Report No. 23991
Report No: i077620 <--Please check for duplicates!
Integrated Safeguards Data Sheet (Updated)
Date ISDS Prepared/Updated: 05/02/2002
Section I - Basic Information
A. Basic Project Data
Country: LAO PEOPLE'S DEMOCRATIC REPUBLIC        Project ID: P077620
Project: Financial Management Capacity Building Credit Task Team Leader:
Abha Joshi-Ghani
Authorized to Appraise Date: May 2, 2002          IBRD Amount ($m):
Bank Approval: June 25, 2002     IDA Amount ($m): 9.00
Managing Unit: PFG       Sector: MY - Non-Sector Specific
Lending Instrument: Sector Investment & Maintenance Loan (SIM) Status: Standby
I.A.2. Project Objectives:
The central objective of the proposed Financial Management Capacity
Building Credit is to provide technical assistance and training programs
to support institutional capacity building for a successful implementation
of the government's reform program in financial and banking sector, public
expenditure management, and SOE reform. The project also aims to provide
a medium-term framework for Bank's assistance. The capacity building
activities are not externally driven; it has been and will continue to be
prepared in consultation with the GOL and the private sector. The
capacity building program builds on the recommendations from other donor
agencies, ADB, and IMF. The output will be a detailed capacity building
partnership program (in the component presented below) between the
government and donor agencies. The proposed project would therefore
support both the achievement of proposed reform objectives and the
long-term development of institutional capacity, through technical
assistance, training programs and system development in selected agencies
in the Lao PDR. The CBC will also provide a comprehensive framework for
consolidating and providing a strategic focus in capacity building
activities in the Lao PDR.
I.A.3. Project Description:
1. Financial Sector Reform
Financial and operational review and restructuring of three state owned
commercial banks (SCBs);
Enhancement of Bank of Lao PDR (BOL) supervisory capacity;
Establishment of policy framework and enabling environment for rural and
micro-credit;
Development of appropriate MIS systems;
Training for BOL/MOJ/MOF/RMFC staff to assist with the implementation of
above;
Training of banking personnel in Lao PDR;
2.    Public Expenditure Reform
Budget Planning - establishment of guidelines and methodologies for future
recurrent costs of investment projects;
Revision of budget classification to allow identification of expenditures



by ministry, province, service etc;
Extension of pilot accounting system and computer systems to all line
ministries;
Expenditure tracking survey in education sector;
Training of staff and policy makers in public expenditure management;
Comprehensive review of oversight bodies i.e. National Audit Office; State
Inspection Agency, MOF Inspection Department; Business Improvement Office
Adoption of international public sector accounting standards and
comprehensive training program on application of these standards.
3. State Owned Enterprise Reform and Development
Establishment of performance monitoring systems for all state owned
enterprise;
Training of MOF staff and SOE Board members and senior staff in principles
of financial management and corporate governance;
Establishment of guidelines and principles for enterprise restructuring;
Audits and restructuring of BPKP, Lao Aviation, EdL, Nam papa Lao,
Pharmaceutical Factory no. 3, DAFI and 4 other SOEs to be identified;
Preparation and implementation of tariff policies for power, water,
transport ( Lao Aviation) and telecommunications to include cost recovery
and targeted and transparent subsidies;
Regulatory framework for water, telecommunication and energy;
Training of staff and policy makers for enterprise development; and
Improving efficiency and performance of SOEs.
I.A.4. Project Location: (Geographic location, information about the key
environmental and social characteristics of the area and population likely
to be affected, and proximity to any protected areas, or sites or critical
natural habitats, or any other culturally or socially sensitive areas.)
All TA and training activities will take place in the ministries, other
government institutions and SOEs located in Vientiane or the provincial
capital cities, and they will not affect any protected areas, critical
natural habitats or any culturally or socially sensitive areas.
B. Check Environmental Classification: C (Not Required)
Comments: No safeguard issues or impacts are expected from this project
as it involves only Technical Assistance and training activities for the
ministries, other key government institutions and SOEs.
C. Safeguard Policies Triggered
Policy Applicability
Environmental Assessment (OP/BP/GP 4.01)         No
Forestry (OP/GP 4.36)    No
Natural Habitats (OP/BP 4.04)    No
Safety of Dams (OP/BP 4.37)      No
Pest Management (OP 4.09)        No
Involuntary Resettlement (OP/BP 4.12)    No
Indigenous Peoples (OD 4.20)     No
Cultural Property (OP 4.11)      No
Projects in Disputed Territories (OP/BP/GP 7.60)*         No
Projects in International Waterways (OP/BP/GP 7.50)       No
*By supporting the proposed project, the Bank does not intend to prejudice
the final determination of the parties' claims on the disputed areas
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Section II - Key Safeguard Issues and Their Management
D. Summary of Key Safeguard Issues. Please fill in all relevant questions.
If information is not available, describe steps to be taken to obtain
necessary data.
II.D.la. Describe any safeguard issues and impacts associated with the
proposed project. Identify and describe any potential large scale,
significant and/or irreversible impacts.
No safeguard issues and impacts in the 10 categories are expected with
the proposed project. Nevertheless, the social assessment will be
conducted with regard to the impact of SOE and SOCB restructuring and
resulting redundancies if any. Social assessment will also be conducted
on the impact of new tariff policies on the poor. TOR once prepared for
these assessments will be sent for review to EASES.
II.D.lb. Describe any potential cumulative impacts due to application of
more than one safeguard policy or due to multiple project component.
N.A.
II.D.lc Describe any potential long term impacts due to anticipated future
activities in the project area.
N.A.
II.D.2. In light of 1, describe the proposed treatment of alternatives (if
required)
N.A.
II.D.3. Describe arrangement for the borrower to address safeguard issues
N.A.
II.D.4. Identify the key stakeholders and describe the mechanisms for
consultation and disclosure on safeguard policies, with an emphasis on
potentially affected people.
The Bank has pursued an ongoing dialogue with key players in the
government departments and ministries impacted by the project, including
state owned enterprises and state owned banks. Consultations have
included, and will continue to include meetings and workshops. The
proposed project is tailored to address the needs of the Government and
its institutions.
E. Safeguards Classification. Category is determined by the highest impact
in any policy. Or on basis of cumulative impacts from multiple safeguards.
Whenever an individual safeguard policy is triggered the provisions of
that policy apply.
I S1. - Significant, cumulative and/or irreversible impacts; or
significant technical and institutional risks in management of one or more
safeguard areas
I S2. - One or more safeguard policies are triggered, but effects are
limited in their impact and are technically and institutionally manageable
[XI S3. - No safeguard issues
I SF. - Financial intermediary projects, social development funds,
community driven development or similar projects which require a safeguard
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framework or programmatic approach to address safeguard issues.
F. Disclosure Requirements Environmental Assessment/Analysis/Management
Plan:   Expected         Actual
Date of receipt by the Bank
Date of "in-country" disclosure
Date of submission to InfoShop
Date of distributing the Exec. Summary of the EA to the ED
(For category A projects)
Resettlement Action Plan/Framework:      Expected         Actual
Date of receipt by the Bank
Date of "in-country" disclosure
Date of submission to InfoShop
Indigenous Peoples Development Plan/Framework:   Expected         Actual
Date of receipt by the Bank
Date of "in-country" disclosure
Date of submission to InfoShop
Pest Management Plan:    Expected        Actual
Date of receipt by the Bank
Date of "in-country" disclosure
Date of submission to InfoShop
Dam Safety Management Plan:      Expected        Actual
Date of receipt by the Bank
Date of "in-country" disclosure
Date of submission to InfoShop
If in-country disclosure of any of the above documents is not expected,
please explain why.
Signed and submitted by          Name    Date
Task Team Leader:        Abha Joshi-Ghani        March 18, 2002
Project Safeguards Specialists 1:
Project Safeguards Specialists 2:
Project Safeguards Specialists 3:
Approved by:     Name    Date
Regional Safeguards Coordinator:         Glenn S. Morgan April 5, 2002
Sector Manager/Director:         Homi Kharas     April 4th, 2002
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