Documentof TheWorldBank FOROFFICIALUSEONLY ReportNo. T7616-BU TECHNICAL ANNEX FORA PROPOSEDGRANT OF SDR 22.2 MILLION(US$33 MILLIONEQUIVALENT) TO REPUBLIC OFBURUNDI FORAN EMERGENCY DEMOBILIZATION, REINSERTIONAND REINTEGRATIONPROGRAM February24,2004 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 2 CURRENCYEQUIVALENT (exchange rate effective as o f January 31,2004) Currency Unit = Burundian Franc (FBU) US$l - - 1,100 GOVERNMENT FISCAL YEAR January 1- December 31 ABBREVIATIONS AND ACRONYMS AIDS Acquired ImmuneDeficiency Syndrome AMIB African Mission inBurundi APPM ArmedPoliticalParty andMovement CNDD Conseil National pour la Ddfense de la De'mocratie, (National Council for the Defense o fDemocracy) CNRS Commission Nationale pour la Rdinsertion des Sinistrds, (National Commission for the Rehabilitation o f War-Affected Persons) DRRP Demobilization, ReinsertionandReintegration Program ES Executive Secretariat o f the NCDRR FAB Forces Arme'es Burundaises, (ArmedForces o f Burundi) FDD Forcespour la Ddfense de la De'mocratie, (Force for the Defense o f Democracy) FNL Forces Nationalespour la Libe'ration, (National LiberationForce) FTA Forces Technical Agreement GDP Gross Domestic Product HIV HumanImmuneDeficiency Virus IDA InternationalDevelopment Association JCC Joint Cease-fire Commission JLT Joint LiaisonTeam o fthe JCC JOC Joint Operations Center JOP Joint Operations Plan MDRP Multi-Country Demobilization andReintegration Program MDTF Multi-Donor Trust Fundo f the MDRP MIS Management InformationSystem MONUC Mission de 1'Organisation des Nations Unies au Congo, (United Nations Organization Missionto Congo) NCB National Competitive Bidding NDF NationalDefense Force NCDRR National Commission for Demobilization, Reinsertion and Reintegration TSS Transitional Support Strategy TWG Technical Working Group UN UnitedNations UNDP UnitedNations Development Programme UNICEF UnitedNations Children's Fund UNOB UnitedNations Office for Burundi VCT Voluntary Counseling and Testing Vice President Callisto E.Madavo Country Director Emmanuel Mbi Sector Manager : JosephBaah-Dwomoh Task Team Leader Ingo Wiederhofer FOROFFICIAL USEONLY Burundi Demobilization, Reinsertion and Reintegration Program - Technical Annex 2 Contents 1. Background and Strategy ......................................................................................................... 4 1.1CIRCUMSTANCESOF THECONFLICT 1.2 ECONOMICAND SOCIAL IMPACT................................................................. .......................... 6 1.3 GOVERNMENT RESPONSE STRATEGY. AND 1.4 INTERNATIONAL RESPONSE .................................................................... 2.2 POVERTY REDUCTION STRATEGY .................................................................................. 2.3 RATIONALEFORIDA INVOLVEMENT ................... 2.4 LESSONS PREVIOUSIDA ASSIS FROM ...................... .............................................................................................................................. 23 4. Studies and Technical Assistance ........................................................................................... 30 4.1 STUDIES .................. ................................................................................................................. 30 4.2 TECHNICALASSISTA 5. Institutional Arrang 5.1 INSTITUTIONAL STRUCTURE................................................................................................................ 3 1 5.1.I Central level.............:. 5.1.2 Provincial level......... 5.1.3 Commune level.......... ................. 5.1.4 Stafjng, institutional 5.I.5Program Coordination Mechanisms........................................................................................... 34 5.2 FINANCIAL MANAGEMENTAND AUDITING ......... ........................ 53.3 Procirrement methods... ........................ .42 5.5 PROGRAMSUSTAINABILITY ....................... 6.1 BENEFITS ............................................................................................................................................. 48 6.2 RISKS AND MITIGATION MEASURES .................................................................................................... 48 6.3 ENVIRONMENTAL AND SOCIAL ASPECTS ....... 50 7. Financial and EconomicJustification ............................................................................... 51 8. Action Plan ............................................................................................................................... 53 9. Attachments ......................................................................................................................... 55 Thisdocument has a restricteddistributionandmay be used by recipients only in ,theperformance of their official duties. I t s contents may not be otherwise disclosed [withoutWorld Bank authorization. I Burundi Demobilization, Reinsertion and ReintegrationProgram - TechnicalAnnex 3 Map- IBRDNo. 30118 Burundi Demobilization, Reinsertion and Reintegration Program - Technical Annex 4 Burundi Demobilization,Reinsertionand ReintegrationProgram 1. Backgroundand Strategy 1.ICircumstances of the Conflict 1. Burundi is emerging from a vicious cycle o f recurrent politico-ethnic conflicts between parties largely based on its two main ethnic groups, the Hutuand the Tutsi. The most recent period o f violent conflict broke out in 1993 following the assassination o f the democratically elected President Ndadaye, and has resulted in the deaths o f an estimated 300,000 people. The duration and increasing social and economic costs o f this conflict prompted the international community to support a negotiation process from 1998 onwards. 2. Negotiations in Arusha, Tanzania, facilitated by late President Julius Nyerere o f Tanzania and former president Nelson Mandela o f South Africa, culminated in the conclusion o f a the Arusha Peace and Reconciliation Agreement, on August 28, 2000. Nineteen Burundian parties signed this agreement, which seeks to assess the origins o f the conflict as well as to propose constitutional and institutional reforms to foster national reconciliation, and to improve the judicial system, public administration, and social service delivery, with a view to preventing future conflict. The Accord envisaged a 36- month transition period during which a transitional government would undertake several security and political stabilization activities and prepare for national elections. A power- sharing transitional government was inaugurated on November 1, 2001, As stipulated in the Agreement, then President Pierre Buyoya, who had led the Government for the first 18-months o f the transition, handed over power to his vice-president, Domitien Ndayizeye, on April 30,2003. 3. The current conflict. Despite the 2000 Arusha Peace Accord, large-scale violence prevented the stabilization o f the political and security situation in the country. Two major armed political parties and movements (APPMs), the Conseil National Pour la De'fense de la De'mocratie -Forces Pour la De'fense de la De'mocratie (CNDD-FDD)and the Forces Nationales Pour la Libe'ration - PALIPEHUTU (FNL-PALIPEHUTU) have refused to participate in the Arusha process and continued their armed struggle against the Government. Both groups fragmented into sub-factions, further complicating peace negotiations. 4. With facilitation assistance from the African Union, the governments o fTanzania, South Africa and Uganda, and the United Nations (UN), the Government continued to pursue cease-fire negotiations with these parties. This strategy beganto bear fruit with the signing o f cease-fire agreements between the Government andtwo o f the smaller factions - the CNDD-FDD faction led Jean Bosco Ndayikengurukiye and the FNL- PALIPEHUTU faction o f Alain Mugabarabona - inOctober 2002. This was followed by Burundi Demobilization. Reinsertion and Reintegration Program - Technical Annex 5 the signing o f a cease-fire agreement with the larger CNDD-FDD faction o f Pierre Nkurunziza inDecember 2002. 5. However, in the absence o f a clear implementation framework and in an environment marked by mutual distrust, the implementation o f the agreements remained uneven. Insecurity persisted in many parts o f the country until the signing o f a comprehensive cease-fire agreement between Government and the CNDD-FDD (Pierre Nkurunziza) in Dar-es-Salaam, Tanzania, on November 16, 2003. The subsequent integration o f the leadership o f this group into the Government and other state institutions has significantly improvedprospects for the full implementationo f the agreements signed to date. 6. InMay 2003, at the request o f Government and several intemationalpartners, the African Mission in Burundi (AMIB) launched a pilot "cantonment" exercise for combatants o f the CNDD-FDD (Ndayikengurukiye) and the FNL-PALIPEHUTU (Mugabarabona), who had signaled a willingness to disarm. In the absence o f agreed criteria and procedures for combatant status, a military integration policy or a structured demobilization process, this exercise resulted in the costly and logistically challenging long-term encampment o f an estimated 180 persons claiming combatant status. This initiative highlighted the risks and costs o f initiating cantonment without having exit strategies inplace, especially ina hostile security environment. 7. The continued refusal o f the FNL-PALIPEHUTUfaction o f Agathon Rwasa to sign a cease-fire remains an obstacle to comprehensive peace in Burundi. Intensive diplomatic efforts to secure a cease-fire with the FNL-PALIPEHUTU(Rwasa) and to facilitate its participation in the transitional institutions o f Burundi are ongoing with the support o f intemational partners. A first meeting between this group and President Domitien Ndayizeye took place in the Netherlands in January 2004, and has improved prospects for its incorporation into the peace process. 8. The Arusha Peace and Reconciliation Accord of August 28, 2000 and the comprehensive cease-fire agreement of November 16, 2003 provide the overall policy framework for all subsequent negotiations and agreements in Burundi. The Accord details the responsibilities and attributes o f administrative institutions, including the role o f the army and national police force. The integration o f combatants o f all armed parties into new security and defense forces is a key provision o f the Arusha Accord. On November 2, 2003, the Government and the CNDD-FDD (Nkurunziza) signed a Forces Technical Agreement (FTA) outlining the process and scope o f the integration o f CNDD- FDD (Nkurunziza) forces and the FAB into the new National Defense Force(NDF). The Arusha Accord also makes reference to the need for a demobilization and reintegration process to address the needs o f those former combatants who do not remain with the new defense and security forces.' IAmsha PeaceAccord, Protocol 111,chapter 11, article 21. Burundi Demobilization, Reinsertion and Reintegration Program-TechnicalAnnex 6 1.2 Economicand Social Impact 9. Inlight of persistent conflict, the economic situation has been marked by falling output and incomes (GDP declined by nearly 20% in real terms over the period 1993- 2002); high levels o f inflation; diminished public revenues; the withdrawal o f international financial assistance (international aid transfers fell from an annual average of nearly US$300 million to less than an annual average o f US$lOO million between 1992 and 2002); lower investment (the investment rate fell from an annual average o f more than 15% to 9% between 1992 and 2002); and the accumulation o f domestic and extemal deficits andextemal payment arrears (which stood at US$148.5 million in2002). Defense expenditure increased from 3.6% of GDP to 8% from 1992 to 2001. Furthermore, the conflict has had a significant impact on the national budget. Defense expenditures rose from approximately 10.7 percent o f total central government expenditures in 1992 to about 27.1 percent in 2001, while education and health sectors receivedonly 15 percent and two percent respectivelyin2001. 10. On the social front, the situation i s marked by rising poverty: the proportion o f people living below the poverty line rose from 35% in 1992 to more than 60% in 2002. The lives o f most Burundianshave been severely disrupted. According to the UNOffice for the Coordination o f Humanitarian Affairs, there are currently about 300,000 Internally Displaced Persons (IDPs) in Burundi and around 600,000 Burundian refugees inneighboringcountries (mainly inTanzania). Almost 15% of Burundi's populationhas thus been displaced by conflict. Average life expectancy, which was more than 47 years in 1990, decreased to 42 years in2001. The quality and the accessibility o fbasic social services have also deteriorated. The precarious social situation has been further aggravated by the high prevalence o f HIV/AIDS and the destruction and lack o f maintenance of social facilities. 11. Primary sector activities have been disrupted by widespreadinsecurity, especially inthe rural areas o fthe country. Frequent ambushes against civilians and clashes between parties to the conflict have been a deterrent to farming and marketing activities. The livestock sector in general has perhaps suffered the most, as herds became primary targets. A recent survey o f the Food and Agricultural Organization estimated that, by September 2003, about 80% o f the bovine and 50% o f small ruminant herds o f the Easternprovince o f Ruhigi (a Phase IV security province since 1999) hadbeen looted. To avoid rustlers, herders typically regroup their herds around military outposts in or around urban centers, where grazing opportunities are usually limited. As a result of these difficulties, herders are forced to increase culling rate, selling their cattle prematurely at sub-optimal prices, thereby further depleting the livestock population. Crop and animal husbandry has also suffered from the fact that agricultural extension services virtually came to a halt. 1.3 Government Response and Strategy 12. Since its establishment following the conclusion o f the Arusha Accord, the Government has been pursuing a dual strategy o f military pressure and negotiation to encourage the CNDD-FDD and the FNL-PALIPEHUTU to enter the peace process. To Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 7 date, three o f the four APPMs havejoined the peace process, indeed been integrated into Government and state institutions. With the recent integration o f the CNDD-FDD (Nkurunziza), a process o f meaningful defense and security sector reform and demobilization can begin. 13. Following the signing o f the cease-fire agreements in October and December 2002, the Government began to prepare a national Demobilization, Reinsertion and Reintegration Program (DRRP) inJanuary 2003. The preparation o f the national program built on knowledge and experience gained with the support o f a World Bank Post- Conflict Fund grant, which financed the preparation o f eight background studies for social and economic reintegration, training activities, confidence-building measures and leaming trips for Government personnel from March 2000 onwards.2 The Government formally established a National Commission for Demobilization, Reinsertion and Reintegration(NCDRR) on August 28,2003 to provide policy guidance to the DRRP.An Executive Secretariat (ESNCDRR) o f the NCDRR has been put in place to finalize preparation and lead implementation o f the national program, as well as to coordinate the contributions o f international partners. 14. Guidingprinciples. The Government has adopted the following guidingprinciples for the DRRP: (9 demobilization would be implemented gradually to facilitate consolidation o fthe peace process; (ii) theDRRPwouldformanintegralpartofadefense andsecuritysector reform program that would begin with the integration o f the FAE3 and different armed movements to form the NDF and a new national police force; (iii) intheinterestofnationalreconciliation,theProgramwouldtargetallex- combatants irrespective o f previous politico-military affiliation; (iv) the DRRP would allow ex-combatants to choose their community o f settlement and their own path to social and economic reintegration; (VI reintegration assistance would be coordinated closely with broader rehabilitation and reconstructionactivities for war-affected populations; (vi> all demobilization and targeted reintegration assistance to ex-combatants would be provided through the DRRP; (vii) pension and social security issues for ex-combatants would be addressed outside the DRRP, inaccordance with the ex-combatants' respective terms and conditions o f service; (viii) the program would respect the partial amnesty specified in article 26, 1.1 o f the Arusha Accord, which stipulates that "Amnesty is accorded to all combatants o f armed political parties and movements for crimes Burundian officials visited Chad, Eritrea, Ethiopia, Mozambique, Northern Ireland, Rwanda, Sierra Leone, and South Africa under this Program. Burundi Demobilization, Reinsertion and Reintegration Program - Technical Annex 8 committed due to their participation in conflict. However, amnesty is not extended for acts o f genocide, crimes against humanity nor for participation incoups d'ktats"; (ix) as stipulated in the comprehensive cease-fire agreement o f November 2003, the program would respect the temporary immunityextended to the leaders and combatants o fthe CNDD-FDD andthe FAB ;and (x) the program would respect relevant human rights conventions, especially those relatedto the rights o f the person. 15. Target groups. The Government envisages the demobilization andreintegration o f a total o f 55,000 combatants in two stages. Duringthe first stage, approximately 14,000 combatants o f the FAB and o f APPMs who would not join the National Defense Forces (NDF) or the police force would be demobilized. Inaddition, the Program would help to reinsert an estimated 20,000 Guardiens de la Paix, a community-level militia group established by the Government as an auxiliary force, and up to 10,000 Combattants Militants o f the APPMs at this time. During the second stage o f the Program, 41,000 soldiers o f the NDF would be demobilized as part o f the process o f defense and security sector reform. Given the difficulty o f estimating the number o f APPM combatants, Government would maintain sufficient resources in reserve and available for rapid disbursement as required by Program implementation progress. Overall Program cost estimates would be adjusted inline with overall beneficiary numbers. 16. Timing. The pace and scale o f the demobilization process would largely be contingent on the rate o f the military integration process and the subsequent defense and security sector reform process. It i s estimated that the downsizing and demobilization process for the NDF would be completed after four years. The DRRPwould continue for a fifth year to complete the provision o f reinsertion and reintegration assistance to ex- combatants. 17. The military integration o f APPMs and the FAB into the NDF will be a sensitive process. The initial integration will be governed by the Forces Technical Agreement (FTA), and will be observed by AMIB. However, several important details remain to be clarified - inthe spirit o f the FTA -by the Integrated Chiefs o f Staff o f the NDF and the Joint Ceasefire Commission (JCC). This reform should lead to increased Government transparency in the defense and security sector, an improved balance o f the various ethnic, social and regional groups inthe forces at all levels, clarity regarding the division o f labor betweenthe national police and the NDF, and ultimately a net reduction in the size o f the NDF. Government has requested the assistance o f the international community to support the defense and security sector reform process. 18. With a view toward national reconciliation, the Government is also preparing for the return and resettlement o f internally displaced persons (IDPs) and o f refugees from Tanzania. The Government has established a Commission Nationale pour la Re`habilitation des Sinistre`s to support their repatriation andreintegration. A special inter- agency unit for the coordination o f donor assistance for reintegration processes has been established by the UnitedNations Development Programme (UNDP), the United Nations Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 9 HighCommissioner for Refugees (UNHCR) and the World Bank. The NCDRR would closely coordinate its reintegration assistance with the CNRS and this inter-agency unit to ensure overall coherence of assistance to war-affected populations. 1.4 International Response 19. Political. The intemational community is providing considerable support to the peace process in Burundi. At the political level, the governments o f South Africa, Tanzania, Gabon and Uganda have played a critical mediation role in the negotiations between the Government and the different parties before and after the Arusha Accord o f 2000. The United Nations Office in Burundi (UNOB) has also helped to facilitate these negotiations, and presides over the ImplementationMonitoring Committee (IMC) and the Joint Ceasefire Commission (JCC), two central bodies in the oversight o f the implementation o f the Arusha Accord. Other initiatives supported by the intemational community included informal meetings between members o f opposing parties outside Burundi,including meetings with memberso fthe FNL-PALIPEHUTU(Rwasa) inCaux, Switzerland. Senior officers o f the FAB and APPMs participated in joint leadership training sessions in Nairobi in November 2003. The latter event was financed by the European Commission and the Government of the United Kingdom and was a direct spin-off o f the Burundi Leadership Training Program, which is supported by the World Bank's Post-Conflict Fund(PCF). 20. Security. At the request o f the Government o f Burundi, the Government of South Africa provided security protection services for a number o f political leaders o f former opposition groups who returned to Burundi in 2001 after the signing o f the Arusha Accord. This mission has subsequently been integrated into the first peacekeeping mission o f the African Union - AMIB. AMIB consists o f approximately 2,650 soldiers from Ethiopia, Mozambique and South Africa, as well as military observers from an additional 15 African countries. AMIB's mandate includes the provision o f support to the military integration and disarmament processes. 21. Humanitarian. With a large number o f IDPs in Burundi, humanitarian assistance needs have remained substantial. A number o f relief agencies are supporting the government and the people o f Burundi through humanitarian assistance and inpreparing for early reconstruction. The UN Consolidated Appeal (CAP) launched in November 2003 requests intemational assistance in the amount of US$71.5 million to address the humanitarianneeds o f Burundians in2004. 22. Development. Substantial amounts o f development assistance were pledged by donors after the conclusion o f the Arusha Accord. However, a significant proportion o f this assistance has not been disbursed due to persistent insecurity. Several partners, including the European Commission, the UNDP, and the World Bank, have continued to provide significant assistance to Burundi. The Government o f Belgium and the UNDP hosted a Partners Forum for Burundi in January 2004. Donors pledged US$1.032 billion insupport ofBurundiat thismeeting. Burundi Demobilization. Reinsertion and Reintewation Program-TechnicalAnnex 10 23. Demobilization and Reintegration. The international community i s also supportive o f efforts towards the demobilization and reintegration o f ex-combatants in Burundi. Partners o f the Multi-Country Demobilization and Reintegration Program (MDRP) for the greater Great Lakes region share the view that the DRRP would be an essential component o f the broader peace-building and rehabilitation process inBurundi. Representatives o f several MDRP donors and partners have actively participated in some o f the preparation missions for this Project. AMIB, UNOB and UNICEF have been closely involved inthe planning for disarmament and demobilization activities inthe first year o f the DRRP. 2 IDA Response and Strategy 2.1 Multi-Country Program for Demobilization and Reintegration 24. The MDRP is a partnership o f nine regional governments and 42 international partners that serves as a coordination and financing platform for demobilization and reintegration efforts in the greater Great Lakes region. Building on a variety o f country- level initiatives, and inconsultation with governments inthe region as well as donors and UN partners, the Bank elaborated a greater Great Lakes regional strategy for demobilization and reintegration for the MDRP. These were endorsed by the Bank's Board inApril 2002. 1. Within the framework o f the MDRP, the Government o f Burundihas asked the World Bank to provide financial assistance and coordinate extemal partner support for the DRRP.To this end, the World Bank initiated a project preparation process in February 2003, and established a Disarmament, Demobilization and Reintegration Coordination Committee (the DDR-CC) consisting o f interested MDRP partners present in Bujumbura, as well as a Technical Working Group (TWG) to elaborate a Joint Operations Plan for disarmament and demobilization activities. 25. The regional approach has several advantages in the Great Lakes region: the ability to address external regional factors associated with some country programs; enhanced transparency o f related country programs, and the facilitation o f knowledge- sharing and training across national programs. The MDRP framework enhances coordination and harmonization o f the activities o f various donors and UN agencies. MDRP Joint Supervision Missions, in which a number of MDRP partners including bilateral donors and UN agencies participate, have visited Burundi twice since the initiation o f the MDRP. In both instances, the planning status and design o f the DRRP were discussed intensively between the mission and various stakeholders in Burundi. These discussions made significant contributions to the design o fthe DRRP. 26. National demobilization and reintegration programs are already under implementationinAngola and Rwanda, and further programs are under preparationinthe Central African Republic, the Democratic Republic o f the Congo and the Republic o f Congo. The personnel o f the ES/NCDRR have benefited from two study trips to Rwanda to learn from the Rwanda Demobilization and Reintegration Program. They have also benefitedfrom technical exchanges between managers and technical experts o f national Burundi Demobilization. Reinsertion and Reintegration Program - TechnicalAnnex 11 programs supported by the MDRP, including a workshop on management information systems and monitoring and evaluation (M&E) in demobilization and reintegration programs held in Rwanda in August 2003 and a trip to observe ongoing ex-combatant reintegration activities in Sierra Leone inFebruary 2004. 27. The MDRP also serves as a framework for a regional multi-donor trust fund (MDTF) for demobilization and reintegration activities inthe greater Great Lakes region. The MDTF has become the vehicle to mobilize and channel key donor financing; reduce transaction costs for client governments, donors and the Bank; and enable Governments to complement IDA financing with other grant resources. To date, MDRP donor partners have committed US$205 millionto the MDTF. 2.2 Poverty Reduction Strategy 28. Transitional Support Strategy (TSS). A TSS for Burundi (February 12, 2002, Report No. 23635) reflects the Bank's support for the Government's program to overcome the legacies o f the conflict, foster economic growth and reduce poverty. The TSS describes a lending program that includes a grant for a Social Action Project, an Emergency Reconstruction Credit and an Emergency Road Rehabilitation Credit in addition to the Demobilization and Reintegration Project. The support o f the international community for the DRRP (paragraphs 27-29), i s deemed essential for progress in the peace processes. The proposedIDA grant for the DRRP i s thus i l l y consistent with the TSS. 29. Poverty Reduction Strategy (PRS). The Government o f Burundi completed an interim Poverty Reduction Strategy Paper (iPRSP) in November 2003. A Joint Staff Assessment and the iPRSP were presented to the Boards o f the World Bank and the International Monetary Fund (IMF) respectively in January 2004. Assistance to the reintegration of ex-combatants is among one o f six priority areas for poverty reduction identifiedinthe iPRSP. A final PRSP is expected bythe end o f2004. 30. Restructuring of existing credits. The current IDA portfolio consists o f five projects with satisfactory performance. None o f these projects is compatible in design with the DRRP. Nevertheless, to leverage synergies and build on lessons learned, the Government would establish links between the DRRP and several ongoing operations. In particular, the experience gained under the Burundi Social Action Program would be applied to inform the design o f community-based reintegration options for ex- combatants. Close linkages would also be sought with projects dealing with agriculture, publicworks andHIV/AIDS. 2.3 Rationalefor IDA Involvement 31. The Government's request for technical andfinancial assistance for the DRRPhas come at a critical time in the peace process. IDA'S involvement is justified by its considerable experience with such programs, the scale o f resources required for the Program, the focus on sustainable economic reintegration of ex-combatants, and the need Burundi Demobilization, Reinsertion and Reintegration Program-Technical Annex 12 for IDA to be responsive to a client request to lead and coordinate international support for a critical peace-building operation. IDA support would complement the activities of other international stakeholders inBurundiand the region. 32. Need for emergency assistance. The emergency is the extraordinary event o f limited duration which started in November 16, 2003 following the signature o f the comprehensive cease-fire agreement between the Government and the CNDD-FDD (Nkurunziza). The implementation o f this agreement, which should help to bring a 10- year civil war to an end, requires rapid financial and technical support. The impact o f the conflict on Burundi has been profound. An estimated 300,000 Burundians have died as a result o f the conflict and, due to insecurity, an estimated 1.2 million Burundians (approximately 19% of the population), have been displaced within Burundi or fled to neighboring countries. The application o f the Bank's emergency procedures under OP 8.50 i sjustified on the basis o f the following criteria: Impact on economic priorities and investment programs. A successfully implemented DRRP would help consolidate peace in Burundi and the region and support macroeconomic stability. Frequency. There i s general agreement that the peace process can be consolidated with specific stabilization measures, which can also help to prevent a return to conflict. Urgency. Urgent measures are needed to demobilize and reintegrate these ex- combatants ina rapid but structured manner. Prospects for reducing future hazards. Discontented ex-combatants could pose a threat to social stability. Therefore, structured demobilization and reintegration assistance may contribute to a reduction o f the risk o f future conflict. Expected economic benefits. The Program would provide the Government the means to consolidate social and economic recovery following the end o f the conflict. 33. Making resources available for development. The persistent insecurity in the Great Lakes region has led to the diversion o f scarce resources from economic and social sectors to the defense and security sector. In the medium-term, in conjunction with a defense and security sector reform process, the DRRP i s expected to facilitate the reallocation o f Government resources from defense to economic and social investments. The reduction o f defense spending would help ease the fiscal deficit, and is thus an important factor to achieving macroeconomic and fiscal balance inthe longer term. 2.4 Lessonsfrom Previous IDA Assistance 34. IDA has gained substantial experience from a number o f demobilization and reintegration programs it has supported in Africa and elsewhere. Such assistance has often taken the form of technical andor financial support through investment credits, budget support programs or through reallocations from ongoing projects. Based on Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 13 information from these operations, a review o f relevant experiences in selected A h c a n countries, and the Bank's Operations Evaluation Department's evaluations, the following best practices were identified and integrated inProgram design. 35. Demobilization. This phase i s short but logistically complex. The successful implementation o f demobilization activities i s a precondition for the subsequent provision o f targeted reinsertion and reintegration assistance. Key demobilization activities include the distribution o f non-transferable ID cards, the collection o f socio-economic data and the establishment o f a database on the beneficiary population. The assembly o f ex- combatants during the demobilization phase provides a good opportunity for HIV/AIDS voluntary counseling and testing (VCT), as well as the dissemination o f information about program benefits and civilian life. 36. Reinsertion. Upon demobilization, the ex-combatants lose their source o f (formal or informal) income. Experience suggests that they are usually in a vulnerable financial position until they can begin to generate income. During this period (the "reinsertion" phase), ex-combatants require a transitional safety net to cover their families' basic material needs. The objective o f this transitional assistance would be to enable the ex- combatants to return to their community and to sustain themselves and their families for a limitedperiod following demobilization. 37. Economic reintegration. Ex-combatants are often an economically vulnerable group as they lack marketable skills, material assets and social networks. Inaddition, they are often a high-risk group from a security perspective due to their familiarity with weapons and violence. Where this is the case, targeted support i s advisable to help them establish sustainable livelihoods. Inorder to be useful and cost-effective, such assistance should be tailored to their socio-economic profile and adjusted to the economic environment. Female ex-combatants often require specialized support to re-establish sustainable livelihoods. 38. In general, ex-combatants should receive no more support than is necessary to help them attain the general standard o f living o f the communities into which they reintegrate. Furthermore, reintegration assistance should be limited in time to avoid the creation o f a dependency syndrome. Information, counseling and referral services can assist ex-combatants to assess their livelihood options and find employment. Apprenticeships in the informal sector combine the benefits o f vocational training and employment and are thus preferable to training only. Micro-projects can help ex- combatants secure their economic independence through self-employment. Micro- projects are, however, complex interventions that require significant administrative capacity and a stable environment. 39. Ultimately, ex-combatants resettle into a broader economic environment. The creation o f viable long-term employment opportunities for ex-combatants i s closely linked to private sector growth and employment generation. It should be noted that ex- combatants themselves could provide a significant human resource contribution to the economy. Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 14 40. Social reintegration. Social reintegration i s often eased by the support o f an extended family network. Therefore, ex-combatants should be encouraged to reintegrate in the vicinity of their extended families or to consider the social and financial consequence of moving elsewhere. Informal networks o f ex-combatants can be important elements to successful economic and social reintegration. Child ex-combatants should be reunified with their families wherever possible, and assisted to resume their education or enter into gainful enterprise. Disabled ex-combatants commonly require specialized medical and assistance inovercoming the constraints o fthe disability. 41. Care should be taken to prevent the stigmatization o f ex-combatants as unfit for military service or as conveyers of disease and violence. Community sensitization and information efforts are paramount inthis regard. The fears o f communities related to the return o f ex-combatants should also be addressed. 42. Institutional issues. Program coordination by a single civilian agency with overall program responsibility, balanced by decentralization o f implementation to regions and communities makes for a powerful institutional arrangement. Where possible, existing implementation capacities should be leveraged. The employment o f ex-combatants as counselors and field staff can facilitate reintegration. Inpeacekeeping environments such as in Burundi, close operational linkages between the national implementation body and the peacekeeping force are essential. 3. The BurundiDemobilization, Reinsertionand Reintegration Program 3.1 Eligibility Criteria 43. The following general and national criteria needto be fulfilled for Government to be eligible to receive assistance for the demobilization and reintegration of ex-combatants underthe MDRPframework: Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 15 44. General criteria Table 1:General criteria for MDRP Assistance Criteria Status (i) Affected by conflict. Being involved inor Burundihas beenaffectedby civil war since directly affectedby one or more of the 1993. conflicts inthe greater Great Lakes region. The Burundiconflict hasbeenexacerbatedby the participation o f Rwandese elements. The Government o fBurundiandAPPMs undertook military operations inthe DRC before 2003. (ii) Participation in the regional peace process. Burundihas participated inthe Arusha peace Demonstratedwillingness to contribute to process and subsequentpeace negotiations stability inthe greater Great Lakes region under the auspices o f the African Union. andto implement relevant provisions o f the applicable peacelceasefire accord(s). Inaddition, the Government ofBurundihas signed a bilateral non-aggression pact with the Government o fthe DRC. 45. Countvy-specijk criteria Table 2: Country-Specific criteria for MDRP Assistance Criteria Status (i) Preparation of a national demobilization and reintegration program Completed. as a result of the conjlict(s). This would typically be demonstrated by a national program developed in consultation with the international community and national stakeholders. (ii) Establishment of a suitable institutional structure. The government Completed. Government would establish implementation arrangements with significant has established NCDRR planning, coordination and monitoring capacity and with appropriate and Executive Secretariat participation o f relevant political and security stakeholders. (iii) A letter of demobilization policy outlining government commitment. Completed. The Government would draft a letter in which it outlines its commitments to the regional peace process, demobilization and reintegration, defense and security sector reform and the expected fiscal impact o f demobilization. (iv) Establishment of appropriate safeguards andfiduciary measures. The Completed within the government would provide assurances and monitoring measures to context o f the program ensure consistency with standard environmental and social document. safeguards. In addition, government would establish satisfactory financial management and procurement arrangements. Burundi Demobilization, Reinsertion and Reintegration Program - Technical Annex 16 3.2 Objectives 46. The overall goal o f the DRRP would be to help consolidate peace inBurundiand the Great Lakes region through the implementation o f relevant articles o f the Arusha Peace Accord and subsequent cease-fire agreements. The three principal objectives o f the Program are to: (i) demobilize an estimated 55,000 ex-combatants from the FAB, members o f APPMs, and subsequently the NDF, and support their reintegration into civilian life; (ii) support the reinsertion o f an estimated 20,000 Gardiens de la Paix militia o f Government and approximately 10,000 combattants militants militia o f the APPMs; and (iii) contribute to the reallocation o f Government expenditure from defense to social and economic sectors over a period o f five years. 47. This Program is expected to have a significant impact on reducing poverty in Burundi by: a) contributing to a stable and secure environment in which displaced populations can return home, elections can be held, public and private investment i s encouraged, and economic activities can be undertaken or restarted, and b) freeing up additional public resources for investment insocial and economic sectors. 3.3 Coverage and Implementation Period 48. Target groups. the Government envisages the following target groups for the two stages o f the DRRP: 49. Target Groupsfor Stage I (Year 1of DRRP implementation) (i) the demobilization and reinsertion o f 9,000 adult soldiers of the FAB and members o f APPMs; (ii) the demobilization and reinsertion o f up to 27,000 adult members o f the Gardiens de la Paix and combattants militants o fthe APPMs; and (iii) the demobilization and reinsertion o f approximately 8,000 child soldiers. 50. The following target groups would be eligible for assistance during stage Io f the DRRP: Burundi Demobilization. Reinsertion and Reintegration Program - TechnicalAnnex 17 Table3: EstimatedTarget Groupsfor Stage IDemobilizationof the DRRP Estimated# of Nameof Force Estimated # Of Combatants Combatantsto be DemobilizedinStageI* Forces Armkes Burundaises (FAB) 45,000 I 5,000 CNDD-FDD (Nkurunziza) 25,000 I CNDD-FDD (Ndayikengurukiye) 3,000 FNL-PALIPEHUTU (Rwasa) 3,000 CNDD (Nyangoma) 1,000 9,000 Total 80,000 14,000 51. No child soldiers present inthe FAB and APPMs would be eligible for integration into the NDF and all o f them would be demobilized during stage Io f the DRRP. Their demobilization would be undertaken with the support o f the National Child Soldier Demobilization, Reintegration and Recruitment Prevention Project, which i s co-financed bythe MDTF as an MDRP Special Project. 52. The identification and verification o f combatant status would be essential tasks during stage I,in order to prevent non-combatants from accessing Program benefits. These processes would be undertaken in accordance with procedures outlined inthe Joint Operations Plan (JOP).3 According to the JOP, eligibility of members o f Burundian ex- combatants would be assessedon the basis o fthe following general criteria: (i) Submission o f a specified ratio o f arms and ammunition; (ii) Identificationby unit commander of hidher force; (iii) Affiliation with a recognized armed entity that engaged in military fighting before the signing o fthe respective cease-fire agreement o f that group; (iv) Passing a test o f basic military knowledge and skills; and (v) Burundian nationality. The purpose of the JOP is to outline a comprehensive set of procedures and mechanisms for the disarmament, screening for military integration and demobilization of membersicombatants o f APPMs. The JOP also defines the roles and responsibilities of the actors involved in this process. The JOP was elaborated by a Technical Working Group comprising the ES/NCDRR, MDRP Secretariat, AMIB, UNICEF, andUNOB. Burundi Demobilization, Reinsertion and Reintegration Program -TechnicalAnnex 18 53. The verification o f combatants in stage Iwould be undertakenby Joint Liaison Teams consisting o f AMIB, the Government, and a representative o f the relevant group beingdemobilized. 54. As specified in the Arusha Peace and Reconciliation Accord o f August 2000 and the comprehensive cease-fire agreement of November 2003, combatants would be demobilized on the basis o fthe following broad criteria during stage Io fthe DRRP: (i) voluntarytermination; (ii) age(minimumandmaximum); (iii) medical reasons (disability, chronic illness, etc.); and (iv) level o f education and experience associated with respective ranks. 55. In addition, the Program would support the demobilization and reinsertion of approximately 20,000 Guardiens de la Paix, village militia aligned with the Government, as well as an estimated 10,000 combattants militants during stage Iof the Program. The demobilization of Guardiens de la Paix would be undertakenby mobile demobilization teams o f the ES/NCDRR, with monitoring providedby AMIB. 56. Target Groupsfor Stage 11(Years 2-5 of DRRP implementation) (i) the demobilization, reinsertion and reintegration o f 41,000 personnel o f the NDF; (ii) the provision o f reintegration assistance to all ex-combatants demobilized in stage Io f the Program; and (iii) the provision of specialized reintegration assistance to disabled and child ex- combatants. Table 4: EstimatedTarget Group for Stage I1Demobilizationof the DRRP Forces de la DCfense Nationale 66,000 52,000 38,000 25,000 # o f soldiers to be demobilized 14,000 14,000 13,000 0 TOTAL Demobilized inStage I1 41,000 57. Duringstage I1o fthe Program, combatants would be demobilized on the basis o f the following broad criteria: (i) voluntarytermination, (ii) age, Arusha Peace Accord, Article 21,7 (e) Gardiens de la Paix and Combattants Militants would be disarmed by the Government and relevant provincial authorities. The process would be observed by AMIB. Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 19 (iii) medicalreasons,and (iv) force structure requirements as identified inthe Arusha Accord and the Forces Technical Agreement. 58. The reintegration o f approximately 55,000 ex-combatants poses particular challenges in Burundi, a country devastated by conflict and with limited access to arable land. Meaningful reinsertion and reintegration support for ex-combatants is necessary to reduce the risk that the demobilization has negative security and social impacts, which could potentiallyjeopardize the peace consolidation process. 59. Geographical coverage. Reintegration activities would focus on those areas to which ex-combatants return. As the settlement pattern o f ex-combatants is expected to be scattered, Program benefits would likely be spread across the country. To facilitate rapid Program start-up, reintegration activities would be prioritized by province according to the settlement pattern o f ex-combatants, as well as implementation capacity at the provincial and community levels. 60. Duration. The DRRP would be implemented over a five year period. The Program completion date i s December 31, 2008. The implementationtimeframe i s based on the following considerations: (i) It is anticipated that the labor market would not be able to absorb a large number o f ex-combatants duringthe initialwar-to-peace transition period; (ii) The demobilization o f ex-combatants from the NDF during stage I1 o f the Program would be guided by a defense and security sector reform process. It i s anticipated that this reform program will be gradual in order to safeguard the cohesion o f the NDF. In this context, it is also believed that the rank verification process for officers o f the NDFwill take at least 24 months; and 61. The implementation o f demobilization activities may be accelerated in the event that a large number o f combatants choose not to enter the NDF or choose to leave the NDF early on. To ensure Program preparedness for such an eventuality, the Program would maintain adequate resources in its accounts, and financing would be structured flexibly. Furthermore, the ES/NCDRR would maintain close communication with the NDF and partners involved inthe defense and security sector reformprocess. 3.4 Program Components 62. The D W would contain four components6: (i) demobilization, including HIV/AIDS prevention and mitigation measures; Disarmament instage Iwould be undertaken outside the Program inaccordance with the provisions of the JOP. The Government would be responsible for the disarmament of the Gardiens de la Paix and the combattants militants, with observation by AMIB. The disarmament o f NDF personnel in stage I1of the Program would be undertaken by the NDF, prior to their transport to the DemobilizationCenters. Burundi Demobilization, Reinsertion and Reintegration Program -TechnicalAnnex 20 (ii) reinsertion; (iii) reintegration; and (iv) customized reintegration assistance for special groups. 3.4.1 Demobilization Demobilization StageI 63. The demobilization o f 9,000 ex-combatants from the APPMs and 5,000 soldiers of the FABwouldbe completed ina period o f approximately six months duringstage Io f the DRRP. 64. Locations: The demobilization of APPMs and the FAB would be undertaken in Demobilization Centers. The NCDRR would establish at least one demobilization center for the FAB and two centers for the APPMs. The NCDRR would expand their capacity and/or establish additional centers as feasible andnecessary. 65. Security: The DCs for the APPMs would be protected by AMIB. The DCs for the FABwould beprotectedbythe FAB,with monitoring by JLTs. 66. Procedures: To the extent possible, demobilization procedures for FAB soldiers andmembers o f APPMs would be similar. The following activities are outlined indetail inthe JOP and the Program ImplementationManual (PIM) and are envisaged for all ex- combatants inthe demobilization phase. Blankets, cutlery, and cups would be distributed to ex-combatants upon their arrival inthe demobilization centers. 67. Verzjkation. The eligibility o f each arriving combatant candidate would be verified. The identity of FAB ex-combatants would be determined usingtheir military ID card and/or discharge letter, andwould be monitored by JLTs.~ The IDnumber would be compared with a list o f soldiers to be demobilized provided by the FAB. The identification of members o f APPMs would be basedon the criteria above, andwould be undertaken by JLTs.* 68. Registration and ID card. Upon identification for demobilization, each ex- combatant would be registered and provided with non-transferable DRRP identification documents (IDS).To ensure security, these would be individually numbered, signed, stamped, laminated, andcontain a photograph. Additional security features maybe added if necessary. ID cards would be identical irrespective of former military affiliation. ID cards for child ex-combatants would note their special status. Immediately upon 'Priortotheir arrival inthe Demobilization Center, FAB soldiers would be legally discharged. They would beprovided with discharge letters confirming the termination o ftheir military service. APPM combatants repatriated from the Democratic Republic o f Congo with the assistance o f MONUC would be transported to the Demobilization Centers with the assistance o f AMIB. Upon their arrival in DCs, they would follow the same verification and demobilization procedures as all other APPM combatants. Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 21 identification for demobilization, ex-combatants would be required to sign a form acknowledging and renouncing their combatant status. 69. Socio-economic profile and reintegration expectations. Socio-economic profile data and a Reintegration Expectations interview would be conducted by the ES/NCDRR, in order to inform the design of subsequent reintegration assistance measures. Data collected would include demographic characteristics (age, gender, marital status, number o f children, etc.), assets, education level, health status, needs and reintegration aspirations. These data would be entered into the Program's Management Information System (MIS). 70. Pre-demobilization orientation (PDO). Pre-demobilization orientation would provide ex-combatants with information about Program benefits, implementation arrangements at the central and local levels, health issues, and civic rights and duties (including women's legal rights). The PDO would be organized inmodules andwould be carried out by ES/NCDRR and its implementing partners. The ES/NCDRR would identify and train counselors and prepare appropriate counseling materials. The PDO would seek to minimize unrealistic expectations about Program benefits. 71. Medical screening and Voluntary Counseling and Testing for HIV/AIDS. Ex- combatants would be screened to identify serious diseases or impairments that may affect their ability for economic and social reintegration. Furthermore, voluntary counseling and testing (VCT) for HIV/AIDS would be offered. The ES/NCDRR would contract an implementingpartner as required. 72. Distribution of vouchers. The ES/NCDRR would distribute computer-generated, numbered vouchers to enable eligible ex-combatants to access the Transitional Subsistence Allowance (TSA). Each voucher would have three stubs, one for the beneficiary, one for the ES/NCDRR and one for the implementing partner contracted to effect the payments. 73. Transport to communities of return. As part o f the first installment o f the TSA, the ES/NCDRR would provide transport allowances in cash to enable ex-combatants to travel from the DCs to their chosen areas o f retum. Ex-combatants would be requiredto report to the Provincial Program Offices intheir area o f retum within thirty days o f their departure from the DC.9 74. Special Target Groups. DCs would contain special separate living areas for child ex-combatants and for female ex-combatants. Child ex-combatants would undergo a separate demobilization process with the support o f the National Child Soldier Demobilization, Reintegration and Recruitment Prevention Project supported by UNICEF, with MDRP financing. Adult female ex-combatants would undergo a similar demobilization process as male ex-combatants, with extra personal protection, specialized medical screening and PDO as appropriate. Ex-combatants who wish to move from one province to another in the course o f the Program would be required to register with the PPO inhislher new area of settlement inorder to access Programbenefits. Burundi Demobilization, Reinsertion and Reintegration Program-TechnicalAnnex 22 75. Timeframe: The demobilization o fFAB soldiers would take no more than 10 days per person. The implementation o f stage Idemobilization is estimated to be completed within 6 months o f its initiation. The ultimate duration o f the stage Idemobilization process will depend on several factors, including (i) actual number o f combatants to the be demobilized, (ii)the implementation o f disarmament and military integration activities, and (iii) capacity o f AMIB to undertake disarmament and to provide the security at DCs. Demobilization Stage11 76. Stage I1 demobilization would be undertaken during years 2-4 o f program implementation. During this stage, 41,000 personnel o f the National Defense Force (NDF) would be demobilized. Demobilization would be more gradual during stage 11, and would be undertaken from a single DC. The procedures would be identical with those for FAB soldiers demobilized instage I. 3.4.2 Reinsertion 77. In accordance with the principle o f equity among ex-combatants from different politico-military origins, all APPM combatants, as well as FAB and NDF soldiers demobilized in the DRRP would receive a Transitional Subsistence Allowance (TSA). The TSA would be based on salary levels o f FAB soldiers, and would provide for the basic reinsertion needs o f ex-combatants over a period o f 18 months. The amount o f the TSA would be differentiated by rank, with agreed rank distribution percentages for all parties established before the initiation o f demobilization activities. The basic benefit for private soldiers would be FBU566,OOO (US$515). The average benefit would amount to FBU644,OOO (US$586). The total reinsertion assistance for a private soldier compares favorably with similar programs inAfrica (see attachment 5). 78. The TSA would be paid incash for the following reasons: experience insimilar programs suggests that the cash payments have generally been used for constructive purposes by most beneficiaries; cash payments empower ex-combatants to make choices according to their own needs andpriorities; cash payments have lower transaction costs than in-kind assistance; and they help to stimulate a supply response from a variety of local producers o f goods and services, thereby contributing to an invigoration o f the local economy inareas o freintegration. 79. Timeframe. The TSA would be paid in six installments. The first installment would be paid prior to departure from the DC. The second payment would be made three months after settlement in the community o f choice. Four subsequent installments would be paid in quarterly intervals. Experiences from other countries suggest that payment in Burundi Demobilization, Reinsertion and Reintegration Program-TechnicalAnnex 23 installments over time afford ex-combatants an opportunity to improve their financial management skills. 80. Gardiens de la Paix and combattants militants would be eligible for a single reinsertion payment in the amount o f FBU100,OOO (US$91) following their demobilization. These payments would be made through the same banking modalities as those utilized for ex-combatants. 81. Counseling. To encourage the appropriate use o f the TSA, the Program would provide extensive counseling on its use prior to demobilization and after arrival in the community o f settlement, including peer-to-peer counseling (sharing o f experiences by ex-combatants demobilized earlier). It would help ensure that the choice o f their path towards establishing a livelihood - and thus reintegration - corresponds to individual circumstances and the local economic opportunity structure. Families o f ex-combatants would be included inthis counseling to the greatest extent possible. 82. Payment modalities. The payments would be made by the ESNCDRR- through the existing national banking system - and would be monitored by the Provincial Program Office (PPO). Ex-combatants would become eligible for their TSA upon registration at their respective PPO, and after having opened a bank account in their provincial capital. The PPO would request the ES/NCDRR to transfer the funds to the individual bank accounts. Withdrawals would be effected by the participating banks using lists provided by the ESNCDRR, based on presentation o f the required ex- combatant ID card and a payment voucher. Ex-post reviews would verify the correct execution o f payments and facilitate the fine-tuning o f payment systems. The use o f bank accounts has several indirect benefits, including banking education for ex-combatants, rural capital formation, and a boost for the banking system. 83. Monitoring. The ES/NCDRR would monitor the usage o f the TSA through its PPOs, and consider strategies to ensure that inputs are used inthe most effective fashion for the family unit. 84. Safeguards. The DRRP would utilize several safeguards to ensure complete and accurate payment o f the TSA: (i) tracking o f TSA distribution through the financial database as part o f the MIS; (ii) registration at the PPO; (iii) photo ID card; and unique (iv) regular surveys o f beneficiaries to verify receipt o f payment using representative sampling methodologies. 3.4.3 Reintegration 85. Guiding principles. Building on experiences with demobilization and reintegration programs elsewhere in Africa and on lessons learned from community- based development projects in Burundi, the DRRP would provide significant economic and social reintegration assistance to help ex-combatants establish sustainable Burundi Demobilization, Reinsertion and Reintegration Program - Technical Annex 24 livelihoods. The following guiding principles have been agreed upon for reintegration assistance: ex-combatants would receive a similar amount o f assistance, irrespective o f their previous military affiliation; ex-combatants themselves best know their needs and ambitions; they would thus beallowed to choose their reintegrationdestination andactivities freely; the Program would provide special reintegration assistance for former child soldiers, female ex-combatants, and ex-combatants with disabilities; the Program would help ex-combatants secure access to broader national reconstructionand employment creationprograms; in the event that health reasons or death prevent an ex-combatant from utilizing the reintegration assistance themselves, a designated member o f the family would become directly eligible to receive the assistance; and the Program would seek to involve andbenefit communities o f settlement. 86. Detailed reintegration assistance activities would be developed on the basis o f the socio-economic profile and aspiration data collected during the demobilization process, and the opportunities available in the economic environment in which ex-combatants resettle. Based on experience from other reintegration programs, the below activities are likely to form the core o f the assistanceprovided to ex-combatants duringthis phase. 87. Information and referral. An important pillar o f the reintegration support provided through the Program would be the direct interaction o f Program staff with ex- combatants and their dependents, providing them with relevant information, referral to opportunities and other assistance. The ESNCDRR, including staff based in its PPOs, would play a proactive role in answering questions from ex-combatants with regard to employment opportunities, identification and development o f micro-projects, and finding access to training and education opportunities. The staff would also inform the ex- combatants about other opportunities such as parallel reconstruction initiatives in the areas concerned. 88. Counseling. The PPOs would provide advice and counsel individual ex- combatants with regard to specific problems. These could range from administrative and legal issues to community conflicts. Where appropriate and feasible, the staff would refer them to specialized advisors, be they medical, legal or business experts. Experience in other countries has shown that in the reintegration process an approachable `willing ear' that is aware o f the specific problems o f ex-combatants can play an important role in helpingthem establish a new civilian livelihood. 89. Advocacy. The ESNCDRR would actively approach employers, educational institutions and other reconstmction and development initiatives with the aim o f identifying and advocating for the integration o f ex-combatants in a broad field o f activities. Burundi Demobilization, Reinsertion and Reintegration Program-TechnicalAnnex 25 90. Training. The Program would promote training as a means towards social and economic reintegration. This training could take various forms, from formal professional training to on-the-job training and apprenticeship. Training would increase the ex- combatants' skill level, which would provide better access to certain jobs and facilitate self-employment. It would contribute to the stabilization o f the ex-combatants' lives, as well as provide them time to familiarize themselves with the challenges and opportunities o f civilian life. (i) The ES/NCDRR would approach existing training and educational institutions to facilitate participation o f ex-combatants intheir courses; (ii) The ES/NCDRR would encourage these institutions to develop fast-track courses which would be tailored to the needs and aspirations o f ex- combatants; and (iii) The ES/NCDRR would encourage small and medium sized enterprises inthe formal and informal sector to provide apprenticeships and on-the-job training to ex-combatants. 91. Micro-projects. The ES/NCDRR would, through the various means indicated above, guide the ex-combatants to opportunities o f starting a micro-project for themselves or in collaboration with others. The most likely sectors in which these initiatives would take place are small-scale agriculture, livestock keeping, fisheries, handicraft, construction, services or trade. The criteria for access to micro-projects would be inline with the general practice inthe country. 92. For some o f the possible reintegration support projects (e.g., training, formal education, apprenticeships), the ES/NCDRR may enter into a contract with implementing partners. This contract would stipulate the responsibilities o f the implementers regarding the provision o f economic reintegration assistance to ex-combatants, including the expected result of the sub-project and its duration and cost. The PPOs would undertake regular monitoring on a representative basis to verify service delivery to Program beneficiaries. 93. Micro-finance. Ex-combatants would be encouraged to link up with existing micro-finance opportunities. This could be especially helpful for groups including ex- combatants together with other civilians. However, the Program would not itself undertake micro-credit financing activities. 94. Synergies. Along the lines indicated in the previous paragraph, the Program would also assess the feasibility and appropriateness of some existing reintegration, employment creation, and social development programs to channel some o f the assistance towards the reintegration o f ex-combatants. 95. Access to land. It is anticipated that up to 75% o f the ex-combatants will settle in rural areas. Therefore, access to land i s likely to become one o f the critical elements for successful economic integration. Ex-combatants' access to landwould be facilitated with the same procedures used for others who needland. Specifically, any Burundian insearch o f land for housing or agricultural production would normally contact the local Burundi Demobilization, Reinsertion and Reintegration Program-TechnicalAnnex 26 administration, which would allot an available piece o f public land for use ifpossible. In the event that no public land were available, the local administration would consult with relevant community membersto determine whether they would agree to cede part o f their land to the newcomer(s) on a voluntary basis." There would be no involuntary displacement o f other civilians as a result o f ex-combatants settling ina community. 96. Social reintegration. The objective o f social reintegration assistance would be to promote reconciliation and cooperation between ex-combatants and other civilians in communities o f settlement. Social reintegrationmay be especially difficult incases where ex-combatants have no 'home' to which they can return. The participation o f communities in the reintegration aspects o f the Program i s considered critical for successful reintegration. Activities to facilitate social reintegrationwould include: (i) information and sensitization o f ex-combatants and communities through outreach activities, including training o f counselors and sensitization efforts (national awareness campaign regarding the Program, discussion o f ex- combatants and community rights and obligations, training sessions for community leaders, regular activities by the ESNCDRR towards sensitization andproblem solving, gender issues, etc.); (ii) fostering reconciliation between ex-combatants and their host communities, where appropriate; (iii) assessments of social impacts o f reintegration, community perceptions o f ex- combatants, and vice versa; (iv) provision o f support to ex-combatants that would have positive secondary (spin-off) effects on the larger community (e.g., infrastructure rehabilitation); and (v) specialized counseling (e.g., family, HIV/AIDS, and women). 97. Linking projects with other initiatives. The Program recognizes the need to proactively coordinate assistance to ex-combatants with assistance provided to other war- affected populations. The following approaches would be considered to attain more balance in the support provided to ex-combatants, other war-affected groups and the communities inwhich they try to reintegrate: (i) Utilization - to the extent possible - o f community development mechanisms and systems to appraise and channel assistance to ex-combatants; (ii) Provision o f support to community - or area-based programs - and other broad development schemes - in areas where a large number o f ex- combatants settle, and conditional on the participation o f a large proportion o f ex-combatants inthe implementation o f such assistance; and (iii) Ensuring clear communication towards a broad audience on the support provided to the ex-combatants and the broader benefits to the community. ~~~ loThe Programwould not finance the acquisition ofland. Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 27 3.4.4 Special target groups 98. Child ex-combatants. It is anticipated that approximately 8,000 child soldiers would be demobilized by the Program - representing a significant target group. The demobilization o f and reintegration support to underage soldiers i s currently being addressed through a Special Project implemented by Govemment and UNICEF with financing from the MDTF o f the MDRP.Inthe preparation for this National Program, the procedures and approaches o f the ESNCDRR and the current Special Project would be harmonized. 99. The DRRP would adopt the Cape Town Principles and associated definitions o f child soldiers. In line with the assistance provided under the current Special Project, assistance to the reintegration o f child ex-combatants would include family tracing and unification, trauma counseling and psycho-social care, and facilitation o f access to education and recreation in communities o f settlement. Children older than 15 years may have different needs and would receive appropriate support (e.g., for vocational training). Under the overall coordination o f the National Program, the National Child Soldier Demobilization Project unit would be responsible for implementation, with the technical assistance o fUNICEF. 100. Female ex-combatants. The Program would pay special attention to the well- being o f female ex-combatants and provide targeted support. Specific measures would include the following: Provision o f information and training to Joint Liaison Teams and AMIB concerningthe eligibility o f female ex-combatants for DRRP assistance; Sensitization o f APPMs in pre-disarmament assembly areas about the eligibility o f female ex-combatants for DRRPassistance; ensuring that benefits for ex-combatants are equally accessible to men and women; encouraging implementing partners to ensure that their reintegration support activities facilitate the participation o f female ex-combatants; encouraging female ex-combatants to participate inwomen's associations; including partners o f ex-combatants and women in communities o f retum in community-level counseling activities; strengthening the gender awareness and capacity o f the staff o f the ESNCDRR and authorities o f the communities to which a significant number o f female ex-combatants may return; and monitoring the impact o f the Program on partners o f ex-combatants and women in communities o f retum and bringing emerging problems to the attention o f the relevant authorities. Burundi Demobilization, Reinsertion and Reintegration Program - Technical Annex 28 101. Disabled ex-combatants." The Program would seek to systematically address the medical and economic rehabilitation needs o f disabled ex-combatants. The degree o f disability would be defined by a medical screening during the demobilization process. The Program would finance the provision o f medical rehabilitation assistance depending on the degree o f disability. To this end, it would seek to reinforce key medical facilities to provide prosthesis and physiotherapy services to ex-combatants. In cases where ex- combatants are unable to pursue economic activities, the Program would facilitate the deferral o f Program benefits to a family member identified by the ex-combatant. 3.4.5 HIV/AIDS prevention and mitigation measures 102. The DRRP would provide HIV/AIDS sensitization and voluntary counseling and testing (VCT) to ex-combatants during demobilization. The DRRP would coordinate closely with the existingnational AIDS program to take over counseling and treatment o f ex-combatants and their families incommunities o f settlement. 103. Demobilization phase. The following activities would be conducted for all ex- combatants during the demobilization process: (i)initial sensitization; (ii)pre-test counseling; (iii) voluntary testing (every effort would be made to have facilities available to run the confirmatory test in the field for ex-combatants who test positive on the first screening test); and (iv) post-test counseling. Ex-combatants who test negative would be given an individual counseling session in which they would be informed o f their sero- negative status and receive the standard Information, Education and Communication (IEC) material and condom package. Ex-combatants who test positive would have confirmatory testing, receive intensive post-test counseling, be given condoms, and be referred to a local hospital for management and support for potential opportunistic infections. The ES/NCDRR would sub-contract the sensitization and VCT during the demobilization process to appropriate specialized agencies. 104. Reintegration phase. Incollaboration with activities envisaged under the national AIDS program, the following activities would be considered in the reintegration phase: (i)referring HIV positive ex-combatants to the organizations responsible for implementingthe national AIDS program, (ii) encouraging HIV-positive ex-combatants to join or establish support groups o f people living with HIV/AIDS; (iii) utilizing ex- combatant networks to disseminate HIV/AIDS sensitization in communities o f settlement; and (iv) transferring economic reintegration assistance o f HIV/AIDS affected ex-combatants who are unable to resume economic activities to a family member. 3.5 Program Cost 105. The Program i s estimated to cost US$84.4 million (see table 5), o f which IDA would finance US$33 million with grant resources. The MDTF o f the MDW would " Disability is defined as the functional limitation within an individual causedby physical, mental or sensory impairment. Burundi Demobilization, Reinsertion and Reintegration Program -TechnicalAnnex 29 provide financing in the amount o f US$45.4 million (see table 6). The German government has indicated that it plans to finance about US$6 million bilaterally. The average direct benefit per ex-combatant would amount to US$1,054, while the average cost per beneficiary is likely to amount to US$1,325. Inview o f the fact that the actual number o f ex-combatants may vary from the estimates, the Program has incorporated contingency resources o f US$4 million. Table 5: BurundiDemobilization,ReinsertionandReintegrationProgramCosts Component AverageUnit Cost * Average unit cost for ex-combatants, excluding special target group beneficiaries, Gardrens de la Paix and Combattants militants. 106. Government counterpart contribution. Notwithstanding its fiscal constraints, the Government i s committed to supporting the Program. In this spirit, Government would waive all taxes levied inBurundion works, goods and services for this Program. Table 6: BurundiDemobilization,ReinsertionandReintegrationProgram FinancingPlan Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 30 3.6 Conditions of Effectiveness 107. The following conditions o f effectiveness have been agreed upon with Government: (i) Government has adopted a decree definingex-combatant status and associated criteria, inform and substance satisfactory to the Association; (ii) Government has adopted a ministerial order defining Gardiens de la Paix and Combattants militants status and associated criteria, in form and substance satisfactory to the Association; (iii) the Program Implementation Manual (PIM), including a financial management and procurement section, has been adopted by the NCDRR in form and substance satisfactory to the Association; and (iv) the Demobilization and Reintegration Fund Account (DRFA) has been established. 4. Studies and Technical Assistance 108. Institutional development support would be provided in the form o f studies and technical assistance to inform the implementation o f the Program. The Bank would provide technical support as required. 4.1 Studies 109. Several studies were completed during program preparation with the assistance o f a Post-Conflict Fund grant from the World Bank. These studies covered the following areas: agriculture, livestock, employment, micro-credit, vocational training, social reintegration, and medical rehabilitation-o f disabled ex-combatants. While some o f the studies may have to be updated. 110. Economic Opportunity Inventory. The ES/NCDRR would undertake one new studyto map economic opportunities. The objective o fthis studywould be to establish an inventory o f reintegration opportunities (training, employment, development projects, etc.) by province and sector. This inventory would be used by the PPOs for informing and counseling ex-combatants. 4.2 Technical Assistance 111. Pre-demobilization orientation program. A program would be developed to provide ex-combatants with information about the Program, health issues and civilian life. Inparticular, ex-combatants would be briefed about their benefits and the modalities to access them, banking and financial matters, civic and community duties, training and employment opportunities, access to land and credit, income generating activities, and family and health issues. Burundi Demobilization, Reinsertion and Reintegration Program-TechnicalAnnex 31 112. Program of community sensitization and participation. The objective o f this program would be to sensitize the civilian population about the DRRP and the challenges faced during this process by ex-combatants and their families. The program would also address the concerns o f the receiving communities and to encourage their participation in reintegration activities. The program would be disseminated on various forms o f media (e.g., radio, brochures, popular folk theater, andnewspapers). 113. Local and/or expatriate technical assistance may be required for short-term and longer-tenn assignments during Program implementation. Consultancies would be required on an ongoing basis, especially for periodic external audits and independent evaluations. Qualified (private andor public) providers would be sub-contracted by the ES/NCDRR to undertake such activities. Targeted technical assistance may also be needed for HIV/AIDS activities and the special target group component (child ex- combatants, disabled ex-combatants, female ex-combatants). The ES/NCDRR could sub- contract relevant activities in part or as a whole to qualified implementing partners. For training and employment opportunities, the ES/NCDRR would prepare a roster o f qualified organizationdemployers byprovince. 5. Institutional Arrangements and Program Implementation 5.1 Institutional Structure 114. Government formally established the National Commission for Demobilization, Reinsertion and Reintegration (NCDRR) on August 28, 2003. The NCDRR has been mandated to provide policy guidance and to oversee the design and implementationof the DRRP. It would be dissolved upon completion o f demobilization and reintegration activities envisaged inthe Program. 115. The NCDRR is supported by an Executive Secretariat (ESNCDRR), which i s tasked with the technical planning and implementation o f the DRRP, as well as coordination with external program partners. Government nominated key personnel o f the ESNCDRR in November 2003. The ES/NCDRR would be supported by Provincial Program Offices (PPOs). 5.1.1 Central level 116. National Commission for Demobilization, Reinsertion and Reintegration. The Commission would be the Government's supervisory body o f the DRRP.12The NCDRR i s chaired by the President o f the Republic. Its mainresponsibilities would include: l2 The costs associatedwith the Commission wouldbe bome by the GovernmentofBurundi. Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 32 (i) determiningGovernmentpolicyfor thedemobilizationandreintegrationof ex-combatants; (ii) guiding the activities undertaken to ensure ex-combatants' successful transition to civilian life; (iii) monitoringandguidingtheimplementationoftheProgrambytheExecutive Secretariat; and (iv) providing strategic and policy-level Program coordination. 117. Executive Secretariat. The Executive Secretariat would serve as the Program's implementation unit. The ES/NCDRR would report to the office o f the President. In particular, the ES/NCDRR would be charged with: the preparationand costing o f detailed annual implementationplans; the implementation and coordination o f the individual DRRP components (demobilization, reinsertion, reintegration, special target groups, HIV/AIDS measures). To this end, the ESNCDRR would establish close links with relevant Government departments, local organizations and associations, and the private sector; the transparent and accountable administration o f Program resources (including procurement and financial management); monitoring and evaluation o f program implementation progress and impacts; and ensuring the coordination o f international partners in accordance with the provisions o f the Grant Agreements and the principles o f the MDRP. 118. The ESNCDRR would be headed by an Executive Secretary and comprise three main departments (see attachment 7 for organigram): (i) administration and finance (including personnel and financial management); (ii) operations (including demobilization, reintegration and special groups); and (iii) informationmanagement (including information and sensitization). 5.1.2 Provincial level 119. The ESNCDRR could not hope to properly oversee implementation o f reintegration assistance from one central point. Therefore, the NCDRR would establish a Provincial Program Office (PPO) in each province (17 provinces) to help administer reinsertion and reintegration assistance, and to monitor and evaluate program implementation progress and impacts. In provinces in which more than 3,000 ex- combatants settle, additional personnel would be deployed. The PPOs o f the ES/NCDRR would be attached to the offices o f the provincial administration. The ESNCDRR would Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 33 recruit staff o f the PPOs in consultation with the respective provincial administrators. PPO staff would report to the ES/NCDRR. This approach would help strengthen decentralized Program delivery capacity and ensure the integration o f Program implementation inthe Government's provincial structures. 120. The DRRP Provincial Program Offices would be responsible for the following: (i) updating the inventory o f projects and training and employment providers; (ii) conducting outreach activities with ex-combatants, including counseling and referral as well as business development support; (iii) managingthe work o f district ex-combatant outreach personnel; (iv) technical and financial monitoring o f reintegration activities, especially at the community level; (v) coordinating with other Government and non-governmental institutions and reconstruction activities; and (vi) reporting to the ES/NCDRR on a regular basis. 5.1.3 Commune level 121. The ES/NCDRR would also recruit and train one ex-combatant ineach o f the 117 communes of the country to serve as a Commune Outreach Officer (COO). These outreach officers would serve as the link between the Program and the ex-combatant at the community level. Their responsibilities would include the following: (i) provision o f Program information to ex-combatants; (ii) identification o f local economic reintegration opportunities and constraints; (iii) advocacy o f ex-combatant access to local community-based development and reconstruction activities; (iv) facilitating ex-combatant communicationwith local authorities; (v) collecting monitoring and evaluationdata; (vi) facilitating conflict resolution and reconciliation at the community level; and (vii) identification o f major reintegration bottlenecks and conflicts, and their referral to PPOs. 5.1.4 Staffing, institutional support and capacity building 122. The institutional structure for Program implementation requires strengthening at all levels (Executive Secretariat and Provincial Program Offices). Government has already recruited several management personnel o f the ES/NCDRR satisfactory to IDA, Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 34 including the Executive Secretary, the Information and Sensitization and Operations and Missions advisors, as well as the Director o f Finance and Administration and Operations. The ESNCDRR would be further strengthened through the appointment o f key technical personnel through a competitive process and terms o f reference satisfactory to IDA. PPO personnel would be recruited in accordance with the settlement pattems o f ex- combatants. All positions could be filled by qualified ex-combatants. Impartiality in implementation o f activities for different target groups would be closely monitored duringprogram implementation. 123. Equipment would be procured to help the ESNCDRR and the PPOs fulfill their responsibilities effectively. For the ESNCDRR, this would include vehicles and office equipment. Each PPO would receive essential office equipment as well as motorcycles for monitoring and outreach activities. 124. Staff development at the central and provincial levels would be critical for effective Program implementation. Staff at all levels would therefore undergo training. The objectives o f this training, which would commence immediately after staff have been recruitedlassigned, would be to ensure that all involved in the DRRP have the same understanding o f the Program objectives, procedures, and specific responsibilities, including their tasks in relation to the internal reporting system. A staff development program would be prepared and would include: (i) the preparation o f a training plan; (ii) the development of training materials; and (iii) carrying out o f training activities, the including gender awareness and sensitization, conflict resolution and reconciliation. Staff selection and training would include measures to enhance the ability o f ES/NCDRR personnel to provide assistance in an equitable manner irrespective o f the former military affiliation o f beneficiaries. As necessary, relevant PPO and commune outreach personnel would also undergo training for supervising the micro-project activities supported by the DRRP. 5.1.5 Program Coordination Mechanisms 125. The Government and the World Bank established a Disarmament, Demobilization and Reintegration Coordination Committee (DDR-CC) in Bujumbura in February 2003. With the recent establishment of the NCDRR, and in accordance with the principle o f national ownership fundamental to the MDRP, the ESNCDRR would assume the co- chairmanship o fthis ~ommittee'~.The main objectives o fthe committee are to: (i) coordinate the provision of intemational assistance to disarmament, demobilization and reintegration (DDR) activities inBurundi; (ii) act as a forum for technical discussions between Government and intemational partners o f the national program design, preparation and implementation; 13The establishment of technical coordination sub-committees o n specific subjects (social reintegration, training and education, etc.) will be considered as required. Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 35 (iii) ensure coordination between DDR and related activities, including pre- cantonment, humanitarian assistance, defense and security sector reform, AMIB, andreintegration o fother war-affectedpopulations; and (iv) monitor the implementation o f DDR activities. 126. In addition, the following three coordination mechanisms would play an important role at different levels duringimplementationo f stage Io f the D W : (9 the JCC would provide overall policy guidance and monitoring support to the disarmament process envisaged inthe JOP; (ii) aTechnicalCoordinationCommittee(TCC)consistingofkeyimplementation stakeholders, and co-chaired by the AMIB Chief o f Staff and the Operations Advisor o f the ES/NCDRR, would serve as a technical coordination body for the implementation o f all JOP activities. (iii) a Joint Operations Center (JOC) consisting of AMIB and ESNCDRR demobilization personnelwould be responsible for operational coordination o f AMIB and ES/NCDRR activities envisaged in the JOP. The JOC would be situated within the offices o fthe ESNCDRR. 127. The ES/NCDRR would establish additional coordinationmechanisms as required. Inparticular, the ES/NCDRR would envisage the establishment of a technical committee to help further refine its social and economic reintegration strategy, and to ensure coordination o f targeted ex-combatant reintegration activities with broader recovery and reconstructionefforts, bothwithin Government and with external partners. 5.2 Financial Management and Auditing 128. The overall coordination o f the Program would be under the responsibility o f the ES/NCDRR, which i s headed by an Executive Secretary. H e i s assisted by three advisors, and three heads o f departments including the Director o f Administration and Finance, the Director o f Operations, and the Director o f Information and Sensitization. All funds would be managed by the ES/NCDRR. PPOs would not be involved in funds management, though petty cash would be made available to cover minor expenses within established limits. 129. The principal objective o f the Program's financial management system (FMS) would be to support management inthe distribution o f limitedresources with the purpose o f ensuring economy, efficiency and effectiveness in the delivery o f outputs required to achieve program objectives. Specifically, the FMS must be capable o f producing timely, understandable, relevant and reliable financial information that would enable management to plan, implement, monitor and appraise the Project's overall progress towards the achievement o f its objectives. Burundi Demobilization, Reinsertion and Reintegration Program - Technical Annex 36 130. Qualified, experienced and independent auditors would be appointed on approved terms o f reference. The external audit would cover all World Bank, other donors and Counterpart funds at all levels o fProgram execution. 131. The detailed financial management arrangements i s contained inAttachment 9 o f the Technical h e x . 5.2.1 DisbursementArrangements Financing Mechanisms 132. There would be five distinct financing mechanisms for the DRRP: a A quick disbursingmechanismfor Category (1) o fthe Grant; a A special Account for Categories (2) to (5) o fthe Grant; a The government's contribution inclusive of donor support through the budget; a The Multi-DonorTrust Fund(MDTF) o fthe MDW; and a Accounts for other bilateral financing partners. 133. The rapid implementation o f the Program requires a substantial amount o f primarily local currency at specific points in time. The Program addresses this exigency by incorporating the provision o f foreign exchange through a quick disbursing mechanism. This mechanism would consist o f reimbursement to the Government o f the foreign currency used for private sector imports for eligible goods included in a pre- approved positive list o f imports. The proceeds o f the quick disbursingcomponent would be disbursed twice a year in roughly equal installments following the sequence o f the demobilization plan agreed uponwith the Government. 134. Upon receipt o f the proceeds o f the Grant through the release o f each installment, the Central Bank o f Burundi (BRB) would convert the foreign currency into Burundian Francs and deposit them in a Demobilization and Reintegration Fund Account (DRFA) opened by the Government for this purpose. 135. A positive list o f imports would be established. It would be linked to the emergency at different levels: a The rehabilitation o f infrastructure and equipment destroyed by or dilapidated duringthe war; a The (re) construction o f houses for war affectedpopulations; a The program proper, in particular the reintegration component (agriculture, training, etc.) but also demobilization (transport, rehabilitation, etc). 136. Retroactivefinancing. To facilitate speedy support to ex-combatants demobilized as o f March 2004, the Project would allow retroactive financing inthe amount o f US$6.6 million (20% o f the IDA grant amount). This would apply to eligible imports for which Burundi Demobilization, Reinsertion and Reintegration Program-TechnicalAnnex 37 payments were made after December 31, 2003. Retroactive financing would allow the Government to initiate large-scale demobilization activities prior to Grant effectiveness if necessary. 137. Multi-donor trust fund. The Government recognizes that the MDRP trust fund would help to ensure comprehensive financing for the Program, facilitate the involvement o f donors that might otherwise not be able to participate, minimize duplication o f efforts, and reduce the administrative burden on Government through the application o f one set o f implementationprocedures. Government would thus apply to the MDTF o f the MDRP to finance the part o fthe program not financed by the IDA Grant or bybilateral partners. 138. The following bank accounts would be maintained bythe ESNCDRR for program funds: Deposit Account: DenominatedinU S dollars, would serve as the mainproject account into which would be deposited program funds under the quick disbursement mechanism for Category (1) o fthe Grant. 0 IDA Grant Special Account: Denominated inU S dollars, would beto deposit program funds for Category (2) to (5) o fthe Grant. MDTF Special Account: Denominated inU S dollars, wouldbe deposited program funds from the Multi-Donor Trust Fund(MDTF). a Demobilization and Reintegration FundAccount(DRFA): This would be denominated inlocal currency. Counterpart funds from the Government o f Burundimaybe deposited onthis account inaccordance withprogram objectives. 139. The Deposit Account would be maintained in BRB. The IDA Grant Special Account, the MDTF Special Account, and the DRFA would be maintained in a commercial bank acceptable to IDA. 140. The chart in Attachment 10 illustrates the proposed banking and funds flow arrangements. 5.2.2 Accounting arrangements Financial Management Manual 141. For the sake o f comprehensiveness and harmonization o f procedures, Program funds would be administered and audited irrespective o f their source and the financing mechanism employed. 142. The accounting system o f the project would be based on a Manual o f Financial and Accounting Procedures that would be part o f the PIM. Proper books o f accounts would be kept on double entry principle usingthe cash based system. Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 38 5.2.3 ReportingArrangements Integrated Financial Management System 143. For the Program to deliver on its objectives, a Financial Management System would be developed inaccordance with the Financial Management Assessment Report presented inthe Attachment 9. The system should integrate budgeting, operating and accounting systems to facilitate monitoring and reporting. System generated formats for periodic reports would be developed and agreed with program management. Financial Monitoring Reports (FMRs) 144. Project management staff should be able to produce FMRs by effectiveness. The report would be prepared on a quarterly basis in accordance with the Guidelines for Borrowers on Financial MonitoringReports and would include the following: 0 Sources andUses o f Fundsby Grant Categories andProgram Components 0 OutputMonitoringReport 0 Procurement MonitoringReports Financial Statements 145. In compliance with International Accounting Standards and IDA requirements, the project would produce annual financial statements. Financial Statements would include: 0 A Statement o f Cash Receipts and Payments which recognizes all cash receipts, cash payments and cash balances controlledby the project. 0 A Balance Sheet that shows Assets and Liabilities. 0 A Statement o f Sources andUses o fFunds. 0 Notes in respect o f significant accounting policies and accounting standards adopted by management and underlyingthe preparation o f financial statements. 0 A Management Assertion that Bank funds have been expended in accordance with the intendedpurposes as specified inthe World Bank legal agreement. 5.2.4 Audit Arrangements External Auditing 146. Qualified independent auditors would be appointed by the ES/NCDRR. The selected auditors would be acceptable to IDA in terms o f independence, qualifications and experience. The audit would be based on terms o f reference agreed with IDA. The external audit work would include all World Bank funds, other funds and Government funds (ifavailable) o f the program. Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 39 147. The financial statements o f the Program would be audited every six months until performance i s proved to be satisfactory, and annually thereafter. The date o f the first audit would be determined inconsultation with IDA. 148. In addition to the audit report, the auditor would be required to prepare a Management Letter where internal control weaknesses and recommendations for improvements, are highlighted. A single audit opinion would be issued on program income and expenditures, special accounts and statements o f expenditure. The audit reports along with Management Letters would be sent to IDA and all other financing partners not later than four months after the end o f eachpreceding period. 149. For the sake o f comprehensiveness and harmonization o f procedures, Program funds would be administered and audited irrespective o f their source and the financing mechanism employed. 5.2.5 Supervision 150. Financial Management Supervision would be done by the World Bank over the program life to ensure the implementation o f strong financial management systems. Statement of Expenditure (SOE) reviews would be undertaken where necessary in compliance with World Bank requirements. 151. On a semi-annual basis or at such time that the Government and the Bank deem necessary, the Government and IDA would carry out joint supervision missions. These missions would make spot checks on a small random sample o f beneficiaries at their place o f residence to verify the use o f the funds disbursed. Disbursement of I D A Funds to Program Management 152. IDA funds wouldbedisbursed to the ProgramManagement for activities basedon Financial Monitoring Reports (FMRs) that include financial reporting, procurement and contract management with physical implementation progress. 153. The Borrower would open a Deposit Account for Category 1inUS dollars inthe BRB. Upon Grant effectiveness and at the request o f the borrower, proceeds o f the first installment would be deposited in the accounts against Statement o f Expenditures. The remaining installments would be released if the Program i s being implemented in a manner satisfactory to the Association and on the basis of: 0 An implementation plan and resource requirements for the subsequent 6 month period; 0 Beneficiary survey findings confirming that ex-combatants have received payments due them from previous tranches; and 0 A list o f ex-combatants, identifying the amount o f the funds allocated to each in support o f their reinsertion and reintegration. Burundi Demobilization, Reinsertion and Reintegration Program - Technical Annex 40 Disbursementof funds from DRFA to Ex-combatants 154. Funds would be disbursed to the DRFA to Ex-combatants through the commercial banking system. Eligible ex-combatants would be required to open accounts in commercial banks o f their choice. Payments would be initiated and authorized at the central level by the ES/NCDRR. 5.2.6 RiskAnalysis 155. Inorder to establish anacceptable control environment and to mitigate financial management risks, the measures outlined inthe Action Plan inAttachment 9 should be implemented. The Program i s at highrisk untilthe FMS and other operational systems are well defined and documented, andpersonnel are trained. 156. Safeguards to ensure theproper use of funds. Six safeguards have been built into the Program to ensure that IDA funds are utilized for the purposes intended: Replenishments under the quick-disbursing mechanism (Category (1)) would be linked to Programperformance; Periodic audits would verify appropriate use o f funds under all Categories; A unique, non-transferable, photograph ID would be provided to each ex-combatant. This wouldbe usedto verify ex-combatants' eligibility for assistance; The IDSwould be entered in an integrated MIS that would enable the ES/NCDRR and Provincial Program Offices to track Program implementation at the central and local level; Annual surveys o f a representative sample o f the beneficiary population would track Program delivery and verify their receipt o f assistance; and Semi-annual supervision missions would be carried out by IDA in collaboration with interested UN/donor partners. 157. Overall assessment. A Bank accredited Financial Management Specialist has reviewed the present status and the agreed actions indicated above and detailed in attachment 10. On this basis, IDA has reasonable assurances for satisfactory financial management o f Program funds in conformity with current IDA requirements. The financial management o f the DRRP would require close follow up. To this end, specialized Bank staff would monitor financial management performance on an ongoing basis. 5.3 Procurement 158. Procurement o f goods and works to be financed from the proceeds o f the Grant would be govemed by the Guidelines for Procurement under IBRLI Loans and IDA Credits published in January 1995 and revised in January and August 1996, September 1997 and January 1999. Consultant services contracts financed by IDA would be Burundi Demobilization, Reinsertion and Reintegration Program-Technical Annex 41 procured in accordance with the Bank's Guidelines for the Selection of Consultants by World Bank Borrowers published in January 1997 and revised in September 1997 and January 1999 and M a y 2002. 159. In addition to the eligible private sector imports financed through the quick disbursement component, the Grant would finance goods required for the demobilization process, including basic needs kits, equipment to prepare ID cards and VCT materials. The Grant would also finance office equipment and vehicles/motorcycles for the ES/NCDRR and the PPOs, as well as the rehabilitation of, and the purchase o f essential equipment for up to four demobilization centers and up to two medical rehabilitation centers. 5.3.1 Procurementcapacity assessment andimplementationarrangements 160. Procurement activities would be handled by the central bank for the quick disbursing component and by the ES/NCDRR for all the other components. The central bank has efficiently executed four IDA operations with a quick disbursing component during the last decade. Hence, the quick disbursing component should be implemented smoothly. The ESNCDRR would handle the procurement tasks for the remaining components, hence the ES/NCDRR would be responsible for among other things : (i) preparation o f the General Procurement Notice and its annual update; (ii) preparation o f the specific procurement notices; (iii) preparation and update o f the annual procurement plan; (iv) drafting bidding documents and request of proposals; (v) awarding o f contracts and requesting for IDA no-objections when required; and (v) drafting o f contracts and ensuring that contracts are implemented and managed properly. 161. A procurement capacity assessment o f the ES/NCDRR was carried out during appraisal in accordance with the Procurement Policy and Service Group (OPCPR) guidelines o f July 15, 2002 The ES/NCDRR i s a new institution with limited procurement experience. As a result, the project i s considered high risk. While the procurement program financed by the Grant i s not extensive, the fact that the upfront delivery o f some goods and the completion o f rehabilitation o f some works would be critical to the success o f the Program, means that the ESNCDRR needs to be guided and assisted in order to fulfill its responsibilities satisfactorily. Consequently, the following measures were agreed: (i) recruitment o f an international procurement consultant to assist the ESNCDRR to prepare the detailed procurement plan for the first year of operation, the biddingdocuments for the first six months and provide onjob training to the national procurement officer; (ii) recruiting a consultant to prepare the Program implementation manual (PIM); (iii)recruiting the national procurement officer before Grant Effectiveness. These activities would be financed under the Project Preparation Facility (PPF). The adoption o f a PIM satisfactory to IDA would be a condition o f Grant effectiveness. The international procurement consultant has been in place since December 2003, the selection process o f the consultant who would prepare the manual is under way, and the PIM should be available by April 2004. Burundi Demobilization, Reinsertion and Reintegration Prozram - TechnicalAnnex 42 5.3.2 Procurement plan 162. The ESNCDRR would prepare the procurement plan for the first year o f operation before Grant effectiveness. It would update the plan every six months for discussion with the Bank during supervision missions. Regular Financial Monitoring Reports would present procurement activities inan appropriate degree o f detail. 53.3 Procurement methods14 163. Goods imported by the private sector under Category (l), to cost less estimated than US$2 million equivalent per contract, may be procured in accordance with established commercial practices satisfactory to the Association. 164. For contracts for goods estimated to cost US$ 200,000 equivalent or more, may be awarded by International Competitive Bidding (ICB). However, given that some goods and items are required during the first semester o f 2004, it i s unlikely that this method would be used for goods needed before June 2004. Furthermore, since demobilization from the NDF is expected to be implemented through a six-month cycle and by groups not exceeding 2,000 ex-combatants, goods contracts valued more than the above amount would be numberedand should not exceed two. 165. Goods estimated to cost less than US$ 200,000 equivalent per contract may be awarded by National Competitive Bidding(NCB) as described inparagraphs 3.3 and 3.4 o f the IDA procurement guidelines. Due to the urgency o f the Program, and in order to facilitate the speedy procurement o f immediately required drugs and other critical items, international and national shopping methods would be employed more than i s customary in Bank financed projects. Hence, drugs, reagents, medical items and other goods estimated to cost not exceeding the equivalent o f US$ 150,000 per contract may be procured on the basis o f comparison o f at least three quotations at national or international level in accordance with the provisions o f paragraphs 3.5 and 3.6 o f the Guidelines. A sample format for international shopping would be included in the Program implementationmanual. 166. Goods including vehicles, motorcycles, computers, drugs and medical items up to aggregate amount not exceeding the equivalent o f US$200,000 may be procured through United Nations agencies (IAPSO, UNFPA, UNICEF, WHO) in accordance with the provisions o fparagraph 3.9 o f the guidelines. 167. Goods which must be purchased from the original supplier to be compatible with existing equipment or, are o f proprietary nature up to an aggregate amount not exceeding the equivalent of U S $ 100,000 may, with IDA'Sprior agreement, be procured by direct contracting inaccordance with the provisions o f the paragraph 3.7 o f the Guidelines. 168. Civil works contracts would be very limited inboth number and value, hence no I C B i s foreseen. However, ICB procedures would apply for civil works estimated to cost l4The amounts per contract andthe aggregate amounts apply to the IDA Grant only. Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 43 the equivalent o f US$ 500,000 or more. Civil works estimated to cost between US$ 100,000 and less than US$ 500,000 equivalent per contract may be awarded by National Competitive Bidding(NCB) in accordance with the provisions o f paragraphs 3.3 and 3.4 o fthe Guidelines. 169. Given the urgent requirement to rehabilitate at least two demobilization centers and up to two medical rehabilitation centers, on an exceptional basis, civil works estimated to cost less than US$ 100,000 equivalent per contract may be procured on the basis o f quotations obtained from at least three qualified contractors in response to a written invitation. The written invitation would include a description o f the works, basic technical specifications, completion date and if necessary the plan of the works. The contract may be awarded to the contractor who offers the lowest quotation provided that the bid is substantially responsive to the conditions specified in the written invitation. A simple format o f the invitation with all the subsequent documents (instruction to bidders, model o f contract etc.) would be included inthe Program implementationmanual. 170. Consultants' services procured under the Grant would finance the strengthening o f local institutions responsible for the execution o f the Program: the ES/NCDRR, Provincial Program Offices, district administrations as well as associations and community-based groups. The Grant would also finance technical studies in support o f Program execution, the monitoring o f Program components, external financial audits and external Program evaluations. 171. All consultant services estimated to cost more than US$ 100,000 equivalent per contract would be selected using the Quality and Cost-Based Selection (QCBS) method. For contracts estimated to cost less than US$ 100,000 equivalent, the short list may be comprised entirely o f national consultants provided that at least three qualified national consultants are available. However, if foreign firms express an interest inthese contracts, they would not be excluded from the selection process. 172. Consultant services for training, technical advisory services and implementation support for special groups and HIV/AIDS activities estimated to cost less than US$ 100,000 equivalent for firms may be awarded through the Consultants' Qualifications method inaccordance with the provisions o fparagraphs 3.7 of the Guidelines. Consulting services contracts meeting the requirements o f Section V o f the Consultants Guidelines may be selected under the provisions for the selection o f Individual Consultants, i.e. through the comparison o f the curriculum vitae o f at least 3 qualified individuals. 173. Contracts for consultant services for financial audits and external evaluations, estimated to cost less than US$75,000 equivalent per contract, may be awarded using the least cost selection method, in accordance with the provisions o f paragraphs 3.1 and 3.6 o f the Bank's Guidelines for the selection o f consultants. 174. UN agencies may be hired as consultants, where they are qualified to provide technical assistance and advice in their area o f expertise, according to the provisions o f paragraph 3.13 o f the Guidelines. UNagencies may be hired on a single-source selection basis ifthe criteria outlined inSection 3.9 o f the Guidelines are fulfilled. Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 44 5.3.4 Thresholds for prior review 175. Goods estimated to cost the equivalent o f US$150,000 or more and civil works contracts estimated to cost the equivalent o f US$200,000 or more would be subject to IDAprior review. 176. For consultant services, contracts estimated to cost the equivalent of U S US$50,000 or more for individuals and the equivalent o f US$lOO,OOO or more for firms would be subject to IDA prior review procedures. Burundi Demobilization, Reinsertion and Reintegration Program - Technical Annex 45 Table 7. ProcurementArrangements SummaryTable I I Procurementcategory Eligible private sector importsvalued at less than Commercialpracticesas describedunder clause3.12 of US$2,000,000 per contract: "Guidelines: procurementunder IBRD loanand IDA Grant". Goodsestimatedto cost the equivalent of US $ 200,OO IntemationalCompetitiveBidding as describedunder or more and civil works estimatedto costthe equivalent section 11. of "Guidelines: procurementunder IBRDloan of US$500,000 or more: and IDA Grant" (ICB). Goods estimatedto cost less than the equivalent of NationalCompetitiveBidding as describedunder US$200,000 andcivil works estimatedto cost more paragraphs3.3 and3.4 of"Guidelines :Procurementunder than the equivalentof US$lOO,OOO andless than the IBRD loansand IDA Grants". equivalent of US$500,000: Goodspurchasedfrom the original supplier to be Direct contractingas describedunder paragraph3.7 o f compatiblewith existingequipmentor, are of "Guidelines : Procurementunder IBRD Loans and IDA proprietarynature, upto an aggregate amount not Grants". exceedingthe equivalent of US$100,000: Goods including medicalitems upto an aggregate UNagenciesas describedunderparagraph3.9 of amount not exceedingthe equivalent of US$200,000 : "Guidelines :Procurementunder IBRD Loans andIDA Grants". Drugs, reagents, medical equipment and goods not Quotations obtained from at least three qualified enterprises exceedingthe equivalent of US$ 150,000 per contract as describedunderparagraphs3.5 and 3.6 of "Guidelines : andcivil works not exceedingthe equivalent of Procurementunder IBRD Loans andIDA Grants". US$lOO,OOO per contract : IConsultant servicesto beprocuredby firms and Quality andcost based selection as describedunder section estimatedto cost the equivalent ofUS$lOO,OOO or 11.of the Guidelines"Selection andEmploymentof more: consultantsby World Bank Borrowers". Consultant servicesto beprocuredby firms andnot Consultants' qualification selection as describedunder exceedingthe equivalent of US$lOO,OOO per contract : paragraphs3.1 and3.7 ofthe Guidelines"Selection and Employmentof consultantsby World BankBorrowers". Consultant serviceswhich can be conductedby an Selection of individual consultantsas describedunder individual without additionaloutside professional section V. of the Guidelines"Selection and Employmentof support: consultantsby World Bank Borrowers". Consultant servicesfor financialaudits and external Least cost selection as describedunderparagraphs3.1 and evaluationsnot exceedingthe equivalent of US 75,000 3.6 of the Guidelines"Selection and Employmentof per contract : consultantsby World BankBorrowers". Hiring UNagencies as consultants: Selection according to paragraphs3.13 and3.9 of the Guidelines"Selectionand Employmentof consultantsby World Bank Borrowers". 177. All other goods, civil works and services contracts would be subject to post review by IDA during supervision missions and by auditors during the technical and financial audits. Burundi Demobilization, Reinsertion and Reintegration Program-TechnicalAnnex 46 5.4 Monitoring and Evaluation 178. A strong monitoring and evaluation system, complemented with close Bank supervision, would seek to ensure that the Program reaches targeted beneficiaries in a timely andefficient fashion. It is essential that informationon all beneficiaries is captured during the initial demobilization process, securely stored, and subsequently utilized to inform Program implementation. 179. Establishment o f a Management Information System. A well-functioning MIS i s a critical management tool, as throughout Program implementation there is a need to register and monitor the target group beneficiaries and Program implementation progress and effectiveness. Furthermore, a robust M I S can provide monitoring data on beneficiaries and activities that can serve as an important input into the planning o f subsequent demobilization phases. Additionally, and to keep track o f the utilization o f Program funds, it would be relatedto the financial management system. 180. Monitoring would be undertaken at central (ES/NCDRR), provincial (PPOs) and the commune (COOS) levels. The Monitoring and Evaluation unit o f the ES/NCDRR would collect information during demobilization operations, when ex-combatants report for TSA payments and when ex-combatants apply for reintegration assistance. The ES/NCDRR would track the provision o f assistance to the ex-combatants throughout the life o f the Program. Inaddition, within six months o f the Effectiveness date and annually thereafter, or upon the request o f the Association, surveys o f a statistically representative sample o f Program beneficiaries would be conducted to verify that they (i) have received reinsertion and reintegration benefits in accordance with the semi-annual work program and budget o fthe Program, and (ii) have acquired the goods and services intended. 181. Evaluation. Independent evaluations o f Program implementation would be carried out annually and would consist o f quantitative and qualitative parts. An analysis o f the databases and existing administrative records andreports would establish to what extent the Program as such as well as the individual components have achieved their objectives. As the integration o f ex-combatants into communities i s a major factor for the long-term success o f the Program, the statistical evaluation would be complemented with a beneficiary assessment consisting o f participant observation and key informant and focal group interviews. It would be directed towards the ex-combatants and their families as primary and the communities as secondary beneficiaries. 182. Performance indicators. The ES/NCDRR and Provincial Program Offices would measure Program performance against the agreed performance indicators specified below (see Table 8). Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 47 Table 8. Key PerformanceIndicators Component Key PerformanceIndicator Ex-combatants from the APPM, FAB and NDF are demobilized inaccordance with the criteria andprocedures set out inthe Programimplementation manual. A t least 14,000 ex-combatants are demobilized annually. Demobilization All ex-combatants are registered, receivenon-transferable IDcards andtheir data i s captured inthe MIS. The demobilization process does not, on average, exceed 10 days per individual ex-combatant. Eachdemobilized ex-combatant has receivedhislher TSA within 30 days o f Reinsertion scheduled payment dates. TSA payments are utilized for reinsertion needs o f family units. Ex-combatants have access to reintegration assistance within 9 months o ftheir demobilization. A t least 40% o f ex-combatants are engaged insustainable income-generating Reintegration activities within 18 months o f demobilization. Average income levels o f ex-combatants are similar to average community incomes intheir communities of settlement within 24 months o f their demobilization. All demobilized female ex-combatants have receivedreinsertion and reintegrationbenefits under the Programinthe same amount and according to the same procedures as demobilized male ex-combatants. Special target Each demobilized disabled ex-combatant has received medical rehabilitation groups assistancewithin 18 months o f demobilization. Eachdemobilized child ex-combatant has received targeted reintegration assistancewithin 12 months o f demobilization. 17 Provincial ProgramOffices are operational withm 6 months o f Grant effectiveness inaccordance with criteria set forth inthe Program Implementation implementation manual. arrangements An independentevaluationis carried out annually and includes an analysis o f environmental and social monitoring indicators. Recurrent expenditures on defense are a maximumo f FBU49.4 billion in2005, Public FBU36.1 billion in2006 andFBU23.8 billion in2007. At the same time, expenditures expenditures on health and educationcombined increase by FBU6.7 billion in 2006 and FBU 19 billion in2007. 5.5 ProgramSustainability 183. The DRRP is designed to aid the sustainable social and economic reintegration o f ex-combatants. In this regard, it would make a positive contribution to the socio- economic status o f ex-combatants, their families and their communities o f settlement. The Program would also foster micro-economic recovery by transforming ex-combatants into positive economic actors and injecting financial resources at the local level. Furthermore, the Program would encourage national reconciliation. Although the Burundi Demobilization, Reinsertion and Reintegration Program-TechnicalAnnex 48 NCDRR itself i s a temporary structure, the Program would strengthen Government capacities at the provincial level for developing, managing and monitoring development interventions. 6, Benefitsand Risks 6.1 Benefits 184. The Program would enable the Government to consolidate the peace process, its social and economic recovery efforts. The Program i s designed to facilitate and expedite the process o f returning about 55,000 ex-combatants and 30,000 militia to productive social and economic life. Increased security following the first stage o f the disarmament, demobilization and reintegration process should contribute to a return to normalcy in agricultural activities and livestock husbandry, ease transport constraints and provide an enabling environment for the return o f displaced populations, elections and social investments. In addition, the return o f such a large percentage o f the labor force to the labor market is expected to inject significant human resources into the civilian economy. 185. A secondary benefit would be the freeing up o f resources currently allocated to the defense and security sectors, and their reallocation towards social and economic sectors. Such public expenditure restructuring would allow Government to restore expenditure levels inthe social sectors in line with its poverty reduction strategy. 186. At the recent Brussels partner conference on Burundi, donors pledged over one billion dollars to assist the country. Although previous pledges (Paris 2000; Geneva, 2001 and 2002) did not result in commensurate financial assistance - partly because o f perceived lack o fprogress on the peace and reconciliation agenda and security concerns - it i s anticipated that the current positive political momentum, aided by successful implementation o f the proposedDRRP,would contribute to a resumption o f development assistance. 6.2 Risks and Mitigation Measures 187. Program external risks. There are four significant external risks: (i) A failure to implement the political and security aspects o fthe Arusha Accord and the subsequent cease-fire agreements and protocols, especially the sensitive military integration process, could undermine the DRRP. Even if large-scale violent conflict did not resume, delays in the implementation of these provisions o f the agreements might delay Program implementation; (ii) notwithstanding the recently initiated dialogue, potential delays in the conclusion o f a cease-fire between Government and the FNL-PALIPEHUTU (Rwasa) and its entry into the institutions o f Government and the state may Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 49 lead to continued violent conflict between the Government and this party, and delay full implementationo fthe DRRP; and (iii) the support o f AMIB is critical to the disarmament phase. A failure to finance the AMIB, or to transfer its responsibilitiesto a UNpeacekeeping operationin a timely and operationally coherent manner, could jeopardize the implementation o f the Program. 188. These external risks are mitigated by several factors: (i) First, the integration o fthree o f the parties into state institutions has increased their stake inthe consolidation o f the peace; (ii) the Forces Technical Agreement (FTA) provides a framework for the integration o f combatants o fthe CNDD-FDD (Nkurunziza) into the NDF; (iii) the JCC, which serves as a forum to resolve issues o f friction and to build confidence among all the signatories o f the Arusha Accord, i s fully functioning; (iv) the full deployment o f AMIB helps to provide confidence in the security aspects o f the process and serves as a deterrent for renewed efforts to destabilize the Government. Recent initiatives, mentioned before, in which senior officers o f the FAB and (former) APPMs participate injoint leadership training, i s also contributing to increased trust and confidence between the parties; (v) recent high-level meetings between the Government and the FNL- PALIPEHUTU (Rwasa) are leading towards the initiation o f a formal negotiationprocess; and (vi) the Government's preparation o f the DRRP provides an indication o f its commitment to the implementation o f the peace process and to defense and security sector reform, and initself serves as an important confidence-building measure. 189. In the event of a collapse of the overall peace process and resumption of hostilities, IDA would consider exercising its remedies under the legal agreement. 190. The major Program-specific risks andmitigation measures are as follows: (i) Program resources would possibly be diverted toward military spending. Appropriate safeguards with respect to financial management, procurement and disbursement have been put in place to avoid any such misuse o f Program resources; Burundi Demobilization, Reinsertion and Reintewation Program - Technical Annex 50 (ii) Savings from the downsizing o f the NDF do not translate into increased spending inthe health and education sectors. Government expenditures would be carefully monitored by IDA inthe context o f its overall assistanceprogram; (iii) Given the limited human resource capacity in Burundi's public and private sectors, implementation is unsatisfactory. The Program would carefully monitor implementation progress and actual reintegration experiences o f ex-combatants. The ES/NCDRR would be reinforced with additional qualified staff and technical assistance as required; and (iv) HIV/AIDS spreads via the ex-combatants demobilized under the DRRP. The HIV/AIDS prevention and mitigation measures included in the Program's design would mitigate this risk significantly. 6.3 Environmentaland Social Aspects 191. Building on lessons from reintegration programs for displaced persons and ex- combatants in Burundi and elsewhere, the Program contains a number o f specific elements to identify social and environmental risks and devise appropriate mitigation measures. These procedures and measures would be based upon a social and environmental framework developed for the Multi-Country Demobilization and Reintegration Program (MDRP) by the Africa Region's Social and Environmental Safeguards unit (ASPEN) in collaboration with the MDRP Secretariat. Relevant procedures and measures would be detailed in the Program implementation manual (see Attachment 8 for a detailed description o f social and environmental management arrangements). Measures aimed at mitigating negative social impacts o f the Program include: (i)ensuring that there i s no involuntary resettlement or displacement and that Batwa ex-combatants have equal access to the Program's benefits; (ii)carrying out specific social reintegration activities and monitoring; (iii) addressing the needs o f female ex-combatants and o f partners o f ex-combatants; and (iv) carrying out activities targeted at child ex-combatants. 192. The Program is classified as environmental category B, as it includes support to income-generating activities. However, the phased and widely dispersed reintegration o f 55,000 ex-combatants into civilian life is expected to be environmentally neutral. Furthermore, the Program would not finance the construction or rehabilitation o f infrastructure other than the rehabilitation o f up to four demobilization centers and two medical rehabilitation centers. Environmental mitigation measures under the Program include the screening and monitoring o f sub-projects financed under the reintegration component for environmental impact according to the procedures, acceptable to IDA, set up for the MDRP. Furthermore, adequate arrangements for medical waste disposal o f HIV/AIDS testing materials would be included inthe Program implementation manual. 193. The DRRPwould seek to promote participatory social and environmental monitoring. Annual evaluations would include an assessment of, among others: the procedures to access land; the occurrence o f involuntary displacement or resettlement; the degree o f community acceptance; the existence o f discrimination on the basis o f Burundi Demobilization, Reinsertion and Reintegration Program - Technical Annex 51 gender or previous military affiliation; the levelofpersonal security of ex-combatants; the inclusion o f Batwa ex-combatants inthe program's activities; the level o f criminal activities undertaken by ex-combatants; and the impact o freintegration on an ex- combatant's family members. These evaluations would help to identify social and environmental impacts, determine the appropriateness of procedures andprocesses, and make recommendations for improvementswhere necessary. 7. Financial and Economic Justification 194. Macro-economic context. An analysis of defense expenditure inrelation to key economic and financial data permits an assessment ofthe potential long-term impact o f military downsizing on social and economic development. Four main sources have been used: (i) GDP and other macroeconomic data from the IMFfor 2000 to 2003, with projections for 2004 - 2006; (ii) FAB salary structure; (iii) on expenditure from the data the Ministryo f Finance; and (iv) data provided by Government inthe Letter o f Demobilization Policy. 195. Analysis of defense expenditure. From 1992 to 2001, defense expenditure increased from 3.5% of GDP to 8.0%. Nominal defense expenditure increased from FBU 30.5 billion in 1999 to FBU45.6.3 billionin2002. Table9. GovernmentExpenditure(inbillionsFBUand percent) Source. IMF and Governmentfor data up to 2003. IMF and Government estimatesandprojections for the period 2004- 2007. Staffand Governmentestimatesandprojectionsfor 2007 il Socialsectors includeexpenditure for healthandeducation. 196. Impact of Demobilization. The analysis of the impact of demobilization i s based on several assumptions, and i s therefore only indicative. l5 Although 55,000 combatants would be demobilized under the DREW, the calculation of the Program's fiscal impact i s based on the plannednet reduction inforce o f the NDF o f 20,000 from the current size o f the FAB. The following assumptions are used: (i)integration of APPMs into the national defense force, increasing its size from 45,000 in 2003 to 66,000 in 2004; (ii) demobilization o f 5,000 FAB soldiers in 2004, the 14,000 NDF soldiers in2005, 14,000 NDF soldiers in2006, and 13,000 NDF soldiers in2007; and (iii) the reallocation o f 100% o fbudgetary savings to social sectors. Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 52 197. With demobilization completed during 2007, the net reduction in force of 20,000 NDF soldiers would reduce defense expenditure by approximately FBU 22 billion (US$19.9 million) annually over the 2003 budget. The share o f defense expenditure in total current expenditure would decrease from 31.7% in 2003 to 13.5% in 2007. The share o f defense expenditure in GDP would decrease from 7.1% to 2.6% over the same period. Concomitantly, social sector expenditures would almost double. 198. Analysis of alternatives. The Government's proposal, and the IDA appraisal o f it, have taken into consideration various alternatives in the design o f the DRRP. The final design i s based on best practices and responds to the specific requirements o f the situation inBurundi. It pursues a gradual approach to demobilization and reintegration as compared to a simple one-off discharge. The political and security requirements stipulated in the h s h a Agreement (August 2000) and the Forces Technical Agreement (November 2003), the stabilization o f the country before and during elections, the need for a structured defense and security sector reform process, and the difficulty o f economic reintegration in the immediate post-war period were judged to justify the related short- term defense expenditure costs. 199. The Program tries to support the reintegration o f ex-combatants into civilian life by providing a transitional safety net to facilitate the re-establishment o f households and to avoid social tensions. The Program's design attempts to minimize interference with market forces and to maximize the choice o f the individual and synergies with ongoing interventions. Furthermore, economic reintegration measures would be based on the socio-economic profile o f the ex-combatants, their own efforts and aspirations, and the specific opportunity structure intheir communities o f retum. 200. Cost-effectiveness analysis. The Program design seeks to minimize costs without compromising quality. Whenever possible, existing structures would be used rather than parallel systems created. For example, with respect to the disbursement mechanisms, transitional safety net allowance payments would be effected directly by the ES/NCDRR through participating banks. With overall per capita costs o f US$1,325 equivalent, the costs o f the DRRPare within the range established by the MDRP framework. 201. Cost-benefit analysis. It i s instructive to compare the total cost o f the Program US$84.4 million with the direct savings in recurrent cost to the Government's budget from the medium-term net reduction in force o f 20,000 soldiers. Compared to the counterfactual, the reduction in force o f the NDF would save approximately US$40 million during the Program's duration and US$22 million annually thereafter. l6Fiscal savings from demobilization would thus exceed Program costs in 8 years. This calculation does not take into account long-term savings in overhead costs to the NDF, including training and maintenance o f material. It also does not take into account the budgetary impact o f a planned increased in the size o f the national police force. Finally, this simple comparison does not take into account productivity gains and benefits to the communities and households o f the ex-combatants' retum to civilian life. l6The counterfactual would be that the share o f military expenditure in Government current expenditure remains constant at 32%. Burundi Demobilization, Reinsertion and Reintegration Program - Technical Annex 53 8. Action Plan Issue Action/ Responsi IDemobilization 1. Prepare logistics plan for demobilization JOC and ESINCDRR I 28Feb04 2. Complete rehabilitation o f demobilization centers Contractor and ESINCDRR 31 Mar04 3. Initiate disarmament o f Gardiens de la Paix and Government 18 April 04 Combattants Militants I4. Initiate demobilization o f FAB and APPMs ES/NCDRR, AMIB, JOC and 30 April 04 JLTs I5. Complete stage Io f DRRP demobilization ESINCDRR, JLTs and AMIB 31 Oct. 04 IReinsertion r6. Develop payment mechanismand accounting ESINCDRR 31 March 04 procedures 7. Sign contract with participating banks ESINCDRRandBanks 3lMarch 04 IReintegration 8. Establishcoordination mechanisms with MNRRR, ESINCDRR 31March04 I CNRS and other partners 9. Prepare provincial inventories o f economic PPOs and ESBCDRR I 2 July04 opportunities Special target groups 10. Establishjoint planwith National AIDS Program ESINCDRR andNational 31 March 04 regardingthe provisiono f social and medical AIDS Secretariat assistance to HIV/AIDS affected ex-combatants 11. Initiate special medical rehabilitation assistancefor Ministry ofHealthI I disabled ex-combatants Consultant 30Ju1y04 12. Integrate national Child Soldier Demobilization and ESINCDRR and 31 Dec. 04 Reintegration Special Project into nationalprogram Institutional arrangements I 13. Finalize procurement plan ESINCDRR I 28Feb04 I 14. Finalize Program implementation manual ES/NCDRR and consultant I 18 March04 15. EstablishDRFA ESINCDRR and Central Bank 18 March04 16. Pass decree on definition o f ex-combatant status GOB 18 March04 and associatedcriteria 17. Pass ministerial order defining status o f Gardiens GOB 18 March04 de la Paix and Combattant Militants and associated criteria ~ ~ 18. Set up financial management system ES/NCDRR and consultant 31 March 04 19. Procure essential equipment ESINCDRR 31 March 04 Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 54 20. Set up management informationsystem ES/NCDRR 15 April 04 21. Establish Provincial Program Offices ESNCDRR 31 March 04 Financing I ~~ 22. IDA Board Review o f DRRP IDA 18 March 04 23. IDA Grant Effectiveness IDA After completion o f conditions o f Effectiveness 24. Conclusion o f Grant Agreement for MDTFof IDA andGOB 30 April 04 MDRP Burundi Demobilization, Reinsertion and Reintegration Program - Technical Annex 55 9. Attachments 1. List of Documents inthe Project File 2. Estimated Program Costs 3. IDADisbursementCategories 4. ProgramBeneficiaries 5. A Comparison ofTransitional Safety Nets 6. Organigram 7. Positive List of Imports for Category 1 8. Environmental and Social Monitoring 9. Program Implementation Plan 10. Financial ManagementAssessment Burundi Demobilization, Reinsertion and Reintegration Program-TechnicalAnnex 56 Attachment 1 List of Documentsin Project File A. Peace andCease-fireAgreements 1. Arusha Peace andReconciliation Agreement.August 2000. 2. Government o f BurundiandCNDD-FDD (Nkurunziza). The Pretoria Protocol on Political, Defense and Security Power-sharing inBurundi.October 2002. 3. Government of Burundi andCNDD-FDD (Nkurunziza). Comprehensive Cease-fire Agreement. November 2003. B. Government 1. Ministryof Finance.November 2003. InterimPoverty Reduction StrategyPaper. 2. Ministryof Finance. February 2004. Letter confirmingwaiver o ftaxes on all goods andservices purchasedunder the DRRP. 3. MinistryofFinance. February2004. Letter of DemobilizationPolicy. 4. National Commission for Demobilization, Reinsertion andReintegration. January 2004. Demobilization andReintegration Program. C. BankStaffAssessments 1. Aide-Mtmoire, Identificationo fthe DRRP,March 2003. 2. Aide-Mtmoire, Preparationo fthe DRRP, May2003. 3. Aide-MCmoire, Pre-appraisal of the DRRP, September2003. 4. Aide-Mtmoire, Appraisal of the DRRP, December2003. 5. Transitional Support Strategy. February2002. D.Other 1. Colletta, Nat J., Markus Kostner andIngoWiederhofer. 2002. Disarmament, Demobilization, and the Social and Economic Reintegration of Ex-Combatants: , Lessonsand Liabilities inState Transition. 2. Colletta, Nat J., MarkusKostner and Ingo Wiederhofer. 1996a. The Transition from War to Peace inSub-SaharanAfrica. Directions inDevelopment. Washington, DC: World Bank. Burundi Demobilization, Reinsertion and Reintegration Program-TechnicalAnnex 57 3. Colletta, Nat J., MarkusKostner and Ingo Wiederhofer. 1996b.Case Studies inWar- to-Peace Transition. The Demobilization andReintegration o fEx-Combatants in Ethiopia, Namibia, andUganda.Discussion PaperNo. 331. Washington, DC: World Bank. 4. De Watteville, Nathalie. 2001. Addressing Gender Issues inDemobilization and Reintegration Programs. Africa Region Working Paper Series. 5. Technical Working Group. February 2004. Joint OperationsPlan. 6. Kostner, Markus.2001. A Technical Note on the Design andProvision o f Transitional Safety Nets for Demobilization andReintegration Programs. The World Bank. 7. Kreimer, Alcira, John Eriksson, Robert Muscat, Margaret Arnold, andColin Scott. 1998. The WorldBank's Experiencewith Post-conflict Reconstruction. Operations and Evaluation Department.Washington, DC: World Bank. 8. MDRP Joint Supervision Mission Report. October 2002. MDRP Secretariat. 9. MDRP Joint Supervision Mission Report. October 2003. MDRP Secretariat. 10.UNAIDS. 1998.AIDS and the Military.Best Practice Collection. UNAIDS. 11.Verhey, Beth.2001. Child Soldiers: Preventing, Demobilizing, Reintegrating. Africa Region Working PaperNo. 23. 12.World Bank. 2002. Greater Great Lakes Regional Strategy for Demobilization and Reintegration. Washington DC. World Bank Burundi Demobilization, Reinsertion and Reintegration Program-Technical Annex 59 'Attachment3 IDA Disbursement Categories (US$) Category Amount of the Grant YOof Expendituresto be Allocated Finance (1) Eligible Imports required 100% for the Project as specified in Annex to this Schedule (a) 10,000,000 fb) 10.000.000 (C) 6,000,000 (2) Civil Works 1,000,000 100% (3) Vehicles, Furniture, 1,000,000 100% Equipment and Materials (4) Consultants' Services, 2,000,000 100% Training and Audits (5) Operating Costs 1,000,000 100% (6) Refunding o f the Project 596,000 Preparation Advance (7) Unallocated 1,404,000 Burundi Demobilization, Reinsertion and Reintegration Program - Technical Annex 60 BurundiAttachment 4 DRRP Beneficiaries - Target Groups Demobilization Reinsertion Reintegration FAB&APPMs I 14,000 I 14,000 I 13,1000 Ofwhich adult 9,000 9,000 8,100 Of which children 5,000 5,000 5,000 Phase I Gardien de la Paix and 30,000 30,000 3,000 Combattants militants Of which adult 27,000 27,000 0 I Of which children 1 3,000 1 3,000I 3,000 I I I I Phase NDF 41,000 41,000 36,900 I1 Of which adult 41,000 41,000 Of which children 0 0 0 3 v) \ Ir, \ 9 0 m d r I r Burundi Demobilization, Reinsertion and Reintegration Program-Technical Annex 63 Attachment 7 Classes of Eligible Importsto be Financed Underthe IDA Grant (Category 1) 1. Agricultural equipment and inputs. 2. Petroleum and fuel products. 3. Constmction materials. 4. Transport vehicles and spare parts. 5. Livestock, animal products and veterinary supplies. 6. School supplies and equipment. 7. Medical supplies and equipment. 8. Constructionequipment, industrial machinery and spare parts. 9. Electrical equipment, machinery, materials andparts. 10. Industrialraw materials andchemicals. 63 Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 64 Attachment 8 Social and EnvironmentalSafeguardArrangements The BurundiDemobilization, Reinsertionand ReintegrationProgram (DRRP)aims to demobilize a large number o f ex-combatants and support their reintegration into civilian life. To enhance the chance o f success, the DRRPneeds to address a range o f social and environmental issues effectively. To this end, six months within Grant Effectiveness, a Social Assessment including an Environmental and Social Management Framework will be prepared and disclosed. Its purpose will be to identifypotential social and environmental impacts, summarize the social and environmental mitigation measures implemented under the Program, outline targetedmonitoring and evaluation activities, and propose institutional capacity buildingactivities. 1. Social and Environmental Dimensions 1.1 Successful long-term reintegration o f ex-combatants can make a major contribution to conflict resolution and the restoration o f social capital, while failure to achieve reintegration can leadto crime and insecurity and also increase the risk o f resumed conflict. Reintegration takes place at the community level, and the perceptions, attitudes and organizational capacity o f communities to receive and support ex-combatants become a major factor for determining the success or failure o f a demobilization and reintegrationprogram. 1.2 Ex-combatants may face profound social reintegration problems. There may be a generalized fear that ex-combatants are merely conveyers o f violence, crime and sexually transmitted diseases. Communities may then resent support provided to what is perceived as an overly privileged group. Ex-combatants may be discriminated against on the basis o f previous military affiliation. Their personal security may be at risk, especially ifthey committed atrocities inthe communities to which they return. 1.3 Female ex-combatants who have become accustomed to a more independent way o f life inthe militarymay struggle to adapt to the expectations o f traditional communities. Femalepartnerso f ex-combatants and their children who migrate to communities o f other ethnic, linguistic andor cultural backgrounds may be rejected. Last but not least, the years o f development children lose to military life profoundly affect their fiture identity. 1.4 Ex-combatants may also exert pressure on the natural resource base, especially in communities with highpopulation densities. Community members may be involuntarily displaced or ex-combatants involuntarily resettled to communities that are not o f their choice. Traditional tenure arrangements may bar female ex-combatants from,access to land. Ex- combatants may start income-generating activities that, ifuncontrolled, may lead to overgrazing, deforestation or improper waste management. Burundi Demobilization, Reinsertion and Reintegration Program - Technical Annex 65 2. Social and Environmental Management Arrangements 2.1 Buildingon lessons from reintegrationprograms for displaced persons and ex- combatants inBurundiand elsewhere, the Programcontains a number o f specific elements to identify social and environmental risks and devise appropriate mitigation measures. These procedures and measures will be based upon a social and environmental framework developed for the Multi-Country Demobilization and ReintegrationProgram (MDRP)bythe Africa Region's Social and Environmental Safeguards unit (ASPEN) incollaboration with the MDRPSecretariat. They willbedescribed indetail inthe Program ImplementationManual. 2.2 Access to land. The program would seek to facilitate access o f ex-combatants to land inareaso freturninaccordance with local landtenure systems andwith support from local authorities. The following principles would be applied: (i) the programwould not bear the cost o f land acquisition; (ii) ex-combatants will be free to settle inthe community o ftheir choice; (iii)no citizen would be compelled to cede any land to an ex-combatant; (iv) thus there would be no involuntary displacement o f civilians as a result of ex-combatants settling ina community. 2.4 Social reintegration. The principle objective o fthe social reintegration assistance would be to ease the retum o f ex-combatants into civilian life while promoting reconciliation and harmony. Given that a significant proportion o fthe target group would have spent a significant period of time inmilitary service, many have only knownwar intheir adult life. This fact, coupledwith the`lack o fprevious work experience and low educational levels o f many o f the former soldiers, will require social support following their return to communities. 2.5 Facilitators working with ex-combatants would undertake activities to promote the social reintegration process, including: (i) Community level sensitization and confidence buildingprograms; (ii) Assessments o f community perceptions o f ex-combatants and ex-combatants' perceptions o f communities; Awareness-raising programs focused on civic rights and responsibilities; (iii) Information and counseling on sexually transmitted infections (STIs), HIV/AIDS, health and sanitation; (iv) Media campaigns through radio, posters, pamphlets and print media; (v) Conflict analysis and reconciliation activities inareas o freal or potential tension to develop concrete interventions to diffuse potential conflict; and (vi) Community activities (cultural, sporting events or work projects) which promote social cohesion and help to rebuildsocial capital inreturn communities. 2.7 Gender. While it appears unlikelythat the number o f female ex-combatants to be demobilized will be sizeable, the DRRPwould provide targeted support for the social and economic reintegration o f female ex-combatants. Specific measures would include the following: (i) Provision o f information and training to Joint Liaison Teams andAMIB concerning the eligibility o f female ex-combatants for DRRP assistance; Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 66 (ii) SensitizationofAPPMsinpre-disarmamentassemblyareasabouttheeligibilityof female ex-combatants for DRRP assistance; (iii) ensuringthatallbenefitsforex-combatantsareequalforandequallyaccessibleto men andwomen; (iv) encouraging implementing partners to ensure that their reintegration support activities facilitate the participation o f female ex-combatants; (VI encouraging female ex-combatants to participate inexisting women's associations; (4 including partnerso f ex-combatants and women incommunities o freturn in community-level counseling activities; (vii) strengthening the gender awareness and capacity o f the staff o f the ES/NCDRR and authorities o f the communities to which a significant number o f female ex- combatants may return; and - (viii) monitoring the impact ofthe Programon partners of ex-combatants andwomen in communities o f returnandbringingemerging problems to the attention o f the relevant authorities. 2.8 Disabled ex-combatants.' To date, only limitedmedical and economic assistance has beenprovided to disabled ex-combatants. The DRRPwould provide assistance for medical rehabilitation depending onthe degree o f disability, and including the provision o fphysical rehabilitation assistance (prosthesis and orthesis), counseling, vocational training and/or support for micro-enterprise activities. Furthermore, the DRRPwould seek to reinforce key medical facilities (such as the provincial orthopedic workshops inor near areas o f return) to provide systematic prosthetic and physiotherapy services, including maintenance o fprosthetic devices, to ex-combatants. 2.11 Under age ex-combatants.Inclose coordination with the National Child Soldier Demobilization and ReintegrationProject andUNICEF, the DRRPwill support assistance to underage soldiers and other minors associated with both armed forces inaccordance with the Cape Town Principle definition o f "child soldiers". Assistance for the reintegration o f child soldiers would include family tracing and unification, trauma counseling andpsycho-social care, and facilitation o f access to education and recreation incommunities o f settlement. Children older than 15 years may have different needs and would receive appropriate support (e.g., for vocational training). 2.12 Environmental classzjkation. The program is classified as environmental category B, although the phased and widely dispersed reintegration o f 55,000 ex-combatants into civilian life over a period o f four years i s expected to be environmentally neutral. Furthermore, the program will not finance the construction or rehabilitation o f infrastructureother thanthe ` Disabilityi s defined as functional limitation within an individual causedby physical, mental or sensory impairment. Ifthe pattern o f disability among ex-combatants follows national averages, about three infive disabled soldiers are likely to have traumatic injuries resultinginloss o f limbthrough amputation (due to war, landmines, or accident) and about two infive disability originating from disease and resulting inloss of a bodily fimction (e.g. deafness, blindness, paralysis due to poliomyelitis Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 67 possible small-scale rehabilitation o f certainmedicalrehabilitation centers and Demobilization Centers. Environmental mitigationmeasures under the program include the screening and monitoring o f sub-projects financed under the reintegration component for environmental impact according to the procedures, acceptable to IDA, set up by the Government. 2.13 Environmental screening. The DRFSmay provide reintegration support to ex- combatants inthe form o f sub-projects inthe areas o f agricultural activities, community works, training, and promotion of income-generating activities. Community works activities and income-generating activities would be screened for environmental impact using screening mechanisms developed for the MDRP.The objective o f environmental screening would be to minimize the negative environmental impacts o fthe Program. The screening procedures will betailored to the small-scale nature of community works andincome-generating activities, examining the potential for impacts and identifyingany mitigation measures. The focus o f the screening would be on the following issues: health, water and sanitation, natural resource exploitation, erosion, pesticide use and any other safeguard-related issue. The screening will also assess the potential environmental impact o f community works and income-generating activities on neighboring communities. Incase o f wider negative environmental impact, actions would be agreed upon with the relevant local administrations. 3. Social and Environmental Monitoring and Evaluation 3.1 The DRRPwill seek to promoteparticipatorysocial and environmental monitoring. Annual evaluations would include an assessment of, among other things: the procedures governing access to land; the occurrence of involuntary displacement or resettlement; the degree o fcommunity acceptance; the existence o f discrimination on the basis o f gender or previous military affiliation; the level of personal security o f ex-combatants; the level o f criminal activities undertaken by ex-combatants; and the impact on an ex-combatant's family members. The evaluations would help to identify social and environmental impact, determine the appropriateness o fprocedures andprocesses, and make recommendations for improvementswhere necessary. 3.2 Social assessment. Shortly after Grant effectiveness andbuildingonrelevant preparatory activities (preparation of the sensitization program and o f the pre-discharge orientation), a social assessment will be undertaken andwill include the following: (i) Astakeholderanalysis; (ii) Aninstitutionalcapacitydiagnostic; (iii) The development o f apublic consultationmechanism as part o fthe DRRP's sensitization program; and (iv) The design o f a participatory monitoring and evaluation framework. 3.3 The social assessment will help identify the social and cultural structure o f incentives and constraints that guide and govem behavior with respect to buildingsocial cohesion and promoting the sustainable use o f natural resources. Furthermore, it will help determine the relevant social indicators for participatory monitoring, including on the social exclusion o f Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 68 returningex-combatants. Also, attention will be paid to returningBatwaex-combatants in project areas. 3.4 Information will be distributedhorizontally (especially important for the beneficiaries and ingeneral for sake o ftransparency) and vertically inthe management structure o fthe Program. Information will be readily available for assembly and analysis into periodic monitoring and evaluation reports. The Program's computerized Management Information System is built around these parameters. 3.5 Independent evaluations. A special Program element would be annual evaluations o f environmental and social indicators as part o f the annual Program evaluationundertaken by independent consultants. These evaluations would include a beneficiary assessment and a review o f Program achievements. The issues to be addressed would include, among other things: the procedures governing accessto land; the occurrence o finvoluntary displacement or resettlement; the degree o f community acceptance; the existence o f discrimination on the basis o f gender or previous military affiliation; the level o fpersonal security o f ex- combatants; the level o f criminal activities undertaken by ex-combatants; and the impact on an ex-combatant's family members. The evaluations would help to identifysocial and environmental impacts, determine the appropriateness o fproceduyes andprocesses, and make recommendations for improvementswhere necessary. 3.6 The monitoring and evaluation system i s designed insuch a way that the regular review o f social and environmental aspects is part andparcel o f Programimplementation, and that mitigation measures would be initiated quickly as needed. -r- ! m W Burundi Demobilization, Reinsertion and Reintegration Program - Technical Annex 70 Attachment 10 Financial Management and Auditing A. IMPLEMENTATIONARRANGEMENTS ProgramManagementStructure The main implementing agency for the program will be the Ministry o f Finance while the Ministryo fDefense will provide logistical assistanceinthe demobilization phase. Central level The National Commission for Demobilization Reinsertion and Reintegration (NCDRR) will be the Government's supervisory body. The Commission will advise the Government on matters conceming the demobilization and reintegration o f ex-combatants. The overall coordination o f the Program will be under the responsibility o f the Executive Secretariat, which will be headed by an Executive Secretary. H e will be assisted bythree head o f departments including the Director o f Administration and Finance, the Director o f Operations and the Director of Information Systems, as well as a Procurement Specialist. There would be a clear division o f labor between the commissioners and the Executive Secretariat. Provincial level The NCDRR will establish a decentralized presence at the provincial level to help administer reinsertion and reintegration assistance. Provinces in which a significant number ex- combatants settle, a fully-fledged Provincial Program office will be established. Inthose with fewer ex-combatants, an assistant program officer would be attached to the local administration. Planning,Budgeting& BudgetaryControl The project will ensure the existence o f suitable work plans. Planning will be done within the guidelines issued in the Program Implementation Manual to be adopted prior to project effectiveness. A well definedbudgeting and budgetary control system will be put inplace. Annual budgets will be prepared based on specific guidelines contained inthe project implementationmanual and on annual work plans. The Technical Annex and the Program Implementation Manual will include a disbursement schedule. They will be used as the basis for the preparation o f annual budgets.The planwill be updated as part o fproject implementation. 70 Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 71 The budget format will be based on program components and will be integrated into the program accounting system. The budget will be used as a management tool. Expenditureswill be authorized inaccordance with agreed budgets. Accounting System Financial Management Manual The accounting system o f the project will be based on well documented Manual o f Financial and Accounting Procedures. Proper books o f accounts will be kept on double entry principle usingthe cashbased system. Written job descriptions with defined duties, responsibilities, lines o f supervision and approval limits will be established. Definitiono f responsibilities should ensure segregation o f duties for proper accountability. Staff and Transaction Recording The program will be under the responsibility o f the Executive Secretary who reports to the Commission. He will be assisted by a Chief Financial Officer(CFO), a Chief Operations Officer, a Procurement Specialist and a Chief Information Officer. An accounting unit will be created for program activities under the control o f the CFO. Thus, the accounting system should allow for the proper recording o f program financial transactions, including the allocation o f expenditures in accordance with the respective components, disbursement categories and sources o f funds. Controls over the preparation and approval o f transactions should be put in place to ensure that all transactions are correctly made, recordedandreported. A well defined chart of accounts will be put in place. The chart o f accounts should be developed in a way that allows project costs to be directly related to specific work activities and outputs o f the project. The accounting system will be managed through an accounting software. This should facilitate the production o f the required program financial reports. Accounting staff will be adequately trained to maintain the system and appropriate controls will be instituted to safeguard the confidentiality, integrity and availability o f the data. The accounting system will be able to generate financial monitoring reports. Books of Accounts Although a computerized accounting system will be put in place, Program Management should ensure that proper books o f accounts are kept. This will be achieved through a well defined filing system that allows authorized users easy access to accounting and supporting Burundi Demobilization, Reinsertion and Reintegration Program - Technical Annex 72 documents .on a permanent basis. Registers for Fixed Assets, Contracts ,In-coming and out- going Cheques, should be properly maintained. ReportingArrangements Integrated Financial Management I nformation System The program will put inplace an IntegratedFinancial Management Information System. The system should integrate the Budgeting, Operating and Accounting Systems to facilitate monitoring and reporting. System generated formats for periodic reports will be developed and agreed with program management. An action plan will be reached with the borrower before BoardPresentation. Financial Monitoring Reports(FMRs) Project management should be able to produce FMRs by effectiveness. Consolidated quarterly FMRswill be produced to include: Sources andUses o fFundsby Credit Categories and Program Components 0 Output Monitoring Report 0 Procurement Monitoring Reports Financial Statements Incompliance with InternationalAccounting Standards (IAS) andWorld Bank requirements, the project will produce annual financial statements. Financial Statements will include: 0 A Statement o f Cash Receipts and Payments which recognizes all cash receipts, cash payments and cash balances controlled bythe project. 0 A Balance Sheet that shows Assets andLiabilities. 0 A Statement o f Sources andUses o fFunds. 0 Notes in respect o f significant accounting policies and accounting standards adopted bymanagement and underlyingthe preparationo f financial statements. 0 A Management Assertion that Bank funds have been expended inaccordance with the intended purposes as specified inthe World Bank legal agreement. The report will be prepared in accordance with the Guidelines for Borrowers on Financial Monitoring Reports. MonitoringReports Monthly Activity Reports will be preparedby Program management. Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 73 Audit Arrangements External Auditing Qualified independent auditors will be appointed by the Technical Secretariat. The selected auditors will be acceptable by IDA in terms o f independence, qualifications and experience. The audit will be based on terms o f reference agreed with IDA. The external audit work will include all World Bank funds, other funds and Government funds(if available) o f the program. Furthermore, the financial statements o f the Program will be audited every six months until performance is proved to be satisfactory. The date o f the first audit will be determined in consultation with IDA. In addition to the audit report, the auditor will be requiredto prepare a Management Letter where internal control weaknesses and recommendations for improvements, are highlighted. A single audit opinion will be issued on program income and expenditures, special accounts and statement o f expenditure. The audit reports along with Management Letters will be sent to IDA and all other financing partners not later than four months after the end o feachpreceding period. Supervision Financial Management Supervision will be done by the program World Bank Financial Management Specialist over the program life to ensure the implementation o f strong financial management systems. Statement O f Expenditure(S0E) reviews will be undertaken where necessary, incompliance with World Bank requirements. The Project Status Report(PSR) will include a financial management rating. Ona semi-annual basis or at such time that the Government andthe Bank deemnecessary, the Government and IDA would carry out joint supervision missions. These missions would make spot checks on a small random sample o f beneficiaries at their place o f residence to verify the use o fthe funds disbursed. DisbursementArrangements FinancingMechanisms Therewould be five distinct financing mechanisms to manage Program funds: 0 A quick disbursing mechanism for Category (1) 0 A special Account for Categories (2) to (5) o fthe Grant Burundi Demobilization, Reinsertion and Reintegration Program - Technical Annex 74 0 The government's contribution, inclusive o f Franc Burundais equivalent o fUS$ deposited for the quick-disbursing mechanism, other donor support through the budget, and Government's counterpart contribution; 0 A SpecialAccount for the Multi-Donor Trust Fund(MDTF) 0 Other bilateral financing partners The rapid implementation o f the Program requires a substantial amount o f primarily local currency at specific points in time. The Program addresses this exigency by incorporating the provision o f foreign exchange through a quick disbursing mechanism. This mechanism would consist o f reimbursement to the Government o f the foreign currency used for private sector imports for eligible goods included ina pre-approved positive list o f imports. The proceeds o f the quick disbursing component will be disbursed in accordance with the implementation o f Program activities. Upon receipt o f the proceeds o f the Grant through the release o f each installment into the Deposit Account, the Central Bank o f Burundi (BRB) will convert the foreign currency into Burundian Francs and deposit them in a Demobilization and Reintegration Fund Account (DRFA) openedbythe Government for this purpose. A positive list o f imports will be established. It will be linked to the emergency at different levels: 0 The rehabilitation o f infrastructure and equipment destroyed by or dilapidated during the war 0 The (re) construction o f houses for war affectedpopulations 0 The program proper, in particular the reintegration component(agriculture, training, etc) but also the demobilization(transport, rehabilitation, etc). BankingArrangements World Bank Financed-Projects activities in Burundi are generally controlled through Special Accounts(SA) and Project Account (PA). Counterpart funds are usually received through the Project Account. These accounts are managedby the Project Management. The following bank accounts will be maintained by the Executive Secretariat for program funds: 0 Deposit Account : Denominated inU S dollars, will serve as the main project account into which will be deposited program funds under the quick disbursement mechanism for Category (1) o f the Grant. 0 IDA Grant Special Account: Denominated in US dollars, will be to deposit program funds for Category (2) to (5) o f the Grant. 0 M D T F Grant Special Account: Denominated inU s dollars, will be deposited program funds from the Multi-Donor Trust Fund(MDTF). Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 75 0 Demobilization and Reintegration FundAccount(DRFA1: This will be denominated in local currency and counterpart funds from the Government o f Burundi may be deposited on this account inaccordance with program objectives. The Deposit Account will be maintained in BRB. The Special Accounts, and the DRFA will be maintained in a Commercial Bank with a wide geographical coverage. The Commercial Bank shouldbe acceptable bythe World Bank. Disbursementof IDA Fundsto ProgramManagement IDA funds will be disbursed to the Program Management for activities based on Financial Monitoring Reports (FMRs) that include financial reporting, procurement and contract management with physical implementationprogress. The Borrower will open the Deposit Account for Category 1inU S dollars inthe BRB. Upon Grant effectiveness and at the request o f the borrower, proceeds o f the first installment would be deposited in this account against Statement o f Expenditures. The remaining installments would be released if the Program is being implemented in a manner satisfactory to the Association and on the basis o f 0 An implementationplan and resource requirements for the subsequent 6 month period; 0 A list o f ex-combatants, identifying the amount o f the funds allocated to each in support o ftheir reinsertion and reintegration; and 0 Verification that a statistically representative sample o f the Ex-Combatants have received their payments in accordance with the work program and budget o f the Project and providing information on the purposes for which the resources were utilizedby the ex-combatants as well as their income-generation and social status. Provincial Program offices will manage petty cash accounts for limited expenses. The petty cash will be managed on an imprest system. Petty Cash limits will be established. It will be replenished on presentation o f adequatejustifications. Disbursement of funds from DRFA to Ex-combatants Funds will be disbursed to the DRFA to Ex-combatants through the Commercial Banking System. Eligible ex-combatants will be required to open accounts in a Commercial Banks. Payments will be initiated and authorized at the central level by the Executive Secretariat. Flow of Funds The diagrambelow illustrates the Funds Flow arrangements: Burundi Demobilization, Reinsertion and Reintegration Program - TechnicalAnnex 76 FUNDS FLOW ARRANGEMENTS Government o fBurundi IDA Deposit IDA Grant MDTFGrant DRFA 4 Account Special Special Account Account B. CONCLUSION Financial Management risks will be reduced through the implementation of the actionplan Financial ManagementAction Plan procedures to be usedfor the program