Business Case

Summary Sheet Title: Burma Humanitarian Assistance and Resilience Programme (HARP) Project Purpose: DFID will provide up to £108.5 million over five years, which includes a pre-approved risk facility of £xx million. This will help provide humanitarian support to some of the most vulnerable people in Burma and Thailand affected by crises. The Business Case will support immediate relief and early recovery interventions, improve emergency preparedness, help to reduce future humanitarian needs and build resilience of people in protracted crises. The Business Case will also support innovation and learning required for humanitarian responses to be more effective in future in Burma. Programme Value: £108.5 million Country: Burma (and Thailand) Project Code:

Start Date: November End Date: December 2020 2015

Overall programme risk rating: Quest Number:

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Table of Contents

Intervention Summary .................................................................................................................. 4 Strategic Case .............................................................................................................................. 6 Summary .................................................................................................................................. 6 Context and humanitarian needs .............................................................................................. 7 Remaining gaps and role of DFID ........................................................................................... 13 The Burma Humanitarian Assistance and Resilience Programme (HARP) ............................ 16 Cross-cutting themes .............................................................................................................. 23 Expected results ..................................................................................................................... 25 Assumptions ........................................................................................................................... 26 Appraisal Case ........................................................................................................................... 28 Design principles .................................................................................................................... 28 Options appraisal .................................................................................................................... 28 Detailed options appraisal....................................................................................................... 31 Commercial Case ....................................................................................................................... 39 Procurement/commercial requirements for intervention.......................................................... 39 How does the design use competition to drive commercial advantage for DFID? .................. 41 How do we expect the market place will respond to this opportunity? .................................... 41 What are the key cost drivers? How is value added and how will we measure and improve this? ........................................................................................................................................ 42 How will the contract be structured and how will performance be managed through the life of the intervention? ..................................................................................................................... 42 Financial Case............................................................................................................................ 43 Overview of costs ................................................................................................................... 43 How will funds be disbursed? ................................................................................................. 44 What is the assessment of financial risk and fraud? ............................................................... 45 How will expenditure be monitored, reported, and accounted for? ......................................... 45 Management Case ..................................................................................................................... 46 Governance and Management Arrangements ........................................................................ 46 What are the risks and how these will be managed? .............................................................. 50 How will progress and results be monitored, measured and evaluated? ................................ 51 Annex 1 – Results Framework ................................................................................................... 54

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List of Acronyms / Abbreviations 3MDG AB BC BoA CBPF CCSDPT CHASE CSO CSSF DFID DHS EAG EC ECHO EPRP ERF FCO GCA GoB HARP HC HCT HERR HFU HRP IASC ICF ICRC IDP INFORM INGO KIO/A LIFT MAR MEC MEL MERF MNDAA MOU MRCS MSF MTR NGCA NGO NNDMC OCHA ODI OECD-DAC OIOS OJEU OFDA QAU RC/HC RDEL RRF SC SGBV SRO TAMEL TNLA UN UXO VfM WASH WFP WPS

The Three Millennium Development Goal Fund Advisory Board Business Case UN Board of Auditors Country Based Pooled Fund Committee for Coordination of Services to Displaced Persons in Thailand DFID Conflict, Humanitarian and Security Department Civil Society Organisation Conflict and Stabilisation Support Fund Department for International Development Demographic and Health Survey Ethnic Armed Group Executive Committee European Commission Humanitarian Office Emergency Preparedness and Response Plan Emergency Response Fund Foreign and Commonwealth Office Government Controlled Area Government of Burma Humanitarian Assistance and Resilience Programme Humanitarian Coordinator Humanitarian Country Team DFID Humanitarian Emergency Response Review OCHA Humanitarian Funding Unit UN Humanitarian Response Plan Inter Agency Standing Committee International Climate Funds International Committee of the Red Cross Internally Displaced Person Index For Risk Management International NGO Kachin Independence Organisation/Army Livelihoods and Food Security Trust Fund Multilateral Aid Review Myanmar Education Consortium Monitoring, Evaluation and Learning Myanmar Emergency Response Fund, managed by UNOCHA Myanmar National Democratic Alliance Army Memorandum of Understanding Myanmar Red Cross Society Médécins Sans Frontières (Doctors Without Borders) Mid Term Review Non Government Controlled Area Non Governmental Organisation National Natural Disaster Management Committee UN Office for the Coordination of Humanitarian Affairs Overseas Development Institute Organisation for Economic Co-operation and Development – Development Assistance Committee UN Office of Internal Oversight Services Official Journal of the European Union US Office of Foreign Disaster Assistance DFID Quality Assurance Unit UN Resident Coordinator/Humanitarian Coordinator Resource Departmental Expenditure Limit DFID Rapid Response Facility Steering Committee Sexual and Gender-Based Violence DFID Senior Responsible Owner Technical Assistance, Monitoring, Evaluation and Learning Ta’ang National Liberation Army United Nations Unexploded Ordnance Value for Money Water, Sanitation and Hygiene World Food Programme Women, Peace and Security

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Intervention Summary What support will the UK provide? Over the next 5 years, DFID will provide up to £108.5m including an Internal Risk Facility of £xxm to respond to humanitarian needs in Burma and of Burmese refugees in Thailand. This will provide humanitarian relief assistance to those affected by conflict and natural disasters, as well as support to build resilience and find solutions for those affected by protracted complex crises in several parts of the country. DFID will establish a Burma Humanitarian Assistance and Resilience Programme (HARP) Facility and through this provide an anticipated £xxm for response to protracted humanitarian crises across the country and to Burmese refugees in Thailand. This will meet humanitarian needs, build resilience and reduce vulnerability. It will fund capacity building and strengthening the evidence base for humanitarian action. DFID will provide an anticipated and performance-based £xxm to the UN-run Myanmar Emergency Response Fund (MERF), which will strengthen humanitarian coordination, fund smaller projects and gaps in the humanitarian response, and encourage wider donor burden sharing. DFID will respond to on-going flooding and the increased risk of extreme weather linked to an El Nino event in 2015 and 2016 with targeted programming worth up to £xxm. DFID will also maintain an Internal Risk Facility of £xxm to provide flexibility to respond to significant new needs arising during the period of the Business Case, such as major spikes in conflict or natural disasters. What are the main HARP activities? The HARP brings together DFID humanitarian programming in Burma and Thailand into a consolidated and strategically coherent whole. The HARP will continue to provide relief assistance to both new emergencies and protracted crises, but look to tailor assistance to a more protracted complex crisis environment, providing multi-year commitments to more flexible and adaptive funding where appropriate, focusing on gender-sensitive interventions that help to build individual and community resilience, and ensure incentives and support are aligned to encourage displaced people and refugees to find lasting solutions to their situation. The HARP will also build the evidence base on what works in humanitarian assistance in Burma, and ensuring this is disseminated to the wider humanitarian community. Through streamlining of programming, the HARP should also ensure DFID advisory resources can be used more effectively for influencing and leadership in the humanitarian system. Why is UK support required? There has been conflict in Burma since independence in 1948, one of the longest running conflicts in the world. Humanitarian needs have grown rapidly in the last 4 years, while the country undergoes significant political and economic transition from a closed society under a military dictatorship. Conflicts and displacement in Rakhine and Kachin/Northern Shan States since 2011/12 have added to longer term displacement in the South East of the country and refugees in Thailand1. Increasingly protracted and entrenched crises risk perpetuating vulnerability, as children and youth are affected developmentally and miss out on education and vocational opportunities. At the same time the country remains at very high risk of natural disasters, primarily cyclones and flooding. The UK has an established commitment to leadership in global humanitarian response, recently restated by the Secretary of State following the 2015 elections in the UK. DFID is well-placed to play a critical role in innovating and moving the humanitarian system towards a more effective response to needs in Burma. We have built strong relationships with our implementing partners in some of the most inaccessible parts of the country. Through our work to improve the response of the humanitarian system, our ability to provide 1

Thailand is not a signatory to the 1951 Refugee Convention or its 1967 Protocol and although it is hosting 9 refugee camps on Thai/Burma border it does not recognise as refugees the people in the camps or others who have crossed the border but do not live in the camps and might meet the international definition of refugee.

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humanitarian assistance in the most difficult areas and our diplomatic influence and engagement, we have a disproportionately large impact with a level of humanitarian assistance that reflects our fair share. Any reduction in our support is unlikely to be replaced by other donors in the current environment. The government of Burma and ethnic authorities will be encouraged to be more accountable for the humanitarian needs of their people, but even in the most positive scenario significant international assistance will be needed over the period of this Business Case. What are the expected results? The HARP will directly support up to 400,000 people in need, assuming that the full allocation is spent. The primary results will be humanitarian: saving lives and reducing suffering of crisis affected populations. In addition the HARP will support solutions and build resilience, to reduce the need for humanitarian assistance in the future. Innovative approaches will improve the efficiency and effectiveness of the wider humanitarian response. The HARP will also help ensure that DFID, its implementing partners and the wider humanitarian system are better prepared for responding to new crises, and ensure adequate focus on the different needs of women and girls and youth in humanitarian response, preparedness and resilience work. How does the HARP fit with DFID Burma strategic objectives set out in the Operational Plan? Humanitarian assistance is a core component of the DFID Burma Operational Plan2. The provision of humanitarian assistance directly contributes to DFID’s vision of reducing poverty and vulnerability in Burma. Humanitarian assistance also helps to increase the likelihood that development gains are not lost in crises, and that crisis-affected people still have an opportunity to benefit from inclusive growth and increased human capabilities, addressing some of the key constraints identified in DFID Burma’s Country Poverty Reduction Diagnostic and Inclusive Growth Diagnostic. Humanitarian assistance by its nature assists the most vulnerable and is often the only form of assistance able to do so, and as such it is a core part of DFID’s offer for Burma. The HARP will ensure that in Burma DFID contributes to the UK government vision of the UK playing a leading role in emergencies and humanitarian response. The HARP will also contribute significantly to UK government targets on water and sanitation, nutrition and education. The different impact of crises on women and girls will be a focus of the HARP, addressed through the involvement and voice of women throughout the programme cycle and a particular attention to their specific needs in humanitarian response. The HARP will contribute significantly to the UK’s work on Women, Peace and Security and towards DFID’s strategic objective on improving the voice, choice and control for women and girls. The HARP will also look to support the role of youth as significant change agents in Burma, as well as ensure adequate focus on the specific needs of young people, particularly in protracted crises. What are the key risks to the success of the HARP? The two principal risks to the success of the HARP are: a return to a more closed society and significant further restrictions on humanitarian access; or much wider conflict or a major natural disaster. With respect to humanitarian access, the current environment permits some (albeit often limited) access to most areas, although through a patchwork of different actors and modalities. Further restrictions could significantly hamper the ability to deliver assistance. A major new crisis would require a refocusing of the approach back towards emergency and relief assistance, meaning that the aims of building resilience and solutions for displacement would be very difficult to achieve. The HARP is designed to provide flexible response and additional capacity to respond to small and medium-scale crises, but is not designed to cover all requirements for a major crisis of the scale of Cyclone Nargis. Additional support over and above the HARP would be required. A significant cut in funding levels of other donors might also mean DFID humanitarian resources might have to refocus on the meeting of basic needs, making some of the wider aims of reducing vulnerability and dependency on humanitarian assistance more difficult to achieve. 2

The current DFID Burma Operational Plan is for 2011/12 – 2015/16. Work is underway to produce a successor plan for 2016/17 – 2019/20, which is expected to be finalised in early 2016.

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Strategic Case Summary 1.

Humanitarian needs in Burma have grown rapidly in the last 4 years, with conflict and displacement in Rakhine and Kachin/Northern Shan adding to a longer term displacement in the South East and refugees in Thailand. Up to 2% of the population are displaced or refugees3, a further 2% are from the extremely vulnerable Rohingya group, and many more are seriously affected by conflict. In several states affected by conflict the majority of working age population may have migrated outside the country, and women and girls face particular risks and challenges. States significantly affected by conflict hold up to a third of Burma’s total population. At the same time the country remains at very high risk of natural disasters, primarily cyclones and flooding.

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While there has been political reform since 2011, the role of government in providing humanitarian assistance remains very limited. Current humanitarian needs primarily result from conflict and displacement, with the government as a party to the conflict. This limits the capacity and appropriateness of government-led humanitarian response. Significant areas of the country remain out of State control, either directly controlled by ethnic groups or in areas of disputed control. In the past the main role of government has been to limit humanitarian assistance through controls on access and authorisations. Government capacity and interest in provision of humanitarian assistance may increase with a successful electoral process in late 2015, and similarly with progress in the peace process with ethnic armed groups. The role of government and military in a natural disaster response would likely be more significant.

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The international humanitarian system has not kept pace with the needs and changing environment. Due to historical and current government restrictions, a patchwork of different implementing partners operate in different areas. Uncertain humanitarian access requires time-consuming multi-layered negotiation and bureaucracy, even once authorisation is given at central government level. Selfcensorship operates, with UN agencies and NGOs unwilling to have their authorisations delayed for months or rejected by requesting to work in sensitive areas of the country, particularly parts of Rakhine and Kachin States. The responses to conflict in Rakhine and Kachin have been limited by the complexity of the operating environment, the number and capacity of those with authorisation from the government to provide assistance, and then the access granted at local levels. These issues and the primarily short-term donor funding4 have meant that the focus of effort in humanitarian assistance has remained on the delivery of basic emergency assistance.

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Internationally, the average displacement crisis is estimated to last 17 years5. Burma has been faced with a prolonged history of crisis and despite ongoing reforms, it is increasingly likely that crises in Kachin and Rakhine in Burma will not be resolved quickly and may last for several years, and the effects of conflict on mental and physical health, as well as nutrition and education for children and youth risk creating longer term poverty, vulnerability and instability. In this context, the current approach of providing basic relief assistance alone to a subgroup of those affected, primarily refugees and displaced people, is neither efficient nor effective. DFID-supported development instruments6 are increasingly moving into crisis-affected areas but the process is partial and relatively slow.

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The refugee and IDP camps on the Thai/Burma border have largely been in place since the 1980s. There are prospects that the camp situation may change significantly during the period of the Business Case, with increasing discussion of, and planning for, repatriation. UK policy is to support repatriation of refugees only as far as this is in line with international refugee law. Humanitarian

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This estimate includes displaced people within Burma, and those who have crossed borders from Burma to Thailand, China and Bangladesh and would meet the definition of refugee. 4

Humanitarian funding outside of South East Burma from major donors (UK, US, Australia, European Commission, Japan and Switzerland) has all been of duration of one year or shorter since 2011. USAID has provided multi-year humanitarian and recovery support in South East Burma, and DFID has provided multi-year humanitarian funding in South East Burma and for the refugee camps in Thailand. 5 UNHCR, ‘Protracted Refugee Situations’, UN Doc.EC/54/SC/CRP.14, (2004) 6 Examples are the 3 Millennium Development Goal Fund (3MDG) in health, the Livelihoods and Food Security Trust Fund (LIFT), and the Myanmar Education Consortium (MEC)

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assistance would in any case be required through a process of repatriation, were it to happen during the Business Case. Any movements would likely be partial and leave a residual caseload in Thailand requiring further assistance. DFID continues to support advocacy and policy dialogue with all related parties to ensure the best possible solutions for refugees and displaced persons. 6.

The aim of this Business Case is to provide more appropriate effective humanitarian assistance through approaches that recognise the protracted nature of humanitarian needs and that complement and look to transition to development instruments where appropriate. A longer term more strategic approach will also allow us to address some of the upstream issues of prevention, and of vulnerabilities that exacerbate humanitarian need, and to integrate a vision of building resilience into our work. The Business Case also aims to streamline a complex DFID humanitarian portfolio, freeing up DFID Burma management and advisory resources to provide a response to humanitarian needs that moves beyond direct assistance: engaging with system-wide and strategic issues, advocacy and influencing.

Context and humanitarian needs 7.

The central government of Burma has been in conflict with differing ethnic groups since independence in 1948. The country is also at high risk from natural hazards, most notably in 2008 when cyclone Nargis killed over 138,000 people, affected 2.42m people, and caused an estimated US$4bn in economic damages. A closed military regime has partially democratised and significant political and economic reforms have been undertaken since 2011. National elections are planned for November 2015.

A. Conflict 8. Conflict-related humanitarian needs in Burma have increased considerably since 2011 due to outbreak of violent conflict in Kachin and Northern Shan states in June 2011; waves of violence in Rakhine State in June and October 2012; violence in Kokang in Shan State since February 2015. A number of smaller-scale armed conflicts still take place in other parts of the South East. There are some but uncertain prospects of return of refugee populations from Thailand as a result of increasing stability in their areas of origin and pressure from Thailand. Rakhine 9. An estimated 1.2 million Muslims live in Rakhine State, primarily Rohingya7. There is a history of incidents of violence between Rohingya and Buddhist ethnic Rakhine over decades, and there has been an increasing incremental delegitimisation of Rohingya as lawful residents of Burma through the media and the actions of state authorities. 10. In 2012, growing tensions led to major violence between the two communities, disproportionately affecting the minority Rohingya. 140,000 people - largely Rohingya in areas where they were a minority - were confined to displaced person (IDP) camps. In other areas, repressive policies applied only to the Rohingya population were tightened, including further restricting movement, limiting even further access to livelihoods, markets and services. State provision of health services is extremely limited and formal education for children and youth almost non-existent, which contributes to desperation and the perpetuation of marginalisation. Finding a solution for the majority of IDPs around State capital Sittwe may take years. Girls suffer disproportionately from malnutrition and women from the lack of reproductive health services. Domestic violence is highly prevalent, and likely worsened by a situation of increasing desperation and deprivation. 11. Also since 2012 an estimated 125,000-130,000 Rohingya have left Rakhine State in increasing numbers through people smugglers on boats, largely to Malaysia, including 88,000 since 2014 and with an estimated 1,050 deaths8. This practice and the increasing proportion of people trafficking was highlighted in May 2014 when the Government of Thailand took action against transit camps in Thailand, and traffickers abandoned boats at sea with up to 8,000 people on board. A further 200,000 7 8

Based on interpretation of population data from 2014 census UNHCR / IOM / UNODC: Bay of Bengal and Andaman Sea – Proposals for Action, May 2015

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– 500,000 Rohingya are estimated to have crossed to border areas of Bangladesh since the 1970s, where they have no official status, humanitarian access is restricted and basic services are not available. DFID Bangladesh provides assistance in border areas of Bangladesh, and coordinates with DFID Burma on situation analysis and programming options. 12. The operating environment for international actors in Rakhine is challenging. State persecution of the Rohingya and their consequent extreme vulnerability has resulted in them being the main targets of humanitarian assistance in Rakhine. This, and international support for basic human rights and selfidentification for the Rohingya has given rise to allegations of bias from Buddhist nationalists and ethnic Rakhine leaders. Most international organisations in Rakhine were attacked and systematically looted in March 2014, while security forces did nothing. The environment remains restrictive, and the political economy unfavourable to a resolution of the situation. Ethnic areas of East Burma 13. The conflict in Burma is one of the longest-running conflicts in the world. The Burmese state and its army, the Tatmadaw, have been fighting with a variety of Ethnic Armed Groups (EAGs) since shortly after independence. 14. Since 2011 the government has reached bilateral ceasefire agreements with the majority of the main EAGs, and is now aiming to sign a National Ceasefire Agreement as a precursor to a broader peace process. In many bilateral ceasefire areas large numbers of people remain displaced, largely due to lack of trust of the Burmese authorities and security forces in their areas of origin, as well as landmine/UXO contamination. Many of these, some displaced for decades, may have settled and be unlikely to return. There are estimates of up to 400,000 such displaced people9, as well as 110,000 people from Burma remaining in refugee camps in Thailand. Large-scale return is unlikely until there is further progress on a peace agreement, a level of trust-building and demilitarisation, and in some areas only once landmine/UXO contamination can be mapped and addressed. The situation is not uniform, however, and in some areas conditions may be more conducive to earlier return than others. A return to fighting could also significantly increase displacement and humanitarian needs. Education for children and youth in ethnic areas remains largely inaccessible, entrenching longer term inequality and vulnerability.10 15. Armed conflict is however ongoing in various parts of Kachin and northern Shan States. One of the most significant of these is the conflict between the Tatmadaw and the Kachin Independence Army (KIA) in Kachin State and northern Shan State. This escalated after the breakdown of a 17-year ceasefire in 2012 and has resulted in up to 100,000 people displaced, largely into small camps. These displaced people are split between areas under government and areas under KIA control. A ceasefire and peace agreement is possible but the timing is difficult to predict. Return after a peace agreement would likely be a lengthy process due to the need for demilitarisation for confidence-building, and landmine mine/UXO contamination. Further fighting could also redisplace many of those already displaced, particularly in KIO-controlled areas, and lead to greater humanitarian needs. There are distinct gender dimensions to humanitarian needs: women and girls are at higher risk of domestic violence and human trafficking, as well as sexual violence in conflict11, while boys and men face higher risk of forced labour, arbitrary detention and extrajudicial killings, and recruitment into armed groups. 16. The other significant conflict is in the Kokang self-administered zone, in Shan State, between the Tatmadaw and the Myanmar National Democratic Alliance Army (MNDAA), supported by the Ta’ang 9

The only comprehensive survey of displacement across 36 townships of South East Burma by TBC in 2012 found 400,000 displaced. “Ceasefires and durable solutions in Myanmar: a lessons learned review”, Joliffe and South (2014) suggests very few of these will have found durable (i.e. lasting) solutions for displacement, and that many more have undergone forced migration as a result of conflict, including migrants to neighbouring countries who are not counted as refugee or IDP. They also note that IDPs in the South East are in a variety of different situations, including those who may have tentatively returned to their original areas. There has been no survey that allows for estimates of the overall number of displaced since 2012, the figure of 400,000 is used as an indicator of the diverse needs of conflict-affected populations in the area. 10 Education is largely not available in ethnic languages, only in Burmese and English, even where state services are available. Qualifications issued by ethnic education authorities are officially unrecognised. See “Higher education case studies – Myanmar”, Guerrero, Economist Intelligence Unit (2014) 11 See for example “If they had hope, they would speak”, Women’s League of Burma (2014)

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National Liberation Army (TNLA) and the Arakan Army. The conflict started in February 2015 and all of the 155,000 population of the Kokang zone have been severely affected, with many taking refuge in China, while others have fled to various areas in Burma. There is currently no humanitarian access permitted to Kokang zone. The Chinese government has not requested international assistance for refugees from Kokang, and is providing assistance through government institutions and the Chinese Red Cross. No access is allowed to other organisations at the current time, and it is not anticipated that this will change. 17. In addition to these two conflicts, armed conflict is also ongoing in other parts of northern Shan State between the Tatmadaw and various ethnic armed groups, and despite a series of bilateral ceasefires, clashes in parts of the South East occur periodically, particularly in Kayin State. B. Natural disasters 18. Cyclones and storms have recently been responsible for the greatest number of natural disaster deaths in Burma and largest economic impact, and their frequency is increasing12. Compared to just one storm every three years prior to 2000, they now occur every year. Damages and losses experienced during cyclones are most severe in the southern delta region of the country. 19. Despite improvements in its approach to disaster risk management since Nargis, the government’s capacity deficit is a major constraint following decades of military rule, diplomatic isolation and economic mismanagement. Government neglect in providing basic services to the population means that institutional reach remains generally low across the country. 20. Burma ranks seventh in DFID’s top ten most at risk countries13. It is particularly exposed to hydrometeorological natural hazards, including tropical cyclones and the associated effects of flooding, landslides and coastal surges. Burma also faces the risk of earthquakes and associated landslides, particularly in the more vulnerable North. 21. Climate change is likely to intensify hydro-meteorological hazards, including droughts and floods. Conflict further exacerbates and compound Burma’s vulnerability to natural disasters. This is a result of disproportionately higher levels of poverty in conflict areas, especially among IDPs and refugees. Health risks (particularly tuberculosis and malaria) remain a serious problem, particularly along the conflict-affected border areas of the ethnic states. 22. Extreme poverty across Burma increases vulnerability to these hazards. Disproportionately higher levels of poverty exist in rural areas and the conflict-affected border and coastal regions. This coexists with high levels of dependence on agriculture and fishing, environmental degradation and high levels of vulnerability to health risks amongst IDPs and refugees displaced due to conflict. 23. Cyclone Komen and concurrent extensive flooding in July and August 2015 have affected 12 of Burma’s 14 States and Regions, and caused the greatest natural disaster in Burma since Cyclone Nargis in 2008. As of 20th August, the National Natural Disaster Management Committee (NNDMC) reported that 117 people were killed and over 1.6 million people had been displaced by floods and landslides since mid-July, and the President of Burma declared Chin and Rakhine States, and Magway and Sagaing Regions as natural disaster zones. Due to the timing, the impact of flooding on the agricultural cycle and on food availability is likely to be significant over the following year, and exacerbated by any further extreme weather related to El Nino, whose impact on Burma is historically unpredictable. C. Role of other actors

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Information in this section from CHASE Burma Multi-Hazard Risk Assessment (2013) DFID Burma multi-hazard risk assessment (2013). The more recent DFID-supported INFORM index that includes conflict risks th rd ranks Burma 10 for overall risk globally and the highest in Asia-Pacific. INFORM ranks Burma the 3 highest in exposure to natural hazards. 13

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24. The humanitarian system in Burma took a more formal structure following cyclone Nargis in 2008. Prior to this there were few agencies present with limited coverage in-country with a limited number involved in cross-border operations. The main features of the system are: . Government 25. Relief assistance is nominally led by the Natural Disaster Preparedness Committee of the Prime Minister. While the government has taken the lead in responding to annual flooding and cyclones, the role of government in meeting conflict-related humanitarian needs has been limited and largely separate from that of the international community. The government has taken charge of particular caseloads or sectors: civil servants displaced from Kokang, or shelters for ethnic Rakhine displaced in Rakhine State. The government controls and restricts international humanitarian assistance through limiting which organisations have Memoranda of Understanding to operate in which sectors and areas, without defined criteria. There are further processes for state and local authorisation of projects, and complex processes of travel authorisations particularly applicable to international staff. 26. In Thailand, the Royal Thai Government has assigned its National Security Council responsibility for refugee camps oversight on the border as well as issuing regulations for humanitarian assistance. The Thai government allocates land for, administrates and polices the camps, while humanitarian assistance is provided largely through international NGOs, as well as the UN. 27. The Burmese government’s role in emergency preparedness and response to major natural disasters is relatively unestablished, although the government Relief and Resettlement Division together with the Myanmar Red Cross respond to smaller scale flooding on an annual basis. The first efforts at joint planning and simulation were undertaken between UN and government counterparts in 2014, but operational coordination has yet to be tested14. The role of the Tatmadaw and military assets in emergency response remains opaque although this may be substantial. Ethnic Authorities 28. In areas under control of ethnic authorities and ethnic armed groups, their role in provision of humanitarian assistance and basic services is very variable. Some, such as in Karen, Kachin and Mon States, have relatively well developed education and health systems15, although often poorly resourced and supported by NGOs and civil society groups, and not providing recognised educational qualifications that allow for further education. Where there are displaced people, such as in Kachin, ethnic authorities sometimes play a coordinating role and provide some assistance, but the bulk of assistance comes from NGOs and civil society groups. The UN 29. The main UN agencies are present, some dating from before cyclone Nargis and others more recently established. The UN has a Resident Coordinator/Humanitarian Coordinator (RC/HC) in Burma, in post since late 2013. The main limitations on UN humanitarian work include very limited access to nongovernment controlled areas, and limited lines of communication with armed groups and forces, and hostility from local people and communities in Rakhine. The UN has been slow to react to the protracted nature of the different crises in the country and has not yet developed any comprehensive country or area-based strategies. The UN led the development of an initial Emergency Preparedness and Response Plan (EPRP) for Burma in 2014, although many areas of work remain to establish what is considered a minimum level of preparedness. 30. Following cyclone Nargis, the UN Office for Coordination of Humanitarian Affairs (OCHA) formally took up its role as Secretariat to the RC/HC. An Emergency Response Fund (ERF) was established, which has recently been going through a reform process, see Box 1 below. Box 1 - Myanmar Emergency Response Fund (MERF), UN-OCHA Burma’s UN multi-donor humanitarian fund is managed by UN-OCHA. Until recently this has been a standard Emergency Response Fund (ERF) but in line with OCHA global guidelines it is coming under global Country 14

The significant government response to floods in July/August 2015 at the time of writing will provide a case study and learning on these points. 15 See “Ethnic Conflict and Social Services in Myanmar’s Contested Regions”, The Asia Foundation (2014) for more detail

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Based Pooled Fund guidelines, although will remain called the Myanmar Emergency Response Fund (MERF). It is one of the smallest of the 19 ERFs and Common Humanitarian Funds globally, having received around $13m in funding since its establishment in 2007. Funding allocations The MERF provides funding for projects which provide humanitarian assistance to vulnerable people affected by natural disasters or conflict in Burma. All humanitarian sectors are eligible for funding but non-emergency projects must correspond with needs and priorities identified in the Humanitarian Response Plan. The MERF issues a call for proposals for core humanitarian response in Burma twice per year. The call for proposals is managed by the MERF Advisory Board and the UN Humanitarian Coordinator in consultation with the Humanitarian Country Team (HCT). For urgent emergency response projects, the MERF accepts proposals on a rolling basis and there is a quicker review and approval process. Grant size and duration Under the revised guidelines the MERF has no grant ceiling, however, the average size of projects funded in 2014 under the MERF was approximately $310,000. While previously under the MERF there were restrictions on the percentage of a project’s budget that must be devoted to field implementation, on eligible costs and on the duration of projects, these regulations have recently been reviewed as part of the contextualisation of global guidelines for country-based pooled humanitarian funds. Eligibility The MERF funds registered non-governmental organisations (NGOs) and UN agencies that are registered to operate in Burma. NGOs that are not registered with the Myanmar Government may still receive funding through a sub-grant from a registered NGO. As part of the move from the global guidelines, NGOs will be pre-registered with the MERF and will go through a due diligence process in advance to be eligible to receive MERF funding. Progress to date To date the MERF has at most provided 2% of humanitarian funding to Burma, and has had limited engagement from implementing partners due to its size and restrictions. The move to global guidelines and an agreed commitment from OCHA and donors to ambitious resource mobilisation targets for the MERF provide an opportunity to grow this into a fund that can significantly contribute to humanitarian assistance and coordination in Burma. Reforms of the MERF The main constraints of the MERF have been: - limited awareness of the MERF among implementing partners; - restrictive rules on eligible costs made it an unattractive source of funds for many NGOs; - limited engagement of UN Resident Coordinator; - very small size of the MERF made it inefficient and meant it did not catalyse improved coordination. Efforts are underway to address these constraints. In 2015, key donors and OCHA agreed an ambitious resource mobilisation strategy aiming to bring new donors into the MERF and grow to a target of 10% of the overall humanitarian funding to the Humanitarian Response Plan, which would equate to an annual MERF funding level of $12-$13m at current levels of assessed humanitarian need. Together with the move to the more flexible global guidelines, this should resolve or mitigate some of the above limiting factors. DFID already plays the most active role on the Advisory Board and will continue to play an active role in ensuring the changes underway effectively address the constraints of the MERF. Limitations of the MERF With the reforms underway, the MERF should be able to provide a useful complement to bilateral funding streams. The advantages of the MERF are the ability to respond flexibly to jointly agreed priorities of implementing partners, and through the prioritisation processes to improve engagement with and functioning of humanitarian coordination structures. By design however the MERF is targeted towards short term delivery of standardised humanitarian assistance, with a prioritisation process that tends to lead toward the prioritisation of short term humanitarian needs. This can be most useful in early stages of new crises, or to fill gaps in assistance, but has limits to effectiveness in protracted crises.

Red Cross Movement 31. The International Committee of the Red Cross (ICRC) was effectively closed down in 2008 after criticising the Burmese government. They were allowed to restart operations in 2012 and have been gradually re-establishing their presence. They have restarted detention visits to prisons (but not yet to those held by police and border guard forces) and they have been working with Ministry of Health facilities in Rakhine and Kachin. Their protection programming is limited but increasing.

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32. The Myanmar Red Cross Society (MRCS) has been making efforts to establish a more professional humanitarian operation, supported by the International Federation of the Red Cross. They operate closely with the government and as such have very limited trust with ethnic groups and limited access to non-government controlled areas. They have a strong network across much of the rest of the country, and play a significant relief role particularly in response to natural disasters. NGOs and civil society 33. International and national NGO and civil society capacity varies greatly across the country, in part due to Burmese government restrictions. Because government has historically controlled and limited the work of civil society, and due to high levels of mistrust of central government within ethnic groups and civil society, many NGOs and CSOs in ethnic areas have never formally registered with the Government of Burma. This limits transparency and information sharing. Some are now in the process of registration. 34. The below table highlights the diversity of role of different types of actors providing humanitarian assistance in different areas, further complicated as it is often different actors within each category operating in different areas. Table 1: Typical assistance delivery in different areas Rakhine Kachin/ South East N.Shan

Government Ethnic authorities

In GCA Parts NGCA

In GCA of Parts NGCA

Thailand

Natural disasters in other parts of Burma

of

UN International NGOs National NGOs CSOs Primary role in delivery of assistance Secondary or funding/coordination role No significant presence D. Humanitarian coordination 35. Burma has a Humanitarian Country Team (HCT) under the RC/HC. Despite lengthy discussion in 2014 and 2015 donors are not part of this group, and there are significant challenges, notably divisions on strategy between UN and INGO members, and a lack of trust. National and local NGOs operate largely outside of the international coordination system and have no presence on the HCT. 36. Despite the presence of OCHA, UNHCR leads coordination in northern Rakhine and South East Burma for historical and capacity reasons. In Thailand there is no equivalent UN structure and NGOs and UNHCR coordinate through the “Committee for Coordination of Services to Displaced Persons in Thailand” (CCSDPT), a NGO-led body with sector-based grouping among NGO members. 37. In Burma three clusters16 have been activated: Health; Water, Sanitation and Hygiene (WASH); and Shelter. These clusters operate with a focus on sub-national areas such as Rakhine and Kachin, rather than a country-wide remit, and provide a very variable quality of coordination. In sectors where clusters are not formally activated, sectoral groups operate similarly, headed by the global cluster lead

16

The cluster approach was implemented by the UN Emergency Relief Coordinator and Inter-Agency Standing Committee for humanitarian responses as part of Humanitarian Reform in 2005. It is the formal structure for sectoral humanitarian coordination at country level, aiming to strengthen humanitarian response by demanding high standards of predictability, accountability and partnership in all sectors or areas of activity.

12

agencies. Few clusters/sectors have NGO co-leaders; the Health Cluster is co-led by the Ministry of Health. 38. Since 2014 the UN has produced a Humanitarian Response Plan for Burma, which also focuses on Rakhine and Kachin/Northern Shan only. UNHCR has strongly resisted expanding the scope of humanitarian coordination to humanitarian needs in South East Burma. The proposed alternative ‘Durable Solutions Framework for South East Myanmar’ has been in development for at least 18 months by UN agencies and is yet to produce a full draft. 39. National and local NGOs are not represented on the HCT and have formed a parallel coordination structure in Kachin where they implement the large majority of the response. As in Thailand where NGOs coordinate without a mandated organisation for coordination and prioritisation, this works less effectively. 40. There are also sector-based development working groups at national level – the Sector Working Groups. Engagement with these groups is important as well as their related Government Ministries (where there may not always be one clear Ministry but rather several). In the 2015 floods the Government activated a US-supported Emergency Coordination Centre for the first time, and further post-disaster learning needs to take place between the nascent government structures and the international humanitarian architecture. E. Other donors 41. Some other donors have been reducing their humanitarian funding17, predominantly due to large-scale humanitarian crises (such as in Syria, South Sudan and Ebola) drawing heavily on donor resources, and in the case of Australia a significantly reduced overall aid budget. Coordination is good between most of the major humanitarian donors with humanitarian capacity in country, including the UK, US, Australia and the Swiss. 42. Since 2013, 37% of what is characterised as humanitarian funding by donors has fallen outside the UN Humanitarian Response Plan (HRP)18. This funding goes primarily to South East Burma. This is partly continuation of a historical necessity to classify recovery or development funding as humanitarian to facilitate Burmese government permissions. It is also indicative of the limitation of geographical restrictions in the HRP and UN-led humanitarian coordination structures and the real humanitarian needs that exist in the South East of Burma, albeit in a complex and protracted environment. There is no equivalent regular and comprehensive assessment of humanitarian needs for the South East, nor for Burmese refugees in Thailand. 43. The UN’s Myanmar Humanitarian Response Plans have been relatively well funded, on average 70% funded since 2013, compared to a global average of 62%19. Most humanitarian donors fund on annual or more frequent cycles, notably ECHO, OFDA, and the Myanmar Emergency Response Fund. The short term, inflexible funding is frequently cited by implementing partners as constraining effectiveness in the protracted crisis environment.

Remaining gaps and role of DFID 44. The above assessment of the existing context and institutional framework has identified four main barriers to effective improvement in humanitarian priorities and practice in Burma. These are set out below. Barrier 1: Variable geographical coverage of humanitarian assistance and emergency response capacity 17

The European Commission, Australia and Sweden are among the major humanitarian donors to Thailand and Burma who have reduced funding over the last few years. 18 OCHA Financial Tracking data at 16 June 2015. This probably understates the issue as funding outside the Humanitarian Response Plan is unlikely to be captured in full 19 Ibid

13





The Government and ethnic authority responses are inadequate to meet humanitarian assistance needs in Burma. Humanitarian and development organisations have limited access and coverage. Security restrictions and bureaucratic bottlenecks limit the presence and capacity of UN agencies and NGOs to deliver. The UN Humanitarian Response Plan has limited geographical coverage and needs assessment has not been carried out in South East Burma.

Barrier 2: Poor coordination, strategic management and policy of humanitarian assistance for protracted crises and emergency response  To date within the humanitarian system in Burma there has been limited humanitarian direction, lack of a humanitarian strategy or effective strategic response, and slow and incoherent planning. There has also been insufficient attention in assuring coherence by the international community in messaging to lobby the Burmese Government on key critical issues.  Donor engagement with the international humanitarian system, usually through the Humanitarian Country Team and OCHA, is not well established and ineffective.  There is relatively little multi-year humanitarian funding20 despite the increasingly protracted nature of the crises.  The Myanmar Emergency Response Fund (MERF), managed by UNOCHA was set up in 2007 but to date it has only been used to a limited extent (see Box 1 above). Barrier 3: Inadequate technical, delivery and M&E capacity of implementing partners  There are technical weaknesses of implementing partners, with some NGOs and UN agencies relatively new to Burma and high staff turnover in some attritional environments. Local NGOs have proved slow to adopt international standards and have weak organisational capacity.  Limited capacity for monitoring and evaluation or coordination of M&E activities between agencies. Evidence on what is working well/less well is not being centrally captured, and technical weaknesses mean that evidence available is not always acted on.  Significant data weaknesses on basic information and key indicators needed for prioritisation of humanitarian assistance, such as mortality rates in IDP camps, humanitarian assistance gaps in parts of South East Burma and Thailand, overall levels of assistance to different areas.  Geographical access and travel restrictions further limit the implementing partners’ M&E capacity. Barrier 4: New and complex crises have resulted in a focus on responding to immediate humanitarian needs. Emergency preparedness, less visible needs, and considerations of operating in a more protracted crisis environment have not yet been addressed. Opportunities for building resilience are not systematically considered  Humanitarian support particularly to Rakhine and Kachin has focused on meeting the most immediate and visible humanitarian needs, largely due to access constraints in both areas. There is now need and scope to move beyond this towards a focus on meeting the needs of the most vulnerable, supporting solutions through adaptive and flexible programming, and building dignity through reducing dependency on humanitarian assistance.  While some steps towards improving emergency preparedness were taken in 2014, including through DFID support, much remains to be done to achieve even a minimum level of preparedness.  A focus on assistance to visible displaced populations has encouraged encampment of displaced people, and prolonged food assistance has led to poor nutritional outcomes in some areas. Less visible or immediate needs, including child protection, stunting, mental health, schooling, and creating livelihood opportunities have received less attention and assistance. 45. The four barriers set out above have led to four specific challenges that the HARP will seek to address, while continuing to meet humanitarian needs:  

There is an uneven quality, quantity and coherence in the delivery of humanitarian assistance, emergency preparedness and emergency response across the country. Humanitarian assistance is not helping people to move beyond dependency on assistance and a barrier to finding solutions to displacement.

20

Some donors, including USAID and DFID, have multi-year humanitarian and recovery programming in South East Burma, and DFID support to Thai refugee camps from 2012-15 was on a multi-year basis.

14

 

To date there has been insufficient focus on approaches designed to address protracted humanitarian needs effectively, reducing vulnerability and building resilience through humanitarian and development interventions in protracted crisis areas. There has been insufficient data collection, analysis and generation of learning on what works well and less well to inform future programming.

46. In addition the structuring of DFID support proposed under this Business Case should provide DFID Burma with more capacity to engage with strategic issues, coordination, influencing and leadership in the humanitarian system in Burma. Why DFID? 47. DFID has made a global policy commitment to remain a leading humanitarian donor and address priority needs. DFID’s 2011 Humanitarian Emergency Response Review (HERR) and subsequent Humanitarian Policy have shaped our approach to humanitarian response in DFID Burma. DFID Burma’s Operational Plan 2011-15 restates DFID’s commitment to assisting humanitarian needs in Burma. Box 2 – linkages with DFID Burma’s wider programme DFID is committed to provide humanitarian assistance based on need alone, and in accordance with 21 internationally accepted humanitarian principles . Our humanitarian assistance forms part of the UK commitment to meeting our share of global humanitarian needs. DFID Burma’s humanitarian programming nevertheless forms part of DFID’s wider offer to Burma. DFID Burma’s Country Poverty Reduction Diagnostic and Inclusive Growth Diagnostic identify the constraints to inclusive growth and poverty reduction in Burma, and identify conflict and natural disaster risk as among the major constraints on poverty reduction and inclusive growth. DFID programming in Burma aims to promote structural transformation and growth through addressing these political and economic constraints, while ensuring that the poor and marginalised are included in the benefits of these changes. The majority of DFID’s humanitarian programming in Burma reaches those at a time and place where development activities are not possible. Without humanitarian assistance in crises, development gains can easily be lost: affected people can lose their belongings, risk death, injury and illness, incur debts and drop back into poverty. Crisis affected people also are frequently forced to adopt survival strategies that damage their longer term prospects, for example selling assets, taking children out of education, restricting food intake and damaging child development, joining armed groups or undertaking hazardous migration. DFID humanitarian assistance therefore fits strategically within DFID’s aims in Burma through providing support to help ensure that the most vulnerable people in Burma are not left behind during crises and are better able to benefit wider political and economic changes and access growth opportunities. DFID Burma has other programmes that have a similar target of making sure more marginalised and poorer populations are not left behind, notably our contributions to 3MDG, LIFT and MEC multi-donor funds. Our humanitarian work is designed to be complementary to these funds, working in areas and at times where needs are critical and where these funds are not at that time able to operate, while looking to hand over to these or other specialised development instruments where and when possible. DFID Burma also has a peacebuilding programme supporting a peace process with the potential to transform the conflict areas where much of DFID’s humanitarian work takes place. DFID humanitarian programming will be conflict sensitive (see paragraph 74) and will ensure complementarity with any peacebuilding activities at local level.

48. Since 2012 DFID Burma has been one of the largest humanitarian donors. The three primarily humanitarian Business Cases currently in the DFID Burma portfolio total £62m of approved funding over 3 years between 2013-15, spread across 20 different components. Overall this period in Burma

21

As indicated in “The UK Government’s Humanitarian Policy” (2011) the UK adheres to the internationally accepted principles of humanity, impartiality, neutrality and independence in its humanitarian action, as well as international humanitarian law.

15

and Thailand DFID has been the second largest bilateral humanitarian donor22. Despite this, fair share calculations using CHASE methodology (see paragraphs 122-124) indicate that the current level of UK humanitarian assistance reflects the lower end of our fair share, and given the scale of flooding in 2015 may be insufficient at currently approved levels.23 49. DFID has some key advantages over the other large humanitarian donors:  Capacity to fund longer term projects, increasing strategic coherence and greater efficiency and effectiveness in achieving outcomes.  Flexibility to fund humanitarian, recovery and resilience-building activities together, adapting to context.  Risk appetite and ability to fund more innovative delivery options, including cross-border, able to reach most vulnerable populations.  Ability to fund adaptive outcome-based rather than input-based projects in complex contexts  DFID as a major humanitarian and development donor allows cross-office working to build linkages between humanitarian, development and peacebuilding instruments (see Box 2).

The Burma Humanitarian Assistance and Resilience Programme (HARP) 50. Given the above analysis of DFID’s added value and the targeted challenges for improving humanitarian assistance, this section identifies what the HARP will seek to achieve. Planned impact: Reduced poverty and suffering of crisis affected people in Burma and Thailand border areas. Enhanced resilience and capacity respond to future humanitarian need in Burma. Planned outcomes: 

Increased effectiveness of humanitarian action in protracted crises. What does success look like?



o

Increased voice of affected people, women and girls in decisions around humanitarian assistance that affect them

o

A stronger evidence base around what works in humanitarian assistance, and more use of evidence in decisions

o

DFID and wider humanitarian assistance responds adequately to the specific needs of women and girls, particularly risks of violence.

o

Stronger messaging for coherent influencing of key stakeholders on humanitarian issues

o

A larger role for cash assistance in humanitarian response

o

A stronger role for empowered civil society and national NGOs in humanitarian action, including in decision-making bodies

o

A Myanmar Emergency Response Fund that is adequately resourced, functions according to global guidelines, attracts high quality proposals from implementing partners, and is structured to provide cash as well as material assistance

Improved quality and coverage of emergency preparedness and response across the country What does success look like? o

DFID emergency preparedness procedures, and regular preparation exercises

22

Top 4 bilateral contribution totals recorded by OCHA Financial Tracking System 2012-14 for Burma and Thailand: US $115m, UK $65.2m, Japan $61.9m, Sweden $46.9m. Adjusted for contributions to CERF and EC. OCHA data is incomplete but the only comprehensive data available on humanitarian donor contributions. 23 In August 2015 at time of writing the UN-led Flood Response Plan for the recent flooding in Burma had not yet been finalised, but may be in the region of $70m or more,

16



o

Preparedness actions in inter-agency emergency preparedness plans achieved and maintained

o

Improved cash preparedness in DFID partners and the international humanitarian system

o

Local NGOs and civil society better prepared and with increased capacity to respond to crises

o

Flexibility and capacity for emergency response in DFID humanitarian contracts and accountable grants, and where relevant in development instruments supported by DFID

o

Improved coordination with government on emergency preparedness and disaster management, the extent depending on changes in the political environment

Enhanced focus on addressing the causes of humanitarian needs and building resilience at the individual and community level within humanitarian assistance What does success look like? o

Reduced dependency on humanitarian assistance for those in protracted crises

o

Displaced people or refugees with the desire and possibility to find a lasting solution to displacement are supported to take the opportunities available

o

Improved individual resilience for those in protracted crises, for example through improved nutrition and education for children, and community protection mechanisms

o

Relief and early recovery work in natural disasters specifically aims to reduce future vulnerability to disasters

HARP objectives

Objective 1

• Better support to protect and provide basic services to vulnerable people living in protracted crises

Objective 2

• Stronger capacity of DFID and partners to meet acute spikes in humanitarian need

Objective 3

• Better accountability, coordination and coherence of the humanitarian system in Burma

Objective 4

• Improved approaches to address long term drivers of humanitarian need and disaster risk and actions that build resilience

Objective 5

• Better focus on generation of evidence and synthesis of learning on what works in humanitarian programming in Burma

Objective 1 - Better support to protect and provide basic services to vulnerable people living in protracted crises 51. In a primarily constrained24 context, where “humanitarian space is limited by the actions of different parties – by violations creating crises, by deliberate limitations of access or, in many cases, by both”, longer term flexible and adaptive approaches are critical to maximising the effectiveness of assistance. 52. The move to longer-term, flexible and adaptive approaches would be an innovative approach in this context and bring several advantages. The planning cycle would allow for more investment in design

24

See “Responding to changing needs? Challenges and opportunities for humanitarian action”, Ramalingam and Mitchell (2014) for discussion of the “four C’s” humanitarian models.

17

and efficiencies over the Business Case period25. It would allow for projects that addressed immediate needs but with built-in flex to take advantage of opportunities that arise to improve the situation of conflict affected people. Examples of this might be through moving to more cash-based assistance where possible, through integration with government health or education services, restoring livelihoods access or taking a more holistic approach to protection concerns that responded to context-specific needs. Longer term programming would be complemented by a mechanism to respond to new needs out of area or unanticipated gaps. 53. The movement from an acute to a protracted phase of crisis should also lead us to focus more on interventions that provide longer term benefits and address drivers of longer term chronic vulnerability. Flexible approaches to finding lasting solutions to displacement will be a critical part, but even within protracted displacement this can be addressed through a proportionate focus on longer term issues that drive vulnerability. Examples are addressing maternal and child nutrition, education for children and youth, and the psycho-social and protection issues associated with prolonged crises. These approaches will also be more feasible through multi-year programming. The balance between meeting acute needs and addressing these chronic drivers will have to be adapted to each situation. 54. DFID will also focus support more directly on geographical areas where we can bring the most added value. Partly this will be in cross-border work and work with ethnic authorities, where DFID support can balance the UN and development actors’ focus on more accessible areas and government systems. Objective 2 - Stronger capacity of DFID and partners to meet acute spikes in humanitarian need 55. Work in this area would build on work started in 2014 by the UN to map out preparedness actions and needs in Burma through an Emergency Response and Preparedness Plan (EPRP). It would also involve looking at strengthening coordination and coherence in areas outside of the UN-led coordination structures, notably in non-government controlled areas, and in Thailand. 56. DFID Burma emergency preparedness and that of our development implementing partners will also be a focus of Objective 2. This will be largely non-programmatic, but require advisory resources. DFID Burma will develop an Emergency Preparedness and Response Plan, and will ensure adequate consideration of crisis risk and potential modification in new DFID Burma development Business Cases. Regular simulation activities will be undertaken by DFID Burma, where possible combined with wider HMG crisis simulation exercises in Burma. Internal Risk Facility26 57. An Internal Risk Facility (IRF) under this Business Case would provide pre-approved flexibility to scale up a rapid response to significant new needs resulting from a rapid onset crisis. The IRF would give pre-authorisation by Ministers to commit available resources transferred from other DFID budget lines to augment resources available under this Business Case to respond to the crisis in question. This would allow timely reprogramming of DFID resources to and within DFID Burma following a significant rapid onset crisis. The IRF would provide a framework for the rapid reallocation of funding held by central DFID departments and by DFID Burma teams – where the need for DFID to respond quickly to the crisis justifies such a reprioritisation. The governance / decision-making process for the use of the Internal Risk Facility is set out in paragraphs 153 - 154 below. The Internal Risk Facility is intended to be used only when necessary and flexibly at any point of the Business Case. 58. This would allow for further rapid DFID financing flexibility in responding to crises that exceed the preparedness and flex capacity of State and international actors under existing agreements. Additional funding through the Internal Risk Facility would likely be used through existing implementing partners

25

See “Value for Money of Multi-year Approaches to Humanitarian Funding” Courtenay Cabot Venton (2013). VfM aspects considered in more detail in appraisal and financial cases. 26 The design of the Internal Risk Facility draws on learning from other DFID humanitarian Business Cases with similar recurrent risk profile and contingency funding mechanisms, such as Somalia, Ethiopia, Sudan, and Pakistan and DFID’s internal “Multi-Year Humanitarian Business Cases Lessons Review” (2015) that found contingency measures were “vital” in design “for ensuring that multi-year commitments retain flexibility”

18

of the Business Case, or to established partners engaged in the response27. A major disaster beyond the scale that could be addressed through the Internal Risk Facility would require reconsideration of the approach of the Business Case and the planned outcomes. This would likely require a new Business Case or significant amendment to the existing Business Case. In such a situation the Internal Risk Facility would provide an initial and catalytic role as part of a wider response.

Figure 1 – Indicative response modalities for rapid onset crisis

High impact, low frequency, e.g. Cyclone Nargis

CHASE DEC / support Agency New appeals funding L3 declaration Internal MERF Risk Facility Special allocation Allocation Crisis modifiers Flash Appeal / in development update to HRP instruments

Medium impact, medium frequency, e.g. Cyclone Giri

Low impact, high frequency, e.g. annual flooding

Others

Flexibility built into existing agreements Contingency stocks

Additional modalities / actions

Humanitarian impact

DFID/partners

Strategic Capacity Building Facility 59. Recognising that the primary assistance to new crises in many areas is provided through CSOs and local and national NGOs (see Table 1), under this objective DFID would support the organisational strengthening and capacity building of key organisations present in areas where they are likely to play important roles in emergency preparedness and response, as well as in responding to protracted humanitarian needs. This support would be given through the establishment of a Strategic Capacity Building Facility, and would link closely with DFID Burma’s wider support to strengthening civil society. 60. Capacity building will be focused on key bottlenecks and technical weaknesses limiting the effectiveness of humanitarian response, and particularly in areas related to emergency response. This will recognise that many of the limiting factors involve organisational structure and administrative processes, as well as technical programming considerations. One aim will also be to address the barriers to access of donor funds for these organisations through other mechanisms such as the MERF. 61. Many national and local NGO and CSOs involved in crisis response have a wide base of community and youth participation and mobilisation, and in many of these organisations, volunteers play key roles in humanitarian response. The Strategic Capacity Building Facility will also look to support these organisations to work effectively with their dedicated youth and volunteer members, and to support their capacity building without undermining the voluntary and charitable nature of their actions. 62. The Strategic Capacity Building Facility will also have an aim of ensuring that women are able to play an equitable role in humanitarian response, particularly in leadership and decision-making positions.

Objective 3 - Better accountability, coordination and coherence of the humanitarian system in Burma

27

Such as UN agencies, Red Cross, RRF agencies, or other DFID Burma instruments, such as 3MDG and LIFT.

19

63. DFID would maintain its commitment to supporting humanitarian coordination and accountability. Much of the work in this area is advisory rather than programmatic, and the HARP structure is designed to increase DFID Burma’s advisory capacity to play a leadership role in improving the response of the humanitarian system in Burma. Increased support to the Myanmar Emergency Response Fund would also strengthen coordination. DFID would also continue to support to critical gaps or needs for strengthening coordination or technical capacity in the system. 64. Based on the analysis in Box 1, DFID would aim to contribute a proportionate share of the MERF. This would be based on the target value of the MERF, and our policy commitment to improved humanitarian coordination and the utility of commitments to grow the MERF to a more effective size and leverage wider donor engagement. Globally in 2014 DFID contributed 33% of the total funding of country-based ERFs and Common Humanitarian Funds28, and our contribution to the MERF would likely be of a similar scale, with the option of a larger catalytic contribution in Year 1 if this was adjudged to be an effective means of encouraging further reform and catalyse other donor commitments to the MERF in the longer term. Under this Business Case we would aim to negotiate a multi-year agreement with UNOCHA that comprised a significant base commitment for the stability and planning of the MERF, and further funding contingent on match from other donors, and on key reform indicators. Technical Assistance, Monitoring, Evaluation and Learning (TAMEL) Facility 65. A Technical Assistance, Monitoring, Evaluation and Learning Facility would be a key component of the HARP design. This would aim to address evidence and data weaknesses in humanitarian response in Burma, identified as one of the key barriers to improved humanitarian response in paragraph 44 above. This would strengthen both DFID’s humanitarian work and that of the wider humanitarian system, contributing across the objectives but particularly to Objective 3. The specific needs will vary over time and will be agreed through the governance structure of the HARP, but some of the possible areas of work of the TAMEL Facility would include: - commissioning research and analysis work to fill evidence gaps29; - commissioning design and evaluation of pilot approaches on particular issues, both programmatic and in monitoring and accountability, including through the use of mobile technology30; - synthesis of existing evidence to improve the humanitarian response, and disseminating this; - providing technical assistance to DFID implementing partners or humanitarian coordination structures - third party monitoring services in hard-to-access areas: humanitarian access in Burma is unpredictable and in some places implementation may be possible but monitoring by DFID or international organisations not possible; - specifically ensure that the voices of women and girls and those of youth are heard in humanitarian response, and the impacts of crises on them is understood - mid-term review and evaluations of specific projects or approaches. 66. DFID Evaluation Handbook suggests 1-5% of expenditure be set aside for monitoring and evaluation. The proposed amount for the TAMEL Facility is x% of the projected expenditure level before use of the Internal Risk Facility. This recognises that a base level of monitoring and evaluation will be carried out by implementing partners and built into their project budgets, but that the scope of work projected for the TAMEL is wider than the standard project monitoring and evaluation.

Objective 4 - Improved approaches to address long term drivers of humanitarian need and disaster risk, such as durable solutions31 for internally displaced people and actions that build resilience to natural disasters and conflict

28

UNOCHA Financial Tracking System For example on the effectiveness of interventions designed to address mental health issues and provide psycho-social support 30 Mobile technology is very immature in Burma, with historically very limited and very expensive coverage through state providers. The first two private sector companies were granted contracts in 2013 and becoming operational only in late 2014. Coverage and penetration has been increasing rapidly, but many of the crisis-affected parts of the country have not yet been reached by Burmese providers. Mobile communications technology will likely provide opportunities both for provision of assistance and for monitoring and accountability in humanitarian response over the period of the Business Case. 29

20

67. The capacity to support options to move people beyond dependency on relief assistance is the primary gap noted by humanitarian actors in recent consultations in Rakhine and Kachin. In the complex environment, possibilities for lasting solutions to displacement may disappear quickly if not taken up, and may require difficult decisions balancing principles with pragmatism and being able to act quickly. Current humanitarian funding mechanisms make such processes slow and cumbersome. 68. There is also more that can be done within humanitarian action to build resilience at the individual or community level, even while an overall solution to displacement or vulnerability is not yet possible. Examples would be addressing stunting in humanitarian caseloads, or establishing community-based protection mechanisms. Box 2 below considers what an effective approach in protracted crises might look like in more detail and paragraph 80 considers the broader approach to resilience across the HARP, which would be addressed particularly under this objective. Box 3 – humanitarian/development approach in protracted crises Humanitarian funding is traditionally short term in nature, and covers a wide range of sectors. In protracted crisis environments, humanitarian needs often persist due to longer-term and more complex causes. Short term 32 humanitarian instruments are traditionally poorly adapted to delivering sustainable results in such contexts. A longer term perspective on the continuation of crisis conditions also makes a clearer case for investment in resilience-building and vulnerability reduction, and for DFID’s role in this where much other humanitarian assistance operates on annual cycles focused on relief assistance, or through development instruments poorly adapted to the complex environments. Longer term funding also allows for flexible and adaptive programming for which there are higher initial costs to establish. The theoretical case for multi-year humanitarian assistance has been made many times, but the evidence base to demonstrate the benefits is still weak. The contention of this Business Case is that multi-year humanitarian assistance provides significant benefits and can be one of DFID’s principal areas of added value, given that other 33 major donors have constraints to providing this kind of funding. Other than the theoretical case of more effective programming The prima facie case for multi-year funding is particularly strong in the Burma context for the following reasons: -

-

-

administrative obstacles can delay implementation in a new area or by a new organisation for months or years. Multi-year support can allow time for more efficient or more specialised organisations to enter an area that otherwise would not be possible. This is the principal reason given for the paucity of organisations present in areas such as the north of Rakhine State. multi-year support makes the upfront costs of formation of consortia more worthwhile, addressing the problem of the highly fragmented presence of UN, INGO and national NGOs across the country that otherwise provides an extremely limited market of organisations able to operate at scale DFID experience of running a humanitarian programme of short term accountable grants at the current scale has demonstrated that the opportunity costs of programme management and administration in such a programme are very high, given the limited administrative and advisory resources, and moving to multi-year programming would free significant capacity for strategic engagement with project design, value for money and influencing of the wider humanitarian system.

This Business Case aims therefore to support multi-year adaptive humanitarian assistance, and will aim to build the global evidence base for the benefits of such approaches through consideration of appropriate indicators. The Business Case also considers the evidence that in many cases humanitarian outcomes can be more effectively and efficiently reached through longer-term more focused and specialised development instruments. In Burma, examples of such instruments are the multi-donor Livelihoods and Food Security Trust Fund (LIFT), the 3MDG health fund, and the Myanmar Education Consortium (MEC). 31

‘Durable solutions’ is the term used for a lasting solution to displacement or refugee status, which can be achieved through return/repatriation, resettlement elsewhere, or local integration in the place of displacement. 32 See “Managing crises together: towards coherence and complementarity in recurrent and protracted crises” ODI paper, Carpenter and Bennett (2015). The draft UK submission to the 2016 World Humanitarian Summit also has two of the four UK priorities that relate to protracted crises: the need for “a seismic shift in the way in which we approach humanitarian crises, by taking a much longer-term perspective and strategic perspective…it is only by building resilience, improved preparedness and enabling recovery that we can reverse the trend of escalating risk” and in improving “financing that is capable of delivering adequate, predictable and appropriate support to those in greatest need”. 33

Of the major humanitarian donors: ECHO, OFDA and the MERF cannot provide funding over 12 months, Japan and Australia normally provide only 12 month humanitarian funding.

21

The principles of operating in protracted and complex crises through this Business Case will be to: -

-

-

-

ensure a focus on understanding the context, monitoring and adapting, and learning what works throughout programming; demonstrate the feasibility of longer term approaches in complex environments; use the humanitarian presence and experience in crisis environments to advocate for, support and hand over provision of assistance to more specialised development instruments where possible and appropriate, where necessary ensuring residual humanitarian needs are met through complementary 34 programming ; be aware of the limitations of less specialised humanitarian assistance in such environments – focus on simpler approaches with clear evidence of impact, for example material or cash support for reestablishment of pre-existing livelihoods rather than income generation, skills or vocational training; ensure overall assistance strikes an appropriate balance between addressing immediate humanitarian needs, reducing vulnerability and building resilience in the longer term (see resilience cross-cutting theme); ensure that field information and analysis can inform DFID and HMG advocacy and influencing. provide longer term assistance where there is no prospect of alternative development instrument engagement and where this is a humanitarian priority; 35 systematically consider a cash approach before deciding on material assistance ; build capacity of and support local actors who will remain present and addressing needs beyond the lifespan of the HARP.

Objective 5 - Better focus on generation of evidence and synthesis of learning on what works well and less well in humanitarian programming in Burma 69. The historically closed and secretive nature of humanitarian work in Burma continues to influence information sharing and learning. There are individual cluster or sector initiatives but there is a significant opportunity to improve humanitarian assistance in Burma by producing evidence and through collecting, synthesising and sharing evidence that exists on what is and is not working in humanitarian assistance. The approach of the evaluation and learning elements of the TAMEL Facility set out in paragraph 66 above will aim to address these gaps. Flood response and El Nino risk 70. Outside the longer term objectives of the HARP, Burma is currently experiencing the worst natural disaster since Cyclone Nargis in 2008 (see paragraph 23). Given the time required for establishment of the proposed Burma HARP Facility (see Commercial Case), the Business Case includes provision for further response to the emerging flood response needs, and for preparedness and response to extreme weather related to an El Nino event, before the Burma HARP Facility is fully operational. 71. An initial UN-led Flood Response Plan36 has estimated international support of $75.5 million (£49 million) is needed for response in 2015. This will be revised as further information and analysis becomes available, and significant further recovery and rehabilitation support will be needed in 2016. The UK has provided approximately £3.4 million in flood response assistance through existing Business Cases, and through UK proportions of CERF and ECHO funding. The UK fair share of these initial response needs would be around £5m in 2015 using CHASE methodology, and taking into account the possible upwards revision of requirements and further needs in early 2016, this Business Case will provide up to a further £xm for flood response in 2015-16, and a provision for a further £xm 34

“Managing crises together: towards coherence and complementarity in recurrent and protracted crises” ODI 2015 stresses the need to move away from rigid divides towards developing joint planning and context-specific rational division of labour between government, development and humanitarian actors as well as incentivising work across the humanitarian/development divide, including multi-year financing (or commitments) and planning that allows for more flexible programming. 35

This Business Case strongly supports the move to the greater use of multi-purpose cash assistance in humanitarian response recommended by the recent High Level Panel on Humanitarian Cash Transfers, and will work towards this. It should be noted however that the principal current limitations on cash approaches in conflict contexts in Burma is the reluctance of Burmese authorities to accept a predominantly cash-based approach, manifested in further formal and informal obstacles to humanitarian access in already constrained environment. A gradual and politically-sensitive approach to increasing the use of cash will be needed. Considerably greater scope and government engagement is possible in the area of natural disasters, where the primary limitation is around the cash preparedness of the international system. 36

“Myanmar: Initial Flood Response Plan (August to December 2015)”, OCHA (2015)

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in 2016-17 to respond to continuing flood recovery and El Nino event preparedness and response if necessary. 72. Allocations for flood response and El Nino preparedness and response will aim to reflect the UK’s fair share of the evolving significant humanitarian needs, and prior to the operation of the Burma HARP Facility, allocations will be programmed through established response partners, including DFID Burma’s current humanitarian implementing partners, UN agencies, the Red Cross, RRF partners or through other DFID-supported instruments in Burma, such as 3MDG and LIFT. The information on needs and gaps is not yet available to be able to define implementation details and implementing partners more precisely. Due consideration will be given to the climate smart element of such programming, which may be significant given the nature of the events.

Cross-cutting themes 73. While there are many cross-cutting themes relevant to the HARP that will be addressed through ongoing management, the principal issues are: Conflict sensitivity 74. Conflict sensitivity of the HARP will be addressed through the engagement of DFID Burma Peacebuilding Adviser as well as rigorous risk management. The Peacebuilding Adviser will conduct a thorough conflict sensitivity audit of the HARP and monitor conflict sensitivity throughout the programme cycle. Risks of humanitarian assistance provoking conflict exist particularly in Rakhine, and risks of prolonging conflict or doing unintended harm exist throughout. These can be mitigated through adequate consultation, design and coordination with DFID’s other work in Burma, including in peacebuilding, governance and livelihoods. Gender and Gender Equality (Compliance with UK 2014 Gender Equality Act) 75. Gender is always a critical issue in crisis situations. There is strong evidence internationally that crisis situations affect men and women differently and have a significant impact on gender dynamics37. Humanitarian crises and resulting displacement creates risks for both men and women, but it can also create opportunities for gender equality that interventions should capitalize on. In situations of crisis, both men and boys and women and girls experience a discrepancy in their gender identities and expectations and their ability to live up to these expectations. For example, in many cultures, men are expected to be the provider to the family, and cut off from their traditional livelihood opportunities because of crisis, they find that they are unable to live up to the provider expectations 38. This discrepancy between gender expectations and daily-lived realities often leads to friction and shifts in gender power relations. 76. Humanitarian crisis often lead to a breakdown of (reproductive) health services, nutrition, and rule of law/access to justice, which impacts men and women differently, and leave women more vulnerable to SGBV, while men and boys may be more at risk of overt violence and forced recruitment into armed forces and groups39. At the same time, especially in societies with deeply entrenched patriarchal structures, situations of crisis can provide opportunities for increased gender equality. As men struggle to provide a livelihood, women often play a more important role in the family's breadwinning, sometimes becoming the primary breadwinner, which causes a shift in power relations that can lead to more gender equality. 77. In Burma, gender issues and context varies hugely between different parts of the country, and needs local context-sensitive analysis and appropriate action. In some ways women have historically had relative equality, for example through parity in primary school enrolment and completion rates, and

E.g., “Humanitarian Policy Note: Gender Issues in Conflict and Humanitarian Action” , Oxfam 2013; “Gender Equality in Humanitarian Action” OCHA, 2012; 38 E.g. “Collapsing Masculinities and Weak States: The case study of northern Uganda” Dolan, C. 2003 in Cleaver F (ed), “Masculinity Matters: Men, Masculinities and Gender Relations in Development” 39 “Rethinking Gender in Peace Building” International Alert, 2014 37

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lower rates of malnutrition for girls.40 This however masks widely differing situations in outlying and conflict areas, where in some cases girls have significantly worse indicators.41 78. The approach under this Business Case will be to ensure adequate local gender analysis and assessment is undertaken, and that all projects meet standards of at least the mainstreaming of gender issues42. The Technical Assistance, Monitoring, Evaluation and Learning (TAMEL) Facility will also ensure continuous monitoring, evidence gathering and adaptation on gender issues throughout the programme cycle, and gender considerations will be an explicit part of all project and overall HARP monitoring and evaluation. 79. In programmatic terms the particular risks of violence in conflict environments will largely be addressed through protection programming, which will include a focus on gender-based violence, and differential consideration of the risks of men and boys and those of women and girls. Programming in reproductive health and nutrition will also address the needs of women and girls in particular. Our humanitarian work will engage with the Women, Peace and Security agenda43, and genderdisaggregated data will be collected throughout the HARP. Resilience 80. Building resilience will be a key focus across the HARP. As a primarily humanitarian programme, the initial focus will be on building resilience of communities and individuals within protracted crisis environments rather than system wide at national level. Specifically this will mean moving focus from the delivery of relief items to interventions that promote the capacity of affected people to improve their situation in the longer term, for example: - Flexible support to take advantage of opportunities for achieving durable solutions to displacement and graduating from dependency on humanitarian assistance, which is the single clearest way of building resilience in the displaced caseload of crisis-affected populations. - Building community self-protection capacity through strengthening of community networks - Building individual resilience through addressing chronic malnutrition. This may be through ensuring humanitarian health and nutrition interventions include actions that are known to reduce chronic malnutrition, or through expanding actions such as maternal cash grants that have been shown to work in Burma to areas out of the reach of development instruments. - Increasing the use of cash-based rather than material assistance where possible and appropriate. All material interventions will have to demonstrate an advantage over a cash alternative. - Improving mental health and psycho-social support, recognising the emerging evidence base44 of the long term impact of this issue and the limited attention this issue has received. - Understanding and shaping the impact of humanitarian assistance on markets and livelihoods. Support to sustainable livelihoods is complex in protracted crisis environments, but some flexible capacity for the recapitalisation and reestablishment of pre-existing livelihoods, where the evidence of impact is strongest, will be integrated into programming.45 - A focus on ensuring the provision of education and skills training to crisis-affected populations, including to youth. Direct provision of educational assistance through humanitarian instruments will be a last resort where authorities and development actors are unwilling or incapable. - Conflict-sensitive building of service delivery capacity and accountability of government or ethnic authorities - In natural disaster response, building the resilience and disaster management capacity of communities and in some cases local government systems will be a part of any response, with a minimum of 10% of any assistance programming going to risk reduction activities. 40

UNICEF Multi-Indicator Cluster Survey (MICS) 2009-10 For example the most recent malnutrition survey in Maungdaw Township of Rakhine found girls had a significantly higher rate of severe acute malnutrition (3.8%) to boys (2.3%). 42 This will be assessed through the use of the IASC Gender Marker, with projects requiring a score of at least 2A, “demonstrating the potential to contribute significantly to gender equality.” 43 Burma is one of six focus countries for the UK Action Plan on Women, Peace and Security (WPS). DFID Burma humanitarian work currently contributes to the Action Plan for Burma under several pillars. 44 See IASC advocacy paper for a summary of evidence and recommendations in this area https://interagencystandingcommittee.org/system/files/20150721_iasc_mhpss_rg_whs_advocay_paper_.pdf 45 “Generating Employment in Poor and Fragile States: Evidence from Labor Market and Entrepreneurship Programs”, Blattman and Ralston (2015) 41

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Accountability to affected populations 81. With the lack of market mechanisms to ensure the appropriateness, quality and value for money of humanitarian assistance, top-down monitoring will be much more effective when ensuring adequate mechanisms for the voice and opinions of crisis-affected populations to be taken account of. Accountability to beneficiaries will be a key theme and critical areas of participation, representative consultation, transparency and feedback will be integrated into all programming, as well as being a core element of the TAMEL Facility (described in paragraph 66 above). Growing possibilities for the use of mobile technology in Burma will also be considered for accountability as well as programming purposes. Broader support to the humanitarian system may also look to build on accountability capacity building work that DFID has been supporting through UNOCHA in Burma. 82. DFID will examine ways of bringing the voices and views of affected populations into strategic and decision-making processes of the Burma HARP Facility, considered in more detail in the management case below. Specific attention will be paid to ensuring adequate voice and control of women is integrated through accountability mechanisms. Climate Change 83. Much of the humanitarian risk in Burma relates to extreme weather. The principal natural hazards have historically been cyclones and storms, the frequency and severity of which are increased by climate change (see paragraphs 18-22). The percentage of climate smart programming is hard to estimate in advance, and will depend on the eventual composition of programming, but an estimated 10-20% of work under the HARP is expected to be climate smart, in particular: - All humanitarian response will be expected to integrate consideration of natural hazard risk, and natural disaster responses will be expected to have at least a 10% element of disaster risk reduction. - Disaster preparedness work, in particular the pre-positioning of emergency response equipment and stocks, will reduce emissions associated with airlifting equipment and supplies in emergency response. - Longer term work on resilience and vulnerability will assist people to cope with shocks and stresses that will include climate-related shocks.

Expected results 84. The composition of detailed results will be dependent on the evolving humanitarian environment in Burma, but the aim will be to play a leading role with other donors to ensure humanitarian needs are met for up to 400,000 people per year. A more detailed results framework and the full logframe for the Business Case will be developed during the first year after selection of the HARP Managing Agent. Headline Results  Humanitarian support to 400,000 people in communities affected by conflict and displacement annually.  Decrease in child chronic malnutrition rates in refugee and IDP camps.  Increased percentage of women in refugee and IDP camp management.  Increase in proportion of targeted refugee and IDPs aware of protection risks, how to mitigate risks and how to access protective services.  At least 40,000 people reached with emergency food or cash assistance annually  At least 100,000 people reached with hygiene water and sanitation interventions.  At least 100,000 people supported by DFID funding to cope with the effects of climate change 85. The Theory of Change below sets out the main anticipated outcomes of the HARP: improving the delivery of humanitarian assistance in protracted crises, improving system-wide emergency preparedness and response, and acting to address the causes of humanitarian need and building resilience. It shows how the actions of the Business Case fit with different elements of DFID Burma’s approach and with central and regional programmes to achieve these outcomes.

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Assumptions 86. The critical assumption is of reasonably stable or improving humanitarian access. Setbacks in political reforms or renewed fighting could limit access to be able to provide assistance in certain areas. Realistically access is likely to be variable at local level, and this is one of the reasons for building in flexible and adaptive capacity into programming. Some humanitarian assistance would likely be possible even in a worst case scenario: DFID cross-border assistance was able to operate in a very restrictive environment before the advent of reforms in 2011; this would limit the geographical scope and ability to achieve results at scale. 87. It is assumed that there will be no major negative developments or retrenchment of political and economic reforms during the period of the Business Case. This would likely require significant rethinking of DFID’s approach in Burma. While humanitarian response may look similar, there would likely be an increasing focus on service delivery outside of government structures, which may include the use of humanitarian instruments and relationships. There may also be significantly increased humanitarian needs if state capacity or reach weakens, and a consequent need to significantly increase the humanitarian element of DFID Burma assistance. 88. While the Business Case is designed to provide capacity for humanitarian response to new crises up to a certain scale, it is not intended that the Business Case would encompass the whole response to a large scale rapid-onset crisis, such as a major cyclone, flood or earthquake. This would significantly alter the context and require major changes to the form of assistance, with significant increases to the scale of humanitarian need and requirement for additional funding.

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Reduced poverty and suffering of crisis-affected people in Burma and Thailand border areas. Enhanced resilience and capacity to respond to future humanitarian need in Burma.

Increased effectiveness of humanitarian action in protracted crises

Better support to protect and provide basic services to vulnerable people living in protracted crises Longer term flexible and adaptive humanitarian support Support livelihoods and coping mechanisms, and transition to development instruments where possible

Better accountability, coordination and coherence of the humanitarian system in Burma Secondments to UN, strengthen MERF, donorHCT coordination Support coordinated humanitarian advocacy

In DFID Burma Humanitarian Strategy

Support/advice to Central or Regional programmes

Primarily through Humanitarian Business Case

Primarily through other DFID Burma programmes

Improved quality and coverage of emergency preparedness and response across Burma

Better focus on generation of evidence and synthesis of learning on what works in humanitarian programming in Burma TAMEL Facility

Support donor coordination and wider burden sharing

Theory of change and DFID linkages

Assistance addresses the causes of humanitarian needs and builds resilience

Stronger capacity of DFID and partners to meet acute spikes in humanitarian need

Ensure flexibility and response capacity in DFID humanitarian grants Internal Risk Facility DFID-UN preparedness project, DEPP

Improved approaches to address long term drivers of humanitarian need and disaster risk, such as solutions for internally displaced

Strategic Capacity Building Facility

Support to MERF Advisory support to crisis modifiers in development instruments DFID Burma office emergency response plan and simulation

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Protracted crisis approach and support to solutions to displacement

Early recovery work in natural disasters

BRACED programme

Support for IDP return and resettlement

LIFT and economic development programmes

Regional sovereign disaster risk insurance pool

Peacebuilding and stabilisation activities

Humanitarian demining

Appraisal Case Design principles 89. The appraisal case considers how the HARP can best achieve the 5 objectives and deliver value for money. Box 3 reviews the emerging international evidence on how development agencies and the wider humanitarian community can most effectively deliver and manage humanitarian finance, particularly in places dealing with protracted crises. Together with analysis of performance of the existing DFID humanitarian portfolio in Burma46, the conclusions are that the HARP should demonstrate: 1. A streamlined and consolidated UK approach to humanitarian support in Burma. To allow DFID to scale up action we will need to design an efficient programme management structure, in line with the resources available in the DFID Burma country office. 2. Flexibility to scale up and down. The Strategic Case makes the case for planning for similar to current levels of humanitarian need for the period of the Business Case, but the need for flexible capacity to respond to new or increasing needs, and governance and review mechanisms to adapt or scale back funding in case of an improving environment. 3. Capacity to learn and adapt to changing circumstances. Burma remains a context of political uncertainty and there is considerable uncertainty about the risks posed by climate change. The HARP should build mechanisms for real time learning about what is working well and less well, and capacity to adapt the mode of delivery in order to best achieve planned outcomes. 4. Multi-year support to address humanitarian needs. The case is set out in box 3 above.

Options appraisal 90. This section will identify and critically assess VfM of the range of options available to address the need set out in the Rationale for Intervention. It will use the ‘3 Es’ VfM framework in line with DFID’s approach to value for money. A. Value for money methodological framework 91. The appraisal will assess the feasible set of delivery options against the questions set out in the framework below. Table 2: VfM Framework Effectiveness

Efficiency

Description Spending wisely – the option should have the ability to achieve the 5 HARP objectives in order to realise the desired outcomes Spending well – the option should ensure that DFID and our implementing partners to convert inputs into outputs in

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Appraisal questions  To what extent is the option likely to achieve the 5 HARP objectives? 

To what extent is the option consistent with the 4 design principles identified in the Strategic Case? (Streamlined support,

Support to Conflict-affected People and Peacebuilding in Burma: A Mid-Term Review, Stabilisation Unit (July 2014), DFID Burma humanitarian Business Case Annual Reviews 2014, advice from DFID Advisers

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Economy

the most efficient way, in line with the design principles we have identified for the HARP Spending less / getting more for the money – the option should ensure adequate control over input costs and ensure we understand what drives them

flexibility, funding)

adaptability

and

multi-year



What are the costs to DFID to manage and implement the HARP under this option?



Does the option enable DFID to ensure that implementing partners are buying inputs of the appropriate quality at the right price?



In rapid onset crises, will DFID be able to measure speed, quality and cost sufficiently 47 well?

B. Feasible options 92. The feasible options to address the needs set out in the rationale for intervention are set out in detail below. The ‘do nothing’ option would be to halt DFID support to humanitarian assistance in Burma. This is dismissed as it does not address the needs set out in the rationale for intervention above. The feasible options for delivery of the HARP are: 

Option 1: In line with the existing approach, DFID would deliver support through a series of Accountable Grants and Memoranda of Understanding to UN agencies and a variety of NGOs in three geographic focus areas. DFID would directly manage up to 20 agreements, as is currently the case. This would include support to the MERF but at the current (smaller) scale.



Option 2: Channel DFID Burma humanitarian support through the multi-donor MERF (managed by OCHA). Establish a new technical assistance, monitoring, evaluation and learning (TAMEL) Facility and a small and agile Strategic Capacity Building Facility for flexible support to building capacity of the humanitarian system in Burma (managed by a third party). DFID would manage three agreements, including procurement exercises for the Strategic Capacity Building and TAMEL Facilities.



Option 3: DFID Burma would establish a new Burma HARP Facility with integrated technical assistance, monitoring, evaluation and learning (TAMEL) and Strategic Capacity Building Facilities. The Fund would initially have thematic or geographic windows in line with the priorities identified in the Strategic Case. DFID would manage a single procurement for an agreement with the Managing Agent.



Option 4: DFID would collaborate with implementing partners in Burma to develop the Terms of Reference for thematic projects (initially likely protection, food security, health, and support to refugees in Thailand). Delivery of each thematic project would be through an agency or consortium of agencies in Burma or Thailand. DFID would establish new TAMEL and Strategic Capacity Building Facilities linked to activities implemented under the thematic projects. DFID would procure and manage four or more thematic projects and the Strategic Capacity Building and TAMEL Facilities.

There are then two hybrid options:

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DFID guidance sets out the criteria of speed, quality and cost as an alternative framework for measuring VfM in emergency response.

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

Option 5: A mixture of options 2 and 3. Under this option DFID would support the multi-donor MERF. In addition DFID would establish a new Burma HARP Facility with integrated Strategic Capacity Building Facility, and a TAMEL facility that could be integrated into the HARP Facility or procured through separate contract. DFID would manage two or three agreements, including procurement for the Managing Agent of the Burma HARP Facility and potentially for the TAMEL Facility.



Option 6: A mixture of options 2 and 4. Under this option DFID would support the Multi Donor MERF. In addition DFID would design an initial four new thematic projects, a TAMEL Facility and a Strategic Capacity Building Facility to be competitively tendered. DFID would manage the MERF contribution, and procure and manage four or more thematic projects and the TAMEL and Strategic Capacity Building Facilities.

Under all of the options, the Internal Risk Facility48 would provide a rapidly deployable capacity that increases DFID Burma’s flexibility to respond to significant new needs arising during the period of the Business Case. Option 5 structure

Option 6 structure

UN-OCHA

UN-OCHA

Emergency Response Fund (£xxm)

Emergency Response Fund (£xxm)

Managing Agent

DFID Burma Food assistance and food security contract (£xxm) Health and nutrition contract (£xxm)

Burma HARP Facility (£xxm)

Community protection / GBV contract (£xxm) Border/refugees contract (£xxm)

Strategic Capacity Building Facility (£xm)

TAMEL Facility (£xm)

Strategic Capacity Building Facility (£xm)

TAMEL Facility (£xm)

48

See paragraph 57-59 for more detail on the Internal Risk Facility

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Detailed options appraisal 93. Option 2 would demonstrate our commitment to pooled funding and coordination for humanitarian response, and strong support for the international humanitarian system. But a contribution of this size to the MERF would make DFID up to 90% of the MERF financing without giving us commensurate voice in the governance or management of the MERF. It would mean also that the MERF would exceed its target funding level, and exceed the volume of the type of short term material relief assistance delivered through small projects that it is most effective at providing (see Box 1). The formal link of the MERF to the UN Humanitarian Response Plan would limit the geographical scope of programming. Flexible and adaptive funding would not be possible under MERF guidelines and experience of other MERF show that the prioritisation system through clusters tends to prioritise immediate needs over addressing causes and promoting recovery. Option 2 is therefore assessed to be ineffective in achieving the objectives of the HARP. 94. Options 3 and 4 do not include the MERF, which despite the above limitations performs several key functions towards achieving the objectives of the HARP: providing a platform for wider donor burden sharing; catalysing coordination and giving DFID a strong voice in improving the humanitarian system. 95. For the above reasons, Options 5 and 6 are taken forward for further appraisal against the counterfactual of the existing approach, Option 1. 96. Annex 2 appraises the options against the methodological framework set out above. Under each of the cost effectiveness criteria the options will be allocated a score between 0 - 4, where 0 = unsatisfactory; 1 = weak; 2 = satisfactory; and 3 = good; 4 = excellent performance against the criteria.

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Table 3 Effectiveness analysis Criteria – expected ability of option to… 1. Protect and provide basis services to vulnerable people in protracted crises

Option 1 (Business as usual – accountable grants and MOUs, small contribution to MERF) Good (3) By providing support to organisations focussed on the challenges at hand, this option has strong potential to support activities that protect and provide basic services to vulnerable people in Burma. Recent Annual Reviews of the current DFID portfolio to this 49 aim have made a positive assessment .

Option 5 (MERF plus Burma HARP Facility with integrated Strategic Capacity Building Facility and TAMEL Facility) Excellent (4) The eligibility criteria for grants under the Burma HARP Facility would be designed so that implementing partners (such as UN agencies and NGOs) could access finance for this aim. The MERF would also continue support under this aim. The Burma HARP Facility could focus on geographic areas not covered under the MERF or areas where a longer term approach would be particularly effective.

2. Meet acute spikes in humanitarian need

Weak (1) It would be possible to scale up support to grantees through this option, but the amount of flexibility and scale up capacity would depend on the proposal from implementing partners. The organisations supported through Accountable Grant agreements to provide basic services for protracted crises might not be the most effective organisations to deal with acute crises. MERF contribution would be able to respond anywhere in the country through pre-qualified organisations but at limited scale. Weak (1) There is limited scope to build and strengthen the wider humanitarian system in Burma through this option, although support for accountability and technical capacity to UN agencies would still be possible through DFID

Good (3) Initial response would be provided through existing partners, and flexibility can be built into grants, as well as emergency preparedness measures. In the event of an acute crisis the MERF would scale up support to pre-qualified organisations anywhere in Burma although the emergency window still takes up to 6 weeks from the call for 50 proposals until disbursement of funds . The new Burma HARP Facility could be designed with a rapid response facility.

3. Improve accountability and coordination of humanitarian system in Burma

Good (3) Delivery through the MERF would signal DFID commitment to strengthening the humanitarian architecture in Burma and could encourage other donors to commit to the MERF. The MERF would respond to needs identified in the UN Humanitarian Response Plan and projects

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Option 6 (MERF, thematic projects, TAMEL and Strategic Capacity Building Facilities) Excellent (4) The thematic projects would be designed in collaboration with implementing partners on the ground to ensure that the HARP delivers against this objective. The MERF would also continue support under this aim. The DFID thematic projects could focus on geographic areas not covered under the MERF or areas where a longer term approach would be particularly effective. Good (3) The thematic projects could be designed with flexible contracts that would allow scale up of funds to suppliers in event of acute crisis. This would allow for rapid scaleup in areas covered by the thematic projects, however limited scope to scale up funds in other areas. MERF would scale up support to pre-qualified organisations anywhere in Burma although this takes up to 6 weeks.

Good(3) As per option 5 with regards to the MERF, TAMEL and Strategic Capacity Building Facilities. There would be some complexity for DFID

DFID Annual Review, Support for Conflict Affected People and Peacebuilding in Burma, November 2014; DFID Annual Review, Humanitarian Assistance in Rakhine State, October 2014; DFID Annual Review Humanitarian Response for Conflict-Affected People in Kachin State, December 2014 50 Derived from the reserve allocation process set out in the MERF Operational Manual (2015)

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Criteria – expected ability of option to…

4. Develop long term solutions that build resilience

5. Increase focus on learning

Total

Option 1 (Business as usual – accountable grants and MOUs, small contribution to MERF) standby partnership agreements. This would also continue to stretch DFID capacity to manage programmes, at the expense of more strategic engagement with the humanitarian system. Weak (1) While it would be possible to support a suite of UN organisations and/or NGOs with a focus of activities around this aim, DFID capacity to manage the number of agreements limits capacity to design and monitor such more complex programmes. Unsatisfactory (0) There is limited scope for learning about different approaches to humanitarian support in Burma through this option. The MTR of the “Support for Conflict Affected People and Peacebuilding in Burma” Business Case found that to date it has been difficult to assess qualitative impact of…the overall programme, mainly because success has largely been measured in terms of the volume of inputs and the numbers of people 52 reached with assistance . 6 of possible 20

Option 5 (MERF plus Burma HARP Facility with integrated Strategic Capacity Building Facility and TAMEL Facility) would be prioritised by international community. The Strategic Capacity Building Facility would provide demand-led support to build key capacity 51 particularly to local actors .

Option 6 (MERF, thematic projects, TAMEL and Strategic Capacity Building Facilities)

Excellent (4) The eligibility criteria for grants under the Burma HARP Facility could be designed so that implementing partners (such as UN agencies and NGOs) could access finance for this aim. There is scope within the HARP Facility to fund longer term approaches that build resilience. Excellent (4) Under this option DFID would integrate a TAMEL Facility into the Terms of Reference for the Managing Agent of the Burma HARP Facility. The TAMEL would draw evidence from the range of activities under the Burma HARP Facility. There may also be scope for the new TAMEL to evaluate projects implemented under the MERF.

Satisfactory (2) Long term solutions and resilience building activities could be built into the design of the four projects. However more focussed programming around disaster risk reduction and preparedness would need to be addressed in future projects. Excellent (4) DFID would establish a new TAMEL Facility linked to activities implemented under the four thematic projects. As per option 5 there may also be scope for the new TAMEL to evaluate projects implemented under the MERF.

18 of possible 20

management of several agreements under this option compared to Option 5, which would limit DFID capacity to engage with more strategic issues of humanitarian assistance.

16 of possible 20

Strength of evidence: medium. Our evidence of the limitations of Option 1 is based on experience in country. Option 6 is similar to models used in other DFID protracted crisis contexts such as Sudan and Somalia. Evidence for Option 5 is weaker as there is no equivalent humanitarian fund operating at country level globally, but is based on the operation of somewhat similar multi-donor funds in Burma, including 3MDG and LIFT. 51

This is consistent with the UK Humanitarian and Emergency Response Review (HERR), 2011, which recommended that, “DFID should make a sustained effort to improve skills in the humanitarian sector” 52

Support to Conflict-affected People and Peacebuilding in Burma: A Mid-Term Review, DFID Stabilisation Unit July 2014

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Table 4: Efficiency analysis Criteria – expected ability of option to demonstrate 1. Streamlined and consolidated approach

Option 1 (Business as usual – accountable grants and MOUs, small contribution to MERF ) Unsatisfactory (0) The current portfolio of humanitarian assistance in DFIDBurma includes 3 Business Cases which support a total of 22 Accountable Grants and MoUs to a suite of NGOs and UN agencies. Whist this model has been effective at getting action off the ground in Burma, there is scope to streamline and consolidate our programming. Consolidation would free up advisory time to work on more strategic issues.

Option 5 (MERF plus Burma HARP Facility with integrated Strategic Capacity Building Facility and TAMEL Facility) Good (3) DFID support to NGOs and UN agencies would be consolidated under the MERF and the new Burma HARP Facility. The Terms of Reference for the Managing Agent of the Burma HARP Facility would include delivery of the TAMEL Facility and a Strategic Capacity Building Facility. Day to day programme management and due diligence requirements would be outsourced; freeing up DFID advisory time for more strategic work.

2. Flexibility to scale up and down

Satisfactory (2) Accountable Grant agreements are a mechanism through which DFID can help finance organisations that are providing goods and services in an area that we wish to support. Under this option DFID has some ability to negotiate flexibility to scale up or down into grant agreements, but limited to the final proposals received from implementing partners.

Good (3) It would be possible to scale support up and down through two mechanisms – the MERF and the Burma HARP Facility. For the Burma HARP Facility, the added management capacity of a Managing Agent, would allow for improved planning and greater reactivity to changes in the situation and level of needs.

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Option 6 (MERF, thematic projects, TAMEL and Strategic Capacity Building Facilities) Satisfactory (2) DFID support to NGOs and UN agencies would be consolidated under the MERF and four thematic contracts. Programme management of the four projects would be overseen by a Humanitarian Adviser and a Programme Manager in DFID Burma. Each supplier would report against an outcome focussed logical framework and results would be collated centrally by the DFID office. DFID would contract suppliers for the TAMEL and Strategic Capacity Building Facilities. Good (3) It would be possible to scale funding up or down through the MERF. It would be possible to build flexibility into the four thematic contracts but more challenging to alter the balance between themes, or add additional locations or sectors in case of need. There would be limit to how much additional finance could be absorbed through the thematic contracts.

Criteria – expected ability of option to demonstrate 3. Capacity to learn and adapt

4. Multi-year support to address needs

Total

Option 1 (Business as usual – accountable grants and MOUs, small contribution to MERF ) Weak (1) As per the discussion on flexibility above, a system of Accountable Grants to implementing partners does not lend itself well to adaptive programming. DFID is able to influence but not direct the activities of implementing partners in receipt of Accountable Grants. Under this option it would be quite difficult to be nimble and change direction in response to changing circumstances. Satisfactory (2) Accountable Grant agreements can be multi-year and would enable grantees to plan activities over the duration of the grant agreement, but DFID would have limited capacity to sufficiently monitor multiple grants. 5 of possible 16

Option 5 (MERF plus Burma HARP Facility with integrated Strategic Capacity Building Facility and TAMEL Facility) Excellent (4) The new TAMEL Facility would provide DFID with real time evidence to inform our programming. Evidence from TAMEL would be used to adapt on-going programme activities under longer term contracts towards achieving planned outcomes, and there would be the possibility of using information to shape the criteria for further funding rounds under the Burma HARP Facility.

Option 6 (MERF, thematic projects, TAMEL and Strategic Capacity Building Facilities) Good (3) The new TAMEL Facility would provide DFID with real time evidence to inform our programming. Evidence generated by the TAMEL would be used to adapt on-going programme activities under longer term contracts towards achieving planned outcomes.

Excellent (4) Support to the MERF and through a new Burma HARP Facility would allow for flexibility in determining appropriate length of agreement with implementing partners.

Excellent (4) Support to the MERF and thematic projects would allow for flexibility in determining appropriate length of agreement with implementing partners.

14 of possible 16

12 of possible 16

Strength of evidence: medium-good. There is extensive experience of the efficiency of Option 1 and the MERF historically in country. CHASE has done substantial work on documenting multi-year humanitarian approaches and lessons learned, although benefits remain largely theoretical53. Further evidence should be provided through on-going evaluation work of the impact of multi-year funding on resilience54.

53

DFID CHASE guidance including: “Multi year humanitarian Business Cases lessons Learned Feb 2015”, “Umbrella, Thematic and Partner specific approaches to multi-year humanitarian funding Feb 2015” 54 “Building resilience and managing risk in fragile and conflict-affected states: A thematic evaluation of DFID’s multi-year approaches to humanitarian action in the Democratic Republic of Congo, Ethiopia, Sudan and Yemen”, Valid International, Inception Report 2015

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Box 4 Key Cost Drivers The key cost drivers for the HARP will depend on the composition of assistance being provided. The cost drivers of different forms of humanitarian assistance vary substantially: for example benchmarks within the humanitarian sector for food or cash distribution are that 90% of the budget will be the cost of supplies (or the value of cash distributed), whereas in a protection programme staff costs may comprise over 50% of the budget. What will be critical is that the chosen option enables DFID to ensure that implementing partners are adequately integrating value for money considerations. There will be costs of management and implementing the HARP through different options, which will be more visible through the separate contracting of a Managing Agent, but not necessarily more significant than the management costs of lead organisations in several thematic consortia. The costs of DFID advisory and programme management resources may also be significant and will vary under the different options. Table 5 Economy analysis Economy criterion

Option 5 (MERF plus Burma HARP Facility with integrated Strategic Capacity Building Facility and TAMEL Facility) Good (3) Managing Agent cost, which we will not be able to estimate until later in the procurement process. In theory this would avoid duplication in management of having several thematic projects. DFID advisory and programme management cost will be necessary but limited compared to option 6.

Option 6 (MERF plus strategic capacity fund, four thematic projects and TAMEL and Strategic Capacity Building Facilities)

2. Does the option enable DFID to ensure that implementing partners are buying inputs of the appropriate quality at the right price?

Excellent (4) The capacity of a Managing Agent would allow closer monitoring of VfM of implementing partners. There is good evidence that multi-year humanitarian financing provides greater 55 economies.

Good (3) DFID should be able to monitor the VfM oversight within each consortium, although DFID capacity to do so is limited. There is good evidence that multi-year humanitarian financing provides greater economies.

3. In rapid onset crises, will DFID be able to measure speed, quality and cost sufficiently well?

Excellent (4) An established Managing Agent would be in an ideal position to be able to measure VfM in rapid onset crises, this would be part of the terms of reference.

Excellent (4) With relatively few established consortia we would be able to define rapid onset crisis monitoring effectively.

Total

11

9

1. What are the costs to DFID to manage and implement the HARP under this option?

Satisfactory (2) Each thematic project is likely to be a consortium, which would then contain management cost for the lead within each. There would be more significant DFID advisory and programme management cost.

Strength of evidence: medium-weak. We have benchmarks for management costs for the Burma HARP Facility though the costs of other funds such as 3MDG, LIFT and MEC, however at this early stage in the process the final costs including the TAMEL Facility are hard to estimate accurately. The costs of fund management will be offset by the additional capacity the Managing Agent would provide to ensure the implementation of VfM measures in implementing partners, and this is likely to provide for overall better value for money.

55

“Value for Money of Multi-year Approaches to Humanitarian Funding”, Venton 2013

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Summary Effectiveness 20 15 10 5 0

Option 1 Option 5 Option 6

Economy

Efficiency

The above analysis indicates the preferred option as Option 5: the Myanmar Emergency Response Fund, plus a Burma HARP Facility with integrated Strategic Capacity Building Facility and TAMEL Facility. This option scored highest on effectiveness, efficiency and economy measures. The main effectiveness advantages of Option 5 are the flexibility of the Burma HARP Facility over thematic consortia in responding to new needs, and in building in a flexible approach to resilience. Option 5 is considered the most efficient as it proposes a more streamlined and flexible approach, able to build in better TAMEL capacity than other options. Option 5 is considered to be likely to provide the greatest economy largely through the improved capacity to monitor and ensure implementation of VfM throughout the programme cycle of implementing partners. The table below summarises how the preferred approach will cover the HARP objectives, with examples of activities.

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Table 6 Fit of preferred approach with HARP objectives I MERF

Burma HARP Facility

Modality

Objective focus

Example activities

Standard allocation

Basic material response (Objective 1) to fill gaps or address priorities in protracted response Strengthening coordination and encouraging wider donor burden share (Objective 3) Geographic and sectoral flexibility to respond to new needs (Objective 2) Longer term flexible provision of protection and assistance (Objective 1) while addressing the longer term drivers of need (Objective 4) Prepared and able to flex to respond quickly to new or emerging needs in areas of operation (Objective 2)

-

Construction of water and sanitation infrastructure Construction/repair of shelters Distribution of hygiene kits or other items Distribution of seeds and tools for restarting farming As above but more quickly in response to new rapid onset needs

-

Initially address the needs of Burmese refugees in Thailand (Objective 1) and prospects for long-term solutions to their displacement (Objective 4) Can provide a more flexible response to strategic or emerging needs (Objective 2)

-

Community-managed WASH, including behavioural change Addressing drivers of malnutrition such as mental health, water and sanitation and care practices as well as treating malnutrition Community protection mechanisms and integrated protective services for crisisaffected populations, including addressing trafficking and GBV Longer term planning for better targeted food assistance and improved use of cash Provision of assistance together with data collection for humanitarian advocacy Flexibility to adapt to situation changes, including supporting options for resolution of displacement or increased autonomy Support to refugee needs such as food and shelter in Thailand that allows for longer term planning and flexibility to support refugee choices and does not incentivise remaining in camps Support to a new needs or particular strategic opportunities that arise

Generation and synthesis of evidence and learning in humanitarian action in Burma (Objective 5), improved accountability and coordination (Objective 3)

-

Emergency allocation Thematic windows

Geographic windows Other/ Emergency windows TAMEL Facility

Strategic Capacity Building Facility

-

-

-

Improved capacity to respond particularly for first response in emergencies (Objective 2) Strengthened involvement of national/local actors in humanitarian coordination and decision-making (Objective 3)

-

Internal Risk Facility

Flexibility to scale responses to meet new or emerging needs (Objective 2)

-

Cash modalities and use of mobile technologies for assistance, information and accountability Research to inform learning and advocacy on subjects such as ethnic service providers, humanitarian access tracking, stunting in humanitarian response Third party monitoring services Independent evaluations on specific topics Emergency response training for volunteers and youth Tailored individual and organisational capacity support for key national/local NGO first responders Assistance in overcoming barriers to accessing international donor funding and barriers to voice for national/local NGOs within the humanitarian system Establishment of training programmes on aspects of humanitarian response with local educational/training providers Further allocations to MERF, to Burma HARP Facility or directly to UN, Red Cross or RRF partner for specific response to new or emerging needs.

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Commercial Case Procurement/commercial requirements for intervention Myanmar Emergency Response Fund (MERF) 97. For the Myanmar Emergency Response Fund, a Letter of Arrangement will be agreed setting out indicative disbursements and a disbursement schedule. DFID will also agree with the RC/HC an annex laying out indicators around the reform process of the MERF, indicators on improved humanitarian coordination that take into account implementing partner feedback, and indicators on resource mobilisation for the MERF. Performance against these agreed indicators will inform the DFID contribution level. The baseline contribution level will reflect DFID’s key role globally within such funds56 and policy commitment to support humanitarian coordination structures, and the aim of the MERF to channel 10% of the funding going to the HRP57. The amount of each disbursement will be determined by considering the HRP and performance against indicators and proposing a sum to the DFID Burma Head of Office who will approve the volume of the disbursement58. OCHA currently does not charge a management fee for management of contributions, while implementing partner indirect costs are capped at 7% of project allocations59. 98. The type of assistance provided by the MERF is primarily relatively short term and focused on immediate lifesaving humanitarian priorities. The MERF does not charge management fees to incountry donors, and caps indirect fees of implementing partners at 7%. As such it is significantly less costly than direct DFID funding to implementing partners, as most implementing partners have agreed indirect cost rates with DFID substantially higher than 7%60 for humanitarian programming. 99. The MERF also allows funding to a large majority of humanitarian implementing partners, provides a common prioritisation process across humanitarian actors, and the OCHA Humanitarian Funding Unit provides due diligence, risk management, administration and monitoring of projects61. As such, for the type of projects for which the MERF is appropriate, it provides significantly better value for money than alternatives for DFID that would include significantly more advisory and programme management capacity. 100. The MERF also has the added benefits of potentially promoting improved engagement with humanitarian coordination structures, and encouraging wider donor burden sharing in humanitarian programming. This Business Case focuses on the added value of DFID’s capacity to manage multiyear adaptive programming in protracted contexts, which will form the bulk of the programming under the Business Case. Alongside this there is a strong logic to supporting the MERF as a complementary instrument, that allows for wider scope geographically62 and of implementing partners, and increased flexibility to respond to new needs and gaps in assistance.

56

In 2014 DFID provided 33% of the funding to such country-based funds globally (OCHA Financial Tracking System) – see also Box 1 57 See Box 1 – the MERF has a formal resourcing target of 10% of the funding going to the Humanitarian Response Plan. In 2013 and 2014 this would have been equivalent to around $12-$13m annually. 58 Disbursements are expected to be within the £5m limit of the Head of Office, otherwise approval will be requested from Ministers. 59 OCHA Burma office funds the costs of the Humanitarian Funding Unit from its core funding (which is partly provided by DFID centrally). This is not the case for all such funds and it is possible that the position of OCHA would change over the life of the Business Case, in which case the costs and contribution would have to be negotiated, and DFID may review the contribution if we considered that the MERF became poor value for money. 60 See the Smart Guide to Humanitarian Emergency Funding 61 See para 134 for more detail on the governance of the MERF 62 Standard allocations of the MERF are only to fund projects within UN Humanitarian Response Plan, which covers only certain parts of the country. This means the MERF would not currently provide funding to the on-going protracted crises in South East Burma, and this is one of the recognised constraints of the MERF (see Box 1 above). MERF funding for new crisis or natural disaster response can be countrywide, however. This gives a geographical reach that would likely be greater than through existing partners under the Burma HARP Facility, who are likely to operate primarily in protracted crisis areas.

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101. The proposed disbursement arrangements and DFID’s leading role on the MERF Advisory Board as the largest donor to MERF will give us significant leverage over the operations of the MERF, helping us to manage risk and performance, and to adapt our contribution accordingly. DFID field visits will also be used for cross-checking the performance of MERF projects and information provided by OCHA Humanitarian Funding Unit.

Burma HARP Facility 102. The Burma HARP Facility Managing Agent will be directly contracted through a competitive ‘Official Journal of the European Union’ (OJEU) procurement exercise, which will commence after the Business Case is approved, with Early Market Engagement already commencing, as set out in the timeline below. This contract would include the activities outlined below and any others required for the successful delivery of the Burma HARP Facility:  Manage calls for proposals  Assess all applications and make recommendations to DFID Burma  Prepare and put in place all grant arrangements for successful applicants  Undertake due diligence checks on all organisations receiving grants to manage risk and ensure close fiduciary control  On-going monitoring of output and financial tracking including verification through spot checks, ensure compliance  Conduct project quality assurance visits and provide input into DFID Annual Reviews  Portfolio analysis and risk management  Financial Management – checking and verifying expenditure claims, disbursement, review audited accounts, monthly financial forecasting and monitoring against yearly accounts  Establish and manage the Strategic Capacity Building Facility contract  Secretariat functions to governance bodies  Establish and manage a Strategic Capacity Building Facility.  Possibly establish and manage a Technical Advisory, Monitoring, Evaluation and Learning (TAMEL) Facility.63 103. The Burma HARP Facility will seek to maintain flexibility throughout the life of the HARP. The successful Managing Agent will be expected to respond and adapt to this characteristic of the Burma HARP Facility, recognising that the size of DFID funding to the Facility may change, that other donors may join, and that outputs may vary in adaptive programmes to achieve outcomes. 104. The Burma HARP Facility will require a Managing Agent for a period of up to five years, the remaining period of the Business Case following the period for the establishment of the Burma HARP Facility and contracting of the Managing Agent, as well as a winding up period. 105. Given the existing humanitarian commitments of DFID Burma and continuing humanitarian needs, the first call for proposals will be announced shortly after the Business Case is approved. An initial supplier consultation has been completed, showing considerable interest and engagement from both established DFID suppliers and possible new suppliers. Further Early Market Engagement through supplier meetings are being planned for late October. 106. Funding to implementing partners will be awarded through a competitive assessment process managed by the Managing Agent, with final review and approval from the Executive Committee. 107. The Managing Agent will be expected to set up and manage the Strategic Capacity Building Facility, and potentially the Technical Advisory, Monitoring, Evaluation and Learning Facility. It is anticipated that the Managing Agent will provide these Facilities as part of the contract, and this is one of the issues being assessed through the Early Market Engagement process. 63

DFID is considering the advantages and disadvantages of contracting the TAMEL Facility separately and is also seeking the views of the market in the Early Market Engagement process.

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How does the design use competition to drive commercial advantage for DFID? 108. As outlined above, the competition to select the Managing Agent for the Burma HARP Facility will be conducted in an open and transparent manner under EU Procurement Directives. We plan a phased approach to Early Market Engagement in testing the market. An initial consultation exercise has been completed, to gain views and feedback from the market, as well as raising awareness of the opportunity within the market to allow us to scope likely market engagement and limitations more clearly. Considerable market interest and engagement with the opportunity was registered. 109. The consultation will be followed by meetings with potential suppliers to discuss the proposed approach, the parameters and contract conditions, and discuss in more detail issues raised in the consultation exercise. Depending on interest, this will likely be held both internationally and in Burma.

Initial written consultation Aug-Sep 2015

Meetings with interested suppliers Oct 2015

Procurement process Nov 15 - May 16

Selection of preferred bidder, post-tender clarification and contracting May 16

First calls for proposals issued June 16

110. Following these steps of Early Market Engagement, the procurement process will be finalised and launched, probably as a restricted competition. A Prior Indicative Notice will be used to alert suppliers to the opportunity and accelerate the timeline. DFID current humanitarian Business Cases have been or will be extended to the end of 2016 to allow adequate time for establishment of the HARP Facility and the contracting process. 111. The MERF requires no procurement and provides a unique opportunity in the context to deliver certain types of humanitarian programming at relatively low cost.

How do we expect the market place will respond to this opportunity? 112. There are several organisations with fund management experience and capacity in Burma and regionally. The on-going procurement exercise for the DFID Burma “Business for Shared Prosperity” Business Case has identified a significant level of private sector interest in management of a DFID fund in Burma, including from many organisations not currently present in Burma. The initial consultation exercise attracted 17 responses, including interest from several DFID key suppliers as well as NGOs and other potential suppliers. Responses indicated that there will be sufficient interest in the Managing Agent role at both levels to drive competition and ensure quality and value for money. In the case that an agreement cannot be reached that represents sufficiently good value for money for the Managing Agent contract, DFID will consider alternative options that might include UN agencies or the Option 6 structure laid out in the appraisal case above. 113. The Early Market Engagement processes are designed to address remaining unknowns and take into account views from those active in the market as to the best way to implement HARP. Aside from gauging market interest and views, the key questions of the consultation process were: - Regulatory issues, and timeline for resolving these, particularly around necessary registrations and authorisations. - Capacity to provide TAMEL and Strategic Capacity Building Facilities along with management of the Burma HARP Facility, or how this is best designed within the Facility. - How value for money can be measured and monitored. - Feedback and questions on the proposed governance structure – including feedback on experiences and lessons from similar structures in Burma or elsewhere. - How to maintain flexibility and adaptive capacity during implementation while ensuring accountability for results.

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-

How best to ensure beneficiary accountability is taken into account through the programme cycle. How to ensure access of humanitarian financing through the Burma HARP Facility to local and national NGOs and CSOs.

What are the key cost drivers? improve this?

How is value added and how will we measure and

114. Bids will be judged against the value for money criteria of economy, efficiency and effectiveness. 

Economy – fees, daily rates, overheads etc. and unit costs of specific inputs. For example; comparison with current costs, and those for other Managing Agent contracts. Costs of accommodation, travel, and other expenses will be included in the commercial evaluation. In consultation with DFID Procurement and Commercial Department, consideration will be given to requesting a breakdown of supplier overhead costs, including profit in the commercial bids.



Efficiency – number of days and or/staff required to deliver outputs, the inclusion of recommendations, which would improve the delivery of outputs or reduce fiduciary risks.



Effectiveness – elements of the proposals that would improve the overall impact of local technical capacity or introducing better management practices into the sector as whole.

115. Management fees proposed to be charged will be included in the commercial evaluation to ensure these costs are at an appropriate level for the Burma HARP Facility and benchmarked against other similar fund disbursement programmes. 116.

[Redacted]

How will the contract be structured and how will performance be managed through the life of the intervention? 117. DFID Burma will follow DFID’s best practice guidance for managing supplier performance as set out in the Smart Rules. Key Performance Indicators will be included in the contract Terms of Reference and used to measure supplier performance throughout the contract duration. Regular supplier meetings to discuss results, value for money and performance will take place with the Executive Committee and SRO responsible for the Business Case. Outputs from these discussions will also inform the Annual Review. 118. The Managing Agent will also submit quarterly accounting reports to DFID. This will enable DFID to make key decisions regarding the direction of the Burma HARP Facility, to ensure efficiency levels are maintained and effective delivery against outputs achieved. 119. Through the procurement process, DFID will test the maturity of the market for output-based contracts, both for the Managing Agent contract, and for contracts with implementing partners through the Facility. Over the period of operation of the Burma HARP Facility consideration will also be given to building market capacity to engage with output based contracting. 120. Contracts with implementing partners through the Burma HARP Facility will be managed through processes agreed in the Managing Agent contract, and regularly reviewed. A standard process will be agreed through thematic or geographic calls for proposals, as well as a fast-track window process for new and emerging needs and the ability to finance individual projects where particularly innovative or strategic. Both the Managing Agent and the Executive Committee will review proposals, and DFID will make final decisions on allocations. Consideration will be given to facilitating access of local and national NGOs to the calls for proposal, as well as building capacity

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through the Strategic Capacity Building Facility. Under each thematic or geographic call for proposals one or multiple contracts may be agreed, with terms set out in each call. 121. The preference will be for all payments to implementing partners to be made in arrears based on the achievement of the agreed outputs. However, the nature of working with small organisations with a limited income means that some will not be able to operate on an arrears basis. DFID guidelines for advance payment would be applied to implementing partner disbursement modalities, and any organisation wishing to claim in advance will be required to provide written justification during the award process and before a contract is signed.

Financial Case Overview of costs 122. Fair share analysis using CHASE methodology and adjusting for our proportion of ECHO and CERF spending in Burma suggests our fair share of bilateral humanitarian programming for the current assessed levels of humanitarian needs would be around £17-23m per annum.64 123. DFID Burma bilateral spending in 2014/15 and 2015/16 on humanitarian programming, including health in conflict-affected ethnic-controlled areas, has been between £16 - £17m per annum. The fact that this reflects our assessed fair share quite closely allows us a degree of confidence that this level of funding is not disproportionate for DFID and that together with other donors the key elements of humanitarian needs are sufficiently covered. 124. This Business Case is based on a projection of a continuation of a similar level of humanitarian need in protracted crisis areas over the Business Case period, given the potential for improvement or deterioration in each crisis context, but also the global average duration of displacement crises of 17 years (see Strategic Case). The proposed investment in building resilience of crisis-affected people should translate into lower humanitarian needs but the effects of many of these interventions, for example the investments in child nutrition and education have larger impacts in the longer term, and are not taken into account in the period of this Business Case. 125. The approach taken in this Business Case will include a certain level of spending that will be more evidently not directly related to the delivery of assistance, including the Technical Assistance, Monitoring, Evaluation and Learning element, the Strategic Capacity Building Facility and the costs of the Managing Agent contract. The analysis of the Business Case is that these elements will be offset by an improved quality of DFID humanitarian programming and the overall humanitarian response, and that the overall level of DFID Burma bilateral funding over the course of the Business Case should be at a similar level. 126. The Internal Risk Facility is not intended to be used for the response to the current protracted crisis caseload but to provide capacity for rapid scale up options in the case of significant new conflict- or disaster-related needs, for rapid onset scale up. 127. This Business Case (which spans financial years 2015/16 to 2019/20) would be principally funded through programme RDEL in initial phases. Elements of preparedness, disaster recovery

64

This DFID Burma bilateral fair share estimate is based on the CHASE target of 10.5% UK bilateral fair share of humanitarian needs. Needs are drawn from the UN Humanitarian Response Plan, and published humanitarian appeals outside the Plan, including part of the UNHCR appeal, ICRC, MSF, and estimates of humanitarian need in South East Burma and in the Burmese refugee camps in Thailand. DFID Burma bilateral contribution is then adjusted for the UK imputed share of ECHO and CERF allocations as per CHASE methodology. This gives the upper end figure of £23m. Some appeal figures are then adjusted downwards where they are considered to include elements beyond basic humanitarian response needs, giving the lower figure of £17m.

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and resilience may be funded through ICF in future years. An indicative breakdown by year is below. Table 7 Indicative breakdown of funds #

Component (modality)

1

Burma HARP Facility - Programme - TAMEL - Capacity Building

2 3

MERF (UNOCHA) 2015 Cyclone/flood response and El Nino preparedness and 67 response (modalities tbd) Total Internal Risk Facility (indicative annual allocation, can be used as necessary) Total with Internal Risk Facility

4

2015201665 16 17 [Redacted]

201718

201819

201920

202066 21

Total

How will funds be disbursed? 128. The HARP will have four main elements: A. A Letter of Arrangement with the MERF setting out biannual disbursements, with annexed performance indicators. B. A contract with a Managing Agent for the Burma HARP Facility and possibly a further contract for the TAMEL Facility, if separated. C. Funding for flood response/El Nino preparedness before the establishment of the HARP Facility, which may take the form of a MoU or Accountable Grant depending on the delivery partner. D. Allocations from the Internal Risk Facility. These would normally be made through the MERF or Burma HARP Facility, although an alternative may be to use the CHASE-managed Rapid Response Facility process. 129. Payments to the MERF will normally be made biannually, in line with the fund’s 6 monthly appeals. The timing of disbursements will be agreed with the MERF Advisory Board. 130. For the Burma HARP Facility, DFID will transfer grant money to the Managing Agent to pay the implementing partners. The Managing Agent will be required to open an account for the payments to implementing partners. In order to keep account balances low, on a quarterly basis the Managing Agent will provide DFID with a list of all claims received that quarter from implementing partners and a total figure for that quarter. This list would detail all of the actual expenditure being accounted for and the amount of advance funding requested for each on every individual project. 131. The Managing Agent will need to submit an assurance statement that all amounts claimed had been checked and verified by their finance team and that they were certifying the accuracy of the figures produced. They would also require fund recipients themselves to have certified the accuracy of all figures and that all advance amounts requested were appropriately justified. DFID would 65

In 2016, projects will transfer from existing Business Cases: at the earliest this would be Rakhine from April 2016, Kachin from January 2016, and Conflict Affected Areas from December 2016. 66 Business case runs until December 2020 67

See paragraphs 70-72 for more details

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review the claims list and, where satisfied that all the necessary assurances had been received, issue a payment to the project account.

What is the assessment of financial risk and fraud? 132. Delivering humanitarian assistance in fragile and difficult contexts such as Burma inevitably has a certain level of risk associated with it, and DFID is prepared to take on some risk in order to meet the pressing humanitarian needs in these countries68. However, DFID has a zero tolerance policy on fraud. Through close engagement with implementing partner organisations’ audit processes, and scrutiny of their financial statements, DFID will ensure all spend is accounted for and work with implementing partner organisations to strengthen financial oversight. If fraud is detected we will demand repayment in full. Continued disbursement of funds will be contingent upon adequate financial oversight mechanisms. 133. The Myanmar Emergency Response Fund (MERF) conducts a capacity and risk assessment of NGO partners to ensure that the partners receiving funds have the capacity to implement projects and have basic accountability mechanisms in place. The Advisory Board and the cluster coordinators are aware of the strengths and weaknesses of some of the implementing partners and poor performance is taken into account at the time of project selection. One audit is carried out per implementing partner per year, and all projects have a monitoring visit from the OCHA Humanitarian Funding Unit during implementation, in areas where the UN is able to access. 134. The MERF has also put in place the UN Harmonised Approach to Cash Transfers (HACT) approach, which seeks to reduce administrative costs and burden by linking disbursement modality and assurance mechanisms to implementing partner risk. 135. The Burma HARP Facility will undertake due diligence assessments of prospective implementing partners that provides assurance to DFID standards, and will be expected to operate a risk-based control framework that allows for tighter controls and oversight on funding to organisations whose internal control systems are assessed to be weaker. This will allow where possible smaller local and national NGOs access to the Burma HARP Facility. Given the complex operating environment and likelihood of implementing partners in some areas having further downstream partner relationships, the Managing Agent will be expected to maintain an up to date register and funding stream map that allows DFID Burma to track quickly, transparently and accountably the flow of funds under the Burma HARP Facility contracts. 136. Assistance in ethnic-controlled areas and cross-border assistance pose particular risks. Monitoring in these areas is subject to access constraints and in some cases only remote monitoring is possible. Organisations working in these areas, and working cross border are often not officially registered in Burma. They may also operate in ways that are not officially sanctioned by border states of China and Thailand, although recognised and tolerated. These elements pose particular risks, but also often allow the only possible access to the most vulnerable populations. DFID’s crossborder work has been with well-established implementing partners and due diligence processes have been carried out for all. We will remain cognisant of these risks and ensure that all possible mitigation actions are taken.

How will expenditure be monitored, reported, and accounted for? 137. All implementing partners will be required to report on their expenditure and results achieved quarterly. The level of detail of information required from implementing partners will be proportionate to the level of funding.

68

http://www.dfid.gov.uk/About-us/How-we-measure-progress/Resource-accounts/Risk-management/

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138. All Burma HARP Facility programming and expenditure will be summarised in an annual report from the Managing Agent, and the Managing Agent will review quarterly narrative and financial reports of each project, as well as expenditure projections. The Managing Agent and/or DFID programme team will aim to conduct at least one field visit to each project each year, and will use these visits to test information in the financial statements, and examine financial management mechanisms at the project level. 139. Each Burma HARP Facility contract with an implementing partner will contain clauses making continued funding contingent on delivery of agreed results or milestones, and adequate financial management mechanisms. Each contract will clearly state that in the case of fraud, resources must be returned to DFID. Results and milestones will be regularly reviewed, particularly for multi-year contracts, to allow for adaptation and flexibility. 140. The MERF produces a detailed Annual Report with a comprehensive financial statement and a breakdown of results achieved every year, as well as a great deal of other management information. The MERF staff currently conduct at least one monitoring visit to each project annually, or during the life of the project if shorter than one year. DFID will continue to engage as a key member of the MERF Advisory Board69 and will continue to monitor the technical review process.

Management Case Governance and Management Arrangements Myanmar Emergency Response Fund (MERF) 141. The MERF has a governance and management structure in accordance with OCHA Emergency Response Fund global guidance. This means that the activities of the MERF are carried out under the overall stewardship of the UN Humanitarian Coordinator (HC) in Myanmar. The HC is supported by the MERF Advisory Board and an OCHA-led Humanitarian Financing Unit (HFU) fulfilling the MERF’s secretariat functions. The MERF Advisory Board is chaired by the HC with senior-level participation of donors, UN organizations (in their capacity as cluster lead agencies) and NGO representatives. Cluster coordinators play a key role in prioritization as well as project review at both a strategic and technical level. 142. The HC has final decision-making authority on MERF allocations, while the Advisory Board (AB) role comprises: i. Strategic focus and fund allocation: The AB supports the HC in ensuring that the main objectives of the MERF are met. The AB reviews and advises the HC on strategic elements of the MERF such as the allocation strategies and the operational manual. The AB also advises on fund allocation to appropriate clusters and priorities. The AB advises the HC in setting funding targets and support resource mobilization efforts; ii. Risk management: The AB supports the HC and the OCHA Country Office in undertaking periodic risk analyses and reviewing a risk management plan of the MERF in accordance with the accountability framework contained in this Operational Manual; iii. Transparency of overall process: The AB monitors MERF processes with the objective of ensuring that all stakeholders are treated fairly and that the management of the MERF abides by established policies; iv. Review of operational activities: The AB monitors the operational performance of the MERF, providing advice to the HC.

69

DFID is currently the largest donor to the MERF and an active member of the Advisory Board. DFID played a key role in the development of the resource mobilisation strategy for the MERF and in the contextualisation of the global guidelines for the development of the MERF Operational Manual in 2015.

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143. OCHA Humanitarian Funding Unit carries out a due diligence process and an assessment of the capacity of potential NGO implementing partners. Partners that meet all the due diligence requirements will undergo the capacity assessment to determine eligibility. The assessment is aimed at determining whether the NGO has a sufficient level of capacity in terms of institutional, managerial, financial and technical expertise. This analysis establishes eligibility to receive funding from the MERF. UN agencies are not subject to a similar due diligence process. 144. The MERF management structure operates a comprehensive Accountability Framework for the management and functioning of the Myanmar Emergency Response Fund. As the level of operational, financial and reputational risks may be considered to be substantial in the NonGovernment Controlled Areas (NGCA) and hard to reach areas, the MERF Accountability Framework is based on a comprehensive risk management model which aims to link principles of due diligence, performance and capacity assessment throughout the project cycle. Accountability for the MERF is articulated on two levels: first the ability of the MERF to achieve its objectives as a humanitarian financing mechanism. The HC is responsible for establishing a process which produces high quality allocation strategies, selects appropriate and qualified implementing partners, monitors implementation and verifies that reported results are genuine and match those of approved project agreements. This is captured in a logical framework in the allocation template that enables the HC to assess the results of the MERF in the short, medium and long term. Secondly accountability relates to the ability of individual implementing partners to achieve expected project outputs and outcomes. Implementing partners are ultimately responsible for project activities, project outputs and for reporting accurately on results. 145. The Accountability Framework consists of the following four pillars: 1. Risk Management: The management of the MERF is based on a risk-based approach to ensure that a thorough analysis of risks has been undertaken and that adequate assurance modalities are identified to mitigate these risks. Risks are analysed at the level of the partner by undertaking due diligence activities and a comprehensive capacity assessment, as well as at the level of the MERF as a whole. Partners assessed as higher risk have a more prudent disbursement schedule and higher frequency of monitoring. 2. Monitoring and Reporting (financial and programmatic): the MERF monitoring and reporting system builds on implementing partners’ own systems with the following key objectives: i) Ensure adequate verification of reported results at project level thereby contributing to increased accountability. ii) Provide evidence on how the MERF has contributed to broader outcomes set forth in the HRP, and reinforce evidence-based decision-making by HC, Advisory Board and Clusters. iii) Ensure that resources are used efficiently and according to what was agreed upon in project documents and MERF Allocation papers. iv) To support implementing partners during their implementation of MERF funded activities. The MERF produces an allocation update with each allocation, a quarterly snapshot, and an annual report, and will maintain all relevant information and reporting on the OCHA country office website. 3. Evaluation: external evaluation of the MERF is undertaken every three years. Evaluations are commissioned by OCHA New York in consultation with the HC and OCHA Myanmar, and with Donors, UN Agencies and NGOs at the global level through the Pooled Fund Working Group. The evaluations focus on how the MERF has ensured a needs-driven humanitarian response, as well as how it has performed as a funding mechanism and delivered against key ERF objectives, such as strengthening HC leadership, the improvement of cluster coordination and promote NGO partnership.70

70

The last evaluation of the ERF mechanism was “The Global Evaluation of Emergency Response Funds (ERFs)”, UNOCHA (2013). The overall conclusion was that “The ERF mechanism works; however, like any process, is in need of continual adaptation and evolution so that it can remain relevant”. Findings from that evaluation played a major role in the development of the global guidelines and their application to the MERF in 2015.

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4. Auditing: Internal UN oversight bodies (OIOS - Office of Internal Oversight Services and the BoA Board of Auditors) regularly audit OCHA operations. Audits performed by these entities are subject to the single audit principle. OIOS and BoA audits regularly cover OCHA management of pooled funds, and consider whether procedures for management are appropriate. These audits cover all parts of the pooled funds (advisory boards, allocations, risk management, etc.) and look at compliance with rules and guidelines. UN agencies are audited in accordance with their own financial regulations and rules and in accordance with the framework for auditing multi-donor trust funds, which has been agreed to by the Internal Audit Services of Participating UN Organizations and endorsed by the United Nations Development Group in 2007. All NGO projects will be audited. 146. The risk management framework for the MERF is produced by the OCHA Humanitarian Funding Unit, endorsed by the Advisory Board and regularly updated. This assesses, mitigates and regularly monitors risks in the following areas: strategic and programmatic; governance and management; financial and accountability; coordination and partnerships; hazards.

Burma HARP Facility Executive Committee

SCS Head of DFID Burma

H-A2

H-A1

H-A1

Deputy Head & Senior Governance Adviser/ Governance & Securty Team Leader

H-A1

Senior Health Adviser

Economic Adviser

Human Development Team Leader

Inclusive Growth & Livelihoods Team Leader

Conflict Adviser S- A2L Peace Building Adviser

H-A2

A2(L)

Humanitarian Adviser

Health Adviser

H-A2

S-B1

Social Development Adviser

H-A2 Head of Programme Delivery

S-A2 H-A2 Livelihoods Adviser

Evaluation Adviser (Hanoi)

Education DESA

Programme Officer S-B2

S-B2

Programme Officer (Bangkok)

Programme Officer

Executive Committee

147. The DFID Burma A2 Humanitarian Adviser will be the Senior Responsible Owner (SRO) for the Business Case. The Governance and Security Team in DFID Burma will have direct management responsibility for the Business Case, with Governance, Peacebuilding and Social Development Advisers playing key advisory roles, along with other advisers where necessary, particularly Health, Livelihoods and Evaluation Advisers from other teams in DFID Burma, as well as the support of the Programme Delivery Team. 148. The programme management responsibilities for DFID Burma will be coordinated by the B1 Programme Manager, and programme management arrangements will be considerably simplified by the use of the MERF and a Managing Agent. Continuing programme management needs in Thailand will reflect the evolution of the portfolio size, depending on the changes to the situation over the period of the Business Case. 149. The HARP would be supervised at an operational level by an Executive Committee. The composition of the Committee is shown above. The purpose of the Committee will be to review regularly the HARP’s progress including its overall direction, monitoring, progress against the delivery plan and delivery against results through the monitoring framework, and update the delivery

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plan and the management of risks. It will meet quarterly with a standing agenda, as well as longer sessions at key points in the cycle, such as for the annual review exercise and the mid-term reviews as well as in response to any key changes in context.

Steering Committee 150. Strategic review of the approach and operation of the Burma HARP Facility will be provided through a Steering Committee that will meet annually, with further ad-hoc meetings where necessary. The Steering Committee will provide a broader internal and external challenge function for the Burma HARP Facility. Membership will be: - DFID Burma Head of Office (Chair) - DFID Burma Deputy Head - FCO Burma and Thailand - CHASE - If other donors contribute to the Burma HARP Facility, they would join the Steering Committee. 151. 2-3 external experts may be invited to join the Steering Committee as observers or in specialist advisory functions. Others may be invited on specific issues on an ad hoc basis in an advisory or challenge function. 152. External challenge will also be brought in through an annual Stakeholder Consultative Forum, and wider consultation of external stakeholders at critical points, such as in the design of calls for proposal. External stakeholders could include other humanitarian donor representatives, UN agencies, international and national NGO representatives and where possible beneficiary representatives.

Management arrangements 153. At the HARP level, downside risks (i.e. a worsening humanitarian situation and increasing needs) will be managed in the Business Case in part through the Internal Risk Facility that would allow for increased funding in a deteriorating situation, rapid onset crisis or unforeseen spike in humanitarian need. It would provide an initial response in such crises, likely through adapting existing agreements with NGOs or UN partners. 154. The activation of the Internal Risk Facility (see paragraphs 57-59 above) would be through a submission from the SRO to the DFID Burma Head of Office, and then to Ministers for amounts over £5m. This submission would then form the basis of discussion with ASCOT Directorate, Ministers, CHASE and DFID Team Leaders on which budget lines are available and appropriate from which to reallocate funding to address the crisis in question. 155. At the HARP level, upside risks will be managed through annual DFID Burma country office budgeting processes, based on an annual analysis of the appropriate DFID humanitarian burden share. A positive scenario of an improving humanitarian situation and continuing political reforms may open space for increased engagement on disaster preparedness, prevention and response through community-based actors and government structures, while direct humanitarian assistance needs may be reducing. 156. At project level, relevant grant agreements and MoUs will include consideration of preparedness and emergency response to new needs. Particularly in multi-year agreements; mechanisms for regular review and reduction or change of focus will be incorporated to adapt to any improvements in the situation or opportunities for durable solutions for displaced people, based on agreed processes and indicators. All multi-year grant arrangements would be required to demonstrate the gains possible and how a longer time frame provides an opportunity to innovate.

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157. Adaptive programming principles will be incorporated into much of the programming at different levels. Support to the OCHA MERF is designed to adapt each allocation71 to priority needs at that point in time. Longer term approaches to durable solutions and protection will incorporate locallydriven adaptive and iterative process into design, and regular points for review and adaptation between DFID and partners. Monitoring and evaluation processes will be designed to feed into review points, and logframes designed to provide flexibility on means to achieve outcomes where appropriate.

What are the risks and how these will be managed? Risk

Probability

Impact

Mitigation

Government of Burma tightens restrictions on access to affected populations

High – likely to continue to be a mixed picture

Medium – impact of restricted access is already significant and unlikely to improve in the short term

Continued support for advocacy on humanitarian access, and conflictsensitive programming.

Selected implementing partners cannot obtain Government of Burma authorisation to implement activities

Medium – partner selection and project design will need to be carried out carefully

Medium – quality of humanitarian response is significantly affected by these restrictions currently

Can be mitigated though not eliminated through design and partner selection, as well as maintaining a portfolio of partners. Risks will remain.

Other donors reduce humanitarian funding

Medium – global humanitarian needs are exceptionally high at the moment and this has had some impact on funding levels

High – maintaining a focus on addressing longer term drivers of humanitarian needs will be difficult if basic short term requirements cannot be met.

Continued discussion and influencing of other donors.

Further crises may negatively affect delivery of humanitarian assistance and increase unmet humanitarian needs

High – Burma remains in the top 10 countries for overall humanitarian risk 72 globally

Medium – there is significant international and national response capacity, strong civil society in many areas and an increasingly responsive government

DFID Emergency Preparedness and Response Plan (paragraph 56), Internal Risk Facility and work with partners under Objective 2 are designed to mitigate this risk.

Government of Burma prevents certain forms of assistance being implemented – cash programming or crossborder

Low

High – if cross border programming had to be halted completely for a sustained period.

Planning in programming can mitigate short breaks in access, through for example multiple delivery channels, multiple partners, donor coordination, local storage and building flexibility and spare capacity into projects.

Thai Government decides to close refugee camps

Low – the Thai government has given

Medium – although would depend on the level of

The international community continues to

71 72

The current timing of standard allocations of the MERF is twice annually, around April and October. See paragraph 20

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and forcibly repatriate refugees

assurances of respecting international standards for return

access permitted to return areas

raise these topics actively with the Thai government, and has had positive engagement and public statements from the Thai Ministry of Foreign Affairs on the topic.

Local NGOs do not engage with Burma HARP Facility

Medium – this would be a new funding methodology and local NGOs have been resistant to these in the past

Medium – this might restrict the number of actors willing to work with the Burma HARP Facility but there would likely still be some

Communication and engagement with local actors in the design and development of the Burma HARP Facility and relevant calls for proposal will be important

Government of Burma requires support to be provided to initiatives that do not respect humanitarian principles (e.g. involuntary return and resettlement, assistance to particular groups for political reasons)

High – issues of return and resettlement are highly politicised

Medium – there has been a mixed record of engagement and leadership on these issues to date

Engagement, communication and establishing common guidelines for conditions that respect international standards will continue to be necessary

How will progress and results be monitored, measured and evaluated? 158. The focus of programmes will be on delivering the best results for the most vulnerable people affected by natural and man-made crises. In addition the HARP will look to support local/national NGOs and community organisations through the Strategic Capacity Building Facility, and to support the wider humanitarian system response through the Technical Assistance, Monitoring, Evaluation and Learning (TAMEL) Facility. 159. The HARP will be monitored and evaluated at 3 levels. At DFID portfolio level, the HARP will be reviewed regularly via the programme financing and forecasting exercise of DFID Programme Management Board and strategically by the Senior Management Team when they look at DFID Burma’s portfolio quality and during the planning exercise. The Steering Committee will address key issues and strategic areas for improvement and decision making, and policy forums may be held on specific issues to seek feedback from DFID/HMG colleagues. 160. At the Burma HARP Facility level, the HARP Facility will set aside a budget up to x% for technical assistance, monitoring, evaluation and learning – this is included in the overall figures under the TAMEL Facility quoted in this Business Case, and is in addition to monitoring and evaluation costs that will be part of implementing partner project budgets. There will be a focus on ensuring an adaptive approach to implementation for projects under the Burma HARP Facility. In line with QAU recommendations on adaptive and flexible approaches to programming (in their recent annual report) and drawing on the experience of similar programmes across DFID, the Executive Committee with the Managing Agent will consider (i) undertaking annual context analysis and (ii) building appropriate mechanisms into the M&E and learning framework to ensure lessons are fed into and shape on-going delivery in a timely manner. This will be closely linked to risk monitoring and include triggers to escalate risks and deliverables when they are at risk of being off track. 161. The SRO will lead the development of a Delivery Plan within the first quarter for the management of implementation, and this will be assessed at each quarter. This plan will be maintained by the SRO and regularly reviewed by the Executive Committee, with annual oversight by the Steering

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committee. The Plan will incorporate a mechanism for monitoring the risks, issues and delivery challenges. DFID staff will also conduct spot checks and field visits at regular intervals, to complement Managing Agent monitoring, and this will be agreed in the Delivery Plan. Over the course of the HARP, DFID Burma’s primary tool for tracking progress will be the logframe guided by the Theory of Change, which will detail indicators, milestones and targets at output, outcome and impact levels. This will be developed over the course of the first year. This approach is in line with the DFID Smart Rules. Once agreed, the logframe will remain a living document to reflect changes in the operating environment and the findings of on-going analysis as well as the formal Annual Reviews. The team will track changes to the logframe and the changes will also reflect a shifting emphasis on the different components over time. 162. A key element of the Managing Agent contract, which will include the TAMEL Facility, will be to engage with all partners to monitor spend, results and performance. DFID will also use our influence to drive forward improved procurement practices and management. This will be done through a detailed analysis of reports and our monitoring and evaluation procedures. DFID’s central Multilateral Aid Review of our multilateral partner performance will also be used in decision-making. Following each Annual Review the overall HARP will be scrutinised to identify potential needs for reprioritisation and adaptation of programming. Where multi-year funding arrangements are agreed, these will be subject to regular (quarterly or 6-monthly) reviews of performance that allow scope for re-prioritisation, increased innovation, reduction in cost and delivery, or discontinuing. 163. At the project level, much of the monitoring and measurement conducted through the HARP will be done directly by the respective Burma HARP Facility Managing Agent and OCHA Humanitarian Funding Unit for the MERF. The SRO, advised by the Steering Committee of the HARP will, however, retain ultimate oversight, and ensure that the objectives and results sought by the projects are fully in line with those set out in the overall Business Case logframe. The SRO supported by the Executive Committee will be responsible for ensuring that all implementing partners funded through the HARP have sufficiently robust monitoring and evaluation plans in place during the first year of the HARP implementation and to be reviewed and updated annually. M&E plans will have measures and indicators that look at both positive and any negative impact (including learning from successes and failure) to ensure that the HARP does no harm to the project targeted areas. They will include measure to receive feedback from beneficiaries on a regular basis. 164. The Managing Agent will ensure that results targets are articulated in individual partner logframes, and detailed reports on results achieved and forecasts will be provided biannually. The indicators will be in line with the master logframe and DFID standards. The standard will be for all results to be gender- and age-disaggregated where possible. All implementing partners will be required to provide quarterly progress and financial reports, including forecast expenditure, and the Managing Agent will hold progress review meetings at least quarterly with each partner, which DFID will attend where possible. Payments will be made on the basis of reports demonstrating sufficient progress, quality and spend. 165. The Managing Agent and/or DFID will conduct direct or indirect monitoring visits to all Burma HARP Facility projects at least annually. Where security does not allow monitoring missions, the team will meet quarterly with external monitors, partner’s field teams, implementing partners and community representatives, at an appropriate and accessible location. Where limitations on monitoring access are anticipated, third party monitoring arrangements will be agreed with implementing partners. Review and Evaluation 166. There will be an independent in-depth Mid-Term Review at the 2½ year point. This will offer a more detailed assessment than the DFID Annual Review process, and will consider HARP performance to date, and whether the HARP remains relevant to the context. Terms of reference for the MTR will be drawn up after submission of the year two Annual Review report. The process will be overseen by the Steering Committee – with the logistics managed by the Managing Agent.

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167. Evaluations of aspects of the HARP will be agreed on a case by case basis, and in particular there will be a focus on building the evidence base of the impact of multi-year approaches to humanitarian assistance in Burma. An impact evaluation of the HARP as a whole will be considered; DFID will also consult with wider stakeholders in the workplan for the TAMEL Facility, which will be updated annually. This will define particular elements that require further testing and evaluation, both for DFID and the wider humanitarian response in Burma, including looking retroactively at learning from previous and current humanitarian work in Burma and Thailand. 168. External evaluations of the MERF will be undertaken every three years. Evaluations are commissioned by OCHA New York in consultation with the HC and OCHA Myanmar, and with Donors, UN Agencies and NGOs at the global level through the Pooled Fund Working Group. Learning 169. Given the adaptive and responsive nature of the HARP, attention will be paid to learning for continuous improvement and responsiveness to the changing context. It also has a strong learning nature: through funding the TAMEL Facility and through monitoring and evaluation systems in individual project, the HARP promotes exposure to successful lessons from different humanitarian and emergency response initiatives. DFID together with the Managing Agent will discuss and agree with implementing partners on mechanisms and tools for learning. These include having open channels for communications among key stakeholders, clear mechanisms for beneficiary feedback, stakeholder analysis, and focus group discussion at important milestone points. There will be mechanisms for the components to share their experiences and best practices. The HARP will also seek to learn from other related programmes including the 3MDG Fund, Burma Civil Society Strengthening Programme and the Peacebuilding programme. Exit Strategy 170. This Business Case argues for continued UK investment in humanitarian assistance for Burma, as the protracted crises are very unlikely to be resolved within the period of the Business Case. A clear focus of programming will be on lasting solutions for those affected by conflict, and reducing dependency on humanitarian assistance where possible. Natural disaster responses will be expected to incorporate consideration of exit strategies. 171. In a positive political scenario for Burma, together with the resilience and solutions focus of this work and resilience work through development instruments, it is possible to envisage future humanitarian needs beyond this Business Case reducing significantly.

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Annex 1 – Results Framework 2016-2020

Impact: Reduced poverty and suffering of crisis affected people in Burma and Thailand border areas. Enhanced resilience and capacity respond to future humanitarian need in Burma.

Indicators

Baseline

Targets

Source of data

Number of people in need of humanitarian assistance

UN HRP and TBC data on South East Burma and refugees in Thailand

Tbd (genderdisaggregated)

programme data, UN and implementing partner data

Data available through DHS in 2015

Tbd (genderdisaggregated)

DHS, programme data

Current DFID Burma humanitarian portfolio

Tbd

Programme data

Improved status of preparedness actions in the UN Emergency Preparedness and Response Plan (EPRP)

Current status of EPRP

Tbd

UN EPRP

Evidence of improved preparedness of DFID and implementing partners

No toolkit

DFID Burma records

Tbd

DFID Burma records

Number of displaced and refugee women and men who have achieved durable solutions to their displacement Reduced chronic malnutrition rates in targeted conflict-affected areas, including refugee and IDP camps

OUTCOME/PURPOSE PO 1: Increased effectiveness of humanitarian action in protracted crises

Increased proportion of multi-year funding out of DFID’s total humanitarian portfolio Adaptive programming principles incorporated into projects

PO2: Improved quality and coverage of emergency preparedness and response across Burma

Increased use of crisis modifiers in development instruments

Programmatic records, MTR, evaluations

Evidence of improved speed, quality and cost of response in new rapidonset crises

PO 3: Assistance addresses the causes of humanitarian needs and builds resilience

Evidence of increased voice and control of women and girls in humanitarian programming Increased proportion of DFID humanitarian funding addressing drivers of humanitarian need and aimed at reducing vulnerability and building resilience. Decreased chronic

Current DFID Burma humanitarian portfolio

Tbd

DFID Burma records

Data available

Tbd (gender-

DHS,

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malnutrition rates in targeted conflict-affected populations

through DHS in 2015

disaggregated)

programme data

Number of people assisted to achieve durable solutions to displacement

To be measured over the course of the Business Case

Tbd (genderdisaggregated)

UN, implementing partner records

Number of people whose resilience has been improved as a result of project support OUTPUTS IO 1: Better support to protect and provide basic services to vulnerable people living in protracted crises

Gender-disaggregated indicators to be determined in logframe development

Tbd

Tbd

Tbd

IO 2: Stronger capacity of DFID and partners to meet acute spikes in humanitarian need

Gender-disaggregated indicators to be determined in logframe development

Tbd

Tbd

Tbd

Tbd

Tbd

Tbd

Tbd

Tbd

Tbd

Tbd

Tbd

Tbd

IO 3: Better accountability, coordination and coherence of the humanitarian system in Burma

IO 4: Improved approaches to address long term drivers of humanitarian need and disaster risk, such as solutions for internally displaced people and actions that build resilience to natural disasters and conflict IO 5: Better focus on generation of evidence and synthesis of learning on what works well and less well in humanitarian programming in Burma

Includes indicators on engagement and capacity of youth in emergency response Gender-disaggregated indicators to be determined in logframe development Includes indicators on accountability to women and girls (including consultation and participation) Gender-disaggregated indicators to be determined in logframe development Specific indicators that address improvements on the long term impact on youth Indicators to be determined in logframe development Includes learning specifically on the impact on and needs of women and girls, and youth

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