Document of The World Bank Report No: 23690 JM PROJECT APPRAISAL DOCUMENT ONA PROPOSED LOAN IN THE AMOUNT OF US$15 MILLION TO JAMAICA FOR THE NATIONAL COMMUNITY DEVELOPMENT PROJECT September 11, 2002 Finance, Private Sector and Infrastructure, Sector Management Unit Caribbean Country Management Unit Latin America and Caribbean Region CURRENCY EQUIVALENTS (Exchange Rate Effective September 6, 2002) Currency Unit = Dollar (J$) J$1.00= US$0.02 US$1.00 = J$48.70 FISCAL YEAR April I -- March 31 ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy CBC Community Based Contracting CBO Community Based Organization CDC Community Development Commitee CDD Community Driven Development CDP Community Development Plan DFID British Department of International Development ERL Emergency Recovery Loan EU European Union GDP Gross Domestic Product GOJ Govemment of Jamaica ICR Implementation Completion Report IERR Internal Economic Rate of Return JS1F Jamaica Social Investment Fund KRC Kingston Restoration Company NCDP National Community Development Plan NGO Non Governmental Organization NPEP National Poverty Eradication Program OPCPR Procurement Policy and Services Group PIOJ Planning Institute of Jamaica SDC Social Development Commission TA Technical assistance Vice President: David de Ferranti Country Manager/Director: Orsalia Kalantzopoulos Sector Manager/Director: Danny M. Leipziger Task Team Leader/Task Manager: Thakoor Persaud JAMAICA NATIONAL COMMUNITY DEVELOPMENT PROJECT CONTENTS A. Project Development Objective Page 1. Project development objective 3 2. Key performance indicators 3 B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 4 2. Main sector issues and Government strategy 4 3. Sector issues to be addressed by the project and strategic choices 6 C. Project Description Summary 1. Project components 7 2. Key policy and institutional reforms supported by the project 8 3. Benefits and target population 9 4. Institutional and implementation arrangements 10 D. Project Rationale 1. Project alternatives considered and reasons for rejection 10 2. Major related projects financed by the Bank and other development agencies 11 3. Lessons learned and reflected in the project design 12 4. Indications of borrower commitment and ownership 13 5. Value added of Bank support in this project 13 E. Summary Project Analysis 1. Economic 14 2. Financial 14 3. Technical 15 4. Institutional 15 5. Environmental 16 6. Social 18 7. Safeguard Policies 20 F. Sustainability and Risks 1. Sustainability 21 2. Critical risks 21 3. Possible controversial aspects 22 G. Main Conditions 1. Effectiveness Condition 22 2. Other 22 H. Readiness for Implementation 22 I. Compliance with Bank Policies 23 Annexes Annex 1: Project Design Summary 24 Annex 2: Detailed Project Description 27 Annex 3: Estimated Project Costs 30 Annex 4: Cost-Effectiveness Analysis Summary 31 Annex 5: Financial Summary 33 Annex 6: (A) Procurement Arrangements 34 (B) Financial Management and Disbursement Arrangements 41 Annex 7: Project Processing Schedule 47 Annex 8: Documents in the Project File 48 Annex 9: Statement of Loans and Credits 49 Annex 10: Country at a Glance 50 Annex 11: JSIF Organization and Project Cycle 52 Annex 12: JSIF Environmental Guidelines 57 Annex 13: Social Analysis - Jamaican Maroons 90 MAP(S) IBRD 20846 JAMAICA National Community Development Project Project Appraisal Document Latin America and Caribbean Region LCSFU Date: September 11, 2002 Team Leader: Thakoor Persaud Sector Manager/Director: Danny M. Leipziger Sector(s): General water/sanitation/flood protection sector Country ManagerlDirector: Orsalia Kalantzopoulos (24%), General education sector (23%), Health (23%), Project ID: P076837 Housing construction (23%), Central government Lending Instrument: Specific Investment Loan (SIL) administration (7%) Theme(s): Civic engagement, participation and community driv (P), Access to urban services for the poor (P), Rural non-farm income generation (P), Other financial and private sector development (P) 1.Project Finaiicing Ddt,- -- - * R er. C *V. [X] Loan [ ] Credit [ ] Grant [ ] Guarantee [ Other: For Loans/Credits/Others: Loan Currency: United States Dollar Amount (US$m): $15.00 Borrower Rationale for Choice of Loan Terms Available on File: 0 Yes Proposed Terms (IBRD): Fixed-Spread Loan (FSL) Grace period (years): 5 Years to maturity: 17 Front end fee (FEF) on Bank loan: 1.00% Payment for FEF: Capitalize from Loan Proceeds Initial choice of Interest-rate basis: Type of repayment schedule: [X] Fixed at Commitment, with the following repayment method (choose one): level [ ] Linked to Disbursement Conversion options: [X]Currency [X]Interest Rate [X]Caps/Collars: Financing Plan (US$r):r ' Loca,l' ce-' "Foreign ' Total BORROWER 10.90 0.25 11.15 EBRD 12.00 3.00 15.00 LOCAL COMMUNITIES 0.91 0.00 0.91 FOREIGN MULTILATERAL INSTITUTIONS 1.34 1.25 2.59 (UNIDENTIFIED) Total: 25.15 4.50 29.65 Borrower: JAMAICA Responsible agency: Jamaica Social Investment Fund Address: 10-12 Grenada Crescent Kingston 5, Jamaica, WI Contact Person: Scarlette Gillings, Managing Director Tel: (876) 929-1620 Fax: (876) 929-3784 Email: sgillings@jsif.org Estimated Disbursements ( Bank FY/US$m): - -; F' - e t20032004 ~2005 : 06Z 207. J ri20 Annual 2.00 3.00 3.00 3.00 3.00 1.00 Cumulative 2.00 5.00 8.00 11.00 14.00 15.00 Project implementation period: 2003-2008 Expected effectiveness date: 01/31/2003 Expected closing date: 12/31/2007 OCS PAD F. RP _d0 2m -2- A. Project Development Objective 1. Project development objective: (see Annex 1) Jamaicans are today suffering the effects of several adverse external events (lingering impact of post-September 11 decline in tourism earnings, low demand for Jamaica's exports), and internal ones (recent floods, high unemployment, poor access to basic services, crime and violence). Many of these problems are inter-related. The primary objectives of the proposed project are to: (a) help communities in the most affected areas by providing basic services and temporary employment opportunities, and (b) assist the Government of Jamaica (GOJ) in its current effort to promote greater social and community development, especially among the poor. The Government has already received Bank assistance through a US$75 million Emergency Economic Rehabilitation Loan (ERL) to help compensate for declining public revenues needed to finance its pre-September 11 investment program and to finance investments needed for tourism-related security measures after the September 11 attacks. To achieve the first project goal mentioned above, funds of the proposed National Community Development Project will be used to finance a backlog of social infrastructure works in the Jamaica Social Investment Fund (JSEF) which have been identified as priority needs by poor communities. These works will be done through contractors hired through JSIF. Some of these funds will also be used to finance priority community works which are determined through Community Development Plans (CDPs) and implemented through Community Based Contract (CBC) procedures. 2. Key performance indicators: (see Annex I) For Basic Service / Emplovment-generation Objective: 1. Increase in access to and quality of basic services. 2. Number of incremental temporary jobs created (gender, number, skilled, and unskilled). 3. Improved operation and maintenance of project facilities. For Social Development Obiective: 1. Increase in the number of projects financed by JSIF after being identified in Community Development Plans (CDPs) 2. Increase in the number of communities which develop the capacity to select their own priority projects and to manage project contracting and project implementation effectively to ensure work quality, reasonable costs, and timeliness. 3. Evidence of increased complementary investment generated (from residents, other public sector entities and the private sector) through JSIF and Social Development Commission (SDC) assistance to community groups. 4. Number of subprojects with active community maintenance plans and clear indication of agreed support from line ministries and/or local authorities. 5. Level of community satisfaction with subproject and performance of sponsoring entities, JSIF, SDC, and Community Development Committees (CDCs). Performance will be measured against the above-mentioned indicators through periodic reviews, audits and reporting arrangements, some incorporating sample surveys and other measurements of beneficiary satisfaction, as well as from Bank supervision missions. - 3 - B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: SecM2000-680 Date of latest CAS discussion: November 30, 2000 In keeping with the CAS objectives of restoring economic growth, promoting inclusion and protection of the poor, and supporting sustainable development, the project seeks to enhance sustainable development of communities of low-income communities by promoting greater community selection of labor-intensive infrastructure-development projects and strengthening the local capacity to implement such projects, with the active participation of the target beneficiaries. To ensure that investments in community infrastructure are priority ones and that they are sustainable, the subprojects will be demand-driven in line with the needs of the communities. It will also empower communities both in subproject selection as well as in the planning and design, contracting and management of the infrastructure investments. With assistance from the European Union (EU) and the British Department for International Development (DFID) to the SDC and JSIF, the Government has recently initiated a program which promotes Community Driven Development initiatives through Community Development Committees which formulate Community Development Plans through community consensus. These initiatives will be supported through the proposed project inasmuch as community development plans will be an important tool which JSIF will use to decide its assistance program. These community plans will also be used to promote greater accountability from parishes and sector entities which are responsible for providing basic services in the selected communities. 2. Main sector issues and Government strategy: Major Issues: Jamaica's economy has been characterized in recent years by low or negative growth. After four years of negligible change in GDP, there was a resumption of real GDP growth at around 1% in 2000/01. Positive economic performance occurred mainly in the services sector where tourism is a leading component. However, the Government continues to be burdened by high debt levels and debt service (interest payments were about 14% of GDP in 2001/02 and 62% of the budget), high interest rates, and a large central government deficit (5.7% of GDP in 2001/02). These factors have constrained the Government's growth efforts. To complicate the situation, over the last two decades, Jamaica has faced political and socio-economic challenges which, have, at times, been manifested in social unrest. Among the main sector issues are: Poverty. From a high poverty rate of 44.6% in 1991, the incidence of poverty rapidly declined over the last decade and by 1999, it fell to 16.9%. In 2000, ihe Jamaica Survey of Living Conditions showed that this figure rose to 18.7% (primarily because of a downturn in agricultural, bauxite and tourism sectors), before declining to its 1999 level in 2001. Poverty is largely a phenomenon of the working poor; demand for labor is not strong enough to raise real earnings and their lack of skills limit access to higher-paying jobs. The majority of the underemployed poor are farmers, agricultural laborers, domestic servants, street vendors, and craftsmen. The poorest quintile claim only about 6.24% of national consumption, while the wealthiest quintile had a 46% share in 2001. Some characteristics of the poor stand out prominently: they and their children have lower levels of education, they have larger households and are more likely to share basic housing amenities. Although poverty is higher in the rural areas (24%) partly due to poor infrastructure, the proportion of the poor in Kingston Metropolitan Area has more than doubled during the 1991-1998 period (from 4% to 10%), indicating the increasing urbanization of poverty. A large share of the recent political and social upheavals which Jamaica has suffered over the past decades has been attributed to unacceptable conditions in the inner-city areas where urban poverty is prevalent. -4 - Unemployment. Unemployment remains high with 15% of labor-force age Jamaicans unemployed. There is also relatively high levels of underemployment and it is estimated that just over 12% of employed Jamaicans also live below the poverty line. The profile of the unemployed is a cause for concern; about 70% of the unemployed are young, 35 years old or under, and the unemployment rate among women is about 21%. According to a recent survey carried out in eleven communities within Kingston for the Kingston Restoration Company (KRC), unemployment among persons 18-25 years averaged 65%, with over 28% of the male heads of households being unemployed. Many residents as well as outsiders have voiced concerns about the practice for employers to compound the problem by shunning job-seekers from inner-city areas. At the same time, anecdotal evidence shows that even when inner-city residents do find employment, they generally have a high drop-out rate, primarily because of difficulty adjusting to the structured demands and discipline of formal employment, including finding affordable care for dependents and convenient transport. Some NGOs are preparing special programs to assist such inner-city residents. Lack of Basic Infrastructure and Services. For years, the need to attend to the crisis in the financial sector and to contain public spending, have severely constrained much-needed public sector investment in essential services, particularly those used by the poor. Even while Jamaica's social indicators compare favorably with those of other Latin American countries with similar income profile, public expectations exceed the capacity of the state to provide social services and supporting infrastructure. In 2000, 33% of the population lacked access to piped water supply and 38% lacked access to sanitation facilities. In terms of access to water and sanitation, while residents in urban areas enjoy a 2:1 advantage over those in rural areas, the gap is narrower when service quality and reliability are considered and the comparison is with inner-city areas. Among urban areas, almost all of the deficiencies are concentrated within the poor inner-city settlements; there are an estimated 50,000 residents who have no direct access to potable water and about 100,000 without,direct access to sanitation facilities in such settlements. In the Kingston Metropolitan Area, it is estimated that less than 10% of the residents in the inner-city areas own their units, the rest being squatters or renters. Access to transport and health, education and social development facilities is also inadequate for a majority of the population. Crime and Violence. Jamaica suffers from very high levels of violent crime. In 2001, over 1,100 homicides were reported, resulting in one of the highest per capita murder rates in the hemisphere. Violence, especially in poor urban neighborhoods, is so extensive that it is impossible to ignore the issue in the context of increasing levels of poverty in the country. Exacerbated by inequality in wealth; domestic violence; rising unemployment, particularly among the youth; political tribalism and drugs, the murder rate has escalated over the last two decades. Government Strategy. The Government's strategy, as spelt out in its Medium-Term Economic and Social Policy Framework 1999/2000 to 2002/03, is to protect the poor and vulnerable while improving the quality of life through increased access to developmental programs, social and economic opportunities and enhanced social harmony. Poverty reduction is a major plank of this strategy, to be achieved through a combination of measures to improve incomes, self reliance, and the quality of life of the poorest groups and communities. The poverty reduction strategy has three elements. The first is a social assistance component with targeted income transfers under the Government's Unified Benefit Programme as the major thrust. The second is the development of the income-earning capacity of the working poor by providing training opportunities, micro-enterprise support, and financial services, using community-based approaches. The third is provision and upgrading of social infrastructure in poor areas, -5 - through focused investments essential to sustained growth. Coordinated efforts by the Government at pursuing the above strategy began with the implementation of its National Poverty Eradication Program (NPEP), elaborated and approved by Cabinet in October 1995 and by Parliament in March 1997. The NPEP has since provided a framework for action, and has emphasized community-based interventions undertaken in partnership with nongovernmental organizations (NGOs), the private sector, and the communities themselves. Cognizant of the limited capacity of existing institutions to initiate small-scale projects at the community level, the Government established the Jamaica Social Investment Fund (JSIF) in February 1996. JSEF is designed to assist in responding to the needs of the most vulnerable groups currently under-served by existing programs and institutional mechanisms. Several studies show that the JSIF community development program has had considerable success in reaching a large number of the poor. It has worked closely with community based organizations (CBOs) in the delivery of priority subprojects widely perceived to reflect Community Driven Development (CDD) principles and providing wide benefits to the communities. JSIF has also built strong capacity in participatory approaches to community development among its implementing partners, including parishes, ministries, NGOs, CBOs and contractors. While it has been successful on several fronts, there are also some clear areas of concern about JSIF's operation. Among these are: (i) less than full participation in some cases in the decision-making stage for project selection, where the relatively wealthier or politically-active groups tend to participate more than the poorer and more vulnerable groups in communities; (ii) JSIF supplanting rather than supplementing traditional providers (ministries and parishes), and being a primary source of financing for infrastructure improvement, a role which explains the large and growing backlog of project applications JSIF now has; and (iii) the limited capacities by beneficiaries, sector ministries and the parishes to provide adequate follow-up operation and maintenance attention and resources for such works. 3. Sector issues to be addressed by the project and strategic choices: The National Community Development Project is aimed at improving living conditions by: (i) providing basic infrastructure and generating temporary employment opportunities, primarily within poor communities which have been affected by declining tourism flows; (ii) rehabilitating, upgrading, and/or constructing essential economic and social infrastructure (e.g. schools, community centers, water connections, rural roads) identified through CDD initiatives and implemented through both JSIF and community-based contracting; and (iii) promoting and facilitating stronger community-based development initiatives. The key sector issue which will be directly addressed by the project is the delivery of sustainable basic infrastructure and complementary services in poor communities while providing temporary employment opportunities for mostly unskilled workers in these neighborhoods. Community Based Contracting of priority works which are decided upon through CDD initiatives and articulated through Community Development Plans will assist in empowering, integrating and strengthening communities while they improve access to basic services. In the process of assessing their priority needs, the target communities will receive assistance to evaluate such priorities according to a range of technical, financial, social, and institutional criteria to ensure that funds are soundly and strategically channeled. Since JSIF has already demonstrated its success in implementing CDD-based projects which reach the poor, a strategic choice has been made to retain it as the primary implementing entity for the project. This will allow lessons learned from its experiences with community-based subprojects to be - 6 - incorporated in subsequent operations throughout both urban and rural areas. JSIF's demonstrated ability to mobilize and channel required funds for social sector investments also enhances this decision. However, to address JSIF's already-identified weaknesses, the following areas have been strengthened in the design of the project: JSIF's role vis-a-vis other sector entities. To prevent the build-up of long-term dependence on JSEF, efforts are being made to get the GOJ to streamline the roles, functions and responsibilities among JSIF and other actors in the sector, including the parishes and ministries. Greater emphasis will be placed upon JSIF's role as a temporary entity which is set up to complement, and not to substitute for sectoral investment and operation and maintenance programs implemented by line ministries, parishes and other local authorities. To reinforce recent decentralization initiatives, the proposed project will emphasize the role of the parish authorities and their recent efforts to promote Community Development Committees (CDCs) and larger functional economic areas. Although most beneficiary communities are capable of carrying out minor maintenance activities, they often lack financial resources and/or technical expertise for larger tasks. The proposed project will help such communities to improve their own maintenance efforts as well as the way they seek assistance from the line ministries and parishes for other operation and maintenance activities. Enhanced role for Social Development Commission (SDC). The SDC is a public entity which has responsibility for, among other things, empowering all Jamaicans, enabling them to participate in an integrated, equitable and sustainable national development process. Under the project, SDC, in partnership with JSIF, will have an important role in (i) enhancing community participation; (ii) encouraging communities to design and utilize Community Development Plans; (iii) helping communities to identify local financial and non-financial resources for the implementation of their plans and (iv) for maintenance of community facilities. Targeting. JSIF will improve its targeting mechanism and will modify its project-cycle process and beneficiary-selection criteria, using such devices as weights and ranking, which among other things, will allow equally-poor communities to compete among themselves for access to project assistance. JSIF will also use the PIOJ geographic targeting criteria aimed at identifying needy residents in poor urban and rural areas, especially those around tourist destinations. It has simplified project preparation requirements for the poorest communities and along with other partners, it will provide intensive support to these communities throughout the project cycle. Proiect Supervision and Monitoring. Revised supervision and monitoring arrangements have been built in with new operational procedures which were developed under the project. These are expected to create incentives for all participating project-implementing entities to maintain quality, efficiency and related standards. C. Project Description Summary 1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown): 1. a. JSIF Subproiects. This component is aimed at providing basic services while helping to create temporary employment opportunities for residents who are among the poorest income strate in Jamaica. There are several subprojects which have been already identified as priority by these communities and submitted to JSIF for funding. JSIF will contract the works for selected subprojects in its pipeline as - 7- well as other new works which are generally large and/or complex and for which direct community contracting will not be feasible. b. Community Subprojects. This component will finance demand-driven and commnunity-implemented socio-economic infrastructure works and activities. Sub-project identification will be in line with JSIF's sub-project menu which includes construction and rehabilitation of basic infrastructure and social superstructure facilities. Community assessment will be carried out to make sure that the selected communities have, or will be able to acquire the skills and resources needed to efficiently manage their proposed community-contracted works. Because this is a new approach for JSIF, special implementation arrangements, acceptable to the Bank, will have to be in place during the first year of project implementation before activities in this component will commence. Based upon discussions with ongoing task teams and reviews of similar operations underway in LAC and other regions, it is expected that this component will be at least 20% of the total value of sub-projects financed under this loan. 2. TA and Institutional Strengthening. This includes financing for Technical Assistance, training and strengthening programs to JSIF and the various entities which would be involved in the proposed project, particularly to support the CBC system. Financing will also be provided for additional consultants to support the implementation of community contracting. 3. Administration. This component includes funding for goods needed to facilitate sub-project supervision, monitoring and community training. ;- '. - - . Indlcative Bank-- % of p-; -g- .- - Component -- . .v- n a*ng -. - ~~. 7.> 7'. . ., . (US$M) ~~Total..7 *'(U4$M) - financing Subprojects 18.30 60.8 12.38 82.5 TA and Institutional Strengthening 3.04 10.1 2.17 14.5 Administration 8.61 28.6 0.30 2.0 Total Project Costs 29.95 99.5 14.85 99.0 Front-end fee 0.15 0.5 0.15 1.0 Total Financing Required 30.10 100.0 15.00 100.0 Bank financing will be 55% of the total project costs net of taxes, this falls within the 3-year local cost financing limits of 60% for the Bank's Jamaican operations. 2. Key policy and institutional reformns supported by the project: In the GOJ's National Poverty Eradication Program, JSIF was created to finance a wide variety of sustainable small-scale projects meeting the needs of the poorest strata who are overlooked by the investment programs of traditional sector entities and parishes. However, during the implementation of the just-completed Social Investment Fund project, JSIF, by default, appears to have become the primary financing source for many new and renovated works and has even started to focus on operation and maintenance functions as several of these sector entities were unable to assume their responsibilities for various reasons. The proposed project will help to refocus JSIF's operation upon its originally-envisaged role and ensure that the parishes and other sector entities assume their respective roles so that JSIF is not overburdened. Another policy modification of the proposed project is to reach consensus among a wider group of poor beneficiaries for project identification, selection and preparation so that more beneficiaries identify with the project output at an earlier stage and make special efforts to maintain them appropriately, either with their own resources or through the appropriate sector entity or parish. While Community Based -8 - Contracting (CBC) has been tried on an experimental basis in previous JSIF works, in the proposed project, a significant share of project funds (20%) is expected to be for works contracted through CBC which is being developed to become a prominent feature in this project as well as in future JSEF lending. This new focus requires several modifications to JSIF's already-revised project cycle and operational manual and these will be finalized during the first year of project implementation. The Bank (OPCPR) is currently conducting a field test in Jamaica of a reference guide for fiduciary management of CDD operations. This exercise is expected to assist JSIF in the preparation of its community-based contracting component. In order to ensure that CBC is operational, a loan condition of disbursement is that JSIF cannot contract more than 30 percent of the loan funds unless it has an established CBC system approved by its Board and the CBC system is fully operational (i.e. the first group of eligible communities participating in the Community Sub-projects have been legally registered and trained in community contracting). However, it is expected that a four month startup period will be needed before the communities should attempt CBC, since they will need technical assistance, guidance, and preparation before CBC can commence. The operating guidelines have been revised to include: relatively greater weights for smaller subprojects; works with relatively more unskilled labor needs; works in areas or among groups affected by the recent floods or the lingering impact of the September 11 events; weights in favor of greater community and private sector contribution; procedures for elimination of backlog applications through division of priority requests among sector entities and renewal of the cycle each year; and improved accountability of JSIEF and all of its principal partners (contractors, consultants, NGOs, CBOs, parishes). The modifications of JSIF role, the adjustments introduced to the project cycle and the operational manual, together with a more community-development oriented model which includes CBC, imply significant institutional changes for JSIF. The success of this new project relies on the incorporation of new ways of operation in JSIFs working culture. To move in this direction, the endorsement and commitment on the part of JSIF's Board and management will be key. Collaboration from middle management and technical staff in the preparation of the project package has been substantial, reflecting the commitment of higher-level officials. Monitoring the pace of consolidation of the changes proposed in JSIFs way of working will be incorporated as an important variable for Project Monitoring and Evaluation. 3. Benefits and target population: As with the first JSIF project, JSIF will continue to identify (via poverty map, PIOJ methodology and data on areas inhabited by residents affected by tourism decline), the targeted households for beneficiaries of the proposed project. Details on the methodology used to define and select poor communities are elaborated in the Operations Manual. In sum, applications from those communities in Quartile 4 (poorest) in the poverty map will be accepted, as will those in other quartiles with a low SDC Poverty Index score. This selection criteria will apply to both subprojects contracted by JSIF and those contracted by the communities. Along with temporary job creation, the project will help to finance much-needed infrastructure, social amenities and economic facilities which will provide both short- and long-term assistance to targeted families. As more of the communities organize themselves and prepare their Community Development Plans, they would be better able to identify their priority needs and seek assistance from the relevant ministries and parishes. Having a substantial share of the project funds allocated for Community Based Contracts will empower these communities and provide greater incentives for them to work together to build, maintain and better utilize the facilities they receive. The proposed project will also assist the GOJ and other donors and lenders in their ongoing efforts to work with communities to create Community Development Committees and Community Development Plans within which the respective role of all of the actors will be much more clearly defined. 4. Institutional and implementation arrangements: The proposed project will utilize most of the existing procedures and guidelines which were created and used for the previous JSEF Bank loan (Loan 4088-JM). The GOJ will borrow the loan funds which will be passed on to JSIF as a grant, under a subsidiary agreement to be entered into between the GOJ, through the Ministry of Finance, and JSIF, under terms and conditions satisfactory to the Bank. However, as explained above, there will be refinements in various stages aimed at addressing the deficiencies and shortcomings noted in the assessment of the previous project. JSIF's project cycle and its operational manual have been revised to reflect such changes. They also include other modifications aimed at having additional targeting instruments to help those affected by reduced tourism flows. JSIF will work with the SDC, CBOs, NGOs and others to promote active community participation in project origination, implementation, monitoring and operation and maintenance (directly or indirectly via the appropriate sector entity). Utilization of the proposed loan for Community Based Contracting will enhance the power of such communities insofar as they will be able to control the entire process of organizing themselves, articulating their needs and have responsibility for contracting the works and being accountable for the results. In order to assure accountability under the community based contracting system, the communities will have legal personality. JSIF's Board has recently reviewed and approved the new project-cycle procedures, including the concept of community based contracting. JSIFs Operational Manual contains details on the various eligibility criteria which will be used in order to review and select subprojects which will be funded under the loan. For a project to be eligible for JSIF funding it must be within the Government's poverty-mapped area; be in JSIF's priority project. menu; have no resettlement requirements; include some form of beneficiary contribution; and for Community Based Contracting, demonstrate the capacity of the community to undertake the works. In the project analysis and selection process, priority will be given to subprojects which have simple design; involve small works; have a relatively high ratio of unskilled labor needs; have short implementation period; benefit a relatively large pool of residents; have a relatively large share of community contribution; are in an advanced stage of preparation and include sustainable operation and maintenance provisions. JSLF currently requires the relevant sector ministry or parish to agree that the new or renovated works which JSIF finances are appropriately maintained. This practice will continue under both JSIF and community contracted works. Greater details on the topics addressed here are found in Annex 2. Funds would be managed similar to the JSIF project, in which a Special Account was maintained in US dollars, and payments were made to local contractors. Since JSIF's operations primarily involve relatively small community-oriented projects, most payments are to local contractors via a local currency account. All funds would be first budgeted via the government's normal budget processes, with counterpart funds made available on a monthly basis via the government's warrant system. D. Project Rationale 1. Project alternatives considered and reasons for rejection: Creation of a special Project Unit to implement the proposed project was among the alternatives considered. However, in discussions with the Finance Minister and his staff, this option was not - 10- considered further because of the additional bureaucracy it would create and because it was felt that it would take time to organize and it would also duplicate many of the functions of the JSIF. A second option considered was to set aside a special funding window in JSIF to manage the proposed project. This was also not pursued further because it was felt that this could add administrative complexity and confuse beneficiaries, especially since the areas of focus do not differ much from JSlF's normal operation. Dividing the funds into two pools, one for JSIF to manage in rural areas and the other for some similar entity to use in urban areas was another alternative considered. This was because it was felt that JSIF has had relatively better success in rural areas and there was need for an experienced entity to work quickly in the urban areas. The absence of any strong entity with wide experience in urban areas and ongoing efforts of JSEF to work with various urban entities to complement its initiatives, led to this option not being considered further. The option accepted by both the GOJ and the Bank for the proposed project was that of continuing with JSIF as was done in the previous Bank project but making various adjustments and TA provisions, including explicit provisions for community based contracting, in response to studies and recommendations on JSIF's performance in previous projects. 2. Major related projects financed by the Bank and/or other development agencies (completed, ongoing and planned). . . .; . . . ---; . Latest*Supervisionf- - Secto'r Issue . - -Project (PSR) Ratings-,. . . . _________________;____ (Bank-financed proJectsoniy) Implementation Development Bank-financed Progress (IP) Objective (DO) Post 9-11 impact amelioration Emergency Recovery Loan - S S closed Social Protection Social Safety Net Project Social Protection Social Investment Fund -closed S S Other development agencies IADB Kingston Urban Renewal-ongoing IADB Rural Water Program-new IADB National Road Services Improvement Program -new LADB Parish Infrastructure Development Program- ongoing LADB Emergency Flood Recovery-new IADB Solid Waste Management ...... CARE Canada Tools for Development DFID Urban Poverty DFI Performance Improvement IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory) -11 - . 3. Lessons learned and reflected in the project design: Even though JSIF experienced some of the difficulties noted earlier, the recently-concluded Bank loan to *JSIF was successful in reaching the target population and in assisting communities to better articulate their needs. Lessons from this and similar operations show that for community development subprojects to be successfully implemented, a number of factors needs to be present. These include: (i) a determined leadership with operational autonomy and with a strong sense of commitment; (ii) a demand-driven participatory approach that gives voice to the poor and serves as a mechanism to ensure impartiality of benefits; (iii) a simple community-based subproject design that ensures local participation, empowerment and ownership; and (iv) transparent and detailed decision-making procedures with regular financial and operational audits to ensure accountability at all levels. JSIF's operations also have important ancillary benefits. They contribute to decentralization of service delivery and bring CBOs and NGOs into a more collaborative and coordinated relationship with the Government. They also provide models of efficiency and effectiveness, which may be used by other public sector agencies. The design of the proposed project, which draws heavily on JSIF's experience, incorporates these factors. In a similar vein, the concept of the proposed project is guided by weaknesses identified in JSIF's operation, as follows: (i) Sustainability is a key element in subproject investment, whether for physical works or community development activities. Based on the evaluation of completed projects under JSIF, maintenance for several completed works was rated as poor. The proposed project will pay greater attention to institutional and financial sustainability aspects through promotion of: * greater community involvement in all stages of the project cycle, including community contracting; * active linkage by beneficiary communities with line ministries (health, education, transport, water) and parish councils with O&M responsibilities to ensure subproject sustainability (e.g., a school-building project would have to be implemented with clearer commitment from the Ministry of Education) along with a clearer division of preventative and periodic maintenance responsibilities between communities and the appropriate sector entities. * introduction of performance-based agreements linking financing to own-contribution from beneficiaries and community commitment efforts in subproject implementation and O&M. (ii) Reform in the identification and selection processes of investments at the community level, making sure that adequate time is given for mobilizing increased participation of the poorest in decision-making and in the project cycle without long delays. This will contribute to greater responsiveness to their demand, greater representation and ownership, and greater transparency and accountability. (iii) Subproject preparation in future project design should be accorded greater attention and contractors and consultants should have clear responsibilities and greater accountability in order to avoid implementation delays, poor work quality and cost overruns. (iv) There should be greater attention paid to monitoring and evaluating the impact of investments. This calls for improvement in the Management Information System (which has recently been done). In line with the recommendations from the Implementation Completion Report (ICR) of JSIF, other operational lessons incorporated in the design of the proposed project are: (i) Streamlined procurement and disbursement rules and regulations to ensure speedy implementation; - 12 - (ii) Detailed operational manual, standardized accounting procedures, regular and rigorous auditing, and quantitative and qualitative evaluations of outcomes, all aimed at ensuring transparency, accountability and effectiveness; (iii) Mechanisms for sector coordination with line ministries and parish councils that are flexible enough not to compromise the independence and efficiency of JSIF, and incorporation of sustainability conditions in the design of the proposed project to ensure continued flow of suboroject benefits. 4. Indications of borrower commitment and ownership: In initiating its request for Bank assistance, the GOJ prepared a background paper in which, among other things, it presented details of the problem and the assistance which it was seeking from the Bank. The JSIF staff collaborated with Bank staff and consultants to review several aspects of JSIF's operation where changes were required to address problems noted in implementation of the previous Bank loan as well as to incorporate the additional needs arising from the September 11 event. JSIF has already revised its project-cycle procedures in light of Bank-JSIF discussions. The Government has also received TA from DFID and the EU for improving JSIFs operation and the Social Development Commission is working to create Community Development Committees and Community Development Plans. JSIF had initially approached the bank about mechanisms for implementing community-based contracting. They followed-up on this by participating in a CBC workshop held at the Bank and are working with consultants from other countries which have implemented CBC. Additionally, in June 2002, the Bank (OPCPR) conducted a roll-out of its CDD Fiduciary Management Training Package in Jamaica with JSIF and other interested bilateral, multilateral and NGO staff in attendance. 5. Value added of Bank support in this project: The Bank has extensive experience in social funds, community-based contracting, upgrading works and emergency assistance. Its comparative strength in these areas can be used to help Jamaica address several critical issues within a sustainable framework. The Bank's initial support for the creation of JSIF was an important step in the GOJ's poverty eradication initiative. It opened the door for assistance from other donors and lenders to be channeled through JSIF to target needy beneficiaries. While the first-generation investments show that social funds and community-development initiatives can yield significant benefits to the poor, several areas of weaknesses also surfaced, e.g., gaps in obtaining greater participation from the poor in the upstream processes; low product quality for some sectors; weak linkages to line ministries, parishes and others who need to operate and maintain the works and to continue to address other sector needs, independently of JSIF and in line with their respective mandates. The lingering negative impact on tourism from the September 11 attacks, recent floods, economic difficulties and the rising level of violence in the country provide a unique opportunity to build upon the strengths of JSIF and to streamline its operation. It also opens up the door for ensuring that other official sector actors do not shunt their responsibilities to JSIF and that the communities have a greater voice in deciding their needs. The Bank's global experience in community-based contracting is being used to help JSIF in its formulation and implementation of community-based contracting. As JSIF has already demonstrated its ability to achieve effective CDD, introducing CBC would deepen this approach and further help beneficiaries achieve greater autonomy in all stages of the process. - 13 - E. Summary Project Analysis (Detailed assessments are in the project file, see Annex 8) 1. Economic (see Annex 4): O Cost benefit NPV=US$ million; ERR = % (see Annex 4) O Cost effectiveness * Other (specify) In most instances, the type of the sub-projects financed, their size, location and other characteristics do not allow for traditional economic rate of return analyses. However, a very strong proxy for such analyses emerges when beneficiaries are given the opportunity to assess their needs and establish priorities. As indicated in Annex 4, Internal Economic Rate of Return (IERR) analyses done on a sample of subprojects under the first JSIF operation show substantial economic benefits. Such results can be expected when the existing facilities are poor and beneficiaries are given the opportunity to assess their needs and establish priorities. Additionally, by requiring that beneficiaries contribute a minimum of their own resources (in cash or in kind), the benefits from their choices becomes very evident. Efforts have been made to ensure that in the selection and design processes for subproject selection, least-cost consideration will also be more explicitly taken into account. In addition to efficiency factors, such an approach is also expected to result in more appropriate technology being utilized (e.g. community latrines instead of individual indoor connections as a first stage for those who can only afford the former at this time). In its evaluation process for subproject selection, JSIF will incorporate weights for such factors as project cost (negative correlation); contribution from beneficiaries (positive correlation); contribution from private sector (positive correlation); operation and maintenance provisions (positive correlation). 2. Financial (see Annex 4 and Annex 5): NPV=US$ million; FRR = % (see Annex 4) At the local level, matching community needs with the available resources (own, JSIF and other) and establishing priorities, will be a continuous challenge. In the previous project, a community contribution of at least 5% of the subproject cost was sought. However, this requirement was reportedly not well enforced. Additionally, the cost of operation and maintenance was apparently also not fully considered and so many of the rehabilitation works faced some of the problems which caused their deterioration in the first place. While explicit cost recovery could be difficult because of both the income level of the beneficiaries as well as the types of subprojects financed, it was clarified that for such infrastructure works as water and sanitation or solid waste removal, the sector entities responsible for such services will levy and collect tariffs in line with their normal policies which include cross subsidies and lifeline rates for such groups. For the schools, community centers, rural roads and other such works, a clearer definition of minor versus major maintenance costs will be made and financing responsibilities will have to be defined during the preparation phase for such works to ensure that all financial obligations are considered and the respective roles of the community and sector entities are clarified. Fiscal Impact: The main fiscal impact will be the counterpart funding from the government, estimated at about US$1 1.1 million, or US$2.2 million per year on average, along with the amortization of the loan. With an expenditure budget of US$2.6 billion per annum, the government's contribution would have a fiscal impact of less than 0.1%, however of the non-debt budget this would be equal 0.2%. These figures would be lower if community contributions (either cash or in-kind) exceed 5%, as is expected under the project since the selection criteria will favor those communities willing to contribute more. With a 5% baseline, community contributions will represent about US$0.92 million of the estimated US$18.3 - 14- miUion spent in project investments. Additional donor grants would also reduce the fiscal impact, but these have yet to be determined. Improvements in the effiency of project identification and delivery, as part of the expected benefits under the new project cycle, would also help to compensate for the increased level of public expenditure. Moreover, by aiding communities under social stress, these could help alleviate tensions and civil unrest and thus help protect the tourist industry, a key revenue source for the Govermnent. 3. Technical: As explained above, technical, financial and economic aspects wiU be more closely integrated in the selection, analysis and approval processes in order to ensure project sustainability. One identified area of weakness in JSIF's operation has been in design and quality-control aspects. Provisions have been made to address these problems. Such provisions include: clearer definition of responsibilities under which those preparing the designs and related works will be held accountable for their accuracy. The contractors will have access to all available information about the proposed task and they have to agree to do the work as specified in the contracts (regarding quality, timeliness, cost, etc.) or face penalties and/or be excluded from future contracting. JSIF will create and maintain an updated database on project cost as well as on the performance record of each contractor for each project. To the degree possible, greater efforts will be made to incorporate design standardization while still being responsive to special community needs. This will help to facilitate ease of subproject preparation in shorter time and improve maintenance, while allowing for easier design and cost comparisons. 4. Institutional: 4.1 Executing agencies: JSIF will be the Executing agency for the project. The Social Development Commission and several Community Based Organizations, Non-Govermmental Organizations, ministries, parishes and other specialized entities will also participate, helping communities in the formation of their Community Based Committees, preparation of their Community Development Plans and in approaching the appropriate entities for investment and maintenance resources. JSIEF wil also provide assistance to help beneficiary communities develop the required capacity to contract their own work and to make the needed operation and maintenance arrangements. 4.2 Project management: The project cycle of JSIF has been reviewed, revised and modified to address both the shortcomings noted in various assessments of its operation (including the Bank's ICR findings), as well as to make provisions for Community Based Contracting arrangements. One important feature of the proposed project is its focus upon the role of JSIF vis-a-vis other sector agencies, the parishes and other specialized entities. While the charter of JSEF clearly highlights its temporary nature and its role in supplementing specific gaps for basic services among the poorest residents, JSIF has by default, assumed a much larger role, partly because of lack of funds in the traditional entities to assume their respective role. Other entities have worked with JSIF to establish procedures for developing Community Development Plans and for using these as one tool in the process of identifying to which of the various sector actors the identified task corresponds. This process reinforces the project goal of reviewing this aspect with GOJ, JS1P and other entities to reestablish their respective sector obligations and responsibilities. Additionally, the community based initiatives which are currently underway will bring in both other donors and other CBOs and NGOs to assist in community development actions. 4.3 Procurement issues: - 15 - A review of a samnple of JSIF's subprojects was done in 2001 as part of the supervision of the just-completed loan. It shows that the guidelines and operational manual of JSIF were consistent with Bank guidelines but closer JSIP supervision is needed to ensure that these guidelines are consistently being followed. The project preparation mission conducted a review of JSEF's capacity for complying with Bank requirements and it found that the updated project cycle and operational manual of JSEF have taken previous Bank comments into account. Additionally, for the Community Based Contracting system, apart from facilitating the attendance of JSIF staff at a recent Bank-sponsored CDD Seminar, Jamaica was used as a pilot country to launch a CDD Fiduciary Management Training Package prepared by OPCPR. During this process, staff of JSIF, SDC, EU, DFID, IDB and several NGOs were trained in a fourteen-module program which included, among other things, manuals, material and instructions on Procurement of Goods, Works and Services, Shopping for Goods, Hiring Labor and Local Bidding. Additionally, the Bank has provided information to JSIF from successful CBC projects in Malawi and staff from Malawi visited Jamaica to work with JSIF in preparing its CBC component. Capacity assessment of the relevant communities which undertake CBC will be conducted prior to any procurement being done by such communities. With IDB financing, JSIF's MIS system has also been updated to keep track during all phases of project implementation and to keep up-to-date record of the performance of each contractor so that appropriate steps can be taken in cases of contractor non-compliance. Arrangements are also in place to maintain an updated system of unit prices for all inputs; this will be a very important tool for both JSIF and community contracting to ensure that bid prices are in line with market prices. 4.4 Financial management issues: As with the just-completed Bank project, JSIF has the lead role in implementing the new project. A Financial Management (FM) Assessment carried out by a Bank Financial Management Specialist concluded that the financial management capacity of the JSIF, with its prior experience in Bank projects, provide a strong basis for good project financial management. However, some aspects of JSIF's FM system need strengthening. More importantly, inclusion of the project component for community-based contracting activities will require several actions with respect to such areas as internal control, monitoring, and reporting requirements of JSIF and its partner entities. A follow-up Financial Mission has already conducted a preliminary review with JSIF and the broad operational parameters have been defined. Follow-up actions will be taken after the community procurement component is more fully developed after the project becomes effective, with financing for this subcomponent occurring only after all of the needed control and related measures are approved by the Bank and established in JSIF and other partner entities. 5. Environmental: Environmental Category: B (Partial Assessment) 5.1 Sunmmarize the steps undertaken for environmental assessment and EMP preparation (including consultation and disclosure) and the significant issues and their treatment emerging from this analysis. The proposed project is aimed at improving living conditions in poor urban communities through the construction/improvement of basic infrastructure and social superstructure facilities. The project is expected to provide: improvements in the urban environment including improved drainage, improved access on rural roads for farmers and reduced pollution from sanitary waste and wastewater sources. It is expected that there will also be public health benefits resulting from improved access to potable water and sanitary facilities. No major adverse environmental impacts are envisaged as a result of the project. Most of the potential negative impacts will be associated with construction nuisances in populated areas. These include dust and noise from construction activities; storage and disposal of construction debris; disruptions to traffic and increased traffic; interruption of public utilities; interruptions and/or limitations of access to dwellings or businesses; and safety of workers and road users; all of which, if not properly handled, could negate or reduce the expected benefits mentioned above. - 16 - To mnitigate negative environmental impacts of the project, JSIF has designed Environmental Guidelines for design and implementation for the different infrastructure project typologies that it funds. These include roads; infirmaries and health centers; sanitary facilities (latrines and community showers); drainage; water projects; and agro-processing facilities. The guidelines cover aspects of design, construction, operation and maintenance. 5.2 What are the main features of the EMP and are they adequate? The guidelines previously revised in September 1999 were found to be mostly generic in nature and not consistently applied among sub-projects. Thereafter, JSIEF has in May 2002, revised and updated its general environmental guidelines as well as those pertaining to specific project typologies in line with the relevant legislation pertaining to project planning, design and implementation. The process has enabled important lessons learnt from past implementation of JSIF sub-projects to be reflected in the revised guidelines thus improving their aptness for mitigating adverse environmental impacts through project design and implementation. Furthermore, significant efforts have been made in the newly revised environmental guidelines to ensure sustainable environmental practices from project design through operation. To this end, the guidelines articulate clearly, the environmental review, clearance, mitigation and monitoring processes required during the project cycle; identifying clearly activities to be carried out and responsibilities in ensuring that environmental issues form an integral part of the technical analysis of every JSIF infrastructure project throughout the project cycle. Screening checklists have been developed as part of a technical evaluation to which all projects are subjected and form the basis for determining the ensuing environmental appraisal procedure that is performed for each project type depending on the potential environmental impacts identified during screening. Additionally, where environmental inpact assessments are required, JSIF guidelines stipulate that the mitigation measures prescribed therein be incorporated into the scope of work of the project designer. To reinforce the environmental compliance of projects during construction, environmental mitigation measures are included in the contract documents, together with penalties for non-compliance by contractors. In addition, the Operational Manual includes: 1) a negative list of investments (sub-projects that would be classified as Category A under The World Bank's Environmental Assessment Operational Policy 4.01) which will not be financed under the project; 2) a provision that subprojects that will result in the significant conversion or degradation of natural habitats will be evaluated to ensure compliance with Operational Policy 4.04 on Natural Habitats; 3) that in the event that any of the subprojects procure pesticides or result in increased use of pesticides, an appropriate Pesticide Management Plan, as required by OP 4.09 on Pest Management, which would include non-chemical measures for pest management and guidelines for proper selection, application, storage, handling, transport, and disposal of pesticides, will be developed. Additionally, sub-projects that involve involuntary resettlement will not be eligible for financing under the project. To reinforce the effectiveness of its environmental screening and review procedures, JSIF is embarking on training of its Technical Officers to strengthen their capacity to identify and address environmental and other technical issues in the various stages of the project cycle. In addition training will focus on improving the ability of Technical Officers to improve communication and involvement of the communities where projects are located, during the project cycle. 5.3 For Category A and B projects, timeline and status of EA: Date of receipt of final draft: Review of existing guidelines was completed on July 31, 2002. -17 - 5.4 How have stakeholders been consulted at the stage of (a) environmental screening and (b) draft EA report on the enviromnental impacts and proposed environment management plan? Describe mechanisms of consultation that were used and which groups were consulted? The revised guidelines have been prepared in collaboration with professionals with expertise in the different areas covered by the guidelines; and relevant govermnent entities which are involved with planning and implementation of similar projects are covered in the guidelines. 5.5 What mechanisms have been established to monitor and evaluate the impact of the project on the environment? Do the indicators reflect the objectives and results of the EMP? While mechanisms for monitoring environmental impacts of the project have not been explicitly established in the project, it is expected that many positive environmental and public health effects will result from this project. Since most of the subprojects involve repairs or renovations to existing infrastructure or superstiuctures which are in need of such attention, a positive environmental impact is generally a large part of the expected benefits to the population e.g. by repairing a broken water distribution line, the supply of clean, potable water is increased. Similarly, the number of new and renovated toilets and other such facilities will be documented during project supervision and evaluation. In addition, the revised JSIF guidelines include a component to selectively assess completed projects with respect to the effectiveness of the environmental mitigation measures implemented in the project. 6. Social: 6.1 Summarize key social issues relevant to the project objectives, and specify the project's social development outcomes. The proposed project has its origins in efforts aimed at improving access to basic service and socio-economic conditions among the poorest communities in Jamaica. It seeks to empower poor communities by: i) strengthening their capacity to jointly identify and prioritize strategic community needs and investments; ii) increasing their abilities and skills to seek and manage financial and non-financial resources effectively; iii) helping to consolidate functional community development cooperation arrangements among communities and local government authorities, central government institutions, private sector, non-governmental organizations and private development foundations whose contributions will converge on supporting integrated commnunity development plans (CDPs); and iv) strengthening the foundations of the community as a collective and reinforcing dialogue and negotiation as a basis for conflict resolution and consensus building. By introducing community procurement for selected activities under the project, it is expected that these communities will benefit from the greater control and responsibility which they will have in key decisions about the project works and this feeling of greater empowerment is expected to have positive impact upon other areas of the community. 6.2 Participatory Approach: How are key stakeholders participating in the project? Studies of JSIF's operation show that residents of low-income communities, working together with social workers of the SDC, NGOs and CBOs, have been active participants in the discussions and decisions made concerning their priority investment needs. The proposed project continues to reinforce and refine this practice through the provision of greater opportunities for wider community participation in deciding comnunity needs. Through community contracting procedures, this process is being taken one step further as communities gain greater voice in whom they contract for getting the works done. Measures are also being put in place for communities to expand their list of potential source of assistance for complementary investments and periodic operation and maintenance responsibilities to include not only - 18 - JSIF but also the parish authorities and all of the other national entities which are supposed to be involved in their respective sector. Under the Community Based Contracting component, communities will have a central role in the formulation of Community Development Plans and will directly manage and administer project implementation and contracting. In so doing, all active community organizations (youth clubs, women's organizations, farmers, etc) are expected to participate. In implementing their CDPs, communities will engage in dialogue and direct negotiation with different partners who are geared to assist them. The SDC wil be a key player and stakeholder in working with the communities to manage and implement the plans. It is also expected that private sector companies will actively support and participate in the definition and implementation of the CDPs via direct funding, sub-contracting services or implementation of lines of action of the CDP involving employment generation, facilitation of market access, etc. 6.3 How does the project involve consultations or collaboration with NGOs or other civil society organizations? The Social Development Commission is an entity created by the Government of Jamaica to work with aU communities in assessing their situation and articulating their needs to the ministries, parishes and other sector entities. The SDC has an active partnership program with JSIF and several other NGOs, CBOs and donor agencies and it has taken a lead role in creating the Community Development Committees and other affiliated entities aimed at promoting community and economic development. The SDC has oriented several communities and initiated several of the subproject requests which JSIF financed. This process is expected to continue and become more formalized now that the SDC has assisted many communities in the creation of the CDCs and in preparing their CDPs. As these mechanisms become more developed, the role of many NGOs and CBOs will also become more important. As Community Based Contracting gets more established, this will also increase the potential for participation of other NGOs, CBOs and private sector entities in the process. 6.4 What institutional arrangements have been provided to ensure the project achieves its social development outcomes? The creation of CDCs and CDPs, with technical assistance from SDC, JSIF and NGOs/CBOs is expected to strengthen the capacity of beneficiaries to work through the CDCs. Additionally, the CBC process will provide these beneficiaries with incentives to ensure work quality, timeliness and follow-up operation and maintenance actions. As these communities improve the community interaction process, they will gain confidence to approach the ministries and parish authorities to obtain the complementary assistance they need. In addition, the project is expected to strengthen the role of JSIF and SDC in creating horizontal dialogue and enhancing coordination among line ministries, local government authorities and other relevant government organizations, as a way of creating the conditions for conmmunities to establish fruitful working arrangements, at local level, with such institutions. 6.5 How will the project monitor performance in terms of social development outcomes? Apart from supervision and follow-up activities by JSIF, there will be other third-party studies aimed at measuring planned versus actual project achievements in several ways. Baseline indicators will be established for all components and actual achievements will be documented and compared with such indicators. - 19 - 7. Safeguard Policies: 7.1 Do any of the following safeguard policies apply to the project? Policy Applicability Environmental Assessment (OP 4.01, BP 4.01, GP 4.01) * Yes U No Natural Habitats (OP 4.04, BP 4.04, GP 4.04) (.) Yes * No Forestry (OP 4.36, GP 4.36) (. Yes * No Pest Management (OP 4.09) ( Yes a No Cultural Property (OPN 11.03) U Yes * No Indigenous Peoples (OD 4.20) ( Yes * No Involuntary Resettlement (OP/BP 4.12) -() Yes * No Safety of Dams (OP 4.37, BP 4.37) (U Yes * No Projects in International Waters (OP 7.50, BP 7.50, GP 7.50) ( Yes * No Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60)* () Yes * No 7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies. Details on the actions which are being taken with respect to the Environmental Assessment are presented in Sections 5 above. No other Safeguard Policies are being triggered under the proposed project. As with the previous Batik loan to JSEF, there are no involuntary resettlement issues since sub-projects involving involuntary resettlement are not considered as eligible projects under JSIP's selection criteria. While the primary objective of the project is to assist residents in communities most affected by tourism declines and violence and to promote greater social and community development, all communities throughout the island are accorded equal. opportunity to participate in the preparation of their respective Community Development Plans and to seek subproject funding from JSIF. Maroon descendants live throughout the island and are concentrated in several remote areas of Jamaica. JSIF does not have a special program for the Maroons because of the primary focus of the project as well as the opportunity which exists for all communities, including the Maroons, to participate in the project. JSIF has identified five communities which are primarily populated by descendants of Maroons. Of these, three are in the Quartile 4 range of the Poverty Map used by JSIF as one of the qualifying criterion for subproject assistance. JSIF has already financed two projects, a basic school and a road, in one of these comrmunities; an indication that these communities do have access to JSIF assistance. Through continued recordkeeping and evaluation procedures, there will be close monitoring of the beneficiary profile to ensure that all targeted low income commnunities are among the beneficiaries of the project. And, should the need arise, JSEF will take the necssary actions to ensure appropriate access to any under-represented target group. -20 - F. Sustainability and Risks 1. Sustainability: JSIF's charter states that it is a temporary entity whose task is to help address critical needs which, for various reasons, cannot be currently addressed by the traditional sector entities for such tasks. Given the great need which exists in Jamaica today for assistance from JSIF, it is expected to continue into the forseeable future. Also, with a revised project cycle in place, most of the weaknesses identified during implementation of the previous project are not expected to reappear, primarily because of project cycle provisions for greater accountability from contractors, clearer definition of lines of operation and maintenance responsibilities among the primary actors, and greater follow-up actions by JSIF. The creation of CDCs and CDPs is also expected to promote project sustainability to the degree that the new CDCs will develop into strong lobbying entities and take greater responsibilities for their own social and economic development and appropriately operate and maintain the works which they planned and contracted. Implementing CBC will also inject new project management skills into the communities, which should improve operation and maintenance of the sub-projects and could encourage ancillary investments and activities. 2. Critical Risks (reflecting the failure of critical assumptions found in the fourth column of Annex 1): Risk Risk Rating. Risk Mitigation Measure. From Outputs to Objective Contractors and consultants fail to M Enforcement of penalty clauses and perform as expected under the revised blacklisting, which can be tracked in new MIS conditions. system. Contractors are not commited to goal of H Projects with higher labor input will be employment creation in implementation weighted more. Community reports back to of project works. JSIF. JSLF, SDC and other participants do not H Phased payment tranches will be delayed if have access to subproject areas JSIF and SDC officers do not get access (due to throughout the project cycle (because of coercion). coercion) Government support for CDC and CDP M Continuous interaction with key staff to ensure wavers. continued Government commitment to the program. CBC proves not to be a viable M TA and assistance to NGOs and CBOs to build mechanism for promoting social upon existing community participation development in Jamaica initiatives. Lack of cooperation between JSIF and M Joint orientation and follow-up sessions among sector entities the primary entities and JSIF From Components to Outputs -Criteria developed for project selection N Periodic evaluation of criteria to ensure are not effective in achieving the relevance. During sub-project appraisals, objectives. project design will take into account objectives. Close supervision of projects. -Projects are not carried out in a timely M Improved MIS system will provide early manner. warning and trigger action to penalize nonperforming contractors. -Not enough communities able to M Promotion campaign by JSIF to. cover regular participate in CBC. sub-projects and CBC. Extensive community -21 - training programs. -Institutional ability of JSIF, SDC, NGOs H Training and periodic review of procedures and CBOs to work with communities will be implemented. Creation of simplified throughout the project cycle is limited. handbooks to guide users. -Difficulty for JSIF to make the M Training and preparatory sessions and a institutional adjustments needed for reasonable adjustment period. implementing the new program package, approach and operational guidelines. -Inadequate staffing skills in line with H Payment of competitive salaries, majority of overall programme and project objectives training budget to be dispensed at an early and high staff turnover. stage in the project. -Lack of cooperation between JSIF and H New procedures for subproject identification sector entities. TA and other activities are designed to improve such cooperation. Overall Risk Rating H Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk) 3. Possible Controversial Aspects: No possible controversial aspects have been identified. G. Main Loan Conditions 1. Effectiveness Condition Signing of Subsidiary Agreement, acceptable to the Bank, between JSEF and Government of Jamaica. 2. Other [classify according to covenant types used in the Legal Agreements.] JSIF cannot contract more than $3 million of JSIF Subproject funds until the first group of eligible communities participating in the Community Subprojects have been legally registered and trained in community contracting. JSEF shall maintain and thereafter update its MIS database on input (material and labor) cost, project cost and performance record of contractor and consultants for all project works. H. Readiness for Implementation D 1. a) The engineering design documents for the first year's activities are complete and ready for the start of project implementation. 3 1. b) Not applicable. D 2. The procurement documents for the first year's activities are complete and ready for the start of project implementation. 2 3. The Project Implementation Plan has been appraised and found to be realistic and of satisfactory quality. D 4. The following items are lacking and are discussed under loan conditions (Section G): -22 - 1. Compliance with Bank Policies X 1. This project complies with all applicable Bank policies. O 2. The following exceptions to Bank policies are recommended for approval. The project complies with all other applicable Bank policies. I)akoor Persaud Danny M. Leipzig Ors ia alantzopou os Team Leader Sector ManagerD t Couitry Manager/Director - 23 - Annex 1: Project Design Summary JAMAICA: National Community Development Project Key PefloriWaihie"F! PDti Ito,tatb, 'Hierar,chy o.t.Objectives;. .' Indcio'rs.-.A, * 4,7. -. -. - Critical Assumptions Sector-related CAS Goal: Sector Indicators: Sector/ country reports: (from Goal to Bank Mission) Ensuring inclusion and Stabilization of poverty level. Survey of Living Conditions. Violence does not increase. protecting the poor. Improved access to basic Economy stabilizes. services. GOJ poverty-reduction program continues. Project Development Outcome I Impact Project reports: (from Objective to Goal) Objective: Indicators: To aid low-income 1. Increase in access to and MIS reports on project Political and related communities by providing quality of basic services. advance. interference can be minimized, basic services and temporary 2. Number of incremental especially in urban areas. employment opportunities (in temporary jobs created response to demand for basic (gender, number, skilled, and No major socio/political services and the effects of unskilled). disruptions during project violence and lingering post 3. Improved operation and implementation. 9-11 impact on tourism flows). maintenance of project facilities. GOJ provides the needed counterpart funds in a timely manner. To assist the government of I .Increase in the number of Periodic evaluation and SDC and other entities will Jamaica in its efforts to projects financed by JSIF after surveys by consultants and adopt improved community promote social and community being identified in Community beneficiaries. development criteria. driven development, Development Plans (CDPs) especially among the poor. 2. Increase in the number of communities which develop the capacity to select their own priority projects and to manage project contracting and project implementation effectively to ensure work quality, reasonable costs, and timeliness. 3.Evidence of increased complementary investment generated (from residents, other public sector entities and the private sector) through JSIF and Social Development Commission (SDC) assistance to community groups. 4. Number of subprojects with active community maintenance plans and clear indication of agreed support from line ministries and/or local authorities. 5. Level of community -24- satisfaction with subproject and performance of sponsoring entities, JSIF, SDC, and CDC. Output from each Output Indicators: Project reports: (from Outputs to Objective) Component: Subprojects (for repairs, 1. Number and type of QuarterlyProgress Contractors and consultants renovation and construction of sub-projects. reports/MIS. perform as expected under the basic infrastructure and social 2. Increased number of revised conditions. superstructure facilities) are incremental temporary jobs Supervision reports. completed and appropriately created by the project (by High contractor commitment utilized. gender, total number, skill Third-party reviews to goal of employment level). creation in implementation of 3. Increased community project works. participation in maintenance of projects. 4. Facility utilization rate over time. Improved effectiveness of I. Number of subproject Mid-term review JSIF, SDC and other community organizations in requests identified through participants have access to identifying, planning, CDP. Stakeholder consultations subproject areas throughout executing and maintaining 2. Number and type of the project cycle. subprojects. subprojects financed through CBC Government support for 3. Number of people trained to encouraging CDC and CDP support community continues. development. 4. Increase in the average CBC proves to be a viable percent of community mechanism for promoting contribution in the social development subprojects. Improved and more efficient 1. Reduced time taken to Financial and operational Cooperation between JSIF and institutions (JSIF, SDC) for prepare and implement audits sector entities. coordinating the provision of sub-projects. basic needs and services to 2. Improved quality in design communities. and preparation of sub-projects. 3. Effective use of the new operational guidelines. 4. Active dialogue with line ministries to obtain their effective engagement in equipping and maintaning project facilities. - 25 - Project Components / Inputs: (budget for each Project reports: (from Components to Sub-components: component) Outputs) Sub-projects $18.3 mln Supervision reports, Quarterly Criteria developed for project i. Works Contracted through Reports. selection are effective in JSIF. targeting the objectives. ii. Works Contracted through Projects are carried out in a Community Based timely manner with greater Contracting. community involvement. Willingness of the communities to participate. Ability of JSIF, SDC, NGOs and CBOs to work with communities throughout the project cycle. TA and institutional $2.2 mln Audit reports. Cooperation between JSIF and strengthening. sector entities. Adequate staffing skills in line with overall programme and project objectives Low staff turnover within primary entities. Project Administration $9 mln Smooth implementation by the Board of JSIF and staff of the new program package approach and operational guidelines. - 26 - Annex 2: Detailed Project Description JAMAICA: National Community Development Project Overview. The proposed project is designed to address both some of the temporary and longer-term problems which Jamaica currently faces (high unemployment, poor access to basic services, crime and violence and socio-political divisiveness). Working through JSIF as the primary implementing agency, funds will be channeled to sub-projects which are identified by the communities through such community-driven development devices, including open forums guided by community facilitators from such entities as SDC or various NGOs and CBOs. In the initial stage of the project, the primary focus will be upon provision of basic infrastructure investments identified as priority ones by the communities which seek such services. In order to commence quickly, JSIF will review the backlog of unfunded requests which it currently has. It will identify those located in areas affected by tourism decline and it will select priority projects meeting the selected criteria established in the operating manual. It will contract out the approved works in the targeted communities (see below, Component I - Subprojects Contracted by JSIF) via competitive bids. In this way, JSIF will be providing priority basic services while at the same time, helping to generate temporary employment opportunities within the selected communities. In parallel with the above, during the first year of project implementation, JSIF will also introduce and implement community-based contracting (CBCs) sub-projects which, in addition to providing priority basic services among needy communities, will also promote community development at various levels. Since this is a relatively new system, there will be an initial institutional learning curve for JSIF and all participants. Funds will be available for technical assistance and training to JSIF staff and other entities (SDC, CDC) involved in mobilizing the communities (Component 2) as well as funds to hire new staff (Component 3) as part of the organizational changes needed to implement CBC. It is expected that a four-month startup period will be needed before the communities should attempt CBC. To ensure that progress is made in implementing CBCs, funds dispensed for works contracted directly via JSIF will be conditioned upon progress in getting CBC investments underway. Sub-projects for both types of contracting will be demand-driven and reflect the priority needs of the affected communities. The communities will be selecting these sub-projects from a menu of sub-projects which can be financed by JSEF which cove basic infrastructure, social superstructure facilities, and social services and employment assistance. Subprojects are those activities which meet the criteria set forth in the Operational Manual and consist of: (i) social infrastructure projects which consist of: (a) the rehabilitation, expansion or construction of schools, health centers, day care centers, shelter homes for children, the elderly and the disabled, community centers, training facilities and sport facilities, including the acquisition and utilization of the goods required therefore; or (b) the rehabilitation or construction of latrines, community showers, drains and canals and community-based water systems; (ii) economic infrastructure projects which consist of: (a) the rehabilitation or upgrading of parochial, feeder and urban access roads; or (b) the rehabilitation or construction of community-based agro-processing facilities; or (iii) social services projects which consist of: (a) the provision of technical assistance and training in career guidance, job placement, counseling, and parenting and family-life education; or (b) the provision of training in productive sector skills. -27- While the list of activities will be the same for both types of contracts, JSIF will be executing larger and more complex subprojects while the communities will be contracting smaller and relatively simple ones. By Component: Project Component 1 - US$18.30 million WB Financing: $12.38 million JSIF Subprojects: Total: $15.1 million WB Financing: $9.8 million These will be subprojects contracted by JSIF. Under this component, basic services are to be provided in poor communities which suffer from the effects of recent declining tourism expenditures. JSIF already has a backlog of requests for priority basic services from communities throughout the island. In order to provide a quick response to basic service needs of such groups while generating much-needed investments in the affected communities, JSEF will select those requests which meet established pre-approved weighted criteria, including the number of temporary unskilled jobs created. The sub-project menu would include those activities already being financed by JSIF in line with its charter, such as those described above, and innovative projects to reach the more vulnerable populations, particularly in the urban areas where traditional JSEF projects have not been as successful. JSIF will then contract the works through private contractors/consultants, with the beneficiary communities being closely involved in the process. Both urban and rural communities are expected to benefit from works under this component. However, since JSIF's strength has traditionally been in the rural and semi-urban areas, efforts are being made to have JSIF use partner entities which have relatively greater experience in urban areas. Community Subprojects: Total: $3.3 million WB Financing: $2.6 million This component will promote demand-driven and community-contracted and managed projects to provide basic services and infrastructure within such communities. Currently, the parrishes and other authorities are working with several communities to form Community Development Committees which are preparing Community Development Plans. Prior to preparing this project, the Eurpoean Union (EU), and British Department for Intemational Development (DFID) have been working with JSIF, the SDC and several community groups to develop Community Based Contracting models. The Bank's contribution under this project will enrich such efforts aimed at strengthening community ownership, cooperation, management, maintenance, and help generate temporary jobs within the participating communities. This component will provide JSIF with the opportunity to formalize and structure such an arrangement, building upon the Bank's successful experience with community contracting, primarily in Africa. Over the next year, JSIF's project cycle and manual will be revised to incorporate the special procedures needed for community based contracting. Along with TA and several orientation material which have already been discussed with JSIF, handbooks and other material which are being field-tested by OPCPR for community procurement in Jamaica, will be incorporated into the documents used for community procurement in this project. Because this is a relatively new tool, it is anticipated that there may be need for mid-stream adjustments and modifications as the process gets underway and obstacles arise and are addressed. -28- The role of the SDC and NGOs will be very pivotal as JSIF works with the communities and CDCs to prepare CDPs and to implement them via community based contracts. Interested communities can apply for community based contracting projects only after they have complied with all of the various requirements (including the establishment of formal entities with elected representatives and other related conditions as stipulated in JSIF's guidelines). Financing for community based contracting works will commence only after Bank-approved procedures are in place. This is expected to occur within one year of project effectiveness. These subprojects will cost less than US$100,000 equivalent. Project Component 2 - US$3.04 million WB Financing: $2.17 million Technical Assistance and Institutional Strengthening. One area of focus of this component will be upon the implementation of the JSIFs newly-revised project cycle, which addresses several of the shortcomings mentioned in the evaluation reports on JSIF. Improvements in the project cycle should lead to shorter project cycles, better project designs, higher community contributions, greater responsiveness of the communities and clearing of the pipeline each year. The JSIF Operations Manual has been revised to reflect greater focus upon these areas. As JSIF moves toward promoting more CBC projects, it will need to train its staff, partners and beneficiary communities to facilitate more effective community dialogue. Moreover, as JSIF's role evolves into a more catalytic and facilitating entity, better coordination between JSIF, the communities, parishes and line ministries will also be needed. This component will be used to finance technical assistance and training (for consultants and stakeholder workshops) of JSIF and its partner organizations (SDC, CDS, KRC, and other NGOs and beneficiary groups). Financing will also be provided for institutional strengthening activities to enable JSIF to fully incorporate CBC into its operations. Implementing CBC will require additional support for JSIF as compared to traditional JSIF-contracted sub-projects, CBC projects will demand more labor intensive interaction with the communities, particulary with the amount of training needed. This component includes provisions to finance consultants to help JSIF in procurement activities, community liaisons and technical issues in the sub-projects (estimated at 2 procurement officers, 2 social officers, and 1 technical officer for project implementation). Project Component 3 - US$ 8.16 million WB Financing: $0.30 million Project Administration. While the counterpart funding will be used to pay for staff and operational funding, this component will provide for goods (equipment and vehicles) needed to support the increased activity associated with community contracting. Funding will be available for goods needed to facilitate sub-project supervision, monitoring and community training. -29 - Annex 3: Estimated Project Costs JAMAICA: National Community Development Project N ^>- i Pr6jectlCost By Cipo ient4 *$ Wilion U$uii Subprojects 16.00 2.30 18.30 Technical Assistance, Institutional Strengthening, Training 2.49 0.55 3.04 Project Administration (including Goods) 6.66 1.50 8.16 Total Baseline Cost 25.15 4.35 29.50 Physical Contingencies 0.00 0.00 0.00 Price Contingencies 0.00 0.00 0.00 Total Project Costs' 25.15 4.35 29.50 Front-end fee 0.15 0.15 Total Financing Required 25.15 4.50 29.65 1-oc1 -_reig .-Total,7 -ProiectCost _By_Categ ory U- - ;llS $rmillibawc in ; ' jilion: Goods 0.15 0.20 0.35 Works 16.00 2.30 18.30 Services 2.20 0.54 2.74 Administrative 6.50 1.31 7.81 Training 0.30 0.00 0.30 Total Project Costs 25.15 4.35 29.50 Front-end fee 0.15 0.15 Total Financing Required 25.15 4.50 29.65 Note: Since the project is essentially a financial intermediary type operation, no contingencies have been provided for the sub-projects. Any increases in the average subproject cost would be reflected in a reduced number of subprojects executed. Identifiable taxes and duties are 2.61 (US$m) and the total project cost, net of taxes, is 27.04 (US$m). Therefore, the project cost sharing ratio is 55.47% of total project cost net of taxes. - 30 - Annex 4 Economic Analysis Summary JAMAICA: National Community Development Project Background In most instances, the type of the sub-projects financed, their size, location and other characteristics do not allow for traditional economic rate of return analyses. However, there is a very strong proxy for such analyses when beneficiaries are given the opportunity to assess their needs and establish priorities. Additionally, by requiring that beneficiaries contribute a minimum of their own resources (in cash or in kind), the importance of the subproject becomes very evident. In JSIF's project selection and design processes, efforts have been made to ensure that least-cost consideration will be more explicitly taken into account. In addition to efficiency factors, such an approach is also expected to result in more appropriate technology being utilized (e.g. community latrines instead of in-house connections as a first stage for those who can only afford the former at this time). In its evaluation process, JSIF will incorporate weights for such factors as project cost (negative correlation); contribution from beneficiaries (positive correlation); contribution from private sector (positive correlation); operation and maintenance provisions (positive correlation). Economic Analysis of Previous JSIF Sub-projects In 2001, an impact-evaluation study was conducted by an external consultant to measure the impact of JSIF sub-projects. In particular, economic analyses were performed on water and road projects with very favorable results. The Internal Economic Rate of Return (IERR) for the 12 rural road projects examined ranged from 7% to 23%, with an average of 13%. The IERR for the 9 water projects ranged from 83% to 303%, and averaged 198%. The high rates for the water supply projects was probably because most of the interventions were in rural communities which had no regular or easy access to potable water. The reduction in water-borne diseases and time-savings also tend to greatly increase the benefits of such water projects. Economic Analysis of Community-Based Contracting Sub-projects Studies show that if conducted properly, the benefits derived from community-based contracting usually exceed those under private contracting. CBCs are designed to elicit greater community participation in all stages of project construction. Greater participation of the community could lower project cost and increase benefits to the participants. Moreover it helps to promote a better sense of ownership and with this, greater interest in maintenance and operation, which results in lower life-cycle costs. Support for these observations comes from the recently-published "Social Funds 2000 Impact Evaluation" which evaluated the comparative costs between direct contracting and community-based contracting. The results showed that in all of the countries in the study, community managed resources led to lower unit costs. Lower cost per unit resulted from lower contractor profit margins, greater transparency and accountability, better control of price escalations, and less expenditure on materials. Moreover, it was found that community-based projects raised the level of local support better than those that were contracted out. Though workmanship of community projects was slightly lower and project completion took longer, these were not considered significant negative factors. In other cases such as the Mexico Municipal Fund Program, CBC project costs were reportedly 30% below those using outside contractors and the quality of the projects was also superior to those in State programs. - 31 - Since CBC will be a new element to JSIF, data on CBC project costs and quality will be maintained and later compared with traditional sub-projects to measure cost effectiveness and efficiency. Aside from the financial cost aspect, other benefits from CBC will also be measured, including social mobilization, training of community members in procurement and contracting, and improved sustainability of the completed projects. -32- Annex 5: Financial Summary JAMAICA: National Community Development Project Years Ending June 30 | .. . IMIPLEMENTATION PERIOD Y Year1 I Year 2 | Year 3 | Year 4 | Year 5 Year 6 Year 7 Total Financing Required Project Costs Investment Costs 2.0 3.5 3.6 4.0 3.0 1.0 0.0 Recurrent Costs 1.2 2.5 2.5 2.5 2.5 1.2 0.0 Total Project Costs 3.2 6.0 6.1 6.5 5.5 2.2 0.0 Front-end fee 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Financing 3.2 6.0 6.1 6.5 5.5 2.2 0.0 Financing IBRD/IDA 2.0 3.0 3.0 3.0 3.0 1.0 0.0 Government 0.9 2.3 2.4 2.8 1.8 0.8 0.0 Central 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Provincial 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Co-financiers 0.0 0.0 0.0 User Fees/Beneficiaries 0.1 0.2 0.2 0.2 0.1 0.1 0.0 Other 0.2 0.5 0.5 0.5 0.6 0.3 0.0 Total Project Financing 3.2 6.0 6.1 6.5 5.5 2.2 0.0 Main assumptions: Continued parallel financing from other donors will be forthcoming. JSIF currently receives about 60% of its funds from other agencies, including the Inter-American Development Bank, Caribbean Development Bank, CIDA, Government of the Netherlands, European Union, Organization of Petroleum Exporting Countries and Britain's DFID. The project is for 5 years, spread over 6 fiscal years. -33 - Annex 6(A): Procurement Arrangements JAMAICA: National Community Development Project Procurement A) Procurement Arrangements Procurement for the proposed project would be carried out in accordance with World Bank "Guidelines: Procurement Under IBRD Loans and IDA Credits", published in January 1995 (revised January/August 1996, September 1997 and January 1999); and" Guidelines: Selection and Employment of Consultants by World Bank Borrowers" published in January 1997 (revised in September 1997, January 1999, and May 2002), and the provisions stipulated in the Project Agreement between the Bank and the Jamaica Social Investment Fund. 1) Procurement methods: The methods to be used for the procurement described below, and the estimated amounts for each method, are summarized in Table A. The threshold contract values for the use of each method are fixed in Table B. Procurement of Works Works procured under this project would include works for subprojects to be procured and implemented by JSIF totaling US$15.05 million equivalent. Works estimated to cost more than US$100,000 will be procured following National Competitive Bidding (NCB) procedures, using standard bidding documents agreed in advance with the Bank. Works estimated to cost less than US$100,000 may be procured following Three Quotations procedures using model request for quotations satisfactory to the Bank. In the case of community subprojects, and on exceptional cases where three quotations are not feasible to obtain, procurement of work might be carried out by direct contracting, and prior agreement with the Bank will be sought. Procurement of Goods Goods procured under this project would include office supplies and equipment totaling US$350,000 equivalent. To the extent possible, contracts for these goods will be grouped into bidding packages of more than US$150,000 equivalent and procured following International Competitive Bidding (ICB) procedures, using Bank-issued Standard Bidding Documents (SBDs). Contracts with an estimated value below this threshold per contract and up to an aggregate amount of US$0.3 million may be procured using National Competitive Bidding (NCB) procedures and standard bidding documents agreed with the Bank. Contracts for goods which cannot be grouped into larger bidding packages and estimated to cost less than US$25,000 per contract, up to an aggregate amount of US$0.1 million, may be procured using national shopping procedures based on a model request for quotations satisfactory to the Bank. - 34 - Selection of Consultants Technical Assistance for institutional strengthening and training are estimated to cost US$2.2 million equivalent and would be procured using Bank Standard Request for Proposals. Firms Contracts for firms estimated to cost more than US$50,000 will be procured using Quality and Cost-Based Selection (QCBS) method. Contracts for firms estimated to cost less than US$50,000 up to an amount of US$1.0 million equivalent may be procured using Consultant Qualification (CQ) or Least Cost Selection (LCS) methods. Individuals Specialized advisory services would be provided by individual consultants selected by comparison of qualifications of three candidates and hired in accordance with the provisions of paragraphs 5.1 through 5.3 of the Consultant Guidelines, up to an aggregate amount of US$0.5 million. Subproiects Contracted bv Communities: The Loan would partially finance the cost of goods and services for the implementation of demand driven subprojects to be proposed and implemented by communities. They are estimated to amount US$3.25 million equivalent. These subprojects will have a cost ceiling of US$100,000 and will be selected following the criteria established in the Project Operations Manual. The goods and works for the subprojects will be procured following Three Quotations procedures. Where three quotations are not feasible to obtain, procurement of works might be carried out by direct contracting, and prior agreement with the Bank will be sought. The Operations Manual will include detailed procedures for procurement of small works contracts, including community contracting. 2) Prior review thresholds: The proposed thresholds for prior review are based on the procurement capacity assessment of the Jamaica Social Investment Fund (JSIF) and are summarized in Table B. In addition to this prior review of individual procurement actions, the procurement plan will be reviewed and approved by the Bank annually. B) Assessment of the agency's capacity to implement procurement The Jamaica Social Investment Fun, JSIF, a temporary, autonomous Government sponsored institution, will coordinate project implementation. The JSIF is composed by a Board of Directors, a Managing Director and four management units: (i) Research, Evaluation, Documentation and Dissemination (REDD) Unit, (ii) Operations Coordination Unit, (iii) Financial and Administration Department, and (iv) a Management Information System Unit. Within the Finance and Administration Department, a Procurement Unit carries out procurement activities and an Accounting Unit is -35 - responsible for. recording project expenditures and preparing financial statements. Initially, the subprojects will be procured and implemented only by JSIF. Capacity assessment of the communities will be carried out before the CBC component can commence. Within the Operations Coordination Unit, a Community Projects Unit will assist the Communities in the preparation of subprojects and applications for JSIF financing; a Screening and Project Concept Development Committee will review and approve the subprojects submitted by the Communities. For a project to be eligible for JSIF funding it must be within the Government's poverty-mapped area; be in JSIF's priority project menu; have no resettlement requirements; include some form of beneficiary contribution; and for Community Based Contracting, demonstrate the capacity of the community to undertake the works. In the project analysis and selection process, priority will be given to subprojects which have simple design; involve small works; have a relatively high ratio of unskilled labor needs; have short implementation period; benefit a relatively large pool of poor residents; have a relatively large share of community contribution; are in an advanced stage of preparation and include sustainable operation and maintenance provisions. The Procurement Unit within the Finance and Administration Department will carry out the procurement process for contracting the construction of the subprojects and consultant services for their supervision. Commencing the second year, selected subprojects will be contracted and implemented by the communities that demonstrate capacity to assume subproject implementation, and JSIF will continue implementing subprojects for the communities that do not have such capacity. For the subprojects.to be implemented by the communities, JSIF would sign a Financing Agreement with the sponsor community under a lump-sum basis. Payments to the community would be made in tranches on the basis of physical progress and the community would be responsible for the procurement of works, goods and services required for the subproject implementation. Consistent with the Operational Manual and the capacity assessment of the community, the financing agreeement with the community will spell out, among other things, the procurement arrangements to be used by the community. An assessment of the capacity of the JSIF to implement procurement actions for the project has been carried out and was approved by the Regional Procurement Advisor on July 25, 2002. The proposed organization, the staffing of the JSIF and the project implementation arrangements are satisfactory. A Project Operations Manual will include procurement procedures, standard bidding documents to be used for each procurement method, and model contracts for works and goods procured on the basis of three quotations or shopping. a) The main risks identified in the assessment include: (i) Staff High turnover of JSIF technical staff that constitutes a risk for an efficient project implementation, especially on procurement activities; (ii) Limited Implementation Capacity of CBC Communities: Since this is a relatively new role for the communities, there will be a learning process. As discussed in other sections, the Bank has taken several steps (OPCPR seminar, JSIF staff visits, planned community capacity assessment), aimed at facilitating this process and minimizing expected problems; (iii)Bidding Documents and Bidding Process : The Communities are not familiar with procurement procedures. The risk of procurement procedures inadequately applied is high; (iv) Construction Designs and Technical Specifications: Deficiencies occurred in the - 36 - construction designs and technical specifications were cause for problems in the previous project implementation. They may also occur in the proposed project; (v) Subproject implementation: lack of experience in project implementation by Communities; (vi) Audit: the Internal Audit Unit is not staffed; and (vii) Record Filing: Present JSIF system for filing procurement records is inadequate. b) The following plan to address these risks is included in the PCA report and was agreed by the JSIF: By negotiations: (i) JSIF will submit to the Bank a Procurement Plan for the first six months of project implementation and will commit to update the plan every six months; (ii) JSIF to submit a draft Project Operation Manual (POM) that include selection criteria of subprojects, procurement procedures fully consistent with Bank Guidelines for Procurement and Guidelines for the Use of Consultants, detailed procedures and instructions for filing of procurement records, and SBDs with one-envelop system; (iii) JSIF to (a) appoint an Internal Auditor, and (b) provide evidence to the Bank that contract for external audit has been extended, or if not, to contract a new firm. Before the start of procurement of works: (v) JSEF staff would include two senior procurement officers. One of them to coach Communities and oversee their procurement activities; (vi) JSIF will appoint qualified individual consultants to review the standard designs for roads, schools and medical centers as well as their technical specifications. Before the start of subproject implementation: (vii) JSIF to invite NGOs to submit proposals for assisting the Communities in subproject implementation; (viii) Capacity assessment of communities. The overall project risk for-procurement is AVERAGE. The project is ELIGIBLE for FMR-based disbursements on procurement reporting grounds in view that the project includes improvements to JSIF Management Information System. C) Procurement Plan Prior to negotiations, the Borrower submitted a Procurement Plan for project implementation. The aggregate amounts for the procurement methods (per Table A) are based on project cost estimates. At the beginning of each calendar year, the Borrower will update the Procurement Plan with a detailed procurement schedule for the coming year. D) Frequency of Procurement Supervision In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment of the JSIF has recommended one supervision mission to visit the field every three months during the first year and one full supervision mission once every six months thereafter to carry out post review of procurement actions. Based on the overall risk assessment (AVERAGE) the post-review field analysis should cover a sample of not less than 1 in 5 contracts signed. - 37- Procurement methods (Table A) Table A: Project Costs by Procurement Arrangements (US$ million equivalent) Procurement'Meotho Expenditure Category ICB NCB Other N.B.F. Total Cost 1. Works 0.00 2.45 12.60 0.00 15.05 (0.00) (1.50) (8.30) (0.00) (9.80) 2. Goods 0.00 0.35 0.00 0.00 0.35 (0.00) (0.30) (0.00) (0.00) (0.30) 3. Services 0.00 0.00 2.75 0.00 2.75 Technical assistance and (0.00) (0.00) (1.92) (0.00) (1.92) institutional strengthening 3/ 4. Project Management 0.00 0.00 0.00 7.81 7.81 (0.00) (0.00) (0.00) (0.00) (0.00) 5. Front-end fee 0.00 0.00 0.15 0.00 0.15 (0.00) (0.00) (0.15) (0.00) (0.15) 6. Sub-Projects Contracted by 0.00 0.00 3.25 0.00 3.25 Communities 4/ (0.00) (0.00) (2.58) (0.00) (2.58) 7. Training 5/ 0.00 0.00 0.30 0.00 0.30 (0.00) (0.00) (0.25) (0.00) (0.25) Total 0.00 2.80 19.05 7.81 29.66 ___ (0.00) (1.80) (13.20) (0.00) (15.00) ' Figures in parenthesis are the amounts to be financed by the Bank Loan. All costs include contingencies. 2' Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to managing the project. Consultant selection will be made using individual consultants method. 3/ WB component includes funds for technical assistance to JSlF to implement CBC, institutional strengthening to NGOs and communities; project evaluation and monitoring; and general institutional support to JSIF. 4/ Demand driven sub-projects to be implemented by communities. The goods and works for these subprojects will be procured following three quotations procedures for contracts less than US$100,000, and direct contracting for works contracts with a value less than US$5,000 and goods contracts with a value less than US$2,000 5/ US$63,000 for CBC training workshops to the communities, US$187,000 training programs to NGOs and commumties. - 38 - Table Al: Consultant Selection Arrangements (optional) (US$ million equivalent) ,. * - ~~~~~~~~~Selection Method . Consultant Services. S Method Expenditure Category QCBS OBS SFB LCS CO Other N.B.F. Total Cost A. Firms 0.70 0.00 0.00 0.00 1.00 0.00 0.00 1.70 (0.55) (0.00) (0.00) (0.00) (0.80) (0.00) (0.00) (1.35) B. Individuals 0.00 0.00 0.00 0.00 0.00 1.05 0.00 1.05 (0.00) (0.00) (0.00) (0.00) (0.00) (0.57) (0.00) (0.57) Total 0.70 0.00 0.00 0.00 1.00 1.05 0.00 2.75 1 (0.55) (0.00) (0.00) (0.00) (0.80) (0.57) (0.00) (1.92) Including contingencies Note: QCBS = Quality- and Cost-Based Selection QBS Quality-based Selection SFB Selection under a Fixed Budget LCS Least-Cost Selection CQ = Selection Based on Consultants' Qualifications Other = Selection of individual consultants (per Section V of Consultants Guidelines), Commercial Practices, etc. N.B.F. = Not Bank-financed Figures in parenthesis are the amounts to be financed by the Bank Loan. - 39 - Prior review thresholds (Table B) Table B: Thresholds for Procurement Methods and Prior Review' Contract Value Contracts Subject to Threshold Procurement Prior Review Expenditure Category (US$ thousands) Method (US$ millions) 1. Works >$100K NCB All over $200K: 1.2 < $100K Three quotations (JSIF) First five contracts: 1.3 2. Goods > $150K ICB All <$150K NCB First two: 0.25 <$25K Local shopping None <$2K Direct contracting None 3. Services >$50K QCBS All : 0.7 Firms <$50K LCS (auditing), CQ (for Only TORs other contracts) 4. Services - Individuals >$50K See Section V of guidelines All (TOR, contract, CV) <$50K Only TOR 5. Services - >$50K All NGO-sponsored and <$50K First three contracts executed sub-projects Total value of contracts subject to prior review: $3.55 million Overall Procurement Risk Assessment: Average Frequency of procurement supervision missions proposed: One every 6 months (includes special procurement supervision for post-review/audits) reviewing a sample of I in 5 contracts signed. In the first year of community based contracting, supervision mission should be conducted every 3 months. I\ Thresholds generally differ by country and project. Consult "Assessment of Agency's Capacity to Implement Procurement" and contact the Regional Procurement Adviser for guidance. - 40 - Annex 6(B) Financial Management and Disbursement Arrangements JAMAICA: National Community Development Project Financial Management 1. Summary of the Financial Management Assessment As with the just-completed Bank project, JSEF has the lead role in implementing the new project. A Financial Management (FM) Assessment carried out' by a Bank Financial Management Specialist concluded that the financial management capacity of the JSIF, with its prior experience in Bank projects, provides a strong basis for good project financial management. However, some aspects of JSIF's FM system need strengthening. More importantly, inclusion of the project component for community-based contracting activities will require several actions with respect to such areas as intemal control, monitoring, and reporting requirements of JSIF and its partner entities. These actions can only be taken after the community procurement component is better defined (after the project becomes effective), with all of the needed control and related measures approved by the Bank and established in JSIF and other partner entities. Country Context. The latest Jamaica Country Financial Accountability Assessment (CFAA) was completed in May 2001. While it identified a number of weaknesses in govemment financial management, the CFAA came to a general conclusion that there is a foundation of transparency and accountability in public financial management systems. The CFAA also noted a number of reforms currently underway, including those financed in part by the Bank via the Public Sector Modemization project. Bank-financed projects are therefore encouraged to utilize existing govemment systems, including those of entities such as JSIF, rather than creating entirely separate, project-specific FM arrangements. Description and Assessment of FM Arrangements The Entity. JSIF received support from the Bank-financed Jamaica Social Investment Fund project, which closed in 2001, and continues to function as an ongoing legal entity. Current JSIF operations are funded by a number of sources, including the Government of Jamaica, the Inter-American Development Bank, the Caribbean Development Bank, OPEC, and the EU. Under the previous Bank-financed JSIF project, a number of financial management issues arose, as a result of audits, Bank missions, and other supervision processes. However, as stated in the just-completed ICR of this project, Financial Management was considered to be much improved by the end of the operation as compared to the earlier years (1996-97). Staffing of the Finance Function. JSIF's Finance and Administration Unit is considered to be fully staffed. It is headed by a Finance and Administration Manager, and also includes a Financial Controller, Financial Analyst, Financial Accountant, and Accounting Clerk. All staff have sufficient background and experience for their duties. The financial staff are considered capable of absorbing the duties of the proposed project to the degree that it is implemented in a manner similar to current JSEF operations. The requirements of the community based contracting system will require some additional preparation of the staff and this will be done after the community based contracting system is developed. Funds Flow Arrangements. Funds would be managed through a process which is similar to that used for the previous JSIIF Bank loan in which a Special Account was maintained in US dollars, and payments were made to local contractors via a local currency account. All funds would be first budgeted via the Govemment's normal budget processes, with counterpart funds made available on a quarterly basis via - 41 - the Government's warrant system. After the community based contracting system becomes operational during the first year of project implementation, additional internal control and reporting arrangements acceptable to the Bank would be put in place before funding for that component can commence. Accounting System. During 2000 and 2001, JSIF migrated from the MACOLA accounting software package to ACCPAC. ACCPAC is now considered to be fully functioning. Duties for entering and maintaining information in the system are segregated among the financial staff. The software has a multi-currency feature, but this is limited in that it only allows for the translation of balances - this is sufficient for asset and liability accounts, but for sources or uses of funds, the average or weighted average exchange rates must be manually calculated. This is not an ideal arrangement but represents an improvement over MACOLA which did not have any multi-currency capabilities. In-kind contributions are generally required to be made by the communities where JSEF projects are undertaken, although compliance with this requirement has not been consistent. JSIF is considered to have an adequate system for recording these contributions. In the past, the project supervisor had to certify that the contributions are actually made and this certification is then reviewed by the JSIF internal auditor before entry into the accounting system (as a simultaneous source and use of funds). For this project, the internal auditor will not be involved in such a line function, but instead be allowed to focus on systemic issues. Financial Management Procedures. The updated JSIF Operational manual, dated July 2002, contains the key financial procedures. This manual reflects procedural changes including those arising from this project. Further modifications, acceptable to the Bank, will have to be made during the first year of project implementation in order to accommodate the requirements of the community based contracting component before disbursements for this component are perrmitted. Reporting and Monitoring. JSIF produces a number of internal financial reports, while also having to create reports for the various donors. Through the use of macros, customized reports can be generated directly in Excel from ACCPAC, which facilitates this process. Each donor has a unique code in the software which allows for the transactions related to that financier to be segregated. For the NCD project, two main financial-oriented reports will be submitted to the Bank. The annual financial statements will be prepared and audited as in the JSIF project. JSIF's audit reports represent a "good practice" model for streamlined reporting, in that an overall report is produced which incorporates the specific information related to various stakeholders. In addition to the audit report, all Bank-financed projects must produce a Financial Monitoring Report, which includes information on financial, physical, and procurement progress. These reports are normally linked by reporting by project components and activities. The infornation from ACCPAC, along with that contained in the JSIF MIS, will be used not only to generate FMRs, but more generally, to provide better information for JSIF managers and other stakeholders. Risks. The following matrix details the financial management risk assessment for the project. The greatest risks are posed by the nature of social fund operations, including the decentralized, community-oriented implementation of.many small projects and the inherent political pressures on such organizations. These inherent risks are mitigated in part by the arrangements that have been put in place in JSIF in recent years. - 42 - .______ _ Risk Assessment H S M N Comments Inherent Risk Country X Entity X FM systems recently improved Project x Due to nature of Social Investment I_Funds and dispersion of authority Overall Inherent Risk x Track record of JSIF for CBC not yet fully established Control Risk 1. Implementing Entity x 2. Funds Flow x 3. Staffing x 4. Accounting Policies and x Procedures . 5. Internal Audit x Weak in the past 6. External Audit x 7. Reporting and Monitoring x Project reporting arrangements still to be established 8. Information Systems x Better linkages still sought between MIS and FM system - management info needs not being .______________________ _ _ _ _ _ _ fully m et Overall Control Risk x_ H - High S - Substantial M - Moderate N - Negligible or Low Summary of Strengths and Weaknesses of FM Arrangements Key strengths of the project's FM arrangements are: * The entity's experience with a prior Bank-financed project * Sufficiently staffed financial function without minimal recent turnover of key financial staff (Finance and Admin. Manager, Financial Controller) * Adequate external audit arrangements and a record of understandable, informative audit reports and management letters * Recently installed/established accounting software and fixed assets tracking system Key areas to be arranged or improved are: * Chart of accounts and reporting arrangements for the proposed project (reflecting definition of project objectives, components, and financial plan/costs) * Appointment of an internal auditor who has a strong voice with the JSIF Board * Definition of funds flow arrangements to provide adequate financing for the yet-to- be-defined project activities within a proper control environment - 43 - * Financial procedures in the Operational Manual to be updated in conjunction with the overall revision of the manual Action Plan The following financial management system has been agreed upon between the Bank and GOJ: Action Responsible Person Completion Date Revise financial aspects of JSIF Finance and Admin. Unit Advanced draft prepared Operations Manual Define chart of accounts for JSEF - depends on definition Completed the project of project activities, funding, and cost Reporting, including FMR JSIF management, JSIF Prior to Negotiations - FMR formats, defined finance team, Bank task team formats to be attached to Minutes of Negotiations Contract internal auditor JSIF management March 31,2002 External audit - confirm JSIF provides evidence to the September 30, 2002 (auditors arrangements Bank that current audit currently under contract for contract will be extended, or if the audit of the year ended not, carries out contracting of 3/31/02 are acceptable to the new firm Bank) Issues to be Included in Legal Agreements The project would be expected to have standard financial management requirements in legal agreements... These include'the requirements for annual audits, submission of FMRs to the Bank on a quarterly basis, and thresholds for the prior review of contracting and the use of Statements of Expenditure (SOEs). Supervision Plan Although this project required relatively less intensive assessment by Bank staff during project preparation, due to the nature of the project and past financial management problems in JSIF, a normal supervision effort is planned. This would involve participation by FM staff in supervision missions at least once per year, including annual reviews of Statements of Expenditure, and prompt review of annual audit reports including the key findings in the auditor's Management Letter. The timely preparation of Financial Monitoring Reports (FMRs) by JSIF will allow the Bank to better focus its supervision efforts. 2. Audit Arrangements Internal Audit. The position of internal auditor was recently filled. The job description for the position. is considered to appropriately represent the role and functions of this position, which reports directly to the JSIF Board of Directors. In the past the person(s) in this position have often carried out line financial' functions, and have not had a strong stature in the organization. It was agreed with JSEF that the current internal auditor will be allowed to focus on systemic issues, while also having the role of receiving comments from staff in a confidential manner. In this way the person will be carrying out the modem internal audit function, thus contributing to the image and integrity of JSIF as an organization. - 44 - External Audit. After some initial formatting and timing issues, the quality of audits in the Bank-financed JSIF project was considered to be good. As noted above, the format of the audits reflect what Bank is now encouraging - one audit for the entity with information for individual donors provided in separate schedules. The current auditors were appointed for a one-year contract renewal in August 2002 in a meeting of the JSIF Board. These auditors are acceptable to the Bank, as they have produced well-organized, informative audit reports and management letters in previous years. JSIF should confirm by September 2002 the decision of the Board for the audit of the period April 2002 - March 2003, as that will be the first audit that reflects the result of the new Bank project. By that time, audit TORs (as modified to reflect the project needs) should be submitted to the Bank, and a formal No Objection should be sought for the current firm (if renewed) or short list of firms (if a new procurement process will be undertaken). Fixed Assets. A recurring item mentioned by auditors in JSIF management letters has been the establishment of an appropriate fixed assets register and related tracking system for JSIF assets. It appears that this system is now largely in place, as an Excel sheet is maintained of the entity's fixed assets - consisting of primarily computer equipment and vehicles - and assets have been labeled with a numbering system that combines a code from the chart of accounts with the asset's serial number. This system will be further tested by the external auditors in their audit for the year ended March 31, 2002. 3. Disbursement Arrangements The project will be implemented over a four year period, from January 2003 to January 2007. Procurement will be completed by September 2006. The proposed allocation of the loan is shown in Table C. Disbursement for JSIF Subprojects will be divided into two categories. Category A, for an amount equivalent to US$3 million corresponds to the 30% of the total allocation for JSEF subprojects. This amount will be available for project execution upon project effectiveness. Category B, for an amount equivalent to US$6.8 million, will be available for the execution of JSIF subprojects only if activity in Community Subprojects has commenced. Disbursements for Community Subprojects. As specified in their Operational Manual, for the community subprojects, JSIF will be making payments to the communities in 3 tranches of 30%, 50%, and 20%. At the start of the project a first payment into the project account will be made of 30 % of the project cost. After receipt of satisfactory technical progress reports and 70% disbursement of the tranche(s) the following tranches of 50 % and 20 % respectively can be released. Reimbursements for community contracted subprojects will be made on evidence of disbursements from JSIF to the community project committees (CPC). The Bank, however, will provide disbursements of the tranches only after completion of each stage. Therefore, the initial 30% advance will be funded by counterpart funds, and then reimbursed by the Bank once the first phase of work is complete. The same holds true of the remaining tranches. EBRD will not finance taxes. The standard disbursement percentage for Jamaica is 85% for foreign and 80% for local. To ensure compliance, no more than 80% of technical assistance and consulting services I will be financed. To encourage community contracting sub-projects, 80% of disbursements will be financed, whereas traditional JSIF contracted sub-projects will be financed at 65%. Allocation of loan proceeds (Table C) - 45 - Table C: Allocation of Loan Proceeds Expenditure Category 'Amount,in US$rnillion FinancingP,.ereqager .9. 1. JSIF Subprojects 9.80 65% A. $3.0 mnl B. $6.8 mln 2. Community Subprojects 2.58 80% 3. Technical Assistance, and 1.92 80% Institutional Strengthening 4. Training 0.25 85% 5. Goods 0.30 85% Total Project Costs 14.85 Front-end fee 0.15 100% Total 15.00 Use of statements of expenditures (SOEs): SOEs will be used for procurement below prior review. Special account: The Special Account will have an "authorized allocation" of $US500,000, and shall be limited to the amount of US$1,500,000 until the aggregate amount of withdrawals from the Loan Account plus the total amount of all outstanding special commitments entered into by the Bank pursuant to Section 5.02 of the General Conditions shall be equal to or exceed the equivalent of US$1,500,000. - 46 - Annex 7: Project Processing Schedule JAMAICA: National Community Development Project Project Schedule Planned Actual Time taken to prepare the project (months) 3 7 First Bank mission (identification) 11/04/2001 11/04/2001 Appraisal mission departure 08/15/2002 08/29/2002 Negotiations 09/05/2002 09/05/2002 Planned Date of Effectiveness 01/31/2003 01/31/2003 Prepared by: Thakoor Persaud, LCSFU Elaine Tinsley, LCSPE Preparation assistance: Ophelia Haase, LCSFU Bank staff who worked on the project included: Name - Speciality Thakoor Persaud Task Team Leader Elaine Tinsley PAD Coordinator Josephina Stubbs Social Sector Marcelo Osorio Procurement Daniel Boyce Financial Management Rajeev Swami Financial Management Yewande Awe Environment Ophelia Haase Team Assistant Maria Victoria Lister Quality Assurance Mila Freire Sector Manager, Urban Luz Meza-Bartrina Legal Jose Augusto Carvalho Legal GOVERNMENT OF JAMAICA STAFF Scarlette Gillings, Managing Director, Jamaica Social Investment Fund (JSIF) Faith Graham, Finance and Administrator Manager, JSIF Bridgette Levy, Participation Coordinator, JSIF Shelley Anne Glasgow, Projects Coordinator/Environmental Officer, JSIF Rhian Holder, Social Officer, JSIF Devon Rowe, Deputy Financial Secretary, Ministry of Finance Leila Palmer, Director of External Cooperation Management, Planning Institute of Jamaica - 47 - Annex 8: Documents in the Project File* JAMAICA: National Community Development Project A. Project Implementation Plan * Jamaica Social Investment Fund Operational Manual. * Jamaica Social Investment Fund Project Cycle. 2002 B. Bank Staff Assessments * Aide-Memoire for Pre-Appraisal Misson, Jan. 17-24, 2002. * Financial Management Assesment, February 12-15, 2002. * Implementation Completion Report - Jamaica Social Investment Fund. Social and Human Development Unit. Draft 2001. * JM-NCDP Pre-Appraisal Procurement Report. March 11-15, 2002. * Procurement Capacity Assessment for JSIF. Marcelo Osorio. July 2002. * Procurement Post Review Supervision Mission Report, January 15-19, 2001. C. Other * Deloitte & Touche. Auditors' Report and Project Financial Statements on JSIF. March 31, 2001. * Caraccioli, Arnold. Analysis of Project Cycle - Jamaican Social Investment Fund. May 2000. * de Silva, Samatha. Community-based Contracting: A Review of Stakeholder Experince. World Bank. January 2000. * ITAD, Ltd. Impact Evaluation of the Jamaica Social Investment Fund. December 4, 2001. * Rawlings, Laura et al. Letting Comununities Take the Lead - A Cross Country Evaluation of Social Fund Performance. Social Funds 2000 Study. World Bank. September 2001 * World Bank. Fiduciary Management for Community-Driven Development Projects: A Reference Guide. 2002 *Including electronic files - 48 - Annex 9: Statement of Loans and Credits JAMAICA: National Community Development Project 06-Feb-2002 Dffference between expected and actual Original Amount in US$ Millions disbursements Project ID FY Purpose IBRD IDA Cancel. Undisb. Orig Frm Rev'd P067774 2002 JM- Socil Safety Net Proect 40.00 0.00 0.00 40.00 0.00 0.00 P007490 1997 JM PUB SCTR MODERNIZ 28.40 0.00 0.00 14.51 13.73 12.26 P038700 1997 JM- STUDENT LOAN 28.50 0.00 0.00 0.37 0.37 0.00 Total: 9B.90 0.00 0.00 54.88 14.10 12.26 JAMAICA STATEMENT OF IFC's Held and Disbursed Portfolio OCT-2001 In Millions US Dollars Committed Disbursed ]IFC IlFC FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic 1995 Jam Energy Prtnr 14.66 0.00 0.00 32.72 14.66 0.00 0.00 32.72 2001 Mossel 18.00 0.00 12.00 5.78 0.00 0.00 12.00 0.00 Total Portfolio: 32.66 0.00 12.00 38.50 14.66 0.00 12.00 32.72 Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic Total Pending Commitment: 0.00 0.00 0.00 0.00 - 49 - Annex 10: Country at a Glance JAMAICA: National Community Development Project Laini Lower.,: POVERTY and SOCIALAera mdd- Jamaia. .:& Caib. Icome Development diamond' 2000 - Population, mid-year (millions) 2.6 516' 2,046: Life expectancy GNI per capita (Atlas mretho6d, USs) 2,800 3,680' 1,140' G NI (Atilas method, US$ NI/Ions) 6 9. 16895: ..2,327 A~verage.annual growth,:1994-00% Population(I%) 086r 16V 1 0 Labor-force (.1.4 23 1 3 GN Gross per ~~~~~~prmary Moat recent eatirnate (latest year available, 199440). capita enroflment Poverty (%of pop)ulation belownhational poverty line) Urban populatioin (%~ of total pulto)56 75 4 Ltfe'expectncy ait birth' (yeami7s)- 69: Inrfant mobrtality (per 1.00 liebrh20 30 32: Child malnutrition (% 0 of ch ildrn ndr ) 9 Ii . Access to improved water source Access to ani imhproved water source (% of population) 71.. 85 80 liteiiacy I(% of population age 15+~) 13. . 12: 15 Gross primary enrollment (% ofschool-age population): . io 113 ¶14 ..Jaac Male .0~ . 1-16 Lower-middle-income group Female .99: 114 KEY ECONOMIC RATIOS and LONG-TERM TRENDS -. 1980 1990. 1999: 2000 Economic ratios- GDP (US$ bifllons) 2.7 4.2 . 72 7.4 Grossidomestic investment/GOP 159 27.9 25 6 268 Trad Exports ol goods and services/GOP 51.1 5206 420' 44 1 Gross domrestic savings/GDP 15.9 23.8 15.6 15.6 Gro'ss national savings/GDP 10.8 18 2.0 :20.6' Curre'nt account balance/GOP -5:2 -77 -. -46 .D esIC Investment interest paymnents/GDP 4 6 4.68 4.5 . 25 Total debt/GOP. 2 13 5. 7 savings To tal debt serviceleXports 19:6 28:4 20.2 :16.5 Present value of debt/GOP 5. Present value of debt/exports .106.9 - 1910-90, 1990-00 1999. 2000' 2000-04 idbens (a vehige annual.growlh) GOP ~~~~ ~~~ ~~~~2.0 05 0,4 068 18 - Jamalca GODP per capita 0.8 .00 4 -1:3 -0:1 1 1:~ iLower-middle-Income group -Eip6rts 6fgoods and servces . . 5. 0.3 0.2 44 42.! STRUCTURE of the ECONOMY 1980 1990 1999 2000 ~Growth of Investment and GDP(% I(% of GDP) Agriculture 8.2 6.5 7.0 6.5 Industry 38.3 43.2 30.8 31.3 0 Manufacturing 16.6 19.5 13.5 13.4 Dss N j4 s Services .53.5 50.4 62.2 62.2 -5t N,. Private consumption 63.8 62.2 67.5 67.9 .rs I General govemment consumption 20.2 14.0 16.9 16.2 - GDI -* GDP Imports ofgoods and services 51.0 56.1 52.0 55.1 1980-90 1990400 1999 2000 Growth of exports and Imports I(%) (average annual growth) Agriculture 0.6 1.9 1.3 -11.2 20 Industry 2.4 -0.5 -0.3 0.2 10 Manufacturing 2.7 -1.9 -0.9 0.7 0 Services 1.8 1.1 -0.8 3.0 .rs ] 95 wXgo,.t 00 Private consumption 4.3 -1.1 -2.6 2.7 -2 General government consumption 6.2 2.7 -2.6 -2.1 -30 Gross domestic investment -0.1 4.4 0.1 0.4 - Exports ---mports Imports of pods and services 9.2 1.1 -2.4 4.3 Note: 2000 data are preliminary estimates. -The diamonds show four key indicators In the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete. -50 - Jamaica PRICES and GOVERNMENT FINANCE Domest ic prices 1980 1990 1999 2000 Inflation (%) (% change) 40 Consumer prices 27.0 22.0 8.4 6.9 ao Implicit GDP deflator 18.3 23.7 7.7 10.6 20 Government finanre 10 (%of GDP, indudes current grants) o Current revenue 24.7 30.4 30.4 31.0 95 96 97 99 99 00 Current budget balance .. 5.9 -2.4 1.1 -GDP deflator CPI Overall surplus/deficit -15.5 2.6 -4.3 -1.0 TRADE (US$ mWilions) 1980 1990 1999 2000 Export and Import levels (USS mill.) Total exports (fob) 963 1,157 1,247 1,293 4,00 Alumina 537 625 627 744 Sawdte 198 103 56 46 35000 Manufactures 57 71 42 49 Total Imports (cif) 1,170 1,850 2,960 3,192 2.000 Food 72 126 274 263 1.000 Fuel and energV 447 404 416 585 Capital goods 198 580 470 509 0 Exportprlcelndex(1995-100) 52 86 113 118 94 95 9r 97 se 99 00 Importpoicelndex(1995=i00) 52 86 113 117 *iEsports *Imports Termsof trade (1995-100) 100 100 100 101 BALANCE of PAYMENTS (UJS$ mIllions) 1980 1990 1999 2000 Current account balance to GDP (%) Exports of goods and services 1,369 2,247 3,367 3,250 2 Imports of goods and services 1,368' 2,340 3,928 3,973 Resource balance 1 -93 -562 -723 0 Net income -229 -506 -333 -410 94 Net current transfers 91 271 649 780 -2 Current account balance -138 -328 -245 -353 Financing items (net) 58 408 123 643 Changes In net reserves 79 -80 122 -290 4 Memo: Reserves Including gold (US$ millions) . 801 1,082 Conversion rate (DEC, local/US$) 1.8 7.2 40.1 43.3 EXTERNAL DEBT and RESOURCE FLOWS 1980 1990 1999 2000 (US$ rn/llons) Composition of 2000 debt (USS mill.) Total debt outstanding and disbursed 1,913 4,674 3,913 4,279 IBRD 176 672 393 415 A: 415 IDA 0 0 0 0 G:748 C: 60 Total debt service 280 662 732 577 IBRD 18 120 99 83 IDA 0 0 0 0 j ComposIton of net resource flows D- 708 Officialgrants 13 117 24 . Official creditors 280 41 -104 29 Private creditors -19 -46 -99 442 F: 1,263 Foreign direct investment 28 138 524 E: 1,085 Portfolio equity 0 0 0 World Bank program Commitments 0 60 0 75 A - IBRD E - Bilateral Disbursements 55 35 64 98 B - IDA D - Other multilateral F - Private Principal repayments 6 62 75 61 c - IMF G - Short-term Net flows 50 -27 -11 37 Interest payments 13 58 24 22 Net transfers 37 -85 -35 1 5 Development Economics 9/17/01 - 51 - Additional Annex 1 1: JSIF Organization and Project Cycle JAMAICA: National Community Development Project Chart 1. JSIF Organization 11mi A ------------ FRrar an mart qmr | _ llks _ 7irigalk lifamTtc Dep T E Hmn RrnM qwkrGXdr Rve 2~~~~~~~~~~~~~~~~~~~~e M BE Tea Tn f ri r ae ., = Sa 9xaTks O0bs ario AdTisbQ Q SS* " : a _ . aRx~~~~~~~~~~~~oior 9- . .1 Wav i_ ~~~~~~~~~~~~~ker J | ~~~~~~~~~~~~~~~Tenl |d -52 - Chart 2. Relationship among Units and Departments with JSIF REDD i Senior researcher/ | Manager researcher -_ poGicyanalyst . COMMUNIT administator ffie / \ / Ea~~st Team contractinot feaf icarOfficers Technical ofaficers SffiaceOfiseyr Social Officers lAengiatfdvey oiantity surveyor offera f mministrative o MIS cer Manager _ systems engineer programmer= PROJECIS Finance and + Adpionistratio n ~ Advisr Manager| pcain _U fc oaicer Projects Coordinator c financial controller sTechmcal financial analyst l | Social finance clerk Environmena contracts co- |Admin. Operations Manager ordinator/special officer contracts of ficerl contracting officersl cost analysis of ficers l legal of ficer. human resources / pecial i officer Pirojects \ L I of fice administrator Li1 5 clerks TeamiL receptionist _cDordinator office attendants -! t sodal officers drivers administrators (co-opt tech \:prise as needed) - 53 - Box 1: Eligibility Criteria Forr Community Projects . Community must be poi,r '* Poe muWbhon`the$JSF mMia. * Pict rust esond to a 0owdev*O e t need $suPorted by he nmajiyt ff .e * Proect mu$t e proposed by a commnunity Pawed geoug, --ther on its own or in. harthr lp with NGO-, snice 'lubs, prOvace Setor (if ocIl go wment eriftes. * pr1v. mV dp a ccatMjbtkbcn to the Ial cost ofthe pro in cash 6rtdd and Oo ipainln the faty/WWces. Summary of Community Project Timelines 1. "d gappiain onigoing 22.1SZ?'a31nipg licatins ' Mn 2 weeks Max 10 weeks (where commurty plan weak and powety status not known) " 3. Realstron > 1N ntore thn 10 weeks fom applicabon (i.e. screerdng perod) , 4. Pe *Conlp oev nt Min 2 weeks Max 4 weft IL PrOjct;Desfgnand Reztw Max iO weeks ( allows for contracting desIgn xonsuttants, ! provision of design and community | sgn Off) (d. Pi°Se Approvat Min I week Max 6 weeks - Whee portY nde & rmmuniky 94.12 VAN" 'plan at y exst MMP 2;1 W_A * Where povety Ind% Bicd (xlnmu*tY _fian do e K,st MM __VON" ?. fet; jmdenzerwo mln 7 weeks average 22 weeks (4 month constucoon) max 3B weeks ( 8 month onsbtrtn) raftfrom a A aw4o 1 roject Comp!ehon Defects liability penod (generally 6 motst) plts 1 month Th- s fthorn -i-i 9 ois Mlh (051M as sa) 21 w . cmpkn G Ida (IS) 46 w_s f 4aE wades °9. EIuatonardSupport Varlab!e up to 2 years post final - m5letion -54 - Chart 3: The Community Project Cycle 9.1.~~~~~~~~~~~~~~~~~~~~~~~~~~~ 3ii d ebr iconwleut e q ploaion? 2.Z. Projectt oe ? if IF'n-'StCoey Inelex Lusq Pomty A*. Cow-tile rr4 iy aIbff , thI m to be S- PoWrtyKIREX faSilfltod wiehin t8 weeh beall no pe*Cor poplicit* 2.3. _tIi y tuud suma?y7 -do"ab po co have pnW7,. 4s prtvcit o sdEd*rt odnotfiO dew slf *Vq-,pri*it7 83 ).If Wg, wty Planing '-. shvnd with As to be fbidtd by -co.,yInt. SIeor otheis within 8 wzoks 2.4. Othr fundSou . 4f other fuxds linrkd Offfor . 10niie1Ypow conumwni*yo# infoti4 to siwK an 7cow.I~ivph vpicirndidtioKn form with iowtfrom S)C & 6fqr recoiwprotn ce,enTng Comeite decks . nPpro6 TOR$ fe- deseign . -JI .ovunt vsto- t ei sacoof betdesti&ps = EIrtm, _ _i ~ Eqrt, collect teh specs. #t'rctde'sign suns t:n coi reetm - t Scening 56 5inC. ti 55- Wkecet TOR, inckding 5wr1gc 1 nNwatwss. avtl risk * per7iassion. fj *iy i& A pWinity dig ROOO i f unfeasibk 4bd 2it~ e of M^pinent oppl~~~~~~"kaicdtn by verifiabtj potr- -55 - 6. Project Approval 7 roject inpleme on -small projects approved by -contracts for services/ Management Review Committee procurement of goods (community -big projects channeled through contracts/3Q/NCB for Management Review, Board construction rotational use of Projects Committee and Board pre-qual, training consultants) -Project information meeting with community -Contract signing ceremony -First site meeting -monitor Supervisors for adherence to TOR -SDC deliver maintenance training 9. Evaluation and support for C sustained use, operations and 8. Project Completfon maintenance-dcrtoofpctclomein mainteconduct CBO assessment -monitor defects liability period -SDC conduct CBO assessment -SDCcompleteall maintenance community maintenonce committee training & supports community role -communityaiitesopee selfi during defects liability period -communities complete self -Final Completion Meeting in evaluation questionnaires (SEQ) 6 Com pletio Meeting in months after final completion Community, identification of actions months~~ ~ c.te fia co.peto to be taken before completion will -JSIF makes 2 follow up visits to t monitor use, operations & ~~be accepted monitor use, operetions -Community sign off on completion mamntenance -Periodic Impact Evaluation -Evaluation of project implementors -formal transfer learning into action with community input session by JSIF/SDC annually -Handing Over and Cradution - active promotion of best practices ceremony externally -56- Additional Annex 12: JSIF Environmental Guidelines JAMAICA: National Community Development Project Jamaica Social Investment Fund Environmental Guidelines 1.0 Overview The Jamaica Social Investment Fund Environmental Guidelines are designed to ensure that the Guiding prindple of Environmental Soundness of all JSIF infrastructure projects in adhered to and these guidelines form an annex to the JSIF Operabons Manual. This principle states that: "Projects funded by JSIF must conform with the Govemment of Jamaica's Environmental Regulations and have minimum negative impact on the natural and cultural environmenr ( JSIF Operations Manual July 2002, Chapter 2, Guiding Principles") The guidelines also call for an integrated approach to project design and implementation, where the analysis of environmental issues Is not an "add-on" activity, but an integral part of the technical soundness of the project. The guidelines present over-riding environmental principles and the regulations that project must adhere to as general guidelines as well as spedflc guidelines for the design and implementation of specific project types, according to each stage of the JSIF project cycle. As these guidelines form part of operational procedures, they also assume the other guiding principles of community participation and consultation in the process, technical soundness, transfer of leaming, sustainable development focus, poverty eradication and cost-effectiveness. These guidelines have been developed for use by the Technical Officers involved in the design and implementation of JSIF Sub-Projects and form part of the technical analysis processes required for successful implementation of JSIF Interventions. 1.1 A. JSIF Project Menu These guidelines apply to the full list of infrastructure project types accommodated under the JSIF Sub-project menu as detailed in Chapter 4, Box 3 of the Operations Manual, which cover the construction, rehabilitation and equipping of: Basic schools, primary schools and all age schools * Small roads in agricultural areas, bridge approaches, small bridges, foot bridges, retaining walls, drains * Urban access roads Gullies * Small scale water schemes (<2000 people) * Ministry of Health approved Health Centres (Types 1 and 2) [ Type 1 and 2 Health Centres provide services but do not admit patients, persons with illnesses requiring admission are sent to regional hospitals. The services offered are as follows: Type 1 - Serves 2,000 - 4,000 people. Provides: 1. Matemal and child helath services (antenatal. postnatal, child health, immunization, nutrition monitoring and support)2. Health promotion/educatoin and community participation Type 2 - As in Type 1 plus 1. Health promotion and illness prevention (veterinary public health and foold, hygiene/food handlers clinics, water quality, solid liquid and excreta disposal) 2. Surveillance and Disease Control (specific communicatble diseases e.g. TB and Hansens, malaria and childhood diarrhoeal disease, STDs, other communicable diseases, rheumatic fever prophyfaxis) 3. Curative Services (common medical conditions, STDs, acutre and chronic diseases 4. Dental services (visiting) Source: Ministry of Health ] - 57 - . Community Resource Centres * Skills Training Centres and Business Incubators * Fadlities for Community Tourism development * Play and recreation areas in inner-cities * Small sports facilities * Offices/meeting facilities/income generation facilities for inner-dty CBOs The Jamaica Social Investment Fund does not Implement housing projects or projects that involve the relocation of individuals or communities. B. Precautionary measure in project selection All JSIF infrastructure sub-projects will comply with donor requirements environmental management for projects assigned. As such: (i) any World Bank-financed sub-projects that will result in conversion of natural habitats will be evaluated to ensure compliance with the World Bank's Natural Habitats Operational Policy 4.04. (ii) for any World Bank-financed sub-projects that procure pesticides or result in the increased use of pesticides, an appropriate Pesticides Management Plan will be developed, as required by the World Bank's Pest Management Operational Policy 4.09, which would include non-chemical measures for pest management and guidelines for proper selection, application, storage, handling, transport, and disposal of pesticides. (iii) sub-projects which belong to the World Bank's environmental category 'A', according to the World Bank's Operational Policy 4.01, will be included in a 'negative list' of sub-projects which will not be eligbible for financing by the World Bank. This negative list applicable will include such sub-projects as: * Construction of any new roads. * Major upgrading or realignment of roads ("major" means changing the road category, such as from seasonal to all-weather or secondary to primary; adding new lanes; or changing road surface) * Improvement and rehabilitation of any existing roads within 5 kilometers of any protected areas or any other areas of natural forest * Dam construction, reconstruction, rehabilitation or strengthening. * Irrigation works with incremental command areas exceeding 200 hectares * Flood protection, sewage treatment, agricultural drainage, or other works which could adversely affect wetlands or natural waterways, either through pollution or hydrological changes. * Use of pesticides on the World Health Organization's Hazardous Pesticides List which are not recommended. * Aquaculture using non-native species in natural water bodies. * Works which would adversely affect cultural property, including archaeological and historical sites * Activities that negatively affect natural protected areas recognized by federal, state or municipal governments (or buffer zones thereof) * Land reclamation such as drainage of wetlands or filling of water bodies to create land. * Purchase or lease of land which has unclear titles * Land clearance and leveling (when affecting critical natural habitats and natural land contours, natural habitats for this purpose being those water or land areas where most of the original plant and animal species are still present). * Hazardous waste management and disposal as well as manufacture, transport and use of hazardous, and/or toxic materials (except small amounts of solvents, degreasing materials, paints, fuels, and the like used during construction). 1.2 7Te National Legal and Institutional context - Environmental Management in Jamaica - 58 - "The Ministry of Land and the Environment is the Ministry with the executive mandate to govem Jamaica's natural environment. The most recent initiative of the govemment was recognition that urban and rural planning must be done within the context of the wider thrust of environmental management, and to this end government has established the National Environment and Planning Agency. This new agency represents an amalgamation of the Natural Resources Conservation Authority which has a statutory mandate for the conservation, protection and proper management of the natural resources of Jamaica; the Town and Country Planning Authority which has the statutory mandate to ensure the orderly planning of Jamaica and the Land Development and Utilization Commission with a statutory mandate to ensure that prime agricultural lands are kept in agricultural production in the interests of inter alia food security and self sustainability'. 'Jamaica's Commitment To The Conservabon And Management Of Natural Resources Ten Years in Retrospect'; Unpublished Paper, National Environmental and Planning Agency; Kingston, Jamaica The legislation relevant to projects of the Jamaica Social Investment Fund are: * The Natural Resource Conservation Authority Act * The Public Health Act * The Clean Air Act * The National Heritage Trust Act * The Town and Country Planning Act * The Local Improvements act * The Land Development and Utilisation Act * The Water Resources Authority Act There are also a number of policies being developed which will have application in JSIF interventions. These indude: * Revision of the Jamaica National Environmental Action Plan * The Draft National Environmental Policy * Towards a National Policy and Strategy on Environmental Management Systems * The National Sustainable Development Plan An Environmental Impact Assessment process has been put in place by NEPA with clear guidelines on implementing EIAs under the NRCA Act. The Act requires an environmental impact assessment of developments with in prescribed areas. Under diredives from the National Policy level, JSIF sub-projects will require permits under the Permit and Ucence System as follows: Building permission to expand buildings License to discharge trade effluent and sewage Permits for Eco-tourism projects Permits for Pipelines and conveyers Permits for Solid Waste Treatment and disposal facilities 1.3 JSIF and Environmental Management Environmental management within the JSIF falls under the purview of the Operations Department as part of the Project Development and Implementation process, under the Policy direcions approved by the Board of Directors. Technical Officers within the Operations Department, under the supervision of the Operations Manager - 59 - and under the guidance of the Environmental Advisor are therefore responsible for ensuring the maintenance of environmental standards throughout the Project Cyde, based on these guidelines. 1.4 The Environmental Impact of ISIF projects Positive There are a number of positive impacts of JSIF sub-projects to physical environmental in the communities in which they are situated. In keeping with principles of sustainable development and holistic planning where the environment is defined as the physical, biological, social and economic factors of life, the projects will have the effect of: i. Eliminating environmental safety hazards from deteriorating structures ii. Improving environmental health through water, sanitation and health infrastructure iii. The creation of temporary employment opportunities and long-term Income generation iv. The provision of social services that were previously not available v. Improved learning environments and access to education and non-formal training vi. Improved living conditions In poor communities Negative Most of the negative impacts assodated with Sub-projects are likely to occur during construction and rehabilitative works on roads, buildings, drainage, water and sanitation projects and where designs are inadequate. These tend to be minor and are easily identified and mitigated and determination of these potential impact forms and integral part of the analysis of the technical feasibility of the projects. In keeping with the principles of technical and environmental soundness however, adequate technical review, through peer review and using technical advisors, must take place to ensure adequacy of designs. Negative impacts will also occur during operation particularly with relation to disposal of solid and sewage waste, where there is improper operational and maintenance procedures in place. These issues must also be factored into the technical analysis of the projects at the design phase. Even with adequate planning and design, there are risks of impacts during implementation where guidelines are not followed at a supervisory level. All contracts and Terms of Reference for formulators, supervisors and contractors must therefore dearly show deliverables with the relation to implementation of mandated environmental procedures. Potential impacts indude: i. Unnecessary removal of vegetation cover ii. Creation of soil slippage and soil erosion conditions from excavation and inappropriate placing of excavated matter on hillslopes iii. Blockage of drains from construction waste and excavated materials iv. Water contamination during construction on all project types or during operation of inadequate sewage faciliffes v. Excessive run-off where drainage on roads and off buildings is inadequate. vi. Inappropriate disposal of solid waste vii. Interruption of vehicular and pedestrian traffic flow or access to amenities. 2.0 General Guidelines for Infrastructure Projects I. Proiect Desian 1. The project must be designed to minimize tree taking and damaging. When the project will result in dearing of land or cutting trees, at least the same number of trees must be replanted on or near - 60 - the facility. 2. Site Selection The land on which a building is to be located must comply with the zoning requirements of the National Environmental Planning Agency and relevant planning legislation. It must also be well drained, aesthetically landscaped and secure, especially if very small children are involved. All relevant permits and no objections from relevant agendes must be obtained. (i) In rehabilitation projects, when an existing building does not comply with the guideline above. Rehabilitation must, whenever possible include drainage, security and landscape of the area as well as the building itself and testing for hazardous materials such as asbestos and lead; (ii) In rehabilitation projects, when an existing building is located on unsuitable land, the JSIF shall not approve the project. The following are considered to be unsuitable lands: (a) land resulted from flll up with any refuse matter that is contaminated by human or animal excreta or any other hazardous material; (b) wetlands and flood plains; (c) Protected Areas where approval has not been obtained (d) steep (more than 30% declivity) and unstable slopes susceptible to slippage. 3. Any road rehabilitation project must comply with the minimum technical standards of the relevant Parish authority to which the road will be handed over to and required no objections obtained. 4. In rehabilitation/expansion or construction projects the technical and flnancial feasibility of using traditional architecture and simple technologies and materials must be assessed, and simple, traditional style and materials adopted when suitable. A comparative assessment of environmentally friendly materials and techniques should also be adopted where suitable, based on comparisons of techniques and long-term cost-benefit analysis. This applies to any building, road, water and sanitation project. 5. All buildings should be well designed to provide security and at the same time to be attractive and well ventilated and make best use of natural lighting. 6. Adequate space and fadlities for recreation inside and outside of a school must be designed accordingly and whenever possible, budget for its construction must be ensured in the project. 7. Sanitary Systems Appropriate sanitation systems must be designed and installed; proper disposal systems must be functioning: it must also be determined if there is a need to provide training in environmental awareness to users Awareness by users of sanitary systems is required whenever new systems are installed which are different from the ones they are used to. This is particularly needed when flushing toilets are introduced to new users. In many cases it has been reported that flush toilets were used to grow plants because new users did not get accustomed to using them. (i) Sanitary facilities must be suitable to the local and ground conditions. (ii) Sanitary facilities must be provided in sufficient number (iii) In order to avoid surface water contamination, when public facilities for - 61 - sewage treatment are not provided, effluent should not be discharged into surface waters without adequate treatnent: to avoid ground water contamination, effluent must be treated in a septic tank (minimum efficiency of 70% reduction of BOD); the absorption tank is not efficient in preventing groundwater contamination. (iv) The site where the sanitary facility is to be installed must have a low water table. (v) If sanitary facilities use alternative technologies such as Ventilated Improved Pits (VIP) latrines and others, it must be located at least 15 meters from existing buildings and houses, in the opposite direction of the prevailing winds, to prevent odours and undesirable impacts. (vi) When an external latrine vent pipe exists, it must be located at the sunny side of the latrine and painted black, to produce an updraft, due to the heating of the air inside the vent: an extemal cover at the top of the vent pipe will prevent flies and mosquitoes from coming out the vent and therefore will reduce the risk of contamination. (vii) All required approval and permits must be obtained and the relevant agencies (NWC, NEPA etc) informed and involved in the development of the project 8. Adequate water supply must be provided: (i) Adequate structures for water storage must be provided. (ii) Rainwater can be collected, stored and used for sanitary facilities. (iii) The storage structure must be located (about 25 meters) from, the absorption tank, septic tank or other similar fadlity, and upstream the direction of the water table flow If the storage facility is underground it can be contaminated by groundwater contaminated with effluent or by effluent directly, in case an absorption tank is located nearby. 9. Haard Mitiaation (i) Fire Control: Safety precautions against fire must be assessed, implemented, documented and functional at all times and water supply for fire hoses must be secured. Note that: (a) Evacuation and fire extinguishing procedures must be approved by the fire department or a similar institution (b) Fire disaster preparedness should be addressed in organisational strengthening exercises and in maintenance training (ii) Natural disaster mitigation: The design of all infrastructure projects must accommodate the potential occurrence of a natural disaster and as such include the necessary mitigation measures to ensure minimum damage from disaster events. This includes but not exclusive to: (a) Earthquake mitigation: Designs must uphold the minimum building standards recommended for Jamaica as indicated by the Building Code. (b) Storm mitigation: This includes heavy rain, storm surges, tropical storms, hurricanes mitigation measures for strong winds and high levels of precipitation and runoff. Road and building designs must therefore have adequate drainage measures and buildings and other structures must maintain the minimum standards under the Building Code for wind resistance. (iii) Safety: Care must be taken to ensure that designs promote a safe work site and safe operation - 62 - of the facility. The following must be considered: (a) Materials: No toxic paints or construcion materials (e.g., lead-based paints, amianthus, asbestos) may be used within the buildings or on water supply projects (b) Site Safety: Designs must factor in terrain and other potential areas of danger that my lead to an unsafe work site. Where there is potential for danger on a site, cautions and recommendations for safe implementation must be outlined. II. Constructon 10. Dust and noise during construction works should be minimised: (i) In residential areas, if works are conducted in the dry season, the contractor must water the exposed area and construction materials either stored or transported must be covered to avoid particulate matter to be blown by the wind (ii) Communities must be given adequate notice of intended construcion and potential for dust and blockage of access to roads or community facilities during construction (iii) When sand is used to fill in land or to level a site it must be capped with clay turf, whenever possible. If this solution Is not viable, spraying the area with water can minimize dust blown by the wind. (iv) Construction work must be limited to daylight hours, from approximately 6:00 am to 8:00 pm, or according to local or specific regulations. (v) Blasting to break up rocks will be conducted during daylight and residents will be advised when blasting will occur. The local regulatory authority should certify the person conducting this activity. 11. Adequate measures for preventing siltation of watercourses by run-off must be implemented, such as silt screens and straw devices, among others. 12. Safety measures must be taken to prevent accidents involving workers and members of the community. 13. Clearing of trees and other vegetation must be minimal 14. All waste must be disposed of in environmentally sound ways and at dumpsites approved by the relevant Parks and Markets Authority. 15. All sewage disposal facilities are required to be adequate and fully functional and the end of construcion 16. Penalties are to be instituted for breach of guidelines mandated by JSIF III. ODeration and Maintenance 13. Sanitary Facilities: (i) Environmental awareness and maintenance training to users will be provided on all sanitation projects. (ii) Latrine pits, absorption tanks or septic tanks must be cleaned regularly, according to JSIF's Operation and Maintenance Manual for infrastructure project. Where technologies such as biodigesters or - 63 - composting toilets are being used, specific training must take place to ensure ongoing functioning of these systems. 14. Solid Waste Manaaement: (l) Solid waste will be collected and disposed of in an appropriate manner and on a regular basis, according to the JSIF's Operation and Maintenance Manual for infrastructure projects. (ii) Wastes must be. stored in a covered garbage storage unit, designed in accordance to current NEPA guidelines and protected from the access by animals. (iii) When appropriate landfill is not provided by the local government or the sponsor community, the JSIF will develop a waste management manual provide the sponsor community with (which will become part of the Operation and Maintenance Manual). This manual will indude self-sustained waste management plans that indudes alternative solutions for adequate disposal of organic wastes and garbage, and potential uses for recyded materials, waste collection campaigns and other environmental awareness activities to be developed with the students and the community Burming or, covering with earth are common practice for waste disposal in rural areas. The appropriate altemative will be provided in the JSIF Operation & Maintenance Manual.. 15. Buildings and other ihysical structures: (i) Maintenance training must be done with users to ensure care of the structure and avoidance of physical danger due to deterioration or lack of maintenance, particularly in the case of schools, community centres, water supplies and small bridges. 3.0 Specific Guidelines by Project Sub-type All Project Sub-types assume the General Guidelines in addition to the type-spedfic guidelines listed below and the procedure required during each stage of the Project Cyde as outlined in Section 4.0. 1. Roads Design Phase 1. Roads must be designed and constructed so that they do not impede the free flow of intervening water ways: (i) At design phase, the grade of road must be established above the level of the existing drains (ii) In case the existing road crosses a waterway, the design for rehabilitation must indude culverts to allow the free flow of water. Size of culverts must be designed to accommodate a 30-year storm event. 2. Capped and uncapped roads must be designed and constructed so that water does not stand over long periods either on the road (in surface depressions) or at the sides or base. (i) In case the size of the existing drains are not sufficient to ensure free water flow of a 30 year storm event, their enlargement must be induded in the rehabilitation design; (ii) If existing drains are blocked byvegetation or silt, dearing must be included In the rehabilitation project. -64- 3. Bridges design must include re-vegetation of shoulders using native vegetation to reduce erosion. 4. The shoulder declivity must be designed according to the soil characteristics. Construction Phase 5. Construcion works must comply with the JSIF's General Environmental Guidelines and implemented using JSIF's Environmental Handbook for Construction Supervision and monitoring and must ensure the following: (i) Defined grades must be correcly set in place (ii) No depressions must be left in the surface of the road (iii) Drains must be unblocked and correctly sized, as in the project design. 6. Erosion control measures must be implemented accordingly to project design: (i) Exposed road shoulders must be vegetated early with native species, appropriate to the site to reduce the impact of raindrop erosion (ii) Erosion (silt/sediment) barriers must be in place and functional throughout construction. 7. There must be a satisfactory system of regular collecion and disposal of waste and garbage; during construction works the contractor must ensure that: (i) Materials are stored in such a way that will not be carried by rains and/or run-off waters into the drains (ii) Garbage and construction wastes are collected and disposed in appropriate sites in a way that ensure that they will not be carried into the drains or discharged into wetlands or in sensitive vegetation communities; (iii) Measures are implemented to avoid spills, of lubricants, fuels and other chemicals, and in the event of an accidental spill, clean up is clone immediately (iv) After construction works are conduded the contractor must clear the area from all equipment, machines and wastes (liquids or solid) (v) Whenever the sponsoring community does not provide an adequate site for waste disposal, the contractor shall follow the guidelines JSIF' will develop for waste disposal Operation and Maintenance 8. Operations and Maintenance should follow JSIF's Operational and Maintenance Manual for Infrastructure Projects. Particular attention needs to be paid to: i. Erosion control ii. Drainage iii. Clearing and mitigating against land-slippage (within the capabilities of the community e.g. minor retaining walls, major works are the responsibility of the relevant authority. - 65 - 2. Infirmaries. Health Centres and Similar Facilities Project Design 1. Ministry of Health Standards for Design of Type 1 and 2 Health Centres must be applied to all JSIF Health Centre projects 2. Optimum sanitation must be maintained at all times. Cleanliness of utensils and equipment is paramount: (i) Water supply fadlities must include running water. When public water supply is not available on site, the project must consider, whenever' technical and economically feasible, drilling a well or other alternative to provide potable water to the centre, induding storage of rain water and roof drain water. (ii) When public water supply is not available and no other altemative is technically and economically feasible, the JSIF must consider not finandng the project. (iii) Medical wastes must be disposed though approved Ministry of Health fadlities or techniques. Construction Phase 3. Construction works must comply with the JSIF's General Environmental Guidelines and implemented using JSIF's Environmental Handbook for Construction Supervision and Monitoring. Opemtion and Maintenance 4. Operations and Maintenance should follow JSIFs Operational and Maintenance Manual for Infrastructure Projects. Particular attention needs to be paid to: i. Maintenance of ventilation i.e. functioning secure windows ii. Pest control - particularly In bathrooms and kitchen/dining area. iii. Landscaping - ensuring safe, aesthetically pleasing surroundings iv. Disaster preparedness - for hurricanes, flooding and fire v. Waste disposal - safe disposal of medical and other wastes 3. Sanitary Facilities (latrines) Site Selection and Project Design 1. Pit latrines should be avoided due to (i) odour and insect (flies and mosquitoes) problems; (ii) risks of contamination by pathogens (virus, protozoa and helminths) transmitted by excreta; (iii) risk of small children falling into pits; (iv) where the water table is high 2. Pit latrines with adequately designed septic tanks and absorption pits are recommended when there is (i) inadequate water supply to support water dosets (ii) where soil absorption rates ensure proper and safe diffusion of waste water (ii) where there is no potential for contamination of ground water supplies. - 66 - 3. Other alternative sanitation technologies, such as ventilated improved latrines (VIP latrines), should be considered appropriate only when flushing toilets are not technically and economically feasible. 4. The sanitary fadlity must be installed in a site that (i) has a low water table (ii) is located down stream any water body source: (iii) is located at least 100 meters form any water body. Construction Phase 5. Construction works must comply with the JSIFs General Environmental Guidelines and JSIF's Environmental Handbook for Construction Supervision and monitoring. Operation and Maintenance 6. Operation & maintenance must comply with the General guidelines presented as well as with JSIFs Manual for Operation and Maintenance of Infrastructure Projects. 4. Sanitary Facilities (community showers) Site selection andproject design 1. Before the sanitary fadlity is designed it must be ensured that the site where it is to be installed is located downstream any water body source. 2. Community showers must be located at least 15 meters from existing buildings and houses. 3. The community shower must be installed inside a well-ventilated and well-drained super structure. 4. The area surrounding the superstructure must be adequately landscaped, secure and well drained. 5. The size and number of showers must comply with JSIFs design guidelines Constucion Phase 6. Construction works must comply with the JSIF's General Environmental Guidelines and JSIFs Environmental Handbook for Construction supervision and Monitoring. Operation and Maintenance 7. Operations and Maintenance should follow JSIF's Operational and Maintenance Manual for Infrastructure Projects. Particular attention needs to be paid to: a. Maintenance of plumbing and water supply b. Cleanliness of fadlity c. Maintenance of security measures 5. Drainage - 67 - Project Design 1. Project design must follow the general guidelines as well as the specified procedures outlines for appraisal of projects in Section 4.0. Construction Phase 2. Construction works must comply with the JSIFs General Environmental Guidelines and JSIFs Environmental Handbook for Construction Supervision and Monitoring. 3. Vegetation and silt materials recovered from dredging must be securely, disposed, in order to avoid being brought back to canals and drains, by runoff.and rains. 4. During dredging, unauthorised persons must be prevented from approaching working areas by the installation of protecting devices, in order to avoid or minimise risks of accidents involving the community. 6. Water Proiects 1. It must be verified that requirements for protecting the water source from contamination are adopted. 2. The delivery of safe potable water must be ensured: materials used in the pipeline must ensure that no leaks will threaten the delivery of safe potable water. a. Site selection and protect design 3. Crater source must be located upstream any possible source of crater pollution and protected from contamination by a superstructure. 4. Project Application must require physical and bacteriological analysis of the water from the water source, which is intended to be used. 5. In case the water is not adequate for human consumption, the JSIF must consider not finandng the project. b. Construction phase Excavation works must be made whenever possible during the dry season, to avoid erosion and siltation of drainage canals or other water bodies in the area. 7. During construction works, unauthorised persons must be prevented from approaching working areas by the installation of protecting devices, in order to avoid or minimize risks of acddents involving the community. c. Operation and Maintenance 9. All infra and superstructure must be permanently maintained in adequate operating condiffons. 9. Water source and water pipes must be continuously monitored to ensure that no contamination has occurred. -68 - 7. Apro-Drocessina Facilities 1. Waste products must not be deposited In watercourses, wetlands or in sensitive vegetation communities. 2. Waste Crater and processing effluent must be treated to reduce contaminants and not be discharged directly to water bodies, wetlands, or in sensitive vegetation communities. - 69 - 4.0 Environmental monitoring and the JSIF Project Cycle Addressing environmental issues will form an integral part of the technical analysis of every JSIF infrastructure project throughout the project cycle. The following is a breakdown of the environmental review inputs in the project cycle, and the relevant environmental appraisal procedures. figure 1: Diagram of Environmental Innut:s in the JSIF Community Proiect CvciF . ;,nera '. __. . applic~atioDs -apiain El> 3X G < g-. registratn; 1.1 Active pr1 2.1 Preliinaffraty 3 o motion to Quartile ' 2.2 Povprty Status? or rejection 4 2eqiivale '2.3 Conmnunity Planned >. , , < ~~~~~~~~Priorityll?a i 6. 5. ~~~~~~Project design anid mVO Poet ocp Project Input Into Project Design , 4 Project Concept.,. ER, EA or EtA conducted & Field visit (to include" 'Board Submissio mltigation measures environniental documernt " identlfied baseW on results r i spar of Environmental 4. Included In, Design tecnia asis consultants TOR ieA ril analysis /Prqj,Ct o conceptbref Projec implementaon 8 Project Con" ipletion 9. Post-ProJet Activities Conumcung. Eauto n upr o Environmental mitigation . Sus ed vise, popert fbr incorporated in contracts . oe , o a rstainenance Sf* SSiS'rOpt: ' ' ' 9 K w | Mo Aoui and lg,ntionpa,nsd -m, htnanc. Supervision: -i iijao~ln Mlonitering or and reporting on "Post-project teichnicali mitigation plans tvlation° r - 70 - Project Concept Development During the project concept development field visit, project officers are to determine the type of environmental appraisal necessary for each project. This determination is to be done using the generalized screening environmental checklist (Annex 1) as part of the technical evaluation of the project. The checidist Indicates which one of four possible environmental approaches is to be taken for each project. These possible approaches are: No further environmental appraisal. An Environmental Review (ER). * An Environmental Assessment (EA). * An Environmental Impact Assessment (EIA). The chosen approach for each project will then be undertaken durng the appraisal of the project. The dedsion on an approach at the screening level will be guided by: * The proximity to and potential impact on a natural habitat (particularly that of animals of importance) a Protected Area or water course * Deterrnination of the height of the water table for potential effect on all types of construction and on design and operation of sewage systems. * Potential for increased run-off, soil erosion, stream siltation and excessive dust at various stages of the project * General analysis of the terrain induding slope-angle, rock and soil type and slope stability, vegetation cover * General analysis of localized climatic conditions * Available methods of solid and liquid waste * Vulnerability of the site to natural disasters Project Design Each of the possible environmental appraisal procedures is described below. An Environmental Review (ER) This is a basic environmental assessment, to be conducted using a generic review form applicable to all types of projects requiring an ER, this can be done during the project concept development field visit. The completed form will indicate the possible negative environmental impacts of the project, and will prescribe the necessary mitigation measures to be employed. Field officers are to develop the appropriate mitigation measures with the help of the generalized list of mitigation measures provided on returning to the office. All completed ER forms with their proposed mitigation measures are to be reviewed and approved by the Environmental Advisor and place on the project file. An ER is not meant to be a lengthy or time-onsuming process, and is to be integrated into sodal and technical appraisal procedures. An Environmental Assessment (EA) This is a more detailed environmental review, and takes the format of a semi-structured report. The EA is project type-specific, and is to be conducted using the EA form. The completed report gives a very brief overview of the project and describes the physical, biological and socio-economic environments related to the project. The EA form itemizes the activities assodated with the project, their possible impacts and their appropriate mitigation measures. The information needed to formulate the necessary mitigation measure is to be obtained from the corresponding action-impact-mitigation form. All completed EA forms with their proposed mitigation measures are to be reviewed and approved by the Environmental Advisor. A field visit is required for an EA, and the completion of an EA form requires special time allocation. - 71 - Information outputs from the EA are to be provided to the Design Consultant for reference, as an appendix to the Terms of Reference. An Environmental Impact Assessment (EIA) This Is a detailed and comprehensive process that usually requires the efforts of a multi-disciplinary team for an explicit analysis. As such, the conducting of an EIA will require the contracting of consultants under a specific Terms of Reference (Annex X - TOR outline). The output of an EIA is to be a document that spedfies all the possible environmental implications of the project, and provides detailed mitigation measures. The mitigation measure recommended are to form part of the scope of work of the Design consultants Terms of Reference and a copy of the EIA report will be provided to the Design consultant for reference. Approval Approval of a project by the Board of Directors should only take place when the environmental appraisal process is complete. The members of the Board should have available to them all information and options required for them to approve a project. Contacting In order to maintain the integrity of the environmental considerations given prior to contracting, the proposed mitigation measures should be provided by the technical officer and included within ciauses of the contracting documents of the supervisors and contractors. Also to be induded within the contracting document are penalties for non-ompliance to mitigation measures by contractors and/or supervising consultants. As the mitigation measures for each project will vary, the wording' within contracts will be specific to each project, and are to be developed by the Environmental Advisor with the aid of the legal advisor. Supervision During the implementation stage of the project JSIF officers are to consider the environmental mitigation measures prescribed during appraisal and contracting and monitor the supervisor's adherence ensuring implementation of these measures. Project specific checklists (provided in the JSIF Environmental Handbook for Supervision and Monitoring of Construction) that outline the mitigation measures are to be used by the officers to monitor and ensure that the prescribed mitigation measures are being enforced. Evaluation In order to assess the effectiveness of the overall environmental approach of the project cycle, post project evaluation also needs to be conducted. Projects that have undergone ER and EA can be selected at random, and evaluated by a site inspection using a cheddist of the environmental objectives of the project. A site visit and evaluation are required for all projects that have undergone an EIA. -72- Annexes N.B. These Checklists are to be integrated into the general technical evaluation checklists used by Officers and form part of the Field Officers Hand-book. -73- Annex I: Generalized Screening Environmental Checklist Project Type ecommended Environmental A_ppraisal (tick) NoneEREAEIA Roads New Rural Roads ural Road Rehabilitation rinking Water/Water Supply ess than 100 persons X_X ore than 100 persons S hools__ _ _ _ _ _ _ _ _ _ _ _ _ ehabilitation Health Centres ehabilitation Community Centre/Homes for children & aged New ehabilitation atrnes/Sanitay Conveniences g ess than 100 people ore than 100 people Agro-processing/income generaton Rehabilitation None - No further environmental action necessary ER - An Environmental Review required EA - An Environmental Assessment required EIA - An Environmental Impact Assessment required Environmental Consideration Response YesNo Is the location * Prone to natural hazards? * Cose to river/coastal waters? . A wetland, forest reserve or National Park? * Of Archaeological or historical importance? An EA is required once there is a YES response to any question above. - 74 - Annex II: Environmental Review (ER) Checklist Type of Expected Impact Description of Possible Proposed Mitigation Impact Measure Would this project directly Y/N result In the following? PHYSICAL ENVIRONMENT Increased soil erosion Increased sediment load into receiving waters Ukely contamination of surface or subsurface waters Excessive dust or noise during construction BIOLOGICAL ENVIRONMENT Removal or disturbance of natural vegetation . Disruption or disturbance of any animals SOCI4L ENVIRONMENT Degradation or disturbance of an historical or cultural site OTHER - 75 - Annex III: Common Environmental Impacts and thei Aporopriate Mitigation Measures IMPACT MITIGATION MEASURES PHYSICAL ENVIRONMENT - soils . Erosion of soil downslope from road. Protection of soil surfaces by * Landslides, landslips or degradation * Revegetation of area . Use of plastic fencing for stabilisation . Construction only during the dry season * Waterlogging of soil * Providing adequate drainage - proper sized drains/culverts Water . Increased sediment/runoff into . Providing adequate drainage away from streams, rivers, ocean major water bodies . Proper disposal of hazardous materials * Store construction materials away from water resources . Contamination of water resources Apply a minimal distance between water (faecal contamination) urce & livestock/human settlements. Ensure appropriate wastewater treatment Ensure proper maintenance of latrines. Develop and implement monitoring of nitary facilities and wastewater treatment ystems. .__ _ __ Construct in area with low water table * Clogging of canals by weeds Control of agro-chemical use Proper design of canals Develop water monitoring programme Air Quality . Dust during construction Dust control using wetting of construction reas with water * Acoustic disturbance * Restrict construction to certain hours . Locate permanent machinery away from residences and business places * Odor problems Ensure appropriate disposal of waste .roducts and effluent - 76 - ADDendix III (cont'd): Common Environmental Imoacts and their ADprORriate Mitication Measures IMPACT MITIGATION MEASURES BIOLOGICAL ENVIRONMENT Natural Habitats * Disturbance of natural * Consideration of alternative sites habitats/environmentally sensitive areas Flora & Fauna - * Loss or degradation of vegetaton or Consider alternate site animal life Replant trees and appropriate vegetation .__ _ __ Mark and protect important trees OTHER * Improper disposal of construction * Determine an approved site for disposal waste - health risk, eyesore * Provide garbage receptades * Sourdng of quarry material for * Ensure supplier has mining license construction * Interruption to services e.g * Ensure adequate notification to the electridty/water supply, road access community of the interruption with Indication . on timeline on resumption of service -77- Annex IV Environmental Assessment Form 1.0 General Description of Project 1.1 Obiective (What is the project objective?) 1.2 Development description (Briefly describe development - type, location, construction involved) 2.0 Description of Environment 2.1 Physical Environment Water (Describe any nearby water bodies and sources. Type, water appearance/quality etc.) Air (Describe the apparent prevailing winds, condition of the air - e.g. dusty) Soil (Describe the slope, type of soil, permeability, signs of erosion etc.) 2.2 Biological Environment Flora/Fauna (Describe any apparent vegetation, look for any important plant and animal species) Habitats & Communities (Near any protected habitats, sensitive ecological areas - wetlands, forests) -78- 23 Socio-economic Environment Historical Aspect (Describe any impacts on monuments, archaeological ruins etc.) .N Aesthetic Aspect (Describe any alteration to vistas, natural landscape) Public Health Aspect (Desaibe any possible health risks) 3.0 Building/Construction/Infrastructure Projects Possible Negative Environmental Impacts Activity Possible Impacts Mitigation Measures Site Preparation Excavation & Filling Sourdng of Construction Material . Construction Works Disposal of Construction Waste Provision of Electricity, Water & Sanitary Conveniences - 79 - 4.0 Road Projects Possible Negative Environmental Impacts Activity Possible Impacts Mitigation Measures Site Preparation Excavation & Filling Sourang of Construction Material Machinery Work 3isposal of Construction Waste Paving Maintaining Roads 5.0 Sanitation Projects Possible Negative Environmental Impacts Activity Possible Impacts Mitigation Measures Site Preparation Excavation & Filling Sourcing of Construction Material Machinery Works isposal of Construction Waste esign & Location of Sewage ystem ischarge of Effluent Maintenance of Sewage System . - 80 - 6.0 Water Delivery Projects Possible Negative Environmental Impacts Activity Possible Impacts Mitigation Measure Site Preparation Excavation & Filling Sourdng of Construction laterials Disposal of Construction Waste Chlorinating/Cleaning of water Maintaining System/Pipes 7.0 Agro-Processing/Income Generation Projects Possible Negative Environmental Impacts Activity Possible Impacts Mitigation Measure Site Preparation Sourcing of Construction Material isposal of Construction aterial achinery Works Use of Chemicals Discharge of process residue and liquid waste - 81 - Annex V Activity-Impact-Mitigation Table Construction/Infrastructure Projects ACTIVITY NEGATIVE IMPACT MIGATION Site Loss of trees & habitat Mark & protect trees, minimize soil Preparation/Vegetabon destruction, soil erosion, erosion, controlled blasting. Clearance siltation, organic waste Preservation of habitat as far a disposal, hazards and noise due possible through project design. to blasting Excavation & Filling Spoil, dust, accidents Stockpile & reuse waste, suppress dust by wetting, use caution tape or barriers around excavations. Use of approved sites for excavation waste and approved quarries Sourdng of Earth Materials Illegal mine &/quarry operation Provide evidence of supplier's mining license Storage & Exposure of Washout, sedimentation, drain Store materials away from drainage Particulate Materials (fines) blockage, dusting features, cover fines with tarpaulin or surround with berms Site Works Noise, fugitive dust, hazards & Restrict activities to normal working acddents hours, suppress dust by wetting, erect hoarding around excavated areas Garbage & Waste/Spoil Improper disposal, faecal Provide garbage receptades, dispose Generation contamination, health risk, waste at approved site, avoid eyesore buming, compost organic waste, waste management plan Solid Waste Improper disposal, public health Regular collection & disposal at risk, eyesore approved sites. Adequate measures for storage, transport and disposal Sewage Disposal Improper disposal, faecal Ensure provision, maintenance & use contamination, water & soil of sanitary fadlities pollution, health risk, eyesore Induced Vehicular Traffic Accidents Use traffic signage Chance finding on site Destruction of archaeologically Stop work temporarily and contact the valuable artifacts National Heritage Trust for an evaluation Other - 82 - Annex VI Activity - Impact - Mitigation Table Road Projects ACTIVITY NEGATIVE IMPACT MITGATION Road Surface Preparation Spoil, washout, dust, soil Stockpile & reuse waste, suppress erosion, siltaffon, hazards and dust by wetting, traffic waming noise due to blasting signage, use flagmen, controlled blasting. Excavation & Filling Spoil, dust, accidents Stockpile & reuse waste, suppress dust by wetting, use caution tape or barriers around excavations Sourdng of Earth Materials Illegal mine &/quarry operation Provide evidence of supplier's mining license Storage & Exposure of Washout, sedimentation, drain Store materials away from drainage Particulate Materials (fines) blockage, dusting features, cover fines with tarpaulin or surround with berms Site Works Noise, fugitive dust, hazards & Restrict activities to normal working acddents hours, suppress dust by wetting, erect traffic waming signage, use flag men Garbage & Waste/Spoil Improper disposal, faecal Provide garbage receptades, dispose Generation contamination, health risk, waste at approved site, avoid eyesore buming, compost organic waste, waste management plan Road Drainage Flooding of adjacent land, soil Consult community about local erosion drainage and flooding pattems, design drainage so as to dissipate properly Blockage of Culverts & Road flooding and surface Community awareness programme, Drains erosion proper maintenance of drains & culverts. Induced Vehicular Traffic Accidents Use traffic signage Other N.B. As JSIF only works on existing roads there should be minimum clearing of trees, habitat loss or damage to cultural property as there would be no dearing of land or excavating for new roads. -83 - Annex VII Activity - Impact - Mitigation Table Sanitation Projects ACTIVITY NEGATIVE IMPACT MMGATION Site Preparation/ Loss of trees & habitat, soil Mark & protect trees, minimize soil Vegetation Clearance erosion, siltation, organic waste erosion disposal Excavation & Filling Spoil, dust, accidents Stockpile & reuse waste, suppress dust by wetting, use caution tape or barriers around excavations Sourdng of Earth Materials Illegal mine &/quarry operation Provide evidence of supplier's mining .__ _ _ _ _ _ license Storage & Exposure of Washout, sedimentation, drain Store materials away from drainage Particulate Materals'(fines) blockage, dusting features, cover fines with tarpaulin or surround with berms Site Works Noise, fugitive dust, hazards & Restrict activities to normal working acddents hours, suppress dust by wetting, erect ._________ __________ _____________ _____hoarding around excavated areas Garbage & Waste/Spoil Improper disposal, faecal Provide garbage receptades, dispose Generation contamination, health risk, waste at approved site, avoid eyesore buming, compost organic waste, waste management plan Improperly situated or Sewage pollution, water Construct in area with low water designed sewage system contamination table, design appropriate disposal method Inappropriate discharge of Faecal contamination, water & Use septic tanks (where appropriate) sewage effluents soil contamination, water bome diseases, public health risk Poorly maintained fadlities Mosquito/fly pests Ensure provision, maintenance & use .__________ __________ .___________________ _ of sanitary fad lities Induced Vehicular Traffic Accidents Use tramffic signage Other - 84 - Annex VIII Activity - Impact - Mitigation Table Water Delivery Projects ACTIVITY NEGATIVE IMPACT MMGATION Site Preparation/ Loss of trees & habitat, soil Mark & protect trees, minimize soil Vegetation Clearance erosion, siltation, organic waste erosion disposal Excavation & Filling Spoil, dust, accidents Stockpile & reuse waste, suppress dust by wetting, use caution tape or barriers around excavations Sourcing of Earth Materials Illegal mine &/quarry operab'on Provide evidence of supplier's mining .____________________________ license Storage & Exposure of Washout, sedimentation, drain Store materials away from drainage Particulate Materials (fines) blockage, dusting features, cover fines with tarpaulin or surround with berms Site Works Noise, fugitive dust, hazards & Restrict activities to normal working accidents hours, suppress dust by wetting, erect hoardinq around e'xcavated areas Garbage & Waste/Spoil Improper disposal, faecal Provide garbage receptades, dispose Generation contamination, health risk, waste at approved site, avoid eyesore burning, compost organic waste, ._____________________ waste management plan Improper Chlorination Supply of poorly treated water, Regular dispensing of chlorine poor public health Improper disposal of Water & soil contamination, Design an adequate wastewater wastewater water bome diseases, public disposal system/plan health risk Other - 85 - Annex IX Activity - Impact - Mitigation Table Agro-Processing Projects ACTIVITY NEGATIVE IMPACT MMGATION Site Preparation/ Loss of trees & habitat, soil Mark & protect trees, minimize soil Vegetation Clearance erosion, siltaton, organic waste erosion disposal Excavation & Filling Spoil, dust, accidents Stockpile & reuse waste, suppress dust by wetting, use caution tape or barriers around excavations Sourdng of Earth Materials Illegal mine &/quarry operation Provide evidence of supplier's mining license Storage & Exposure of Washout, sedimentation, drain Store materials away from drainage Particulate Materials (fines) blockage, dusting features, cover fines with tarpaulin or surround with berms Site Works Noise, fugitive dust, hazards & Restrict activities to normal working accidents hours, suppress dust by wetting, erect hoarding around excavated areas Garbage & Waste/Spoil Improper disposal, faecal Provide garbage receptades, dispose Gerieration contamination, health risk, waste at approved site, avoid eyesore buming, compost organic waste, waste management plan Residue & liquid waste Soil & water contamination Design & implement plant waste discharge management plan, worker training in use & monitoring of facilities Conversion of forest for Deforestation, watershed Compensatory afforestation agricultural use damage Use of agrochemicals on Water pollution Ensure sound use of agrochemicals crops through consultations with RADA, farmer training Other - 86 - Annex X Format for Environmental Impact Assessment Consultant Terms of Reference General Introduction The Jamaica Social Investment Fund (JSIF) was established in December 1996 as a component of the Government of Jamaica's strategy to reduce and eradicate poverty. Recognizing the limited capacity of existing govemment institutions to implement small-scale projects at the community level, Cabinet in December 1995 approved the establishment of the JSIF as a key component of the Government's National Poverty Eradication Programme (NPEP). The JSIF is an autonomous government company designed to provide investments in community based projects Island wide. The JSIF operates as a demand-driven financial intermediary which follows the prindples of community partidpation and partnership with the private sector, non-governmental organizations (NGOs), community based organizations (CBOs), and donor agencies, in seeking to channel benefits to the poorest communities across the country. The JSIF, which is designed as a four-year project initially, will promote, appraise, finance and supervise sub-projects in the following areas: Social Infrastructure - includes the rehabilitation, expansion, construction & equipping of structures such as schools, health centres, homes for the elderly and disabled, infirmaries and community centers; it also Includes the construction and rehabilitation of public sanitary conveniences, drains, canals and community-based water systems. Economic Infrastructure - indudes the rehabilitation and up grading of parochial, feeder and urban access roads and the construction and rehabilitation of community-based agro-processing facilities. Soial Service - includes assistance to programmes offering services in career guidance and job placement, counselling (including conflict resolution & drug abuse), parenting and family life education, and skills training to the productive sectors and the disabled. Organizational Strengthening - includes technical assistance and training to governmental and non-governmental institutions in participatory project identification, and to sub-project sponsors and executing agendes to help grass-roots groups to design and formulate, implement and manage small-scale community-based projects. The execution of sub-projects approved for JSIF funding are monitored by staff of JSIF's Implementation Department, and supervised by extemal on-site Technical Supervisors/Consultants contracted by the JSIF. Background Scope of Work - 87- Outputs Payment Schedule Response to Proposal - 88- Annex XI Project Environmental Monitoring Form ACTIVITY MMGATION MEASURE C NO COMMENTS 0 N-C M Om p P11 L AN I CE A N C E Sources: 1. 'Jamaica's Commitment To The Conservation And Management Of Natural Resources Ten Years in Retrospect'; Unpublished Paper, National Environmental and Planning Agency; Kingston, Jamaica 2. 'Jamaica Social Investment Fund Screening Criteria and Preliminary Impact Assessment, Environmental Consultancy Final Report and Manual'; Peter Reeson, September 1998. - 89 - Additional Annex 13: Social Annex JAMAICA: National Community Development Project General Social Issues in Jamaica Jamaica faces several challenging social problems, among them are: high unemployment, limited access to basic services, crime, violence, and socio-political divisiveness, many of which are interrelated. While the overall poverty rate in Jamaica declined from 44.6% in 1991 to 18.7% in 2000, the proportion of the poor in the Kingston Metropolitan Area more than doubled (from 4% to 10%) during the years 1991-1998. These figures indicate an increasing urbanization of poverty. A large share of the recent political and social upheavals which Jamaica has suffered over the past decades has been attributed to unacceptable conditions in the inner-city areas where urban poverty is prevalent. Moreover, Jamaica suffers from high levels of violent crime. In 2001, over 1,100 homicides were reported, resulting in one of the highest per capita murder rates in the hemisphere. Violence, especially in poor urban neighborhoods, is so extensive that it is impossible to ignore the issue in the context of increasing levels of poverty in the country. The murder rate has escalated over the last two decades, exacerbated by uneven distribution of wealth, domestic violence, rising unemployment (particularly among the youth), political tribalism, and drugs. While the key social issues in the urban areas are violence and unemployment, the key social issue in the rural areas is poverty. The rural poverty rate is 24%, or more than double the urban rate. The high rate is partly attributed to poor infrastructure, inaccessibility, and lack of basic services. Among the rural poor are the Jamaican Maroons who face many of the same problems as their rural counterparts. Maroons of Jamaica Background The Jamaican Maroons are descendants of forebears from the same or neighboring regions of Africa that escaped from slavery during the Colonial Era and obtained their freedom prior to the abolition of slavery. Today, though Maroons live throughout the island, there are some concentrations in several remote areas where they first settled. These semi-autonomous communities follow traditional social customs, elect their "colonels"or community leaders, and deal with certain disputes by themselves, however they are governed by national legal and political institutions. Jamaican Maroons usually identify themselves as Jamaicans or Jamaicans with a Maroon heritage, and while many warmly embrace their sub cultural heritage, many are also fully integrated into mainstream Jamaican society, in some instances holding senior positions in the national government. Though Maroons are not considered to be more disadvantaged in the development process than other low-income rural populations in Jamaica, the inaccessibility of these communities puts them at a disadvantage. The government is aware of this, and efforts are underway to make these communities more accessible. As opportunities open, Maroon communities have been evolving from a primarily subsistence-farming community to rely on revenue from tourism activities and other jobs (as teachers, nurses, bureaucrats, etc.). Existing Communities: There are four main Maroon communities in Jamaica, namely Accompong (St. James), Scotts Hall (St. Mary), Charles Town (Portland) and Moore Town (Portland), and several other settlements that are predominantly Maroon (e.g. Comfort Castle, Seaman's Valley). These are all rural mountain communities, and fall within Quartiles 3 and 4 on the PIOJ Poverty Map. Conditions here are similar to those found in other poor rural communities across Jamaica, including heavy reliance on agriculture, poor access roads, unreliable domestic water supply, and few opportunities for employment. They do, -90 - however, have an advantage over similar non-Maroon communities in that they are able to benefit from heritage tourism opportunities, which are actively being pursued through the Tourism Product Development Company (TPDCo) and the Institute of Jamaica. JSIF Experience JSIF has received sub-project requests from nearly all the Maroon communities, and has approved and implemented projects in Comfort Castle, Ginger House and Moore Town. Other requests are currently in the pipeline (screening and appraisal). Maroon communities have accessed JSIF through the Social Development Commission, TPDCo and through word of mouth from other communities. Maroon communities have been proactive and taken the initiative to contact JSIF regarding subprojects. Recently a delegation from the community went to JSIF to examine the possibility of constructing a road to help . facilitate increased tourism in the villages. And though this is not an official subproject, JSIF is working with them to develop the necessary clearances to obtain the road. As the Maroons have demonstrated their ability to be proactive and participative in JSIF and other programs, the need for a special outreach program for the Maroons has not been envisaged. However, as part of the Bank's monitoring of the beneficiary profile'of JSIF sub-projects, attention will be paid that there is appropriate access by any low-income target group, including the Maroons. -91 - -Z6 - MAP SECTION 85 U.S. . t ,r6 r0 77*3. 90nO(Y BAHAkGAS , E sA A /%A _;P -19 00 Feet Meters JA M IVIA A- MEX0 o CUeA \_ DOOCAN 6eo85||.18004 T Main Arterial Roads 0 Selected Towns Z02 CARIBBEsAN HAIT2 2e4 Main Secondary Roads Parish Capitals BeELZE JAMAICA 1477 450 1 Main Ports, National Capital Bountemtats 6e I . International Airports . Parish Boundaries I AO EL 0I 0 , Region Boundaries - County BEoundaries sa 60~~~~~~~~~ 'CA R ',E IV CORN WALL' salt \d\\ MIDDLESEXr Spring > . ' A ' . \ PORT PoMAR t t = _ _ l-|n;- HI :':AMA '~~~~~~~~~~~~~~~~~~ft C;4jZ/Elay m8| ~ ~~~~~~~~~~~ ~ ~~~Rocky Point ^ C o 10 20 . S0 40 . fio KL TOTS $ A I e M eJ :c T. .ahe bee bbe,. b. Th edb . .e en s,n~ ., th b0E,,C0 f ,-: > -~~~~~~~~~~~~~~~~Ok 0v..n Knnt CebTen TT 1Elm08'b ifl an 0, .,a.da* 50;09..-. on O t. np do - n o t mp l C N ;eS ......... ' - ' .. ,"78' "- >.' ' L n o n a eb.t,..,,, e 'A maggottvN,"'.. Troul Fairy Ml~~~~~~~I .I.' IMAGING Report No.: 23690 JM Type: PAD