Advisory Review of the Bank’s Safeguard Risk Management IAD Report No. IBRD FY14-XX June 16, 2014

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Advisory Review of the Bank’s Safeguard Risk Management

JUNE 16, 2014 DRAFT

CONFIDENTIAL

Introduction 2 Objective To assess safeguard risk management practices with a focus on: 

Safeguard risks identification and response;



Monitoring of the implementation of mitigation measures, and tracking of safeguard risks throughout the project lifecycle;



Accountability arrangements and management’s oversight of safeguard risk management;



The resources for safeguard risk management including the allocation of technical experts; and



The standards set for ENV/SD safeguard staff’s technical qualifications, and ENV/SD safeguard specialists’ training.

Scope 

Active IPF projects as of February 28, 2014.



Projects’ compliance with safeguard policies was not covered.

June 16, 2014

Introduction (Continued)

3 Approach to the Review 

Portfolio-level data analysis.



Survey of ENV/SD specialists (80 environmental specialists and 58 social development specialists responded - response rate was 40%).



Detailed analysis of a sample of 21 projects (6 regions, 21 countries, 21 TTLs, 13 sectors).



Interviews with key staff including; regional safeguard advisors, environment sector managers, social development sector managers, lead ENV/SD specialists, industry sector managers, and OPSOR managers.



Review of relevant policies, procedures, and guidance documents.

ENV/SD Staff Surveyed by Sector

Social Sector 42% Environmen tal Sector 58%

Sample Project Profile Regions

# Proj.

AFR

8

EAP

3

ECA

1

LCR MNA

Proj. Cat(*)

# Proj.

A

6

B

12

4

C

2

3

FI

1

SAR

2

Total

Total

21

21

(*) Category A: The project is likely to have significant adverse environmental impacts; Category B: The project is likely to have potential adverse environmental impacts; Category C: The project is likely to have minimal or no adverse environmental impacts; and Category FI: The project involves investment of Bank funds through a financial intermediary (FI) in subprojects that may result in adverse impacts.

June 16, 2014

Introduction (Continued)

Key Facts 







2,355 Investment Project Financing (IPF) projects were active as of February 2014. The distribution of the safeguard categories of the IPF active portfolio is: Category A (12%); Category B (56%); Category C (29%); and Category FI (3%). (For regional details see Annex I – Regional Project Portfolio by Safeguard Category) 1,115 of the active IPF projects are rated for social and environmental (safeguard) risk through ORAF. The safeguard risk rating distribution of the 1,115 projects shows that 87% of the projects are rated Moderate and Low in terms of safeguard risk.

June 16, 2014

4 Portfolio distribution of safeguard categories

FI 3% C 29%

A 12%

B 56%

Safeguard Category A

269

B

1327

C

687

FI

72

Total

Portfolio distribution of safeguard risk ratings High 3%

Low 45% Moderate 42%

Safeguard Risk Rating High

Subst. 10%

# Projects

2355

# Projects 38

Substantial

109

Moderate

466

Low

502

Total

1115

Introduction (Continued)

5 

The distribution of the 172 ENV specialists and 200 SD specialists, who were identified by the ENV and SD Sectors.

ENV Specialists by Grade GE 1%

STC 31%

ETC 12%

GF 19%

SD specialists by Grade

GH 15% GF 37%

GG 32%

GG 48%

GH 5% STC/ETC data was not available for SD Sector.

June 16, 2014

Review Results 6 Contents 

Key Takeaways



Risk Management



Monitoring of Mitigation Measures



Checks and Balances & Accountability Arrangements



Assignment of Technical Expertise



Skills Development



Funding for Safeguards Risk Management



Institutional Leadership for Safeguards Risk Management



Annexes

June 16, 2014

Key Takeaways 7 The review identified a number of deficiencies in the Bank’s practices for safeguard risk management. Most of these deficiencies are symptoms of broader systemic issues, which are: uncoordinated institutional instructions, fragmented assignment of responsibilities, the lack of integration between budgeting decisions, activity planning, and staffing, and most importantly, the absence of an institutional authority that could coordinate conflicting interests and make top-down decisions. These themes are embedded in the following deficiencies. 1.

Safeguard risk management has been primarily driven by safeguard Categories, which are static by definition. Although "safeguard risk" is assessed separately through ORAF, risk ratings have not been used for practical purposes.

4.

The absence of an institutional information platform that retains risk assessment results and mitigation measures limits the Bank’s ability to track implementation of mitigation measures and monitor changes in risks.

2.

Over a half of the projects have not been rated for safeguard risk although this is mandatory. Only 47% of projects were rated through ORAF.

5.

3.

Mitigation measures to address safeguard risks have not been consistently tracked and documented during project implementation.

ENV and SD Specialists' work in project implementation has not been monitored systematically. The lack of an institutional information platform for safeguard risk management hinders management oversight at the portfolio level.

June 16, 2014

Key Takeaways (Continued)

8 6.

ENV/SD Specialists do not have sufficient independence to challenge TTLs on safeguards performance during project implementation. Although the Specialists are instructed to escalate disagreements to the RSA and/or their Manager, this does not always happen.

9.

ENV/SD specialists have little incentive to undertake safeguard risk management work. Most of the specialists also do other ENV and SD work, including leading projects as TTL or upstream analytical work for projects. Reward is perceived to be low for safeguard work.

7.

Neither the ENV/SD Managers nor the RSAs are responsible for safeguard risk management during project implementation. At present, ENV/SD Managers’ responsibility for safeguard risk management is limited to allocating ENV&SD specialists to projects while the RSAs’ technical review and clearance stop at project preparation.

10.

High grade specialists are not necessarily assigned to high risk projects. Some high and substantial risk projects are allocated to F level specialists.

11.

Due to the lack of institutional information systems supporting safeguard work, data on the allocation of specialists to projects is not complete. According to the information provided by Regions, over half of the active projects do not have assigned specialists. Projects without assigned specialists include high and substantial safeguard risk projects and Category A and B projects.

8.

Accountability for safeguard work between TTLs and ENV/SD specialists is not clear.

June 16, 2014

Key Takeaways (Continued) 9 12.

13.

Accreditation for safeguard risk management is still at an early stage of development. At present, ENV and SD sectors have different approaches for preparing staff for safeguard risk management. In SD, safeguard risk management is a component of a comprehensive SD training program for overall technical competency, while ENV has a dedicated accreditation program for safeguard risk management. In both cases, strategies for using accreditation for skills development and project assignment are still being developed. While a significant part of safeguard work is carried out by consultants, no systematic arrangements are in place to confirm the technical competency of STCs.

June 16, 2014

14.

Management does not plan resource allocation for safeguard risk management using a holistic topdown approach. Safeguard budgets are held by multiple functions without coordination. There is also variation across Regions in regard to the flow of funds to safeguard activities.

15.

Fragmented organizational and budgetary arrangements have led to diffused accountability for safeguards risk management. Responsibilities for safeguard activities are spread among many units including SD and ENV sectors, OPSOR, RSAs, and industry sector managers without institutional leadership.

Risk Management 10

Analysis 1.

The safeguard risk management process has been primarily driven by safeguard categories, which are static by definition. Although "safeguard risk" is assessed separately through ORAF, risk ratings have not been used for practical purposes.  As safeguard categories are not expected to change over the life of projects, categories are not suitable

for dynamic risk management. Instead, the safeguard risk rating should be used.  Historically, safeguard problems have occurred more frequently in Category B projects than Category A

projects.  Although risk and category by definition are different, staff perceive them as interchangeable. Category

is determined only by the potential impact of the project while risk takes into account the adequacy of skills, experience and borrower policies. (see Annex VI: Definitions of Safeguard Categories, Risk and Risk Flags).  The term “risk” is loosely used. In addition to ORAF, risks are also identified through “risk flags”. 2.

Over half of the projects are not rated for safeguard risk although such rating is mandatory. While all 2,355 active IPF projects are assigned to safeguard categories, only 47% were rated for safeguard risks through ORAF.

June 16, 2014

Risk Management (Continued)

11

Data Points 

65% of Category A projects are moderate or low risk projects.



3% of Category C projects are substantial risk projects.





For regional details see Annex II – Breakdown of Regional Portfolio by ORAF Safeguard Risks.

A majority of high and substantial safeguard risk projects are Category B (55%). Distribution of High and Substantial safeguard risk projects

F 3% C 5%

Relationship between Categories and Safeguard Risks Low

16%

Moderate

2% 10%

Substantial 0% 3% 20%

20%

High B 55%

3% 8% 35%

48%

For a total of 147 projects 77%

52%

55% 41% 13% A

June 16, 2014

A 37%

B

C

F

For a total of 1,115 projects

Risk Management (Continued)

12

Data Points •

•

•

•

Distribution of Project Safeguard Categories Among Negative Performance projects

58% of projects with a negative safeguards compliance ratings (ISR rating) are category B projects. 58% of projects with safeguard risk-flags are category B projects. 52% of the Inspection Panel cases for the last 10 years were Category B projects. About half of the safeguard “risk flags” are low or moderate. Safeguard Risk Flag Projects by Safeguard Risk Ratings

L 18%

Safeguard Risk Flag Projects by Safeguard Categories F C 3% 3%

H 12%

ISR Rating/Cat.

A

B

C

FI

Total

Highly Unsat.

0.00%

0.00%

0.00%

0.27%

0%

Moderately Unsat.

26.43%

50.68%

3.27%

2.18%

83%

Unsatisfactory

8.17%

7.63%

0.00%

1.36%

17%

35%

58%

3%

4%

100%

Total

Source: Business Intelligence, Project Portal as end of February 2014

IP Cases by Project Category F 7%

A 36%

A 41%

B 52%

M 29%

S 41%

B 58%

Source: Business Intelligence, Project Portal as end of February 2014

June 16, 2014

Requests recorded between 2003 and 2013, for which IP conducted an approved investigation. Source: Inspection Panel Website.

Risk Management (Continued)

13 From the Survey – What the ENV/SD Specialists Said Survey Question: In your opinion, what factors can promote better environmental or social safeguards risk assessment during project preparation? “Working closely with the TTL inclusive of field visits and attending all relevant meetings with clients. Regretfully, this is not always the case as we are often asked to provide the input for social section in the PAD without even attending a single meeting with the client. This should not be acceptable but we do it as the TTLs are often pressed by time and the need to deliver.” “Develop service standards for safeguards documents review - I can't tell you the number of times I get sent a 70 page RPF from a TTL and 'told' to review today because they can't hold up their processing for safeguards.” “Main factor is to bring the specialists early on, at the very beginning of project preparation” “Early involvement of a well-qualified, competent safeguards specialist; continuous dialogue between design team and safeguard specialists.” “Systematic funding for initial assessment to build capacity in client. (…) Use country system as much as possible (not to redo the same things again and again for each project).” “We are under-staffed. Environmental risk assessment requires plenty of field missions, conversations, VCs. I would personally need more time to devote to projects, which I do not have because of competing demands.” “Sufficient time and safeguard experts plus movement from the prevailing culture of risk aversion in the Bank to that of risk acceptance and provision of adequate support to frontline staff when these risks materialize.” “E&S assessment should be differentiated by sector, as EIAs for thermal power plants are totally different than for roads and forestry projects etc. Now everything is clustered under one group while required expertise is very different from sector to sector. There should be much more focus on developing easily accessible examples of ToRs and EIAs for different sectors and creating a peer review network for E&S safeguards by sector.” “Independence of safeguards from sectors in terms of budget, staff OPE and promotion. Now it is actually the policed (TTL) to decide the OPE and career development of the police (safeguard specialist). How could safeguard specialists really perform their function of ensuring projects/TTLs comply with the Bank OPs, especially when facing delivery pressure?”

June 16, 2014

Risk Management (Continued)

14

Advice 



Redefine “safeguard risks” and align the process, level of effort, and staffing with identified risks. o

Clarify safeguard risk attributes

o

Clarify how to aggregate social and environmental risks into one “safeguard risk”

Review the risk ratings of the existing portfolio against redefined safeguard risks.

June 16, 2014

Monitoring of Mitigation Measures 15

Analysis 3.

The implementation of mitigation measures has not been consistently tracked and documented during project implementation. 

The ENV/SD portfolio monitoring is stronger because the ENV/SD managers are the project managers and they directly supervise the Specialists. However, the same level of oversight is not in place for non ENV/SD projects.



The client’s safeguard compliance rating was missing from 53% of ISRs at the portfolio level.



48% of survey participants responded that TTLs do not always ask for ENV/SD specialists to be part of supervision missions.



23% of survey participants said that they were not informed of the missions in a timely manner.



54% of survey participants reported that missions happen for their designated projects without their knowledge.



56% of survey participants responded that they have a heavy workload and are not able to visit their projects to assess safeguard risks and progress in the implementation of action plans.

June 16, 2014

ENV/SD Specialists Workload

# Projects # ENV per Specialist Specialists 1-5 67 6-10 29 11-15 29 16-20 19 21-25 8 26-30 5 31+ 2 Total 159 Source: Consolidated regional allocations of staff to projects

# SD Specialists 57 33 28 11 4 4 2 139

Monitoring of Mitigation Measures (Continued)

From the Survey: What the ENV/SD Specialists Said:

Survey

Question:

What are the obstacles/difficulties you encounter during project implementation with regards to safeguards supervision? Responses to “Other” “Overall lack of emphasis on supervision part of WB culture.”

16 Obstacles/difficulties encountered by END/SD specialists during project implementation Weak client capacity

87%

Poor record keeping by borrower

73%

Too many projects to supervise

61%

“Treating safeguards as a "check in the box" rather than an integral part of project design and delivery by both client and task team.” “Not being able to do enough visiting missions to get direct feedback from stakeholders.” “Weak client commitment and appreciation of E&S aspects, and in most cases taken conditionally.” “Lack of TTL support.” “Lack of acceptance of safeguards by TTLs.” “Some SM complained safeguard travel is too much and asked us to reduce. (…) During project implementation, TTLs pay much more attention to fiduciary and schedule missions according to their convenience. As a result, safeguard specialists are either unable to go or have to go by themselves ….” “Completely uninterested TTLs who do not give safeguards due attention.”

June 16, 2014

Limited/no budget

50%

Lack of a comprehensive risk assessment tool

29%

Lack of management support No emphasis on safeguards during supervision Other (security, consultants hiring, etc.)

26%

12%

5%

Monitoring of Mitigation Measures (Continued)

17

Analysis 4.

The absence of an institutional information platform that retains risk assessment results and mitigation measures limits the Bank’s ability to track implementation of mitigation measures and monitor changes in risks. 



Such a platform is especially important for “framework” projects which are approved by the Board before mitigation measures are prepared. A system will help management to track and ensure that the mitigation measures are prepared during project implementation. No portfolio level information is available due to the lack of a system, but the LCR Region has developed its own information system to track safeguards compliance. The system tracks projects’ safeguard data including the technical specialists for the project, supervision effort, supervision issues, pending actions, and safeguards compliance records. The system also enables the staff to create and update their own safeguard work.

June 16, 2014

Where ENV/SD Specialists Record Their Safeguards Work During Project Implementation Aide Memoire

93%

Implementation Status and Results Report (ISR)

53%

Keep my own record

46%

Environmental Performance Tracking System (EPTS)

12%

Separate report to TTL

5%

WB Docs

3%

Back to office report (BTOR)

1%

Source: ENV&SD Specialists Survey Conducted by IAD

Monitoring of Mitigation Measures (Continued)

18 From the Survey – What the ENV/SD Specialists Said

Survey Question: How would you improve the ISR for E&S safeguards supervision results reporting? “Like FMIS, if my assessment/rating cannot be changed, then ISR will have a value.” “E & S safeguards should be part of the first page summary that currently includes Procurement, FM, PDO.” “Provide access rights to the E&S specialist with a record of who makes changes to the inputs provided.” “The E&S rating should be supported with a clear description. A flag should be included in cases where a mission does not include an E and S specialist” “Having separate sections for social and environment.” “Mandatory to have safeguards staff on supervision mission - managers should not be able to clear SMO without safeguards staff as part of the mission.” “By providing an annex on E&S aspects in the mission Aide memoire.” “There should be a provision for direct inputs from E&S specialists into ISR. RSA role should include to track and follow-up ISR flags . There should be follow-up from management on safeguard flags.” “Ensure the safeguards specialist is consulted during ISR preparation or at least signs offs on it. Currently, we are not consulted at all..” “By including indicators of safeguards performance in the project's results framework for all Category A, B and FI projects.”

June 16, 2014

ENV/SD Specialists Opinion on Adequacy of ISR for Documentation of Safeguard Supervision

Do not document supervision work in ISR 29%

ISR is adequate for documentation 42%

ISR is not adequate for documentation 29%

Source: ENV&SD Specialists Survey Conducted by IAD

Monitoring of Mitigation Measures (Continued)

19 From the Survey – What the ENV/SD Specialists Said

Survey Question: In your opinion what do you think can be improved in safeguards supervision? “To provide separate budget to the safeguard sector to conduct safeguard mission independent to project budget.” “I think it is not so much supervision but how we approach safeguards - it should not be approached as a policing but as improving project design and effectiveness.” “Support from TTL to follow up the monitoring report on implementation of EMP from clients prior to supervision mission will be very helpful.” “More attention to monitor implementation of mitigation measures, training of borrower.” “The timing of missions needs to be properly coordinated. The TTL needs to be able to provide sufficient airtime for discussing E&S issues with clients during mission meetings.” “A cultural change within the Bank giving more systematic attention to supervision and implementation.” “Better awareness on the issues in the Task Team.” “The Bank’s safeguards must be reformed to include risk assessment.” “Safeguard specialists with the right background, right budget and timeframe allocated to supervision, right workload for safeguard specialists, etc. I do think we need safeguard managers who can assign projects, budgets, etc. to a team that work ONLY on safeguards.” “Provide an independent budget for safeguards supervision as it the case for Procurement and Financial management. The Safeguard specialist should avoid being dependent on the TTL.” “Having a comprehensive tool. Having worldwide clear and agreed standards, guidelines and procedures. I trust we will have those inputs from the Safeguard Accreditation Program and the Safeguard Reform Process.”

June 16, 2014

Monitoring of Mitigation Measures (Continued)

20 Advice 

Provide an institutional safeguard system which can be used for recording safeguard risk assessment and management information including the: o

Tracking and documentation of the borrower’s implementation of mitigation measures

o

Monitoring of changes in safeguard risks.

o

Assignment of ENV/SD technical staff

June 16, 2014

Checks and Balances & Accountability Arrangements 21

Analysis 5.

ENV and SD Specialists' work in project implementation has not been monitored systematically. The lack of an institutional information platform for safeguard risk management hinders management oversight at the portfolio level. •

•

6.

ORAF Safeguard Risks Information in Sample ISRs

The majority of ISR ORAF safeguard risk information is either missing or not updated. 28% of the ISRs have no safeguard risk rating and safeguard risk information was not updated for 49% of the ISRs. Also, portfolio-wide, 53% of ISRs were not rated for safeguards compliance.

ENV/SD Specialists do not have sufficient independence to challenge TTLs on safeguards performance during project implementation. Although the Specialists are instructed to escalate disagreements to the RSA and/or their Manager, this does not always happen. •

June 16, 2014

21% of survey participants reported that they are not able to communicate identified safeguard issues to the right levels of management in a candid manner.

Qualitative Comments

ORAF Safeguard Rating Has rating (# ISRs)

65

No rating (# ISRs)

25

Total

90

%

Updated

22

24%

Not Updated

43

48%

Updated

24

27%

Not Updated

1

1%

90

100%

Source: IAD’s Review of Sample ISRs

From the Survey: What the ENV/SD Specialists Said: Survey Question: Are you able to communicate identified E&S issues of a project to the right levels of management in a candid manner? •

“Safeguards are irrelevant for managers.”

•

“Management views candid communication as creating problems rather than solving them.”

•

“RSA bombards team with bureaucracy.”

•

“In Cat As communication upwards is good, but is not the same for Cat Bs, where communicating too much is not encouraged.”

•

“Resistance from TTL; sometimes change in project design just to avoid improvements through safeguards window.”

Checks and Balances & Accountability Arrangements (Continued)

22

Analysis 7.

Neither the ENV/SD Managers nor the RSAs are responsible for safeguard risk management during project implementation. At present, ENV/SD Managers’ responsibility for safeguard risk management is limited to allocating ENV&SD specialists to projects while the RSAs’ technical review and clearance stops at project preparation. •

8.

Although many projects are transferred from RSAs to Sector Managers during project preparation, there is no institutional data to identify those projects.

Accountability for safeguard work between TTLs and ENV/SD specialists is not clear. •

56% of survey participants reported that the TTL does not always request information on safeguard performance to include in the ISR or Aide Memoire.

•

In the survey, 36.5% of survey participants responded that their name was used in the Integrated Safeguards Data Sheet (ISDS) without their knowledge.

•

See further details on accountability analysis in Annex IV- Safeguard Risk Management Accountability Analysis

June 16, 2014

Checks and Balances & Accountability Arrangements (Continued)

23 Analysis 9.

ENV/SD specialists have little incentive to undertake safeguard risk management work. Most of the specialists also do other ENV and SD work including leading projects as TTL or upstream analytical work for projects. Reward is perceived to be low for safeguard work. •

77% of survey participants think that management does not value their safeguards work.

•

81% of the specialists surveyed indicated that they do both safeguards and other ENV&SD work. Specialists may give greater priority to other tasks than safeguards work. ENV/SD Specialists’ Work Responsibilities Other ENV/SD work only 6%

Safeguards only 13%

Safeguards & other E&S work 81%

Source: E&S Specialists Survey conducted by IAD

June 16, 2014

Checks and Balances & Accountability Arrangements (Continued)

24 From the Survey – What the ENV/SD Specialists Said

Survey Question: What obstacles do you foresee in pursuing a career in E&S safeguards? “Performance evaluations are recognized for only sector work and not managing difficult safeguard situations in projects. Grade change for safeguard specialist is given only for doing an ESW or sector work. This actually forces, safeguard specialists to move away from safeguards work for their career in the Bank.” “Also, our evaluation depends on the opinions of TTLs. Sometimes TTLs are not happy with us if there is an issue that costs them time or money. There is therefore an incentive to please the TTL whereas specialists need to focus on ensuring the project is at its best. “ “No attention by Sector Managers or Directors. Everyone thinks safeguards work can be done by any one.” “Not my area of expertise, I only do safeguards because my manager makes me.” “Safeguard work is not given enough recognition and it is not readily transferable outside the Bank system.” “Limited recognition as a relevant contributor, no Bank-supported career path.” “Lack of clear career development opportunities lack of recognition of the function.” “Lack of promotion to GH; and that most safeguards specialists ends at GG.” “Unclear career path and options to grow.” “The Bank does not offer an E&S safeguards career. Is there a E&S VP? or an E&S Department? or an E&S unit?” “The growth career is not encouraging. you feel sometime like shifting to other sectors in spite of recognition that E&S is beyond safeguards and adds value to the project. This recognition from corporate perspective is missing.”

June 16, 2014

Checks and Balances & Accountability Arrangements (Continued)

25 Advice 

Review the existing accountability arrangements for safeguard risk management throughout the project cycle and redefine them so that (1) the quality of safeguards work done by ENV/SD specialists is monitored, and (2) working arrangements between TTLs and ENV/SD specialists are clear.

June 16, 2014

Assignment of Technical Expertise Analysis 10.

26

High grade specialists are not necessarily assigned to high risk projects. Some high and substantial risk projects are allocated to F level specialists. Some high risk projects do not have assigned specialists. 

75% of projects assigned to Lead Environment Specialists are of low or moderate risk while 13% of projects assigned to Environment Specialists (GF) are of high or substantial risk.



82% of projects assigned to Lead Social Specialists are of low or moderate risk while 13% of projects assigned to Social Specialists are of high or substantial risk.



Only a small percentage of high and substantial safeguard risk projects (1% for ENV and 4% for SD) are allocated to Lead Specialists.



ENV/SD managers recognize that grade level and safeguards competency are not always aligned.



In some Regions, Lead Specialists work as Coordinators and do little work on safeguards.



The current allocation of staff takes into consideration economies of scale such that the same Technical Specialist works on all projects for a country, for example, regardless of the risk level of those projects.



60% of survey participants said they provide safeguards assistance to projects for which they are not the designated safeguard technical specialists.

June 16, 2014

Assignment of Technical Expertise (Continued)

27

Data points ENV/SD specialists Allocation by ORAF Safeguard Risk Rating # ENV Specialists Spec.

ORAF Safeguard Rating H

S

M

L

Total

ETCs and STCs

60

2%

15% 41% 42%

100%

Lead Specialists

9

0%

25% 75% 0%

100%

Senior Specialists

56

4%

11% 50% 35%

100%

Specialists

26

3%

10% 47% 40%

100%

Others (Op. Officers, Analysts, etc.)

8

0%

15% 54% 31%

100%

n/a

4%

7% 36% 53%

100%

No Staff Allocated

ORAF Safeguard Rating

# SD Specialists Spec.

H

ETCs and STCs

35

0% 17% 36% 47%

100%

S

M

L

Total

Lead Specialists

5

12% 6%

59% 23%

100%

Senior Specialists

57

6% 12% 49% 33%

100%

Specialists

35

2% 11% 48% 39%

100%

7

8% 23% 31% 38%

100%

2%

100%

Others (Op. Officers, Analysts, etc.) No Staff Allocated

n/a

8%

38% 52%

Source: Consolidated regional allocations of staff to projects

June 16, 2014

Allocation of projects rated High and Substantial safeguard risk to ENV specialists. Others (Op. officers, analysts, etc), 2%

Lead Specialists, 1%

ETCs/STCs, 33%

Senior Specialists, 43%

Specialists, 21% Allocation of projects rated High and Substantial safeguard risk to SD specialists. Others (Op. officers, analysts, etc), 5% ETCs/STCs, 15%

Specialists, 27%

Lead Specialists, 4%

Senior Specialists, 50%

Assignment of Technical Expertise (Continued)

28

Others (Op. Officers, Analysts, etc.) 3% Specialists 26%

ENV Specialists Allocation to projects by Safeguard Category Safeguard Category

# ENV Specialists Spec.

A

B

C

F

Total

ETCs and STCs 60

11%

83%

5%

1%

100%

9

75%

25%

0%

0%

100%

Senior Specialists 56

22%

67%

5%

6%

100%

Specialists 26

21%

66%

4%

9%

100%

23%

69%

0%

8%

100%

7%

51%

40%

2%

100%

Lead Specialists

Others (Op. Officers, Analysts, etc.)

8

No Staff Allocated n/a

Allocation of Category A Projects to ENV specialists

ETCs and STCs 17%

Senior Specialists 51%

Allocation of Category B projects to ENV specialists Others (Op. Officers, Analysts, etc.) 2%

Specialists 22%

Senior Specialists 42% Source: Consolidated regional allocations of staff to projects

June 16, 2014

Lead Specialists 3%

ETCs and STCs 34%

Lead Specialists 0%

Assignment of Technical Expertise (Continued) 29

B

C

F

Total

11%

69%

14%

6%

100%

5

23%

59%

12%

6%

100%

Senior Specialists 57

29%

61%

6%

4%

100%

Specialists 35

17%

73%

5%

5%

100%

0%

77%

8%

15%

100%

7%

58%

33%

2%

100%

Lead Specialists

Others (Op. Officers, Analysts, etc.)

7

No Staff Allocated n/a

Specialists 27%

Safeguard Category A

ETCs and STCs 35

ETCs and STCs 7%

Others (Op. Officers, Analysts, etc.) 0%

SD Specialists Allocation to Projects by Safeguard Category

# SD Specialists Spec.

Allocation of Category A projects to SD specialists

Senior Specialists 62%

Allocation of Category B projects to SD specialists Others (Op. Officers, Analysts, etc.) 3%

ETCs and STCs 15% Specialists 38% Senior Specialists 41%

Source: Consolidated regional allocations of staff to projects

June 16, 2014

Lead Specialists 4%

Lead Specialists 3%

Assignment of Technical Expertise (Continued) 30 Analysis 11.

Due to the lack of institutional information systems supporting safeguard work, data on the allocation of specialists to projects is not complete. According to the information provided by Regions, over a half of active projects do not have assigned specialists. Projects without specialists include high and substantial safeguard risk projects and Category A and B projects. 

Of the 2,355 active projects in the Bank Project Portal, 1,206 are not included in the ENV/SD specialists’ allocation sheets received from the Regions. Projects with no Specialists by Regions

June 16, 2014

AFR EAP ECA LCR MNA

590 160 137 135 28

SAR

Projects with no Specialists by Project Category A

72

B

548

119

C

560

Other

37

F

26

Total

1,206

Total

1,206

Projects with no Specialists by Sector Agriculture and Rural Development Energy and Mining Environment Health, Nutrition and Population Social Protection Education Public Sector Governance Financial and Private Sector Development Urban Development Social Development Transport Water Economic Policy Global Information/Communications Technology Financial Management Poverty Reduction Competitive Industries Practice Financial Inclusion Practice Procurement Investment Climate Practice Financial Systems Practice Capital Markets Practice Gender and Development Innovation, Tech. & Entrepreneurship Practice Operational Services Total

173 135 119 106 98 91 83 81 58 56 43 35 33 29 24 15 5 5 4 4 3 2 2 1 1 1,206

Assignment of Technical Expertise (Continued) 31 Advice 

Define parameters for the allocation of technical specialists to projects such that high risk projects are handled/overseen by highly skilled safeguard specialists.



Review the entire project portfolio to identify projects without technical specialists and assign specialists if necessary.

June 16, 2014

Skills Development Analysis 12.

32

Accreditation for safeguard risk management is still at an early stage of development. At present, ENV and SD have different approaches for preparing staff for safeguard risk management. In SD, safeguard risk management is a component of a comprehensive SD training program for overall technical competency, while ENV has a dedicated accreditation program for safeguard risk management. In both cases, strategies for using accreditation for skills development and project assignment are still being developed. 



Both the environment and social sectors have accreditation programs. The SD program started in 2011 while the ENV program started in 2012. Additional steps to the social accreditation program have recently been proposed, and therefore, no one has yet been accredited although most SD specialists have started the program. For the environmental accreditation, 38 ENV specialists have been accredited and 22 ENV specialists are awaiting for the Sector Board approval of their accreditation. While the environmental accreditation program focuses on safeguard skills, the social accreditation program covers not only safeguard skills but broader social development technical skills.

ENV/SD Accreditation Programs Accreditation Social Development

Environmental

Focus

Notes

4 competencies: social safeguards, analytical tools for social development, participation and consultation, and social development implications on policy, institutions and operations.

•

120 SD Specialists have gone through the Social training and accreditation Program.

•

63% of the SD Specialists surveyed indicated that they have participated in the social development accreditation program.

Safeguards only

•

As at April 30th, 213 staff have gone through the faceto-face training. Of these, two batches (a total of 38) specialists have been accredited. A third batch of 22 staff is awaiting Sector Board approval of their accreditation.

•

96% of ENV specialists surveyed indicated that they have participated in the environmental accreditation program.

For further details of the accreditation programs, see Annex V – ENV/SD Accreditation Programs.

June 16, 2014

Skills Development (Continued)

33 

At present, environment and social sector managers nominate specialists for accreditation in consultation with RSAs. The criteria for nomination is not clear.



Between the two sectors, there is a difference as to who awards the accreditation. While the environment accreditation is given by the Environment Sector Board, the social development accreditation is proposed to be given by Sector Leads and RSAs in the Region. The accreditation authority should be consistent between the sectors.



Both programs offer one common body of knowledge to all specialists. They are not designed to develop highly specialized skills for different types of industries and safeguard issues.



In addition to the accreditation programs, RSAs, Regional ENV/SD sectors, and OPCS also develop and offer policy and technical training. Different training offerings should be integrated into one skill development strategy. Budgets for developing and conducting training are scattered across units and not managed in an integral way.



TTLs are subject to mandatory safeguard training as part of the Operational Core Curriculum.

June 16, 2014

Skills Development (Continued)

34 13.

While a significant part of safeguard work is carried out by consultants, no systematic arrangements are in place to confirm the technical competency of STCs. 

30% of ENV specialists are STCs



While ENV and SD sectors have a roster of consultants, this roster is not necessarily used for all projects. Sometimes, TTLs hire consultants from outside without consulting the ENV/SD managers. It is not clear who provides oversight for evaluating STC candidates’ technical expertise and makes hiring decisions.

June 16, 2014

Skills Development (Continued)

35 From the Survey – What the ENV/SD Specialists Said

Survey Question: How can the trainings available be improved? “Link these sessions to case studies and practical, operational problems that staff face”. “Study of practical cases, including complex examples, as a way to enhance the trainings”. “With field visits, with the use of real case studies and experts with stories to tell indicating solutions adopted and lessons learned”. “Development assignments , out-of-the-classroom, on-the-job assignments on actual safeguards work should be offered to country staff”. “More time for training and more access by safeguards specialists to specific training (including STCs)”. “The OPCS training is good but very basic and some instructors may lack the understanding of current country challenges. Different levels of trainings for basic, intermediate, and advanced would be useful. Focusing on implementation challenges as well not just the 'theory'. Ultimately, the reality of implementation is the most difficult.” “Need TTLs to also be part of the training” “Less focus of policies More focus on Technical skills Less lectures and more case studies.” “Provide access to safeguards training to country offices.” “More hands-on training, mentoring!!!” “There should be more frequent trainings for the country office based staff.” “It is not the availability of trainings - the main constraint is the time. The management needs to step in and give room for staff to be trained.” “The training should be designed to help the E&S specialists not just enhance their knowledge in the safeguards policies but also in resolving practical safeguards issues on the ground.”

June 16, 2014

Skills Development (Continued)

36 Advice 

ENV and SD Sector Boards should define the criteria for mandatory accreditation based on a staffing strategy, and monitor the staff enrollment and progress. o

Perform a skill-mapping exercise for ENV&SD Specialists to determine competencies and expertise available for the safeguard risk levels, and to identify gaps and take appropriate action with regard to training and mentoring.

o

Define requirements for accreditation, i.e. determine the required level of competence in safeguard risk management and develop a process for assessing whether staff have attained that level.

o

Identify the specific areas in which staff are being accredited, e.g., introduce a graduated scale of accreditation such that it is not ‘one size fits all’.



Integrate the different skills training courses into one skills development strategy. Provide more specific technical field training and mentoring, introduce cross-regional training, and ensure Country Office staff receive the same training as HQ staff.



Introduce guidelines for the use of consultants as ENV/SD specialists including creating an institutional roster of consultants with safeguard expertise.

June 16, 2014

Funding for Safeguards Risk Management 37

Analysis 14.

Management does not plan resource allocation for safeguard risk management using a top-down approach. Safeguard budgets are held by multiple functions without coordination. There is also variation across Regions in regard to the flow of funds to safeguard activities. 



In most Regions, the project specific safeguard budget is included in the project supervision budget held by the TTL. ENV and SD Specialists claim that they are not always funded adequately for safeguard risk management due to the prioritizations made by TTLs. In 5 of the 6 regions, there is no safeguards budget allocation to ENV and SD sectors, although these sectors allocate ENV and SD specialists to projects to undertake safeguard work. RSAs’ budgets cover only a small portion of safeguard work, namely, RSAs’ staff & consultants, travel, and training costs.

June 16, 2014

FY14 ‘Off the top’ Safeguards Budget (‘000s)

AFR RSAs Office ® 1,864

EAP

ECA

LCR

MNA

SAR

2,085

700

1,300

800

750

ENV Sector

NA

NA

NA™ 2,156*

NA

NA

SD Sector

NA

NA

NA™ 2,000*

NA

NA

Legend NA = Not allocated * = Covers staff costs only. Does not include variable costs. ® = Covers fixed and variable costs which include staff & consultant costs, travel costs, and training costs incurred by the RSA’s office. ™ = The ECA ENV&SD sectors have a notional budget allocation to estimate staffing needs for safeguards for SDN tagged projects.

Units Holding Safeguard Budget Activity

Budget Holders

Project preparation

RSAs; Project TTL/Sector Manager

Project Implementation

Project TTL/Sector Manager; (Exception: LCR ENV/SD Sectors)

Technical skills development &Training

Sector Boards (Anchor); Regional ENV/SD units, OPCS, RSAs.

Funding for Safeguards Risk Management (Continued)

38 

Only the LCR ENV and SD sectors have the ability to fund staff costs of specialists working on safeguards, while the other Regions do not. The AFR ENV and SD sectors have a small amount of coordination budget which is used to coordinate staff planning, consultants contracting, and ENV&SD staff training.



The LCR model of allocating dedicated funds for safeguards off the top from the Region’s budget envelope to the ENV and SD Sectors appears to facilitate the assignment of necessary technical resources to projects compared to the model where safeguard budgets are included in the project preparation and supervision budgets managed by project Sector Managers and TTLs.



The TTL has budget authority for safeguard Supervision. 34% of survey participants responded that the TTL decides on the level of safeguards support for his/her project.



Safeguard risk management costs are not codified for capture. As a result, it is difficult to know the actual cost for safeguard risk management although specialists’ time spent at the project level can be estimated based on inquiry and TRS analysis.



For details on regional practices see annex III – Regional Safeguard Practices.

June 16, 2014

Funding for Safeguards Risk Management (Continued)

39 Advice 

Safeguard risk management funding should be aligned to responsibilities/accountabilities for safeguards risks. Upfront commitment of resources for safeguard risk management is necessary.



The Bank should introduce a common institutional code for the recording of all safeguard risk management costs.

June 16, 2014

Institutional Leadership in Safeguards Risk Management 40

Analysis 15.

Fragmented organizational and budgetary arrangements have led to diffused accountability for safeguard risk management. Responsibilities for safeguard activities are spread among many units including SD and ENV sectors, OPSOR, RSAs, and industry sector managers without institutional leadership. Nobody is accountable for safeguard risk management results. Safeguards Risk Management Roles and Responsibilities

OPSOR

RSAs

Provide clearance for safeguard risk mitigation actions during project preparation but assume advisory role during project implementation

Responsible for policy development, interpretation, guidance and support and training.

Who is the Leader?

Legal Department’s LEGEN

Responsible for interpretation of policies and their application.

ENV/SD Sectors

Global Practices What roles will they play?

June 16, 2014

Industry Sector Managers/TTLs

Decide on safeguards budget for projects & are responsible for safeguards risk management during project implementation.

Allocate the technical specialists to projects for safeguard risk management & provide technical skill training.

Institutional Leadership in Safeguards Risk Management (Continued)

41

Advice 

Clarify who is the institutional leader for safeguard risk management to: o

Coordinate assignment of responsibilities for safeguard work; and

o

Integrate budgeting decisions, business planning, and staffing.

June 16, 2014

Annexes

June 16, 2014

Annex I Regional Project Portfolio by Safeguard Category 43 Africa

F 1% C 25%

EAP

F 3%

A 10%

C 30%

ECA F 13%

A 17%

C 30%

F 3%

LAC

F 0% C 28%

F 3%

MNA A 13%

A 8% C 37%

B 64%

B 47%

Source: Project Portal as of February 28, 2014

June 16, 2014

B 47%

B 50%

B 64%

A 10%

C 24%

SAR A 13%

B 60%

Annex II Breakdown of Regional Portfolio by ORAF Safeguard Risks SAR Low

Moderate

24%

Substantial 0% 15%

2% 11%

16%

EAP High

5% 24%

33%

0% 6%

2% 17%

17%

67%

0% 5%

0% 25% 0%

C

F

A

Substantial

1% 10%

0% 5%

48%

36%

58% 41%

59%

High

77%

9% 27%

C

Moderate 3% 5%

0% 4% 46%

81%

75%

55%

A

F

50%

B

Substantial 4% 0% 14%

82%

C

F

AFR

0% 25%

46%

27% 36%

High

Low

40% 14%

75%

46%

40%

Moderate 3% 10%

Substantial 0% 2% 17%

49% 81%

0%

100%

38%

7% B

C

A

High

11% B

Low

Substantial 0% 3% 17%

0%

MNA

LAC Moderate

Moderate

45%

10%

0% 33%

Low

36%

B

B

C

Source: Project Portal as of February 28, 2014

June 16, 2014

High

84%

62%

38%

A

A

Substantial

45% 85%

20%

8%

Moderate

49%

40%

Low

Low

ECA

F

A

B

C

F

High

Annex III Regional Safeguard Practices 45 AFR

EAP

ECA

LCR

MNA

SAR

√

√

√

√

√

√

Environment Sector

×

×

×

√

×

×

Social Development Sector

×

×

×

√

×

×

TTL has budget authority for safeguard Supervision

√

√

√

×

√

√

1 Budgets Allocation Regional Safeguard Advisors have an 'ofthe-top' budget allocation Budgets for safeguards support are provided directly to:

Notes

The ENV&SD sectors each received a coordination budget of $200,000 in FY14. This budget enables the ENV&SD coordination team to contract consultants on a retainer basis

The ENV&SD sectors have a notional allocation to TTL has authority over travel estimate staffing needs for budget. The labor cost is paid safeguards for SDN tagged by the ENV&SD sectors projects.

AFR

EAP

ECA

LCR

MNA

SAR

Environment Sector

×

×

×

√

×

×

Social Development Sector

×

×

×

√

×

×

ENV&SD specialists charge time spent on safeguards support directly to projects

√

√

√

×

√

√

2 Cost Capturing Region has specific codes for specialists to record time spent providing safeguards support:

Notes Legend: × = no; √=Yes

June 16, 2014

The coordination function have own specific budget codes

Annex III Regional Safeguard Practices (Continued)

46 3 E&S specialists allocation to projects ENV&SD Sector Manager allocates specialists to projects based on prior consultation with the TTL ENV&SD Sector Manager allocates specialists to projects directly without prior consultation with TTL

AFR √

EAP √

ECA √

×

×

×

Notes Legend: × = no; √=Yes

June 16, 2014

MNA √

SAR √

×

×

LCR ENV&SD Sector Managers supervise complex/high risk projects through appointed ENV&SD senior staff

MNA

SAR

×

×

× √

After TTL request, a Safeguards Coordinator in each of 6 country offices allocates ENV&SD specialists to projects in consultation with the RSA and ENV&SD Sector Managers

Notes

Supervision/Quality assurance of safeguards support to 4 projects All ENV&SD Sector Managers supervise safeguard activities performed by ENV&SD specialists during project preparation and during project implementation for all projects including those managed by non-ENV&SD Managers ENV&SD Sector Managers only review safeguard activities for projects under their management RSA Clears the concept stage ISDS of all projects and all safeguard documentation required before approval for non-transferred projects. For transferred projects, the project Sector Manager reviews and clears all safeguard documentation required after the PCN decision meeting.

LCR

AFR

EAP

ECA

×

×

×

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

√

ENV&SD Focal Points review Category A safeguards documents for quality assurance before it gets to the RSA for clearance.

Annex IV Safeguard Risk Management Accountability Analysis 47 Responsibilities Project Stage Risk Identification / Assessment

Risk Response / Mitigation

Regional Safeguards Advisor

ENV/SD Sector Manager

Clear project Risk Category and approve Integrated Safeguards Data Sheet (ISDS)

Allocate ENV/SD technical specialists

Allocate ENV/SD technical specialists

Clear the Environmental & Social Mitigation actions

Implementation / Monitoring of the mitigations

Provide advice when consulted

Problems Solving

Provide advice when consulted

Q/A Review & Management Oversight during implementation

June 16, 2014

Sector Manager or TTL

ENV/SD Specialists

OPCS

Borrower

Approve the project’s Provide E&S ISDS Technical Expertise

Policy Support

Prepare the Environmental and Social Impact Assessment (EIA)

Recommend/Clear the Environmental & Advise on mitigation Social Mitigation actions actions

Policy Support

Prepare the risk response (mitigation actions)

Allocate ENV/SD technical specialists

Request specialists and provide the Budget

Supervise and monitor the implementation of the E&S mitigation plan

Policy Support

Implement mitigation actions and report to Bank as per requirements

Provide advice when consulted

Work with Borrower to solve the problem

Identify the problem and advise on solution

Policy Support

Solve the problem

QA Arrangements not defined throughout the Risk Management Cycle,

Annex V ENV and SD Accreditation Programs 48 The Environment and Social sector accreditation programs are governed by their respective sector boards. Environmental Safeguards Accreditation Training

Social Development Training and Accreditation 

Nomination by SM



E-learning on Fundamentals of Bank operations and Safeguards policies OCC

Completion of an open book exam



7-day face-to-face training



5 day face-to-face course



Mentoring



Conversation with a peer reviewer



Practical field experience



Definition of an Action Plan (if necessary to increase trainee’s capacity)

Additional steps under consideration following the above 4 steps



Recommendation by SM (takes into account the views of the Peer Reviewer, and the RSA)



Accreditation decision by Sector Board



Nomination by SM and RSA



Completion of the on-line safeguard policies OCC



June 16, 2014



Annual talent review to identify which staff can undertake high, medium, and low risk safeguard operations.



Confirmation by the Lead Social Development/Safeguard specialist in each region along with the Regional Safeguards Advisor working most closely with that staff member.

Annex V ENV and SD Accreditation Programs (Continued)

49 •

84% of the ENV&SD specialists surveyed indicated that they have participated in the accreditation program. Of the specialists who do safeguards only, 86% have participated in the accreditation program, while 81% of the specialists who do safeguards and other E&S work have participated in the accreditation program.

•

About 80% of accredited environment specialists are GG and above.

E&S specialists Participation in the Sector Accreditation Program No 16%

Consultant 8% GF 13%

Yes 84% Source: E&S specialists Survey conducted by IAD

June 16, 2014

Accredited Environmental Specialists by Grade

GH 45%

GG 34%

Source: Environment Sector

Annex V ENV and SD Accreditation Programs (Continued)

50 •

Safeguard Training Offering Outside the Accreditation Programs 



OPSOR Core Trainings o

World Bank Safeguard Policies – Overview

o

Supervision of Safeguard Policies Application

o

Performance Standards for FIs

o

Use of Environmental and Social Management Frameworks around the Bank

o

WB Group Environmental, Health & Safety Guidelines; Community Health & Safety in EA

o

Processing Integrated Safeguards Data Sheet (ISDS)

o

Inspection Panel: Process and Lessons Learned

o

Safeguards OCC Module

Regional Specific Trainings o

•

Targeted Safeguards workshops and clinics

Holders of funds for skill development 

Sector Boards (Anchor): Cost of organizing, preparing materials and costs of trainers



Regional ENV/SD units: travel and other expenses

June 16, 2014

Annex VI Definitions of “Categories”, “Risk”, “Risk Flag” 51 Risk Identification Classification Approach Categorization A, B, C, FI

ORAF*

H, S, M, L

Project at Safeguard Safeguard flag Risk Flag

Definitions/Factors Reflects potential environment impact. Factors considered are: type, location, sensitivity, and scale of the project and the nature and magnitude of its potential environmental impacts. Reflects environmental and social risk for a project. Factors considered include (1) Environmental: Adequacy of skills, experience and policies of borrower; and environmental impacts; and (2) Social: Adequacy of skills, experience and policies of borrower; and key social issues. A safeguard performance rating in ISR of Unsatisfactory and below raises this flag. Its purpose is to identify projects with safeguard issues which need management attention . * H – High S – Substantial M – Moderate L – Low

June 16, 2014