluated on regularbasis by the FMteam andin consultation with relevant task team leader. 50 Annex 8: Procurement Arrangements MONGOLIA: EnhancedJustice Sector Services Project A. General 149. 1.Procurement for the proposedproject would becarried out inaccordancewiththe World Bank's "Guidelines: ProcurementunderIBRDLoans andIDA Credits" as updatedon October 2006. "Guidelines: Selectionand Employment of Consultantsby WorldBank Borrowers" as updated on October 2006, andthe provisions stipulated inthe FinancingAgreement. Descriptionof various itemsunder different expenditure categories i s presentedbelow. For any contract to be financed by the IDA creditlgrant andPHRDgrant, different procurement methods or consultant selection methods, the need for prequalification, estimated cost, prior review requirement, and time frame should be agreedbetween the Recipient and the IDA, anddocumented inthe Project Procurement Plan. The procurement planwill cover the procurement activitiesduringthe project implementation, but it will be updated annually or as requiredto reflect the actual Project implementationneeds andmatchthe institutional capacity for procurement. 150. Procurement of Works: A total amount of US$3.345 millionfor IDA creditlgrantwould be requiredfor civil works. The works procured under this project would include Supreme Court infrastructure, andrefurnishing of facilities of court enforcement agenciesinAimags. The procurement will be done usingthe Bank's StandardBiddingDocuments (SBD)for ICB andMongolian Standard BiddingDocuments for NCB agreedwith the IDA. (i) Znternational Competitive Bidding (ZCB) Any contracts for works estimated to cost US$500,000 equivalent or more would be procured under ICB procedures specified in the Procurement Guidelines. (ii) National CompetitiveBidding (NCB) Any contracts for works estimated to cost less than US$500,000 equivalent may be awarded under NCB procedures acceptableto the Bank. (iii) Shopping Small works estimated to cost less than US$lOO,OOO equivalent per contract would be awarded through shopping procedures as specified in paragraph 3.5 of the Procurement Guidelines. These works would be suitable for lump sum and fixed-price contracts awarded on the basis of quotations obtained from at least three local contractors. 151. Procurementof Goods: A total amount of US$1.26 millionfor IDA creditlgrant would be required for procurement of goods. The goods would include fiber optic connection to the courts and enforcement agencies,IT equipment and software for judicial archives. The procurement will be carried out done usingBank's StandardBidding Documents for all ICB procurement. International CompetitiveBidding (ZCB). Any contract for goods estimated to cost US$lOO,OOO equivalent or more would be procured under ICB procedures specified in the Procurement Guidelines. National Competitive Bidding (NCB). Any contract for goods estimated to cost below US$lOO,OOO would be procured under NCB procedures acceptableto the IDA. Shopping. Any contract for goods with cost estimate of less than US$50,000 equivalent per contract would be procured under shopping procedures as specified in Para. 3.5 O f the Procurement Guidelines. 51 Direct Contracting. Equipment including standard software with proprietary nature and obtained only from one source or which meet other circumstances as specified in Para. 3.6 of the Procurement Guidelines would be procured on the basis of direct contracting. 152. Selectionof Consultants. A total amount of US$355,000 IDA credidgrantandUS$800,000 PHRDgrant would berequiredfor consultants services. The consulting services would be neededfor development of comprehensive legal education reform inlaw schools, development of nationalpublic information strategy, special information strategy for Kazakhregion, architectural services, court strategic planningandadministrative improvement, etc. Most serviceswould beprovidedby consultingfirms and some would beprovided by individual consultants. Selection of ConsultingFirms:Any consultingcontract expected to cost more than US$200,000 equivalent per contract will use the Quality and Cost Based Selection (QCBS) or Quality Based Selection (QBS) in conformity with Paras. 2.1 Through 3.4 of the Guidelines. Most consulting services are estimated under US$200,000 equivalent per contract under this project. The Selection Based on Consultants Qualifications (CQ) would be used for these contracts. Universities, researchinstitutes as source of consultants may be included inthe shortlist. In such cases, QBS or CQ would be used instead of QCBS. For the selection of auditors, Least Cost Selection (LCS) would be used. Under the circumstances described in paragraph 3.10 of the Consultants Guidelines, consultants may be selected and awarded on a single-source basis, subject to IDA's prior approval. Selection of Individual Consultants: Individual consultants would be selected and awarded in accordance with the provisions of Paras. 5.1 through 5.3 of the Consultants Guidelines. Under the circumstances described in Para. 5.4 of the Consultants Guidelines, individual consultants may be selected and awarded on a single-source basis, subject to the IDA'sprior approval. 153. TrainingandWorkshops. A total amount of US$l50,000 PHRDgrant would berequiredfor trainingand workshops. Detailedprograms will bedeveloped by the PIUduringProject implementation andincludedinthe Project annual work planfor the IDA'sreview. Actual expenditures incurredin accordance with the approved detailed programswill be used as the basis for reimbursement. 154. IncrementalOperatingCost.A total amount of about US$45,000 IDA credidgrantwould be required for the Project operational cost. These costs are largely related to office supplies, translation and printingof training materials, logistics cost for workshops, etc. The implementing agency would follow its own procedures which have been found to be satisfactory. 155. 7. Non-IDAFinancing(NBF).The recipientwill contribute inkindto the Project by allocating suitable tracts of government landfor the construction and/or refurbishment of buildings- estimated inthe to cost the equivalent of $1 million. No purchaseof land or land taking will take place under this Project. B. Assessmentof the Agency's Capacity to ImplementProcurement 156. The Project would be implemented by the Ministry of Justice and Home Affairs (MOJHA). Procurement activities would be handled by the same PIUestablished under MOJHA for the previous IDA financed LJRP. The assessmentcovers project organization structure andfunctions, past experience, staff skills, quality andadequacy of supporting andcontrol system, legal andregulatory framework. The overall risk for procurement i s average. 157. The following action planhas been agreed to address these concerns: (i) the terms of reference andqualifications for the procurement officer require the IDA's priorreview; (ii) procurement training 52 for the PIUstaff would beprovided by the World Bank UlaanbaatarOffice before start upof the Project; (iii)procurementplanshould be updated annually; and (iv) the format of the procurementmonitoring report andprocurementfiling systemwould be agreed andbe inplacebefore start up of the Project. C. ProcurementPlan 158. The Recipienthas developedan overall ProcurementPlanfor Projectimplementation, which provides the basis for the procurementmethods. The procurementplan shouldbe available at the MOJHA and MOFprocurementwebsite and should also be availablein the project's database and on the World Bank's external website. The plan will be updatedinagreement with the IDA annually or as requiredto reflect the actualproject implementationneeds andimprovementsininstitutional capacity. D. IDA PriorReview 159. All contractsinexcess of US$100,000 for goods, contractsfor consultantservices inexcess of US$lOO,OOOfor firms and inexcess of US$50,000 for individuals, all contractsfor civil works regardless of contract value, all direct contractingcontracts and all contracts awardedunder single source selection will be subjectto prior review by the IDA.All terms of reference will also be subject to prior review. All other contractswill be subject to ex-postreview by supervisionmissions;the postreview samplingratio would be one out of four contracts. E. SupervisionPlan 160. Inaddition to the IDA'Sprior review, the capacity assessmentof the PIUrecommendedat least two supervisionmissionsper year to visit the Project to carry out expost reviews of procurementactions. Table 1: Total Project Costsby Expenditure Category (US $) Total 5,000,000 950,000 1,000,000 6,950,000 53 Table 2: Thresholdsfor ProcurementMethodsandPriorReview Expenditure ContractValue Prior Review Threshold ProcurementMethod Threshold (US$ thousands) (US$thousands) 1.Civil Works 2500 ICB ALL e500 NCB ALL e100 Shopping ALL 2. Goods 2100 ICB ALL e100 NCB ALL e50 Shopping N.A. Direct Contracting(DC) ALL 3. Consultants 2200 QCBS/QBS ALL Services e200 CQ ALL Individual Consultants ALL Single Source Contracts ALL 54 Annex 9: Economicand Financial Analysis MONGOLIA: Enhanced Justice Sector Services Project Mongolia - 161. Mongolia has made significant progress modernizing its economy through the passageof new laws prepared to support amarket economy. Mongolia's overall rank inthe World Bank's Doing Business indicators for contract enforcement highlight some of these successes-Mongolia ranked 27* in the overall enforcement of contracts for both2007 and 2008?4 Additionally, Mongolia i s comparable to other EasternAsian countries such as Japan, China and Korearegarding the number of overall procedures for enforcing a contract as well as the duration (days) to enforce a contract.25 162. These favorable ratings contrast with the costs of contract enforcement. InMongolia, the estimates are lower than the regional average of 47.8 percent, butrising. As of January 2004, contract enforcement cost represented, on average, 22.6 percent of the totaljudgment. The latest datafor Mongolia shows this figure at 26.1 percent of the total cost of thejudgment. Within the region, the comparative cost for enforcing a contract inChina i s 8.8 percent, whereas Korea's is 10.3 percent of the total claim andTaiwan's is 17.5 percent. 163. Public perception of the Mongolianjudiciary i s extremely low. Inrecent studies of corrupt government institutions, thejustice sector i s cited as the fourth most corrupt area, closely followed by the police and prosecutors.26 DoingBusiness corroborates this information, showing that as of January 2008, corruption was seenas a major constraint to businessesin49.51 percent polled. Nevertheless, the initial indications from the Bank's LJRP are that caseloadsare increasing within the courts, which could correlate with increasingprestige for thejudiciary as well. 164. The capital investments inthe courts and court enforcement agenciesprovide a more clear-cut rationale for investment. Access to legal information andjustice are pressingissues inMongolia. The country's vast territory, harsh winters and low populationdensity present a compelling case for a technological solution to reduce the geographic barriers to justice. 165. The creation of the UINwas an important, albeit a partial, step given that regional court and court enforcement agency offices outside the capital, Ulaanbaatar, lack the requiredbasic working conditions and IT infrastructure requirements to easily access this tool. The simple lack of access to legal andjudicial information, especially inthe Aimags far from the capital have impeded case management, prevented citizens from accessing information regarding their case(s), and negatively affect the quality of judicial decisions inthe Aimag courts. 166. Subsequently,the LJRP financed the creation andmaintenance of the UIN,which providedfull access to legal information. Inthe proposed project, and expanding on IT investments already made under the World Bank's LJRP andthe USAID-financed case managementsystem, fiber optic networks will be utilized to createtwo independent networks-one for thejudiciary, and another for the Court Enforcement Agency offices. The network will provide much neededreal-time reporting capacities to and from the center inUlaanbaatar. 167. Since January 2008, the judiciary andCourt Enforcement Agency offices began to implement a single case file number to track cases. Without this single case file, monitoring and oversight of these 24 Doing Business 2007Mongolia, page 44. 25 Ibid, pg. 46. Interms of duration of contractenforcement,Doing Business reportsthat inMongolia it takes a proximately 314 days to enforce a contract comparedto Japan's 316. "See generally USAID(2005)Assessmentof Corruption in Mongolia andThe Asia Foundation (2008). Mongolia: Trends in Corruption Attitudes. 55 cases has been extremely difficult. The further development of legal information networks within the court enforcement agencies and thejudiciary will allow for less labor-intensive data collection and monitoring on cases. This will not only decrease the roomfor humanerror inhandlingdata, it will also allow for more optimal utilizationof human resources. 168. Since the court enforcement agency offices are responsible for collecting enforcement fees and auctioning off property, the increaseinhumanresources and transparent procedures, coupled with greater oversight from the center should translate into higher own-source revenues auctions and enforcement fees. This alone couldprove a substantial return on investment and increase the self-financing component of the Agency. 169. Moreover, initialdata show that the Court Enforcement Agency may pursue enforcement of a smaller number of cases with higher monetary value (e.g., commercial cases, bankfailure) rather than a large volume of cases with lower monetary values. Again, considering the vast territory of some Aimags, andthe limited tools at the disposal of the court enforcement agents ineachAimag, the overall productivity gains made through IT solutions could beused to address the outstanding cases. There i s considerable anecdotal information that the vast majority of these cases pendingat the Aimags involve paternity suits, family matters or other small claims. 170. While overall monetary value of these cases may be relatively small (vis-&vis a case involving abank failure), they have a significant economic value for a single mother living inpoverty. The World Bank commissioned a study in2003 to look into the economic value of legal interventions for poor women inEcuador. This study posited that the effectiveness of the legal system inprotecting a woman's rightto ajudgmentlmonetary compensation couldbe measuredusingthe following formula: Effectiveness of -- Actualpaymentreceived = P(x,y) The Legal system Value of entitlement Ab) 171. Inthis equation, A(x) is the entitlement inmonetary unitsany mother with legallyrelevant factual circumstances definedby the vector (x), and P(x,y) i s the actual averagepayment received by such a woman after a courtjudgment inher favor.27 Insome cases, women were found to only receive an actual payment of US$lO/month. Some may argue that a considerable amount of effort i s requiredto collect a smallpayment. Yet the Ecuador study notedthat insome instances, the transfer alone was equal to 92 percent or more of what the household spentfeeding one individual.28 Positive correlations were also made interms of the intergenerational effects - the receipt of court awards raised the possibility of a child attending school by 4.8 percent, reduced incidences of domestic violence, and also proved a strong case for other mothers to seek legalredress, and furthermore improved their overall perspective of the judicial system. 172. Regarding the economic and financial benefits of Component Three, recent IEGratings of judicial reform projects29 with large scale infrastructure works have highlightedthe low or negligible rates of return for these particular investments. Inthese cases IEGcited a lack of evidence that the amount of resourcesspent was justified interms of benefits achieved andrelevance to the overall project objective. However, neither IEG,nor the project teams offered measurable indicators capable of measuring these investment impacts. 2'The World Bank(2003). TheImpact of Legal Aid: Ecuador,page 8. 28World Bank(2003), pg. 37. 29See generally IEG's reviews of the Armenia Judicial ReformProject, GeorgiaJudicial ReformProjectand Sri Lanka Legal andJudicialReforms Project. 56 173. The same could be said for the proposed investments for the new Mongolian Supreme Court facility, given that the initialconstruction proposed under the project will provide for a court records center, a new court server, and a public information center. Although these investments are not easily measuredinterms of short-term economic gains, they are intended to produce greater efficiency and transparency inthe courts over the long-term. Inaddition, the proposed project will only bear approximately one -third of the total costs of the new premises. The remainder of the cost for the new facility will be borne by the government. The government will provide the new landfor the new court, valued at US$1.0 milliondollars. 174. The current premises of the supremecourt were converted from an office buildingfor the supreme court's use. Its deficiencies include a shortage of court rooms and court space; no IT network with regional courts, inadequatepublicaccess to the review of court records. Under the proposed project, the supreme court will be able to better adhereto internationalstandardsand best practices by not only improving facilities, archival capacity andIT infrastructure, but also through improvements to public information services. These improvements to the court facilities will improvenot only the efficiency of court operations, but also to the transparency and accessibility of the public to improved services. Inso doing, these improvements will also contribute to an improved transparency andrespectfor thejudiciary. 175. Inaddition, theproposedProject will only helpfinancerefurbishment andor construction of 10 out of the 21 Aimag court enforcement agency offices. The Minister of Justice and Home Affairs has noted his willingness to examine all cost savings options inorder to best makeuse of the available budget. Increasesinown-source revenue through fees and auctions could help provide funding for further refurbishment of the remaining eleven offices. The planned works, along with the adoption of a nation- wide database and computer system and the provision necessary tools andequipment will help the court enforcement agency to enforcejudgments in amore timely and effective manner, as well as to address complaints concerning enforcement. 57 Annex 10: Safeguard Policy Issues MONGOLIA: EnhancedJustice Sector Services Project Mongolia - 176. SafeguardPolicies. The Bank's SafeguardPolicies on EnvironmentalAssessment (OP4.01) and Indigenous Peoples (OP 4.10) apply. OP 4.01 i s triggered since the Project i s expectedto finance the construction of SupremeCourt facilities andrefurbishment or construction of selectedCourt Enforcement Agency offices. There will be no land acquisition or resettlement under this Project. To address and mitigate impacts under OP 4.01, the Project will adopt a reviewed and revised version of the environmental guidelines included inthe biddingdocuments of a similar Bank Project (Legal andJudicial Reform Project (LJW) (Cr. 3595-MOG). The Bank's Indigenous Peoples Policy applies since project beneficiaries include Kazakhs, an ethnic group with a distinct languagebut with commonality of lifestyle with rural Mongolians.The Kazakh ethnic minoritiesreside within the project site of Bayan-Ulgii Aimag. Since languagehas been identified as a key distinguishingfactor of the Kazakhs, ensuring equitable and culturally appropriate outreach of legal education and awareness-raisingi s a feature of this Project and i s central towards meeting OP 4.10 principles.The Project, therefore, includes a sub-component ensuring equitable treatment, benefit andrepresentation of the Kazakhs of Bayan-Ulgii Aimag via its outreach and communications design. The project emphasis will beon that of languageconsideration. That is, developingmaterials and outreach on thejustice systemin the Kazakhlanguage. 177. Background. Nearly 94 percent of Mongolia's population (2.6 million) practices Tibetan BuddhistLamaism. The Khalk major ethnic group, one of 30, comprises nearly 85 percent of the population. The secondlargest ethnic group of Turkic (Kazakh) origin makes up approximately 7 percent of this population. Although the majority of ethnic and minority groups of Mongolia speakMongolian dialects and share similar customs, traditions, and economic livelihoods, the Kazakhpopulationof Western Mongolia inBayan-Ulgii Aimag i s predominately Muslimand speaks primarily Kazakh. Of Bayan-Ulgii's population, approximately 100,000 inhabitants or 90 percent are of Kazakh descent. The proposed project will also cover Bayan-Ulgii Aimag as one of its project sites therefore the project seeks to enhance the positive impacts pertainingto this ethnic group.30 Key Social Challenges 178. Communication. Communicationwith the Mongolian capital, Ulaanbaatar, is difficult and limitedfor the Kazakhresidents of Bayan-Ulgii. Daily Mongoliannewspapers are delivered nearly one week after publicationor later. There are fewer than 500 local subscriptions for all national newspapers combined. There i s no local newspaper. The Aimag also has its own radio broadcasting channel but it has a limitedreach of 150km. This channel broadcastsurgent information inKazakh one hour a day and i s even usedto summons parties to courts for civil disputes. Most local news i s received by residents of the province via television. 30Bayan-Ulgii Aimag is divided into 13 Soums and 84 administrative Bags. Twenty-one percent of the temtory i s considereda protected area. Studies show that 51.5% of the population's key economic livelihood i s relatedto animal husbandryandthat there are approximately 1.4 million heads of livestock. Given its rather undevelopedinfrastructure, there are few paved roads andtrade with the rest of Mongolia i s often more difficult than with neighboringRussiaor China. 58 179. Education. The education systeminBayan-Ulgii also suffers from serious shortcomings. In 2006 there were 38 schools for approximately 20,000 students.The Social Assessment reveals that the Kazakh speakingpopulation i s largely illiterate and women have even higher rates of illiteracy than men. Most childrenreceive only abasic elementary school education and an increasing number of students speak only Kazakh given that studies untilthe sixth grade are conducted in Kazakh and only slowly integrate the use of Mongolian inlate highschool. 180. Access toJustice Information. With respectto thejustice sector, citizens who participate in formal court hearings present their petitions or complaints inKazakh. Hearings, trials, and formal criminal interrogations are also conducted inKazakh. However, the presentation of formal court documents is translated into Mongolian either by local lawyers or interpreters following the completionof formal procedures.Laws and other legal documents are primarilyavailable inMongolian, but the content and approval of news laws i s transmitted via radio duringa special "law hour" program. Additionally, there has been an effort to begin translating key laws and treaties into Kazakh. The LJRP, for example, also translated and distributed information on the new administrative court system in2006. Other internationaldonors have also begun to translate and distribute legal information inbay an-Ulgii. 181. Preparation ofSociaZAssessrnent. The main social issue for the Project is to enhance development benefits for the Kazakh speaking ruraland marginalizedpopulation of Bayan-Ulgii Aimag by developing culturally appropriate outreach and communication materials on thejustice sector as part of its component to improve legal education and informationfor poorer and rural populations. A Social Assessment conducted in December 2007 provided a baseline data (demographic, social, and cultural features of the population) includingan analysis of how Kazakhs currently experience thejustice systems. Some of the findings inthis context include the centrality of the Kazakh language in accessing information; the relative paucity of Mongolianlanguage comprehension; the need for communication materials (newspapers, radio, television) to be made available to this population; and that particular forms of media (especially radio) show highpromise inreaching out to the population for legal education information. 182. ConsultationMeasures. Inlight of the Social Assessmentfindings, an additional consultative process was carried out inMarch 2008 to: (i) ensure that the project objectives and interventions are appropriate to the targeted population; and (ii) carry out prior and informed consultations on the to proposed project to ensurethat the affected populationunderstood project objectives and were able to provide input towards influencingproject design. The consultations were carried out inthe local languageby a Kazakh female facilitator, who i s also a lawyer with experience inthe country's justice system. The consultations included the followingrecommendations to enhancepublic legal education on thejustice sector: translation of legaljustice teaching aids into Kazakh; dissemination of legalmessages (including on rights,laws, regulations) inKazakh via radio to reach out to marginal and illiterate populations for whom radio i s a key source of information; development of weekly legalradio programs "lawyers corner" to translate the law inlocal vernacular for the concernedpopulation; provide assistance to non-Kazakh concerned government entities to enable them to better reach the Kazakhpopulation on legal andjudicial issues (Le. provide the Kazakh translation of procedural and material laws, setting up a systemic framework for including and updating the Kazakhlanguage translation of laws inofficial legal websites) re-training of law teachers through a national public information strategy. This assessment and consultations have servedto influence programmatic decisions with respect to the overall national strategy and the creation of a specialized legalinformation strategy for Bayan-Ulgii Aimag that will ensure a culturally appropriate mix of implementationstrategies, techniques and culturally appropriate opportunities for this group to participate in, andgainbenefits, from the Project. 183. Use of SociaZAssessmentin Project Design. The results of the SA as well as consultations carried out inMarch2008 are used to ensure that the project objectives and interventions are appropriate 59 to the targetedpopulation and are acceptable to the beneficiaries. A separate project sub-component has been developed to ensurethe equitable treatment, benefit and representation of the Kazakh speaking population of Bayan-UlgiiAimag. The Project will: Identify and include a Kazakh speaking legal specialist in the PIU to assist with all Kazakh speakingactivities; Incorporate specific Kazakh language activities in the Project's first component to enhancepublic legal education on thejustice sector within a nationalpublic information strategy; Design and implement a special information strategy to meet the unique needs of Bayan-Ulgii Aimag. 184. While the content of the nationalpublic information strategy remains to be determined through additional consultations followingproject effectiveness, with respect to the special information strategy the project has identified the following potentialactivities. Creating special radio content to provide specially targeted information to rural residents and poor herders by extending local broadcasting times and creating an additional "lawyers corner" to engage in public dialogue and potentially address caller local and live questions; A legal information phone service to provide referral services in conjunction with other internationaldonors; A series of new bilingual written legal materials including a Mongolian-Kazakh legal dictionary, translating key laws and procedural materials, assisting the Ministry of Justice and Home Affair incorporate Kazakh language materials on its website; Supporting the efforts of the Ministry of Education, Culture and Science to provide training in Kazakh for teachers on Mongolia's legal framework, assisting update and develop bilingual educational materials for children to introduce them essential legal concepts: working closely with the Teachers College to develop additional bi-lingual educational materials for advancedlearningcourse. 60 Annex 11: Project Preparation and Supervision MONGOLIA: EnhancedJustice Sector Services Project Mongolia - Planned Actual PCNreview 2114/07 2114/07 InitialPID to PIC 2121/07 2121/07 InitialISDS to PIC 2121/07 2121/07 Appraisal 5/05/08 04/16/2008 Negotiations 5/05/08 05/16/2008 BoardIRVP approval 6/26/08 06/26/2008 Planneddate of effectiveness 11/28/08 Planneddate of mid-ternreview 1/15/10 Plannedclosingdate 12131112 Key institutions responsiblefor preparationof the project: Ministry of Justice and Home Affairs; General Council of Courts, Supreme Court, Ministry of Education, Culture and Science. Bank staff and consultantswho worked on the project included: Name Title Anthony Toft Chief Counsel LEGES Christina Biebesheimer Chief Counsel LEGJR RobertBuergenthal Senior CounseVTaskTeam LEGJR Leader BethAnne Dabak Operations Analyst LEGJR RowenaM.Gorospe Counsel LEGIA MartinM.Serrano Counsel LEGES David I Sr. Financial Management EAPCO Specialist Yi Dong Sr. Financial Management EAPCO Specialist LhagvasurenOchir Financial ManagementAnalyst EAPCO Junxue Chu Sr. FinanceOfficer LOAFC IanP.J. Nightingale LeadProcurement Specialist EAPCO Jinan Shi Sr. Procurement Specialist EAPCO GerelguaTserendagva ProcurementAnalyst EAPCO SajjadAli Shah Senior Operations Officer EAPCO NinaBhatt Social Development Specialist EASSO May Olalia OperationsOfficer EAPCO ' SusanaUy Womack OperationsAnalyst EAPCO LaurenM.Cat0 ProgramAssistant LEGES Mary J. Keane ProgramAssistant LEGJR Michael Pracher ETTemporary LEGES RameshSivapathasundram LeadInformation Officer ISGEG CarlosEscudero Legal Consultant LEGESLEGJR Andres M.McAlister RecordsManagementand LEGJR Archives Consultant GeraldThacker Justice SectorInfrastructure LEGJR Consultant Bakhitgul Musaiv SafeguardConsultant EACMF 61 Bankfunds expendedto date onprojectpreparation: 1. Bankresources:US$lOO,OOO 2. Trust funds: n/a 3. Total: US$100,000 EstimatedApprovalandSupervisioncosts: 2. Remainingcosts to approval: 3. Estimatedannualsupervisioncost: 62 Annex 12: Documentsinthe Project File MONGOLIA: EnhancedJustice Sector Services Project Mongolia - 185. Project Concept Note, 186. DraftPADat PPWQER Stage, 187. Mission Aide Memoires: 0 Aide-Memoire IdentificationMission Aide-Memoire Preparation Mission Aide-Memoire Pre-Appraisal Mission 188. Report on the Impact Evaluation Study of the Legal andJudicial ReformProject 189. An Assessment Report on Legal andJudicial ReformProject(MOJHA) 190. Outcomes BasedLearning for Law, A report on bringinginternationalstandardsto Mongolian legal education. 191. Assessment Report of Implementationof Strategic Planof Mongolia (MOJHA) 63 Annex 13: Statement of Loans and Credits MONGOLIA: EnhancedJustice Sector Services Project Mongolia - Differencebetween expectedandactual OriginalAmount inUS$Millions disbursements Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev'd PO68133 2006 4E-GEFMARINE ELECTRONICHWY 0.00 0.00 0.00 8.30 0.00 8.05 0.25 0.00 PO79610 2006 4E LivestockWaste Management - 0.00 0.00 0.00 7.00 0.00 6.00 2.46 0.00 PO78034 2005 TargetedResearchfor CoralReefs 0.00 0.00 0.00 11.00 0.00 4.33 1.63 0.00 PO45864 2000 4E-MEKONG WATER UTILE. 0.00 0.00 0.00 11.00 0.00 0.12 0.12 -0.08 Total: 0.00 0.00 0.00 37.30 0.00 18.50 4.46 - 0.08 MONGOLIA STATEMENT OF IFC's Held andDisbursedPortfolio InMillionsof U S Dollars Committed Disbursed IFC IFC FYApproval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. 1994 AF MGMT CO 0.00 0.10 0.00 0.00 0.00 0.10 0.00 0.00 1999 AOF 0.00 40.30 0.00 0.00 0.00 12.79 0.00 0.00 2004 AVENUE ASIA 0.00 39.88 0.00 0.00 0.00 30.58 0.00 0.00 1994 Asian InfraFund 0.00 16.88 0.00 0.00 0.00 13.77 0.00 0.00 2006 Asian LionFund 0.00 6.00 0.00 0.00 0.00 0.00 0.00 0.00 2006 Avenue Asia I V 0.00 50.00 0.00 0.00 0.00 1.30 0.00 0.00 2004 Olam 0.00 5.60 0.00 0.00 0.00 5.60 0.00 0.00 2001 Vital Solutions 0.00 0.17 0.00 0.00 0.00 0.17 0.00 0.00 Total portfolio: 0.00 158.93 0.00 0.00 0.00 64.31 0.00 0.00 Approvals PendingCommitment FYApproval Company Loan Equity Quasi Partic. Total pendingcommitment: 0.00 0.00 0.00 0.00 64 Annex 14: Country at a Glance MONGOLIA: EnhancedJustice Sector Services Project Mongolia at a glance 10/9/07 East I Key DevelopmentIndicators Asia & Low Mongolia Pacific income Age distribution, 2006 (2008) Male Female Population, mid-year(millions) 2.6 1,900 2,403 Surfacearea (thousandsq. km) 1,566 16,300 23215 Populationgrowth(%) 1.3 0.8 1.8 Urbanpopulation(% of total population) 60 42 30 GNI (Atlas method, US$ billions) 2.6 3,539 1,562 GNI per capita (Atlasmethod, US$) 990 1,863 650 GNI per capita (PPP,international$) 2,280 6,821 2,698 GDP growth(%) 8.6 9.4 8.0 15 10 5 0 5 10 15 GDP per capita growth (%) 7.2 8.6 6.1 percent (mostrewnt estimate, 2W&2006) I Povertyheadcountratioat $1 a day(PPP, %) 27a 9 Povertyheadcount ratioat $2 a day(PPP, %) 45 37 Under-5 mortality rate (per 1,000) Lifeexpectancyat birth (years) 65 71 59 infantmortality(per 1,000 livebirths) 21 26 75 Chiid malnutrition(%of childrenunder5) 13 15 Adult literacy, male (Ohof ages 15and older) 98 95 72 Adult literacy,female (`Aof ages 15 and older) 98 87 50 Grossprimaryenrollment,male (% of age group) 93 115 108 Grossprimaryenrollment,female (% of age group) 94 113 96 Access to an improvedwatersource (Yoof population) 62 79 75 Access to improvedsanitationfacilities (%of population) 59 51 38 I OMongolia 13East Asia & Pacific Net Aid Flows 1980 1990 2000 2006 (US$ millions) Net ODA and officialaid 2 13 217 212 rGrowth of GDP and GDP per capita ("A) Top3 donors (in2005): Japan 2 105 56 Germany 4 19 28 UnitedStates 13 18 Aid (% of GNI) 0.1 0.7 20.1 9.4 Aid per capita (US$) 1 6 91 83 Long-Term EconomicTrends Consumerprices(annual% change) 325.5 8.1 5.9 GDP implicitdeflator(annual%change) 2.0 -16.2 26.1 23.1 +GDP -GDP per capita Exchangerate (annualaverage,local per US$) 3.0 5.0 1,076.7 1,179.6 Terms of trade index (2000 = 100) 100 110 1960-80 1990-2000 2000-08 (average annualgrowth %) Population,mid-year(millions) 1.7 2.1 2.4 2.6 2.4 1.3 1.3 GDP (US$millions) 2,310 2,093 1,089 3,149 6.4 2.7 7.1 ("Aof GDP) Agriculture 16.7 15.2 32.7 21.9 1.4 3.7 2.7 Industry 25.0 40.6 20.3 42.3 6.6 2.3 7.9 Manufacturing 35.6 4.6 3.9 -9.7 7.5 Services 58.3 44.2 47.0 35.9 8.4 0.4 8.6 Householdfinal consumptionexpenditure 52.3 61.6 70.1 47.8 General gov'tfinal consumptionexpenditure 24.9 29.8 15.4 11.4 Grosscapitalformation 70.0 35.6 29.0 35.1 Exportsof goods andservices 23.9 22.4 56.4 65.3 imports of goods andservices 71.0 49.4 70.9 59.7 Grosssavings 22.3 6.3 8.5 39.5 Note: Figuresin italicsarefor years otherthanthose specified. 2006 data are preliminary. indicatesdata are not available .. a. Countrypovertyestimateis for earlier period. b. Aid data are for 2005. DevelopmentEconomics,DevelopmentDataGroup (DECDG). 65 Mongolia Balance of Paymentsand Trade 2000 2006 Governance Indicators, 2000 and 2006 (US$ millions) Totalmerchandise exports (fob) 536 1,543 Total merchandise imports(cif) 676 1,486 Voice and accountability Nettrade in goods and services -158 150 Political stability Currentaccount balance -69 221 as a % of GDP -6.3 7.0 Regulatory quality Workers` remittances and Rule of law compensation of employees(receipts) 12 202 Control of corruption Reserves.includinggold 141 822 0 25 M 75 1w Central Government Finance 02006 Countrys percenele rank (0-100) 02000 h8Qkgher values!mowbenar ratings ("A of GDP) Current revenue (including grants) 29.9 36.6 Source Kalllmann-Kmay.MBstruzz World Bank Tax revenue 22.2 30.4 Currentexpenditure 26.8 21.7 Technology and Infrastructure 2000 2005 Overallsurplusldeficit -6.7 8.1 Pavedroads (%of total) 3.5 Highest marginaltax rate (%) Fixed line and mobilephone Individual subscribers (per 1,000 people) 115 286 Corporate Hightechnologyexports ("A of manufacturedexports) 0.5 0.1 External Debt and Resource Flows Environment (US$ mlons) Total debt outstandingand disbursed 897 1,414 Agricultural land ("/.of landarea) 83 63 Total debt service 39 46 Forest area ("A of landarea) 6.8 7.8 Debt relief (HIPC. MDRI) - - Nationallyprotectedareas (% of landarea) .. 13.3 Total debt ("A of GDP) 82.3 44.9 Freshwaterresources percapita(cu. meters) .. 13,626 Total debt service(%of exports) 6.2 2.2 Freshwaterwithdrawal (% of internal resources) 1.3 Foreigndirect investment (netinflows) 54 1 C02 emissions percapita (mt) 3.1 3.2 Portfolioequity(net inflows) 0 GDP perunit of energy use (2000 PPP $ perkg of oil equivalent) ornposition of total external debt, 2006 Energyuse per capita (kgof oil equivalent) (US$milltons) IMF 31 IBRD Totaldebt outstandingand disbursed 0 0 Disbursements 0 0 Principalrepayments 0 0 Interest payments 0 0 otherrn"lU. S$ millions Iated, 511 IDA Total debt outstanding and disbursed 137 301 Disbursements 14 13 PrivateSector Development 2000 2006 Total debt service 1 5 Time requiredto start a business (days) 20 IFC (fiscalyear) Costto start a business (% of GNI percapita) -- 5.1 Total disbursedand outstandingportfolio 1 6 Time requiredto register property (days) - 11 of which iFC ownaccount 1 6 Disbursementsfor IFCown account 0 0 Rankedas a majorconstraintto business Portfoliosales, prepayments and ("A of managerssurveyedwho agreed) repaymentsfor IFC own account 0 0 Tax rates 64.9 Access tolcost of financing .... 64.4 MiGA Grossexpasure 0 20 Stock marketcapitalization(% of GDP) 3.4 2.0 New guarantees 0 0 Bankcapitalto asset ratio ("/.) Note:Figures in italicsare for years other than those specified. 2006 data are preiiminaly. 1019107 ..indicates data are notavailable. -indicates observationis not applicable. DevelopmentEconomics,DevelopmentData Group (DECDG). 66 Millennium Development Goals Mongolia Withselected targets to achievebetween 1990and 2015 (esbmate closest to dateshown, +/- 2yean) Goal 1:halvethe ratesfor $1 a daypovertyand malnutrition 1990 1995 2000 2005 Povertyheadcount ratioat $1 a day (PPP, % of population) 13.9 27.0 Povertyheadcount ratioat nationalpovertyline (% of population) 36.3 35.6 32.2 Share of incomeor consumptionto the poorest qunitile(%) 5.6 8.0 Prevalenceof malnutrition(% of children under 5) 12.3 12.7 13.0 Goal 2 ensurethat childrenare able to completeprlmaryschooling Primaryschool enrollment (net, %) 90 90 91 Primarycompletionrate (%of relevant age group) 76 87 95 Secondaryschoolenrollment (gross,%) 82 63 92 Youth literacy rate (YOof peopleages 15-24) Goal 3: ellminategenderdisparity ineducationand empowerwomen Ratioof girls to boys in primaryand secondaryeducation(%) 109 112 Women employedin the nonagricultural sector (% of nonagricultural employment) 49 48 48 Proportionof seats heldby women in national parliament (%) 25 9 12 7 Goal 4: reduceunder-5mortality bytwo-thirds Under-5 mortalityrate (per 1,000) I04 89 75 24 Infant mortalityrate (per 1,000live births) 64 44 33 19 Measles immunization(proportionof one-yearoids immunized,%) 92 85 94 99 Goal 5: reducematernalmortalitybythreefourths Maternalmortalityratio(modeledestimate, per 100,000 live births) 110 67 Birthsattendedbyskilled healthstaff (% of total) 97 100 Goal 6 haltand beginto raversethe spreadof HIV/AIDSand other major diseases Prevalenceof HIV (Xof populationages 15-49) 0.1 Contraceptiveprevalence (% of women ages 15-49) 67 Incidenceof tuberculosis(per 100,000people) 220 209 199 194 Tuberculosiscases detectedunder DOTS (%) 7 62 68 Goal 7: halvethe proportion of peoplewithoutsustainable accass to bask needs Access to an improvedwater source (%of population) 62 62 Access to improvedsanitationfacilities(% of population) 59 Forestarea (%of total landarea) 7.2 6.8 7.7 Nationallyprotectedareas (% of total landarea) 13.3 CO2 emissions (metric tons percapita) 4.7 3.5 3.1 3.2 GDP per unit of energy use (constant2000 PPP $per kg of oil equivalent) Goal 8: developa global partnershipfor development Fixed lineand mobile phone subscribers (per 1,000 people) 32 35 115 357 Internetusers (per 1,000 people) 0 0 13 IO5 Personalcomputers(per 1,000 people) 3 13 38 Youth unemployment (% of total laborforce ages 15-24) I I Educationindicators(%) IMeasles Immunization(% of 1-yearolde) ICT indicators(par 1,000people) 400 1 io90 1995 2WO 2205 +Primary net enrollmentratio +-Ratio of girlsto boys in primly & I 0Fbted mobilesubscribers + seconda education 0Mongolia 0EastAsia& Pacific Internet users Note: Figuresin italicsare for years otherthan those specified... indicatesdataare not available. 10/9/07 DevelopmentEconomics,Development Data Group (DECDG). 67 85°E 90°E 95°E 100°E 105°E 110°E 115°E 120°E R U S S I A N F E D E R A T I O N Lake Baikal To Biysk 50°N To Ulan-Ude To To Hövsgöl Chita Chita Uvs Nuur 50°N UlaangomUlaangom Nuur Achit Hatgal Hatgal Tavan Bogd Uul avan Bogd Uul Nuur (4,374 m ) (4,374 UVS UVS Tesiyn H Ö V S G Ö L SühbaatarSühbaatar Ereentsav Ereentsav Olgii Olgii Hovd Mörön Mörön BAYAN-AYAN- BAYAN- To Hyargas SELENGESELENGE Hailar Nuur Selenge DarhanDarhan DARHAN-UULDARHAN-UUL Hulun ÖLGIIÖLGII ErdenetErdenet Bayan Uul Bayan Uul Nur Ider ORHONORHON D O R N O D JargalantJargalant ZAVKHAN ZAVKHAAVKHAN Bulgan Bulgan Onon (Khovd)(Khovd) Har Har Nuur BULGANBULGAN KHENTIIKHENTII Kherlen Kherlen A Us Nuur (Choibalsan)(Choibalsan) UliastaiUliastai H a ARHANGAIARHANGAI ULAANBAATAR ULAANBAA l KHOVD KHOVD n g Kerulen Tamsagbulag msagbulag a ErdenebulganErdenebulgan T Ö V ZuunmodZuunmod t yn (Tsetserleg)(Tsetserleg) Öndörhaan Öndörhaan a Tsagaan-Olom sagaan-Olom Dzavhan M ts Baruun-UrtBaruun-Ur Esonbulag Esonbulag . AI 45°N y (Altai) (Altai) BayankhongorBayankhongor GOVI-ALTAI GOVI-AGOVI-ALTALTAI G SÜKBASÜKBAATAATAR SÜKBAATAR ArvaiheerArvaiheer MandalgoviMandalgovi Dundgov' Hongor Hongor 45°N M RKHAN DUNDGOV'DUNDGOV' o u BAYANKHONGOAYANKHONGOR BAYANKHONGOR VÖ SainshandSainshand C H I N A n ÖVÖRKHANGAIÖ t DORNOGOV'DORNOGOV' a i To Jining n DalandzadgadDalandzadgad s e r t Ö M N Ö G O V ' D e s MONGOLIA o b i C H I N A G SELECTED CITIES AND TOWNS MONGOLIA PROVINCE (AIMAG) CAPITALS 40°N To NATIONAL CAPITAL Hami RIVERS 0 100 200 300 Kilometers MAIN ROADS NOVEMBER 40°N IBRD RAILROADS 0 50 100 150 200 Miles PROVINCE (AIMAG) BOUNDARIES 33449R 2006 90°E 95°E 100°E 105°E 110°E INTERNATIONAL BOUNDARIES