Document of The World Bank FOR OFFICIAL USE ONLY Report No: 74444-NI INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF SDR 26 MILLION (US$40 MILLION EQUIVALENT) TO THE REPUBLIC OF NICARAGUA FOR A SECOND LAND ADMINISTRATION PROJECT February 20, 2013 Sustainable Development Central America Country Management Unit Latin America and Caribbean Region This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank's policy on Access to Information. CURRENCY EQUIVALENTS (Exchange Rate Effective January 22, 2013) Currency Unit = Cordoba C 24.20 = US$1 US$1.53 = SDR 1 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS CERC Contingency Emergency Response Component CIP Comite Interinstitucional del Proyecto (Project Inter-Institutional Committee) CONADETI Comisidn Nacionalpara la Demarcacidn y Titulacidn (Commission for Demarcation and Titling of Indigenous Territories) CPS Country Partnership Strategy CTO Comite Tecnico Operativo (Project Operational Technical Committee) CSJ Corte Suprema de Justicia ( Nicaraguan Supreme Justice Court) DIRAC Direcci6n de Resolucidn Alternativa de Conflictos (Nicaraguan Directorate for Alternative Conflict Resolution under CSJ) DNR Direccion Nacional de Registros (National Directorate of Registries) DRM Disaster Risk Management EA Environmental Assessment EMP Environmental Management Plan FAO Food and Agriculture Organization GPS Global Positioning System ICB International Competitive Bidding IDA International Development Association IFR Interim Financial Report INIFOM Instituto Nicaraguense de Fomento Municipal (Nicaraguan Institute of Municipal Development), INETER Instituto Nicaraguense de Estudios Territoriales (Nicaraguan Institute for Territorial Studies) INIDE Instituto Nacional de Informaci6n de Desarrollo (National Institute for Development Information) IP Intendencia de la Propiedad (Nicaraguan Property Intendancy under PGR) IPP Indigenous Peoples Plan IRM Immediate Response Mechanism MAGFOR Ministerio Agropecuario y Forestal (Nicaraguan Minstry of Agriculture and Forestry) MARENA Ministerio del Ambiente y Recursos Naturales (Nicaraguan Ministry of Environment and Natural Resources) MCC US Millennium Challenge Corporation M&E Monitoring and Evaluation MHCP Ministerio de Hacienda y Credito Ptublico (Nicaraguan Ministry of Finance) MITK Miskitu Indian Tasbaika Kum MSBU Mayanga Sauni Bu NCB National Competitive Bidding NDF Nordic Development Fund PCU Project Coordination Unit PDO Project Development Objective PGR Procuraduria General de la Reptublica (Nicaragua Attorney General's Office) PNDH Plan Nacional de Desarrollo Humano (National Plan for Human Development) PPA Project Preparation Advance PRODEP Proyecto de Ordenamiento de la Propiedad (Land Administration Project) SA Social Assessment SBD Standard Bidding Documents SDR Special Drawing Rights SEPA Sistema de Ejecuci6n de Planes de Adquisiciones (Procurement Plan Execution System) SIAFI Sistema Integrado de Administracidn y Finanzas (Integrated Administrative and Financial System) SIC Sistema de Informaci6n Catastral (Cadastre Information System) SIGFA Sistema Integrado de Gestidn Financiera y Auditoria (Nicaraguan Integrated Financial Management and Auditing System) SIICAR Sistema Integrado de Informaci6n de Catastro y Registro (Integrated Cadastre-Registry Information System) SIIPRO Sistema Integrado de Informaci6n de la Propiedad (Property Information System) SILEC Sistema de Informacidn Legaly Catastral (Legal and Cadastral Information System) SISCAT Sistema de Registro Catastral (Municipal Cadastre System) SIT Sistema de Informacidn Territorial (Territorial Information System) SMEI Sistema de Monitoreo y Evaluaci6n de Impacto (Monitoring and Impact Evaluation System) SOE Statement of Expenditures Regional Vice President: Hasan A. Tuluy Country Director: C. Felipe Jaramillo Sector Director: Ede J. Ijjasz-Vasquez Sector Manager: Laurent Msellati Task Team Leader: Enrique Pantoja  NICARAGUA Second Land Administration Project TABLE OF CONTENTS Page I. STRATEGIC CONTEXT .......................................... .............. A. Country Context ..................................................... 1 B. Sectoral and Institutional Context ................1.... .................1 C. Higher Level Objectives to which the Project Contributes ......................... 3 II. PROJECT DEVELOPMENT OBJECTIVES ..................4..... ............4 A. PDO................................................................ 4 B. Project Beneficiaries................ . ....................... ........ 4 C. PDO Level Results Indicators .......................5...... ..............5 III. PROJECT DESCRIPTION ......................................... ........ 5 A. Project Components ...................................................5 B. Project Financing.....................................................7 C. Lessons Learned and Reflected in the Project Design ............................ 8 IV. IMPLEMENTATION .................................................... 9 A. Institutional and Implementation Arrangements ...............9..........9 B. Results Monitoring and Evaluation......................................... 10 C. Sustainability ....................................................... 10 V. KEY RISKS AND MITIGATION MEASURES ......................................... 11 A. Risk Ratings Summary Table.......... ................................... 11 B. Overall Risk Rating Explanation............................................. 11 VI. APPRAISAL SUMMARY ........................................... ..... 12 A. Economic and Financial Analyses. ........................................ 12 B. Technical ......................................................... 13 C. Financial Management ........................................... ..... 13 D. Procurement....................................................... 14 E. Social (including Safeguards) ........................................... 14 F. Environment (including Safeguards) ....................................... 15 ANNEXES Annex 1: Results Framework and Monitoring.............................................. 17 Annex 2: Detailed Project Description .............................................. 22 Annex 3: Implementation Arrangements ............................................ 29 Annex 4: Operational Risk Assessment Framework (ORAF) ....................... 51 Annex 5: Implementation Support Plan............................................. 54 Annex 6: Sectoral and Institutional Context .......................................... 56 Annex 7: Strategic Approach for Improving Nicaragua's Emergency Response Capacity...... ..... 62 Annex 8: IBRD Map 39782 ..................................................... 66 PAD DATA SHEET Nicaragua Second Land Administration Project (P121152) PROJECT APPRAISAL DOCUMENT LATIN AMERICA AND CARIBBEAN LCSAR Report No.: PAD454 Basic Information Project ID Lending Instrument EA Category Team Leader P121152 Specific Investment Loan B - Partial Assessment Enrique Pantoja Project Implementation Start Date Project Implementation End Date 01-Jul-2013 30-Jun-2018 Expected Effectiveness Date Expected Closing Date 30-Jun-2013 31-Dec-2018 Joint IFC: No Sector Manager Sector Director Country Director Regional Vice President Laurent Msellati Ede Jorge Ijjasz-Vasquez Carlos Felipe Jaramillo Hasan A. Tuluy Borrower: Republic of Nicaragua Responsible Agency: Attorney General's Office (PGR) Contact: Dr. Hernan Estrada Title: Attorney General Telephone No.: 505-2266-4416 Email: Heres@pgr.gob.ni Project Financing Data(US$M) ] Loan [ ] Grant [ ] Term: The credit will have standard terms, with a 10- [X] Credit [ ] Guarantee year grace period and 40 years maturity For Loans/Credits/Others Total Project Cost (US$M): 40.00 Total Bank Financing (US$M): 40.00 Financing Source Amount(US$M) BORROWER/RECIPIENT 0.00 International Development Association (IDA) 40.00 Total 40.00 Expected Disbursements (in USD Million) Fiscal 2014 2015 2016 2017 2018 2019 0000 0000 0000 Year Annual 3.00 5.00 6.50 7.50 7.50 10.50 0.00 0.00 0.00 Cumulati 3.00 8.00 14.50 22.00 29.50 40.00 0.00 0.00 0.00 ve Project Development Objective(s) The Project Development Objectives are: (a) to strengthen the property rights of the population in the Project area through improved regularization, titling, and registry services; and (b) to improve Nicaragua's capacity to respond promptly and effectively to an eligible emergency. Components Component Name Cost (USD Millions) Consolidation of the Institutional and Policy Framework 7.30 Strengthening of Property Registration and Alternative 3.70 Conflict Resolution Capacity Titling and Regularization Services 17.80 Project Management, Monitoring and Evaluation 3.20 Contingency Emergency Response Component 8.00 Compliance Policy Does the project depart from the CAS in content or in other significant Yes [ ] No [X] respects? Does the project require any waivers of Bank policies? Yes [ ] No [X] Have these been approved by Bank management? Yes [ ] No [ ] Is approval for any policy waiver sought from the Board? Yes [ ] No [X] Does the project meet the Regional criteria for readiness for implementation? Yes [X] No [ ] Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 X Natural Habitats OP/BP 4.04 X Forests OP/BP 4.36 X Pest Management OP 4.09 X Physical Cultural Resources OP/BP 4.11 X Indigenous Peoples OP/BP 4.10 X Involuntary Resettlement OP/BP 4.12 X Safety of Dams OP/BP 4.37 X Projects on International Waterways OP/BP 7.50 X Projects in Disputed Areas OP/BP 7.60 X Legal Covenants Name Recurrent Due Date Frequency Establishment of the PCU, CIP and CTO X Quarterly Description of Covenant Sch. 2, Section 1, A. 1 - The Recipient shall operate and maintain, at all times during Project implementation, the Project Coordination Unit (PCU), the Inter-institutional Committee (CIP) and the Operational Technical Committee (CTO) with a structure, functions, responsibilities and adequate resources, all satisfactory to the Association. The Recipient shall ensure that the PCU shall include, as its core staff, a general coordinator and a technical coordinator, a procurement specialist, a financial management specialist, a monitoring and evaluation specialist, a social/gender specialist, an environmental specialist and a communication specialist, all with terms of reference, qualifications and experience acceptable to the Association. Name Recurrent Due Date Frequency Agreements between PGR and X Yearly participating municipalities Description of Covenant Sch. 2, Section 1, B.2 - Prior to the carrying out of any Project activity under Parts 1, 2, and 3 of the Project in any given Participating Municipality, the Recipient shall, through PGR, enter into an agreement ("Participation Agreement") with each such municipality under terms and conditions satisfactory to the Association, to address the roles of the participating municipalities within the land administration system, as further described in the Operational Manual. Name Recurrent Due Date Frequency Safeguard Instruments X Monthly Description of Covenant Sch. 2, Section 1, D. 1 - The Recipient, through PGR, shall carry out the Project in accordance with the provisions of the EA, the EMP, the Process Framework and the IPP, as applicable. The Recipient, through the PGR, shall not assign, amend, abrogate, or waive the EA, the EMP, the Process Framework, and/or the IPP, or any provision thereof, without prior approval of the Association. Name Recurrent Due Date Frequency Retroactive Financing 31-Aug-2012 Description of Covenant Sch. 2, Section IV, B.1 (a) - (i) an aggregate amount not to exceed 20% of the amount allocated to Category (1) may be made for payments made prior to the date of this Agreement but on or after August 31, 2012 for Eligible Expenditures under Category (1); or (ii) an aggregate amount not to exceed 40% of the amount allocated to Category (2) may be made for payments made prior to this date but on or after August 31, 2012, for Eligible Expenditures under Category (2) Name Recurrent Due Date Frequency Procurement Audits X Yearly Description of Covenant Sch. 2, Section V, 1 - The Recipient, through PGR, shall: (i) have all the procurement records and documentation of the Project audited each fiscal year during Project implementation, in accordance with appropriate procurement audit principles, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but no later than six months after the end of each fiscal year, the procurement audit report of such audit by said auditors of such scope and in such detail as the Association shall reasonably request and; (iii) furnish to the Association such other information concerning said procurement records and documentation and the procurement review thereof as the Association shall from time to time reasonably request. Name Recurrent Due Date Frequency Poverty Measurement Survey X Quarterly Description of Covenant Sch. 2, Section V, 2 - The Recipient undertakes to carry out the activities under Part 1.C (a) of Schedule 1 of this Agreement in accordance with international best practices, acceptable to the Association. Conditions Name Type Credit Effectiveness Effectiveness Description of Condition Art. V, 5.01 - The Additional Conditions of Effectiveness consists of, namely, the Co-execution Agreements have been executed by PGR on behalf of the Recipient and: (i) the Supreme Court (for DNR and DIRAC); (ii) INETER; (iii) INIFOM; (iv) INIDE; and (v) MARENA. 5.02 - The Additional Legal Matter consists namely that each Co-execution Agreement has been duly authorized or ratified by the PGR on behalf of the Recipient and the respective Co-executing Agency and is legally binding upon the Recipient and the respective Co-executing Agency in accordance with its terms. Name Type Withdrawals for Part 5 (CERC) Disbursement Description of Condition Sch. 2, Section IV, B. 1 (b) - No withdrawal shall be made under Category (2), for Emergency Expenditures, unless and until the Association is satisfied, and notified the Recipient of its satisfaction, that all of the following conditions have been met in respect of said activities: (i) the Recipient has determined that an Eligible Emergency has occurred, has furnished to the Association a request to include said activities in the CER Part in order to respond to said Eligible Emergency, and the Association has agreed with such determination, accepted said request and notified the Recipient thereof; (ii) the Recipient has prepared and disclosed all safeguards instruments required for said activities, and the Recipient has implemented any actions which are required to be taken under said instruments, all in accordance with the provisions of Section I.F 3(b) of this Schedule 2; (iii) the Recipient's Coordinating Authority has adequate staff and resources, in accordance with the provisions of Section I.F.2 of this Schedule 2, for the purposes of said activities; and (iv) the Recipient has adopted the CER Operations Manual in form, substance and manner acceptable to the Association and the provisions of the CER Operations Manual remain - or have been updated in accordance with the provisions of Section I.F. 1 (a) of this Schedule 2 so as to be appropriate for the inclusion and implementation of said activities under the CER Part. Team Composition Bank Staff Name Title Specialization Unit Teresa M. Roncal Operations Analyst Budget and Planning LCSAR Jorge A. Munoz Adviser Peer Reviewer AES Mary Lisbeth Gonzalez Senior Social Social Development LCSSO Development Specialist Jelena Pantelic Senior Operations Land Planning and DRM AFTN2 Officer Patricia De la Fuente Senior Finance Officer Financing/Disbursement CTRLN Hoyes Arrangements Ketty Morales Language Program Program Support LCSAR Assistant Ellen Hamilton Lead Urban Specialist Peer Reviewer UDRUR Enrique Pantoja Sr Land Administration Team Leader LCSAR Specialist Ana Campos Garcia Senior Disaster Risk Disaster Risk LCSDU Management Specialist Management (DRM) Enrique Antonio Roman Financial Management Financial Management LCSFM Specialist Augusto Garcia Senior Operations Operations LCSAR Officer Francisco Rodriguez Procurement Specialist Procurement LCSPT Jeanine Guerrero Program Assistant Program Support LCCNI Nuria De Oca Operations Analyst Peer Reviewer FGISI R. Ignacio Jauregui Counsel Legal LEGLE Escarlata Baza Nunez E T Consultant Legal LEGLE Sofia De Abreu Ferreira E T Consultant Legal LEGEN Stamatis Kotouzas Jr Professional Associate Operational Analysis LCSAR Non Bank Staff Name Title Office Phone City Marco Zambrano Environmental Specialist San Jose Fabrice Edouard Monitoring and Rome Evaluation / FAO Reina A. Zavala Castro Municipal Strengthening Tegucigalpa Margarita Arguello Inter-Institutional Managua Coordination/Strengtheni ng Mario Castejon Agr. Economist / FAO Panama Maria Manuela Faria Communication Washington, DC Fernando Galeana M&E Specialist Washington, DC Victor Endo Land Governance Lima Ricardo Castellon Social Safeguards Managua Zamora Juan Jose Valencia Integrated Cadastre- Tegucigalpa Registry Information Systems Victor Fajardo Impact Evaluation / FAO Mexico City Camilo Pardo Policy/Institutional Washington, DC Analysis Locations Country First Location Planned Actual Comments Administrative Division Nicaragua Departamento de Departamento de X Nueva Segovia Nueva Segovia Nicaragua Departamento de Departamento de X Madriz Madriz Nicaragua Departamento de Departamento de X Leon Leon Nicaragua Departamento de Departamento de X Jinotega Jinotega Nicaragua Departamento de Departamento de X Esteli Esteli Nicaragua Departamento de Departamento de X Chinandega Chinandega Institutional Data Sector Board Agriculture and Rural Development Sectors / Climate Change Sector (Maximum 5 and total % must equal 100) Major Sector Sector % Adaptation Mitigation Co-benefits % Co-benefits % Public Administration, Law, and Central government 60 Justice administration Public Administration, Law, and Sub-national government 25 Justice administration Agriculture, fishing, and forestry General agriculture, 15 fishing and forestry sector Total 100 1 I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information applicable to this project. Themes Theme (Maximum 5 and total % must equal 100) Major theme Theme % Environment and natural resources Land administration and management 56 management Rule of law Personal and property rights 15 Public sector governance Decentralization 7 Social dev/gender/inclusion Indigenous peoples 2 Social protection and risk management Natural disaster management 20 Total 100  I. STRATEGIC CONTEXT A. Country Context 1. With a Gross National Income (GNI) per capita of US$1,510 in 2011,1 Nicaragua is one of the poorest countries in Latin America. Although the situation has improved recently, approximately 42 percent of the country's 5.9 million inhabitants still live below the poverty line and one out of every seven live in extreme poverty. Indigenous peoples, who account for 5 percent of the total population, have particularly experienced deprivation and social exclusion. More than half of Nicaraguans live in urban areas (57 percent), yet poverty remains largely a rural phenomenon. Importantly, the country's economic performance has improved over the last decade resulting in moderate growth of roughly 3.2 percent per annum. Following the 2008-2009 global economic crisis, Nicaragua has had a stronger economic recovery than its Central American neighbors, and at 4.7 percent in 2011, its growth rate was the second highest in a decade. The challenge over the longer term is to sustain higher growth rates to accelerate poverty reduction through improvements in productivity and consequently income growth across the population. Also, as shown in Annex 7, Nicaragua is highly vulnerable to disasters and other external shocks, which threaten development gains. This century alone Nicaragua has suffered the effects of at least five highly destructive events, including tropical storms and hurricanes. 2. Securing property rights and modernizing land administration institutions are critical for improving Nicaragua's productivity. Years of inconsistent legal and administrative decisions affecting land contributed to tenure insecurity and undermined the population's confidence in state institutions. With the support of the Bank and other development partners, including the Nordic Development Fund (NDF) and the US-Millennium Challenge Corporation (MCC), recent administrations have transformed the land sector with the enactment of new laws, modernization of institutions, and systematic regularization. Close to 20 percent of the country's territory2 has thus far benefited from systematic cadastral and regularization activities. Going forward, while continuing to consolidate progress, the Government needs to expand these efforts from mainly pilot areas to the rest of the country and into the regions with no previous cadastre and outdated property registry records. B. Sectoral and Institutional Context 3. Recognizing the importance of land tenure issues in the development agenda of Nicaragua, the Government and the Bank have built a strong partnership over time. Between 1993 and 2000, the Bank-financed Agricultural Technology and Land Management Project (ATLMP, P007780) supported the Government's initial efforts to modernize the land administration system, including resolving the tenure situation of parcels redistributed as part of the agrarian reform of the 1980s. These early efforts were hindered by competing land policies, attempting simultaneously to protect the rights of land reform beneficiaries and to recognize the rights of former landowners. In turn, it became evident that the country needed to establish a 1 Estimate in current US$ (Atlas Method), World Development Indicators database. 2 With a total area of 130,370 sq. km., Nicaragua is the largest country in Central America by area. The 20 percent of the territory that has benefited from cadastral surveying and land regularization refers to pilot areas in the Pacific and Central regions. In addition, the Caribbean region has benefited from collective titling of indigenous territories. 1 suitable land administration framework before a land program could be implemented countrywide. 4. Taking into account the above needs, the Land Administration Project (PRODEP, P056018) was designed as a major pilot effort financed through two IDA credits, one of which was an additional financing.3 Since 2002, PRODEP has helped Nicaragua achieve two major outcomes, namely a more solid and clearer land administration framework and a proven methodology for systematic land regularization.4 As detailed in Annex 6, the country's policy and legal framework has been positively transformed, key land agencies' capacity strengthened, and their services decentralized within the pilot areas. Based mostly on the resulting efficiency gains, the time to conduct a land transaction for people living within the pilot areas has been cut by more than half. Moreover, implementation of the methodology for systematic land regularization has benefited over 110,000 rural and urban, mostly poor, households with titles to their land. Representing a historical achievement, indigenous communities in the Caribbean have received collective titles to most of their ancestral territories, comprising over 22,000 square kilometers or close to 19 percent of the national territory. Although PRODEP is currently scheduled to close in April 2013, all activities had been completed and almost all Credit funds disbursed by August 2012. This satisfactory implementation has been underpinned by strong government commitment and inter-institutional coordination. 5. PRODEP has also provided the Government with the foundation to launch a long-term national program which the Project will support. Improvements in the land administration framework and regularization process have been mainstreamed as the methodology consolidated under PRODEP has been applied in other areas of the country. This methodology has incorporated current technologies and global good practices, and by responding to the country's context, it has simultaneously increased national capacity and institutional ownership of results. At the same time, the growing technical capacity has been progressively incorporated into the main land agencies, including the Nicaraguan Institute for Territorial Studies (INETER), the Property Intendancy (IP) under the Attorney General's Office (PGR) - PRODEP's implementing agency - and the property registries under the Supreme Court (CSJ). On this basis, the Government has outlined its vision for the next 15 years, with an overarching goal of continuing to promote land governance while advancing cadastral and regularization processes and improving land administration services. (See Annex 6 for details on the national program). 6. Given the land tenure challenges still faced by Nicaragua, implementing a national land program will require a concerted effort and substantial resources.6 Further consolidation of the policy and institutional framework is needed, including advancing the integration of the cadastral and property registry information. At the same time, municipalities should continue to be strengthened in order to promote decentralization, territorial planning and disaster risk These include an original Credit of SDR26.2 million (US$32.6 million equivalent) approved in 2002, and an Additional Financing Credit of SDR6.3 million (US$10 million equivalent) approved in February 2010. Parallel to IDA financing, the Nordic Development Fund (NDF) provided a Credit of EUR5.5 million (closed in April 2010) supporting institutional strengthening and urban cadastral and regularization activities complementing the Bank-financed project. 4 This section presents a summary of key preliminary findings from the ongoing final project evaluation, which the Government is currently finalizing with technical assistance from Food and Agriculture Organization (FAO) experts. 5 PRODEP has mainly focused on municipalities in the departments of Chinandega, Esteli, Madriz and Le6n. These departments were selected due to their high levels of poverty, land tenure insecurity and land conflicts. 6 It is estimated that between US$135 and US$150 million is needed just to finalize cadastral modernization in the country. 2 management (DRM), and ensure the updating of cadastral information. Critically, it is estimated that in rural areas about one third of parcels are still held without a clear title, which particularly affects small and poor agricultural producers. Agrarian reform in the 1980s favored land distribution to males as heads of households and former permanent agricultural workers. Under these circumstances, gender equity needs to be advanced by ensuring the implementation of current legislation allowing for joint titling for couples and promoting women's land rights. Overall, land tenure insecurity hinders potential investments and land market transactions, and generates disputes. Building on the progress made in DRM, the Government also needs to ensure that disaster vulnerability and climate change issues are appropriately considered as it moves forward with its land agenda. Given its long engagement in the country, and its regional and global experience, the Bank - which is currently Nicaragua's main partner in land administration modernization - is uniquely positioned to continue supporting the country to deal with these challenges. C. Higher Level Objectives to which the Project Contributes 7. The proposed Project is consistent with the World Bank Group's Country Partnership Strategy (CPS) IDA/R2012-0263 (Report no. 69231-NI) discussed by the Executive Directors on November 13, 2012. The CPS, covering the FY2013-2017 period, has two strategic objectives: (i) improving social welfare by improving access to quality basic services, in particular by poor rural households; and (ii) raising incomes by improving productivity, competitiveness, and diversification. The CPS reiterates the importance of land administration modernization for Nicaragua, and in this context, it is expected that the Project will contribute directly to the second strategic objective by helping to improve the investment climate through policy strengthening, further institutional development of land agencies, and systematic land surveying, titling, and registration. More broadly, the Project will complement the country program by bringing, together with several other operations,8 sustainable development benefits to the population of its target municipalities. 8. The proposed Project will also contribute to DRM and climate adaptation, which is recognized by the CPS as a central issue to ensure more resilient productivity and socio- economic growth. As detailed in Annex 7, the Project will do this by facilitating Nicaragua's rapid access to IDA financial resources in the event of a disaster through a specific component and by helping to make operational the Immediate Response Mechanism (IRM) in the country. This effort will complement activities to continue strengthening the national DRM system, which the Bank helped to establish through the Natural Disaster Vulnerability Reduction Project (P064916, 2000-2009). The Project will also support DRM through the development of geo- spatial information and territorial planning capacity, the carrying out of environmental educational campaigns, and the demarcation of complementary areas of two indigenous territories in the Bosawas biosphere reserve. 7 It is estimated that 35 to 40 percent of all land in Nicaragua faces some type of dispute or conflict, including: (a) boundary disputes, particularly in rural areas; (b) restitution of past rights, exacerbated by the numerous confiscations that occurred during the agrarian reform; (c) lack of documentation to prove legal ownership; and (d) indigenous peoples' claims over ancestral territories that overlap with other land tenure regimes. Among others, it is relevant to mention complementary operations with overlapping areas of intervention: Second Agricultural Technology Project (PO87046), Fourth Roads Rehabilitation Project (P119709), Rural Roads Infrastructure Improvement Project (P 123447), and Rural Water Supply and Sanitation Project (P 106283). 3 9. The CPS continues to focus the governance agenda on regulatory quality, government effectiveness, and voice and accountability. By supporting further consolidation of the policy and institutional framework for property rights, the Project will directly contribute to improving regulatory quality and government effectiveness. It will, in parallel, contribute to greater voice and accountability by building better institutional capacity for monitoring and evaluation (M&E), while helping to generate and disclose information on the performance of land administration institutions as well as on poverty trends and land tenure patterns. 10. Importantly, the proposed Project is aligned with the National Plan for Human Development (PNDH), whose objectives are to reduce inequality by increasing poverty-related spending and boosting investment in social sectors and rural infrastructure. The PNDH recognizes land tenure security as a strategy for economic development by improving productivity through expanded access to credit and facilitating free land regularization services at the local level. It also reiterates the importance of DRM and climate adaptation for the overall sustainability of the country's development efforts. The Government's long-term land program, whose implementation will be supported by the Project, is consistent with the PNDH. II. PROJECT DEVELOPMENT OBJECTIVES A. PDO 11. The Project Development Objectives (PDOs) are: (a) to strengthen the property rights of the population in the Project area through improved regularization, titling, and registry services; and (b) to improve Nicaragua's capacity to respond promptly and effectively to an eligible emergency. Building on the foundations of the previous project, the first objective will be achieved through further strengthening of key land administration agencies, land regularization, strengthening of indigenous peoples' land rights, and demarcation of protected areas. To meet the first objective, and in line with the priorities established in the PNDH and the national land program, the Project will expand activities to new municipalities in the departments of Nueva Segovia and Jinotega while consolidating progress in the departments of Chinandega, Esteli, Madriz, and Le6n (see Annex 2 for details on the Project area).9 The second objective will be achieved through a specific Contingency Emergency Response Component (CERC) and by helping make the IRM operational. B. Project Beneficiaries 12. The Project's direct beneficiaries include: (a) households in participating municipalities, which would benefit from cadastral surveying, titling, and regularization services; (b) women in participating municipalities, who would benefit from titling and regularization services by promoting issuance of titles jointly to couples and to female-headed households, reflecting gender-sensitive legislation of Nicaragua; (c) indigenous communities living in the two complementary areas that will be demarcated and titled, and potentially other communities living in some of the participating municipalities; (d) authorities and technical staff in participating municipalities, who will benefit from technical assistance, cadastral information, and improved 9 According to the 2005 census, the total population of the Project area was 1.6 million (around one third of the country's total population). Municipalities in additional departments may be considered during project implementation if agreed between the Government and the Bank based on the municipal participation criteria included in the Operational Manual. 4 coordination with land administration agencies; and (e) land administration agencies, which will benefit from an improved governance structure and capacity development. More generally, the Project is expected to benefit the country's population through mainstreaming of the methodologies and increased capacity for cadastre and regularization, as well as through the increased capacity to respond to emergencies through the CERC and the IRM. C. PDO Level Results Indicators 13. The Project will result in a more transparent, accountable, effective, and coordinated land administration system, which in turn would contribute to Government's efforts to improve the investment climate and expand economic opportunities for Nicaragua's population. The strengthening of property rights in particular will contribute to securing land access for the poor and other vulnerable groups. Accordingly, the following key results are expected: * Total number of direct project beneficiaries (including percentage of women) [CORE INDICATOR] * At least 90,000 households obtain legal documents, including 60,000 new titles (of which at least 50 percent are issued to women or jointly to couples) * The Integrated Cadastre-Registry Information System (SIICAR) is evaluated independently as satisfactory in terms of operation, data and security * Average number of days to complete recording of a purchase/sale of a property in the land administration system (as processed through SIICAR) reduced from 50 to 28 days [CORE INDICATOR] * Time taken to disburse funds requested by Government for an eligible emergency (target of four weeks) III. PROJECT DESCRIPTION A. Project Components 14. The Project will have the following five components (see Annex 2 for details): Component 1: Consolidation of the Institutional and Policy Framework (US$7.30 million) 15. Subcomponent 1.1. Strengthening of Cadastral Services and Land Regularization Capacity by: (a) supporting INETER through, inter alia: (i) the preparation of technical and administrative cadastral regulations; (ii) the carrying out of training on the standardization of cadastral policy and procedures; (iii) strengthening its capacity in the provision of cadastral services; and (iv) the maintenance and refurbishment (including the acquisition of equipment) of certain INETER offices selected pursuant to the criteria set forth in the Operational Manual; and by (b) supporting IP through, inter alia: (i) the update of the Property Information System (SIIPRO) and the installation of the Legal and Cadastral Information System (SILEC) in IP's regional offices; (ii) the strengthening of IP's capacity to deliver titling, regularization and legal services; and (iii) the maintenance and refurbishment (including the acquisition of equipment) of certain offices of IP selected pursuant to the criteria set forth in the Operational Manual. 5 16. Subcomponent 1.2. Strengthening of Municipal Land Administration Services by supporting the Nicaraguan Institute of Municipal Development (INIFOM) through, inter alia: (a) the preparation of technical guidelines and regulations for municipal cadastre management; (b) the strengthening of the capacity of participating municipalities on: (i) the management of the Municipal Cadastre System (SISCAT) for property taxation and territorial planning; (ii) the maintenance of sustainable municipal cadastres; and (iii) the coordination of cadastral services with INETER; and (c) the establishment of the link of SISCAT with the national cadaster managed by INETER 17. Subcomponent 1.3. Strengthening of Data Collection and Evaluation Capacity by supporting the National Institute for Development Information (INIDE) through, inter alia: (i) the design and carrying out of a poverty measurement survey including a module to collect information on land tenure; and (ii) the strengthening of its capacity for data analysis and surveys, through the provision of training, the acquisition of equipment, and the refurbishment of training facilities. Component 2: Strengthening of Property Registration and Alternative Conflict Resolution Capacity (US$3.70 million) 18. Subcomponent 2.1. Strengthening Property Registration and Alternative Conflict Resolution Capacity by supporting the CSJ through, inter alia: (a) carrying out of capacity building activities, including the provision of technical assistance, and training to staff, on systematic titling and registration in regional property registries covering participating municipalities; and (b) the carrying out of mediation services during the cadastral and regularization processes under the Project, including: (i) the provision of conflict resolution training to mediators and co-executing agencies' staff; and (ii) the preparation of a manual to standardize mediation results. 19. Subcomponent 2.2. Consolidating the SIICAR by supporting CSJ and INETER through, inter alia: (i) the development and upgrading of the pilot version of SIICAR; (ii) the installation of SIICAR in participating municipalities located in at least three different departments of the Recipient through the provision of technical assistance, including training to the Supreme Court and INETER's staff, and the acquisition of computer and office equipment, including software, hardware, and licenses. Component 3: Titling and Regularization Services (US$17.80 million) 20. Subcomponent 3.1. Supporting the Provision of Cadastral, Titling and Regularization Services by supporting INETER, IP and CSJ through, inter alia: (a) the carrying out of systematic cadastral surveying, and land regularization, titling and registration activities in participating municipalities; (b) the carrying out of land surveys, regularization, titling, and registration of parcels for individuals: (i) on a demand basis; or, (ii) prioritized by Nicaragua's pertinent national programs selected pursuant to the criteria set forth in the Operational Manual; (c) the carrying out of land titling and registration activities of eligible parcels subject to the Recipient's agrarian reform selected pursuant to the criteria set forth in the Operational Manual, for current possessors; and (d) the implementation of the Project's Communication Strategy. 6 21. Subcomponent 3.2. Demarcating, Titling and Registration of two complementary areas of the indigenous territories of Mayanga Sauni Bu (MSBU) and Miskitu Indian Tasbaika Kum (MITK), 10 by supporting IP through, inter alia: (a) the carrying out of capacity building and coordination activities; (b) the validation of existing territorial diagnostics; (c) the establishment of conflict resolution mechanisms; and (d) the demarcation, titling and registration activities. 22. Subcomponent 3.3. Demarcating of Protected Areas selected pursuant to the criteria set forth in the Operational Manual by supporting the Nicaraguan Ministry of Environment and Natural Resources (MARENA) through, inter alia: (a) the carrying out of the demarcation of the external boundaries of said protected areas, including preparatory work, data collection, consultation with beneficiaries, determination of boundaries, and geo-referencing and physical demarcation of such boundaries; and (b) the carrying out of an environmental communication and educational campaign in the protected areas and neighboring communities. Component 4: Project Management, Monitoring and Evaluation (US$3.20 million) 23. Subcomponent 4.1. Supporting Project Management through, inter alia: (i) the provision of training and the carrying out of workshops; (ii) the carrying out of the coordination, administrative and fiduciary aspects of the Project, including audits; and (iii) the oversight of the implementation of a communication strategy and a gender strategy for the Project. 24. Subcomponent 4.2. Supporting Project Monitoring and Evaluation through, inter alia: (i) the collection of base line data to assess the Project's social, environmental and economic impacts; (ii) the preparation of the Project's semi-annual progress reports, the midterm review report and the final evaluation report; and (iii) the carrying out a social audit of relevant activities. Component 5: Contingency Emergency Response Component (US$8.00 million) 25. Providing immediate response to an eligible emergency, as needed. This component would finance public and private sector expenditures on a positive list of goods, both domestic and imported, and/or specific works, goods, services (including audit costs) and emergency operation costs required for Nicaragua's emergency recovery. A CERC Operational Manual will apply to this component, detailing financial management, procurement, safeguard and any other necessary implementation arrangements.II In addition, the Project will help make operational the IDA IRM explained in detail in Annex 7 Section D. B. Project Financing Lending Instrument 26. The Project will be financed through an IDA Credit with 100 percent financing of total eligible expenditures. At the request of the Government, the Credit will also include retroactive 10 These territories are located in the Special Development Zone of the Bosawas Biosphere Reserve within Jinotega. Demarcation and titling activities in this jurisdiction fall under the purview of Law 445 (Law for Collective Land Rights of Indigenous Peoples in the Caribbean), which has been successfully implemented under PRODEP. 1 Completion of the CERC Operational Manual - a condition of disbursement for this component - is expected by May 2013. 7 financing of up to 20 percent for components 1 through 4, and up to 40 percent of the total amount allocated to Component 5 (as per OP/BP 8.00 - Rapid Response to Crises and Emergencies). To facilitate project preparation and ensure continuity between the previous and the proposed project, a Project Preparation Advance (PPA) of US$3.0 million was approved by the Bank on October 2, 2012. Project Cost and Financing Project Cost COMPONENTS Including IDA % Contingencies Financing Financing 1. Consolidation of the Institutional and Policy Framework 7.30 7.30 100.00 2. Strengthening of Property Registration and Alternative Conflict Resolution Capacity 3.70 3.70 100.00 3. Titling and Regularization Services 17.80 17.80 100.00 4. Project Management, Monitoring and Evaluation 3.20 3.20 100.00 5. Contingency Emergency Response Component 8.00 8.00 100.00 TOTAL 40.00 40.00 100.00 C. Lessons Learned and Reflected in the Project Design 27. Project design reflects the lessons learned from the 2006 Mid-Term Review and ongoing final evaluation of the previous project, as well as updated analyses carried out during the preparation of the additional financing in 2009. In addition, project design considered the lessons learned from similar programs in the Region and globally financed by the Bank and other development partners. The most relevant lessons include: (i) Achieving PDOs related to land administration reform requires building a long term social and political commitment, mobilizing support from diverse stakeholders, assuring a high level of transparency, and promoting good governance. (ii) Improving a land administration system involves gradual changes in the legal and institutional frameworks, demanding a constant monitoring of such changes to understand their implications for advancing the reform program and project implementation. This lesson is important since the outcome of processes to strengthen and/or consolidate the legal framework is beyond a project's control. (iii) A strong focus on municipalities is critical to the sustainability of investments on cadastre and registry modernization. It is particularly important to integrate land administration within the long-term vision of municipalities and to make them active partners in the implementation of the national cadastral system. (iv) Promoting adequate inter-institutional coordination requires strong leadership and clear understanding of the role and responsibilities of key agencies. These critical factors can be strengthened at the operational level by establishing effective project coordination committees and inter-institutional co-execution agreements. (v) Ensuring broad community support for a project requires attention to representativeness, social accountability, and legitimacy of consultation mechanisms. The consultation and participation framework should rely on existing structures and organizations. A clear 8 methodology should be set in place to ensure that consultations adequately reflect socio- cultural values and perceptions of beneficiaries. Given specific historical and political contexts, consultation and participation processes should be implemented differently in Nicaragua's Pacific and Central regions and the Caribbean Region. (vi) Alternative conflict resolution mechanisms can effectively facilitate cadastral and regularization processes, as corroborated by Nicaragua's experience under the previous project. Key elements of this process should include capacity development for conflict mediation, community outreach, and close inter-institutional coordination. (vii) A well-designed M&E system is crucial for addressing implementation issues in a timely manner, systematizing lessons, and sharing knowledge, and for promoting transparency and accountability. Rigorous impact evaluations, along with thorough supervision, provide a more robust basis for project design and policy making. (viii) To enhance its effectiveness, provision of contingency funds should be part of a broader disaster risk financing strategy, coupled with the promotion of an integral approach to DRM. At the same time, both a clear and practical operational manual and emergency and rehabilitation planning are critical for timely disbursement and implementation. (ix) Even though project coordination units (PCUs) might make institutionalization more challenging, in countries facing capacity constraints and governance challenges they represent practical solution to achieving efficacy and managing risks. To mitigate the risk of creating a parallel structure under a PCU, effective mechanisms for coordination with co-executing agencies and national technical and administrative capacity development should be promoted as part of a project. IV. IMPLEMENTATION A. Institutional and Implementation Arrangements 28. For Components 1 through 4, the proposed Project will replicate the implementation arrangements that have been successfully put into effect under the previous operation. The implementation arrangements for Component 5 (CERC) will be detailed in a specific Operational Manual (which is a disbursement condition for this component). Accordingly, PGR - currently the main land institution in the country - will continue to be the implementing agency through the existing Project Coordination Unit. PCU-PGR will thus continue to be in charge of financial management , procurement, and the management of all Credit funds. In addition, the PCU will be responsible for safeguard compliance, supervision of the implementation of the communication and gender strategies, and monitoring and evaluation (M&E). The technical implementation of the Project will remain decentralized through the co-executing agencies. A Project Inter-Institutional Committee (CIP), chaired by PGR and including senior management of the co-executing agencies, will provide policy and strategic guidance; and a Project Operational Technical Committee (CTO) will have consultative character to act as an ad hoc group under CIP when specific issues require in depth analysis. 29. The PCU will be under the leadership of a General Coordinator, and will also include as its core staff a technical coordinator and specialists in the areas of procurement, financial management, monitoring and evaluation, social development and gender, environment, and communication. The General Coordinator will have the overall responsibility to supervise the PCU staff in their planning, organizing, and executing of all day-to-day administrative, technical, 9 and legal activities of the project. The Operational Manual includes the PCU's organizational structure and describes the duties and responsibilities of PCU staff along with the Project's technical, administrative, financial, procurement, safeguards, and M&E procedures. 30. The Project will include the four main co-executing agencies from the previous operation: (i) CSJ, which through the National Directorate of Registries (DNR) and the Directorate for Alternative Conflict Resolution (DIRAC) is responsible for property registry, conflict mediation, and the development of SIICAR in close collaboration with INETER; (ii) INETER, responsible for the national cadaster and the carrying out of surveying activities; (iii) INIFOM, responsible for municipal capacity development; and (iv) MARENA in charge of activities related to protected areas. In addition, INIDE will co-execute the data collection and evaluation capacity activities under Component 1. Before Credit effectiveness, these agencies will sign co-execution agreements by component with PGR specifying their respective roles and responsibilities under the Project. Finally, the IP under PGR will continue to facilitate the regularization and titling processes. 31. Before starting activities at the local level, PGR will sign participation agreements with the municipalities benefiting from the Project. These agreements will describe the roles and responsibilities of the municipalities within the scope of their local competencies as part of the land administration system. B. Results Monitoring and Evaluation 32. PGR, through the PCU, will be responsible for M&E. Accordingly, the PCU will (a) collect, consolidate and report on project performance data (including physical and financial progress); and (b) provide periodic information on intermediate project results and progress toward higher level outcomes. Co-executing agencies will provide the necessary inputs to ensure adequate M&E. The PCU will prepare semi-annual progress reports throughout Project implementation. The Credit will finance gathering of baseline data to assess the Project's social, environmental and economic impacts, including gender-differentiated impacts. Project indicators and impacts will be assessed in depth during the Mid-Term Review and final evaluation, both of which will be carried out by independent consultants. A social audit will be conducted to complement M&E and promote transparency and accountability. C. Sustainability 33. The proposed Project builds on the experience and satisfactory results of a major pilot effort supported through the previous operation. Over the life of that project, successive governments have maintained a consistent land policy and strategy, and have moved forward reforms that have resulted in a clearer legal and institutional framework. Inter-institutional coordination will be further emphasized under the Project, while also focusing on making municipalities active partners in land administration. Moreover, current achievements will be consolidated by continuing to support institutional capacity building, the modernization of property registries, and the development and institutionalization of SIICAR. The involvement of municipalities will further increase the sustainability of Project results by ensuring that cadastral information is kept updated. Through improvement in registry and cadastral services, helped by outreach and social communication, a culture of registry will in time take hold in the country. 10 V. KEY RISKS AND MITIGATION MEASURES A. Risk Ratings Summary Table Risk Rating Stakeholder Risk Moderate Implementing Agency Risk - Capacity Moderate - Governance Moderate Project Risk - Design Low - Social and Environmental Moderate - Program and Donor Low - Delivery Monitoring and Sustainability Low Overall Implementation Risk Moderate B. Overall Risk Rating Explanation 34. Overall implementation risk is considered Moderate (for a detailed analysis see Annex 4). Strengthening of property rights is a Government priority. PGR and co-executing agencies have a strong commitment to the PDOs, and there is broad consensus on land regularization in Nicaragua. Project implementation is likely to unfold in a stable policy environment. The legal framework is relatively complete, with some consolidation still needed. PGR has proven to be a diligent implementing agency, methodologies for land regularization have been developed and tested, while national capacity have been strengthened and institutionalized in key agencies. Despite this positive outlook, the Project faces several risks: 35. Ensuring support and participation from indigenous communities in municipalities in the Pacific and Central regions. Meeting some of the indigenous communities' expectations remains challenging given the constraints of the legal framework regarding the recognition of territorial land rights of indigenous peoples in these regions. 12 It is thus likely that some communities in these areas may not agree to provide broad support required to implement cadastral and regularization activities in certain municipalities. Although legal limitations exist that cannot be currently overcome, and some political factors hinder further progress in this regard, the Government has demonstrated its commitment to recognize the land rights of indigenous peoples. To ensure adequate consultation, an Indigenous Peoples' Plan (IPP) has been prepared, complemented by a Communication Strategy and a grievance redress mechanism. Following the practice introduced under the previous project, no cadastral surveying will take place in a municipality where an indigenous community has a land claim or faces land right issues unless such community agrees to these or any related subsequent activities under the existing framework. 12 Reflecting its specific history and culture, the Caribbean Region enjoys relative autonomy, whereby Law 445 (developed under by the previous Project) provides indigenous communities in this region with a legal and institutional framework that allows for the collective titling of their lands as indigenous territories with a certain degree of self-governance. A similar draft law for the Pacific and Central regions has been prepared but its future remains uncertain. (See Annex 6 for further details). 11 36. Maintaining adequate inter-institutional collaboration. Inter-institutional coordination among land administration agencies has improved over the years. Maintaining this progress remains a challenge in the face of political factors and possible leadership changes. Moreover, land administration functions - similarly to other countries - are shared between the judiciary (property registry) and the executive branch (cadastre and regularization). PGR has a strong mandate to coordinate the land administration system in the country. Further integration of the property registry and cadastral information platforms through SIICAR will foster closer and more permanent collaboration. At an operational level, this risk will also be mitigated by ensuring an active role of the Project Inter-Institutional Committee and the signing of co- execution agreements by Project component. 37. Strengthening governance. Governance in the country is perceived as weak, which may also affect the country portfolio. Taking into account country risks and the experience of the first Land Administration Project, during project preparation the Bank has conducted a thorough review of relevant lessons. In general, the Bank will continue supporting the strengthening of country fiduciary systems. To manage project fiduciary risks specifically, the Bank will continue to decentralize procurement and financial management supervision. Thus far, close supervision, adoption of the electronic procurement management system (SEPA), and periodic fiduciary training for government and project staff have generated good results. The Project will continue the fiduciary arrangements from the previous operation, but specific actions will be carried out to promote oversight, including annual procurement audits, a social audit of relevant activities, and close monitoring of the grievance redress mechanism (for which a specific indicator has been included in the results matrix). It is also expected that the existing fiduciary staff in the PCU under PGR, whose capacity is generally considered adequate, will be maintained. 38. Disaster Vulnerability. Considering Nicaragua's vulnerability, it is possible that a major disaster would occur during the Project's five-year implementation period. To mitigate this country risk, the Project includes a specific CERC and will also facilitate the implementation of the IRM through other projects across the country's portfolio (See Annex 7). The Bank will also continue to support DRM efforts through trust funds and analytical work. VI. APPRAISAL SUMMARY A. Economic and Financial Analyses Net Present Value of Flows Expected Benefits: USD 30.18 Million Total Project Costs: USD (22.97) Million Net Benefits: USD 7.21 Million IRR: 18% 39. As shown in the table above, results of the economic and financial analyses indicate that the Project represents a sound investment from the cost/benefit and fiscal impact point of view. The cost benefit analysis aims to establish a rationale for a particular investment if it provides sufficient returns/benefits to account for, and justify, its costs and the opportunity cost of capital from society's perspective. The economic benefits quantified for the Project's cost/benefit 12 analysis are those expected to accrue through higher property values as a result of increased land tenure security after titling. The likely impact of titling on property values was estimated through econometric and other statistical methods that allowed for isolating, with a reasonable degree of statistical confidence, the effect of property titling on perceived market values from the effect of other variables contributing to the determination of property prices. Taking into account the estimated increases due to titling and the physical targets established for the Project, it was possible to estimate the stream of economic benefits resulting from the Project, which together with other relevant project costs allowed for the estimation of economic cost/benefits indicators. 40. The fiscal impact analysis aims at quantifying the net impact that the implementation of the project would have on both central and municipal government finances. In this case, this impact was primarily estimated on the basis of incremental operating costs and fiscal revenues captured by institutions providing services as part of the land administration system. Final results show that as a whole the net present value of fiscal revenues is sufficient to cover the incremental costs associated with project activities while resulting in net fiscal gains. (A full economic and fiscal analysis is available in Project files and the Project's website).13 B. Technical 41. The proposed Project builds on the experience, proven methodologies, and national and local capacities developed over the years with the support of the Bank and other development partners. At the same time, these methodologies reflect current international good practices adapted to Nicaragua's legal and institutional context. The cadastral surveying and regularization methodology has been developed further under the previous project, after being piloted with support from MCC in Le6n. This methodology is underpinned by a standardized parcel cadastral surveying process using modern technologies such as orthophotos, Global Positioning Systems (GPS), and total stations that are cost and time efficient. The experience gained so far has also yielded a more precise estimation of costs and better understanding of the technical and capacity demands of cadastral and regularization activities. Finally, the automated integration of the cadastral and property registry information platforms will be furthered by ensuring consistency among processes, program development and inter-institutional coordination. C. Financial Management 42. PGR, through the PCU, will be directly in charge of financial management tasks, which include: (i) budget formulation and monitoring, (ii) cash flow management (including processing of payments and submitting withdrawals applications to the Bank), (iii) maintenance of accounting records (including the administration and maintenance of an inventory of project assets), (iv) preparation of in-year and year-end financial reports, (v) administration of underlying information systems, and (vi) arranging for execution of external audits. Furthermore, the PCU will oversee the Project's administrative aspects and will ensure coordination with co- executing agencies. Based on a recent capacity assessment, overall financial management risk is considered Moderate (see mitigation measures in Annex 3). 1 See Project website: http://www.pgr.gob.ni/index.php/areas-de-la-pgr/aa/ 1177-estudios-prodep 13 D. Procurement 43. PGR, through the PCU, will be responsible for procurement under the Project. Procurement would be carried out in accordance with the World Bank's "Guidelines: Procurement of Goods, Works and Non-Consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011, and the World Bank's "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011, as well as the provisions stipulated in the Financing Agreement. As per a recent capacity assessment, the PCU is reasonably well prepared and has adequate experience and understanding of procurement-related issues. The overall Procurement risk rating is Moderate (see mitigation measures in Annex 3). A Procurement Plan for the first 18 months of Project implementation, dated February 5, 2013, was prepared by PGR. E. Social (including Safeguards) 44. The Project triggers social safeguards for Indigenous Peoples (OP/BP 4.10) and Involuntary Resettlement (OP/BP 4.12). Accordingly, a Social Assessment (SA) was carried out to analyze socio-economic and land-related issues, identify possible risks and impacts, and to identify and characterize key stakeholders. Moreover, an Indigenous Peoples Plan (IPP) and a Process Framework were prepared and included in the Operational Manual. The SA and IPP are based on consultations with representatives of indigenous communities in the Project area.15 In accordance with the Bank's Information Disclosure Policy (BP 17.50), the IPP and Process Framework were made available to the public in-country and at the Bank's website on December 27, 2012. Copies of these documents will also be available in the PGR's office in Managua and the regional offices of the main co-executing agencies. 45. The Project will demarcate the external boundaries of selected protected areas, but will not support any regularization activities within these areas nor will it demarcate the boundaries of their core zones. These protected areas have management plans approved by MARENA, and the Project will not include the updating of these plans nor will it result in changes to the protected areas' existing zoning. Nevertheless, given that demarcation could pose a potential risk of restricting access to natural resources, as required by the Resettlement Policy (OP/BP 4.12), a Process Framework was prepared to ensure that (a) the population living adjacent to or within a protected area, or using the area's resources, is consulted during the demarcation process, and if necessary, that (b) adequate measures are taken, in a participatory manner, to minimize and/or mitigate any potential adverse impacts. 46. Complementing the required safeguard instruments, the Project also includes gender and communication strategies. Based on a gender assessment and lessons learned from the previous project, the Gender Strategy aims to mainstream gender across Project activities and to empower women beneficiaries by raising awareness about their property rights. To help monitor the strategy's implementation, the Project's results framework includes gender-differentiated indicators. The Communication Strategy has two main objectives: (i) to support the 14 No resettlement is expected to take place under the Project. OP/BP 4.12 is triggered in relation to the potential restriction of access to natural resources related to the demarcation of the external boundaries of protected areas. 15 Consultations took place between September and November 2012, and included focus groups, semi-structured interviews and field site visits. 14 implementation of Project activities, in particular the active participation of beneficiaries in cadastral and regularization processes, and the expansion of conflict mediation services, and (ii) to promote the sustainability of these activities. At the same time, this strategy will seek to promote three crosscutting aspects: environmental education, gender equity, and transparency and accountability. 47. The Grievance Redress Mechanism, embedded in the Project's Communication Strategy, will seek to establish two-way communication channels and processes to allow beneficiaries to seek additional information about the Project on the one hand, and present grievances, on the other. It will also allow the PCU to promote participation of beneficiaries, and inform them about the way their complaints are being addressed. A variety of entry points will ensure that the system is accessible to all beneficiaries, regardless of their location or literacy level. The Communication Strategy will inform stakeholders of the existence of the Grievance Redress Mechanism, its various entry points, and how complaints received will be handled by the relevant agencies. F. Environment (including Safeguards) 48. The Project is classified as Category B. The Project triggers environmental safeguard policies for Environmental Assessment (OP/BP 4.01), Natural Habitats (OP/BP 4.04), Physical Cultural Resources (OP/BP 4.11), and Forests (OP/BP 4.36). An Environmental Assessment (EA) and Environmental Management Plan (EMP) were prepared in consultation with relevant stakeholders. 16 In accordance with the Bank's Information Disclosure Policy (BP 17.50), the EA and EMP were made available to the public in-country and at the Bank's website on December 27, 2012. Copies of these documents will be available in the PGR's office in Managua and regional offices of the main co-executing agencies. 49. The Project is expected to have positive overall impacts. It will contribute to the conservation of critical habitats by helping identify these zones and facilitating the management of protected areas. As corroborated by the previous project, the demarcation process allows for community and inter-institutional participation while increasing peoples' awareness and education about the importance of protected areas and natural resource protection in general. 17 Moreover, land regularization is expected to discourage forest clearing by illegal settlers and to induce overall positive behavioral changes resulting in more sustainable land and natural resource uses. 50. As done satisfactorily under the previous project, close attention will have to be paid to potential risks such as the possibility that land administration entities inadvertently (i) regularize land tenure within a protected area if there is no adequate coordination between demarcation and regular cadastral activities, or (ii) title private properties that may have culturally valuable resources before being appropriately identified. At the same time, it will be important to monitor potential adverse environmental impacts related to regularization processes stemming from essentially unpredictable and diversely motivated behaviors. Examples of these cases include: (i) 16 Consultations were carried out in October and November 2012, and included, among others, local authorities and technical personnel, and community representatives. 17 Under the previous project, MARENA satisfactorily led the demarcation of 14 protected areas, coupled with educational and environmental protection awareness raising campaigns. 15 landholders accelerating land clearance before the arrival of the Project field teams to display the largest possible area under productive use; and (ii) newly-titled landowners deciding to clear forested areas in their properties to expand pasture or cropland as they enjoy easier access to credit. 51. The EMP includes activities, financial resources, and specific responsibilities to ensure that the above risks are appropriately monitored and mitigated. Mitigation measures, most of which have been included in the Project components and activities, include: (i) synchronized sequencing of land regularization activities and related social communication; (ii) outreach activities to avoid premature unconditional titling of lands within protected areas; and (iii) environmental educational and awareness raising activities. Moreover, the EMP provides contractually-binding guidance on environmentally-friendly and worker health and safety practices to be observed during the laying out of physical markers for the boundaries of the protected areas, and the carrying out of small rehabilitation works for some offices of co- executing agencies. The EMP also provides guidance on any permits that may be necessary for these activities. Importantly, during the demarcation activities, MARENA will implement the Guidelines for Good Environmental Practices developed and implemented during the previous project. 16 Annex 1: Results Framework and Monitoring Country: Nicaragua Project Name: Second Land Administration Project (P121152) Project Development Objectives PDO Statement The Project Development Objectives are: (a) to strengthen the property rights of the population in the Project area through improved regularization, titling, and registry services; and (b) to improve Nicaragua's capacity to respond promptly and effectively to an eligible emergency. Project Development Objective Indicators Responsibility Cumulative Target Values Data Source/ for ndctrNmCoe Unit of.Mehdlg DaaClcto Indicator Name Core Baseline YR1 YR2 YR3 YR4 End Target Frequency Methodolog Data Collection Measure Population projections from PCU-PGR, in Mid-term and the National collaboration [1] Direct Project Nubr 00Mi -300.0--700.0ed-termrojec beneficiariesNumber 0.00 300000.00 750000.00 Statistical Institute with all co- and database of executing Project agencies beneficiaries Population projections from PCU-PGR, in the National collaboration [1(a)] Female beneficiaries Percentage 0.00 -- -- 45.00 -- 51.00 Mid-term and Statistical Institute with all co- and database of executing Project agencies beneficiaries [2] At least 90,000 households PCU-PGR in Database of IP andcolbrtn receive legal documents l Number 0.00 20000.00 30000.00 40000.00 65000.00 90000.00 Yearly PGR collaboration through the Project with IP 17 [2(a)] of which 60,000 receive IP and PGR PCU-PGR in new titles (and 50% benefit Number 0.00 8000.00 12000.00 20000.00 32000.00 60000.00 Yearly dPaad collaboration databases .t I women or couples jointly) with IP [3] SIICAR is evaluated independently as satisfactory [ / Mid-term and SIICAR's CSJ and Yes/No 0.00 -- -- Yes -- Yes edo rjc ltom in terms of operation, data and end of Project platforms INETER security [4] Avg no. of days to PCU-PGR in complete recording of / Number 50.00 35.00 28.00 Mid-term and SIICAR (INETER collaboration purchase/sale of property in end of Project and IP databases) with INETER land adm systm (SIICAR) and IP [5] Time to disburse funds M 'CP, requested by Government for Weeks 0.00 4.00 4.00 4.00 4.00 4.00 As needed SINAPRED, MHCP World Bank en eligible emergency systems systems Intermediate Results Indicators Cumulative Target Values Responsibility 9 Data Source/ for Indicator Name Core Basene YR1 YR2 YR3 YR4 End Target Frequency Methodolog Data Collection Measure I Component 1: Consolidation of the Institutional and Policy Framework 1.1 Reduction in number of PCU-PGR in days to issue a cadastral Days 12.00 11.00 10.00 9.00 7.50 6.00 Yearly PlatfornT collaboration certificate with INETER 1.2 Participating l PCU-PGR in municipalities increase by collaboration 25% the database of fiscal Percentage 0.00 5.00 10.00 15.00 20.00 25.00 Yearly Project database with INETER, cadastre INIFOM and municipalities Component 2: Strengthening of Property Registration and Alternative Conflict Resolution Capacity 2.1 SIICAR consolidated in Chnneaad xaddt Progress reports; CSJ and Chinandega and expanded to Number 0.00 1.00 1.00 2.00 3.00 4.00 Yearly Mid-term and final at least three more INETER deparmentsevaluation reports departments 2.2 At least 30% of -iProgress Reports; CSJ in 2.2 t lest 3% ofPercentage 0.00 5.00 10.00 15.00 20.00 30.00 Yearly Pors eot;CJi agreements on conflicts Mid-term and final collaboration 18 resolved by DIRAC are evaluation reports with PCU-PGR formalized by the Property Registry Component 3: Titling and Regularization Services INETER's 3.1 Land parcels with use or database, Progress INETER in ownership rights recorded as a Number 0.00 30000.00 50000.00 75000.00 100000.00 123000.00 Yearly Reports; Mid-term collaboration result of the Project and final with PCU-PGR evaluation reports 3.1 (a) Land parcels with use/ownership rights recorded / Number 0.00 9000.00 15000.00 22500.00 28000.00 37000.00 Yearly As 3.1 above As 3.1 above as a result of Project-female 3.2 At least 70% of PCU-PGR, in households with surveyed Mid-term and collaboration parcels report a substantial Percentage 0.00 -- -- 55.00 -- 70.00 final Surveys; focus with IP, improvement in land tenure evaluation groups INETER and security CSJ GRM monitoring PCU-PGR in 3.3 Grievances registered . database; Progress coordination related to delivery of project Percentage 0.00 n/a n/a n/a n/a n/a Yearly Reports; Mid-term with co- benefits addressed (%) and final executing evaluation reports agencies 3.3 (a) Grievances related to delivery ofproject benefits / Number 0.00 n/a n/a n/a n/a n/a Yearly As 3.3 above As 3.3 above that are addressed-(number) 3.4 At least two PCU-PGR in complementary areas of the coordination indigenous territories in the Number 0.00 0.00 1.00 2.00 2.00 2.00 Yearly Project database; cit on Special Development Zone of Progress Reports executing Bosawas are demarcated and . titled agencies 3.5 At least five protected areas are demarcated and Project database; MARENA in registered in the database of Number 0.00 1.00 3.00 4.00 5.00 5.00 Yearly Mid-term and final collaboration the National System of evaluation reports with PCU-PGR Protected Areas Component 4: Project Management, Monitoring and Evaluation 19 4.1 Baseline for Project PCU-PGR in impact evaluation, Mid-term - Project files; collaboration Report, and Final Evaluation Number 0.00 1.00 1.00 2.00 2.00 3.00 Yearly Actual Reports with co- Report completed in a timely executing and satisfactory manner agencies Component 5: Contingency emergency Response Component 5.1 CERC established and ready to provide access to MIMHCP files, CERC MHCP, World financial resources to Yes/No 0.00 Yes Yes Yes Yes Yes As needed Operational Bank Nicaragua in case of an Manual eligible emergency Description of Indicators Project Development Objective Indicators Indicator Name Description (indicator definition etc.) [1] Direct project beneficiaries [CORE INDICATOR] Direct beneficiaries are people or groups who directly derive benefits from an intervention (i.e., children who benefit from an immunization program; families that have a new piped water connection). For the proposed Project, this indicator measures the total direct beneficiaries of new cadastral surveying activities and all regularization activities. [1(a)] Female beneficiaries Based on the assessment and definition of direct project beneficiaries, this indicator will provide the percentage of the beneficiaries who are female. [2] At least 90,000 households receive legal documents through the This indicator only measures results of regularization activities, including new titles, resolutions Project (solvencias), tenure certificates, and other legal documents confirming property rights. [2(a)] of which 60,000 receive new titles (and 50% benefit women or Sub-indicator measuring beneficiaries receiving new titles, and gender-differentiated impacts. couples jointly) [3] SIICAR is evaluated independently as satisfactory in terms of An independent evaluation for SIICAR will be carried out at MTR and end of Project, based on a operation, data and security methodology and terms of reference developed jointly between CSJ and INETER. The evaluation should provide recommendations as needed to ensure SICAR's sustainability. [4] Average no. of days to complete recording of purchase/sale of This indicator measures the improvements in the timeliness of recordation of property purchases or sales, property in land administration system (through SIICAR) [CORE applicable to the project. The baseline value will be the average number of days required to complete the INDICATOR] recordation of a purchase/sale of a property in the land admin system (SIICAR in this case) at the start of the project. [5] Time to disburse funds requested by Government for en eligible This indicator measures the effectiveness of the instrument to provide rapid access to financing to emergency Nicaragua after an emergency. Time will be measured from the moment the Bank receives the Government's request for assistance after declaring the national emergency, in relation to a positive list of 20 national and imported goods as agreed in the CERC Operational Manual. Intermediate Results Indicators Indicator Name Description (indicator definition etc.) 1.1 Reduction in number of days to issue a cadastral certificate This indicator measures improvements in cadastral services in INETER's offices within the Project area based on a methodology agreed with INETER. 1.2 Participating municipalities increase by 25% the database of fiscal This indicator measures results from the transfer of cadastral databases and capacity development cadastre provided to municipalities. 2.1 SIICAR consolidated in Chinandega and expanded to at least three This indicator measures the progress in the integration of cadastre and registry information, and the more departments collaboration between CSJ and INETER. 2.2 At least 30% of agreements on conflicts resolved by DIRAC are This indicator measures the effectiveness of conflict mediation and resolution, beyond DIRAC's role, by formalized by the Property Registry assessing formal acceptance of mediated agreements by the property registry. 3.1 Land parcels with use or ownership rights recorded as a result of This indicator measures the number of land parcels with use or ownership rights recorded in the land the project [CORE INDICATOR] admin system as a result of the project. The baseline value is expected to be zero. In the case of the proposed Project, it will reflect total number of land parcels recorded in the national cadastre system. 3.1 (a) Land parcels with use/ownership rights recorded as a result of This sub-indicator measures the number of land parcels with women as a record holder, either jointly or project-female individually. The baseline value is expected to be zero. 3.2 At least 70% of households with surveyed parcels report a This indicator measures perceived improvement in tenure security among Project beneficiaries through substantial improvement in land tenure security surveys and focus groups. 3.3 Grievances registered related to delivery of project benefits This indicator measures the transparency and accountability mechanisms established by the Project so the addressed (%) [CORE INDICATOR] target beneficiaries have trust in the process and are willing to participate, and feel that their grievances are attended to promptly. 3.3 (a) Grievances related to delivery of project benefits that are This sub-indicator measures the transparency and accountability of mechanisms established by the addressed-(number) project. It provides the total number of complaints and inquiries that are addressed. 3.4 At least two complementary areas of to the indigenous territories This indicator measures progress on titling of indigenous territories. in the Special Development Zone of Bosawas are demarcated and titled 3.5 At least five protected areas are demarcated and registered in the This indicator measures progress on demarcation of protected areas and overall promotion of their database of the National System of Protected Areas environmental sustainability. 4.1 Baseline for project impact evaluation, Mid-term Report, and This indicator measures progress and effectiveness of M&E strategy. Independent consultants will be Final Evaluation Report completed in a timely and satisfactory contracted to carry out the mid-term and final project evaluations. manner 5.1 CERC established and ready to provide access to financial This indicator will measure the effectiveness in making the CERC operational through the finalization of resources to Nicaragua in case of an eligible emergency the Operational Manual and agreement on overall implementation, procurement, FM, and safeguards arrangements. 21 Annex 2: Detailed Project Description NICARAGUA: Second Land Administration Project A. Project Development Objectives (PDOs) 1. The PDOs are: (a) to strengthen the property rights of the population in the Project area through improved regularization, titling, and registry services; and (b) to improve Nicaragua's capacity to respond promptly and effectively to an eligible emergency. On the foundations of the previous project, the first objective will be achieved through further strengthening of key land administration agencies, regularization of land rights, strengthening of indigenous peoples' land rights, and demarcation of protected areas. The second objective will be achieved through a specific CERC and by helping make IDA IRM operational, thus allowing Nicaragua to have fast access to financial resources in the event of a disaster. B. Project Area 2. The Project will focus on participating municipalities in six departments (see Map in Annex 8.) These include municipalities in Nueva Segovia and Jinotega, which will benefit from systematic land surveying and regularization, and modernization of property registry information. In line with the priorities established in the PNDH, these departments were selected based on their economic potential, land tenure issues, and poverty levels. Nueva Segovia and Jinotega are important agricultural centers, rich in natural resources, and strategically located along the Honduran border. There is potential to continue expanding agriculture, but farmland suffers from a high level of tenure insecurity. The Project will also continue to include participating municipalities in Chinandega, Esteli, Madriz, and Le6n in order to complete pending land regularization and to consolidate institutional modernization.18 Demand-based regularization will also be conducted. The Project may include any other municipality based upon the future agreement between the Government and the Bank and reflected in the Operational Manual, which will specify the criteria for municipalities' participation in the Project. If deemed necessary, social and/or environmental analyses may be conducted before project activities can start in the proposed additional municipalities. 3. Five protected areas will be demarcated in the departments of Nueva Segovia and Jinotega in order to support cadastral and regularization processes. 19 These areas include: Cordillera Dipilto in Nueva Segovia, and Cerro-Dantali-El Diablo, Cerro Kilambe, Macizo de Pefias Blancas, and Volcan Yali, in Jinotega. Moreover, two complementary areas of the indigenous territories of Mayanga Sauni Bu and Miskitu Indian Tasbaika Kum, located in Jinotega, will be demarcated and titled. Table 1 below summarizes the proposed type of intervention by department and municipality. 4. According to the 2005 Census, the total population of the Project area was 1.6 million, or over one third of the country's total population. As shown by the SA, the municipalities that may be targeted by the Project are characterized by higher than average rates of poverty and IS These departments were originally selected due to their high levels of poverty, land tenure insecurity and land conflicts. 19 Protected areas in the other departments were demarcated under the previous project. 22 illiteracy. Estimates from 2009 indicate that poverty rates (49 percent) are higher than the national average of 42.5 percent. Moreover, the rate of those living in extreme poverty is also 20 higher (18.2 percent, compared with 14.6 percent nationally). Illiteracy levels are also higher in the Project area, as 18.9 percent of the population over 15 years of age is illiterate (compared to 4.10 percent nationally).21 Importantly, illiteracy rates are much higher among the rural population (22.7 percent, compared with 10.2 percent in urban areas). In terms of land access and tenure, 53.5 percent of the population in the Project area is employed in the primary sector, well above the national average of 39.7 percent.22 However, most of the agricultural land in the project area is held by large and medium scale producers (49 percent and 43.5 percent, respectively), whereas small scale producers hold the remaining 7.5 percent. The SA also indicates that indigenous peoples represent 3.8 percent of the population in the Project area, and that most of their communities are located in the departments of Madriz and Jinotega. Table 1 - Activities in Proposed Municipalities Activities Type of Intervention Department Potential Participating Municipalities 12 Municipalities: Jalapa, Murra, El Cadastral surveying, Jicaro, San Fernando, Mozonte, Dipilto, confictresoutin, uevaSegvia Macuelizo, Santa Maria, Ocotal, Ciudad conflict resolution, Nueva Segovia Antigua, Quilali y iwili de Nueva regularization, titling, and Sgva registration of urban and rural properties, cadastral 6 Municipalities: Wiwili, El Cu6, San maintenance Jinotega Rafael del Norte, San Sebastin de Yali, La Concordia y Jinotega 35 Municipalities: Nagarote, La Paz Centro, Telica, Larreynaga, Quezalguaque, El Sauce, Santa Rosa del Conflict resolution, Peh6n. El Jicaral, Le6n, Achuapa, rChinandega, Posoltega, Chichigalpa, Regularization and reguariation, titl and Corinto, El Realejo, El Viejo, Puerto Titling registration, cadastral Le6n, Chinandega, Morazn, Villanueva, Somotillo, Cinco maintenance, s M Pinos, Santo TomMrs del Noe, San Pedro implementation ofdel Noe, San Francisco del Noe. La SIICARTrinidad, Esteli, Condega. Limay, Pueblo Nuevo, San Nicol6s, Somoto, Yalaguina, San Juan de Rio Coco, Totogalpa, Palacaguina y San Lucas Regularization and titling of urban and rural properties affected by land reform n/a Based on beneficiaries' demand Poverty and extreme poverty rates are even higher in the municipalities of Nueva Segovia (where 52.3 percent of the population lives in poverty, and 19.9 percent in extreme poverty), and Jinotega (where 60.5 percent live in poverty and 24.5 percent live in extreme poverty). 21 Data from the SA also shows that illiteracy levels are higher in the municipalities of Nueva Segovia and Jinotega (23.9 and 26.1 percent, respectively). Data from the Social Assessment based on the IV Population Census and VIII Housing Census, INIDE, 2005, and the Household Survey, FIDEG, 2011. 23 Physical demarcation, 8 Municipalities. Dipilto y Jalapa (Nueva Deacto of geo-referencing, sign Demarcation of Nueva Segovia and Segovia); Jinotega, Yali, La Concordia, Protected Areas envirnm ent Jinotega San Rafael del Norte, El Cua y San Jos6 educational campaign de Bocay (Jinotega) . . Physaial ecatpion, Demarcation and titling Physical demarcation, of two complementary conflict resolution, titling 2 Municipalities: San Jos6 de Bocay y aesoinieos and registration Jinotega wWilli areas of indigenousWili territories C. Project Components 5. The proposed Project will have five components: (1) Consolidation of the institutional and policy framework (US$7.30 million); (2) Strengthening of property registration and alternative conflict resolution capacity (US$3.70 million); (3) Property regularization and titling (US$17.80 million); (4) Project management, monitoring and evaluation (US$3.20 million); and (5) Contingency Emergency Response Component (US$8.00 million). Component 1: Consolidation of the Institutional and Policy Framework (US$7.30 million) 6. The objective of this component is to help consolidate the land administration system by strengthening the capacity of key agencies and participating municipalities, promoting inter- institutional coordination, and furthering decentralization of services. A stronger partnership between municipalities and INETER, the national cadastre agency, will facilitate the maintenance of cadastre information, while closer collaboration between land administration agencies will enhance service provision. Key elements of this effort will include linking municipal cadastres with INETER's database and strengthening local capacity to ensure that municipalities meet INETER's standards. Reflecting its mandate, INIFOM will play a central role in municipal capacity strengthening activities. Training activities are a central element of this component, and as required in the Operational Manual, the annual training plans will be sent to the Bank for no objection. Specifically, Component I will comprise the following sub- components and activities: 7. Subcomponent 1.1. Strengthening of Cadastral Services and Land Regularization Capacity by: (a) supporting INETER through, inter alia: (i) the preparation of technical and administrative cadastral regulations; (ii) the carrying out of training on the standardization of cadastral policy and procedures; (iii) strengthening its capacity in the provision of cadastral services; and (iv) the maintenance and refurbishment (including the acquisition of equipment) of certain INETER offices selected pursuant to the criteria set forth in the Operational Manual; and by (b) supporting IP through, inter alia: (i) the update of S1IPRO and the installation of SILEC in IP's regional offices; (ii) the strengthening of IP's capacity to deliver titling, regularization and legal services; and (iii) the maintenance and refurbishment (including the acquisition of equipment) of certain offices of IP selected pursuant to the criteria set forth in the Operational Manual. 24 8. Subcomponent 1.2. Strengthening of Municipal Land Administration Services by supporting INIFOM through, inter alia: (a) the preparation of technical guidelines and regulations for municipal cadastre management; (b) the strengthening of the capacity of participating municipalities on: (i) the management of SISCAT for property taxation and territorial planning; (ii) the maintenance of sustainable municipal cadastres; and (iii) the coordination of cadastral services with INETER; and (c) the establishment of the link of SISCAT with the national cadastre managed by INETER. These activities reflect an important focus of the Project to ensure that municipalities can play an active role in cadastral modernization and regularization processes, and become active partners in the maintenance of the national cadastre. 9. Subcomponent 1.3. Strengthening of Data Collection and Evaluation Capacity by supporting INIDE through, inter alia: (i) the design and carrying out of a poverty measurement survey including a module to collect information on land tenure; and (ii) the strengthening of its capacity for data analysis and surveys, through the provision of training, the acquisition of equipment, and the refurbishment of training facilities. 10. The Bank has been providing technical assistance to INIDE to carry out a series of surveys, starting in 1993 and most recently in 2009. Over time, these surveys have helped to promote evidence-based policy making and impact evaluation in the country. The representative sample for the poverty measurement survey to be conducted under the Project will likely include close to 8,000 rural and urban households. In addition to measuring poverty levels, the survey will include questions on land tenure trends to support data collection and evaluation of the land program, which will help establish a baseline on the land tenure and property rights situation in the country. As part of the open data policy, results will be made available to interested organizations and the general public. Component 2: Strengthening of Property Registration and Alternative Conflict Resolution Capacity (US$3.70 million) 11. The objective of this component is to support CSJ in strengthening the capacity of the regional property registries for systematic titling and registration, consolidating SIICAR in collaboration with INETER, and facilitating mediation of land conflicts and disputes through DIRAC. To ensure adequate provision of services, mediation will be implemented by qualified local mediators trained by DIRAC. Implementation of SIICAR across new departments will, in turn, help strengthen the collaboration between CSJ and INETER, while enhancing citizens' access to property information. The component will comprise the following sub-components and activities: 12. Subcomponent 2.1. Strengthening Property Registration and Alternative Conflict Resolution Capacity by supporting CSJ through, inter alia: (a) carrying out of capacity building activities, including the provision of technical assistance, and training to staff, on systematic titling and registration in regional property registries covering participating municipalities; and (b) the carrying out of mediation services during the cadastral and regularization processes under the Project, including: (i) the provision of conflict resolution training to mediators and co- executing agencies' staff; and (ii) the preparation of a manual to standardize mediation results. 25 13. Subcomponent 2.2. Consolidating SICAR by supporting CSJ and INETER through, inter alia: (i) the development and upgrading of the pilot version of SIICAR; (ii) the installation of SIICAR in participating municipalities located in at least three different departments of the Recipient (most likely Esteli, Madriz and Le6n) through the provision of technical assistance, including training to the Supreme Court and INETER's staff, and the acquisition of computer and office equipment, including software, hardware, and licenses. 14. The above activities will entail upgrading hardware and licensing requirements, migrating data to a new platform, adding more options for various types of land transactions and a data mining function, creating a digital folio for the cadastre linked to successive tract and cadastral regulations, redesigning the software to respond better to institutional requirements and to ensure better maintenance control, and deploying the enhanced version of the system in the selected departments in a secure environment. Overall, these activities will help bring together the cadastral information (exact geographical description of a parcel) managed by INETER and the legal information (certainty of ownership and rights) managed by CSJ. In the medium term this should promote accuracy and maintenance of property records while making these more readily accessible to the public. Component 3: Titling and Regularization Services (US$17.80 million) 15. The objective of this component is to record and clarify the land rights of the following beneficiaries: (a) the population of participating municipalities through a systematic process; (b) individuals requesting land regularization services on a demand basis; (c) individuals prioritized by national programs; and (d) indigenous communities living in two complementary areas of indigenous territories in the department of Jinotega. To advance these activities, PGR, including through the IP, will work with INETER, and seek the collaboration of the Secretariat for the Development of the Atlantic Coast and the National Commission for Demarcation and Titling in the case of indigenous territories. Moreover, MARENA will lead the effort of demarcating the external boundaries of selected protected areas and carrying out complementary environmental educational campaigns. The component will comprise the following sub-components and activities: 16. Subcomponent 3.1. Supporting the Provision of Cadastral, Titling and Regularization Services by supporting INETER, IP and CSJ through, inter alia: (a) the carrying out of systematic cadastral surveying, and land regularization, titling and registration activities in participating municipalities; (b) the carrying out of land surveys, regularization, titling, and registration of parcels for individuals: (i) on a demand basis; or, (ii) prioritized by Nicaragua's pertinent national programs selected pursuant to the criteria set forth in the Operational Manual (such as groups of female small farmers identified by the Ministry of Agriculture and Forestry, MAGFOR); (c) the carrying out of land titling and registration activities of eligible parcels subject to the Recipient's agrarian reform selected pursuant to the criteria set forth in the Operational Manual, for current possessors; 23 and (d) the implementation of the Project's Communication Strategy. 23 This activity implies legalizing, as national lands, eligible land from the agrarian reform, in order to subsequently transfer it formally to its current occupants. 26 17. INETER and IP/PGR will carry out the above activities following the organizational model developed and successfully validated under the previous Project. By providing greater institutional ownership, control and coordination, and streamlining of technical processes, this model has helped to reduce processing times. Titling will occur almost simultaneously with cadastral surveying, as parcels with technical and legal conditions allowing for advanced titling are identified. Early demand for titling of properties in participating municipalities where surveying has not yet started will also receive attention. Quality control of cadastral products will be based on internationally accepted standards, and carried out through two independent units in INETER: the Geodesy and Cartography Directorate and the Territorial Information System (SIT) Unit of the Physical Cadastre Directorate. Furthermore, IP's regional offices will conduct controls for parcel records and pre-diagnostic quality checks. To facilitate implementation, the Government prepared a Project's Cadastral Surveying and Regularization Strategy, identifying annual targets. This strategy may be updated upon agreement between the Government and the Bank. 18. Subcomponent 3.2. Demarcating, Titling and Registration of two complementary areas of the indigenous territories of MSBU and MITK,24 by supporting IP through, inter alia: (a) the carrying out capacity building and coordination activities; (b) the validation of existing territorial diagnostics; (c) the establishment of conflict resolution mechanisms; and (d) the demarcation, titling and registration activities. These territories are located within a Special Development Zone (established by Presidential Decree No. 19-2008) in the Bosawas Biosphere Reserve, which covers the basin of the rivers Alto Wangki and Bocay in the department of Jinotega. Demarcation and titling procedures in this jurisdiction fall under the purview of Law 445, which was developed and has been successfully implemented under the previous project. 19. Subcomponent 3.3. Demarcating of Protected Areas selected pursuant to the criteria set forth in the Operational Manual25 by supporting MARENA through, inter alia: (a) the carrying out of the demarcation of the external boundaries of said protected areas, including preparatory work, data collection, consultation with beneficiaries, determination of boundaries, and geo- referencing and physically demarcation of such boundaries; and (b) the carrying out of an environmental communication and educational campaign in the protected areas and neighboring communities. As per the Access to Public Information Law, the information about these areas should be disclosed to interested organizations and the general public. The campaign will include, among other relevant topics, basic information about the protected area, relevant environmental laws and regulations, direct and indirect benefits of natural resources conservation activities, and recommended land management practices. The campaign will be coordinated with the local family, health, and life councils of the target areas. 20. The physical demarcation will be done with markers (mojones) and the placing of signs in the perimeter and within boundaries of the protected area. These activities will be carried out in accordance with the EMP, MARENA's Environmental Guidelines for the Demarcation of Protected Areas, and the Process Framework, to ensure that appropriate measures are taken to 24 These territories are located in the Special Development Zone of the Bosawas Biosphere Reserve within Jinotega. Demarcation and titling activities in this jurisdiction fall under the purview of Law 445 (Law for Collective Land Rights of Indigenous Peoples in the Caribbean), which has been successfully implemented under PRODEP. 25 The basic requirement is that the protected area be relevant to the Project's cadastral surveying activities. 27 prevent, minimize, mitigate and compensate any potential negative environmental and social impacts (taking into account the potential restriction of access to natural resources). Component 4: Project Management and Monitoring and Evaluation (US$3.20 million) 21. The objective of this component is to support Project administration, and monitoring and evaluation. The PCU established during the previous project will continue to be responsible for overall project coordination under the leadership of PGR. The component will comprise the following sub-components and activities: 22. Subcomponent 4.1. Supporting Project Management, through inter alia: (i) the provision of training and carrying out of workshops; (ii) the carrying out of the coordination, administrative and fiduciary aspects of the Project, including audits; and (iii) the oversight of the implementation of a communication strategy and a gender strategy for the Project. 23. Subcomponent 4.2: Supporting Project Monitoring and Evaluation, through inter alia: (i) the collection of base line data to assess the Project's social, environmental and economic impacts; (ii) the preparation of the Project's semi-annual progress reports, the midterm review report and the final evaluation report; and (iii) the carrying out of a social audit of relevant activities. Component 5: Contingency Emergency Response Component - CERC (US$8.00 million) 24. Providing immediate response to an eligible emergency, as needed. More specifically, this component will finance public and private sector expenditures on a positive list of goods, both domestic and imported, required for Nicaragua's emergency recovery. A CERC Operational Manual will apply to this component, detailing financial management, procurement, safeguard and any other arrangements to ensure that funds are disbursed in a rapid and efficient manner following an eligible emergency. Moreover, the Project will help make operational the IRM by facilitating agreement on the requirements and arrangements, and by helping finalize the Operational Manual necessary to ensure proper coordination and implementation of the IRM in the country. Further details are provided in Annex 7. 28 Annex 3: Implementation Arrangements NICARAGUA: Second Land Administration Project I. Project Institutional and Implementation Arrangements 1. This Annex refers to components 1 through 4. Implementation arrangements for Component 5 (CERC) will be described in a specific Operational Manual which will be a disbursement condition for this component (for additional details on this component see Annex 7). PGR will continue to be the implementing agency for these components through the existing Project Coordination Unit (SE-PRODEP or PCU), which will have the responsibility for financial management (FM) and procurement, and will continue to manage all Credit funds. In addition, the PCU will be responsible for safeguard compliance, supervision of the implementation of the communication and gender strategies, and M&E. The technical implementation of the Project will remain decentralized through the co-executing agencies. A. Specific Implementation Arrangements for Components 1 through 4 2. The PCU within PGR will be under the leadership of a General Coordinator, and will also include as its core staff a technical coordinator, a procurement specialist, a financial management specialist, an M&E specialist, a social/gender specialist, an environmental specialist, and a communication specialist. The General Coordinator will have the overall responsibility of supervising the staff of the PCU in their planning, organizing, and executing all day-to-day administrative, technical, and legal activities of the project. The Operational Manual includes the PCU's organizational structure and describes the duties and responsibilities of Project staff along with the Project's technical, administrative, financial, procurement, safeguards, and monitoring and evaluation procedures. 3. The Project will include the main four co-executing agencies from the previous operation, including CSJ (under the judiciary) and INETER, INIFOM, and MARENA (under the executive branch). Consistent with the institutional framework for land administration, the role of each of these agencies will continue to be as follows: (a) CSJ, through DNR and DIRAC will be responsible for property registry, conflict mediation, and the development of SIICAR, in close collaboration with INETER; (b) INETER will be responsible for activities related to the national cadastre and surveying activities, and will work in close collaboration with INIFOM and participating municipalities; (c) INIFOM will be responsible for municipal capacity development, particularly regarding municipal cadastre and territorial planning; and (d) MARENA will be in charge of demarcation of and educational campaigns related to protected areas. In addition, INIDE will co-execute the data collection and evaluation capacity strengthening under Component 1. Before Credit effectiveness, these agencies will sign co- execution agreements by Component with PGR specifying their respective roles and responsibilities under the Project. Finally, IP, a decentralized entity under PGR, will continue to be a part of the Project, facilitating the regularization and titling processes, including in the indigenous territories in Bosawas. 29 4. As was done under the previous operation, PGR will also sign participation agreements with the municipalities benefiting from Project activities. These agreements will describe the roles and responsibilities of the municipalities as part of the land administration system, including inter alia, the management of their municipal cadastres, linking these to the national cadastre system under INETER, and the carrying out of territorial planning. The table below outlines the specific role of each agency / entity by component. Other Partners/ Formal Project Partners Adhsr arnes Advisory Agencies Component Co-ExecutingLocal Level Agencies / Entities 1. Consolidation of the Institutional and Policy INETER, INIFOM, Framework INIDE, and IP under Municipalities PGR CSJ, through DNR Local communities / 2. Strengthening of Property Registration and and DIRAC, and in Municipalities organizations Alternative Conflict Resolution Capacity collaboration with INETER INETER, INIFOM, SDC, CONADETI, MARENA, DIRAC, Local communities / 3. Titling and Regularization Services and IP under PGR Municipalities indigenous and women's organizations 4. Project Management, Momtoring and Evaluation All co-executing Municipalities Local .communities 4 agencies organizations B. Project Coordination Mechanisms 5. The Project Inter-Institutional Committee (CIP) will be comprised of the heads or the delegates of MHCP, PGR, IP, CSJ, INIFOM, MARENA and INETER. The CIP will also invite other public administration officers or representatives, centralized or decentralized, territorial or autonomous, whose operations are related to Project activities to discuss specific policy and operational issues. CIP's main responsibilities are to (a) formulate, coordinate and follow up on policies related to land administration, (b) ensure effective inter-institutional coordination and collaboration, and (c) oversee Project implementation. 6. The Project Operational Technical Committee (CTO) is an ad hoc committee under CIP with consultative character whose objective is to ensure efficient operational Project implementation based on the project's strategic needs. The CTO will be composed of technical experts from public sector institutions working closely with the Project. The CTO's duties and authority will be determined by the CIP, and will be presided over by the Attorney General or a delegate. II. Financial Management and Disbursement Arrangements 7. A financial management capacity assessment was carried out to evaluate adequacy of financial management arrangements under the present project. This assessment was performed in accordance with OP/BP 10.02 and the Financial Management Manual for World Bank- Financed Investment Operations effective on March 1, 2010. 30 8. The conclusions of the financial management Assessment are: (a) PCU-PGR is executing a project financed by the Bank (Land Administration Project or PRODEP, Cr. 3665-NI and an Additional Financing Credit, Cr. 4680-NI). The PCU has in place adequate FM arrangements that meet the Bank's minimum fiduciary requirements to manage the financial activities of the proposed Project. (b) The financial management capacity assessment has identified project-specific actions in order to enable the PCU to carry out the financial activities of the proposed project effectively. (c) The Project will use country systems for accounting and reporting purposes, as these systems would provide adequate information for monitoring specific project expenditures and budget execution. The combined use of these systems will allow the proper record and identification of each payment. In addition to the use of country systems, the Project will also continue using the Integrated Administrative and Financial System (SIAFI) as accounting system to generate detailed financial statements. A. Organizational Arrangements and Staffing 9. Overall project coordination and administration will fall under PGR through the PCU. The PCU will be directly in charge of financial management tasks. These will include: (i) budget formulation and monitoring; (ii) cash flow management (including processing payments and submitting Credit withdrawal applications to the Bank); (iii) maintenance of accounting records (including the administration and maintenance of an inventory of project assets), (iv) preparation of in-year and year-end financial reports, (v) administration of underlying information systems, and (vi) arranging for the carrying out of external audits. B. Budget Planning 10. Between August and September of each year, the PCU will prepare a preliminary investment program for the upcoming year (including the investment program for the proposed project) and submit it to the Ministry of Finance (MHCP) for review and approval. The program should be consistent with the budget policy provided by the Ministry, and be incorporated into the national budget for its submittal to Congress by October or November each year. 11. On the basis of the approved budget, the PCU will adjust as needed the Project's annual work plan and procurement plan, which will be reviewed and cleared by the Bank. C. Staffing, Accounting and Financial Reporting 12. Staffing. The PCU will maintain the same financial structure and staffing as agreed under the previous project. As currently established, the financial structure provides an acceptable framework, with the staff assessed to be adequate to perform the financial management functions in terms of skills, experience and knowledge. 13. Accounting Policies and Procedures. The main financial management regulatory framework for the project will consist of: (i) Nicaragua's laws governing budget management; and (ii) the Project's Operational Manual. Project-specific financial management arrangements 31 that are not contemplated in the general national documents will be described in a concise financial management section of the Operational Manual. Among others, specific reference will be made to: (i) the internal controls appropriate for the Project; (ii) the formats of project financial reports; and (iii) the auditing arrangements. 14. Information Systems. The Project will utilize country systems for budgeting, budget execution and financial reporting. 15. Treasury System. The PCU will continue using SIAFI for recording project financial transactions and will report on cash basis. 16. Financial Reports. On a semester basis, the PCU will prepare and submit to the Bank an unaudited interim financial report (IFR) containing at least: (i) a statement of sources and uses of funds and cash balances; (ii) a statement of budget execution per activities (with expenditures classified by the major budgetary accounts). The interim reports will be submitted not later than 45 days after the end of each semester. In this case, and at least at the beginning, the IFRs are not expected to be utilized for disbursement purposes. If at a later date, the IFRs are used for disbursement purposes, the following annexes would be required: (i) a Designated Account activity statement (including a copy of the bank statement); (ii) a summary statement of Designated Account expenditures for contracts subject to prior review, and (iii) a summary statement of Designated Account expenditures for contracts not subject to prior review. 17. On an annual basis, the PCU will prepare project financial statements including cumulative figures, for the year and as of the end of that year, of the financial statements cited in the previous paragraph. The financial statements will also include explanatory notes in accordance with the Cash Basis International Public Sector Accounting Standard, and PCU's assertion that credit funds were used in accordance with the intended purposes as specified in the Financing Agreement. These financial statements, once audited, will be submitted to the Bank not later than six months after the end of the Government's fiscal year (which equals the calendar year). 18. The supporting documentation of the semester and annual financial statements will be maintained on PCU's premises, and made easily accessible to both Bank supervision missions and external auditors. D. Flow of Funds 19. Disbursement Method. Credit proceeds will be withdrawn by the PCU using the advance method supported by documentation showing that the credit proceeds previously withdrawn have been used to finance eligible expenditures. Initially, supporting documentation will be in the form of Statement of Expenditures (SOE) with the exception of payments related to contracts above the SOE threshold, which will be reimbursed against full supporting documentation. The SOE thresholds for the project have been set at US$150,000 equivalent or more for Works and Goods, US$100,000 equivalent or more for Consultant Firms, US$50,000 equivalent or more for Individual Consultant and Non-Consultant Services; and US$25,000 equivalent or more for training and operating costs. 32 20. Other Procedures. No need was identified at appraisal for the use of special commitment procedures. Should the need arise during implementation, the Bank will evaluate it and if granted, agree to their use via an amendment to the Disbursement Letter. The Project may use reimbursement or direct payments. 21. World Bank Designated Account. The PCU will open two Designated Accounts in the Central Bank of Nicaragua in United States dollars, (a) one segregated to be used exclusively for deposits and withdrawals of Credit proceeds for eligible expenditures under Category 1 and managed by the PCU-PGR; and (b) one pooled account to be used for deposit and withdrawals of the Emergency activities managed by MHCP. After the conditions of Effectiveness have been met, and the Designated Accounts have been opened, the PCU will submit its first disbursement request to the Association, together with the expenditure and financing needs forecast for the next six months. For subsequent withdrawals, the PCU will submit the disbursement request, along with the supporting documentation (e.g., SOEs) and the updated forecast for the following six months. 22. The Designated Account shall operate under the traditional mechanism of replenishment by the SOE method. Copies of records would be used to support disbursement during the entire execution of the Project. Disbursements would be made against standard documentation throughout the entire execution of the Project, and documentary evidence would be sought by the World Bank for expenditures above thresholds in the Disbursement Letter. The disbursements for the proposed Project would be subject to standard and approved World Bank disbursement methods, which would be defined in the Disbursement Letter. These would include reimbursements, advances and direct payments. 23. Disbursement Deadline Date. Four months after the Closing Date specified in the Financing Agreement. 24. Retroactive Financing. The Bank will finance up to 20 percent of eligible expenditures for Category 1 (Components 1 through 4), and up to 40 percent of the amount allocated under Category 2 (Component 5), for expenditures incurred on or after August 31, 2012 (but no more than one year from signing.) E. Audit Arrangements 25. Internal Audit. In the course of its regular internal audit activities vis-d-vis the institutional budget, internal auditors for the PCU may include project activities in their annual work plans. If such audits occur, the PCU will provide the Bank with copies of internal audit reports covering project activities and financial transactions. 26. External Audit. An external, independent, private audit firm, acceptable to the World Bank under Terms of Reference also acceptable to the Bank, will be contracted by PGR for the entire life of the project, no later than five months after Credit effectiveness, to audit Project funds. The audit firm will review and provide an opinion on the Annual Financial Statements, covering the Government's fiscal year (which coincides with the calendar year). The audited financial statements shall be presented to the World Bank no later than six months after the end of the fiscal period. Terms of reference and a short list for the selection and contracting of the 33 independent auditor will be sent for the Bank's previous review and no objection. According to the Bank Policy 10.02, Audited Financial Statements will be made public, as established in the Financing Agreement.26 27. The Disbursement Schedule is as follows: Category Amount of the Financing Percentage of Expenditures Allocated (expressed in SDRs) to be Financed (inclusive of Taxes) (1) Goods, works, consultants' services, Non-Consultant 18,835,000 100% Services, Training/workshops and Operating Costs for Parts 1, 2, 3, and 4 of the Project (2) Emergency Expenditures under Part 5 of the Project 5,200,000 100% (3) Project Preparation Advance 1,965,000 TOTAL AMOUNT 26,000,000 100% SDR exchange ofUS$1.541340 as ofJanuary 31, 2013 F. Risk Assessment Summary 28. The financial management risk for this project has been assessed as Moderate. During implementation, the level of financial management risk for the Project will be re-assessed and revised if necessary. The following table presents the risk assessment, as well as the risk mitigating measures incorporated into the design of the project and the financial management implementation arrangements. Risk Risk Rating Risk Mitigating Measures Incorporated into Project Design Inherent Risk Country Level27 S Nicaragua has been committed to improving the quality, effectiveness and efficiency of public sector institutions as well as establishing credible and effective accountability systems. The Government has also advanced a modernization process including organizational reforms within the Executive to further strengthen its regulatory capacities as well as to enhance control and accountability capabilities of central government institutions. A strengthened fiscal policy unit has been fully operational in the Ministry of Finance since 2005 and the gradual introduction of the Medium Term Budget Framework (MTBF) is part of the successful reforms already implemented by Nicaragua. The Government is continuing its efforts to implement a comprehensive PFM modernization plan aiming at strengthening its own management capacities as well as upgrading the PFM systems and also SIGFA and supporting its full implementation in the rest of the public sector. Entity Level M The PCU under PGR has prior experience in managing Bank-financed projects with adequate financial management performance. Following current practice, the PCU will assign day-to-day financial management activities to the same units that have managed previous Bank-financed projects. Project Level M The financial management aspects of the project will be concentrated in the PCU (institutionalized within PGR), staffed with personnel with adequate qualifications. The Financing Agreement will include a requirement that the Government, through PGR, shall maintain adequate implementation arrangements at all times. 26 OP 10.02 "...For operations for which the invitation to negotiate is issued on or after July 1, 2010, the Bank requires that the borrower disclose the audited financial statements in a manner acceptable to the Bank; following the Bank's formal receipt of these statements from the borrower, the Bank makes them available to the public in accordance with The World Bank Policy on Access to Information.." 27 As per PFM Diagnostic (see PEFA 2011 and PEFA 2011 Update). 34 Control risk Budgeting, M Project budget and accounting will be registered in the national system. The Project will operate under Accounting, an Operational Manual approved by the Bank. An update of the Operational Manual has been Internal Control prepared by PGR detailing the principal financial management procedures, including budgeting, accounting, payments, support documentation, accounts reconciliation, financial reporting and inventory control over assets. Funds Flow M The Project will use the single treasury account to make payment to suppliers, contractors and consultants. Financial M The Project will utilize SIAFI and SIGFA systems for accounting and financial reporting. Reporting, The PCU will contract individual external audit for the entire implementation period of the Project. Auditing The annual audit shall be carried out by an audit firm and under TORs acceptable to the Bank. FM Risk M G. Financial Management Action Plan 29. The financial management Action Plan is proposed as follows: Action Responsible Entity Completion Date 1. Finalize the financial management sections of the Project's PCU-PGR Completed Operational Manual 2. Finalize draft audit Terms of Reference and short list. PCU-PGR By May 20, 2013 3. Receive a financial management "on the job" training focused World Bank By July 31, 2013 on Disbursements 4. Contract external auditors, based on short list satisfactory to the PCU-PGR Five months after Credit Bank. effectiveness H. World Bank FM Supervision Plan 30. A World Bank financial management Specialist will conduct a supervision mission prior to Credit effectiveness to verify the implementation of the action plan and review all financial management arrangements for the Project. After effectiveness, the Financial Management Specialist would review the annual audit report, the financial sections of the semiannual IFRs including a monthly reconciliation of accounts, and perform at least one complete supervision mission per year. This supervision strategy will be reviewed periodically and adjusted based on performance and risk. I. Disbursement Arrangements for Contingency Emergency Response Component (CERC - Component 5) 31. Implementation arrangements for the CERC will be detailed in a specific Operational Manual (see Annex 7 for more details). This component would finance public and private sector expenditures on a positive list of goods, both domestic and imported, and/or specific works, goods, services (including audit costs) and emergency operation costs required for Nicaragua's emergency recovery. These expenditures will be in accordance with OP 8.00 and will be appraised, reviewed and found to be acceptable to the Bank before any disbursement is made. 35 III. Procurement Arrangements A. General 32. Procurement for the proposed Project will be carried out in accordance with the World Bank's "Guidelines Procurement of Goods, Works and Non-Consulting Services under IBRD Loans and IDA Credits and Grants by World Bank Borrowers," dated January 2011; the World Bank's "Guidelines Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers," dated January 2011; and the provisions stipulated in the Financing Agreement. For each contract to be financed by the Credit, the different procurement methods or consultant selection methods, the need for prequalification, estimated costs, prior review requirements, and timeframe will be agreed between the Borrower and the Bank in the Procurement Plan. 33. Procurement of Works. The proposed operation is not expected to finance new construction. However, small rehabilitation works for offices of selected co-execution agencies and demarcation works are included. These works will be procured by National Standard Bidding Documents (SBD) agreed with or satisfactory to the Bank, or by shopping method following the procedures stipulated in paragraph 3.5 of the Procurement Guidelines, using Request for Quotations documents acceptable to and agreed with the Bank. 34. Procurement of Goods. Goods procured under the Project would include inter alia vehicles, motorcycles, computer equipment and software, satellite images, office equipment (i.e. scanners, photocopy machines, data shows, telephone system, digital cameras, etc.), laboratory equipment, and furniture (i.e. desks, chairs, bookshelves, etc.). The Bank's SBD will be used for all International Competitive Bidding (ICB), and National SBD acceptable to and agreed with the Bank will be used for all National Competitive Bidding (NCB). For procurement of small value goods, shopping procedures will be followed using a Request for Quotations acceptable to and agreed with the Bank and in accordance with paragraph 3.5 of the Procurement Guidelines. 35. Procurement of Non Consultant Services. Technical services provided by firms for aerial photography, surveying and cadastral services, publications, and communications services will be procured as non-consultant services. The Bank's SBD will be used for all ICB, and National SBD acceptable to and agreed with the Bank will be used for all NCB. For procurement of small value non-consulting services, shopping procedures will be followed using the Request for Quotations documents acceptable to and agreed with the Bank. 36. Selection of Consultants: Contracts for employment of firms will include services for different types of studies such as social, economic and environmental impacts, promotion and communication campaign, design of works, characterization studies, project monitoring and evaluation, and financial audits. Selection methods for consultants would include: Quality and Cost Based Selection (QCBS), Quality Based Selection (QBS), Fixed Budget Selection (FBS), Least Cost Selection (LCS), Selection Based on Consultants' Qualifications (CQS), and Single Source Selection (SSS). Contracts for employment of individuals will include hiring of the PCU technical and administrative staff. Technical services provided by individuals for data collection, mapping, digitalizing and indexing, and measurement, will be financed under Service Delivery 36 Contractors. Selection procedures of individuals for these services will be indicated in the Operational Manual. 37. Operational Costs: The Project will finance Operational Costs consisting of expenses required for managing and supervising the Project, such as office supplies and consumables; utilities, internet, maintenance of vehicles and equipment; car and equipment insurance; travel; subsistence; and per diems. These items will be procured using comparison procedures described in the Operational Manual. In addition, Project support personnel costs (such as assistants, cleaners, and drivers) will be financed under operational costs. Selection procedures of individuals for these services will be indicated in the Operational Manual. B. Assessment of the Implementing Agency's Capacity to Carry out Procurement 38. PGR will be the implementing agency, through a Project Coordination Unit (SE- PRODEP), which will have the responsibility for procurement and financial management, and will continue to manage all Credit funds. There will be five co-executing agencies, including MARENA, INETER, INIFOM, INIDE, and CSJ. In addition, the IP, a decentralized entity under PGR will continue to be a part of the Project. Each agency will have a small coordination unit. An assessment of the PCU-PGR capacity to implement the procurement actions was updated in October 2012. The following were assessed: (a) organizational structure, (b) facilities and support capacity, (c) qualifications and experience of the staff that would work in procurement, (d) record-keeping and filing systems, (e) procurement planning and monitoring/control systems used, and (f) capacity to meet the Bank's procurement contract reporting requirements. It was concluded that the PCU-PGR has the staff, experience and capacity from the previous operation to manage the Project, implement World Bank procurement procedures, monitor implementation and provide technical assistance to the co-executing agencies. The following detailed action plan was prepared to address the remaining risks identified: MITIGATING MEASURES RESPONSIBLE ENTITY STAGE Prepare a comprehensive General Procurement Plan PCU Completed Adjust sample bidding documents for NCB, shopping and PCU Before the first process of each consultants method Update the Operational Manual. The Operational Manual PCU Completed shall include procedures to hire the support staff as well as all other expenditures under operational costs' category, and templates and samples of the agreed procurement documents, such as request for proposals, and any other bidding documents most commonly used in the Project Prepare a comprehensive, detailed Procurement Plan for the PCU Completed first 18 months of project execution Establishment of SEPA as the system to monitor and PCU / World Bank After Credit effectiveness expedite Procurement Plans The current staff should continue to work for the PGR During implementation implementation of the project (to minimize staff turnover) Regular procurement training will be provided to the PGR / World Bank During implementation procurement specialist as well as to relevant technical staff throughout Project implementation, starting within six months of effectiveness; 37 39. The overall Project risk for procurement is rated Moderate, considering the country risk and the agencies' capacity to implement procurement. The level of risk for the Project will be reassessed once there is evidence that the above-mentioned mitigating measures have been properly conducted. 40. PGR prepared a Procurement Plan for the entire scope of the Project, and a detailed and comprehensive Procurement Plan, which includes all contracts for which invitations for bids and proposals are to be issued during the first 18 months of project implementation. The Procurement Plan will be available in the Procurement Plan Execution System (SEPA). Annual Procurement Audits 41. PGR shall: ( i) have all the procurement records and documentation for each fiscal year of the Project audited, in accordance with appropriate procurement audit principles, by independent auditors acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such fiscal year, the procurement audit report of such audit by said auditors of such scope and in such detail as the Bank shall reasonably request and; (iii) furnish to the Bank such other information concerning said procurement records and documentation and the procurement review thereof as the Bank shall from time to time reasonably request. C. Procurement Special Provisions 42. In addition and without limitation to any other provisions set forth in this section, the Procurement Guidelines or the Consultant Guidelines, the following principles of procurement shall expressly govern all procurement of works, goods, non-consulting services or consultants' services, as the case may be: (a) foreign bidders shall not be required to be registered with local authorities as a prerequisite for bidding; (b) no bids shall be rejected, and no provisional awards shall be made at the time of bid opening; (c) the invitation to bid shall not establish, for purposes of acceptance of bids, minimum or maximum amounts for the contract prices; (d) the invitation to bid shall not publish the estimated cost of the contract; (e) in the case of Shopping, a minimum of three quotations shall be obtained as a condition to award the contract; (f) unless the Bank may otherwise agree, for the procurement of goods and non- consulting services, the "best offer" shall be the one submitted by the bidder whose offer was determined to be the lowest evaluated bid and was found substantially 38 responsive to the bidding document acceptable to the Association, provided further that the bidder was determined to be qualified to perform the contract satisfactorily; (g) bidders and Consultants shall not be allowed to review or make copies of other bidder's bids or consultants' proposals, as the case may be. Likewise, bidders' and consultants' responses to requests of clarifications made by the procuring entity during the bidding process shall not be disclosed to other bidders or consultants, as the case may be. Finally, reports including recommendations for award shall not be shared with bidders and consultants prior to their publication; (h) eligibility criteria shall be the one defined in Section I of the Procurement Guidelines and Consultant Guidelines. Articles 17 and 18 of the Procurement Law shall not apply; (i) automatic rejection of bids or proposals, as the case may be, due to differences between bid or proposal prices and cost estimates being higher than predetermined percentages, shall not be allowed; (j) bidders shall have the possibility of procuring hard copies of bidding documents even if they are published on the procurement portal; (k) unless so indicated in the applicable Bank Standard Bidding Documents, pre-bid conferences shall not be conducted; (1) bid preparation terms shall not be reduced as a result of re-bidding; (m) consultants shall not be required to submit proposal and performance securities; (n) complaints shall be handled as indicated in the appendices to the Procurement Guidelines and Consultant Guidelines. Articles 110 to 116 of the Procurement Law shall apply in a supplementary manner; (o) the procurement of goods and works shall be carried out using standard bidding documents acceptable to the Association; (p) the Recipient, shall: (i) supply the SEPA with the information contained in the initial Procurement Plan within 30 days after the Project has been approved by the Association; and (ii) update the Procurement Plan at least every three months, or as required by the Association, to reflect the actual Project implementation needs and progress and shall supply the SEPA with the information contained in the updated Procurement Plan immediately thereafter; and (q) the invitations to bid, bidding documents, minutes of bid opening, requests for expressions of interest and the pertinent summary of the evaluation reports of bids and proposals of all goods, works, non-consulting and consultants services shall be published in SISCAE, and in a manner acceptable to the Association. The bidding period shall be counted from the date of publication of the invitation to bid or the 39 date of the availability of the bidding documents, whichever is later, to the date of bid opening. D. Procurement Plan (a) General * Bank's approval Date of the Procurement Plan: February 5, 2013 * Date of General Procurement Notice: January 22, 2013 * Period covered by this Procurement Plan: 18 months (b) Goods, Works and Non-Consulting Services. (i) Prior Review Threshold: Procurement decisions subject to prior review by the Bank as stated in Appendix 1 to the "Guidelines: Selection and Employment of Consultants by World Bank Borrowers": Thresholds for procurement methods and prior review (US$ thousands) Expenditure Category Contract Value (Thresholds) US$ Procurement Method Contracts Subject to Prior Review 1. Works >1,500,000.00 ICB All 150,000.00 - 1,500,000.00 NCB First two <150,000.00 Shopping First two DC All 2. Goods >150,000.00 ICB All 25,000.00 - 150,000.00 NCB First two 25,000.00 < Shopping First two DC All Note: ICB = International Competitive Bidding NCB = National Competitive Bidding DC = Direct Contracting Summary of the Procurement Packages for Works, Goods and Non-consulting Services (Based on Procurement Plan of February 5, 2013) 1 2 3 4 5 6 7 Ref. Description Estimated Packages Domestic Review by Comments No. Cost US$ Preference Bank million (yes/no) (Prior/Post) 1 Summary of ICBs - 0,244 1 No Prior Civil Works 2 Summary of NCBs - 0,535 6 No First two prior Civil Works 3 Summary of 0,025 1 No Prior Shopping - Civil Works 40 4 Summary of ICBs - 1,974 4 No Prior Goods 5 Summary of NCBs - 0,468 7 No First two prior Goods 6 Summary of 0,162 20 No First two prior Shopping - Goods 7 Summary of DC - 0,095 1 No Prior Non-consulting services (c) Selection of Consultants (i) Prior Review Threshold: Selection decisions subject to prior review by the Bank as stated in Appendix 1 to the Guidelines for Selection and Employment of Consultants are as follows: Thresholds for methods and prior review (US$ thousands) Contracts Subject to Prior Consulting Services Contract Value (Thresholds) US$ Procurement Method r eview Review 3.a Firms >200 QCBS, QBS, FBS, LCS >200 QCBS, QBS, FBS, LCS, <200 CQS Terms of Reference SSS Comparison of 3 CVs in accordance with Chapter V >100; 3.b Individuals of Guidelines <100 Terms of Reference Note: QCBS = Quality- and Cost-Based Selection QBS = Quality-Based Selection FBS = Fixed Budget Selection LCS = Least-Cost Selection CQS = Selection Based on Consultants' Qualifications (shall not exceed US$300,000.00) SSS: Single Source Selection (ii) Short list comprised entirely of national consultants: The short list of consultants for services, estimated to cost less than US$200,000 equivalent per contract, may consist entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. Consultancy Assignments with Selection Methods and Time Schedule (based on Procurement Plan dated February 5, 2013) 1 2 3 4 Number Estimated Ref. No. Description of Assignment Cost US$ million 1 Summary of number of contracts 1 0,084 that will be let under QCBS 41 2 Summary of number of contracts 2 0,088 that will be let under LCS 3 Summary of number of contracts 137 6,807 for IC 4 Summary of number of contracts 472 5,980 under Service Delivery Contractors (iii) In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment of the Implementing Agency has recommended semiannual supervision missions to visit the field in order to carry out a post review of procurement actions. The size of the sample for post review will be not less than 1 in 10 contracts. (d) Contingency Emergency Response Component (CERC - Component 5). This component will finance public and private sector expenditures on a positive list of goods, both domestic and imported, and/or specific goods, works and services (including audits). The procurement procedures that will apply to these expenditures will be described in a specific Operations Manual which will require the Bank's no objection, and is a disbursement condition for this component. IV. Environmental and Social Aspects (includin$ safeguards) 43. The Project has been designed to comply fully with the content and objectives of the relevant World Bank safeguards, which include in this case: Environmental Assessment (OP/BP 4.01), Natural Habitats (OP/BP 4.04), Forests (OP/BP 4.04), Physical Cultural Resources (OP/BP 4.11), Indigenous Peoples (OP/BP 4.10), and Involuntary Resettlement (OP/BP 4.12) - specifically in reference to the potential restriction of access to natural resources related to the demarcation of protected areas. In accordance with IDA's Information Disclosure Policy (BP17.50), all the required safeguard documents, including the EA and EMP, the IPP, and Process Framework were disclosed in-country and on the World Bank's website on December 27, 2012. These documents will also be made available to the public, in Spanish, in PGR's offices in Managua and the regional offices of the main co-executing agencies. A. Environmental Assessment (OP/BP 4.01) 44. The Project is classified as Category B and required the preparation, approval, and disclosure of a partial EA. Accordingly, the EA was prepared along with its respective EMP. Five consultations were held during the drafting process of the EA and EMP in October and November 2012 in the following municipalities: Ocotal, Jinotega, RN Dipilto, RN Cerros de Yali, San Sebastidn de Yali, and in RN Datanli-El Diablo. A broad range of stakeholders participated in the consultations, including among others, PRODEP staff, municipal authorities, technical and environmental personnel (in particular, cadastre, registry and environmental specialists), collaborative management committees of protected areas and other community representatives. Potential impacts, positive and negative, direct and indirect, were identified and 42 evaluated in the EA through the review of technical and environmental information compiled from technical workshops and field visits.28 Expected Positive Environmental Impacts 45. Overall, it is expected that the Project will have highly positive environmental impacts. First, cadastral surveying and the process of land tenure regularization generally induce positive changes to land-use decisions and lead towards more sustainable land use and natural resources management. And second, the land titling process, apart from its principal objective of securing land tenure, incorporates cadastral surveying, which helps identify areas that are highly vulnerable to disasters or are ecologically fragile. The Project will encourage these practices, in accordance with the existing national legislation. 46. Each of the Project's components is expected to result in positive environmental impacts. Component 1 (Consolidation of the Institutional and Policy Framework) will help improve cadastral services and overall institutional capacity, including closer attention to environmental sustainability issues. Moreover, Component 2 (Strengthening of the Property Registry and Alternative Conflict Resolution Capacity Component) will help strengthen property rights, which contributes to more sustainable land uses. 47. Under Component 3 (Titling and Regularization Services), the ortho-photos generated through aerial photography may be used as primary data and information base for geological, hydrological, geomorphological, land use, and urban/rural territorial planning studies. Likewise, the wider use of GPS systems and satellite imaging in cadastral surveying is precise and efficient as well as environmentally friendly since it makes it unnecessary to intervene in the ecosystem (e.g., by cutting down existing vegetation.) An important aspect of Component 3 is the inclusion of disaster risk vulnerability criteria in cadastral surveying while increasing awareness about decisions involving sustainable and unsustainable land use practices that degrade the environment and increase vulnerability to disasters. 48. The demarcation of protected areas, also under Component 3, is expected to have the most direct positive environmental impacts, which will be enhanced through an awareness raising and educational campaign. Specifically, the Project will finance the demarcation of the external boundaries of five protected areas in Nueva Segovia and Jinotega.29 Project design emphasizes the need for the maintenance of the demarcation and signage activities within their respective management plans and in the participation agreements to be signed by PGR with the municipalities. Both actions aim to ensure the sustainability of the positive environmental impacts of the Project. Additionally, MARENA's Guidelines for Good Environmental Practices for Protected Areas Demarcation will be applied during project implementation. 49. In addition to the proposed Project's environmental activities, participating municipalities are considering, inter alia: (a) pursuing the environmental restoration of the Dipilto-Ocotal river, 28 In addition to the consultations, a field visit was conducted to the Natural Reserve of Yali with the collaboration of MARENA as part of the preparation of the EA. In addition, the Bank team visited several of the protected areas during Project preparation. 29 These protected areas are: Sierras de Dipilto-Jalapa in Nueva Segovia; and Cerro Kilamb6, Macizo Pefias Blancas, Cerros de Yali, and Cerro Datanli-El Diablo in Jinotega. 43 the Mozonte river, and neighboring areas, (b) increasing efforts to prevent forest fires, (c) supporting the oversight of natural resources with appropriate human and financial resources, (d) promoting rural and community-based tourism, and (e) formulating, revising and updating Plans for Prevention, Mitigation, and Response to Disasters. Potential Adverse Environmental Impacts 50. The potential negative environmental impacts of increased land tenure security are few. There are, however, several impacts that are derived from the execution of minor works under Component 1. These works are generally small in scale, temporary, and reversible, but could involve cutting down trees and dealing with some construction waste within protected areas. Any adverse environmental impacts that may arise will be mitigated by the implementation of good environmental and construction practices as well as by continuous supervision of the demarcation of protected areas. 51. There are also potential adverse environmental impacts which do not relate to physical works, but more broadly, to land use changes and the process of land regularization and titling. Although these impacts have not been an issue under the previous project, there may be incentives for individuals or groups to take over public, private or protected area lands in order to pressure for land titling. Such actions may have destabilizing effects on society, the economy and the environment. Disagreements and/or conflicts about the external borders of protected areas, especially when adjacent to indigenous communities, may lead to tension or behaviors that can produce adverse effects on the local ecosystem. Finally, it is possible that landholders accelerate land clearing activities in protected areas or other forested areas in advance of the Project's surveying and registering activities, in order to show the largest possible area under productive use. To mitigate these potential impacts, in addition to the implementation of the communication strategy and environmental education campaign, the PCU-PGR, in collaboration with the relevant co-executing agencies, will closely monitor and supervise environmental impacts within the Project area. B. Natural Habitats (OP/BP 4.04) and Forests (OP/BP 4.36) 52. Land regularization, particularly in rural areas, may potentially have adverse impacts for critical natural habitats that include forests. Thus, both the Natural Habitats and Forests safeguard policies are triggered. The five protected areas to be demarcated include natural habitats, although they are inhabited. The boundaries of these protected areas are already well administratively defined and the Project will not modify them. Moreover, these areas already have management plans approved by MARENA, and the Project will not include revising these plans or changing existing zoning. It is expected that the Project will contribute to the preservation of natural habitats by physically marking these boundaries and updating the areas' cartography with georeferenced records. 53. The Forests safeguards policy is triggered because the protected areas targeted for demarcation are home to forests. However, the Project will not support any forestry (natural or plantation) activity. It is expected that the Project will contribute to the preservation of forests by marking the selected protected areas' administrative boundaries on the ground and by updating their cartography with georeferenced records. 44 C. Physical Cultural Resources (OP/BP 4.11) 54. The Project will support conservation of all cultural and archaeological physical resources within the Project area by delimiting any undeclared sites. Activities with potential risks include minor civil works, cadastral surveying, demarcation of protected areas, and demarcation of indigenous territories. The Project will abide by national laws and procedures regarding physical cultural resources in order to address potential "chance finds". In these cases, the exact location of the sites will be given to the Nicaraguan Institute of Culture, which in partnership with the relevant municipality and according to national laws, will decide on the actions and regulations that apply to the protection of the specific physical cultural resource. Finally, the SA helped identify sacred sites and landscapes of cultural importance to indigenous peoples. The IPP includes actions to avoid, minimize, or mitigate any potential risk to physical cultural resources of indigenous peoples. D. Social Assessment 55. A SA was carried out to analyze the views of the most vulnerable social groups in the project area regarding the expected project impacts, and their interest in participating in project activities. The SA collected primary data through semi-structured interviews to staff of the co- implementing agencies, focus groups with representatives of indigenous communities, and information and consultation workshops with representatives of non-indigenous communities and small and medium-sized rural producers. The findings of the SA, including draft versions of the proposed safeguard instruments, were discussed with interested stakeholders and potential beneficiaries during three public consultations held between October 15 and 30, 2012 in several localities throughout the Project area.30 56. The Social Assessment helped identify a variety of types of conflict over land tenure, most of which concern the need for recognition of the land rights of particular stakeholder groups by other groups. The Assessment recommends four broad areas of intervention: (i) improvement of information and consultation mechanisms with project beneficiaries; (ii) capacity building regarding land regularization, administration, and management; (iii) strengthening of indigenous and non-indigenous communities' participation in land regularization activities, demarcation and titling of indigenous territories, and demarcation of protected areas; and (iv) strengthening of beneficiaries' participation in monitoring and evaluation. The Project's Communication Strategy and Grievance Redress Mechanism will further support communication mechanisms and participatory processes. E. Indigenous Peoples (OP/BP 4.10) 57. The presence of indigenous communities in the Project area, and the demarcation and titling of complementary areas of indigenous territories in the Special Development Zone of Bosawas, requires an IPP to ensure that free, prior, and informed consultation takes place with indigenous communities, and that any identified potential adverse impacts are avoided, minimized, mitigated or compensated. In conjunction with the Social Assessment, the IPP was developed following a consultation process involving leaders and representatives of indigenous 30 Public consultations were held in Nueva Segovia on October 15, Jinotega on October 16, and Amak on October 30, 2012. 45 communities in the Project area. The IPP analyzes potential risks concerning project activities in indigenous territories, and identifies culturally appropriate mitigation measures. Mitigation measures include the participation of indigenous peoples in the demarcation and titling process, taking into consideration in the case of the complementary areas the manual approved by the Government,31 as well as the establishment of consultation mechanisms and capacity building activities. The IPP will be further strengthened by the Project's gender and communication strategies. F. Involuntary Resettlement (OP/BP 4.12) 58. No resettlement is expected to take place under the Project. OP/BP 4.12 is triggered considering the potential restriction of access to natural resources related to the demarcation of the external boundaries of protected areas. As applied in the previous and similar operations financed by the Bank, the systematic cadastral and regularization activities are considered to be largely outside the purview of OP 4.12 as set forth in footnote 8 of this policy regarding disputes between private parties in land titling projects.32 Finally, the small civil works for the renovation of some of the co-executing agencies' offices do not require land acquisition. 59. As required, to address the potential restriction of access to natural resources, a Process Framework was prepared and included in the Operational Manual. The Process Framework identifies several likely scenarios under which such restrictions may occur, particularly for (i) indigenous peoples who live within or around protected areas and (ii) non-indigenous peoples who live within or around protected areas. Nevertheless, given that the management of natural resources within protected areas, even more so within buffer zones, allow for the sustainable use of resources, demarcation activities under the Project are not likely to restrict the currently sustainable practices of people living within or around the selected protected areas. In line with OP/BP 4.12, the Process Framework describes the participatory process for the identification and mitigation of any potential restriction. Activities include participatory diagnostics, consultation forums, and communication and environmental awareness activities for affected communities. G. Capacity for Safeguard Implementation 60. PGR and co-executing agencies have experience with Bank's safeguard policies relevant to land administration efforts in the country. Safeguard compliance has been satisfactory under PRODEP, and this performance should continue since similar policies will apply under the proposed Project. Under PRODEP, these agencies have gained significant experience through, inter alia, the demarcation of 14 protected areas and demarcation and titling of 15 indigenous territories, with no apparent negative social or environmental impacts. 61. Capacity for safeguard implementation will be further ensured by including in the PCU- PGR a Social/Gender Specialist and an Environmental Specialist, whose work will be 31 The manual for demarcation and titling of indigenous territories in the Caribbean was developed and applied under the previous project, reflecting Law 445 and its regulations. It describes the various phases of the process as well as the institutional framework and responsibilities of the various agencies and government levels involved. 32 As stated in footnote 8: "...The policy... does not apply to disputes between private parties in land titling projects, although it is good practice for the borrower to undertake a social assessment and implement measures to minimize and mitigate adverse social impacts, especially those affecting poor and vulnerable groups. 46 complemented by that of a Communication Specialist. The former two specialists will supervise the implementation of the safeguard instruments, tracking environmentally and socially related impacts, and will coordinate environmental and social sustainability issues for the entire project with assistance of the co-executing agencies, including especially MARENA. Moreover, the Bank will provide periodic training to project staff to ensure that capacity is maintained. H. Consultation Framework 62. In addition to the IPP and Process Framework, the Project's consultation framework includes outreach activities required to advance cadastral and regularization processes, which are also related to the Communication Strategy and grievance redress mechanism described below. These consultation activities include meetings with local authorities and technical staff, community leaders, and interested organizations. Participation of beneficiaries is critical to gather property legal and geographical information, and to validate it. An important, legally mandated mechanism for this is the public display of information (exposiciones publicas) that is an integral part of the cadastral and regularization process. 63. In the case of protected areas, the demarcation process starts with consultations with municipalities and other local stakeholders, followed by the selection and hiring of technical services. Actual demarcation is carried out with the participation of local actors associated with the protected area. The educational campaign linked to the demarcation is also a useful mechanism to engage stakeholders and promote environmental sustainability. 64. The overall consultation approach is also informed by the analysis of the consultation process within the framework of the Indigenous Peoples Policy conducted in Nicaragua in May- June 2012. This analysis, carried out by the Bank, included as one of the case studies the experience of PRODEP, and provides key recommendations to ensure that indigenous communities are adequately engaged throughout the project cycle. I. Communication Strategy 65. The Project's Communication Strategy has two main objectives: (i) to support the implementation of project activities, in particular the cadastral surveying and the expansion of conflict mediation services, and (ii) to promote the sustainability of those activities, in particular the maintenance of the cadastre and registry information. In this regard, key audiences include the beneficiaries of the land administration system, and the institutions expected to maintain this system, including the municipalities. Strategy activities, channels, and messaging will be tailored to the information and communication needs of project activities, as well as to the profile of key audiences. In addition, environmental education plans will be developed and implemented by MARENA to support specifically the demarcation and sustainability of protected areas and their buffer zones. 66. The Communication Strategy will also seek to promote three cross-cutting aspects: environmental education, gender equity, and transparency and accountability. While the environmental education plans will target primarily the population living within and around the protected areas, focusing more narrowly on the importance of natural resource and 47 environmental management and sustainable land uses, the Communication Strategy will seek to raise environmental awareness among Project beneficiaries in general. J. Grievance Redress Mechanism 67. The Grievance Redress Mechanism embedded in the Project Communication Strategy will seek to establish two-way communication channels and processes to allow beneficiaries to seek additional information about the Project on the one hand, and present grievances, on the other. It will also allow the PCU-PGR to inform beneficiaries about how it is addressing their inquiries and complaints. A variety of entry points and manners of communication (relevant to the beneficiaries' educational levels) will ensure that the system is accessible to all beneficiaries, regardless of their location or literacy level. The Project's Communication Strategy will inform stakeholders of the existence of this mechanism, its various entry points, and how inquiries and complaints received will be handled by the relevant agencies. 68. To the extent possible, the Grievance Redress Mechanism will make use of, and build upon, the institutional Grievance Redress Mechanism of the Executive Branch, which mandates government agencies and state-owned companies to implement mechanisms for receiving and handling complaints and suggestions from the public. In addition, the Project will seek to engage community organizations at the local level to serve as an additional entry point for questions and complaints, and for keeping beneficiaries informed of the way the PCU-PGR is addressing their grievances. Moreover, the results matrix of the Project includes a specific indicator to measure the effectiveness of this mechanism. K. Gender Analysis and Strategy 69. The Project will support the Government's efforts to promote gender equity in property rights in Nicaragua. Among other things, reflecting the country's gender-sensitive legislation, the Project specifically seeks to benefit women by promoting issuance of titles jointly to husband and wife, as well as to female-headed households. To that end, the Project's Gender Strategy was informed by a Gender Assessment and by an evaluation of the gender strategy of the previous project. The Assessment was carried out to analyze the factors that may enable or limit gender equity in strengthening of property rights. It collected primary data through interviews and focus groups with three groups of key informants across the Project area.33 70. The evaluation of the Gender Strategy of the previous project showed that the strategy facilitated the integration of the gender perspective across the different activities related to the surveying and regularization process. The following findings stand out: (i) application of gender- sensitive practices in the daily tasks of project staff as a result of gender-specific guidelines, tools, and capacity building activities; (ii) commitment of project staff to implement the Gender Strategy; and (iii) perception among Project beneficiaries that PRODEP promoted women's property rights, thanks to communication and awareness campaigns. As a result, community organizations where women are represented are committed to supporting project activities. In 33 Key informants included staff of the co-executing agencies in central and departmental offices; men and women community leaders in Nueva Segovia, Jinotega, Le6n, Chinandega and Esteli; and Indigenous women and representatives of Indigenous groups in Jinotega and Mozonte. 48 addition, the Project facilitated the coordination among municipalities and community-based organizations34 at the local level to promote the active participation of women in Project activities. Importantly, the evaluation also identified some limitations of the implementation of the strategy, notably that the lack of monitoring of the strategy limited the institutionalization of the gender perspective in Project activities. 71. The Gender Assessment also helped identify several community organizations in the six departments included under the proposed Project that seek to advance women's property rights. Representatives of the indigenous communities in Chorotega, for example, although not recognizing the need to participate in the regularization process, have set in motion processes to promote the right of women to inherit land. In addition, representatives of indigenous communities in Jinotega recognize the inequality in the granting of community land rights to women.35 However, some risks still remain to achieving gender equity in land access and tenure security. For example, the unequal access to land markets due to the fact that women are not sufficiently empowered to exercise their rights and make decisions over their properties, even when titles are also issued to them. 72. Based on these findings, the Project's Gender Strategy aims to mainstream gender across Project activities, and to empower women beneficiaries by raising their awareness about their property rights. The strategy is based on four pillars: institutionalization of gender across the Project's co-executing agencies, strengthening of relevant institutional capacities, communication and awareness among communities, and inter-institutional coordination. In addition, the strategy recommends that the Project's M&E system measures progress towards gender-differentiated targets. The Project's Communication Strategy will further support the implementation of the Gender Strategy. V. Monitoring & Evaluation 73. PGR, through the PCU, will be responsible for monitoring and evaluation (M&E). Accordingly, the PCU will (a) collect, consolidate and report on project performance data (including physical and financial progress); and (b) provide periodic information on intermediate project results and progress toward higher level outcomes. Co-executing agencies will provide the necessary inputs to ensure adequate monitoring and evaluation. The PCU will prepare semi- annual progress reports throughout Project implementation. The Credit will finance gathering of baseline data to assess social, environmental and economic impacts of key activities, including gender-differentiated impacts. Project indicators and impacts will be assessed in depth during the Mid-Term Review and final evaluation, both of which will be carried out by independent consultants. These evaluations will be complemented by a social audit of relevant activities, which will most likely be conducted at the time of the Mid-Term Review. The Operational Manual includes the strategy for M&E, covering issues such as the definition of PDO-level and intermediate outcome indicators, instruments to collect information on the indicators, periodicity, and responsible personnel and entities. 34 Among others, these organizations included Gabinetes del Poder Ciudadano and Consejos de Liderazgo Sandinista. 3s Three common types of inequality of land rights identified are: women do not inherit land, they are granted smaller areas than men, and they are sometimes evicted by tenants. 49 74. The Project will also finance the carrying out of a poverty measurement survey, which in addition to measuring poverty trends will include questions on land tenure trends to support data collection and evaluation. It is expected that through this effort, a baseline on the land tenure and property rights situation in the country will be established to measure future progress on the implementation of the national land program. VI. Role of Partners 75. There is no co-financing or parallel financing for the Project. At present, the Bank is the main partner of Nicaragua in land administration modernization. During the previous operation, the Bank worked closely with MCC and NDF. Preparation of the proposed Project, however, has been advanced in consultation with development partners interested in land tenure issues and DRM, and with technical assistance from FAO. A stock-taking exercise of complementary projects and initiatives was also carried out to inform Project design. Accordingly, the Project has linkages with projects financed by other donors that are supporting municipal strengthening, rural development and DRM. These donors include, inter alia, FAO, the International Fund for Agriculture Development, the Inter-American Development Bank, the European Union, Japan, Canada, Switzerland, and Finland. Further coordination will be promoted during Project implementation. 50 Annex 4 Operational Risk Assessment Framework (ORAF) Nicaragua: Second Land Administration Project (P121152) Stakeholder Risk Rating Moderate Description: Risk Management: Gaining support from some of the indigenous Although there are legal limitations that cannot be currently overcome, and political factors hindering further communities in municipalities in the Pacific and progress in this regard, the Government has demonstrated its commitment to recognize the land rights of indigenous Central regions remains challenging. The legal peoples. To ensure adequate consultation, an Indigenous Peoples' Plan (IPP) has been prepared, complemented by a framework in these regions is limited regarding the Communication Strategy and a grievance redress mechanism (see details below). Importantly, following the practice recognition of territorial rights of indigenous peoples. under the previous Project, no cadastral activities will take place in a municipality where an indigenous community As a result, the Project may find it difficult to meet has a land claim or faces land right issues unless such community has agreed to the implementation of these some indigenous communities' expectations, and as a activities or any related subsequent ones under the existing framework. result, they may not agree to provide the broad Resp: Stage: Recurrent: Due Date: Frequency: Status: support required to implement cadastral and Client / Bank Implementation Y regularization activities in certain municipalities. Capacity Rating Moderate Description: Risk Management: PGR's capacity, which is currently adequate, will The UCP has previous experience with Bank policies and practices through the first Land Administration Project. A need to be maintained to ensure a smooth transition PPA was approved by the Bank, ensuring continuity between the two projects. Fiduciary assessments have been into the proposed Project's implementation start and completed to identify the main areas in which the PCU would need to be further strengthened. As part of the to ensure appropriate funds flow and accurate mitigation measures the Bank will require: (i) contracting of individual external audit for the entire implementation financial reporting. Since taking over as Project period of the Project; (ii) continuing the use of SIAFI as Integrated Financial Systems and as part of mitigation Implementing Agency in 2008, PGR has measures; and (iii) an updated Operational Manual reflecting lessons learned from the previous project. demonstrated its commitment to achieving sustainable results. The PCU within the PGR has Resp: Stage: Recurrent. Due Date: Frequency: Status: carried out project activities under the previous Client Preparation / Yerly In Progress project in accordance with the Bank's financial Implementation management and procurement policies. Governance Rating a Moderate Description: Risk Management: Governance in the country is perceived as weak. In general, the Bank has been supporting Nicaragua in improving the public financial management system and 51 Despite progress, the land administration sector promoting accountability. To manage fiduciary risks, the Bank will continue to provide annual integrated training requires further consolidation and strengthening of for project fiduciary staff and will maintain decentralized procurement and FM supervision. Thus far, close accountability and transparency. In addition, supervision, adoption of the electronic procurement management system (SEPA), and periodic fiduciary training for municipalities have not yet fulfilled the potential of government and project staff have generated good results. With respect to the proposed Project, the fiduciary becoming partners in the managing of the national arrangements from the previous operation will be continued, but specific actions will be implemented to promote cadastre and land regularization. oversight, including the carrying out of annual procurement audits, a social audit of relevant activities, most likely at the time of the mid-term review, and close monitoring of the grievance redress mechanism (for which a specific indicator has been included in the results matrix). It is also expected that the existing fiduciary staff in the PCU under PGR, whose capacity is generally considered adequate will be maintained. Resp: Stage: Recurrent: Due Date: Frequency: Status: Client / Bank Implementation 0 Yearly In Progress Risk Management: The Project will contribute to greater voice and accountability by (i) strengthening grievance redress mechanisms in the land administration sector; and (ii) disclosing monitoring and evaluation (M&E) results on the performance of land administration institutions. Resp: Stage: Recurrent: Due Date: Frequency: Status: Client Implementation E0 Quarterly In Progress Risk Management: Decentralization of functions to municipalities has the advantage of consolidating services at the local level. The Project will continue to provide capacity building to municipalities through INIFOM. Resp: Stage: Recurrent: Due Date: Frequency: Status: Client Implementation 0 Quarterly In Progress Design Rating Low Description: Risk Management: Municipalities have relatively weak technical Project design emphasizes the active role of the municipalities. Technical strengthening will be provided to capacity to provide land administration services. municipalities by INIFOM, whose mandate dictates this role and has experience doing this under the previous and Hence, they may not be able to maintain their other projects. cadastral databases updated and integrated with the national cadastre, or use this information effectively to collect property taxes or to carry out land use Re planning. Nevertheless, the Project builds on tested esp: Stage: Recurrent: Due Date: Frequency: Status: methodologies and increased overall capacity at the C national level. 52 Social and Environmental Rating Moderate Description: Risk Management: Overall, the Project is expected to result in positive The PCU will have a Social/Gender Specialist and an Environmental Specialist, complemented with a social and environmental impacts. However, there Communication Specialist, and the Bank will provide safeguard training at the beginning of project implementation. still exists an uneven understanding of safeguards Required safeguard instruments (Environmental Analysis and Management Plan, Indigenous Peoples Plan, Process among co-executing agencies. Framework) were finalized and disclosed before appraisal. A Communication Strategy and a Gender Strategy will complement these instruments. Resp: Stage: Recurrent: Due Date: Frequency: Status: Client / Bank Both E Monthly In Progress Program and Donor Rating Low Description: Risk Management: Although the Government's National Land The Project was prepared in consultation with development partners interested in the sector. A stock-taking exercise Regularization Program requires substantial of projects and initiatives was carried out to inform Project design. Further coordination will be promoted during resources, the World Bank is the main agency implementation. currently supporting the land sector in Nicaragua. Resp: Stage: Recurrent: Due Date: Frequency: Status: Both Both Yearly In Progress Delivery Monitoring and Sustainability Rating Low Description: Risk Management: Rigorous impact evaluations of land administration Capacity of the PCU to conduct impact evaluation has been strengthened by data collection efforts under the projects are scarce. Measurement of efficiency previous project. Baseline data will be collected in the new participating municipalities at the early stages of Project indicators in land administration institution is implementation. Expert advice will be provided during preparation of evaluation methodologies and implementation hindered by the lack of reliable financial records. of surveys. Resp: Stage: Recurrent: Due Date: Frequency: Status: Client Implementation O 30-Dec-2013 Not Yet Due Implementation Risk Rating: Moderate Description: Overall risk for project implementation is rated moderate. Project implementation is likely to encounter a stable policy environment. The legal framework is relatively complete, with only minor consolidation required. PGR has proven to be a diligent implementing agency. Despite this positive outlook, there are still some risks during implementation: (a) the possibility of political factors affecting inter-institutional coordination; (b) indigenous peoples, particularly in the Pacific and Central Regions, do not support Project activities; and (c) smaller municipalities take longer than expected to build their capacity. 53 Annex 5: Implementation Support Plan NICARAGUA: Second Land Administration Project A. Strategy and approach for Implementation Support 1. The strategy for Project Implementation Support (IS) by the Bank reflects the nature of the Project and its risk profile. The strategy aims at making IS to the client more efficient while remaining focused on implementation of the risk mitigation measures identified in the ORAF. The strategy is also an indicative and flexible instrument which will be revisited during Project implementation and as part of the Implementation Status and Results Report (ISR) reviews and adjusted based on emerging project challenges and field conditions. * Overall Project Implementation. Project supervision will support the following critical areas: (a) fiduciary capacity to promote the establishment of adequate internal control systems and overall governance; (b) technical expertise on land administration to support further adoption of good practices and cost-effectiveness; (c) mitigation of potential political interference to maintain strong technical capacity, alignment with Project objectives, and due diligence; (d) free, prior, and informed consultations with indigenous peoples throughout project implementation to ensure that they receive benefits that are culturally compatible; (e) management of environmental and social factors in protected areas and critical natural habitats to contribute to conservation without compromising the wellbeing of the local population; (f) communication campaign to maintain stakeholders informed and engaged; and (g) gender strategy to ensure that Project benefits are gender inclusive. * Fiduciary aspects. The Bank will: (a) provide implementation support and training as necessary; (b) follow up on the Project's financial management system and its adherence to the Operational Manual, including but not limited to accounting, reporting and internal controls; (c) provide guidance on the Bank's Procurement Guidelines to the PCU and co- executing agencies; (b) review procurement documents and provide timely feedback to the PCU; and (c) help monitor procurement progress against the Procurement Plan. * Environmental and Social Aspects. The Bank will emphasize opportunities for social development and environmental sustainability provided by the Project, as well adequate attention to gender equity issues. Within this framework, the Bank will help to monitor the implementation of activities and of safeguard instruments. Bank social and environmental specialists will be available to provide timely guidance to the PGR and co-executing agencies and will participate in field visits on a regular basis to maintain a good and ongoing understanding of the situation on the ground. * Information and Communication. A Communication Strategy will support the implementation of the Project in its different areas of intervention. The strategy will also seek to support implementation of consultative and accountability processes, including a grievance redress mechanism. B. Implementation Support Plan 2. Task team leadership, as well as safeguards and technical aspects will be managed from the Bank's office in Washington, in close collaboration with the Country Office in Managua. Implementation support for Project procurement and financial management will be carried out 54 from the Managua office. International and national consultants will be hired to provide advisory services in specialized land administration issues. Formal supervision and field visits will be carried out semi-annually or as needed to help promote satisfactory Project implementation. 3. The main focus of implementation support is summarized below. Partner Time Focus Skill Needed/Resource Estimate rte Role First 12 Technical and procurement review of the Cadastral survey specialists 30 days NA months bidding documents Procurement Specialist 4 SWs (SWs/year) (days/year) FM supervision FM Specialist 4 SWs Social Development and Gender -Supervision Social specialist 5 SWs and training Gender Specialist 2 SWs Environmental Sustainability and safeguards - Environmental specialist 5 SWs Supervision and Training Project Management and Task Team Leader 8 SWs Communication/Information Operations Analyst 3 SWs Communication Specialist 4 SWs Months 13- Cadastral surveying and land regularization Cadastre survey specialists 30 days NA 48 Municipal decentralization (SWs/year) Specialist 30 days (days/year) Procurement Specialist 3 SWs Environmental Sustainability and Safeguards Environmental specialist 4 SWs Social Development and Safeguards Social Specialist 4 SWs Gender Specialist 2 SWs Financial Management, FM Specialist 4 SWs Disbursement and Procurement Procurement Specialist 4 SWs Project Management and Task Team Leader 8 SWs Communication/Information Operations Analyst 5 SWs Communication Specialist 3 SWs Note: SW - Staff-Week 4. Skill mix required is summarized below. Skills Needed Number of Staff Weeks Number of Trips Comments Environmental specialist 3 SWs annually Field trips as required Social specialist 3 SWs annually Field trips as required Gender specialist 15 days annually Field trips as required Cadastral survey specialist 30 days annually Field trips as required Municipal decentralization 30 days annually Field trips as required specialist Procurement specialist 4 SWs annually Minimum two field trips Country office based Financial management 4 SWs annually Minimum two field trips Country office based specialist Operations Analyst 5 SWs annually Field trips as required Task Team Leader 8 SWs annually Minimum two field trips 55 Annex 6: Sectoral and Institutional Context NICARAGUA: Second Land Administration Project A. Sectoral Context 1. Recognizing the importance of land tenure issues in the development agenda of Nicaragua, the Government and the Bank have built a strong partnership over time. Between 1993 and 2000, the Bank-financed Agricultural Technology and Land Management Project (ATLMP, P007780) supported the Government's initial efforts to modernize the land administration system, including as a priority resolving the tenure situation of parcels redistributed as part of the agrarian reform of the 1980s. The post-conflict, post-land reform environment was characterized by massive confiscation/nationalization of urban and rural property, unresolved tenure issues of the reformed sector, destruction of property records, and land claims and conflicts, all of which were contributing to social instability and hindering economic recovery. These early efforts were hindered by competing land policies attempting simultaneously to protect the rights of land reform beneficiaries and to recognize the rights of former landowners. In turn, it became evident that the country needed to establish a suitable land administration framework before a land program could be implemented countrywide. 2. In this context, the Land Administration Project (PRODEP, P056018), approved by the Bank's Board in June 2002, was designed as a major pilot effort focused on municipalities in Chinandega, Esteli, Madriz, and later on Le6n, characterized by high levels of poverty, land tenure insecurity and land conflicts. Accordingly, PRODEP's Project Development Objectives (PDOs) are: (a) to develop the legal, institutional, technical and participatory framework for the administration of property rights in Nicaragua's territory; and (b) to demonstrate the feasibility of a systematic land rights regularization program. The project has been financed through two credits from IDA: an original Credit of SDR26.2 million (US$32.6 million equivalent) and an Additional Financing Credit of SDR6.3 million (US$10 million equivalent), approved in February 2010.36 After experiencing initial delays, PRODEP has performed well, and Progress towards achievement of PDO and Overall Implementation Progress are rated Satisfactory. Although the Project's closing date is April 30, 2013, almost all Credit funds had been disbursed by August 2012. This satisfactory implementation has been underpinned by strong government commitment and inter-institutional coordination. 3. In addition to helping to cement the Government-Bank partnership for land administration modernization, PRODEP has helped Nicaragua achieve two major outcomes, namely a more solid and clearer land administration framework and a proven methodology for systematic land regularization. Accordingly, major results of PRODEP include: 37 4. Strengthening the legal and institutional framework for land administration and improving inter-institutional coordination. The country's policy and legal framework has been 36 Parallel to IDA financing, the Nordic Development Fund (NDF) provided a Credit of EUR5.5 million (closed in April 2010) supporting institutional strengthening and urban cadastral and regularization activities outside the scope of the Bank-financed activities. 3 This section presents a summary of key preliminary findings from the ongoing final project evaluation, which the Government is currently finalizing with technical assistance from FAO experts. 56 positively transformed, key land agencies' capacity strengthened, and within the Project area, their services have been decentralized. Specifically, PRODEP supported the preparation of the National Land Policy Framework and the approval and implementation of key legislation such as the Law for Collective Land Rights of Indigenous Peoples in the Caribbean (2003), the Cadastral Law (2005), and the Public Registry Law (2009). This latter law facilitated the implementation of the Integrated Cadastre-Registry Information System (SIICAR) in Chinandega. As a result, the current legal and institutional framework is adequate to support systematic land rights regularization as envisioned in the Government's National Land Program. Moreover, PGR has been given a clear mandate to coordinate the land agenda in the country. Over the life of PRODEP, there has been a process of consolidation of institutions and responsibilities, which has improved the institutional framework. Implementation of SIICAR has fostered a closer partnership between the Supreme Court (CSJ), which is responsible for the property registry, and executive branch agencies dealing with cadastre and regularization, including particularly INETER and IP under PGR. 5. Developing, testing and consolidating a systematic land rights regularization program in pilot departments. Cadastral modernization has been substantially completed in municipalities across Chinandega, Esteli, Madriz and Le6n. Implementation of the methodology for systematic land regularization has benefited over 110,000 rural and urban households with land titles, 51 percent of which have been issued jointly to couples or to women; and through cadastral surveying of over 200,000 parcels. Throughout these processes, even if the number of conflicts resolved directly by DIRAC-CSJ seems relatively small (912 out of 2,667 cases filed), alternative conflict mediation has proven to be a vital and effective tool contributing to a culture of peace and negotiation in the country.39 In parallel, indigenous communities in the Caribbean have received collective titles to 15 of their ancestral territories, comprising over 22,000 square kilometers - or close to 19 percent of the national territory - representing unprecedented historical progress in the recognition of indigenous peoples' land rights in Nicaragua and Latin America in general. Environmental management of 14 protected areas has improved thanks to the completion of demarcation activities, community involvement, and promotion of educational campaigns. Long-Term National Land Program 6. PRODEP has also provided the Government with the foundation to launch a long-term national program which the proposed Project will support. Reflecting the Government's vision for the next 15 years, the Program has the overarching goal of continuing to promote land governance. It will do so through the continued development of a comprehensive and enabling policy and institutional framework supporting property rights, while advancing cadastral and regularization processes and improving land administration services. Depending on the resources available, as shown in Table 1 below, by 2027 it is expected that all but one of the departments in the Pacific and Central regions would have up-to-date cadastral information; close to 90 percent of their land parcels will have been surveyed, representing half of the country's total territory; over 220,000 parcels will have been regularized; one third of all municipalities in the 38 These results were corroborated by the institutional, policy and legal analyses carried out as part of the preparation of the proposed Project. These are available in Project files and the Project's website at: http://www.pgr.gob.ni/index.php/areas-de-la- pgr/aa/1 177-estudios-prodep. 39 Many disputes and conflicts related for instance to property boundaries are resolved during the cadastral surveying process. 57 country will have improved capacity for cadastral services, and 7 out of 17 regional property registries in the country will have been modernized through SIICAR expansion. Moreover, 51 percent of the buffer zones of protected areas will be demarcated and georeferenced, and the delimitation and titling program for indigenous communities in the Caribbean will have been completed. As indicated by Table 1, the Project will contribute substantially to this program and the achievement of its results. Table 1 - National Land Administration Program Indicator Countys 2003 - July 2012 August 2012-2017 2018-2027 Totals Departments covered by 15 departments Chinandega, Esteli, + Jinotega, Nueva + Matagalpa, Chontales, systematic land titling and Madriz, Le6n Segovia, Managua, Boaco, Carazo, Masaya y regularizationt (26.7%) Granada (60%) Rio San Juan (93.3%) (cumulative %) Surveyed parcels (cumulative 1,470,000 367,500 (25%) 543,900 (62%) 396,900 (89%) 0%) Number of municipalities 153 35 (23%) 36 (52%) 55 (88%) (cumulative %) Surface area in sq. km. 130,000 7,800 (6%) 19,500 (21%) 40,300 (52%) (cumulative %) Number of regularized land Unknown 186,109 122,400 244,800 parcels Number of demarcated 72 19.50% 26% 51% protected areas (cumulative %) Number of municipalities 153 1 30 45 strengthened and maintaining cadastral information Number of property registries 17 1 (Chinandega) 3(Esteli, Le6n and 7 (Nueva Segovia, modernized and operating Madriz) Jinotega, Granada, Rivas, SIICAR Chontales, Matagalpa and Boaco) Demarcation and Titling of Indigenous Territories Number of titled indigenous 23 territories and 17 (74%) 8 (100%) (100%) territories in the Caribbean 2 complementary Region (cumulative %) areas ' Systematic land titling and regularization services exclude the North Atlantic Autonomous Region and the South Atlantic Autonomous Region in the Caribbean Region. B. Institutional and Legal Framework 7. Nicaragua's Land Administration System has achieved considerable improvements in its legal and institutional framework, which will facilitate implementation of the proposed Project. As corroborated by the legal, policy and institutional analyses which were carried out as part of project preparation, there is an adequate legal ground for the implementation of all general processes (cadastral, titling and registry). In turn, land administration institutions have progressively acquired relatively clear mandates during PRODEP's implementation. 8. A set of laws approved in recent years has laid the basis for a stronger framework for property rights and their administration. Some of the most relevant include the General Cadastre Law ( 2004), which provides clear norms and regulations for the establishment, development, maintenance and updating of the National Cadastre. In terms of regularization and titling, the Executive Power Law (290/1998) concentrates competencies on the subject in the Property 58 Intendancy (IP) under PGR. The General Public Registry Law (2009) sets up the legal and institutional basis for a modem property registry service, and mandates the integration of property and cadastral information in order to ensure the provision of updated and accurate records on property rights. The legal framework also provides for specific procedures when establishing and strengthening property rights in special areas such as country borders (Law 749 of 2010), coastlines (Law 690 of 2009), protected areas (Laws 217 of 1996 and 647 of 2008, respectively), and indigenous peoples' territories in the Caribbean (Law 445 of 2003). 9. With respect to indigenous people land rights, it is important to note that the Constitution of Nicaragua recognizes their collective land rights, and that the Government ratified the International Labor Organization (ILO) Convention 169.40 Nevertheless, for socio-political and historical reasons, there are differences between the Pacific and Central regions, on the one hand, and the Caribbean region, on the other, in the way and the extent to which the recognition of these rights can be addressed. The Caribbean region, which was colonized by the British, comprises almost half of the national territory and is sparsely inhabited by indigenous communities who have preserved their culture and traditional organizations. In the Pacific - which is the economic and demographic core of the country - land rights originate mainly from titulos reales (royal decrees) granted by the Spanish crown. In the Central region, land rights have been acquired through possession during colonization and settlement processes reflecting the advance of the agricultural frontier. Most of the indigenous populations in these regions lost their culture and traditions and became integrated into the prevalent mestizo culture. 10. Reflecting the historical and political circumstances described above, the Caribbean region has been given relative autonomy and Law 445 provides its indigenous communities with a specific legal and institutional framework for the formal recognition of their collective land rights in the form of territories with some level of self-governance (based on traditional organization and decision-making processes.) Although in the Pacific and Central regions recognition of indigenous territories is not yet possible, the Government has generally respected indigenous peoples' land rights, and has carried out cadastral surveying and regularization of their lands only when a concerned community would agree to participate in the process through their traditional decision-making bodies based on prior, free and informed consultation. 11. Table 2 below details the main land agencies / entities in the country and their mandates. Briefly stated, these are: (i) PGR, which is currently the main land agency in the country; (ii) the Property Intendancy (IP), which is ascribed to the PGR and as such, apart from being in charge of all titling processes, serves a coordinating role for land regularization; (iii) the CSJ, which is in charge of the registration process and conflict resolution; (iv) INETER, which holds general competencies over cadastral processes at the national level; (iv) MARENA, which plays a leading role in demarcation of protected areas and collaborates in the recognition of indigenous peoples' land rights; (v) INIFOM, which leads the support to the institutional development of municipal governments, including municipal cadastres; and (vi) the municipalities, which in addition to constituting the institutional context where all the land regularization process takes place, are responsible for developing and managing their local cadastres and advancing territorial planning. 40 Convention No.169 is a legally binding international instrument open to ratification, which deals specifically with the rights of indigenous and tribal peoples. 59 Table 2 - Nicaragua's Institutional Framework for Land Administration Agency Pertinent Laws and Regulations Responsibilities on Land Administration Attorney General's Law 290 of 1998 "Organization, Competencies Leads the land agenda in the country Office (PGR) & Procedures of the Executive Power". Legally represents the Republic of Nicaragua. [Decentralized Law 411 of 2001 "PGR Organic Law" Designs and implements Communication agency under the Decree 19 of 2009 "Regulation of Law 411 of Strategy Presidency] 2001" Property Law 290 of 1998 "Organization, Competencies Coordinates the design and execution of national Intendancy (IP) & Procedures of the Executive Power". policies related to state land. under PGR Decree 56 of 1998 "Creation of IP" Implements agrarian reform. - Decree 71 of 1998 "Regulation of Law 290 of Appraises confiscated property in order to pay 1998" corresponding compensations. - Decree 45 of 2002 "De-concentration of IP" Titling of beneficiaries of agrarian reform. - Decree 130 of 2004 "Reestablishment of IP" Regularizes land to implement agrarian reform. - Decree 25 of 2006 "Reforms & Additions to Coordinates indigenous land demarcation and Decree 71 of 1998" titling. *Decree 33 of 2009 "Attachment of IP to PGR" Supreme Court of Law 968 of 2009 "General Registry Law" Coordinates and manages the National Registry Justice (CSJ) pLaw 260 of 1998 "Judicial Power Organic System. Law" IManages and oversees the functioning of the [Judicial Branch of Decree 71 of 1998 "Regulation of Law 290 of Property Registry, decentralized through Government] 1 998" regional offices. Decree 77 of 2000 "Operative Regulation of Develops and implements Alternative Conflict Alternative Conflict Resolution Direction Resolution Mechanisms through DIRAC (DIRAC)" Nicaraguan Law 825 of 2013 "Reform to Law 311" M Manage the National Cadastre. Institute for * Law 509 of 2004 "General Law on National Design cadastral policies. Territorial Studies Cadastre" Accord procedures to integrate cadastral and (INETER) o Decree 62 of 2005 "Regulation of law 509" registry information. Law 311 of 1999 "INETER Organic Law" Provide technical assistance. - Decree 120 of 1999 "Regulation of Law 311 of Demarcate Environmentally Protected Areas, [Decentralized 1999", Indigenous Communities Land, Coastline Areas entity under the *Law 690 of 2009 "Development of Coastlines", and Country Border Areas. Presidency] *Law 445 of 2002 "Indigenous People's Communal Property Regime" Ministry of the *Decree 1 of 1994 "Creation of MARENA" *Regulate and manage environmentally protected Environment and *Law 217 of 1996 "General Law on the areas. Natural Resources Environment" *Participate in the design of land use regulation. (MARENA) *Law 647 of 2008 "Reforms & Additions" to *Participate in the delimitation of Coastline Law 217 of 1996 Areas. Decree 01 of 2007 "Regulation of [Ministry under Environmentally Protected Areas" Executive Branch] Decree 26 of 2007 "Reforms & Additions" to Decree 01 of 2007 Nicaraguan *Law 347 of 2000 "INIFOM Organic Law" *Provide technical assistance to municipalities in Institute for * Decree 75 of 2000 "Regulation of Law 347 of order to establish municipal cadastres. Municipal 2000" *Provide assistance to raise funds to set up Development Law 509 of 2004 "General Law on National municipal cadastres. (INIFOM) Cadastre" [ Decree 62 of 2005 "Regulation of law 509" - aw69eocent"Dvloratlfizaelned entity under the Presidency] Municipalities Law 40 of 1988 "Municipalities Law" Regulate urban development and land use Law 309 of 1999 "On Regulation, Zoning and Conduct territorial planning [Local Titling of Spontaneous Human Settlements." Manage municipal cadastres governments] Law 509 of 2004 "General Law on National Titling of informal human settlements within Cadastre" their jurisdiction Law 690 of 2009 "Development of Coastlines". Manage coastline areas 60 12. INIDE, although not a land agency per se, will provide leadership under Component 1 in the strengthening of data collection and evaluation, including information related to land tenure and property rights. INIDE is Nicaragua's main statistical agency established as an autonomous entity by Law 612, published in the official Gazette on January 29, 2007.41 Its general mission is to collect, analyze, preserve, disseminate and provide access to statistical information to support policy decisions and facilitate the design and implementation of programs and projects. Remaining Challenges 13. Despite the progress achieved thus far, Nicaragua's land administration system still has room for improvement in order to address the challenges of securing land rights for its citizens more effectively. The proposed Project will help the country continue addressing these challenges, the most relevant of which are: (a) Continued close coordination and collaboration across key land agencies is critical to ensure progress and sustainability of results. (b) The technological platform for the integration of cadastre-registry information (SIICAR) needs to be rendered fully operational and expanded beyond its pilot phase. At the same time, SIICAR needs to respond better to the country's institutional and legal framework. A concerted effort, based on close collaboration between CSJ and INETER, is thus required to improve SIICAR's technological platform and ensure that the system is fully operational. (c) Municipal capacity needs to be strengthened to advance the decentralization of the land administration system, and in particular ensure the accuracy and sustainability of the National Cadastre under INETER. Municipalities should be prominent actors of the land administration system and specifically of the management of cadastral information. Because of the use of different methods nationally and locally, information from the physical cadastre in INETER and from municipal cadastres is not always compatible and needs to be standardized. This represents a great challenge, not only for the validity of the information of the National Cadastre, but also for the final interrelation that is expected between cadastre and registry information. (d) Institutional capacity of the CSJ, responsible for the National Registry System, needs further strengthening, and its regional property registries modernized. In particular, CSJ requires capacity strengthening to respond more efficiently to the high demand resulting from the increasing volume of titles being provided. (e) Mediation of land conflicts requires a special focus. DIRAC within CJS was created specifically to expedite land regularization procedures by solving competing claims over land, and has obtained good results. However, DIRAC currently provides its services more broadly for different types of conflict, which keeps challenging its initial mandate. 41 Law 612, "Reform and Addition to Law 290, Law of Organization, Competency and Procedures of Executive Power." With this law, INIDE replaced the National Institute of Statistics and Census (INEC) and took over its functions. 61 Annex 7: Strategic Approach for Improving Nicaragua's Emergency Response Capacity NICARAGUA: Second Land Administration Project 1. In addition to its general susceptibility to external shocks, Nicaragua is specifically vulnerable to disasters. Its socio-economic development has been historically slowed down by devastating disasters generated in both the Pacific and the Atlantic oceanic environments, or by a complex tectonic system responsible for the country's seismic and volcanic activity. As a result, the country is seriously affected by climate-related phenomena such as droughts, hurricanes, El Nifio-Southern Oscillation and its associated events, including floods and landslides, along with geological events (e.g., earthquakes and volcanic eruptions). 2. Only in the last five years Nicaragua has witnessed the effects of five highly destructive tropical storms and hurricanes, which caused significant social suffering and devastating economic and financial losses. As is common in such situations, basic social infrastructure has been the most harshly affected, specifically water and sewerage systems, school and hospital buildings, housing, the transport system and the agricultural sector. GDP lost or diverted to respond to emergencies and recovery from these disasters illustrates clearly Nicaragua's inherent vulnerability: the 2001 droughts caused a loss of 2.15 percent GDP; the 2007 Hurricane Felix was responsible for 14.4 percent GDP loss; heavy rains of 2007 in the north-western region and the 2011 Tropical Depression 12E, wiped out 3 and 6.8 percent GDP, respectively. While precise GDP losses for the 2009 Hurricane Ida are not available, they were most likely significant. Adjustments to the country program under the 2008-2012 CPS were required to accommodate government requests for assistance after Hurricane Felix (2007), the food and oil price crisis (2008), and the onset in 2009 of the HINI flu epidemic. Such events contributed to large fiscal deficits and debt accumulations requiring Nicaragua to restructure its public debt in 2007 and created challenges during the previous CPS implementation. Severe budget constraints, at the same time, have limited Nicaragua's ability to finance adaptation and mitigation activities. 3. Nonetheless, encouraging progress was evident as early as 2000 when solid legal and institutional arrangements for DRM were established through the National System for Disaster Prevention, Mitigation and Response (SINAPRED). This framework, supported by the Bank and other donors, has facilitated the formulation of the National Policy for Disaster Risk Management (PNGR) together with its comprehensive 2010-2015 National Disaster Risk Management Plan (PNGR). It is notable that PNGR is aligned with the Regional Policy (PCGIR) and Plan for Disaster Risk Reduction (PRRD), as promoted by the Central American Coordination Center for Disaster Prevention (CEPREDENAC) and the Hyogo Framework for Action at the global level. 4. Risk Assessment at the sector level and the formulation of a national financing strategy for risk management are two of the most relevant potential contributions planned by the Bank in the 2013-2017 CPS, along with the continued support to strengthen institutional and coordinating capabilities of SINAPRED and its ability to integrate municipal levels in DRM efforts. In this regard, Nicaragua's access through the Project to emergency response funds, through Component 5 and eventually the IDA Immediate Response Mechanism (IRM) in other projects across the country portfolio, will complement the national disaster risk financing strategy by providing resources to respond immediately to an eligible emergency. 62 A. Objective 5. The proposed Project, as part of its PDOs, will help improve Nicaragua's capacity to respond promptly and effectively to an eligible emergency. This objective will be achieved through the provision of rapidly accessible IDA financial resources in the aftermath of a crisis or emergency, including a Contingency Emergency Response Component (CERC) with an initial allocation of US$8.0 million under the Project (Component 5), and by helping make operational the IRM at the country level. 6. Consistent with the CERC and IRM's goals, financial resources will be made available to Nicaragua after an eligible emergency in a reduced period of time. This approach builds on the flexibility provided by OP 8.00 (Rapid Response to Crises and Emergencies) that allows using simplified procedures and for rapid restructuring of project portfolios to meet crises and emergency needs. Accordingly, implementation arrangements and fiduciary and safeguards requirements, which will be detailed in an Operational Manual, will seek to ensure smooth implementation of post-emergency response based on rapid and effective disbursement of available funds. B. Preparatory Steps 7. The Project's CERC has a defined initial allocation of funds while the IRM will be made operational by including a contingent window with zero allocation under new or restructured projects. If an eligible emergency does occur (as defined in the Operational Manual for the CERC and IRM) during the life of the project, Nicaragua will be able to access funds, depending on financing needs, through this operation and eventually through IRM windows under other projects in the country portfolio. The Project will support the preparation of the Operational Manual and any other required documents, including the Environmental and Social Screening Assessment Framework (ESSAF). 8. Taking into account the objective of this approach, the Government and the Bank will agree on the definition of eligible emergencies, implementation arrangements, in addition to fiduciary and safeguard requirements. These will be reflected in the CERC and IRM operational manuals, which will be endorsed by the Government and the Bank. C. The Project's CERC (Component 5) 9. The Project's CERC will finance public and private sector expenditures on a positive list of goods, both domestic and imported, and/or specific works, goods, services (including audit costs) and emergency operation costs required for Nicaragua's emergency recovery. These expenditures will need to be in accordance with OP 8.00 and will be reviewed and found to be acceptable to the Bank before any disbursement is made. 10. The positive list will be defined in the CERC Operational Manual, but it may include, inter alia: (i) construction materials and industrial machinery; (ii) water, land and air transport equipment, including supplies and spare parts; (iii) school supplies and equipment; (iv) medical supplies and equipment; (v) petroleum and fuel products; and (vi) communications equipment. 63 11. Other eligible expenditures to be defined in the CERC Operational Manual could include: 42 (a) for specific works : activities to mitigate the risk associated with the disaster and minimize suffering of the affected population (including urgent infrastructure works, repairs, rehabilitation, construction; (b) for goods: construction materials and equipment, telecommunication equipment, and, agricultural inputs (excluding pesticides) among others; (c) for services: studies (technical, social, environmental, and feasibility assessments, and others necessary to assess the effects of the disaster and identify priority works), or delivery of related analyses; and (d) for emergency operation costs: incremental expenses (such as additional transport costs, increased electricity bills for the public sector, staff overtime, and rental of light and heavy machinery). CERC Operational Manual 12. An Operational Manual will be prepared describing the actions to be taken by the Government if a crisis or emergency occurs. In Nicaragua's case, the definition and the declaration of emergency procedures as described in the SINAPRED Law (Law 337-2000, especially Article 23 and 24) will be followed. The Manual will also describe the country's Coordinating Authority; the roles and responsibilities of implementing and oversight bodies in the context of emergency response and the Project's CERC; arrangements on procurement, financial management, safeguards, and disbursements; eligible expenditures; and the M&E and reporting arrangements. The Bank's corporate policies on FM, procurement, safeguards and disbursement will apply, with the added flexibility provided under OP 8.00. The Manual will be referred to in the Financing Agreement (FA) and will be reviewed and cleared by Legal, Procurement, FM, CTR, and safeguards staff before it is submitted for Country Director's approval. All periodic updates to the Manual undertaken to reflect evolving country conditions, will be subject to "no objection" of the Bank. Implementation 13. If an eligible emergency occurs, the Government will be able to request from the Bank funds available under the CERC to meet emergency needs. If these needs outstrip the funds available under the CERC, the Government could also request funds from the IRM contingent windows from other projects, and/or a reallocation of funds within the Project to increase the amount of CERC's funds. 14. To access funds under the Project's CERC, based on the process described in the Operational Manual, the relevant Government authority will need to declare the state of emergency, and in turn, the Bank will have to agree and notify the Government. Any required safeguards instruments will need to have been finalized and disclosed. 15. Goods purchased up to 12 months from the date that CERC's implementation is triggered will be eligible for financing, while retroactive financing (as provided under OP 8.00) would also be made available under the Project's CERC.43 42 As is the case for all works, a sequenced approach to safeguards, as per OP 8.00, will be followed. 43 OP/BP 8.00 provides for retroactive financing up to 40 percent of the Credit or Loan amount for payments made by the Government no more than 12 months prior to the expected signing of the legal agreement. Under an IRM Component, the 12- month retroactive period is from the date when the implementation of the contingent component is triggered. 64 D. Immediate Response Mechanism (IRM) 16. The IRM will be made operational at the country-level by: (a) adding to the Project Development Objective (PDO) of new or restructured projects the specific IRM objective of supporting Nicaragua "to improve its capacity to respond promptly and effectively to an eligible emergency;" (b) including an IRM Contingent Component (IRM CC) with zero funds through which an agreed amount of Credit funds from the respective project would be reallocated to finance post-emergency needs; (c) adding to the Project Results Matrix a PDO outcome indicator and an intermediate indicator related to the IRM Component. These will be: (i) at PDO level, "Time taken to disburse funds requested by Government for an eligible emergency (target of four weeks); and (ii) at component level, "IRM established and ready to provide access to financial resources to Nicaragua in case of an eligible emergency;" (d) finalizing the IRM Operational Manual, reflecting agreements on implementation arrangements, fiduciary and safeguard requirements, according to OP 8.00; (e) referring to the IRM Operational Manual in all the financing agreements (FAs) of the Operations including an IRM CC; reviewing and clearing by legal, procurement, FM, CTR, and safeguards staff before submitting for approval by the Country Director; the Manual may be updated periodically to reflect evolving country conditions, with updates being subject to Bank's "no objection;" and (f) identifying the disbursement methods and corresponding supporting documentation requirements for disbursement under the component (if known) through an initial Disbursement Letter for all the projects with an IRM CC (a revised Disbursement Letter will be issued once the arrangements become clearer or the circumstances change). 17. As part of country dialogue and Country Performance Portfolio Reviews, the Government and the Bank will periodically identify the amount of funding that may be reallocated from the list of projects with an IRM window. The list and indicative amounts reflected in the IRM Operational Manual. 18. The IRM for Nicaragua will provide financing for a positive list of goods including public and private expenditures, both domestic and imported and/or for specific works, goods, services (including audit costs) and emergency operation costs, required for emergency response and recovery. These expenditures will be in accordance with OP8.00 and would be appraised, reviewed and found to be acceptable to the Bank before any disbursement is made. The eligible expenditures will be defined in the IRM Operational Manual. 65 Annex 8 - MAP 66 8W 87'W 86'W 85°W --84°W 83'W NKCARAGUA H N D U R AS 15°N SECOND LAND ADMINISTRATION PROJECT AREA INTERVENTION TYPE Limus DEPARTMENTS WHERE CADASTRAL CONFLIKT RESOLUTION, REGULARIZATION AND TITLING OF URBAN AND RURAL SIIRVEYIGHASCONCLIIDED PROPERTIES DEPARTMENTS WITITIO CADASTRAL SURVEYING,CONFLIKT RESOLUTION, REGULARIZATION OF CADASTRAL SURVEYINR URBAN AND RURAL PROPERTIES AND DEMARCATION OF PROTECTED AREAS Bah ' B SOAZ S 5EVE» D EMARCATION AN J TIT.1%NG0 FlN DIG ENOU S TE RRITORIE S 4 o Bonanza PuertoCabezas 14'N -1 LaRosita NU EVA 'ýctlSEGO VIA 0 EL SALVADOR H 0 N D U R A S, AlÓ Sana no MADRIZ AUTONOMADE -2 MBguel T Sdn Sebatia ATZnNTIICO NdORTeEolk ýE STI sonotgatLruzd Caribhbean 13°N4 Potosi Rio Grande 13° N fl4 lSueM1ATAGALPA BlnoSea C,HINANDE,GA t8'W \,,i, i o Ro v.0ui SANNuICAvo Amnanecer Chinaindeg 0 N 9R EGION nMAINMANAGAITBEAAAU N MAD AT LA*n1C SUR Liun PA CIFIC OCSan J\ \SenBc 12°N i0 ANA GUA Lma Bl shown .n this map do not imply, on the part of The World Bank •a Group,.an judgment on the legal status of any terrifory,or any Masachapa endorsemn RALepfanceofsuchboundaries. CA0RAZO R 6uloee 88°W Ni RIO Rl VA S S'(Put AorN NKCARAGUA- JUA_N 0 MAIN CITIES AND TOWNS Rivas San , \ Miguelito DEPARTMENT CAPITALS sPenas Blancas S NATIONAL CAPITAL •San CarlosY ljlj 1~\~ El Castillo de MAIN ROADS 11°N La Concepcion San Juan del Norte 11°1N RAIllRADS 1 20 40 60 Kilometers ..............>DEPARTMENT BOUNDARIES r a 0 10 20 30 40 50OMiles INTERNATIONAL BOUNDARIES 86'W 85°W 84'W 83°W