Page 1 INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Report No.: AC2691 Date ISDS Prepared/Updated: 01/09/2007 I. BASIC INFORMATION A. Basic Project Data Country: Venezuela, Republica Bolivariana de Project ID: P055927 Project Name: VE National Slum Upgrading Task Team Leader: Ivo G.P. Imparato Estimated Appraisal Date: April 23, 2007 Estimated Board Date: July 17, 2007 Managing Unit: LCSUW Lending Instrument: Specific Investment Loan Sector: Water supply (40%);Sanitation (30%);General transportation sector (20%);General finance sector (5%);Other social services (5%) Theme: Access to urban services and housing (P);Participation and civic engagement (P);Municipal governance and institution building (P);Land administration and management (P) IBRD Amount (US$m.): 50.00 IDA Amount (US$m.): 0.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: Borrower 20.00 20.00 B. Project Objectives [from section 2 of PCN] Improve the quality of life for over 150,000 residents in urban slums in medium-sized cities through the integrated improvement of basic water, sanitation, transportation, solid waste management and community infrastructure services. Additionally, the project aims to strengthen the ability of municipal governments to implement slum improvement programs and prevent the future growth of slums by planning strategically for urban expansion. Lastly, the project will facilitate through technical assistance land tenure regularization and the piloting of a incremental housing microfinance component. C. Project Description [from section 3 of PCN] The Government has requested Bank support for a National Urban Upgrading project (PISO) that would focus on secondary cities outside of the Metropolitan Region of Caracas. The Project would build on the strengths of the earlier CAMEBA and PROMUEBA projects, aiming to improve living conditions in informal settlements in these cities, foster community development Page 2 and empowerment, promote good urban planning and land management practices at the local government level and provide access to micro-credit for housing improvements to families residing in informal settlements. This would be done in the context of increasing the capacity of the National Government to both scale-up and decentralize its urban upgrading program. Components. The proposed loan will finance four primary technical components: (1) Community Participation and Capacity Building: This key component will finance technical assistance, social mobilization and public education activities that aim to: (i) facilitate the organization and capacity enhancement of community-based associations; (ii) promote an extensive and deep participation of residents throughout the project cycle; (iii) improve the specific financial management and project management capacity of community organizations; and (iv) enhance community awareness through public education campaigns. (2) Institutional Strengthening: The component aims to strengthen the ability of participating municipalities to implement complex slum upgrading programs and improve medium-term territorial planning and land-use management capacity with the view of preventing the growth of new slums. In this regard, the component will finance technical assistance to: (i) prepare urban, territorial and land-use plans; (ii) update and develop municipal cadastres; (iii) improve municipal solid waste management and collection systems; and (iv) support tenure regularization and land titling in areas of intervention. The Government has presented preliminary ideas regarding the development of the proposed component. During preparation the component will be developed in close coordination with Office of Planning, Regulation of Public Works and Urban Development within the Ministry of Infrastructure and the Instituto Geografico Simon Bolivar which have jurisdictional responsibility for urban and regional planning and the development of cadastres, respectively. (3) Urban Basic Infrastructure: This component will finance a series of integrated basic and network infrastructure investments in target slum areas. Eligible investments will likely include: (i) the rehabilitation and extension of network water, sanitation and drainage infrastructure; (ii) secondary and tertiary roads, stairways and footpaths; (iii) household electricity and street lighting; (iv) recreational facilities, playgrounds and community centers; (v) solid waste collection infrastructure; and (vi) hazard prevention infrastructure. The project will rely during the first 18-24 months on CONAVI - Programa II projects. A methodology to prioritize and update these projects will be developed during preparation and applied to all eligible CONAVI projects to ensure that they meet cost and technical criteria outlined for the PISO program. The methodology will ensure that investments under the PISO program are reflected in integrated neighborhood plans that emerge from a system of participatory consultation and prioritization. In this context, the Government will lead during preparation a consultative process in prioritized slums to validate final project design. It is proposed that the component will be implemented through a three-tiered contracting system, each with varying degrees of community control and involvement. An outline of the proposed system is presented below. Page 3 (4) Incremental Housing Microfinance: This component will finance a pilot microfinance program for incremental housing improvement. The component would aim to build upon effective microfinance models in the country. A preliminary proposal made by the Government for the component design focuses on operating the microfinance component through associations of local savings groups which would provide small loans to group members through mobilized savings. The component would finance a system of technical assistance and outreach to savings groups and would not initially require capitalization under the project. Instrument and Framework Approach: The Government proposes the use of a Specific Investment Loan (SIL) to support the PISO program. Given the national scope of the Government program, the team proposes the use of a 'framework' or 'program' approach for the design and implementation of the investment. Under a framework approach the project will develop: (i) clear technical and municipal eligibility criteria; (ii) a methodology for the technical preparation of subprojects; (iii) an approach for the economic and financial analysis of subprojects; (iv) safeguard frameworks for the social and environmental subprojects; and (v) operating procedures that specify arrangements for subproject management, execution, monitoring and evaluation. The Bank team will appraise these framework instruments, and their application to this sample of subprojects, during preparation to ensure that they meet quality standards and that adequate capacity has been developed within the implementing institution. Eligibility Framework: As first-order criteria, the Government has decided to focus the PISO program on cities with population greater than 100,000 inhabitants - other than Caracas - and state capitals that may be smaller. Based on these criteria, approximately 42 cities are eligible to participate in the program. The decision to focus PISO on medium and large cities reflects the Government's desire to both: (i) target the program to a large segment of the country's urban poor and slum populations; and (ii) achieve economies of scale by strengthening municipal capacity in both the upgrading of existing slums and the prevention of future informal settlements. The Government's explicit decision to concentrate PISO on areas outside of the Caracas metropolitan region relates both to the unique operational conditions associated with slum upgrading in the capitol (e.g. precarious mountainous settlements and associated high investment requirements) and the existence of an alternative, locally-financed program to support upgrading in Caracas. Lastly, the Government has decided to include state capitols with fewer than 100,000 inhabitants to ensure that all states are eligible for the program and have the opportunity to build capacity in the upgrading of slum areas. During preparation the Government and the task team will finalize a series of eligibility criteria to prioritize investments: (i) between eligible cities; and (ii) between slums within these cities. The task team and the Government have agreed that these criteria will be clear, transparent and rely on objective variables to the extent possible. Eligible cities will be ranked through an index comprised of a proxy poverty measure and an estimate of the percentage of households in substandard housing units. Institutional Arrangements: The PISO program will be implemented by a technical and administrative team within FUNDACOMUN - an agency responsible to the Ministry of Social Participation and Development (MINPADES). FUNDACOMUN is the primary agency in Venezuela with experience in the implementation of urban upgrading projects and has a long Page 4 track record of working with the Bank. Most recently, FUNDACOMUN has served as the implementing entity for the recently closed CAMEBA and the preceding PROMUEBA operations. The development of the proposed PISO program will build on methodologies and administrative systems already mobilized within FUNDACOMUN in the context of these past operations. The agency has outlined a preliminary internal organizational structure for managing the national PISO program involving three primary departments at the central level responsible for: (i) social mobilization and capacity building; (ii) technical supervision of infrastructure development; and (iii) finance and administration. The Government is currently recommending that it will divide the country into eight regions each with a social organization and technical team. Lastly, at the level of each subproject or slum, PISO will dedicate a team of social and technical specialists responsible for the implementation of each of the programs components. At the local level, the client aims to involve municipalities closely in the execution of physical works, tenure regularization, resettlement, social mobilization and institutional strengthening activities. During preparation the task team will work with the Government to articulate a coherent approach to involving municipalities in project execution with the aim of building capacity at the local government level to implement slum upgrading activities. Community-based Contracting and Project Management: The Government has outlined a broad policy in recent years to decentralize the management of capital investment to a range of community-based associations including Consejos Comunales, cooperatives, Mesas T?cnicas de Agua, etc. In this context, the Government has requested that the proposed operation develop and implement a methodology for community-based contracting and project management. The Bank and PISO teams have outlined a preliminary three-tier system for the management of physical investments in project areas. The objective of the system is to progressively build community capacity in project management while also ensuring that adequate fiduciary safeguards and quality control measures are in place. The Bank would conduct rigorous financial management, procurement and technical assessment of the proposed system during preparation. D. Project location (if known) Given the 'framework' nature of the operation, the exact locations of investments under the project are not currently known. However, the universe of eligible cities in which the PISO program will be implemented includes 42 medium-sized cities. A complete list of these cities, criteria for determining where investments will be directed, and a preliminary ranking of the highest priority urbanizations are included in the PCN. E. Borrower’s Institutional Capacity for Safeguard Policies [from PCN] The borrower possesses significant capacity and experience to comply with the Bank's environmental and social safeguard policies. FUNDACOMUN, the project's key stakeholder responsible for implementation, has developed extensive experience in the application of both social and environmental safeguards under previous Bank-financed CAMEBA and PROMUEBA operations. For CAMEBA, FUNDACOMUN all financed subprojects included provisions in their bidding documents that require the contractor to prepare an environmental management plan. The project also called for periodic audits to ensure that plans were carried out. The CAMEBA unit within FUNDACOMUN successfully carried out significant resettlement under Page 5 the operation. The team developed Resettlement Plans to a high standard and has articulated management guidelines for carrying out of resettlement activities. The PISO project will build upon these capacities and resources already established within FUNDACOMUN to develop the Resettlement and Social and Environmental Management frameworks. F. Environmental and Social Safeguards Specialists Ms Elena Correa (LCSSO) Mr Marco Antonio Zambrano Chavez (LCSTR) II. SAFEGUARD POLICIES THAT MIGHT APPLY Safeguard Policies Triggered Yes No TBD Environmental Assessment (OP/BP 4.01) X The Bank team has concluded that the proposed operation will trigger Bank safeguard policies for Environmental Assessment. Component 3 of the proposed operation will involve investment in minor physical works including the: (i) the rehabilitation and extension of network water, sanitation and drainage infrastructure; (ii) rehabilitation and maintenance of secondary and tertiary roads, stairways and footpaths; (iii) household electricity and street lighting; (iv) recreational facilities, playgrounds and community centers; (v) solid waste collection infrastructure; and (vi) minor hazard prevention infrastructure (e.g. retaining walls and footbridges). For these types of activities, a Category B environmental rating is considered appropriate, because the Project does not foreseen significant environmental and social impacts that could not jeopardize the natural environment of its influential area. Therefore has anticipate temporal and directs impact during the execution of works that will be prevent, mitigate and compensate the environmental and social impacts, to ensure the environmental sustainability of the Project. No potential impacts are expected to be significant, irreversible or adverse and no cumulative impacts in the medium and long term are anticipated. Given the 'framework' design of the project, the team proposes to develop an Environmental and Social Management Framework (ESMF) documents that outline specific operational guidelines for screening and managing potential environmental and social impacts during the Project implementation. The ESMF document will be prepared by the client with technical assistance from the Bank team and will outline the respective legal framework in the country, specify screening procedures, outline mitigation actions and management procedures. The frameworks will subsequently be applied prior to appraisal to a representative sample of 4-6 eligible subprojects - and to all investments identified during implementation. The bank team will appraise the framework documents and their application. Once finalized, the framework document will be incorporated into the operating procedures for the PISO program. Natural Habitats (OP/BP 4.04) X N/A Forests (OP/BP 4.36) X N/A Pest Management (OP 4.09) X N/A Page 6 Safeguard Policies Triggered Yes No TBD Physical Cultural Resources (OP/BP 4.11) X The team does not envision at this stage any particular disturbance to culturally significant sites. However, the team has decided to trigger the Physical Cultural Resources safeguard given that all subprojects that will be financed under the project have not been identified in advance. Specific management guidelines and screening procedures consistent with the cultural property policy will be built into the Environmental and Social Management Framework mentioned above. Indigenous Peoples (OP/BP 4.10) X N/A Involuntary Resettlement (OP/BP 4.12) X The team estimates that minor resettlement and compensation for damaged property may occur in the case of certain subprojects. Resettlement is not expected to be significant. Accordingly, the team recommends that, given the 'framework' design of the project, the team proposes to develop an Involuntary Resettlement Framework which will outline specific operational guidelines for screening and managing resettlement processes. The framework document will be prepared by the client with technical assistance from the Bank team and will outline the respective legal framework in the country, specify screening procedures, outline mitigation actions and management procedures. The frameworks will subsequently be applied prior to appraisal to a representative sample of 4-6 eligible subprojects - and to all investments identified during implementation. The bank team will appraise the framework document and their application. Once finalized, the framework document will be incorporated into the operating procedures for the PISO program. Safety of Dams (OP/BP 4.37) X N/A Projects on International Waterways (OP/BP 7.50) X N/A Projects in Disputed Areas (OP/BP 7.60) X N/A Environmental Category: B - Partial Assessment III. SAFEGUARD PREPARATION PLAN A. Target date for the Quality Enhancement Review (QER), at which time the PAD-stage ISDS would be prepared: 02/14/2007 B. For simple projects that will not require a QER, the target date for preparing the PAD-stage ISDS: N/A Page 7 C. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing 1 should be specified in the PAD-stage ISDS. Final drafts of the Environmental and Social Management and Involuntary Resettlement Frameworks will be completed prior to January 31, 2007. Preliminary drafts of both documents have been reviewed and were considered satisfactory by the team's Environmental and Social specialists. The framework documents are being applied in the field and a draft report annexed to the core framework documents will be completed by February 15, 2007. These dates provide sufficient time for public disclosure prior to Appraisal as per Bank disclosure policies. IV. APPROVALS Signed and submitted by: Task Team Leader: Mr Ivo G.P. Imparato 01/09/2007 Approved by: Regional Safeguards Coordinator: Mr Reidar Kvam Comments: Sector Manager: Mr John Henry Stein Comments: 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. Page 8