75111 L egal Vice P residency Annual Report FY 2012 The Framework for Accountability within the World Bank FY 2012 Annual Report 1 L egal Vice P residency Annual Report FY 2012 The Framework for Accountability within the World Bank Cover: Guatemala Education Quality and Secondary Education Project. Promoting access to secondary school among low income and indigenous students. Credit: Alejandro Alcala Gerez ii Legal Vice Presidency | The World Bank Contents Acknowledgements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv From the Senior Vice President and World Bank Group General Counsel. . . . . . . . . . . . . . . . . v I. The Year in Review: Legal Highlights from FY 2012 . . . . . . . . . . . 1 The World Bank’s Legal Team: Striving for Excellence . . . . . . . . . . . . . . . . . . . . . . . . . 2 The Legal VPU and Bank Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Crafting Innovative Solutions for the Bank’s Lending Portfolio. . . . . . . . . . . . . . . . . . . . . . 8 Safeguard Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Environmental and Natural Resource Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Infrastructure and ICT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Guarantees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Insolvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Banking and Finance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Justice Reform. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Trust Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Partnership Programs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 The Legal VPU and the Bank’s Corporate Governance. . . . . . . . . . . . . . . . . . . . . . . . 51 Supporting the Bank’s Finance Complex. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Institutional Affairs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Administrative Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 The Legal VPU’s Contribution to Knowledge and Learning. . . . . . . . . . . . . . . . . . . . 62 Knowledge and Learning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Law Resource Center. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 II. Clear Accountability and Effective Decision-Making: An Essay by Anne-Marie Leroy, Senior Vice President and World Bank Group General Counsel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 Staff List. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 Abbreviations and Acronyms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82. FY 2012 Annual Report iii Acknowledgements This report was prepared by the Legal Vice Presidency Annual Report Subcommittee led by Victoria Delmon and Edith Ruguru Mwenda, and comprising Peter Chapman, Zenaida L. Chavez, Aristeidis Panou, Shirmila Ramasamy, Dolie Schein and Adam Shayne. Valuable contributions and pictures were provided by staff from the various practice groups in the Legal Vice Presidency. The Legal Vice Presidency management team reviewed and provided input to this report at various stages of its development. The essay on “Clear Accountability and Effective Decision-Making� issued by Anne- Marie Leroy was prepared by Anna Chytla. The annual report was developed under the guidance of Hassane Cisse, Deputy General Counsel, Knowledge and Research, who provided general strategic guidance, substantive input and support to the Annual Report Subcommittee. This report covers fiscal year 2012. iv Legal Vice Presidency | The World Bank From the Senior Vice President and World Bank Group General Counsel Whilst nimbleness, innovation and Welcome to the second annual report of the Legal Vice Presidency (Legal VPU) which covers fiscal year 2012, a period of significant political change and transition for a simplification of processes are all number of our members in the Middle East region following the Arab Spring, continuing impact of the welcome, the Bank has a fiduciary global financial crisis, food crises, and natural disaters. The Bank has had to be more agile and flexible to obligation to ensure that its funds are respond quickly to these challenges, and the Legal VPU has played a significant role in providing timely advice to used for the correct purposes and the the complex legal issues arising from these challenges. Legal VPU has played a key role in The Bank has been continuing its comprehensive internal reform program to strengthen accountability and to ensuring these reforms comply with improve efficiency and effectiveness of its operations. The Bank introduced its first completely new lending instrument in 30 years, the Program-for-Results (PforR) the Bank’s Articles of Agreement. financing instrument, moving towards program and results based lending, which required significant input from the Legal VPU. The Legal VPU led a review of Photo: Franciscus Prahastanto/World Bank World Bank Group General Counsel Anne-Marie Leroy visits the National Program for Community Empowerment Project, Indonesia. FY 2012 Annual Report v methods of assigning authority and responsibility within The Legal Vice Presidency raised the profile of our management in the Bank and developed a new frame- knowledge and learning agenda this year through a num- work to strengthen accountability “the Accountability ber of new initiatives. In November 2011, the Legal VPU and Decision-Making Policy� which was approved by launched its first Annual Report, it brought together the the President in May 2012 (described in Part II of this legal departments of the World Bank, IFC, MIGA and Report). Whilst nimbleness, innovation and simplifica- ICSID, for the first joint Law, Justice and Development tion of processes are all welcome, the Bank has a fidu- Week and it initiated the launch of the Global Forum ciary obligation to ensure that its funds are used for the on Law, Justice and Development, a forum that seeks correct purposes and the Legal VPU has played a key role to generate and share knowledge about innovative legal in ensuring these reforms comply with the Bank’s Articles solutions to development challenges. The Global Forum of Agreement. This report highlights a number of other is already supported by an impressive and expanding significant reforms. base of partners. Other notable initiatives included the reinstitution of our key annual flagship publication, the Support for Bank financing operations accounts for World Bank Legal Review, the formal publication of approximately 64 percent of the work of the Legal VPU. our sector work as World Bank Studies, the continued Legal VPU staff have worked to enable the Bank to production of a compendium of legal publications and respond to crises faced by member countries in a timely reports of the World Bank Group on a CD-ROM as and efficient manner, often providing advice out of part of our ongoing efforts to increase the accessibility of hours, to ensure that Bank operations are consistent with our knowledge and resources, and the development of the Bank’s policies. This annual report will highlight some training components and legal databases. These are also of the projects our staff worked on during the past year. highlighted in this report. The Legal VPU also provides support and advice to I am grateful to the President, the Board, senior man- clients and Bank teams on legal issues arising in relation agement, and all our colleagues around the Bank with to the environment and social safeguards, infrastructure whom we have worked to deliver a high-quality and and information technology projects public private responsive service to our member countries. I would also partnerships, and banking, finance and insolvency. These like to thank the dedicated staff of the Legal VPU, whose teams are also involved in extensive knowledge develop- tireless efforts have helped the Bank to continue to move ment and dissemination activities. The annual report will its agenda forward. We continue to work with the rest of highlight some of these initiatives from fiscal year 2012. the Bank as we strive to help the Bank fulfill its mission of fighting poverty with passion and professionalism. This year the Legal VPU, in collaboration with the Poverty Reduction and Economic Management Vice Presidency (PREM), oversaw the development of The World Bank: New Directions for Justice Reform, the first World Bank-wide approach to justice reform. It also pre- pared and issued a Legal Note on Bank Involvement in the Criminal Justice Sector which clarifies the Bank’s mandate in responding to the increasing requests from members for Bank support in reforming their criminal justice systems. The Legal VPU also developed a Staff Guidance Note which provides guidance to Bank staff on applying Anne-Marie Leroy the Legal Note to operations. Senior Vice President and World Bank Group General Counsel vi Legal Vice Presidency | The World Bank Year in Review: I. The Legal Highlights from FY 2012 FY 2012 Annual Report 1 The World Bank’s Legal Team: Striving for Excellence The Legal VPU is a frontline actor in What We Do In fiscal year 2012, the Bank’s legal team continued to the Bank’s development agenda and work towards fulfilling the mission of the Legal VPU in serves as the Bank’s corporate counsel, an efficient and productive manner—at all times ensur- ing the highest standard of service to Bank teams. The focusing on the many legal challenges work of the Bank’s legal team can be grouped into three broad categories: associated with the governance and • The Legal VPU is an operational unit, a frontline actor reform of a complex institution, and in the Bank’s development agenda. as a knowledge center, leveraging • the Legal VPU serves as the Bank’s corporate counsel, focusing on the many legal challenges associated with partnerships inside and outside the governance and reform of a complex institution. the Bank to promote cross learning • Legal VPU serves as a knowledge center, leveraging among practitioners to respond to partnerships inside and outside the Bank to promote cross learning among practitioners to respond to client client needs. needs. Photo courtesy of Jonathan Pavluk Meeting of women in the village of Dodote, Oromia, Ethiopia. 2 Legal Vice Presidency | The World Bank Who We Are The Mission of the Legal VPU Our lawyers are a diverse group of individuals who have a wealth of experience in fields as far ranging as bank- The mission of the Legal VPU is ing, insolvency, environment, justice reform, litigation, to develop sound, flexible and project finance and international law. They come from all over the world—with roughly 28% from Europe innovative legal solutions to enable and Central Asia, 28% from North America, 18% the Bank to successfully respond to from Asia, 14% from Latin America and the Carib- bean, 10% from Africa, and 2% from Middle East and the evolving needs of its members North Africa. Within the corridors of the Legal VPU, while protecting it from legal and a myriad of languages are spoken including Albanian, Arabic, Bulgarian, Cantonese, Dutch, English, French, reputational risks in a demanding Greek, German, Hindi, Igbo, Italian, Japanese, Kazakh, global environment. The Legal VPU Kiswahili, Kyrgyz, Malay, Mandarin, Marathi, Nepali, Polish, Portuguese, Romanian, Russian, Slovak, Spanish, will promote the role of law as an Tagalog, Tamil, Thai, Urdu and Vietnamese. important dimension of the Bank’s The Legal VPU is committed to training and cultivat- strategy for poverty alleviation and ing new talent that will be able to better serve our client needs. With that in mind, the Legal Associates Program achieving sustainable and equitable was launched in 2004 and is designed to introduce tal- economic growth. ented young legal professionals from all over the world to the Bank and to the Legal VPU. In carrying out its mission, the Legal Legal Associates who are invited to participate in the VPU shall operate with the highest program will initially be with the Legal VPU for a one- year term, with the possibility of extending their stay standards of professional and for a second year, based on their individual performance ethical conduct and provide timely, and the business needs of the Legal VPU. Those who perform exceptionally well and successfully compete in proactive, value-added, and objective the normal selection procedures may have the opportu- advice to its clients. nity to remain as staff on a long-term basis. Accordingly, the program hopes to contribute to the gradual renewal of the legal talent of the vice presidency. Legal VPU Resource Utilization 26% Legal Support to Lending 15% Trust Fund Support 14% Legal Support to Supervision 9% Country Program Support 11% Legal Institutional Services 10% Management and Administration 8% ACS and Paralegal Support 7% Knowledge Management and Training Direct Support to Operations (about 64%) FY 2012 Annual Report 3 Legal Associates rotate through the various practice A New Look groups within the Legal VPU in order to gain exposure As part of its commitment to the roles of the Legal VPU to the different areas of the Bank’s legal practice and to within the Bank as well as to our mission, management develop country expertise and Bank-specific legal skills. reviewed the existing organizational structure of the Community Service Legal VPU to understand how we could better serve the clients we support. As a result, while the core functions In an effort towards team building among colleagues in of the Legal VPU will remain the same, certain units the Legal VPU, at the same time giving back to the com- were reconfigured with the objectives of (a) creating munity, our staff organized a successful LEG Commu- better opportunities for staff to work in more than one nity Service Day on June 8, 2012. The legal VPU spent region, (b) creating dedicated capacity to enable the a fruitful and enjoyable day doing a host of activities Legal VPU to engage in projects across all regions which ranging from wetlands planting to preparing and serving are complex, and (c) combining the work related to food at selected venues, including Anacostia Watershed concessional donor relationships, including with respect Society, DC Central Kitchen, Martha’s Table and Habitat to trust funds and global partnerships, with work related for Humanity. to IDA resource mobilization to enable the Legal VPU to serve the Concessional Finance and Global Partnerships Vice Presidency (CFP), in an integrated manner. The chart on the facing page shows the new organiza- tional structure of the Legal VPU as a result of the steps taken to implement this reconfiguration at the end of fiscal year 2012. Food and Friends Anacostia Watershed Habitat for Humanity DC Central Kitchen Martha’s Table Ronald McDonald House Iona Services 4 Legal Vice Presidency | The World Bank Organizational Chart of the Legal VPU OCTOBER 1, 2012 LEGVP LEGRA Assistant General Counsel Senior Vice President & Resources & Administration Institutional Affairs World Bank Group General Counsel Legal Administrator & CAO Anna Chytla Anne-Marie Leroy Barbara Friedman ICOIO Special Assistant to Inter-Institutional Business WBG General Counsel Conflict of Interest Giuliana Dunham Irving David Satola Deputy General Counsel Deputy General Counsel Operations Knowledge & Research Anthony Toft Hassane Cisse LEGAM LEGSO LEGIA LEGJR LEGFI AFR & MNA Special Operations Institutional Justice Reform Corporate Finance AFR: Hadi Abushakra Ximena Talero & Mark Administration Christina Biebesheimer J. Clifford Frazier MNA: Sidi Boubacar Walker (Legal Advisors) David Rivero LEGES LEGPS LEGOP Op.Policy EAP & SAR PSD, Finance & LEGIP Info.Policy EAP: Sheila Braka Musiime Infrastructure Ferenc Molnar SAR: Melinda Good Vijay Tata LEGLE LEGCF LCR & ECA Concessional Finance LCR: Reynaldo Pastor Alessandra Iorio ECA: Irina Kichigina LEGEN Environmental & All Practice Groups will maintain a dotted line of International Law reporting relationship to the Deputy General Counsel, Charles Di Leva Knowledge and Research, in respect to their respective knowledge activities and products. FY 2012 Annual Report 5 The Legal VPU and Bank Operations Photo: Juan Carlos Alvarez Karnataka Community Based Tank Management Project, India. Project beneficiaries came to greet Anne-Marie Leroy during a presentation of the project’s positive impact on the community’s livelihood. FY 2012 Annual Report 7 Crafting Innovative Solutions for the Bank’s Lending Portfolio The Legal VPU has continued to provide critical support The Bank continues to respond to to the Bank’s country operations as well as in regional and global initiatives. Several integral innovations and the reverberations from the global improvements have facilitated our lawyers’ contribution in fiscal year 2012, including the introduction of a new financial crisis and to the continued lending instrument called Program-for-Results (PforR) Financing. demand for development assistance As a result, the Bank continues to respond to the rever- around the world. berations from the global financial crisis and to the con- tinued demand for development assistance around the world. IBRD commitments in fiscal year 2012 totaled year 2005-08, but less than the record US$44.2 billion US$20.6 billion, down from US$26.7 billion in fiscal in fiscal year 2010 when the crisis peaked. IDA commit- year 2011. Commitments remain significantly higher ments reached US$14.7 billion, a 9.8 percent decrease than the historical average of US$13.5 billion in fiscal from the fiscal year 2011 figure of US$16.3 billion. Photo: Dana Smillie Vocational education and training center. National Initiative for Human Development Support Project (INDH). 8 Legal Vice Presidency | The World Bank Incremental Legal Support to Operations 5,000 4,500 4,000 1,533 1,490 3,500 1,451 Trust Fund 1,383 Support (Staff Weeks) 3,000 1,135 2,500 1,056 1,107 830 768 Legal Support 728 2,000 to Supervision (Staff Weeks) 1,500 1,000 1,768 1,842 1,913 1,995 2,157 Legal Support 500 to Lending (Staff Weeks) 0 FY08 FY09 FY10 FY11 FY12 Regional Deliverables (Fiscal Year 2012) 600 $14000 495 500 $12000 400 $10000 $8000 300 $7,525 282 284 $6,628 $6,595 $6,629 $6,445 $6000 210 218 200 $3,720 $4000 $3,434 $3,331 115 100 92 $1,513 $2000 38 42 $1,325 37 30 11 12 12 14 1 5 $350 4 5 0 0 $ AFR EAP ECA LCR MENA SAR IBRD/IDA No. Projects Under Supervision CAS Products IBRD/IDA Amt (billions) DPL Loan Amt (billions) HIPC Projects FY 2012 Annual Report 9 HIGHLIGHTS Program-for-Results: Legal and Policy Support for a New Lending Instrument On January 24, 2012, the Bank’s Board of Executive Directors approved a new lending instrument called Program-for-Results (PforR) Financing. PforR is the first truly new lending instrument at the Bank in almost three decades. PforR has several unique developmental and design characteristics. It seeks to provide support to borrowers’ own developmental programs. Such programs may be governmental or nongovernmental Photo: World Bank programs, new or ongoing, and national, subnational, sectoral, subsectoral, or multisectoral in scope. Under PforR, there is a direct link between the disbursement of Bank funds and the delivery of defined, verifiable and critical results. PforR relies on the Bank’s assessments of Anthony Toft, Deputy General Counsel, Operations (first left). program systems and institutions, promotes an integrat- Myanmar National Community Driven Development Project. ed approach to risk, and encourages management rather than avoidance of risk, by identifying risks, and balanc- ing them against results. PforR relies on the borrowers’ It was also agreed by the Bank’s Board of Executive fiduciary, environmental and social systems, and seeks to Directors and Senior Management that unlike the Bank’s address gaps in such systems through a combination of other main project lending instrument (referred to as initiatives, from legal requirements and actions, to capac- Investment Lending or IL), which relies on a relatively ity building, disbursement incentives and to implementa- complex set of detailed policies and procedures, PforR tion support. The emphasis on program and system level would be regulated by a broadly formulated set of poli- assessments, rather than at the transaction level, is a key cies and operational requirements. These requirements distinguishing feature of PforR. are expressed through a dedicated single, concise, clear and user-friendly statement of operational policies and The preparation of PforR involved a number of interest- procedures. In Bank nomenclature, these are referred ing legal and policy issues that often challenged tradi- to as Operational Policies (OPs) and Bank Procedures tional ways of doing business at the Bank. It called for (BPs). These mandatory statements are supported by, creative approaches and legal solutions, which is never an but are also clearly delineated from, nonbinding advisory easy task, but especially so in a complex institution such guidance notes. Articulating rules that are clear, precise as the Bank, with its many constituencies and diverse and yet sufficiently flexible required a deep understand- clients and beneficiaries. Of course, PforR had to meet ing of the Bank’s legal and institutional mandate, due the requirements of the Bank’s Articles of Agreement and consideration of the roles and responsibilities of the the other key operational policies approved by the Bank’s Board of Executive Directors, management and staff, Board of Executive Directors and Senior Management, oversight entities, and the Bank’s clients and beneficia- including those dealing with procurement, financial ries, recognition of the new instrument’s developmental management, governance, social and environmental objectives, and, in practical terms, close daily coopera- protection as well as technical soundness. Additionally, tion between lawyers and operation clients. the rules framework for PforR needed to describe what can be financed by the new instrument, exclusions of Going forward, the OP and BP related to PforR are certain activities, rights and responsibilities of the Bank expected to be a model for the next generation of Bank’s and PforR borrowers, as well as the applicability of the policies and procedures. In addition to providing key Bank’s legal remedies and anticorruption, sanctions and inputs to the formulation of the PforR OP and BP, the debarment requirements. Legal VPU drafted PforR Anticorruption Guidelines that were approved by the Board. 10 Legal Vice Presidency | The World Bank PforR in Action Our lawyers’ significant contributions at different stages NEPAL of this program in Nepal made the delivery of the first The Nepal Bridges Improvement and Maintenance PforR operation in the Bank possible. Program is one of the first two PforR operations to be MOROCCO financed by the Bank. An IDA Credit of SDR 38.70 million (US$60.00 million equivalent) was approved Morocco National Initiative for Human Development to finance the program in Nepal. The objective of the (INDH) 2 Program is one of first two PforR operations program is to provide safe, reliable and cost effective to be financed by the Bank. An IBRD Loan of 227 bridges in Nepal’s Strategic Roads Network. The Bank- million Euros (300 million US Dollars equivalent) was supported program is a part of the Nepal Department of approved for financing the Program in Morocco. The Road’s overall road and bridge infrastructure program as objective of the Program is to improve access to and/or set forth in Nepal’s Bridge Policy and Strategy. It consists use of enhanced participatory local governance mecha- of the activities related to the bridges: planning, techni- nisms, basic infrastructure, social services and economic cal design and quality control of bridge construction and opportunities in the Program Area. The Program Area maintenance; major and minor maintenance of existing covers the territory of Morocco, with the exception of bridges; construction of new bridges; and related capacity the disputed territories (Western Sahara). building and operating support activities, including, The Loan for INDH 2 will support the second phase of monitoring and evaluation, collection of bridge condi- the Morocco’s National Initiative for Human Develop- tion data, auditing, verification of Disbursement Linked ment program which was launched in 2005. In 2006, the Results, and training. Board approved a EUR 78,900,000 loan (National Ini- During the preparation of the program, Legal VPU law- tiative for Human Development Support Project: Loan yers worked with the team in Nepal to formulate specific No. 7415-MOR) for the Kingdom of Morocco to assist terms of the Environmental Action Plan as well as the the Borrower in implementing the first phase of its Na- Disbursement Linked Indicators/Results in such a way tional Initiative for Human Development (2005-2010). that the actions and results are precise, actionable and This first operation was a Specific Investment Loan (SIL) measurable. Lawyers from different sections of the Legal through a Sector Wide Approach (SWAp) under which VPU worked together to finalize the Financing Agree- the Bank financed almost 10 percent of all expenditures ment, including providing advice on the application of and released annual tranches based on the satisfaction of the PforR OP and BP, the application of the Anticor- disbursement conditions and indicators. ruption Guidelines and advice on the Environment and The first phase of the National Initiative for Human Social System Assessment. Development was launched with the objectives of combating social and economic exclusion and improv- ing the living conditions of poor and vulnerable groups through enhanced economic opportunities, better access to basic services, and improved governance. The National Initiative for Human Development is based on local par- ticipatory governance and community-driven develop- ment (CDD) principles, and incorporates core values of inclusiveness, accountability and transparency. The first phase of its National Initiative for Human Development delivered important results on gender and youth, both by providing opportunities for voice and participation Photo: World Bank in decision-making as well as opening opportunities for economic and social inclusion. The King of Morocco launched the second phase of the Signing Ceremony of the Nepal Bridges Improvement and National Initiative for Human Development on June 4, Maintenance Program, at the Ministry of Finance, Nepal. FY 2012 Annual Report 11 2011, expanding the target population and geographic Legal VPU worked together to finalize the Loan Agree- scope, and increasing resource allocation. The new ment, including providing advice on the application of Government of Morocco, established in January 2012, PforR OP and BP, the application of the Anticorruption also retained the second phase of the National Initiative Guidelines and advice on the Environment and Social for Human Development as a priority. Targeted results System Assessment. aimed for improved supply and access to basic services, infrastructure, and economic opportunity for poor Our lawyers’ significant contributions at different stages and vulnerable groups; and strengthened local of this Program in Morocco made the delivery of this participatory governance. PforR operation in the Bank possible. The second phase of the National Initiative for Human The Legal VPU Supports the Process for Development includes the following subprograms to a New Country to Become a Member of be implemented for the period 2011-2015: (a) a rural Four World Bank Group Affiliates subprogram to alleviate poverty in rural areas; (b) an SOUTH SUDAN urban subprogram to alleviate social exclusion in urban South Sudan, an independent state since July 9, 2011, areas; (c) a cross-cutting subprogram; (d) a vulnerability became a member of four World Bank Group af- subprogram; and (e) a territorial upgrading subprogram. filiates on April 18, 2012. The Legal VPU tapped the skills, experience and expertise of its staff—drawn from The new Loan will be used to help finance activities various practice areas including finance, trust funds, (mainly projects to improve living conditions of the environment, operations, administrative affairs and the population, carried out by public entities, local gov- Africa region—to help the Bank respond to the new ernments or nongovernmental organizations) under nation’s needs. South Sudan needed access to resources subprograms (a), (b) and (c) in the Program Area from for financing development activities including ensur- January 1, 2012 to December 31, 2015. Such activities ing continuation of Bank support notwithstanding its will essentially replicate those under the 2006 National changed status and the availability of additional resources Initiative for Human Development Support Project. in the transitional period and this new country needed to acquire membership in the World Bank Group affiliates. During the preparation of the Program, Legal VPU lawyers worked with the team in Morocco in particular From the Bank’s perspective, the legal consequence of to formulate the Disbursement Linked Indicators/Results South Sudan’s independence was the shift of its status in such a way that the actions and results are precise, from a “territory of a member� (Sudan) to a “nonmem- actionable and measurable, including the disbursement ber sovereign state�. Since the Bank’s Articles of Agree- arrangements. Lawyers from different sections of the ment require that resources and facilities be exclusively South Sudan Becomes World Bank’s Newest Member. Photo: Deborah W. Campos 12 Legal Vice Presidency | The World Bank used for the benefit of their respective member countries, how could IDA continue to work in South Sudan prior to its membership to the Bank? In anticipation of the change of legal status of South Sudan, and with advice from the Legal VPU, the Bank’s Senior Management requested the Bank’s Board of Executive Directors to determine that the use of IBRD/ IDA resources and fa- cilities in South Sudan would in fact benefit IBRD/ IDA members. The Bank’s Board of Executive Directors made this determination at their meeting on June 14, 2011, a month before South Sudan became independent and on this basis Bank support to South Sudan could continue seamlessly when South Sudan became independent. The Legal VPU also contributed to the eventual decision by the Bank’s Board of Governors to utilize a portion of IBRD surplus in an amount of US$75 million to South Sudan during the transitional period between South Sudan’s independence and its anticipated membership with World Bank Group affiliates. The Legal VPU helped design and structure a unique trust fund for this purpose. Since then, three operations proposed to be funded under this trust fund have been prepared, appraised, negotiated and approved in fiscal year 2012. As a new state, South Sudan had to apply for member- ship with World Bank Group affiliates in order to be eligible for additional financing options. Following a year of preparatory work supported by the Legal VPU, South Photo: Deborah W. Campos Sudan fulfilled the membership requirements for four Anna Chytla, Assistant General Counsel World Bank Group affiliates. On April 18, 2012, the and Evarist Baimu, Senior Counsel, World Bank. Minister of Finance and Economic Planning of South Sudan signed the founding documents of the World Bank Group affiliates and deposited the requisite instru- Meeting the legal and policy challenges of ments of ratification making South Sudan the 188th the Arab Spring shareholder and member of the Bank. The Legal VPU worked closely throughout fiscal year In discharging its advisory role, the Legal VPU leveraged 2012 with the Middle East and North Africa (MENA) the knowledge and judgment of a number of lawyers Region to meet the legal and policy challenges of the across different practice areas of the Legal VPU. Among “Arab Spring�. Though these developments were largely other legal issues addressed were how to structure the unanticipated, the Legal VPU responded rapidly to arrangement to utilize IBRD resources to fund activities advise the Region in an ever-evolving political, economic in a nonmember state, state succession and state creation and constitutional environment. under international law, privileges and immunities of international organizations, interpretation of the Articles In early January, the Legal VPU supported the delivery of international organizations and commencement of of a US$500 million Governance and Opportunity De- membership to World Bank Group affiliates. The han- velopment Policy Loan in Tunisia, to assist the interim dling of the transition of South Sudan demonstrates that government to implement a program of measures for the Legal VPU is able to respond efficiently and effec- good governance during Tunisia’s transition and in con- tively to increasingly complex operations and ensuring solidating social and economic change. Consistent with consistent and coherent legal support is made available to popular demand in the region for increased economic Legal VPU clients in a timely and integrated manner. opportunity, this was followed by a US$34 million loan to improve access to finance for micro, small and me- dium enterprises in Tunisia. FY 2012 Annual Report 13 In late January, grievances over the lack of economic op- portunities and political inclusion in Egypt led to large- scale public demonstrations, civil violence and the over- throw of the Mubarak government. Management, with the support of the Legal VPU, undertook an assessment of existing and new operations in Egypt in the context of the Bank’s policy on “Dealings with De Facto Govern- ments� (OP/BP 7.30). The Legal VPU continues to provide close support to the MENA Region throughout Egypt’s sustained transition to elected government. This includes the delivery of three loans, totaling US$640 million, for the development of critical water and energy infrastructure and a rapid response project for access to basic infrastructure services for the poor and a short-term job creation for unemployed, unskilled and semiskilled workers. The Legal VPU also provided advice to the MENA Region on an Interim Strategy Note to guide Bank operations in Egypt during its transition period. In July 2011, in response to widespread and sustained violence in Yemen and the existence of an extraordinary situation preventing the implementation and supervision of Bank operations, all disbursements for IDA credits and grants and for grants administered under Bank trust funds were suspended. The Legal VPU worked closely with colleagues in the MENA Region to ensure proper fi- duciary management of the portfolio throughout the pe- Photo: Danielle Malek Yemeni children, Sana’a. riod of suspension, and provided advice to country teams and the Bank’s Senior Management on donor issues, as well as reengagement with the transitional government following the lifting of the suspension of disbursement in MENA Region with a valuable mechanism for evaluating January 2012. the Bank’s future engagement in Libya. In Libya, the Bank’s Senior Management, in consulta- In addition, the Legal VPU played an important role in tion with the Legal VPU, initiated a watching brief structuring, drafting and negotiating legal documenta- approach under the Bank’s policy on “Development tion regarding the Micro, Small and Medium Enterprise Cooperation and Conflict�, OP/BP 2.30. The watching Facility for the MENA Region (MSME Facility) under brief approach, launched jointly with the UN under the the Arab World Initiative which includes a comprehen- United Nations World Bank-Partnership Framework for sive package of assistance including a horizontal and Crisis and Post-Crisis Situations, initiated the prepara- vertical Adaptable Program Loan (APL) program for tion of a socioeconomic assessment in order to develop a IBRD loans, a technical assistance package, a plan to better understanding of the context, dynamics, needs and explore partnership arrangements and a proposed facility institutions in Libya. With the overthrow of the Gad- to be set up by the International Finance Corporation dafi government in August 2011, and the assumption of (IFC) which could be used by countries as a guarantee executive and legislative authority by the Libyan Transi- vehicle under the APL loans referred to above. The Legal tional National Council, the Legal VPU also assisted the VPU assisted the region in setting up the facility, and MENA Region to undertake an assessment of the Bank’s specifically in handling all legal aspects of the first two engagement with Libya under OP/BP 7.30 (Dealings APL IBRD loans (to Tunisia funding credit lines, and to with De Facto Governments). Though the Bank did not Morocco consisting of backing partial credit guarantees have a lending portfolio in Libya at the outbreak of hos- issued by a national guarantee institution), the regional tilities (the portfolio consisted principally of reimburs- multidonor trust fund with IFC for technical assistance, able technical assistance), the assessment provided the and general advice regarding the proposed IFC Facility. 14 Legal Vice Presidency | The World Bank Legal Solutions for Developing Renewable A number of teams from the Legal VPU worked closely Energy in Africa with the project team on the extensive documentation OUARZAZATE I CONCENTRATED SOLAR POWER PLANT surrounding the PPP transaction, and provided innova- PROJECT, MOROCCO tive legal input not only on the Bank-financed part of the This innovative project supports the first phase in the project, but also for the overall PPP transaction, includ- development of a 500 MW solar power plant in the ing the structure of the future special purpose company Kingdom of Morocco, and will represent the largest and the contractual framework between suppliers, con- Concentrated Solar Power (CSP) plant in the world. tractors, and government agencies. Crafting the Bank’s The Ouarzazate project responds to the government’s legal agreements also presented a challenge since many “Morocco Solar Plan� (MSP) calling for the develop- risks could not be ascertained in advance (i.e., before ment of 2000 MW by 2020. In addition to furthering completion of the PPP bidding process), so conditional- the country’s low-carbon growth strategy, the MSP is ity embedded in the Bank’s agreements refers to future intended to help address Morocco’s growing need for actions and agreements which are anticipated under the electricity at a time of increasing public awareness of transaction. The project is considered the most valuable the anthropogenic impact on the climate system from contribution to Morocco’s lending program recently. fossil-based generation, and to stimulate investment and economic development at a critical time for the entire LOM PANGAR HYDROPOWER PROJECT, CAMEROON region’s political landscape. Phase I of Ouarzazate is the In March 2012, the Bank’s Board of Executive Direc- first step in what is expected to be a transformational tors approved an International Development Association project for Morocco and all of North Africa. The project (IDA) credit to the Republic of Cameroon for the Lom is expected to support development of an export market Pangar Hydropower Project. At its core, the project into Europe to meet the region’s climate change targets, supports the construction of a regulating dam (designed and, at the same time, diversify and increase generation to facilitate future hydroelectric development on the resources for domestic supply in Morocco. For these Sanaga River), along with a 30 Megawatt hydroelectric reasons, the Bank pledged its support for this first phase power plant and a 105 km transmission line connecting of the project, as part of a consortium of other bilateral the plant to Cameroon’s Eastern Grid, plus associated and multilateral funding institutions. environmental and social measures. Once completed, the project is expected to increase hydropower genera- Ouarzazate will be developed in phases by the Moroc- tion capacity, reduce seasonal variability of water flow, can Agency for Solar Energy (MASEN), the State- and increase access to electricity in the country. This owned entity created by the government for the specific project also leverages IDA resources through cofinancing purpose of implementing the MSP. The project will be provided by a number of other multilateral and bilateral implemented as a public-private partnership (PPP) with organizations. private sponsors selected through international competi- tive bidding in accordance with the Bank’s Procurement Guidelines. This implementation structure envisages also the creation of a special purpose company by the selected private sponsors to finance, construct, insure, own, and operate the plant to be constructed under Phase I. MASEN and the special purpose company will then enter into a power purchase agreement. The project has a number of novel features: (a) it is supported by both the International Bank For Reconstruction and Develop- ment (IBRD) and the Clean Technology Fund (CTF) loans; (b) the IBRD loan provides a gap fill mecha- nism similar to a “feed-in tariff fund� (to help pay the incremental costs of renewable energies which could be replicated in Morocco, and elsewhere in the world); and (c) the Bank’s financial support is one of the elements of a larger PPP transaction, where the Bank plays an impor- tant role of lender and technical advisor, and coordinates Photo: Dana Smillie the efforts of many external partners. Solar Power Plant, Morocco. FY 2012 Annual Report 15 The project was presented as a high risk, high return Addressing Urban Challenges in investment. The “high risk� nature stems from risks at Two Asian Megacities country, sector, and implementation levels. Accordingly, JAKARTA URGENT FLOOD MITIGATION PROJECT (JAKAR- the legal issues were many, and the input required from TA EMERGENCY DREDGING INITIATIVE - JEDI), INDONE- the Legal VPU was significant. SIA, AND THE METRO MANILA WASTEWATER MANAGE- MENT PROJECT (THE MANILA PROJECT), PHILIPPINES Our lawyers were instrumental in advising on a variety of complex matters, including on: Introduction: Jakarta and Manila are two Asian mega- cities, facing megachallenges to provide services for • environmental and social safeguards in terms of their populations. They each face problems related to reviewing safeguard documentation and generally inadequate sanitation and drainage, a high incidence of assisting with the overall project design in an effort to waterborne diseases, and serious environmental pollu- best mitigate safeguard risks; tion. The high population density in each city exacer- • adequacy of the enabling environment by conducting bates these problems. The Bank assisted the two cities to due diligence on the legal and regulatory framework design projects to address two urban challenges related of Cameroon’s energy sector and advising on the risks to water, flooding in the case of Jakarta, and treatment of and mitigation measures through innovative provisions wastewater in the case of Manila. Both projects involved in the legal agreements, namely in light of the coun- relatively straightforward infrastructure investments, but try’s adoption of a new electricity law in the months the rapidly changing urban environments in which the preceding Board approval; and projects were being implemented presented complex institutional, legal and safeguards issues, that were both • cofinancing arrangements given the multiple donors challenges and opportunities for the projects. (and their respective policies and procedures) involved by providing guidance on how to reconcile the Bank’s Jakarta regularly floods during the rainy season, bring- policies and procedures with such other policies and ing transport and commerce to a halt, causing damage procedures. and economic losses, and increasing health risks for the large urban population. Forty percent of the city lies below sea level and land subsidence continues. The JEDI Project supports the dredging of selected key floodways, canals and retention basins identified as priority sec- tions of the flood management system. The project also seeks to demonstrate sustainable institutional, social and environmental practices. Resolving the challenges Farhana Asnap Jakarta Emergency Dredging Initiative – JEDI 16 Legal Vice Presidency | The World Bank of flood mitigation in Jakarta is a complex undertaking, cating the end of active involvement with the CDF and requiring resolution of difficult issues under the institu- providing future events warranties and liability limitation tional responsibility of different and often disconnected mechanisms. The Bank accepted the risks intrinsic to stakeholders. working in a complex urban environment. The gov- ernment accepted the Bank’s requests for undertakings Metro Manila is located on the largest island of the beyond the project closing and beyond direct project Philippine archipelago and is in the hydraulic zone of parties. three major water systems: the Laguna Lake, the Pasig River and the Manila Bay. Domestic wastewater is the In the Manila Project, the question of how to ensure primary source of pollution in the Manila Bay watershed. that the borrower and the project implementing enti- The city is flat, so that canals and water courses flow too ties remained accountable for the effects of the project slowly to carry solid waste away and what runoff that without taking responsibility for actions beyond their does occur is channeled into the Manila Bay, creating control was also considered. Extensive consultations high levels of pollution that endanger fishing and rec- among the Philippine counterparts, the project team, the reation. In 2007, a group of concerned residents of the regional safeguards units and lawyers from the operation- Metro Manila area brought a case to the Supreme Court al and safeguards advisory units led to implementation against the government agencies charged with protecting and safeguards arrangements that struck this balance. and preserving Manila Bay. In a landmark decision that For example, the objective of the project “to improve was sharply critical of the government agencies’ inaction wastewater services in selected subcatchments of Metro in the face of growing pollution1, the Supreme Court Manila and surrounding area� was carefully crafted so as ordered the concerned government agencies to clean up, to ring-fence the project. A subcatchment was defined rehabilitate and restore the water quality of the Manila as the wastewater treatment plant (including sludge and Bay within a determined time frame. The Manila Project treated wastewater transportation and disposal arrange- supports the efforts of the authorities to improve waste- ments) pipelines for carrying treated wastewater financed water services by financing the construction of sewage by the Bank and sewerage lines that collect wastewater treatment plants and associated wastewater conveyance leading to the Bank financed wastewater treatment plant. systems. In a subcatchment where there is Bank financing, all activities—Bank financed or non-Bank financed—nec- In the JEDI Project, the Bank team, including lawyers essary to achieve the stated development objective will from the operational and safeguards advisory units, follow the Bank’s safeguards policies. In a subcatchment devised control points throughout implementation where there is no Bank financing—even if it is adjacent and after completion, covering environment, resettle- to a Bank financed subcatchment—the Bank’s policies on ment, complaints handling and other issues. One issue safeguards will not apply. involved the disposal of nonhazardous dredged material in a purpose-built confined disposal facility (CDF) in Ja- Two cities, one conclusion: The intense discussion and karta Bay and the government’s planned use of the CDF collaboration required between government and Bank for reclamation after the project ends. Jakarta Bay is the teams in Manila and Jakarta frame both an opportunity site of numerous reclamation activities as Jakarta expands and a challenge for the Bank to think, going forward, its habitable space. A reclamation company (majority about ways to address difficult institutional, legal and government-owned) is building the CDF. The CDF is safeguards issues in complex urban projects with sophisti- necessary for the project, but the Bank does not have a cated middle-income borrowers. direct relationship with the CDF company. Despite the regulatory and contractual obligations of the company, there remained a risk that it could allow nonproject materials into the CDF, which could potentially include hazardous materials, or it could mismanage the reclama- tion, in both cases with adverse impacts long after the project has ended. The project technical design and covenants addressed postproject risks, including demar- 1 Metropolitan Manila Development Authority et al versus Con- cerned Residents of Manila Bay (General Record Nos. 171947-48) FY 2012 Annual Report 17 Coordinated Legal Services to Support The Global Environment Facility (GEF) grant was Forests and Climate Change Activities fairly complicated given the intricate legal structure that Mexico requested support from the Bank to develop and supports the activities of Mexico’s National Commis- implement a new package of services focused on forests sion for the Biodiversity (CONABIO). The activities and climate change. In response, a set of instruments was of CONABIO are financed through a biodiversity trust designed to support sustainable management, restora- fund (the Trust) but, in Mexico, trust funds do not have tion, and expansion of Mexico’s forests, while promoting legal personality: they have a technical committee which local socio-economic development to strengthen local makes decisions regarding the use of the funds of the communities’ resilience to climate change and spearhead- trust, and a trustee, who executes the decisions made by ing the global effort on Reducing Emissions from De- the technical committee. As a result, the parties to the forestation and Forest Degradation (REDD+). A list of GEF grant agreement are IBRD (as trustee of the GEF), financial instruments involved in this package is included the trustee of the Trust (as recipient of funds), and the in the table below. United Mexican States. The latter is involved because Instrument Description Forests and The FIP is a program of the Climate Investment Funds to support developing countries’ efforts on REDD+ and promote sustainable forest management. Mexico Climate Change is one of eight pilot countries worldwide. FIP resources included a US$16.34 million Forest Investment Strategic Climate Fund (SCF) Forest Investment Program Loan, and a US$25.66 Program (FIP) million SCF FIP Grant. Forests and The US$350 million IBRD SIL will support Mexico in two main areas: (a) multiscale Climate Change institutional strengthening; and (b) incentive programs to communities. The activities Sector Investment of the IBRD SIL are co financed by the SCF FIP Grant and the SCF FIP Loan described Loan (SIL) above. Forestry is one of three pillars in the Social Resilience and Climate Change DPL Social Resilience (US$300 million). The pillar supports three policy actions: (a) launching of a new and Climate Change collaboration among CONAFOR and the Ministries of Agriculture and Environment; Development Policy (b) creation of one national and three state-level REDD+ civil society Consultative Loan (DPL) Groups; and (c) inclusion of REDD+ in the first inter-municipal initiative. These actions are also supported by the French Development Agency A US$3.6 million grant from the FCPF for Readiness Preparation has been prepared Forest Carbon to support activities that would culminate in a Readiness Package consisting of: (a) a Partnership Facility national REDD+ strategy; (b) a national forest reference level; (c) a forest monitoring (FCPF) and verification system; and (d) a system for addressing environmental and social safeguards. The Bank mobilized PROFOR grants to support CONAFOR in: (a) assessing Mexico’s Program on Forests community forestry enterprises’ competitiveness in local and global markets (PROFOR) (US$150,000); and (b) conducting a South–South collaboration on REDD+ and Payments for Environmental Services with Costa Rica and Ecuador (US$150,000). The objective of the Sustainable Production Systems and Biodiversity project is Global to conserve and protect nationally and globally significant biodiversity in Mexico Environmental through improving sustainable management practices in the productive landscape in Facility (GEF) priority ecological corridors. This will be financed with a US$11.688 million GEF grant negotiated this year. 18 Legal Vice Presidency | The World Bank two of the four members of the technical committee of the Trust are part of the Executive. It is the Secretary of the Mexican Secretariat of Environment who appoints the president of the technical committee, and the presi- dent has a tie-break vote. Therefore, the United Mexican States has the possibility to control the decisions of the technical committee. In order to ensure compliance with all the legal obligations of the GEF grant agreement (in- cluding fiduciary and safeguards obligations), the United Mexican States committed to use its voting rights in the technical committee of the Trust in such a manner as to comply with the provisions of the grant agreement. Meeting the Legal and Policy Challenge in Regional Fibre Optic Cable Projects Photo: Jannina Flores Ramirez CARIBBEAN REGIONAL COMMUNICATIONS Sulphur Springs (near Soufrière), Saint Lucia. INFRASTRUCTURE PROGRAM On May 22, 2012, the IDA Board of Executive Direc- tors approved credits to three of the four countries, The objective of the Program is, therefore, focused on participating in the first phase of the Caribbean Regional drawing country efforts at the regional level to increase Communications Infrastructure Program (CARCIP). access to regional broadband networks and advance Along with the credits, an IDA regional grant to the the development of ICT-enabled services in the Carib- Caribbean Regional Communications Union (CTU) was bean region. In the design of components and activities, also approved. the Legal VPU provided the in-house expertise in ICT projects to focus specific components to include technical The first phase of CARCIP includes specific country assistance for the design and implementation of the PPP projects for Grenada, Saint Lucia, Saint Vincent and arrangements and for strengthening and harmonizing the the Grenadines and Dominican Republic. Although the legal and regulatory framework for telecommunications. proposed IBRD-financed project for the Dominican Re- The Legal VPU was also at hand to advise on the envi- public will be presented to the Board at a later date, the ronmental and social safeguard policy questions under Project is designed and was prepared as part of the first the Program both at the regional and national levels in phase of the CARCIP along with the four IDA-financed view of the two policies that are triggered as a result of projects. the project (OP/BP 4.01 “Environmental Assessment�, and OP/BP 4.12 “Involuntary Resettlement�). CARCIP is designed as a horizontal regional APL to allow the flexibility for other countries in the Carib- The CTU, a regional organization established in 1989 bean region to participate in subsequent phases of the under the Agreement for the Establishment of the Carib- Program. The participating Caribbean countries are de- bean Telecommunications Union with a mandate to veloping a regional digital strategy to address key policy facilitate the development of the Caribbean ICT sector, and regulatory bottlenecks, which constrain the use of satisfied the eligibility criteria for regional organizations information and communication technology (ICT) to that receive grants under IDA 16. The criteria entails: stimulate growth. CARCIP is designed to support the (a) the recipient is a bona fide regional organization that implementation of the regional strategy and to provide has the legal status and fiduciary capacity to receive grant opportunities to the region to bridge some of the gaps in funding and the legal authority to carry out the activi- regional and domestic broadband communication infra- ties financed; (b) the recipient does not meet eligibility structure, including a submarine cable infrastructure and requirements to take on an IDA credit; (c) the costs and landing stations, domestic backbone networks and cross- benefits of the activity to be financed with an IDA grant border links, and national and regional internet exchange are not easily allocated to national programs; (d) the points. The Program also aims at creating an enabling activities to be financed with the IDA grant are related environment that leverages the regional and domestic in- to regional infrastructure development, institutional frastructure to foster employment and economic growth. cooperation for economic integration, and coordinated FY 2012 Annual Report 19 interventions to provide regional public goods; (e) grant Two other regional institutions are involved in Project cofinancing for the activity is not readily available from implementation (i.e., the Eastern Caribbean Telecom- other development partners; and (f ) the regional entity munications Authority (ECTEL), and the Caribbean is associated with an IDA-funded regional operation Knowledge and Learning Network (CKLN)). The role involving some of the participating member states. of the two organizations is critical for the activities as- sociated with regulation harmonization, and research In view of the participation of the Dominican Republic, and education, since the two institutions have specific an IBRD only country, the Legal VPU provided guid- mandate and expertise on these areas. For the purpose ance and clarity required to ensure that IDA Grant will of harmonizing the regional institutional arrangements, be used for the benefit of the IDA only countries to the the Legal VPU designed the implementation agreements. exclusion of the IBRD only participating country. Since The coordination between the national and regional level IDA funds cannot be used for the benefit of the IBRD entails technical agreements between the participating countries, the activities undertaken by the CTU will countries and CTU. be directly targeted to Grenada, Saint Lucia and Saint Vincent and the Grenadines, whereas the Dominican Since Dominican Republic is not a member of the CTU, Republic will only benefit from the anticipated improve- at the regional level, a memorandum of understanding ment in regional ICT and connectivity at the regional among the three participating CTU countries, Domini- level. can Republic and the CTU is being elaborated for the purpose of cooperation in implementation of the project activities. Signing of three credits for Grenada. V. Nazim Burke, Minister of Finance, Francoise Clottes, World Bank. Legal staff pictured: Edith Mwenda and Manju Ghumman. Photo: World Bank 20 Legal Vice Presidency | The World Bank Safeguard Policies The vision of the Bank’s safeguard The Legal VPU plays a number of essential roles in the interpretation and application of the Bank’s ten safeguard policies goes beyond mitigating policies. On a daily basis, we provide legal assistance to the Bank’s operational staff, regional safeguard advisors, risks and avoiding harm. They are and borrowers on how to manage environmental and social aspects of Bank projects. In fiscal year 2012, we fundamentally aimed at promoting fielded well over two hundred specific requests across all regions for safeguard advice on projects under prepara- desirable social and environmental tion or in implementation, with issues ranging from simple to complex, requiring long-term legal involve- development outcomes. Sound ment in numerous instances. We develop covenants to deal with identified risks and to ensure that prevention legal strategies are critical for their and mitigation measures are implemented. We serve as lead focal point for the two “legal safeguard� policies: OP effectiveness. 7.50, Projects in International Waterways, and OP 7.60, Projects in Disputed Areas. Photo: Anne-Marie Leroy State of Rio de Janeiro, Brazil. FY 2012 Annual Report 21 The Legal VPU plays a key role with Operations Policy Finally, the Legal VPU advises Bank management and Country Services (OPCS) in assessing national throughout the steps of the Inspection Panel process, legal frameworks through the lens of Bank safeguards, contributing to the preparation of management re- identifying equivalencies and gaps, and helps lead the sponses and facilitating interaction with the Panel, while piloting of the Use of Country Systems approach under separately, the General Counsel retains an independent OP 4.00. We contribute to safeguard policy clarifications role as counsel to both the Panel and the Board. and reforms when needed and participate as core faculty members in safeguard training activities for both staff and clients. HIGHLIGHTS Rolling Out the Common Approach for Contributing to Safeguards Policy Review Safeguards in FCPF and Clarification The Legal VPU continued to help put in place the The Legal VPU has been a key partner with the Sustain- unique safeguards architecture for the Forest Carbon able Development Network (SDN) and the Operations Partnership Facility (FCPF), playing a leading role in the Policy and Country Services (OPCS) in the develop- finalization and rolling out of the “Common Approach ment of an approach paper for the review and updating to Environmental and Social Safeguards for Multiple of Bank safeguards, a process that is expected to get Delivery Partners� (Common Approach). The Common fully underway in fiscal year 2013. In parallel, we have Approach, adopted by the FCPF Participants Committee worked closely with OPCS and the Regional Safeguard in Oslo in June 2011, paves the way for Delivery Part- Advisors on a number of policy-related initiatives, ners other than the Bank to participate in grant adminis- including the development of guidance notes on the tration. The challenge was to achieve consensus between application of safeguards in fragile and conflict affected the Bank and a number of potential Delivery Partners situations, and on tailoring safeguards application to dif- (DPs), UNEP, IADB, ADB, FAO—each of which has its ferent types of technical assistance activities. own sustainability policy—on a common set of safeguard standards that all DPs would be responsible for applying Legal Drafting Tools for Safeguards the context of REDD+ activities. The Legal VPU is cur- Covenants rently assisting the FCPF team in the conclusion of the As part of its ongoing Knowledge Management activities, first Transfer Agreements between the Bank and IADB the Legal VPU has developed an online database entitled and UNDP, which will operationalize the Common Ap- “Safeguards Definitions and Covenants: A Drafting proach in five countries where those DPs are taking the Resource.� This database resource is aimed at providing lead. Bank lawyers with sample text taken from actual invest- ment lending operations to assist them with drafting the Advising Management on Inspection Panel most commonly-used safeguards-related definitions or Matters covenants that address a project’s legal policy require- Six new requests for inspection were registered by the ments for environmental assessment, pest management, Inspection Panel in fiscal year 2012 for projects in India indigenous peoples, physical cultural resources, invol- (3), Kenya, West Bank and Gaza, and Kosovo. The year untary resettlement, and safety of dams. In addition to also saw the completion of inspections for cases in Peru, providing sample text for 250 definitions and covenants Papua New Guinea and the ESKOM project in South taken from actual projects, search features and results Africa. The Legal VPU played a leading role in all phases include links to project documentation in the Operations of these cases, from participating in the preparation of Portal. The database is also linked to the Legal VPU’s An- Management Responses to interaction with the Panel notated Safeguards OP/BP database. and national counterparts. We continued during the year to lead supervision and monitoring of the Bank’s support for legal review in Albanian courts of grievances arising from an earlier case in Albania. 22 Legal Vice Presidency | The World Bank Advising on the Environmental and Social in OP/BP 9.00. The Legal VPU played a key role Dimensions of Program-for-Results (PforR) in the design of the PforR approach to environmen- The newly adopted PforR adopts a risk-manage- tal and social risks and has advised task teams in all ment approach to address potential environmen- Regions in reviewing and improving the ESSA’s that tal and social impacts. Rather than applying the have been produced in the initial round of PforR Bank’s suite of safeguard policies, PforR operations operations. This involvement has been particularly involve an upfront environmental and social system important in light of PforR’s reliance on robust assessment (ESSA) that describes and assesses the analysis of national legal provisions and institutions, applicable legal and institutional frameworks in which is critical for informed risk management borrowing countries against principles spelled out decisions by the Bank’s Senior Management. Photo: Jonathan Pavluk World Bank legal staff support site inspections to verify findings of environmental and social impact assessments with respect to possible resettlements of community. This site is in rural Rwanda. FY 2012 Annual Report 23 Environmental and Natural Resource Management For the Bank to respond meaningfully by a clear appreciation of the complex array of applicable international obligations and principles. to new and intensifying environmental At the corporate level, the Legal VPU provides spe- challenges, innovative lawyering is cialized legal advice to the Sustainable Development Network (SDN) Vice Presidency and others involved in essential to ensure effective targeting developing the Bank’s strategies on the environment and related issues. We help shape the Bank’s participation of Bank operations, and to help clients in international fora and initiatives on climate change, biodiversity, forestry, agricultural land investment, and adapt national and international legal related subjects. The Legal VPU plays a key role in the design and implementation of international partnerships, frameworks. including the Global Environment Facility (GEF), for which it serves as legal advisor to the Secretariat, and In addition to its work on safeguard issues, the Legal the Consultative Group on International Agricultural VPU provides specialized legal advice to Bank operations, Research (CGIAR). partnerships and clients, at national and global levels, Finally, our lawyers provide a full array of legal services in across a wide range of environmental and natural re- support of the Bank’s initiatives in carbon finance. The source management issues and initiatives. Legal VPU was a key player in designing the legal archi- For country or regional operations that focus on envi- tecture and institutional arrangements when the Bank ronmental or natural resource issues, the Legal VPU pioneered carbon finance more than a decade ago. Today frequently contributes to assessments of national legal the Legal VPU’s carbon-related practice has expanded frameworks for pollution control, forestry, watershed to providing legal support to more than a dozen carbon management, fisheries, land tenure and planning, wild- funds or facilities for which the Bank is trustee, including life, mining, and related issues. Our input helps ensure the Forest Carbon Partnership Facility (FCPF). We also that Bank-supported reforms are guided by best-practice provides legal services for the Climate Investment Funds comparative law developments at the national level, and (CIF administrative unit, which provides secretariat services for the CIFs.) Photo: Anne-Marie Leroy State of Rio de Janeiro, Brazil. 24 Legal Vice Presidency | The World Bank HIGHLIGHTS Legal Support to Global Oceans fund has decreased over the years. Beyond the political Partnership considerations behind this question (hence to be decided Lawyers in the Legal VPU worked closely with colleagues by the Council), the question has a strong legal compo- from SDN in establishing the Global Partnership for nent, having to do with the interpretation of the GEF Oceans (GPO). The GPO was launched at the Rio+20 Instrument and the practice that the GEF has developed UN Conference on Sustainable Development in June in the almost 20 years since its restructuring in 1994. For 2012. Legal VPU staff helped the team prepare the this reason, the GEF Secretariat requested that the Legal “Declaration for Healthy, Productive Oceans to Help VPU (in its capacity as advisor to the GEF) draft what Reduce Poverty�, which spells out the key objectives of would then become GEF Council paper GEF/C.41/11. the partnership. The declaration has attracted more than Rev.01. The paper, after a detailed analysis of the rules 100 signatories from the private sector, civil society and on the composition of GEF constituencies and the national governments. prerogatives of the Council under the GEF Instrument, concluded that decreasing contributions do not have Combating Wildlife Crime automatic effects for single-country constituencies (of The Legal VPU intensified its support to boosting inter- which there are currently ten), but the GEF Council may nal capacity to help countries deal with environmental always approve alterations to constituency composition crimes, such as illegal logging, poaching of wildlife, toxic without any need to amend the GEF Instrument, unless discharges, unlicensed fishing, and related corruption the GEF Council alters the rules and criteria contained and money laundering. Recognizing that such crimes in the GEF Instrument. This paper was well received at are placing increasing stress on natural resources, the the 41st GEF Council meeting in August 2011 and was Bank, along with the World Customs Organization, the instrumental in diffusing potential problems. UN Office of Drugs and Crime, Interpol and CITES launched the International Consortium on Combating Addressing Land Risks of Commercial Wildlife Crime (ICCWC) as a partnership to leverage Agriculture Investment the capabilities of each institution to achieve better com- This year witnessed growing attention within the Bank to pliance with sustainable natural resource management re- enhancing the contribution of commercial agriculture to gimes. Further to ICCWC’s mission, the Bank—through development in Africa. At the same time, there has been the Development Grant Facility—and other partners, continued concern within the Bank and globally about supported the preparation of a Forest and Wildlife Crime the social and environmental risks associated with a new Analytic Toolkit. The toolkit provides new ideas on how wave of international investment in African agricultural countries can combat wildlife crime. The Legal VPU staff land, in particular concerning the effects on local land contributed to this work by discussing the importance of rights and livelihoods of vulnerable populations. The the international legal framework and provided guidance Legal VPU has helped task teams negotiate the tension on analyzing the robustness of national level legislation between these opportunities and risks, contributing to and subsequent legal reform. legal and land rights diagnostic studies and the design of land risk mitigation approaches for projects in Ghana, Support to Global Environment Facility Senegal and Tanzania. The Council members of the GEF represent constituen- cies which are formed taking into account the need, on the one hand, to achieve an equitable representation of all GEF participants and, on the other hand, to give due weight to the funding efforts of all donors. At a GEF Council meeting, a point was raised whether arrears in contributions to the GEF Trust Fund has an impact on constituency formation, more particularly whether a donor country can still maintain its single-country con- stituency even when its contribution to the GEF trust FY 2012 Annual Report 25 World Congress on Justice, Promoting the Use of Alternative Dispute Governance and Law Resolution in Carbon Contract Disputes In advance of the United Nations Conference on Sus- To streamline and economize dispute resolution in the tainable Development Rio+20, the Legal VPU led the context of the Bank’s carbon fund work, the Legal VPU Bank’s partnership with UNEP and other organizations was instrumental in helping to pioneer mediation of in convening the World Congress on Justice, Governance carbon contract disputes as a valuable alternative dispute and Law for Environmental Sustainability, held in Brazil, resolution tool. The process was used this year for the on June 17-20, 2012. The Congress attracted more than first time at the Bank to settle a dispute with a public en- 200 participants, comprising high-level judges, pros- tity which was the counterparty in an emission reduction ecutors, auditors and other legal experts, and aimed to purchase agreement. The settlement documents have foster a common vision on the effective use of justice, been made accessible to the public. law and governance strategies in promoting environmen- tally sound development. In addressing the Congress on behalf of the Bank, Charles Di Leva, Chief Counsel, Environmental and International Law, stressed the criti- cal importance of transboundary environmental, strategic and social impact assessments, of international donors confirming project compliance with national law, and of building mechanisms to address public grievances within the context of donor-funded initiatives. Photo: Jonathan Pavluk Rusumo Falls 26 Legal Vice Presidency | The World Bank Infrastructure and ICT The updated World Bank Group Infrastructure Strategy Many of the Bank’s activities in FY12-15 entitled “Transformation through Infrastruc- ture� lays out the framework for transforming the Bank’s infrastructure and Information and engagement in infrastructure and places emphasis on the role of the private sector and private sources of financing Communication Technology include in infrastructure. components for legal, regulatory and Many of the Bank’s activities in infrastructure and Infor- mation and Communication Technology (ICT) include institutional reform to help client components for legal, regulatory and institutional reform countries maximize the benefits of to help client countries maximize the benefits of invest- ment and also attract private sector investment in these investment and also attract private sectors. sector investment in these sectors. The Legal VPU advises on legal, regulatory and institu- tional reform for Infrastructure and ICT sectors as well Our infrastructure specialists also participate in the as on legal issues related to private sector investments in World Bank Group’s Global Expert Team for PPP and infrastructure and public private partnerships (PPPs). It advise the Bank’s management in connection with Bank- provides legal assistance to the Bank’s operational and ad- wide initiatives and strategies related to infrastructure visory staff on the transactional aspects of Bank-financed and ICT. They have also contributed a regular legal or guaranteed infrastructure and ICT across all sectors column to the IFC’s Handshake online magazine on PPP and regions. projects—www.ifc.org/handshake. Photo: Arne Hoel Cellular tower, Ghana. FY 2012 Annual Report 27 HIGHLIGHTS Assisting Legal and Contractual Providing Legal Support to the Bank’s Components of Bank Projects Supporting Power Sector Investments Countries in Developing their TRANSMISSION LINE FOR WEST AFRICA PPP Programs The Legal VPU provided support to a project, which was The Legal VPU supports a number of PPP Projects in approved by the Bank’s Board of Directors in July 2012, Sub-Saharan Africa, particularly Nigeria, Ghana and Ke- to design, construct, own, and operate a transnational nya, which have different components, such as supporting transmission line that will cross Côte d’Ivoire, Liberia, Si- the legal and institutional framework for PPPs, support- erra Leone, and Guinea. The line is expected to form part ing prefeasibility and feasibility studies for specific pro- of the West African Power Pool (WAPP), and is envisaged posed PPP projects and providing loans for government to capitalize on the region’s rich hydropower resources by support to projects which are not otherwise commercially opening markets for this power in countries that are short viable (for instance, where the tariff charged to support on supplies. In the near future, the line is expected to the financing of the infrastructure is deemed too high for become the backbone for a national grid in Sierra Leone consumers to bear without a subsidy). The Nigeria project where 93 percent of the population remains without became operational in fiscal year 2012 and the Ghana access to power, and to significantly reduce the cost of project was submitted to the Bank’s Board of Executive power in Liberia by providing access to lower-cost genera- Directors for approval in fiscal year 2012. The Kenya tion capacity than is currently available domestically. On project is projected to be submitted to the Bank’s Board this project, different units of the Legal VPU worked for approval in the second quarter of fiscal year 2013. closely to provide support on the development of the in- The Legal VPU has provided support and comments on stitutional and contractual framework for implementation the optimal legal and policy frameworks for these jurisdic- of the project through an international treaty and a suit of tions. Ghana and Kenya have published their PPP poli- contracts that will govern operation of the line. cies in fiscal year 2012, and draft PPP laws are scheduled to be presented to their respective Parliaments by the end NIGERIA’S POWER SECTOR REFORM of fiscal year 2012 or early in fiscal year 2013. The Legal The Legal VPU was engaged on the continuing effort of VPU is also assisting the Governments in the preparation the Bank to support the reform process in Nigeria’s power of Terms of Reference for consultants for prefeasibility sector. In 2010, the Federal Government of Nigeria (FGN) announced a forward-looking roadmap to address and feasibility studies, and the selection and prioritization the chronic problems in the country’s power sector. The of projects as part of ongoing support to build capacity in FGN decided to divest its generation and distribution the relevant agencies and line ministries. assets and rely on private sector support to revamp the The Legal VPU has also been supporting a diagnostic sector’s wholesale and retail operations. The FGN also study of the role that the East African Community (EAC) decided to increase its reliance on independent power can play in developing PPPs in the region, particularly in producers to significantly increase the generation capacity in the country that had fallen woefully behind demand projects with a regional dimension. for power as a result of years of underinvestment in the sector. The FGN requested Bank support in the form of credit enhancements and other risk mitigation instru- ments to facilitate private sector development and financ- ing of specific projects. The guarantees and infrastructure advisory teams in the Legal VPU have been engaged with the Region and other Bank units on providing this sup- port through a series of partial risk guarantees that would be designed to ensure that the most advanced projects reach financial close. In this effort, the Bank has been coordinating with both the Multilateral Investment Guar- antee Agency (MIGA) and the IFC to ensure appropriate Photo: Curt Carnemark leverage across the whole World Bank Group spectrum to Nairobi, Kenya provide the scope and depth of support needed. 28 Legal Vice Presidency | The World Bank ADVICE ON THE MOROCCO OUARZAZATE Addressing Legal Dimensions of the Bank’s CONCENTRATED SOLAR POWER PROJECT ICT Interventions (See description in “Legal Solutions for Developing The Legal VPU was engaged in supporting a number of Renewable Energy in Africa�, page 15). new initiatives aimed at bringing the benefits of market liberalization and core infrastructure, including in small/ SUPPORT FOR POWER SECTOR INITIATIVES IN CAMEROON fragile and postconflict states. In the past year, our work Various units of the Legal VPU were engaged in support has focused on: (a) getting the policy/legal/regulatory of a number of power sector projects in Cameroon. The enabling environment “right�, which is a hallmark of the Kribi Gas Power Project, which was approved by the Bank’s successful work (as was noted in the Independent Bank’s Board of Executive Directors in November 2011, Evaluation Group’s 10-year retrospective review), and is involves both an IBRD guarantee and an IFC loan to a core aspect of our engagement on project preparation assist with the construction of a 216 Megawatt power work in the sector; and (b) supporting the preparation plant (designed to be subsequently expanded to 330 and supervision of legal and transactional work advising Megawatt). The Legal VPU advised on the development on financing, building and the management of of an innovative guarantee instrument, which will provide investments in new infrastructure (e.g., submarine cables). coverage to a consortium of local commercial lenders (see section on “Guarantees�, page 32). In addition, various NEW PACIFIC PROJECTS teams from the Legal VPU made contributions in regard Technical Assistance Lending for the Kiribati to operational considerations, social and environmental Telecommunication and ICT Sector Development issues and the development of Cameroon’s legal and Project was approved by the Board on July 25, 2012. The regulatory framework for the power sector. The latter Project aims to: (a) strengthen the legal, regulatory and units were also actively engaged with the Lom Pangar institutional environment to encourage new investment Hydropower Project (see description in “Legal Solutions in the ICT sector; (b) provide advisory support to the for Developing Renewable Energy in Africa�, page 15). state-owned Telekom Services Kiribati Limited; and (c) Furthermore, the Legal VPU was extensively involved in support the creation and implementation of a subsidy supervision activities under the Cameroon Energy Sector fund to improve services in areas, especially on remote Development Project (which had been approved by the Outer Islands, that are not viable on purely commercial Bank’s Board of Executive Directors in 2008), focusing on terms. Kiribati is currently one of the least “connected� capacity building and private sector development issues. countries in the world and telephone and Internet costs are very high. A Development Policy Operation was negotiated with the Marshall Islands on July 12, 2012, which is designed to support: (a) the transition from a monopolistic to a liberalized telecommunications market; (b) the reform and restructuring of the majority state-owned National Telecommunications Authority; and (c) the development of a new legal and regulatory framework for telecommunications/ICT and an independent regulatory function. It is anticipated that this engagement will lead to the first World Bank Project in the Marshall Islands. The Marshall Islands became a member of the Bank in 1992. Photo: Lauren Day Building Seawalls. Tarawa, Kiribati. FY 2012 Annual Report 29 Broadband Connectivity Across Regions LEADERSHIP ON DEVELOPING A CORPORATE-WIDE We have also been engaged in providing assistance under STRATEGY REGARDING PROTECTING THE WORLD BANK various regional projects supporting activities to improve BRAND AND DOMAIN IN THE FACE OF THREATS FROM the legal enabling environment and invest in broadband NEW GTLD APPLICATIONS connectivity infrastructure. These engagements spanned In addition to project related work, assistance was given Africa (the West African Connectivity Infrastructure over the past year in connection with the development Project, Central African Backbone Project and the and elaboration of the new ICT sector strategy which Regional Connectivity Infrastructure Project), the was published by the Information and Communication Caribbean (Caribbean Connectivity Infrastructure Project) Technology Group (TWICT). We are also pleased and the Pacific (the Regional Connectivity Project). that the Legal VPU received implicit recognition in the IEG report for its excellent work over the past • In South Sudan, a fragile, postconflict state, an decade on elaboration of legal and regulatory enabling infrastructure investment project is being prepared environments. We expect to see strong demand for more focusing on: (a) developing and implementing a new work on privacy, cyber-security, freedom of and access legal and regulatory enabling environment for the ICT to information. These issues are taking on increasing sector; and (b) investing in fibre optic cable systems to importance as connectivity improves internationally improve international and domestic connectivity. The through the development and implementation of high- project will fall under the umbrella of the Regional speed infrastructure networks (e.g., submarine and Connectivity Infrastructure Project for Eastern Africa. terrestrial fibre links). We have also taken a leadership on behalf of the Legal VPU, working with TWICT, • The Caribbean Regional Communications Information, Management and Technology (IMT), and Infrastructure Program was approved by the External Affairs (EXT), on developing a corporate-wide Board on May 22, 2012. The Program is focused strategy regarding protecting the World Bank brand on, among other things: (a) improving physical and domain in the face of threats from new generic connectivity infrastructure, including submarine top-level domain (gTLD) applications, advising the cable infrastructure, terrestrial broadband backbone Web Governance Council on adopting that strategy, as fiber networks, and terrestrial and submarine cross- well as working with the General Counsel of some 26 border links; and (b) capacity building focused on Intergovernmental Organizations (IGOs) in crafting a the legal and regulatory enabling environment, and common position of the trademark protection of IGOs options for designing and implementing a PPP that in the face of the new gTLD process. will own, manage and ensure competitive and non- discriminatory access to the infrastructure. In addition Structuring Solid Waste, Transport and to a regional grant, the first phase of this Program Water Projects covers Grenada, Saint Lucia, and Saint Vincent and In water, the Legal VPU supported the Bank team the Grenadines. that provided input to the Philippine Government on its proposals for restructuring the water sector and • Under the umbrella of the Pacific Regional developed an options paper on possible mechanisms Connectivity Project, Technical Assistance and for economic regulation of the Philippine water sector, Investment projects are being prepared in the drawing from international experience. It also provided Federated States of Micronesia (FSM) and Palau, support to the Water and Sanitation Program (WSP) on which are aimed at: (a) supporting core legal and developing a form of lease contract for small scale water regulatory reforms and institutional capacity building; projects in Kenya and conducted a comparative analysis and (b) landing submarine fibre optic cables and of contracts developed for small scale rural water projects bringing the benefits of high-speed connectivity to worldwide. Palau and FSM without submarine fibre (i.e., Yap, Chuuk and Kosrae). Initial discussions have also In transport, it supported the Bank team reviewing commenced with the Government of Samoa regarding the model form Engineering, Procurement and options for investing in a new submarine cable. Construction (EPC) contract for roads developed by the Indian Planning Commission and has assisted in the legal structuring of a number of road projects in India, including the annuity road project in Karnataka. It also provided support on proposed port projects in West Africa. 30 Legal Vice Presidency | The World Bank In solid waste, the Legal VPU supported a team providing technical assistance to the Kuwaiti government in analyzing its solid waste sector and reform thereof. It also participated in a team analyzing challenges facing PPPs in the solid waste sector between private providers and municipalities in Morocco and proposing measures to resolve these challenges. Photo: John Hogg National road up the West Coast, the N7. Runs from Cape Town to Namibia. FY 2012 Annual Report 31 Guarantees By covering certain risks that private sovereign borrowing and (normally) public sector proj- ects, providing partial cover of debt service default and/ financiers cannot take or are not or credit risks of sovereign and public-sector borrowers (e.g., state-owned enterprises); and (b) IBRD and IDA willing to take, the Bank’s guarantee Partial-Risk Guarantees (PRGs) to support private sector projects, covering debt service default caused by govern- products make private financing ment nonperformance of contractual obligations to a specific project. While PBGs provide fiscal support for possible and improve commercial a member country’s development program, PCGs and PRGS are project-based. In providing these guarantees, debt terms. the Bank requires a counter-guarantee from the partici- pating member country, as in its lending operations. Bank guarantees facilitate the mobilization of com- Fiscal year 2012 saw the Legal VPU continue to break mercial debt within our member countries in order to ground in structuring and supporting new features, promote development in member countries’ public and instruments and member countries with Bank guaran- private sectors by supporting policy reform, infrastruc- tees, as well as in comprehensively providing vital input ture projects and the growth of legal and commercial in updates designed to modernize the Bank’s guarantee institutions. By covering certain risks that private finan- program. Along with these innovations, the Legal VPU ciers cannot take or are not willing to take, the Bank’s continued to work productively with its counterparts in guarantee products make private financing possible and private sector sponsors, lenders and law firms, member improve commercial debt terms. The Legal VPU pro- country finance and economic ministries, and cofinan- vides support in respect of all Bank’s guarantee products, ciers at other international development institutions to currently: (a) IBRD Partial Credit Guarantees (PCGs), extend Bank guarantees in a number of different coun- including Policy-Based Guarantees (PBGs), to support tries and contexts. Photo Courtesy of Hisham Abdo Kahin Trung Son Hydropower Project, Vietnam. 32 Legal Vice Presidency | The World Bank HIGHLIGHTS Modernization of the World Bank’s ing and negotiating the very complex documentation Operational Policy on Guarantees for these PRGs which follow a deemed loan structure, The Legal VPU has been heavily involved in the forth- under which termination payments by the governments coming updates to the guarantee program, slated to go will be converted into loans which repayment would be to the Bank’s Board of Executive Directors at the end guaranteed by IDA. of 2012. These updates propose, among other things, streamlining certain policy requirements and extending Kribi Power Project IDA Partial Risk certain types of guarantees to qualifying IDA countries. Guarantee in Cameroon This long-awaited project aims to bring power to over Kenya Private Sector Power Generation 100,000 new households in Cameroon, a country in Support Project IDA Partial Risk Guarantee need of increased power supply. In addition to featuring Series the cooperation of IFC and many other development This operation involves a series of guarantees of four sub- banks (EIB, Proparco, AfDB, FMO and BDEAC), it projects to support power production efforts in Kenya, includes groundbreaking features such as participation in advance of the guarantee modernization which will by local banks in a major project finance transaction, a address procedures for providing guarantees in a series. roll-over option designed to double the maximum tenor This modernization will address procedures for further of local loans, and a special credit guarantee component guarantee series. The project was developed in coordina- authorized by the Board, which anticipates upcoming tion with IFC and MIGA, who will also participate in features of the guarantees modernization. The Legal VPU some of the subprojects, and was jointly discussed at the was deeply involved in the analysis of the provision of a Board. It will bring a combined 284 MW of additional credit guarantee features in this IDA operation, and in power supply to Kenya, while the World Bank Group’s drafting and negotiating transaction documentation to proposed risk mitigation package enabled Kenya to reflect the many innovative features of this complicated mobilize the investments in the project with a reduced and long-awaited operation. scope of sovereign guarantee to the project. The project received an Africa Vice Presidency award for Best Proj- FYR Macedonia IBRD Policy-Based ects. The Legal VPU was responsible for all key aspects of Guarantee Operation drafting and negotiating guarantees in this series, among This Europe and Central Asia Vice Presidency award- different counterparties and often under extreme time winning PBG, only the second in ten years, allowed pressures. the Former Yugoslav Republic of Macedonia to obtain its first international commercial loan on favorable IDA Partial-Risk Guarantees in Support of financing terms and tenor while leveraging IBRD’s the Joint Railways Concession for Kenya resources. The Legal VPU played a key role in designing and Uganda and negotiating the PBG and its documentation both Following a successful restructuring of this project to with internal clients in the Treasury Vice Presidency facilitate the injection of additional funding, the two and with the country and its lenders, working quickly partial-risk guarantees in support of the joint Kenya to expedite support for this member country’s program and Uganda railways concession became effective in the of financial sector reforms, as set out in the member summer of 2012. The railways concession is intended to country’s Letter of Development Policy, which the Legal improve management, operational and financial perfor- VPU also advised on and cleared. mances of the two railway networks in both Kenya and Uganda for the duration of a 25 year concession. The two partial-risk guarantees provide political risk mitiga- tion guaranteeing to the project companies undertaking the project the payment by each of the governments of Kenya and Uganda of early termination payment obligations. The Legal VPU was instrumental in draft- FY 2012 Annual Report 33 Insolvency Effective insolvency and creditor/debtor regimes are an The Legal VPU plays a central role in essential element for economic growth and the develop- ment of any economy, as well as representing a key factor the World Bank’s standard setting for for the stability of the financial sector. The Legal VPU, through its leadership of the World insolvency and creditor rights. Bank’s Insolvency and Creditor/Debtor Regimes Initia- tive, plays a key role in the analysis and assessment of The insolvency team of the Legal VPU also participates credit protection and insolvency legal frameworks in in numerous Bank initiatives directed to assist client client countries, which produce Insolvency and Creditor/ countries with their insolvency law reform strategies. Debtor Regimes Reports on the Observance of Standards The functions of the team in the implementation of the and Codes (ICR ROSCs). The Legal VPU’s specialists Bank’s standard setting role in insolvency and creditor/ carry out an analysis of the country’s legal framework debtor, regimes alongside its international partners in and then canvas public and private sector stakeholders on this area, have been, and continue to be, fundamental. how the framework is being implemented and applied. The ICR ROSCs set out this analysis and also provide prioritized recommendations on how the client country might strengthen its credit protection and insolvency legal frameworks. Photo: Salwa M. Saleh Jose Garrido, Senior Counsel, presenting World Bank Study on Out of Court Debt Restructuring. 34 Legal Vice Presidency | The World Bank HIGHLIGHTS The Standard-Setting Role of the Leading the Preparation of ROSCs and World Bank Supporting the Financial Sector Assessment The Legal VPU continues to work on the development Program in the Area of Insolvency and of the insolvency and creditor/debtor regimes standard Creditor/Debtor Regimes and on the production of guidance and supporting docu- The year 2011-2012 was extremely productive for the ments for the benefit of client countries. work of the Insolvency Initiative: the Legal VPU com- pleted ICR ROSCs for Ghana, Rwanda, South Africa, After the World Bank Insolvency Task Force meeting Peru, Kazakhstan, Thailand, Russia, Brazil, Paraguay, held in Washington DC in January 2011, the World Kenya, Kosovo, Kuwait, Bangladesh, Mongolia, and Bank pursued the project of producing a comprehensive Romania. The South Africa ICR ROSC was extremely document that provides guidance to countries inter- well-received by the authorities and opened the way for ested in the creation of an insolvency regime for natural additional work in the area of the insolvency of financial persons. A working group was created within the World institutions and the insolvency of natural persons. Bank Task Force, and the group made substantial prog- ress in the process of drafting a comprehensive report on During 2012, work was underway on ICR ROSCs for approaches to the insolvency of natural persons. Malaysia and for Colombia. In the latter case, the ROSC will update the previous report, which was completed be- After a formal resolution adopted by the United Nations fore the reform of the Colombian insolvency framework. Commission for International Trade Law (UNCITRAL), staff from UNCITRAL and the Bank are working on a Dissemination events were held for the ICR ROSCs set of principles for secured transactions law, that will in Tanzania and Thailand, with ample participation of supplement the ICR standard in this key part of the legal public and private stakeholders. The events contributed environment of credit. At the same time, the Legal VPU to raise awareness about the importance of the insolvency is collaborating very actively with UNCITRAL in the and credit framework and the opportunities for reform. development of a guide for the creation of registries for security interests over movable assets. This project has an In addition, the Legal VPU supported the Financial immediate relevance to access to finance in developing Sector Assessment Program (FSAP) led jointly by the countries. Bank and the IMF, by providing input on insolvency and creditor rights issues. The Legal VPU provided input The Legal VPU plays a critical and continuing role in the for the Financial Sector Assessment Programs (FSAPs) formulation of legislative guidance on key elements of of Mexico, Brazil, Mongolia, Rwanda, and Latvia. In the UNCITRAL Model Law on Cross-Border Insolven- the cases of Rwanda and Latvia, the Legal VPU also cy, the internationally recommended framework for the produced technical notes that were incorporated to the cooperation in the insolvencies of multinational enter- FSAP reports. prises, and the duties and liabilities of corporate directors when their company is in severe financial distress. The Legal VPU continues the work started at the 2011 Task Force meeting to assess what lessons can be learnt from the recent financial crises as to the proper bank- ruptcy treatment of financial contracts. This work is be- ing undertaken through engagement with the bar, bench, academia and finance at events such as the National Conference of Bankruptcy Judges, in collaboration with the American Bankruptcy Institute, as well as in-house at the Legal VPU. FY 2012 Annual Report 35 Providing Technical Assistance on the The insolvency and creditor rights team has also sup- Reform of Insolvency and Creditor/Debtor ported activities of the access to finance group, such as Regimes the reform of the secured transactions law in Colombia The Legal VPU, working together with IMF and IFC and the introduction of a new framework for creditor colleagues, played a key role in assisting Ukrainian information systems in Haiti. authorities in the creation of the new Insolvency Law, which was passed by the Rada in December 2011. While Developing and Disseminating Knowledge reform of the country’s ICR framework is in progress and The Legal VPU participated in numerous dissemina- there remains much room for improvement, the new law tion activities and the specialists of the group published represents a significant advance on the status quo ante. articles and produced research on important topics of Our lawyers also assisted Belarussian authorities in their insolvency and the legal environment of credit. (see sec- ongoing efforts to modernize their insolvency regime. tion on “The Legal VPU’s Contribution to Knowledge and Learning�, page 68). Photo: Salwa M. Saleh Session on The Regulation of the Insolvency of Natural Persons at the Law, Justice and Development Week 2011. 36 Legal Vice Presidency | The World Bank Banking and Finance Assist client countries in improving The Legal VPU’s banking and capital markets team contributes to the legal and regulatory aspects of the the legal and regulatory frameworks Financial Sector Assessment Program (FSAP), a joint program of the IMF and the World Bank. Through these of their financial sectors. programs and other initiatives, it provides legal advi- sory services and collaborates with other international financial institutions and national regulators, as well as international regulatory bodies, to assist client countries in improving the legal and regulatory frameworks of their financial sectors. This work includes analysis of countries’ legal and regulatory frameworks for financial services and for consumer protection. Photo: Shehzad Noorani FY 2012 Annual Report 37 HIGHLIGHTS Islamic Banking number of member countries including Cambodia, Laos, The Legal VPU has been actively involved in advising on Turkey, Pakistan, Sri Lanka, Mongolia, Nepal, Maldives, Islamic banking issues through its representation on the Botswana and West Bank and Gaza during this fiscal year. Bank’s Islamic Finance Working Group. The Legal VPU has spoken on behalf of the Bank at various international Macroprudential and Financial Stability conferences, including the conference organized by Red and Central Banking Laws Money on “The Role of Sukuk in Development� in One of the key lessons learned from the global financial Kuala Lumpur and a conference that was organized by crisis is the importance of ensuring macroprudential the Islamic Financial Services Board in Bahrain on “Ef- oversight over the financial system to reduce the risk fective Insolvency Regimes for Islamic Finance�, as well and the macroeconomic costs of financial instability. as the Bank’s training program on Islamic finance and It is recognized as a necessary ingredient to fill the gap the Knowledge Management seminar organized by the between macroeconomic policy and the traditional mac- Financial and Private Sector Development Vice Presi- roprudential regulation of financial institutions. This is a dency on Islamic Finance and Development. All these new policy and there are hardly any legislative examples events were attended by a wide group of international for countries to emulate. The Legal VPU team has been participants that included private sector participants, active in advising central banks—including the Reserve regulators, Islamic Shar’ia experts and policy makers. Bank of South Africa and Bank Indonesia on incorporat- The Legal VPU also contributed to speeches delivered by ing this policy and related institutional arrangement’s the Managing Director of the Bank on Islamic finance at into the central bank law. international conferences. Our lawyers peer reviewed a number of proposals on Islamic Finance in the East Asia and Pacific and South Asia Regions as well as contributed a specific chapter on “Insolvency Regimes: Developing an Analytical Framework for Meeting Legal and Regula- tory Challenges in Islamic Finance� to a joint publication with the Islamic Financial Services Board on “Effective Insolvency Regimes: Institutional, Regulatory and Legal Issues Relating to Islamic Finance�. Capital Markets Development The Legal VPU’s involvement in capital markets develop- ment in member countries is delivered through advisory services in strengthening legal and regulatory frameworks with the goal of assisting client countries to diversify their financial systems by providing long term financ- ing instruments and creating new investment vehicles. Photo: Salwa M. Saleh The global financial crisis has increased the demand for domestic securities markets primarily due to the out- flow of foreign investors, inability of domestic banks to meet extensive financing requirements and the need by companies to de-leverage and increase the demand for equity financing. In order to support this develop- Vijay Tata, Chief Counsel, ment objective, the legal and regulatory framework for Private Sector Development and Infrastructure, capital markets needs to be substantially modernized in Law, Justice and Development Session on Legal Framework these countries. Our lawyers have provided advice to a for International Financial Regulation 38 Legal Vice Presidency | The World Bank Consumer Protection and Financial Participation in Standard Setting Literacy The Legal VPU has been actively involved in providing The Legal VPU has been actively involved in the de- intellectual input as well as perspectives from developing velopment and updating of the “Global Principles on countries in various international standard setting Consumer Protection and Financial Literacy� as well initiatives including the UNIDROIT’s Study Group as participating in a diagnostic review of countries that on Close Out Netting, Financial Stability Board’s provides a systematic analysis of the legal, regulatory “Methodology on Bank Resolution� and OECD’s and institutional frameworks for consumer protection in “Global Principles on Consumer Protection and financial services and programs for financial education. Financial Literacy�. The diagnostic review by our lawyers includes detailed as- sessment of the banking and nonbanking segment of the Developing and Disseminating Knowledge financial sector and make prioritized recommendations Legal VPU staff have been involved in a number of to address the weaknesses in the legal, regulatory and in- conferences and publications, as described on page 68. stitutional framework. The India FSAP Update was the launching pad for the consumer protection assessment as part of an FSAP program. The technical note—the first of its kind on the consumer protection in the banking system—was done for the FSAP and it was well received by the authorities. Modular FSAPs and Role of the Legal VPU Our lawyers have been involved in FSAPs in the areas of legal and regulatory assessment for the financial sector as well as capital market development. The modular FSAP seeks to diagnose potential vulnerabilities and analysis of development priorities in the financial sectors of member countries. One objective of the FSAP is to help countries map a transition to a more diversified and competitive sector without creating vulnerabilities. The existence of a wide and diversified set of sound, well managed institutions and markets also reduces the likelihood and magnitude of a financial crisis. Hence, the Legal VPU’s involvement in the modular FSAP seeks to provide an assessment of the gaps and areas that need strengthening in the legal and regulatory framework for the financial sector as well as in the capital markets. Countries where our lawyers have participated in FSAP missions include India, China, Mongolia, Pakistan, Cambodia, Indonesia, Thailand, Chile and Argentina. FY 2012 Annual Report 39 Justice Reform The Legal VPU manages a range Presidency, the Legal VPU coordinated the development of New Directions in Justice Reform, the articulation of the of innovative justice reform trust World Bank’s new strategy for justice reform. The team also provides advisory services on justice sector assess- funds, loans and fee-for-service ments, public expenditure and institutional reviews in the justice sector, justice reform and governance strate- programs, including significant justice gies, economic sector work, operational projects and also supports and coordinates a Bank-wide community of components of larger projects. practice on justice reform. The Justice for the Poor (J4P) program, also housed The Legal VPU provides advice and assistance to Bank in the Legal VPU, is a global research and operational task teams and client countries on how to build and program supported by a trust fund from the Australian improve institutions that provide citizens with conflict government, in collaboration with other donors, that resolution and prevention, sound and equitable interpre- engages justice reform as a cross-cutting issue in the tation and enforcement of laws, and public safety. practice of development. Grounded in evidence-based approaches focused on the perspective of the poor and Our justice reform team consolidates and disseminates marginalized, the program aims to improve the delivery knowledge through publications, a website and regular of justice services and to support sustainable and equi- training courses with Bank staff. In collaboration with table development processes which manage grievance and the Poverty Reduction and Economic Management Vice conflict stresses effectively. Photo: Graham Crouch Kabul, Afghanistan. 40 Legal Vice Presidency | The World Bank HIGHLIGHTS Supporting the Bank’s Operations structures that strengthen the Bank’s ability to realize the on Justice Reform vision presented in the New Directions paper. At the request of World Bank regional and sector teams, the Legal VPU manages a range of innovative justice Refining the Bank’s Approach reform trust funds, loans and fee-for-service programs, to Criminal Justice including significant justice components of larger proj- The Legal VPU prepared and issued a Legal Note on Bank ects. The Legal VPU supports regional and sector teams Involvement in the Criminal Justice Sector in February by leading justice reform projects including: 2012. Member countries are increasingly request- ing World Bank support for assistance reforming their • Abu Dhabi fee-for-service program providing technical criminal justice systems and the Legal Note clarifies how assistance on justice reform (US$900,000). the Bank’s mandate is responding to these demands. The note found that criminal justice sector work is not • Afghanistan Phase 2 Justice Service Development precluded under the Bank’s Articles of Agreement and Project (US$85.5 million grant from the Afghanistan the Bank has already financed numerous criminal justice Reconstruction Trust Fund). interventions in the area of governance. A Staff Guidance Note: World Bank Support for Criminal Justice Activities • Mongolia Enhanced Justice Sector Services Program accompanies the Legal Note and provides guidance for (US$5 million IDA grant). staff in applying the Legal Note to Bank activities. The In collaboration with other sectors, the Legal VPU Note is framed around four areas, which set out the steps contributes to: that task teams should take when considering an activity in the criminal justice sector. These are: (a) Justification • The Access to Justice component of the Serbia Multi- for Criminal Justice Work; (b) Risk Assessment; (c) Risk donor Trust Fund (US$2.7 million). Mitigation; and (d) Assistance and Review Processes. Criminal justice reform activities will complement Bank • The Judicial Performance and Improvement Project in work in several sectors such as natural resource gover- Kenya (US$120 million). nance, environmental crimes and crime and violence. The Legal VPU is establishing a cross-sector Criminal Identifying New Directions Justice Resource Group (CJRG) and will host its secre- in Justice Reform tariat in an effort to provide Bank teams with a resource In collaboration with the Poverty Reduction and for designing and implementing projects in the criminal Economic Management Vice Presidency (PREM), the justice sector and managing potential risks of engage- Legal VPU oversaw the development of New Directions ment. in Justice Reform, the articulation of the Bank’s strategy for justice reform. New Directions was developed as a Justice in Fragile and Conflict-Affected So- companion to the Bank’s Updated Governance and Anti- cieties: Operationalizing World Develop- corruption (GAC) Strategy and represents the first World ment Report 2011 (Conflict, Security and Bank-wide approach to justice reform. The New Direc- Development) tions paper establishes priorities for the Bank’s justice re- A core finding of WDR 2011 is that the emergence of form work including: (a) applying a problem-solving and effective and legitimate institutions to manage justice, empirically based approach to justice reform anchored in security and jobs is crucial for countries to break out of the needs of end users that focuses on actual realizations cycles of fragility and violence. The Legal VPU is leading and accomplishments; (b) identifying flagship justice the Bank’s work on justice in fragile and conflict-affected reform initiatives as sites of learning and innovation; societies (FCS) in close collaboration with the Center (c) integrating justice reform into select Bank opera- for Conflict, Security and Development and the Social tions, including natural resources and service delivery; Development anchor. This work involves engaging in (d) developing a focus on justice reform in fragile and a range of FCS to inform the Bank’s Country Partner- conflict-affected states; and (e) developing organizational ship Strategies, conduct analytical work and develop FY 2012 Annual Report 41 justice programming and justice-sensitive components Supporting Justice Sector Reform of sectoral operations. To this end, our justice reform in Mongolia team is working in South Sudan, Liberia, Nigeria, CÔte The justice sector in Mongolia has changed significantly d’Ivoire, Yemen, Honduras, Solomon Islands and Timor in the 20 years since the country became a democracy. Leste. This work is enhanced by our emphasis on deep- The Bank and other international partners have pro- ening understanding of how different kinds of political vided significant assistance to justice reform, particularly settlements, social and fiscal pressures affect the nature of around independence of the judiciary. While Mongolia justice institutions, toward identifying new approaches has made progress, still much needs to be done. Build- that maximize the effectiveness of development assistance. ing on prior efforts, the World Bank Country Manage- ment Unit in Mongolia asked the Justice Reform Practice Justice for the Poor Refines Analytical and Group to manage the Enhanced Justice Sector Services Operational Work Program. Project (EJSSP), a US$5 million investment lending The Justice for the Poor (J4P) program completed a project. Starting in June 2009, the aim of this project Mid-Term Review (MTR) of its East Asia and Pacific is to enhance access to justice and the efficiency and Regional Program in December 2011. The MTR clari- transparency of the courts and court decision enforce- fied program focus around three operational areas: access ment agencies. to justice, equity and conflict management in service delivery, and land and natural resource governance. The The project has had significant impact, despite its rela- program includes development effectiveness and gender tively modest size. Websites provide access to all laws, as thematic areas. New programmatic activities are ex- higher court decisions and other important government pected to include support to pilot a community dispute decrees; legal assistance is provided via internet and SMS management and governance initiative in Solomon messages; over 1000 community paralegals have been Islands, a pilot initiative to provide advisory services on trained to provide legal information and assistance to leasing to customary land holders engaged in leasing the poor in the capital and rural areas, including some negotiations in Vanuatu and support to prosecuting cor- of the most remote locations. A comprehensive public ruption associated with community driven development information campaign is raising awareness of legal issues in Indonesia. The J4P program is also active in Africa and access to justice options. Legal information material where it is working on social accountability and legal was developed in Braille, minority languages and others empowerment in Sierra Leone and Nigeria, justice and in everyday language and is distributed throughout the community-driven development in South Sudan and the country, including through “Nomad libraries�, mobile intersection of resource investment and local justice in book collections aiming to reach herder families. Liberia. Using Public Expenditure and Institutional Reviews in the Justice Sector While Public Expenditure and Institutional Reviews (PEIRs) are commonly used across World Bank sectors, Bank teams have only recently started to use PEIRs in the justice sector. Bulgaria and Serbia were the first justice sector PEIRs and three others are currently under preparation for Croatia, Morocco and El Salvador. PEIRs analyze various aspects (expenditure level and composi- tion, caseloads, performance, institutional arrangements, political economy, budgeting, procurement and financial management, and physical, human and ICT resources) to develop strategies for improving justice sector efficiency Photo: Saraa Horloo and performance through more effective utilization and management of resources. The Legal VPU will continue to support Bank teams in Bank Regions and Sectors to conduct justice sector PEIRs in an effort to promote evidence-based justice reform in client countries. Legal Aid center for ethnic minorities in Bayan-Ulgii Aimag, supported by the EJSSP, Mongolia. 42 Legal Vice Presidency | The World Bank Some of the most significant impacts have come from run down facilities that simply did not provide the neces- very small investments. For under US$30,000 the sary space and resources to enable personnel to effectively project provided assistance to two legal aid centers in the undertake their work. The judiciary in these areas is western most province of the country with significant now utilizing the better facilities to increase the range of minority populations. In just two years, a total of 2210 services they are providing to the local populace and, on individuals were directly assisted through various forms their own initiative, are undertaking legal outreach and of legal advice, over half of which were poor women. information campaigns as well as starting to offer media- Kazakh women in particular are often limited in being tion services. Soon project activities will connect every able to seek assistance for their problems, not only due to court, court enforcement agency and prosecutor office language issues but also since they often may not address via fiber optic cable. This will allow for more effective a state organization without the permission of their hus- data exchange and management supported by software band. In practice, this cultural norm does not apply to developed with support of this project and the GIZ. women addressing legal aid centers. Disadvantaged seek assistance for varied claims, including access to social en- Many challenges continue to remain and Mongolia’s titlements (pensions), altercations over land, lack of civil rapid economic growth is likely to give rise to many registration documents required to access other services more. However, the infrastructure, increased capacity of (e.g., health care), labor rights and some criminal cases. justice system officials as well as the increased availability Other assistance is focusing on improving law school of legal assistance and information available to everyone education, including the advancement of legal clinic ad- has laid an effective basis for the continued sustain- judication which not only builds students’ practical skills able development of the justice sector in support of the but provides for another resource to deliver free legal aid broader development goals of Mongolia. to the poor. Bringing Justice to Health Services: the Role of Sierra Leone’s Community The project is also supporting infrastructure improve- Paralegals ment. The program will construct four court buildings In a clinic in Moyamba district in southern Sierra Leone, and three court enforcement agency buildings in rural mothers stand in line with their infants to receive im- areas. The sites were chosen based on need—in terms of munizations that the government now provides free increasing case load and population and deterioration of of charge. The Government’s Free Health Care Initia- facilities—and personnel previously shared cramped and tive (FHCI), launched in 2010, guarantees free health Photo: Saraa Horloo The new court building for Bor-under Soum, funded by the EJSSP, Mongolia. FY 2012 Annual Report 43 services for pregnant and breastfeeding women, as well as centralized Services Delivery Project (I and II), the Gov- children under five. It is a hopeful picture for a coun- ernment is currently conducting a randomized controlled try that is one of the least safe places in the world for a trial on the impact of joint community-clinic monitor- woman to give birth, with one out of every seven women ing on health outcomes. Through the use of scorecards dying on account of pregnancy or childbirth. Yet, a showing their clinic’s performance, community monitor- closer look reveals that as each mother reaches the front ing enables community members and clinic staff to draft of the line, the nurse is demanding six cups of rice before a joint action plan to improve health and then monitor she will provide the immunization. Feeling powerless, one another’s performance. the mothers comply. With support from the Bank’s Nordic Trust Fund and Despite the FHCI policy change, users regularly report in partnership with the legal empowerment organization improper fees such as the cups of rice demanded in Namati, the J4P program is also exploring how Legal Moyamba. Nurses are also often absent and the Govern- Empowerment tools, such as trained community para- ment and UNICEF statistics cite “leakage� of up to 30% legals, can tackle challenges in health care delivery and of FHCI drugs before they reach health clinics. Improv- complement social accountability efforts in the health ing accountability around the delivery of services will sector. Community paralegals (lay persons trained in be essential in translating the progressive FHCI policy the law and operating in approximately a third of Sierra into tangible outcomes. Experience from other countries Leone’s chiefdoms) may be able to help citizens navigate suggests that social accountability (or “demand-side� administrative accountability channels to address larger, accountability) programs can complement supply-side systemic breakdowns in service delivery. efforts to improve health outcomes2. The Bank, Gov- ernment, and civil society groups in Sierra Leone have Documenting Impact and Supporting all embraced a role for social accountability and justice Policy Dialogue services in improving health care delivery. The J4P program is using a range of methodological approaches to measure the impact of the above initiatives. The Legal VPU’s Justice for the Poor Program (J4P) is The impacts of community monitoring is being tested supporting these efforts by testing and evaluating several via a randomized controlled trial, supplemented by social accountability approaches to improving health qualitative research to understand the dynamics of influ- service delivery including community-clinic monitoring ence. The legal empowerment initiative is being explored and legal empowerment. With financing from the De- as a scalable alternative that leverages existing account- ability structures. Findings will help the Ministry of 2 See, e.g., M. Bjorkman and J. Svensson, “Power to the people: Health clarify policy and evaluate justice and account- Evidence from a randomized experiment on community-based ability strategies for scale-up under the government’s monitoring in Uganda,� Quarterly Journal of Economics 124/2 decentralization strategy. (2009). A CONCERN Worldwide facilitator in Tonkolili district, Sierra Leone, shows a group of traditional birth attendants their clinic scorecard on the number of children who completed their first year of immunization. Photo: Margaux Hall 44 Legal Vice Presidency | The World Bank Trust Funds The Bank’s trust fund portfolio continues to grow, re- The Legal VPU contributed to flecting the increased importance of trust funds as a key source of development financing. The cash contribution addressing many legal, policy and level, disbursement level, and total amount of funds held in trust have all increased sharply since fiscal year 2007. governance issues that arose as the Cash contributions to trust funds supporting activities directly implemented or supervised by IBRD or IDA— trust fund portfolio continued to comprising recipient-executed trust funds (RETFs) and evolve from numerous small single Bank-executed trust funds (BETFs)—were US$3.9 billion in fiscal year 2011, a slight decline from US$4.3 donor trust funds to more complex in fiscal year 2010. However, the number of Financial Intermediary Funds (FIFs) and the amounts managed by multidonor trust funds and financial the Bank under FIFs have continued their increase from prior years, with cash contributions to FIFs increasing to intermediary funds. US$6.1 billion in fiscal year 2011 from US$6 billion in fiscal year 2010. Overall disbursements under both trust The Legal VPU’s trust fund related work has grown in funds and FIFs have grown from US$5.6 billion in fiscal parallel with these developments. Our specialists work year 2007 to US$8.3 billion in fiscal year 2011. Of this closely with the Concessional Finance and Global Part- total, FIFs accounted for US$4.5 billion and IBRD/IDA nerships Vice Presidency (CFP), Controllers, Trust Fund trust funds for US$3.8 billion. Quality Assurance, Operations Policy and Country Ser- vices (OPCS), Regions and Networks on a wide range of trust fund issues. We advise on trust fund policy and procedural issues, develop model forms of trust fund Photo: Anne-Marie Leroy Coffee planters community, State of Rio de Janeiro, Brazil. FY 2012 Annual Report 45 documentation, provide legal and governance advice on and governance agreements that articulate the different new and existing trust funds, review trust fund propos- roles the Bank is assuming. als, and participate in the drafting and negotiating of trust fund agreements and framework agreements. In 2011, the Legal VPU contributed to addressing many legal, policy and governance issues that arose as the trust The increasing prominence of FIFs brings to the fore- fund portfolio continued to evolve from numerous small front many new legal challenges. FIFs have a flexible single donor trust funds to more complex multidonor design, often involve innovative arrangements, and their trust funds (MDTFs) and FIFs, and as contributions structures are heavily customized. The Bank’s distinctive from “nontraditional� donors increased. By fiscal year role across all FIFs is the provision of financial interme- 2011, MDTFs represented 42 percent of total active diary services, as trustee of the funds. In addition to its trust funds, but accounted for a significantly larger financial intermediary role, the Bank may have addi- proportion of all funds held in trust. In fiscal year 2011, tional roles in FIFs, such as acting as an implementing the Bank was receiving contributions not only from tra- agency, providing administrative and fund coordination ditional OECD-DAC member countries and emerging support to a FIF, or acting as chair of the FIF governing donors, but also from private foundations, corporations body. FIFs hence require detailed and well-tailored legal and other non-profit and for profit entity donors. HIGHLIGHTS Green Climate Fund MSME Facility In response to the invitation by the Conference of the The Legal VPU played an important role in structuring, Parties to the UNFCCC to the World Bank to serve as drafting and negotiating legal documentation regarding interim trustee for a new Green Climate Fund (GCF), the multidonor trust fund with IFC under the Micro, the Legal VPU has been working on the design and es- Small and Medium Enterprise Facility for the Middle tablishment of a FIF, which would facilitate financing to East and North Africa Region (MSME Facility) under support an early and effective start to the GCF, while also the “Arab World Initiative� (described on page 14). offering flexibility to support the medium-term funding needs of the GCF, in a cost effective manner. Delivering Trust Fund-Financed Operations: An Overview of the Legal VPU Technical Assistance Facility for the Arab Operational Units in Trust Fund Work Finance Facility for Infrastructure A significant part of the work related to trust funds is The Legal VPU recently brought the Technical Assistance handled by the operational units of the Legal VPU. Trust Facility (TAF) of the Arab Finance Facility for Infrastruc- funds are established to bring together resources on mat- ture (AFFI) into operation. The AFFI is an investment ters of global interest, provide coordinated responses to facility in partnership with the Islamic Development crisis and emergencies and also to leverage World Bank Bank including funds mobilized through sharia-com- resources to maximize the impact of its development pliant bonds and other sources designed to provide an projects. integrated approach that will address policy, project preparation and financing challenges of infrastructure To understand the Legal VPU operational units’ involve- projects. The Legal VPU recently brought the AFFI’s ment related to trust funds, one should look at the num- Technical Assistance Facility (TAF) into operation. TAF ber of active trust funds per Region. The Africa Region provides technical advisory, capacity building through (AFR) currently has around 1,290 active trust funds, strengthening national enabling environments for infra- the East Asia and Pacific Region (EAP) around 1,126, structure Public-Private Partnerships (PPP) and raises the the Latin America and Caribbean Region (LAC) around awareness of countries on the complex policy, legal and 650, the South Asia Region (SAR) around 575, the regulatory aspects of PPP projects. Middle East and North Africa Region (MENA) around 420, and the Europe and Central Asia Region (ECA) around 492. In carrying out trust fund work operational lawyers and paralegals offer continuous legal support to 46 Legal Vice Presidency | The World Bank trust fund preparation, negotiations of administration gram moved from one APL phase to another and when and grant agreements, and also trust fund supervision. additional resources were made available by the Bank, The following examples from three Regions (AFR, EAP through additional financings, or the development and LAC) showcase critical legal contributions in facili- partners. This process involved numerous amendments tating trust fund work. to the legal agreements related to the MDTF, but also the device of innovative legal solutions to ensure that it Africa is conducted in the most efficient way aimed at reducing LEVERAGING RESOURCES TO MAXIMIZE IMPACT OF the time required for this purpose. DEVELOPMENT PROJECT: MULTIDONOR TRUST FUND FOR PRODUCTIVE SAFETY NET PROJECT East Asia and the Pacific Ethiopia is a country with a quite active and stable trust RESPONDING TO EMERGENCIES: JAVA RECONSTRUCTION fund portfolio, which is actually one of the largest in the FUND AFR with US$642 million in commitments allocated in Three major disasters in five years: a 6.2 Richter earth- 68 trust funds as of June 1, 2012. Trust funds in Ethiopia quake, a tsunami, and the worst volcanic eruption of the complement Bank-financed projects to maximize their century, all happened in the same areas of Yogyakarta and reach and results. A case in point is the Productive Safety Central Java, Indonesia. The response needed was one Net Program (PSNP), which is structured as an Adapt- that could allow funds to flow to communities, based on able Program Loan (APL) and its overall aim is to reduce their own priorities, even as they literally dug themselves household vulnerability, improve resilience to shocks out of disaster areas. In response to a series of earth- and promote sustainable community development in quakes and a tsunami that destroyed more than 300,000 food insecure areas of rural Ethiopia. PSNP is currently houses in 2006, the Java Reconstruction Fund (JRF) was in its third phase and in March 2012, the Bank’s Board established at the Government of Indonesia’s request. The of Executive Directors approved an additional financing World Bank serves as Trustee and works in close coopera- of US$370 million for this third phase. The PSNP from tion with the Government of Indonesia, with a total of its first phase has been also supported by a multidonor US$94.1 million contributions from seven international trust fund (MDTF) administered by the Bank, which donors. Following the 2010 eruptions of Mount Merapi brings together contributions from almost ten develop- volcano in Yogyakarta district, which displaced more ment partners. The role of the operational lawyer has than 350,000 people, the JRF’s legal instruments proved been critical in ensuring continuous and uninterrupted flexible enough to be restructured and extended to allow support of the MDTF towards the PSNP, as the pro- for a focused response to victims of the eruptions. Photo: Jonathan Pavluk Staff of Nile Basin Initiative coordination unit for the Equatorial Lakes subbasin show World Bank staff a proposed hydropower project site located on the border of Rwanda and Tanzania. FY 2012 Annual Report 47 The JRF is due to close in December 2012. All of the Latin America and the Caribbean contribution funds will have been fully disbursed. Sig- COORDINATING DONORS SUPPORT TO ADDRESS nificant results have been achieved in the reconstruction CLIMATE CHANGE: GUYANA REDD+ INVESTMENT FUND of communities and the rehabilitation of livelihoods. The The Guyana REDD+ Investment Fund (GRIF) is a portfolio consists of three projects in the area of housing multicontributor trust fund for the financing of activities and community infrastructure and two projects address- identified under the Guyana’s Low Carbon Develop- ing the recovery of livelihoods. These projects encour- ment Strategy. The Low Carbon Development Strategy aged greater involvement of marginalized groups in the (LCDS) set out Guyana’s approach to transition to a reconstruction of homes and community infrastructure green economy. The GRIF was established in October and planning for future disasters. Over 7,300 temporary 2010, with the World Bank as trustee. The World Bank, houses provided shelter while more than 15,000 seismic- as trustee, receives payments from donors, holds them resistant permanent houses were constructed alongside in a trust fund and then transfers them to GRIF Part- critical community infrastructure. More than 16,000 ner Entities responsible for implementing projects. The micro, small and medium enterprises were aided. A World Bank does not make decisions involving project total of 310 villages have developed Community Settle- funding. All funding decisions are made by the GRIF ment Plans with emphasis on disaster-risk reduction by Steering Committee compromised of representatives the time the housing reconstruction project closes. The of Norway and Guyana. The World Bank, as trustee, operational lawyers worked as part of the Bank team for transfers funds to GRIF Partner Entities once projects the closing of projects and the JRF, which included a are approved by the GRIF Steering Committee and the visit to the project areas with donors and representatives GRIF Partner Entities have requested the funds. The of the Government of Indonesia. The visit allowed the GRIF Partners are the Inter-American Development Government and donors to see the tangible results of Bank (IDB), United Nations Development Programme what they have been contributing, as well as impacts that (UNDP), and the World Bank. will continue to expand beyond the JRF’s life. On June 5, 2012, the GRIF Steering Committee ap- proved for the first time a GRIF project with the World Bank as Partner Entity: the Cunha Canal Rehabilitation Project. Our lawyers’ advice was sought to process this Project before the GRIF Steering Committee as there were no precedents to follow. After conducting ap- praisal and negotiations, a GRIF Grant Agreement will be executed between the World Bank, as Partner Entity, and the Ministry of Education of Guyana as Project Implementing Entity of the GRIF project. World Bank procedures will apply to the projects for which the Bank is selected as Partner Entity. Legal advice was provided during the preparation of the GRIF project to ensure compliance with Bank’s policies. Photo: Julio Pantoja 48 Legal Vice Presidency | The World Bank Partnership Programs The Legal VPU plays a critical supporting role with re- Given the great variety of partnership spect to the Bank’s engagement in partnership programs, most of which are also supported by Bank-administered programs, the Legal VPU has had to be trust funds. This support comes in three principal areas: proactive and creative in highlighting Structural aspects: Each partnership program features critical choices to be made in terms of structure and gov- and handling any number of policy- ernance arrangements (e.g., who provides what resources, who has what responsibilities and who has what deci- related areas affecting the Bank’s sion making authority). Clear delineations and efficient governance are needed to match partner expectations, engagement in partnership programs. promote transparent arrangements and ensure effective development impact. We provide conceptual and practi- governance terms, clear governing body approvals and cal advice based on an understanding and analysis of the clear contract terms, all of which we help put in place. specific circumstances and requirements. This advice also addresses potential reputational, associational and other Policy advice: Because the policy framework directed risks related to the Bank’s roles, particularly in those cases specifically at partnership programs is minimal, there where the Bank is handling funds in a fiduciary capacity. is somewhat of an art to knowing which Bank policies apply directly to partnership programs and which other Implementation work: While the early implementation Bank policies may indirectly inform partnership program phase involves the sui generis development of constitu- treatment. In this context, legal support can provide tive documents, continuing legal support is often needed a broader analytical understanding within a nuanced, for structural shifts, policy issues and even trouble risk-based approach to the Bank’s work. Given the great shooting (especially in connection with reputational and variety of partnership programs, the Legal VPU has had other risks). From a legal perspective, where the Bank to be proactive and creative in highlighting and handling houses the secretariat, it assumes the role of custodian of any number of policy-related areas affecting the Bank’s the partnership, accordingly putting a premium on clear engagement in partnership programs. Photo: Anne-Marie Leroy Primary Education for Disadvantaged Children Project, Vietnam. FY 2012 Annual Report 49 HIGHLIGHTS Global Partnership for Education Consultative Group on International The Legal VPU has provided legal support to the restruc- Agricultural Research’s Intellectual Assets turing of this partnership and its trust fund arrange- Policy ments, replacing five different trust funds with a single The Legal VPU, spent countless hours negotiating with umbrella governance structure and one trust fund. stakeholders across the newly reformed Consultative Group on International Agricultural Research’s (CGIAR) Global Partnership for Social agricultural/food research partnership, including country Accountability and NGO donors, research centers, representatives The Legal VPU helped design and structure the Global of CGIAR leadership and their counsel to reach the Partnership for Social Accountability (GPSA), a partner- successful adoption of the first system-wide Intellectual ship of a broad range of development actors committed Assets/Intellectual Property policy governing access to to enhancing social accountability to increase development the results of the groundbreaking research carried out by effectiveness. The GPSA aims to contribute to country- the CGIAR for the benefit of the most vulnerable. level governance reforms and improved service delivery by: (a) strengthening the capacity of civil society on social Enabling the Global Partnership for accountability, through knowledge generation and Disaster Reduction and Recovery Support financing; (b) helping to improve coordination of social to South Sudan accountability work at the country level; (c) supporting The Legal VPU has provided assistance enabling the country teams and development partners in strengthen- Global Partnership for Disaster Reduction and Recovery ing the links and complementarities between supply-side (GFDRR) to give crucial support to the new country of and demand-side interventions; and (d) working with South Sudan, where crop cultivation had been disrupted external partners to scale up social accountability. by conflict with Sudan. 50 Legal Vice Presidency | The World Bank The Legal VPU and the Bank’s Corporate Governance Photo: Salwa M. Saleh FY 2012 Annual Report 51 Supporting the Bank’s Finance Complex The Legal VPU supports the Bank’s Treasury, Controller, To respond to the development Corporate Finance and Risk Management, and Conces- sional Finance and Global Partnerships Vice Presidencies needs of its clients who are most on a wide range of transactional and policy issues. In this capacity, the Legal VPU: susceptible to natural disasters, the • Advises upon and negotiates the terms of the Bank’s financial transaction and investments. World Bank has developed a broad • Provides legal and governance advice to the Treasury’s menu of solutions in its overall banking and asset management business lines. • Negotiates the terms of pension investments and framework for disaster response provides policy and governance advice to the Pension Finance Committee. and risk management. • Advises the Audit and Budget committees and the management committees on finance, risk management, and financial products. • Creates innovative financing solutions using capital • Provides legal and governance advice on IDA matters, markets and structured finance techniques to provide including serving as counsel for periodic IDA highly desirable development outcomes that would not replenishments. be available under more traditional donor arrangments. Photo: Nugroho Nurdikiawan Sunjoyo Rebuilding a road after eruption of Mount Merapi. Yogyakarta, Indonesia. 52 Legal Vice Presidency | The World Bank HIGHLIGHTS Providing Market-Based Solutions for The World Bank’s involvement in providing natural Disaster Risk Mitigation and Financing disaster risk intermediation services to its client countries Natural disasters disproportionately affect the World has demonstrated that clients value the World Bank’s role Bank’s client countries, with some 3.3 million deaths which can help overcome some of the major constraints and $2.3 trillion worth of property damage caused by to wider use of market-based solutions, particularly those droughts, earthquakes, storms and floods in the period related to market access and capacity. To further broaden from 1970 to 2010. Disasters negatively impact both the the range of natural disaster risk intermediation solutions economy of an affected region or country and the health offered by the World Bank, the Legal VPU has worked and well-being of the people impacted by the hazards. with the Finance Complex to obtain the authoriza- To respond to the development needs of its clients who tion of the Executive Directors for the offer of natural are most susceptible to natural disasters, the World Bank disaster products that will cover geological events (e.g., has developed a broad menu of solutions in its overall earthquakes) — in addition to already-covered meteo- framework for disaster response and risk management, rological events (such as wind and precipitation) — to spanning risk assessment, capacity building, investment client countries, subnational entities and regional and in disaster preparedness, sovereign disaster risk financing international organizations. Following the grant of this and postdisaster response and reconstruction. authorization by the Executive Directors on October 5, 2012, the Legal VPU is providing support to the Finance The primary channel for providing the disaster risk Complex, Finance and Private Sector Development and financing solutions offered by the World Bank has been East Asia and Pacific Vice Presidencies on the execution through lending, grant or budget support instruments of a catastrophe derivative that will cover earthquake that have a direct financial impact on its balance sheets. (including, for the first time ever for a transaction of However, not all natural disasters or World Bank clients this type, tsunami) risk and tropical cyclone risk for five are the same, and the complexity and diversity of clients island countries in the South Pacific. The Legal VPU is needs, hazards, risks and priorities, particularly in the also providing support to Treasury Vice Presidency on area of disaster risk financing, has demanded flexibility a proposed weather derivative transaction for Uruguay’s and customization. In 2008, the World Bank began to state-owned public electric company, Administración offer innovative market-based financial solutions to its Nacional de Usinas y Trasmisiones Eléctricas (UTE), that client countries that leverage private sector participation is designed to mitigate the impact of drought on UTE in disaster mitigation, reduction and recovery needs with and Uruguay’s energy needs, of which more than 80% is the common objective of providing immediate liquid- provided by hydropower plants. ity to governments in the event of a natural disaster. To this end, the Legal VPU has provided support to the Treasury, Concessional Finance and Global Partnerships, Sustainable Development Network and Africa Vice Presidencies for a series of weather derivatives transac- tions for Malawi that provide coverage against the risk of severe drought during the critical rainfall season from October 1 to April 30 of each year. The weather deriva- tives transactions have been based on a weather index that incorporates the Malawi Meteorological Service’s national maize yield assessment model which uses daily rainfall to predict maize yields and therefore production throughout the country. FY 2012 Annual Report 53 Extending Conversion Options to IBRD spread over the last 12 years). The cost to a borrower of Loans with a Variable Spread opting for a fixed spread loan—or moving from a vari- IBRD has offered, since 1999, a fixed spread loan prod- able spread loan to a fixed spread loan—in order to take uct that contains embedded options designed to assist advantage of the conversion options that were otherwise developing countries manage financial risks and imple- not available to variable spread loans was, therefore, ment their asset-liability management strategies as part of modest and this was reflected in the rapid uptake of the their overall sovereign debt management process. fixed spread loan which accounted, at its peak in 2007, for 70% of all Bank loans outstanding (Fig. 2 shows the The introduction of the conversion options was predi- number of fixed spread loans outstanding as a percentage of cated on pricing the loans at a fixed spread relative to a total IBRD loans over the past 12 years). market reference rate (e.g., LIBOR), which facilitated management by the Bank of the associated risks and al- This all changed in 2008. The financial crisis precipi- lowed it to pass on the benefits of the Bank’s comparative tated by the near-collapse of AIG and failure of Lehman funding advantage in the capital markets. The Bank bears Brothers led to an increase in borrowing costs for all issu- the refinancing risk that flows from rising interest rates ers, including the Bank. In order to mitigate its refinanc- as the fixed spread reflects the Bank’s projected (rather ing risk on fixed spread loans, the Bank increased the than actual) cost of borrowings. By contrast, the variable fixed spread to reflect its projected cost of funding and spread loan offers an interest rate based on LIBOR but the increased market risk. There was also an increase in with a variable spread that adjusts every six months to the variable spread due to an increase in the Bank’s actual reflect the Bank’s cost of borrowings and on which the cost of funding, but this increase was not as steep and clients bear the risk of rising interest rates. the differential between the fixed spread and the vari- able spread widened to as much as 0.93% in 2010. The At the outset, the difference between the interest rate on Bank’s clients balked at the idea of paying the significant- fixed spread loans and that on variable spread loans was ly higher price for the fixed spread loan and the number relatively modest and, in the period between 1999 and of outstanding fixed spread loans declined sharply and 2008, amounted—on average—to only about 0.11%, now stands at 10% of the loan portfolio. As borrowers with a low of 0.06% in 2005 (Fig. 1 shows the differential understandably retreated to the seemingly cheaper vari- in basis points between the fixed spread and the variable able spread loan, they also gave up the ability to manage 140% 120% 100% 80% 60% 40% 20% 0% -20% FY00 FY02 FY04 FY06 FY08 FY10 FY12 Fixed Spread over Libor Variable Spread over Libor Figure 1 54 Legal Vice Presidency | The World Bank their financial risks as the conversion options embedded tion of these new options for variable spread loans. The in the loans could only be exercised by first converting potential benefits of extending the conversion options to the variable spread into a fixed spread. A move from a variable spread loans are clear; it will allow borrowers to variable spread to a higher fixed spread, furthermore, reduce their exposure to financial shocks from interest attracted a transaction fee which pushed the resulting and exchange rate movements on a cost-effective basis interest rate even higher than that payable on loans that while ensuring the equitable treatment of variable spread started life with a fixed spread. and fixed spread loans (Fig. 3 illustrates the savings on converting the interest rate on a 10 year variable spread loan With a growing number of borrowers requesting a without first fixing the spread). Offering better access to solution to this disparity in treatment between variable these conversion options will, consequently, reduce the spread and fixed spread loans, the Executive Directors Bank’s own risks, as its clients will be better placed to approved, on March 12, 2012, a proposal to offer for implement their asset-liability management strategies and variable spread loans the same conversion options offered improve their ability to service their debt to the Bank. on fixed spread loans without requiring borrowers to first The Legal VPU will continue to provide ongoing support fix the variable spread. The Legal VPU was intimately to the Finance Complex and the Regions as these new involved in this process and provided legal and gover- conversion options for variable spread loans are rolled nance advice and support to the Bank’s Finance Complex out and taken up by the Bank’s clients. in the conception, design, approval and implementa- 80% Comparative Costs of Interest Rate Convertion on a 10 year VSL 60% 3.00% 40% 2.50% 2.00% 20% 1.50% 0% VSL to FSL to Fixed Rate FY00 FY02 FY04 FY06 FY08 FY10 VSL to Fixed Reference Rate Figure 2 Figure 3 FY 2012 Annual Report 55 Institutional Affairs The Legal VPU provides active support to OPCS on a The Legal VPU makes contributions wide spectrum of issues related to the Bank’s operational and other policy matters. In this capacity, we assist in to various initiatives designed to the advancement of the Bank’s operational policy reform agenda by contributing actively to the modernization strengthen the Bank’s governance and and simplification of the Bank’s policies, facilitate policy implementation through advice in interpreting and accountability. applying the Bank’s policies for lending operations, and contribute to the “Knowledge Bank� by conducting research and sharing information related to the Bank’s operational policies. The Legal VPU also provides significant support and wide management committees (Governance Council, input on legal and policy matters regarding investigations International Development Fund Committee, State- and of fraud and corruption in Bank-financed projects. Peace-Building Fund Committee, etc.). Our operational policy function includes provision Finally, the Legal VPU makes contributions to various of support to the Board Committee on Development initiatives designed to strengthen the Bank’s governance Effectiveness (CODE) and participation in various Bank- and accountability. Photo: Simone D. McCourtie 56 Legal Vice Presidency | The World Bank HIGHLIGHTS Accountability and Decision-Making voice reform and subsequently approved by the Boards Framework (see also Part II) of Governors of the Bank and IFC. As of June 27, 2012, The Legal VPU developed a framework for consistent basic votes of each member will be the number of votes assignment of accountability and clear decision-making. that results from equal distribution among all members The framework defines basic delegation of author- of 5.55% of the total voting power of all members. The ity concepts and specifies roles for participants in the Legal VPU provided advice and support during the decision-making process. It also requires managers to amendment process. articulate with greater precision the scope of authority and responsibility of staff members who come together Leading the Opening-Up of the Sanctions from different parts of the matrix to execute the most System important business decisions made in the Bank. Greater Following on from the package of reforms passed by the precision ensures that the right people are involved, the Boards of IBRD, IDA, IFC and MIGA in November right information is considered, and decisions are made 2010, this year has seen an impressive opening-up of the as quickly as possible. Bank’s sanctions system. The system has been made in- creasingly transparent and the measures of accountability Policy and Procedure Framework have been revealed and bolstered: The Legal VPU began work on a new approach to man- age the Bank’s governing documents. The goal of this • In January 2011, the Bank’s Sanctioning Guidelines, project is to: which seek to afford clarity and predictability about the imposition of sanctions and to offer guidance to • Develop an efficient system for development and dis- INT in its negotiation of settlements, were updated semination of policies and procedures that set out the and made public. ground rules for conducting business. • Create an efficient system to distribute internal knowl- • In November 2011, the Bank released, for the first edge about policies and procedures to staff at all levels time, a detailed Information Note, written by the and in all locations, and present that knowledge in a Legal VPU, describing the entire sanctions regime. reliable and user-friendly manner. This Note gives the public an understanding of the • Promote accountability by giving better instructions system as a whole, making known the system’s internal and guidance to staff on how to conduct the Bank’s relations and operations, information which was previ- business. ously largely unknowable to outsiders. • Increase openness by making policies, procedures • In May 2011, the undisputed first-tier determinations and guidance more understandable and accessible to of the Evaluation and Suspension Officer (EO) were stakeholders. published. In addition, in December 2011 the appel- New Calculation of Basic Votes late decisions of the Sanctions Board, which are fully Amendment to IBRD and IFC Articles of Agreement— reasoned and include relevant facts and the applied Effective June 27, 2012, Article V Section 3(a) of the legal reasoning, were first published in the Sanctions IBRD Articles of Agreement and Article IV Section 3(a) Board Law Digest. of the IFC Articles of Agreement were amended to reflect • In April 2012, the Legal VPU coordinated the a new calculation for basic votes. redrafting and updating of the Sanctions Procedures, Basic votes were introduced at the founding of each which were released to the public with notes on those institution to maintain relative voting power for smaller changes. Among other things, this update clarified the members, with the number of basic votes fixed at 250 alignment of the impact of suspensions and debar- votes per member. With the increased level of mem- ments. Moreover, the Sanctions Board was given the bership and various capital increases, the protection power to call hearing on its own authority, rather than provided to smaller members by the 250 basic votes on request. has diminished. This amendment was proposed during FY 2012 Annual Report 57 These developments are all the more dramatic given that Access to Information the sanctions system has been excepted from the 2010 The Legal VPU, through its Information Policy unit, World Bank Group-wide Access to Information Policy. manages the Bank’s Access to Information Policy (AI For the sake of the deliberative process, confidentiality is Policy), which is a central element of the Bank’s modern- maintained throughout the sanctions process. ization and Open Development agenda. The AI Policy has enabled the Bank to fully commit to the concept of In the sanctions system, the Legal VPU plays an objec- Open Development by actively working to make the tive role, offering support for specific legal questions, Bank’s operations, data and research more accessible, generally about the state of the law in the Bank’s system, transparent and accountable, including opening up while refraining from weighing in on the specifics of any the way the Bank develops its research and knowledge. one case. The Legal VPU continues to actively review The goal of the AI Policy is to make the Bank an even the functionality of the sanctions regime, especially in more effective partner to developing countries, other light of all of the above mentioned developments, paying international development institutions, and civil society particular attention to the regime’s institutional aspects organizations. and how the various actors can be brought together with increased facility. The Legal VPU also has been working The Information Policy unit contributes to this goal on developing reforms that would increase the efficiency, by providing AI Policy advice to management and staff effectiveness, and transparency of the entire sanctions Bank-wide on the application and implementation of the process. AI Policy to all information created or held by the Bank. Our advisory services include working closely with all Managing Inter-institutional Business front-line units responsible for implementing the AI Poli- Conflicts of Interest cy, such as External Affairs and the World Bank Group’s In accordance with the restructuring of institutional Archives unit, to ensure effective management of all arrangements for managing inter-institutional business public access information cases. This unit also provides conflicts of interest by the Conflicts of Interest Council ongoing AI Policy advice to the institution’s Access to In- (chaired by the World Bank Group General Counsel), formation Committee (AIC), an internal administrative a World Bank Office of Interinstitutional Business body represented by members of Operations Policy and Conflicts of Interest (WB CoIO) was established and Country Services (OPCS), General Services Department housed in the Legal VPU and a new head of the office (GSD), Legal VPU, External Affairs (EXT), Informa- appointed, effective January 1, 2012. The head of the tion Management and Technology (IMT), Corporate WB CoIO reports to the World Bank Group General Secratariat (SEC), and one Region, that broadly oversees Counsel and liaises with counterpart officers in IFC and the implementation of the AI Policy. In addition, the MIGA who report to their respective General Counsel. unit advises SEC in various matters arising from the AI The WB CoIO is advisory in nature, and undertook ap- Policy concerning the Board and its Committees, the proximately a dozen cases in the second half of the fiscal Board of Governors, and individual Executive Director’s year. The head of the office also, inter alia, participated offices. In this advisory capacity, our lawyers have served in a number of institutional reviews, began conducting as counsel to the AIC Chair and SEC in presenting AI training which will continue throughout the upcom- Policy related matters to the Committee on Governance ing fiscal year and began the establishment of the office, and Executive Directors’ Administrative Matters (CO- including developing a database for tracking cases and GAM), and has advised SEC and the Board in respect to building a body of knowledge around managing interin- the Board’s authority to exercise the Bank’s prerogatives stitutional business conflicts of interest. to restrict and disclose information under the AI Policy. In fiscal year 2012, the Information Policy unit also continued to manage the Bank’s AI Focal Point program consisting of a roster of more than 180 staff members across the Bank, who serve as AI champions through their support of colleagues in the implementation of AI Policy matters. As part of its management of the AI 58 Legal Vice Presidency | The World Bank Focal Point program, the unit provides AI Policy support present to the AIC, on a bi-weekly basis, the consider- to AI Focal Points. It also uses the AI Focal Points as a ations and analysis of the underlying materials and infor- mechanism to disseminate Bank-wide AI Policy related mation related to the cases and issues before the AIC for updates and information, through the unit’s preparation consideration, and carries out all necessary consultations and issuance of AI Focal Points Newsletters, which com- with management and relevant business units. In view of municate, inter alia, AI Policy updates, AIC interpreta- the end of the two-year appointment of the first mem- tions on the AI Policy, and Frequently Asked Questions. bers of the AI Appeals Board in June 2012, our team In fiscal year 2012, the unit published a series of six AI has also supported the President’s office in searching and Focal Point Newsletters. selecting new members for the AI Appeals Board. As part of its responsibilities as the anchor unit for the The Information Policy unit also promotes AI Policy AI Policy, our team monitors and reports to management understanding and dissemination with, civil society and the Board on the implementation of the AI Policy. organizations, client countries and other international As part of this mandate, in fiscal year 2012, we provided development institutions. In fiscal year 2012, our team management and the Board with two reports on the AI delivered multiple presentations on the AI Policy to Policy’s implementation: a progress report, issued in July external groups, including to a global audience of civil 2011, and the Bank’s first Access to Information Annual society organizations at a civil society forum held during Report (AI Annual Report), issued in February 2012. the Bank-IMF Spring Meetings. The unit also continued All reports prepared by the Information Policy unit were to advise the Inter American Development Bank, the also made available to the public. In FY12, as part of its Asian Development Bank, and the African Development monitoring and reporting activities, the unit also devel- Bank, in the development of their respective access to oped and carried out the Bank’s first Access to Informa- information policies. tion public survey. Data gathered through the AI survey were reported to management, and relevant results were included in the AI Annual Report. In fiscal year 2012, the Information Policy unit also began its preparation of an AI Policy implementation report to the Board. This report covers the first 18 months of the AI Policy’s imple- mentation (i.e., July 1, 2010, through December 31, 2011), and aims at providing the Board with a compre- hensive 18-month overview of the Bank’s experience in implementing the AI Policy; this report will be presented to the Board in early fiscal year 2013. In addition to its role as the institution’s AI Policy an- chor, the Information Policy unit serves as the secretariat to the AIC and the Access to Information (AI) Appeals Board, an impartial body of outside experts appointed to consider second level appeals filed under the AI Policy. The mandate of the AIC includes the authority to exer- cise the Bank’s prerogative to disclose certain restricted information, to interpret the AI Policy, and to decide on the first level appeals filed against the Bank’s decisions to deny the public’s access to information. Our lawyers provide ongoing support to the AIC on all AIC deliver- ables. As part of this support, our lawyers prepare and First Annual Report on Access to Information released in February 2012. FY 2012 Annual Report 59 Administrative Matters The Legal VPU’s role as the World Bank’s legal advocacy The World Bank’s legal advocacy team team not only involves the interpretation of the privileges and immunities clause of the Bank’s Articles of Agree- not only involves the interpretation of ment but involves several dimensions of international law as well as the unique body of law applicable to the World the privileges and immunities clause Bank. It also involves the development of internal poli- cies and procedures as well as the preparation of contracts of the Bank’s Articles of Agreement and agreements that aim to prevent disputes and develop understandings between the World Bank and the parties but involves several dimensions of with which it deals. international law as well as the unique body of law applicable to the World Bank. Photo: Deborah Campos World Bank Headquarters 60 Legal Vice Presidency | The World Bank HIGHLIGHTS Representing the Bank before the Administrative Tribunal The Legal VPU represents the Respondent in cases filed with the Administrative Tribunal. This representation involves the preparation of briefs, as well as participation in hearings. The Applications before the Tribunal impugn administrative decisions and disciplinary actions against staff, alleging nonobservance of contracts of employment, and terms of appointment. These Applications deal with issues such as misconduct, unsatisfactory performance, Photo: Salwa M. Saleh discrimination, retaliation, termination of employment, nonrenewal of appointment, amongst others. Advising on Legal Aspects of Human Resources Members of the Institutional Administration team. Our lawyers provide legal advice to the Human Resources Vice Presidency on the interpretation and application of the staff rules and human resources policies, as well as on the formulation and reform of policies and on enactment of rules. We also provide advice on various legal problems Managing the Bank’s Real Estate that involved Bank staff. Pursuant to a services contract Transactions at Headquarters with IFC, the Legal VPU also provided legal assistance to Negotiating and drafting agreements for the lease or IFC’s Human Resources department. purchase of real estate property, and advising on related transactions at World Bank Headquarters. Advising the Ethics and Business Conduct Vice Presidency and the Integrity Vice Coordinating Outside Litigation Presidency The Legal VPU provides legal advice in outside litigation The Legal VPU provides legal advice to both the Integrity involving the institution, and coordinates with outside Vice Presidency (INT) and the Ethics and Business Con- counsel to defend the institution and protect its interest. duct Vice Presidency (EBC) on matters that fall within their respect mandates under the staff rules. In advising Resolving Tax Issues EBC and INT, the goal of the Legal Vice Presidency is to We provide legal advice and handles matters implicating endeavor or ensure that the interests of the institution are the tax immunity of the institution and its staff. protected and the rights of staff are respected. Advising on the Legal Dimensions of New Providing Legal Support to the Regions Information Technology and Intellectual and Country Offices Property The Legal VPU assists the Regions and Country Of- The Legal VPU provides legal advice on the Bank’s social fices on a host of institutional and administrative law media strategy and practices, as well as on privacy policies matters, such as negotiating and drafting Establishment and terms of use for websites and platforms and on mat- Agreements and Real Estate Agreements. We prepare ters relating to intellectual property rights. Establishment Agreements for the purpose of fleshing out and further securing the status, privileges and immunity of the institution and its staff in the Country Offices. On an ongoing basis, we assist in dealing with national legislations that attempt to undermine our privileges and immunities in those countries. FY 2012 Annual Report 61 The Legal VPU’s Contribution to Knowledge and Learning Photo: Salwa M. Saleh Judge Sang-Hyun Song, President of the International Criminal Court, Keynote Speaker at Law, Justice and Development Week 2011 62 Legal Vice Presidency | The World Bank Knowledge and Learning “Lasting peace and prosperity in the The Legal Vice Presidency has a long tradition of con- tributing to the Bank’s knowledge agenda, spanning from post-conflict societies can only be interventions, including regular peer reviews on the Bank knowledge products, contribution and development of achieved if development challenges substantial portions of major Bank products and the generation of the Legal VPU’s own knowledge products. and justice enforcement are However, the development and dissemination of innova- addressed in a coordinated manner� tive legal knowledge undertaken during fiscal year 2012 has raised the profile of the Legal VPU’s knowledge and learning agenda. Initiatives were launched for the first Judge Sang-Hyun Song time, many of which were set to become our flagships, Keynote Speaker at Law, and included the Legal Vice Presidency Annual Report, Justice and Development Week 2011 the Law, Justice and Development Week organized for the first time by the legal departments of the World Bank, IFC, MIGA and ICSID, and the Global Forum on Law, Justice and Development, an initiative launched last year and already embraced by an impressive base of partners that keeps expanding. Photo: Salwa Mohamed Saleh Ana-Mita Betancourt, Director and General Counsel, MIGA, Meg Kinnear, Secretary-General, ICSID, Anne-Marie Leroy, Senior Vice President and World Bank Group General Counsel, and Rachel Robbins,Vice President and General Counsel, IFC. Law, Justice and Development Week 2011 FY 2012 Annual Report 63 Other notable initiatives included the reinstitution of our key annual flagship publication, the World Bank Legal Review, the formal publication of our sector work “The ability of the World Bank to have as World Bank Studies, New Directions in Justice Reform, Legal Note on Bank Involvement in the Criminal Justice attracted the subject matter expertise Sector, the continued production of a compendium of across several informational tracks was Legal publications and reports of the World Bank Group nonpareil. The content of the presenta- on a CD-ROM as part of our ongoing efforts to increase the accessibility of our knowledge and resources, and the tions all were immediately useful to our development of training components and legal databases. office professionally. My own sense of Our progress and continuing efforts during fiscal year professional development was rewarded; 2012 only confirmed our determination to make knowl- as the depth of the information was edge and learning a key priority and the trend towards a educational, thought-provoking, insightful stronger knowledge sharing mechanism keeps growing. and practical. Aside from the agenda, it was very well done in terms of affording ample opportunities for networking and forming project-based alliances. In addi- tion to my own experiences, I witnessed many other small groups forming through- out the conference period based upon common challenges and the desire to make connections for skills not core to their own organizations. The degree and diversity of participation was a huge factor in the utility of the event.� Photo courtesy of the Supremo Tribunal Federal, Brazil Testimonial on Law, Justice and Hassane Cisse, Deputy General Counsel, Knowledge and Development Week 2011 Research, World Bank, meets with Minister Cezar Peluso, President, Federal Supreme Court of Brazil, to discuss the Global Forum on Law, Justice and Development Initiative. 64 Legal Vice Presidency | The World Bank HIGHLIGHTS First Annual Report of the Legal Vice With a combination of 44 plenary and parallel sessions, Presidency the event explored how legal innovation and empower- As part of our efforts to increase and sustain communica- ment contributed to development and addressed: tion across the institution, we published the first annual global issues, including the role of intellectual prop- report of the Legal Vice Presidency to provide a review of erty in innovation, financing women entrepreneurs and significant legal challenges facing the Bank and possible political risk management; regional challenges, includ- recommendations for changes or reforms to the Bank’s ing legal harmonization as a tool for regional integration, legal or policy framework. The annual report offered a the Organization for the Harmonization of Business detailed retrospective of our milestones and contribu- Law in Africa (OHADA) experience, and financing tions to the work of the World Bank as well as a knowl- carbon-efficient investments in civil law vs. common law edge piece about “Strengthening the Bank’s Internal Rule jurisdictions; and country cases, including opportunities of Law�, an intellectual contribution to significant legal and challenges for law and development in China, and issues of importance to the Bank and the development perspectives from various Middle East and North Africa community. countries on the rule of law, governance and develop- ment. The event brought together legal practitioners, Law, Justice and Development Week 2011 judges, justice officials, academics, and general counsel The Law, Justice and Development (LJD) Week, held on and staff of international organizations who built a November 14-17, 2011, was organized for the first time strong vision and collaboration through active exchanges. by the legal departments of the World Bank, IFC, MIGA and ICSID, and in collaboration with partners including At the opening of the event, keynote speaker Judge Sang- American Bankruptcy Institute, American Bar Asso- Hyun Song, President of the International Criminal ciation, American Bar Association Section of Interna- Court, spoke about the fundamental connection between tional Law, George Washington University Law School, justice, peace and development and invited development Harvard Law School, International Development Law experts to think of international criminal justice and eq- Organization, Ministério Público do Estado de Minas uitable development as being essential to secure stability, Gerais, Syracuse University, and Tsinghua University security and prosperity in the world. School of Law. Signing of Letter of Endorsement of the Global Forum on Law, Justice and Development. FY 2012 Annual Report 65 The roles of law and justice are critical in the fight of pants, speakers, and organizers shared the same commit- poverty and the opportunities to discuss them are valu- ment, exchanged a variety of perspectives and ideas and able. The LJD Week 2011 not only demonstrated the brought legal solutions to development challenges. World Bank Group leadership but also showed that it is a global convener and connector of law and development practitioners and experts. At the LJD Week 2011, partici- Law, Justice and Development Week 2011 Achievements Some Numbers on the Success of LJD • World Bank Group leadership and global Week 2011 convener role on Law, Justice and • A 5-day event Development issues. • 44 sessions offered • Major learning and knowledge exchange for World Bank Group staff and external • 9 external partners audience with wide participation of partners • 176 panelists/moderators (including 18 from around the world. General Counsel, 6 World Bank Vice • Agreement among participants to develop Presidents, 3 World Bank Managing better integration of law and justice Directors, and previous World Bank considerations in the development agenda. President James Wolfensohn) • Launch of the Global Forum on Law, Justice • 838 external participants and Development as permanent knowledge • 1,474 World Bank Group/IMF staff sharing partnership supported by an information and communication technology platform. Photo: Salwa M. Saleh Law, Justice and Development Week 2011. The General Counsel Round Table was attended by 18 General Counsel. 66 Legal Vice Presidency | The World Bank Global Forum on Law, Justice and Development Global Forum on Law, Justice The Global Forum on Law, Justice and Development and Development (GFLJD) is a permanent global forum that seeks to con- Generating Innovative Legal Solutions to nect experts and stakeholders from around the world, Development Challenges and provides a mechanism for continual and efficient knowledge exchange and for the cogeneration of in- Key Objectives novative solutions to development challenges based on • Strengthen and promote a better understanding efficiency, equity and justice. of the role of law and justice for a sustainable The GFLJD was officially launched during the World development through structured North-South and South-South dialogue. Bank Group Law, Justice and Development Week in November 2011, where GFLJD partners attended the • Better integrate legal and judicial institutions in signing ceremony of the letters of endorsement. Initiated the development process to increase develop- and supported by the World Bank Legal Vice Presidency, ment effectiveness. the GFLJD has already attracted a broad spectrum of • Encourage the cogeneration of innovative legal intellectual development partners made up of think- solutions to development issues. tanks, regional and international organizations, interna- • Support knowledge dissemination by a free tional financial institutions, governments, judiciaries, the access, use and sharing of legal solutions to private sector, and civil society organizations. The base development challenges. of GFLJD partners, which counted 101 at the time this report was published, keeps expanding. Activities • Carrying out research and assessment of regula- In its first year, the GFLJD activities focused on five tions/legislations and legal and policy analysis. formal Thematic Working Groups (TWGs) and two • Providing guidance and precedents. subgroups which were created based on the areas of inter- est expressed by the GFLJD Partners. The TWGs and • Carrying out data collection and action research. subgroups provide the platform for cogeneration of legal • Institutional analysis. knowledge and products. They are co-led by intellectual • Database of experts, peer reviewers, practitioners. partners who are accountable for the management and outputs of the overall working group. A number of high- • Training materials and capacity building. level events already took place at the end of fiscal year Thematic Working Groups as of June 2012 2012, including a Colloquium on Bankruptcy Treatment of Financial Contracts in Maryland, USA, a Training • Empowerment and Equity for Diverse Communities. Program in Bankruptcy Law for Chinese Judges in Beid- • Environmental and National Resources Law. aihe, China, and an E-discussion on Access to Justice for • Governance and Anticorruption. Persons with Disabilities. A week-long event is planned • Justice and Rule of Law Reform. for December 10-14, 2012 with dedicated sessions of each GFLJD TWG. • Law and the Economy. Subgroups as of June 2012 • Access to Justice for Persons with Disabilities. • Suspension and Debarment. FY 2012 Annual Report 67 Law, Justice and Development Compendium of Publications and Reports In our ongoing efforts to increase the accessibility of our knowledge and resources, we continued the tradition of producing a compendium of publications and reports on a CD-ROM to be disseminated during the Law, Justice and Development Week 2011 and to law libraries around the world upon specific requests. The 2011 CD- ROM contained 101 publications and reports covering a wide range of topics such as environmental and natural resources law, justice reform, and private sector develop- ment, finance and infrastructure. A presentation of World Bank Group recent knowledge products took place at a luncheon event on November 15 with opening remarks by Mahmoud Mohieldin, Managing Director, World Bank, and included the first Legal Vice Presidency Annual Report, the Legal Review on Law, International Financial Institutions and Global Development Cooperation), as well as the IADB. It has Legal Governance (Volume 3), as well as other signifi- developed new pages this fiscal year on PPPs in renew- cant publications. able energy, solid waste, rural water and sanitation and irrigation and also financing pages that provide guidance Web-based Knowledge Products on project finance and include links to risk mitigation Legal staff’s efforts to design knowledge products that products such as the Bank’s partial risk and credit guar- make an impact on the issues they address can hardly antees and MIGA political risk products. be achieved without strategic dissemination and the en- hanced use of information technology systems, either for Insolvency and Banking external or internal audiences. Our effort in this area was The Legal VPU participated in numerous dissemina- significantly expanded with databases developed under tion activities and the specialists of the group published the leadership of our lawyers. For example, the Public- articles and produced research on important topics of Private Partnership (PPP) Resource Center for contracts, insolvency and the legal environment of credit. laws and regulation continued to be a valuable resource Our staff also participated in the organization of the for sample legal materials and practical toolkits, check- INSOL—World Bank Group Africa Roundtable on lists, and guidance for evaluating projects. Many Internal insolvency law (ART) held in Cape Town, on September web-based tools developed to support the sharing of 16-17, 2011. The conference focused on value-preserva- information by lawyers to help ensure that our mandate tion strategies in Africa and brought together an ample was achieved, included the newly launched Safeguards representation of public and private sector representatives Guidance that provides sample text taken from actual from the whole African continent. investment lending operations to assist our lawyers with the drafting safeguards-related definitions. In addition, the Legal VPU had a leading role in the organization of the Forum on Asian Insolvency Reform PPP in Infrastructure Resource Center for (FAIR), the most important and consolidated regional Contracts, Laws and Regulations forum on insolvency matters. The Eighth FAIR was (www.worldbank.org/ppp) held in Kuala Lumpur on November 30 and December The Legal VPU’s initiative to provide free public guid- 1, 2011. For this event the Malaysian Authorities—the ance and resources on PPPs and the contractual and Malaysia Department of Insolvency and Bank Nega- legal issues relating to them continues to expand and ra—joined efforts with the Bank and its international increase readership. The site is now receiving approxi- partners, UNCITRAL, OECD, and INSOL. The Legal mately 13,000 hits per month from all over the world VPU holds the chair and the secretariat of the steering (13% of traffic coming from Sub-Saharan Africa) and is committee for the FAIR, and was therefore involved supported by IFC, Public Private Infrastructure Advisory in all stages of the process. The conference program Facility (PPIAF) and Norad (Norwegian Agency for included sessions on Islamic Finance and Insolvency, the treatment of insolvency of SMEs in Asian countries, and 68 Legal Vice Presidency | The World Bank one of the first public debates on the Financial Stability The training was supported by a complete set of materi- Board (FSB) Key Attributes for the resolution of systemic als produced in English and in Chinese. The program financial institutions. The program was highly valued was time-intensive, and was rewarded with the active by the attendants, who included policy makers from all engagement of the Chinese judges. In particular, the major Asian economies. sessions based on role-playing and practical exercises were extremely well received by the trainees, and helped The Legal VPU published a study in 2011 on out-of- them to see many bankruptcy issues in a new light. The court restructuring mechanisms, based on the ICR National Judges’ College conducted the evaluations of standard and the experience accumulated over the years the educational program, and these evaluations have evi- in the Insolvency Initiative in the formulation and assess- denced a very high level of satisfaction with the training ment of informal and hybrid restructuring approaches received. The training program opened possibilities for to situations of corporate debt distress. The publication further cooperation with the Chinese judiciary, and also condenses, in an accessible way, the lessons learned in the assisted the World Bank in gathering information about work done by the Legal VPU and other departments of the application of the Chinese Enterprise Bankruptcy the World Bank in different countries around the world. Law 2006. For the World Bank Insolvency and Creditor/ Debtor Regimes Initiative, the training served as a very TRAINING PROGRAM ON BANKRUPTCY LAW valuable pilot, and proved that similar programs could be TO CHINESE JUDGES very useful in many client countries. A team from the Legal VPU, reinforced with internation- al specialists, delivered a training program in bankruptcy law to Chinese judges (Beidaihe, China, June 2012). The program was organized in partnership with the Interna- tional Developmental Law Organization (IDLO) and with the National Judges’ College of China. The training was delivered to 162 judges coming from all Chinese provinces, and was based on the premise that the judges would benefit from a comparative and functional per- spective, providing them with specific examples of how to solve complex issues that typically arise in insolvency cases, and illustrating practically the economic and social impact of judicial decision-making in the bankruptcy context. Photo: Wanfei Zhao Training of Chinese Judges in Bankruptcy Law (Beidaihe, June 2012). From left to right: US Judge Charles Case, Yawei Cao, three Chinese judges from different provinces, Jose Garrido and Xin Liu (Legal Vice Presidency). FY 2012 Annual Report 69 Global Lawyer Course, University of lawyers�, including lawyers at the World Bank and IMF. Melbourne Law School The session this year was opened by the World Bank For the second year in a row, the Legal VPU hosted Group General Counsel and was presented by three students from the University of Melbourne Law School lawyers in the Legal VPU, each covering different areas in Australia for a short training session as part of their of the Bank’s work. The session was a great way for Global Lawyer course. The course examines the various the Legal VPU to demonstrate the role it plays in the roles played by lawyers within the international legal development arena and an opportunity to engage with realm, including as advisers, advocates, negotiators, law students who will go on to become future leaders, settlers of disputes, and drafters of legislation, contracts development experts or work in other areas that the Bank and treaties. Through this course, students explore the is engaged in. complex functions and responsibilities of “international Photo courtesy of Andrew Mitchell, Professor, Melbourne Law School University of Melbourne students visit the World Bank in July 2012. 70 Legal Vice Presidency | The World Bank The Five Pillars of the Legal VPU’s Knowledge and Learning Agenda in FY 2011 Pillar 1. Intellectual Leadership through Research Pillar 5. Outreach and Communication and Publications • During the year, Legal VPU senior management • The World Bank Legal Review: Law, International participated in a wide range of international fora Financial Institutions and Global Legal Governance, including: Voume 3, 2011. - The Role of Legal Counsel in International Economic • Forty-one articles/monographs by the Legal VPU Law, University of Manchester, London Comparative staff were published. Perspective of the Statistical Indicators of the Judicial Power in the World, National Council of Justice Semi- • A compendium of legal publications, with 101 nar, Justice in Numbers, Brazil reports and papers from the Legal VPU was made available on mini CD and internet. - The Limits of Regulation, 15th Forum 2000 Conference, Prague • The quarterly Law, Justice and Development E-Newsletter was disseminated, reaching 5,764 - Presencing Global Forum, Presencing Institute, readers. Cambridge - The World Bank and Human Rights, Canadian Pillar 2. The Law at your Fingertips Council of International Law’s 2011 Conference, • The Legal VPU continued to strengthen and expand Ottawa the provision of specialized knowledge through online databases for internal users (procurement, - Rodney Lecture, African Studies Center, Boston safeguards, negative pledge, sanctions, governance - Howard University, Washington DC and anticorruption) and external users (PPP Resource - GFLJD and Justice Reform, Nairobi Center, Global Insolvency Law Database, General - GFLJD and Justice Reform, Abuja Conditions, Justice for the Poor, etc.) - GFLJD and Justice Reform, Abidjan Pillar 3. Law, Justice and Development University - Administrative Tribunals and their Implications for the • The annual New Lawyers Training was conducted in Immunity of International Organizations, University of September/October 2011, led by experienced Pretoria World Bank lawyers. The training addressed the full - Global Education Forum, Harvard spectrum of issues covered by the Legal VPU’s various practice groups, including an introduction to - Role of Law in Economic Development: Catalyst? Or the project cycle and lending instruments, fiduciary Inhibitor?, Harvard African Development Conference and safeguards aspects of project finance, trust - Opting Against International Law in International funds, corporate and advisory work, and administra- Financial Regulation, American Society of Interna- tive matters. As in FY2011, participants were asked tional Law, Georgetown University to provide feedback which was considered for - Lecture on Political Prohibition Provision in the World improving the training in subsequent years. Bank Articles, George Mason University • Continued support to facilitate requests for funding - Legal Advisers of the United Nations System, Paris external learning activities for staff and to provide - Innovating Justice Forum, Hague Institute for the career guidance to junior staff through mentoring. Internationalisation of Law, the Hague • The Legal VPU hosted or cosponsored over 20 - Conference on the Impact of Foreign and Interna- learning events during the year, on topics as diverse tional Law on National Legal Systems: Comparisons as judicial reform, harmonization of business law in in Legal Development, Lausanne Africa, safeguards and grievance mechanisms, - Meeting with Professor Mark Pieth, Basel Institute international environmental liability, property rights and development, public-private partnerships, - Meeting with Director General on the Law, Justice sanctions reform, sovereign defaults, intellectual and Development Week, Development and property, hydrodiplomacy, and regional integration, Cooperation - EuropeAid, Brussels among others. - Union Internationale des Huissiers de Justice, Cape Town - Qatar Law Forum Pillar 4. Partnership - Legal Aspects of International Financial Institutions, Joint • The Legal VPU’s commitment to global convening Vienna Institute Seminar, International Monetary Fund and partnership was epitomized in fiscal year 2012 by the Law, Justice and Development Week and the - United Nations General Assembly, New York Global Forum on Law, Justice and Development. - Legal Risk Conference, European Investment Bank, Luxembourg FY 2012 Annual Report 71 Law Resource Center The Law Resource Center (LRC) is comprised of the Focus on training and Law Library, Legal Help Desk, Legal Records Center and Official Documents Desk. Throughout 2012, LRC staff digitization to increase continued to provide high quality information sources and services in support of the Legal VPU work program, researcher independence. while leveraging resources to maximize their impact in meeting the business needs of our clients. Providing cus- tomized reference and research in response to individuals’ The Law Library continued increasing access to electron- specific information needs, and using our weekly email ic resources, including Ebooks, while selectively reducing newsletter, we surfaced content and provided current the size of the print collection. Through subscriptions awareness, highlighting relevant databases, new books, managed by the LRC, Legal VPU staff has desktop ac- and articles. cess to LexisNexis, HeinOnline, Oxford law and other databases for efficient researching. Legal Records staff In response to training needs of clients, LRC staff liaised with the Information Management and Technol- conducted over 100 in person orientations and training ogy (IMT) unit to migrate legal documents from the In- sessions. LRC staff also provided hands on WBDocs (the stitutional Records and Information System (IRIS) to the Bank’s document management system) training sessions new WBDocs platform. They also assisted with the final for staff in the Legal VPU. To facilitate knowledge shar- steps in the digitization process of the microfiche collec- ing, staff created three orientation videos on Law Library tion, making older lending documents publicly available. and Legal Records services. Posted on the LRC website, The overall impact of these initiatives was increased “self these videos may be accessed by staff in Washington and service� availability of information. field offices. Photo: Kim Rhodes Law Library staff conduct LexisNexis training, World Bank Law Resource Center. 72 Legal Vice Presidency | The World Bank I I. ClearAccountability and Effective Decision-Making: An Essay By Anne-Marie Leroy, Senior Vice President and World Bank Group General Counsel FY 2012 Annual Report 73 The Bank has been undergoing comprehensive reforms • Few institutional tools exist to manage delegations in to strengthen its governance and accountability and to an orderly and efficient manner. This makes it difficult improve efficiency and effectiveness of its operations. As for managers to delegate and take risks. part of this initiative, the Legal VPU was asked to review the methods of assigning authority and responsibility • Some delegations can be hard to find because they are within management and develop a new framework to not centrally recorded. As a result, staff struggle to strengthen accountability within the institution. navigate through the Bank’s decision-making processes and determine the scope of their own responsibility I. Review and of their colleagues and managers. Information gathered during the review revealed that the II. Challenges Presented by the Matrix authority of the Bank’s managers to take action on inter- nal matters is specified or implied in numerous docu- The above-described challenges are not unique to the ments, rules and manuals, as well as electronic systems, Bank. Large matrix organizations face similar issues3. announcements and emails. These modes of assigning In the last 30 years, the Bank and many other institu- accountability have evolved over time to accommodate tions, transformed from centralized hierarchies to much organizational changes without a systematic approach. looser matrix structures, with multiple centers of power. Lack of a comprehensive framework has resulted in com- In a hierarchy, only a handful of managers participated in mon issues across the Bank, which can be grouped into decisions, making it easy to coordinate, come to agree- five categories: ment on a desired outcome, and ensure accountability. In a matrix, participants in key business decisions report • Absence of systematic delegations starting with the to different managers, play specialized roles, and are President and flowing down the management stream often dispersed around the globe. Transaction volume leads to blurred lines of authority, responsibility and and complexity have increased. Advances in information accountability in certain areas. technology have accelerated expected response time. The accountability and decision mechanisms that worked • Definition of delegation terms, such as authority, in a centralized structure are no longer adequate. In a accountability and responsibility, is not always consis- matrix environment, different methods are needed to tent across the Bank. manage complex work programs and facilitate collabora- tion across organizational boundaries and geographical • Definitions of roles performed by team members in locations. the decision-making process, such as recommendation, clearance, advice, and decision, tend to vary. Persons Some companies have managed these challenges by who play the advisory and the clearance role are some- concentrating on decisions that are central to their times uncertain as to the scope of their authority and business and implementing corporate policies that rein- responsibility. Situations arise where it is difficult for force effective decision-making4. Fixing organizational a decision-maker to determine when advice must be problems and improving functioning of the matrix is followed and when it can be considered and rejected. important, but unless an organization is good at having It is sometimes unclear who the decision-maker is be- different parts of the matrix come together to execute cause of group decision-making and other mechanisms decisions that matter most, results suffer5. The connec- that obfuscate responsibility. Those in the recom- tion between organizational performance and effective mendation role are occasionally under the impression decision-making is obvious6. that they are in the decision role when in reality they are not. Also, different terms are used to refer to the same roles. Besides recommendation, clearance, advice 3 Thomas Malone, The Future of Work, (Boston, MA: Harvard Business School Press, 2004); and Blenko, Mankins and Rodgers, and decision, words such as proposal, endorsement, Decide and Deliver, (Boston, MA: Harvard Business Review Press, concurrence, comment, input, consultation, approval, 2010). no objection, and agreement are also in use across the 4 Blenko, et al. institution to denote similar concepts. Absence of 5 Id. clarity engenders much discussion among staff about 6 Id. the scope of their functions and results in considerable “churning� before a decision is made. 74 Legal Vice Presidency | The World Bank III. Link with Other Accountability and Those determinations are for management to make. Nor does it make fundamental changes to the manner Modernization Initiatives in which the Bank makes decisions. Rather, it codifies, Parts of the Bank have developed decision-making pro- clarifies and fills gaps in current practice. These relatively tocols in an effort to ensure accountability and improve minor shifts in definitions and approach could poten- corporate performance. Regional project processing tially have a profound impact on the business culture of procedures are an example of such decision tools. Other the Bank. The basic elements of the new approach are reforms deal with distribution of responsibilities in the described in more detail below. institution as well. The Matrix Leadership Team (MLT) Consistent Delegation. The ADM Policy requires more has conducted a review of substantive accountabilities methodical delegation of authority and assignment of ac- within the Regions and the Networks. OPCS, the countability starting with the President and cascading to Regions and the Networks are making efforts to stream- line-managers. The purpose of this aspect of the Policy line and modernize business processes, and revamp the is to clarify and focus on the functions of each orga- Operations Manual. Human Resources has standardized nizational unit, limit overlapping mandates, and align and automated routine actions. work programs more closely with institutional goals and The accountability solutions adopted by various units are budgetary resources. not uniform and often partial, however. The issues noted Definition of Basic Delegation Concepts. The ADM Policy above are the result of such partial solutions. Lack of also defines basic delegation concepts. The operative uniformity creates needless friction when different parts terms are: of the matrix have to collaborate and make key business decisions collectively. Also, the various initiatives did • Authority, which means the legal power to make not address systemic issues created by lack of consistent decisions and take action7. delegation of authority and assignment of accountability from the President down the management chain. • Responsibility, which means performing assigned tasks. A person with responsibility has a duty to complete At the end of Bank-wide consultations conducted a task and is accountable to his or her manager for during the review, it became apparent that a corporate results. policy was necessary to fill these gaps by providing more predictability in the system, promote quality business • Accountability, which means being answerable for decisions, informed risk-taking, and faster action. decisions and activities. A manager who has delegated responsibility to a subordinate is no longer performing IV. Accountability and a task, but is accountable for it. Decision-Making Policy The distinction between delegation of authority and Working with a team of staff from various parts of the assignment of tasks is often misunderstood. The legal Bank, the Legal VPU developed a framework for con- principles underlying delegation of authority are based sistent assignment of accountability and clear decision- on principal-agent concepts. The principal transfers legal making within management entitled the Accountability power to the agent and enables the agent to act on the and Decision-Making Policy (ADM Policy or Policy). principal’s behalf. Thus, in delegating a manager: (a) The ADM Policy defines basic delegation of author- assigns responsibility, (b) establishes accountability, and ity concepts and specifies roles for participants in the (c) transfers authority. The subordinate has discretion to decision-making process. It also requires managers to carry out his or her responsibilities independently within articulate with greater precision the scope of authority limits prescribed by the delegation. While a delegation and responsibility of staff members who come together transfers the responsibility and authority for a task to a from different parts of the matrix to execute the most subordinate, it does not transfer accountability. Both important business decisions made in the Bank. Greater the manager and the subordinate remain accountable for precision ensures that the right people are involved, the results to their respective managers. right information is considered, and decisions are made as quickly as possible. It is important to note that the 7 Staff with delegated authority is required to exercise it in ac- ADM Policy does not prescribe where authority should cordance with all applicable Bank policies, and directions of their rest, what decisions ought to be made, or by whom. managers. FY 2012 Annual Report 75 In contrast, assignment of tasks by a manager to subor- be reserved for compliance and technical functions dinates within a team is based on an employer-employee such as Legal, Operational Procurement, Finance and relationship. The manager: (a) assigns responsibility Safeguards that typically review only a portion of a and (b) establishes accountability, but does not transfer proposal that falls within their area. Without a sign off authority. While the team members are obligated to from a clearer, a proposal cannot be forwarded to the perform the assigned responsibilities and are accountable decision-maker. In addition to ensuring compliance for the results jointly with the manager, they have limited with technical requirements, persons in the clearance discretion, and are directed entirely by the manager. role provide advice. As is the case with other advice, this portion of the clearer’s contribution is not binding The review revealed instances where managers in an on the decision-maker. Clearers are required to specify effort to produce good results withheld authority. This whether their contributions fall into the essential clear- occurs when a subordinate is given the responsibility to ance or the advice categories to inform the decision- make certain decisions, but the manager continues to maker and the team about the nature of their input8. approve those decisions. The manager has not delegated authority in this situation, but merely given an assign- • Recommendation. Persons performing the recom- ment and reserved the power to authorize each transac- mendation role are tasked with gathering facts, tion. Ensuring quality through review of each transac- analyzing information and preparing a proposal for tion has drawbacks. The volume of work faced by the the decision-maker’s consideration. In developing the Bank’s managers makes meaningful scrutiny of all trans- proposal, they obtain the required advice, clearances actions impossible. This can result in a layer of review, and concurrences; and evaluate options and alterna- which contributes little value but adds to transaction tive approaches. The recommender’s judgment about costs and slows processing. The ADM Policy provides what to include and exclude from the recommenda- managers guidance on when it is appropriate to delegate tion has considerable impact on the quality of the final authority and when it is appropriate to assign tasks. decision. These individuals serve a key coordination function in the decision-making process. An example Clear Roles in the Decision-Making Process. Another of this role is a task team leader. group of concepts defined in the new Policy deals with roles of team members in business decisions. After look- • Concurrence. Persons that concur in a recommenda- ing at many different types of decisions routinely made tion review and attest to the soundness of the entire in the Bank, it became clear that staff members perform proposal. Examples of this role would be Sector staff, the following five functions, regardless of decision type: Regional quality control staff, and other persons who recommendation, clearance, advice, concurrence, and conduct an assessment of the recommendation before decision. Again, while these roles are generally under- it proceeds to the decision-maker. Without an agree- stood, there are variations in definitions. Consistent ment from the person in the concurrence role, the terminology minimizes debates about the scope of each proposal cannot move to a decision. role, increases efficiency and lower transaction costs. Al- though different terms can be chosen to refer to the five • Decision. Persons in this role have the authority and roles played in business decisions, the ADM Policy uses responsibility for all aspects of the decision. It is essen- the ones that are most widely accepted in the Bank: tial that the function is performed by one individual to ensure accountability. If a decision is made by a • Advice. Persons in the advisory role provide input committee, it should be clear how the group makes in their area of responsibility. They are important decisions, i.e., by majority or unanimously9. because they contribute knowledge and guidance that underpin good decisions. Advisers are often staff with 8 In some areas it may be difficult to distinguish between input high levels of experience, such as sector specialists that falls into the clearance and the advice categories, but in most and other experts. The decision-maker is required to instances the differentiation can be readily made. consider their advice, but has the discretion to accept 9 Further work is needed on the substantive responsibilities of the or reject it. An example of this role in operations is a persons in the decision, recommendation, advisory, clearance and peer reviewer. concurrence roles, as this defines what they are accountable for. Many units in the Bank have implemented standards and best • Clearance. Persons who are required to provide a practice guidelines, but more can be done to set out professional expectations and even out technical contributions at critical points. clearance attest that essential standards in their area It is important to note that the ADM Policy does not prescribe of responsibility have been met. This role should such standards. Instead, the work needs to be undertaken sepa- rately by organizational units in their area of expertise. 76 Legal Vice Presidency | The World Bank Resolving Different Views Among Participants in the and how many staff should provide clearance, advice and Decision-Making Process. Much time is spent on resolv- concurrence. The composition of the participants in the ing differences of opinion among participants in key process can vary depending on the decision, and is gener- business decisions. Some staff indicated that it can be ally left to the delegating manager in order to maintain difficult to have their issues heard and considered early flexibility. Careful selection of key players in business while the proposal is being formulated. As a result, the decisions with clear responsibilities ensures that the ap- same issues resurface late in the decision process causing propriate mix of people is involved and that all relevant delays. To facilitate faster resolution, the ADM Policy information is considered before a decision is executed. includes basic protocols for addressing situations where It also discourages over-inclusion of staff in the decision- persons in the recommendation, advisory, clearance and making process with vague roles, which often adds little concurrence roles disagree. The recommender is respon- value but results in cumbersome and slow decisions. sible for addressing disagreements among team members. If the disagreements cannot be resolved at the team level, Although providing managers with flexibility in selecting the recommender is required to escalate the issues to the participants in business decisions is important, in the decision-maker. The decision-maker is tasked with certain areas, such as Operations, Resource Management either resolving the matter or escalating it further up the and Human Resources, it is desirable to prescribe who management chain. ought to participate in standard decisions and require consistency across the institution. The ADM Policy Balance between Prescribing Rules and Ensuring Flexibility. provides a vehicle for ensuring such consistency when It is essential to strike the right balance between prescrib- needed. ing basic rules to promote accountability and disciplined decision-making, and at the same time maintain flex- Other Delegation Ground Rules. The Policy includes a ibility so the ADM Policy does not become a bureau- number of additional ground rules to promote consistent cratic burden. To this end, each delegation of authority and efficient decision-making within the institution. contains: These rules cover withdrawal of authority, acting assign- ments, subdelegation, and group decision-making. • a general delegation from a manager to a subordinate about the broad scope of the subordinate’s authority V. Implementation and responsibility, and The President approved the Accountability and Decision- • a specific delegation to make significant decisions. Making Policy for Bank-wide implementation in May 2012. The details and timing of implementation were It is expected that at higher management levels the del- left to the Managing Directors and the Chief Financial egations will be more general, with a limited number of Officer. A team of staff is currently working on a plan specific delegations that list the most important decisions for rollout across the institution. made at those levels. The number of specific delegations will likely increase at the line-manager level as the work Implementation will present a number of challenges. becomes more specialized. In the culture of the Bank, decisions are often made by consensus. More defined accountability and more dis- Specific delegations should be reserved for most significant ciplined decision-making will require not only a change business decisions where a delegation framework adds in policy, but also a change in organizational behavior. value (i.e., decision that are made repeatedly and require Management of such cultural change must be undertak- contributions from several units and multiple staff). It en with care to ensure success. During the review stage would be a mistake to try to capture too many decisions of this exercise, some staff reacted to the idea of institu- in a delegation scheme. That would make a delegation tionally prescribed accountability and decision-making system unmanageable. policies with some suspicion, arguing that corporate rules add another layer of bureaucracy, limit flexibility and In making specific delegations, a manager designates the stifle innovation. As the Bank implements the ADM person in the decision role. If the manager would like Policy, it is essential that the new protocols are agile, help other staff to be involved in the decision-making process, business process run more smoothly, and do not become those in the recommendation, clearance, advisory and overly prescriptive. The operative principles should be concurrence roles have to be listed as well. While typi- speed, efficiency and cost-savings. The multitude of cally there should be only one recommender to ensure documents, policies and procedures that address the ac- clarity, it is up to the delegating manager to decide who FY 2012 Annual Report 77 countability and decision-making in the Bank will have to be reviewed and revised to adhere to the new policy. This will be an extensive and time consuming effort. To make the process manageable, policy revisions should be phased. Finally, further thought is needed on how the new accountability and decision-making approach will be reflected in the Bank’s information technology archi- tecture and in existing systems. Once implemented, however, the ADM Policy will bring a number of benefits. At a basic level it will make accountability and decision-making more transparent. This should improve the quality and speed of key busi- ness decisions. The new framework will also provide a vehicle for managing work programs and staff in a matrix structure, and aid staff, especially in Country Offices, in navigating through the Bank’s decision-making processes. Finally, the Policy is expected to encourage managers to hand more authority to their subordinates and take more informed risks. 78 Legal Vice Presidency | The World Bank Staff List Office of the Senior Vice President Reddi, Pooshpa Muni Program Assistant and General Counsel (LEGVP) Sperling, Alexandra C. Legal Analyst Leroy, Anne-Marie Senior Vice President Rukuba-Ngaiza, Nightingale Senior Counsel and General Counsel Zerihun, Tsehay Program Assistant Chytla, Anna Y. Assistant General Counsel Cisse, Hassane Deputy General Counsel, Cofinancing and Project Finance (LEGCF) Knowledge and Research Talero, Blanca Ximena Chief Counsel Friedman, Barbara S. Legal Administrator & CAO Ashar, Neil Pravin Counsel Kasilag, Maria Lourdes Quiogue Sr. Executive Assistant Delpino Fernandez, Fiorella Senior Counsel Nicoli, Marco Senior Knowledge Management Dzowela, Jayne Njoki Senior Program Assistant Officer Gonzalez Rodriguez, Pilar Elisa Senior Counsel Schein, Dolie G. Knowledge Management Officer Happel, Thibaut Flavien Charles E T Consultant Segura Labadia, Elena Senior Counsel Laohapakakul, Duangrat Counsel Smith-Brown, Diane Senior Program Assistant Liu, Xin E T Consultant Toft, Anthony G. Deputy General Counsel, Malpica Valera, Rocio Mariela Senior Counsel Operations Maslen, Susan Senior Counsel Nwachukwu-Irondi, Vivian Paralegal Africa (LEGAF) Okubo, Atsuko Senior Counsel Molnar, Ferenc E. Chief Counsel Pardo De La Pena, Maria Lourdes Senior Counsel Abi Karam, Maya Counsel Restrepo, Monica Teresa Senior Counsel Ahmad, Altaf Program Assistant Santos, Emilie Suarez Paralegal Ait El Hadj, Kamel El Malik E T Consultant Stumpf, Andrea E. Lead Counsel Augustin, Marie Roger Paralegal Vasquez, Luis F. Team Assistant Baimu, Evarist F. Senior Counsel Bertaud, Helene Senior Counsel Europe, Central Asia, Middle East Boudry, Charles E T Consultant and North Africa (LEGEM) Butt, Liaqat Ali Program Assistant Kichigina, Irina L. Chief Counsel DeWitt, Nicolette K. Lead Counsel Akerova, Anarkan Counsel Goldstein, Daria Senior Counsel Al-Shawwaf, Sarah E T Consultant Granier, Taiyeba Senior Program Assistant Allen, Frances M. Operations Analyst Hristov, Manush A. Senior Counsel Costache, Ruxandra Counsel Junqueira, Daniela Anna B. D. Counsel De Daruvar, Jean-Charles Senior Counsel Makdssi Afram, Diala Jr Professional Officer Jauregui-Zabalaga, Ramiro Ignacio Counsel Makori, Christine Counsel Morata, Brenda Paralegal Meza-Bartrina, Luz Senior Counsel Nadi, Marie K. Program Assistant Molle, Anthony Counsel Png, Margaret Lead Counsel Mpundu, Marjorie Senior Counsel Propst, Kirsten Burghardt Senior Counsel Mukaindo, Stephen Mugendi Counsel Radovic, Ljiljana Language Program Assistant Mwenda, Edith Ruguru Senior Counsel Rieger, Julie Counsel Nadeem, Mohammad Legal Analyst Roosa, Danielle Malek Senior Counsel Nwogu, Nneoma Veronica Counsel Sacks, Marie-France Senior Program Assistant Pardinas Ocana, Claudia M. Senior Counsel Shayne, Adam Lead Counsel Pavluk, Jonathan David Senior Counsel Soubbotin, Nikolai Senior Counsel FY 2012 Annual Report 79 Youness, Ghada Senior Counsel van Tilburg, Johanna Senior Counsel Wang, Mei Senior Counsel Environmentally and Socially Sustainable Zhou,Wen E T Consultant Development and International Law (LEGEN) Corporate Finance (LEGFI) Di Leva, Charles E. Chief Counsel Frazier, J. Clifford Chief Counsel Ninio, Alberto Chief Counsel Cochrane, Sarah Legal Analyst Bo, Giovanni E T Consultant Dougherty, Patrick Michael Counsel De Abreu Ferreira, Sofia E T Consultant Greemanova, Tamara Lead Counsel Eejima, Nina Masako Senior Counsel Iorio, Alessandra J. Lead Counsel Funahashi, Junko Senior Counsel Kaliaskarova, Gaukhar M. Senior Counsel Hoffman, Beth Anne Operations Analyst Kaniaru, Muthoni W. Senior Counsel Lindsay, Jonathan Mills Senior Counsel Kaye, Helen Wendy Senior Counsel Mance, Richard M. Program Assistant Kiara, Duncan Senior Counsel Meades, Una Senior Counsel Lawley, Ceri Wyn Senior Counsel Morita, Sachiko Counsel Nwokoye, Uzoamaka I. Paralegal Mosoti, Victor Bundi Counsel Servaes, Bart Andre Senior Counsel Munzberg, Nathalie S. Senior Counsel Stocker, Stephen D. Program Assistant Pohlmann, Markus Senior Counsel T. S. Ramasamy, Shirmila Counsel Ragazzi, Maurizio Senior Counsel Rosembuj, Flavia Senior Counsel Institutional Administration (LEGIA) Tao, Yuan Counsel Rivero, David Rodolfo Chief Counsel Thaler, Julius Martin Counsel Burghardt, Ingo Senior Counsel Dunham Irving, Giuliana H. Senior Counsel East Asia and South Asia (LEGES) Grados Salinas, Yelina Judith E T Consultant Abushakra, Hadi Chief Counsel Hinderks, Stephanie Lin Sun Counsel Walker, Mark Chief Counsel McKinnon, Gabrielle Marie Paralegal Abdo Kahin, Hisham A. Senior Counsel Okeke, Edward Chukwuemeke Senior Counsel Ahmed, Syed I. Lead Counsel Ramakrishnan, Ranjini Counsel Alliali, Solange A. Senior Counsel Rivera Garcia Sancho, Monica Senior Counsel Alvarez, Juan Carlos Senior Counsel Williams Jr, Robert Earl Counsel Bakshi, Anu Paralegal Yegorova, Natalia Counsel Berhanu, Seble Legal Analyst Young, Mary E. Program Assistant Cato, Lauren M. Senior Program Assistant Dost, Sameena Senior Counsel Information Policy (LEGIP) Farid, Mazhar Legal Analyst Lui, Lisa Lead Counsel Good, Melinda Senior Counsel Jones, Karen A. Senior Program Assistant Kane, Minneh Mary Lead Counsel Miranda, Patricia Senior Counsel Kebede, Meseret Program Assistant Levesque, Roch Senior Counsel Justice Reform (LEGJR) Micali Drossos, Isabella Senior Counsel Biebesheimer, Christina Chief Counsel Molares-Halberg, Marta Elena Lead Counsel Beardsley, Lubomira Zimanova Senior Counsel Ogawa, Akiko E T Consultant Chiongson, Rea Abada E T Consultant Pascual IV, Jose Ramon R. Counsel Decker, Klaus Public Sector Specialist Prachar, Michael Program Assistant Epineuse, Harold Counsel Raghavan, Vikram Senior Counsel Fernandez-Monge, Fernando Jr Professional Officer Serrano, Martin M. Senior Counsel Gramckow, Heike P. Senior Counsel Uprety, Kishor Senior Counsel Hall, Margaux Janine E T Consultant 80 Legal Vice Presidency | The World Bank Isser, Deborah Hannah Senior Counsel Private Sector Development, Finance Joel, Sema E T Temporary and Infrastructure (LEGPS) King, Nimalka Perera Senior Program Assistant Tata, Vijay Srinivas Chief Counsel Mathew, Lakshmi Program Assistant Alvarez, Eugenia M. Program Assistant Melis, Eva Maria Jr Professional Officer Annamalai, Nagavalli Lead Counsel Menzies, Nicholas Counsel Delmon, Victoria Hilda Rigby Senior Counsel Nash, Richard George Andrew Counsel Garrido, Jose M. Senior Counsel Nelson, Christopher David E T Consultant Keane, Mary J. Program Assistant Olul, Brigitte E T Consultant Malik, Mahwush Mushtaq E T Consultant Stefanova, Milena Petrova Project Officer Mobarek, Sameh I. Senior Counsel Tuhanuku, Ali E T Consultant Mokal, Riz Senior Counsel Walsh, Barry Raymond E T Consultant Morozov, Alexey Nickolaevich E T Consultant Moseley, Mark M. Lead Counsel Latin America and Caribbean (LEGLA) Neumann, James L. E T Consultant Pastor, Reynaldo F. Chief Counsel Oh, Miyoung Lim Paralegal Alcala Gerez, Alejandro Senior Counsel Patino Loayza, Maria Laura Raquel Senior Counsel Altimari Montiel, Fabiola Senior Counsel Satola, David Lead Counsel Alva-Luperdi, Jorge Luis Counsel Wong, Sau Ngan Senior Counsel Baza Nunez, Escarlata E T Consultant Borges, Karen A. Senior Program Assistant Resource and Administration (LEGRA) D’Amelj, Antonio Cristian Counsel Balderrama Rojas, Jhonny F. Resource Management De Oliveira, Cleuzy V. Legal Analyst Officer Escobar Saenz, Mirtha Liliana Paralegal Chavez, Zenaida L. Resource Management Analyst Garrote, Jimena Counsel Farrales, M. Victoria Senior Program Assistant Ghumman, Manju Program Assistant Hakobyan, Diana Records/Archives Associate Gonzalez Flavell, Sara Senior Counsel Higgins, Mark Charles Resource Management Analyst Guerrier-Gray, Sophia Legal Analyst Laghriab, Rajaa Junior Professional Associate Kassem, Gamila E T Consultant Lalime-Mowry, Laura J. Information Officer, Library Montiel, Mariana Margarita Senior Counsel O’Connor, Kimberly Erin Information Assistant Portelo, Catarina Isabel Senior Counsel Paulraj, Mariadoss Resource Management Assistant Restrepo Gomez, Carolina Program Assistant Santos, Jose W. Information Analyst Sabella, Mariangeles Senior Counsel Tomas, Christian Jimenez Information Specialist Wiese, Georgina Program Assistant Operations Policy (LEGOP) Kolovou, Zoe Acting Chief Counsel Dakolias, Maria Lead Counsel Fariello, Frank Anthony Lead Counsel Flah, Agustin E T Consultant Gorospe, Rowena Margaret S. Senior Counsel Manka, Belita Counsel Micheli, Alison J. Lead Counsel Miller, Lisa Kristin Senior Counsel Musiime, Sheila Braka Senior Counsel Ogawa, Akiko Counsel Pilch, Gennady Senior Counsel Piselli, Elisabetta Senior Counsel Sachdeva, Nidhi Program Assistant FY 2012 Annual Report 81 Abbreviations and Acronyms ACS Administrative and Client Support IFC International Finance Corporation AfDB African Development Bank IFI International Financial Institution AFR Africa Vice Presidency IMF International Monetary Fund AIC Access to Information Committee IMT Information Management and Technology AIG American International Group, Inc. Vice Presidency BDEAC Banque de Développement des Etats de l’Afrique INSOL International Association of Restructuring, centrale Insolvency & Bankruptcy Professionals CARCIP Caribbean Regional Communications J4P Justice for the Poor Infrastructure Program LAC Latin America and the Caribbean Vice Presidency CGIAR Consultative Group on International Agricultural MENA Middle East and North Africa Vice Presidency Research MIGA Multilateral Investment Guarantee Agency CITES Convention on International Trade in Endangered MTR Mid-Term Review Species of Wild Fauna and Flora OECD Organisation for Economic Co-operation CJRG Criminal Justice Resource Group and Development CKLN Caribbean Knowledge and Learning Network OHADA Organization for the Harmonization of Business CODE Committee on Development Effectiveness Law in Africa COGAM Committee on Governance and Executive Directors’ OPCS Operations Policy and Country Services Administrative Matters Vice Presidency CSP Concentrated Solar Power PEIR Public Expenditure and Institutional Review CTF Clean Technology Fund PPP Public-Private Partnership CTU Caribbean Regional Communications Union PROFOR Program on Forests ECA Europe and Central Asia Vice Presidency PREM Poverty Reduction and Economic Management ECTEL Eastern Caribbean Telecommunications Authority Vice Presidency EIB European Investment Bank REDD Reducing Emissions from Deforestation EJSSP Enhanced Justice Sector Services Project and Forest Degradation EPC Engineering, Procurement and Construction SDN Sustainable Development Vice Presidency ESSA Environmental and Social System Assessment SEC Corporate Secratariat EXT External Affairs Vice Presidency SME Small and Medium Enterprise FAO Food and Agriculture Organization TWG Thematic Working Group FCPF Forest Carbon Partnership Facility UN United Nations FCS Fragile and Conflict-Affected Societies UNCITRAL United Nations Commission on International FHCI Free Health Care Initiative Trade Law FMO Netherlands Development Finance Company UNDP United Nations Development Programme FSAP Financial Sector Assessment Program UNEP United Nations Environment Programme GAC Governance and Anticorruption UNFCCC United Nations Framework Convention on Climate GEF Global Environment Facility Change GFDRR Global Partnership for Disaster Reduction and UNIDROIT Institut International pour L’Unification du Droit Recovery Privé (International Institute for the Unification GFLJD Global Forum on Law, Justice and Development of Private Law) GIZ Deutsche Gesellschaft für Internationale VPU Vice Presidency Unit Zusammenarbeit (German Society for International WAPP West African Power Pool Cooperation) WBG World Bank Group GPO Global Partnership for Oceans WDR World Development Report GSD General Services Department WSP Water and Sanitation Program IADB Inter-American Development Bank IBRD International Bank for Reconstruction and Development ICCWC International Consortium on Combating Wildlife Crime ICR Insolvency and Creditor Rights ICT Information and Communication Technology IDA International Development Association IDLO International Developmental Law Organization 82 Legal Vice Presidency | The World Bank 1818 H St. NW Washington, DC 20433