INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Public Disclosure Copy Report No.: ISDSC153 Date ISDS Prepared/Updated: 02-Aug-2012 I. BASIC INFORMATION A. Basic Project Data Country: Vietnam Project ID: P121643 Project Name: Vietnam Inclusive Innovation Project (P121643) Task Team Nancy Chen Leader: Estimated 08-Oct-2012 Estimated 28-Feb-2013 Appraisal Date: Board Date: Managing Unit: EASFP Lending Specific Investment Loan Instrument: Sector: General industry and trade sector (100%) Theme: Technology diffusion (40%), Micro, Small and Medium Enterprise support (40%), Infrastructure services for private sector development (10%), Regulation and competition policy (10%) Financing (In USD Million) Financing Source Amount BORROWER/RECIPIENT 5.00 Public Disclosure Copy International Development Association (IDA) 55.00 Financing Gap 0.00 Total 60.00 Environmental B - Partial Assessment Category: Is this a No Repeater project? B. Project Objectives The Project's Development Objective (PDO) is to help strengthen Vietnam's capacity to undertake inclusive innovation for improving the lives of the Bottom of Pyramid population. This will be achieved by: (i) Adopting, upgrading and developing inclusive innovationtechnologies; and (ii) Strengthening SMEs' technological and innovation capabilities thereby enhancing their competitiveness. C. Project Description The project will focus on developing high-performance and affordable solutions to address the needs of the BoP, as well as providing support to SMEs to acquire, adopt, create and use technology and innovation. The project will use a pilot a pproach to reduce risk, focus on achieving some early wins and scaling-up a few Public Disclosure Copy pilot technologies, while building long-term capacity in selected institutions t o carry out inclusive innovation in Vietnam. The project will support tools to e ncourage and incentivize collaboration between stakeholders, especially, among t he business and research and universities sectors. In order to expedite the deve lopment of high-performance and cost effective solutions, collaboration with app ropriate global R&D organizations will be supported. The project support will be targeted at priority needs filling gaps only, with due consideration given to a void duplication of efforts being supported under the FIRST project and/or other donor initiatives. The project, estimated to cost around US$60-75 million, will consist of three components: 1. Developing Inclusive Innovation Technologies 2. Upgrading Enterprise Technological Capabilities 3. Knowledge Transfer and Capacity Building Component I: Developing Inclusive Innovation Technologies Under, this component, the project will support the development of inclusive innovation technologies that will help address the problems of the BoP society. Whi le developing actual solutions, project will also provide ancillary benefit in t he strengthening of the overall institutional capacities (see Component III) of the participating institutions. Initiatives to support could include: (i) develo ping technological solutions to address National Development Challenges (NDCs); and (ii) acquiring, adopting, upgrading and creating inclusive innovation techno logies. (i) Developing Technological Solutions to address National Development Challenges. Under Public Disclosure Copy this initiative, the project will support solutions for two priority Na tional Development Challenges that are important to address the problems of the BoP. (ii) Developing, Adopting and Upgrading Inclusive Innovation Technologies. Under this program, the project will provide funds to RDTIs, enterprises and grassroo ts innovators to bring forward existing research and/or prototype technologies f or development of (pilot) products up to the level ready for commercialization. This program would focus on upgrading available research/ technologies (both nat ionally and globally) for faster outcomes and would not include support for gree n field research. The priority areas would be identified by Authorities in cons ultation with stakeholders and international experts. Component II: Upgrading Enterprise Technological Capabilities This component would provide support to the small and medium enterprises to upgrade their technological capabilities in order to improve competitiveness and pro ductivity. This will include support for: (i) the acquisition, adoption and use of technologies and innovation available domestically as well as globally; (ii) commercialization and sustainable production of inclusive innovation technologie s including spin offs and start-ups; and (iii) scaling-up of a few inclusive tec hnology enterprises. The project will focus support on certain key SME sectors w ith significant untapped potential for improvement. Depending upon the particula r activity, the project would provide matching grants Public Disclosure Copy and/or loans. The project would assist business sector to convert inclusive innovation pilot technologies (coming out of initiatives under Component I) into commercially viab le and affordable high- performance products for sustainable production. In order to ensure the pilot technologies developed are acceptable to industry (i.e., co mmercially viable), the institutions (supported under Components) will be requir ed to interact with the relevant business/ industry sector in the early stages of taking these products/services from the development stage to the commercial sta ge. The program would be open to all private enterprises and would provide suppo rt in a broad range of areas such as protection of intellectual property rights (IPR); global best practices on development and commercialization (such as the p rovision of a license, by a government, for scaling up production of a technolog y that would expire if the enterprise does not move forward with production with in a certain time frame). Component III: Knowledge Transfer and Capacity Building The project would provide funding for, inter alia, knowledge transfer, training, study tours, feasibility studies, technical expertise, collaboration and twinin g arrangements with global institutions, program design and execution, project m anagement, monitoring and evaluation, etc. This would include provision of exper t assistance to the relevant Ministries (such as MPI) and implementing agencies, technol ogy licensing, IP protection, technology extension services to enterpris es, skills upgrading, etc. If needed, this could also include preparation of imp ortant feasibility studies such as MSTQ infrastructure upgrading. Consideration could also be given to funding inclusive innovation fellowships to graduate stud ents, awards, and research chairs (at RDTIs and universities) all focusing on in clusive innovation technologies and solutions. The project support would be targ eted at priority needs filling gaps only, with due consideration given to avoid Public Disclosure Copy duplication of efforts being supported under other projects and/or donor initiatives. D. Project location and salient physical characteristics relevant to the safeguard analysis (if known) National scope so activities could take place anywhere in Vietnam. E. Borrowers Institutional Capacity for Safeguard Policies The Ministry of Planning and Investment (MPI), as representative of the Government, will have the overall responsibility for project implementation and coordina tion through the Enterprise Development Agency (EDA). The EDA will be responsib le for the preparation and management of the project in close coordination with FERD and other relevant MPI departments, sector ministries (e.g. MoST, MoH), and specialized implementing agencies. EDA is the responsible agency for the planni ng, coordination and monitoring of government support programs for the developme nt of SMEs in Vietnam. The project will be implemented in a decentralized manner by relevant agencies (based on the contents of the programs) under the overall coordination and oversi ght of MPI. The safeguard capacities of EDA have not yet been evaluated but it is possible they will not be very familiar with either World Bank or GoV safeguard policies. As determined necessary during project preparation, support will be provided und Public Disclosure Copy er the project to ensure they have sufficient safeguards capacity. To the degree that subprojects will be decentralized to other agencies, safeguard capacity (i f any is needed) will liky vary substantially. In all cases however, EDA would b e ultimately responsible for ipmlementation of the EMF. F. Environmental and Social Safeguards Specialists on the Team Douglas J. Graham (EASVS) II. SAFEGUARD POLICIES THAT MIGHT APPLY Safeguard Policies Triggered? Explanation (Optional) Environmental Assessment OP/ Yes The project is considered to trigger OP 4.01 on BP 4.01 Environmental Assessment. The project intends to trigger the development of new technologies and promote them, p ossibly at large scale. It is impossible to further quantify what kinds of impacts might be generated as the kinds of innovative technologies to be promoted are unknown at this time and could be in almost any conceivable sector. The project will develop an Environmental Management Framework (EMF) to screen all innovation technology proposals for their potential positive and adverse envi Public Disclosure Copy ronmental and social impacts, to develop relevant measures to mitigate adverse i mpacts, and to ensure compliance with applicable national laws and regulations, emission and discharge standards. A Category "B" for safeguards purposes is suggested because the potnetial adverse environmental impacts, if any, would not be irreversible and will be mitigable by design measures to be incorporated into the design of any given innovation. Natural Habitats OP/BP 4.04 No Although the exact nature of innovative ideas to be supported is not currently known, it is not considered possible that any proposal would be supported that wo uld have a negative impact on natural habitats. Appropriate screening measures w ould be included in the project's EMF to avoid impacts on critical natural habit ats and mitigate any other impacts on natural habitats. Public Disclosure Copy Forests OP/BP 4.36 No No impact on forests or changes in management of forest resources will be contemplated under the project. Pest Management OP 4.09 No No procurement of pesticides will be contemplated or facilitated under the project. No innovation would be supported that would lead to a significant increase i n pesticide use for agricultural activity or any other purpose. Physical Cultural Resources OP/ No An appropriate chance finds procedure will be BP 4.11 included in the EMF. Indigenous Peoples OP/BP 4.10 No There is no reason to believe that any innovation supported under the project would involve any ethnic group so the policy is not triggered. Involuntary Resettlement OP/BP No No land acquisition or involuntary resettlement 4.12 will be supported under the project; this will be included as a criterion for eligibility of support. Safety of Dams OP/BP 4.37 No The project will not support or invovle any dams in any way. Projects on International No The project will not have any impact or effect Waterways OP/BP 7.50 on any international waterway. Projects in Disputed Areas OP/BP No No investment of the project will take place in Public Disclosure Copy 7.60 any internationally disputed area. III. SAFEGUARD PREPARATION PLAN A. Tentative target date for preparing the PAD Stage ISDS: 28-Sep-2012 B. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing1 should be specified in the PAD-stage ISDS: ESMF is under development by the client. IV. APPROVALS Task Team Leader: Name: Nancy Chen Approved By: Regional Safeguards Name: Panneer Selvam Lakshminarayanan (RSA) Date: 07-Aug-2012 Coordinator: Sector Manager: Name: Hamid R. Alavi (SM) Date: 02-Aug-2012 1 Reminder: The Bank's Disclosure Policy requires that safeguard-related documents be disclosed before appraisal (i) at the InfoShop and (ii) in country, at publicly accessible locations and in a form and language that are accessible to potentially affected persons.