INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE

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1 . Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Date ISDS Prepared/Updated: INTEGRATED SAFEGUARDS DATA SHEET 20-Mar-2017 Date ISDS Approved/Disclosed 26-Mar-2017 I. BASIC INFORMATION A. Basic Project Data CONCEPT STAGE Country: Eastern Africa Project ID: P Project Name: Task Team Leader(s): Estimated Appraisal Date: AFCC2/RI-EAC Accelerated Regional Integration (P154227) Charles Kunaka,Jean Lubega-Kyazze,Rosanna Chan 30-May-2017 Estimated Board Date: Report No.:ISDSC Oct-2017 Managing Unit: GTC01 Lending Instrument: Investment Project Financing Financing (In USD Million) Total Project Cost: Total Bank Financing: Financing Gap: 0.00 Financing Source Amount BORROWER/RECIPIENT 0.00 International Development Association (IDA) Total Environmental Category: Is this a Repeater project? B. Project Objectives B - Partial Assessment No A. Proposed Development Objectives38. The development objective of the proposed project is to accelerate regional trade integrationby reducing costs and barriers for farmers and small scale traders in the EAC. The objective will be achieved through reforming trade policies and procedures, improving facilities and systems, leveraging digital platforms, and enhancing the capacity of select trade regulation agencies. 39. Project beneficiaries will primarily be Farmers; Cross-border traders, especially women; Services providers in selected sectors (ICT, transport, professional) as well as consumers and users of such services ; and National and regionalpolicy institutions tasked to implement and monitor policy reforms to deepen regional integration in the EAC. C. Project Description IPF is the proposed financing instrument for the project. The project has the potential to overcome the bottlenecks that have prevented deeper regional economic integration in the past. It is designed as a regional operation, mainly because of the necessity of cross-country cooperation and policy coordination. An IPF is Page 1 of 7

2 an effective instrument for such types of projects. Through peer-leaning and pressure, the operation aims to ensure that coordination takes place effectively, and thereby to respond to concrete demand from EAC countries to advance regional integration initiatives. The proposed project meets all the eligibility criteria for Regional IDA, namely: (i) it includes three or more countries (Burundi, Kenya, Rwanda, Tanzania and Uganda); (ii) the project can generate significant benefits that spill over country boundaries. Specifically, improvements of infrastructure, policies and procedures at the borders are expected to benefit traders and consumers in all five countries and beyond; (iii) there is clear evidence of regional commitment, most recently demonstrated by the high level communique of the Heads of State and Government of the EAC countries as well as the significant body of regional instruments that commit the countries to deeper regional integration; and (iv) the Project provides a platform for policy harmonization on areas that have already been identified as a priority but have lacked synchronous action and support in all the countries. In order to achieve the PDO it is necessary to have a mix of infrastructure developments, systems improvements and policy reforms. The proposed project components an indicative costs estimates are summarized below. Component 1: Policy reforms and capacity building to accelerate regional integration the EAC ($15m) Component 1 of the proposed project would support policy reforms in three main areas: a) Modernization and implementation of EAC SPS Protocol: Interventions that streamline SPS procedures and eliminate unnecessary and repetitive tests are needed to improve current SPS procedures. More than building trust in each other s systems and certifying capacity, the incorporation of risk-based approaches in deciding what to inspect and what to control would be a practical way to improve national and regional SPS systems. The sub-component would include (i) support for dialogue between regulators and farmers and traders on appropriate safety requirements; (ii) training of farmers in how to meet the standards; and (iii) upgrading of public and private inspection capacities. A commodity-based approach is proposed. By focusing on specific commodities of significant importance to regional trade, producers and consumers will have a direct and immediate stake in project interventions and outcomes. Further, by selecting commodities of importance to the rural poor, this approach will maximize impact on economic growth and poverty reduction. To back the commodity approach, the project would also provide crosscutting support for establishment of performance-based border management systems designed to speed the handling of agriculture consignments and improve the transparency of SPS and standards procedures (see annex 2). In addition, COMESA is implementing the STDF-funded Breaking Barriers Project that is looking to tackle MRA and other issues in SPS management between pairs of countries. Kenya and Uganda are participating so the proposed project would learn lessons and seek to adapt the COMESA model to the other project countries. b) Implementation of EAC STR: Lessons from previous trade facilitation projects show that efforts to rationalize SPS procedures and quality requirements would support the STR by reducing the number of other procedures associated with formal sector trade. There is a need to accompany improvements in infrastructure with policy and procedural reforms and capacity building. Therefore, the project would include policy and procedural reforms to improve the efficiency, capacity, and security of border operations. The project should improve border crossing conditions by ensuring the application of transparent and consistent procedures by customs and other agencies at the border. It should also support the implementation of reforms at the border that will enhance the benefits from investments in border infrastructure and from the GoRs strategy to create and improve markets in the border areas. The main policy of the EAC to simplify procedures for small scale Page 2 of 7

3 traders is based on the Simplified Trade Regime. The project would finance measures to effectively implement the STR including support for Joint Border Committees (JBCs), TIDs and the EAC Secretariat. Implementation of the STR would be based on the principles enunciated in the Charter on Cross Border Trade in Goods and Services. Further support may be provided for a regional forum of Cross-Border Traders Associations, tasked with lobbying the EAC Secretariat on policy issues, gathering and disseminating information etc. c) Implementation of MRAs for select services: Support to recognize the negotiated MRAs at the regional level: The operation would support national authorities and the EAC Secretariat to develop mechanisms both to recognize the three existing MRAs as official EAC instruments and establish a procedure that will avoid the legal status problem arising again for other MRAs and professions. Component 2: Digital Enablers of Cross Border Trade and Innovation ($15m) Component 2 of the proposed project would leverage digital technologies and the region s burgeoning technology innovation ecosystem to improve transparency, accountability and efficiency of cross border trade. a) Sub-component 2.1 ICT platform for agricultural trade information to (i) improve the transparency of agriculture trade requirements, (ii) bridge information gaps regarding small-scale trade, and (iii) support services reform. The ICT platform would be designed to bridge information gaps regarding small-scale trade. It would cover the following, among others: i) complete step-by- step procedures and documentary requirements on an EAC-sponsored website together with downloadable application forms and (up to date) information on any trade bans or restrictions in the region, and feedback systems in which officials must specify the exact reasons for any product rejections matched by a right to appeal by the traders. The platform would be a combination of on- line tools and apps, SMS, USSD and voice-based systems, electronic billboards, radio announcement and leaflets, and would include the following elements (information on traded products and services, number and volume of transactions and flows of people, prices and other market conditions; information on requirements for cross-border trading covering issues such as duty levels, documentary requirements, immigration procedures, Simplified trade regimes/eac protocol provisions; complaints filed by traders regarding abuses affecting themselves and their peers, particularly women). b) Subcomponent 2.2 Open Data for Regional Trade: The subcomponent will focus on (i) identifying, developing and releasing a set of regionally relevant, harmonized, machine readable market data for use by traders, policy makers and innovators, (ii) sponsoring hackathons or establishing other incentive mechanisms for development of digital applications, platforms utilizing and analytical tools using the data to enable users to access real time market pricing information (both inputs and outputs), facilitate cross border transactions, and boost the analytical capacity of policymakers and traders. Release of timely, high quality, standardized, open license, machine-readable data by governments in the region can help facilitate the development of new digital applications and analytics by innovators and entrepreneurs. For example, data on agricultural market pricing and weather, paired with up to date info on trade requirements and updated extension information could be incorporated into a digital platform/application. By harmonizing the data at a regional level it can generate the scale needed to increase the attractiveness and usefulness of the data to entrepreneurs and facilitate the rollout and adoption of applications at a regional level. This activity would build upon the national level open data readiness assessments already conducted in Tanzania, Uganda and Rwanda, as well as work under the Open Data Initiative in Kenya and would focus on data most relevant to agriculture and trade as a starting point. Page 3 of 7

4 c) Sub-component 2.3 Regionally integrated digital identification for cross-border traders: This subcomponent would focus on: (i) providing access to a national digital ID for cross-border traders, farmers and professional service providers; (ii) facilitating mutual recognition of national digital IDs across borders (legislation, policy, capacity building); (iii) integration/interoperability of national digital ID systems/databases; and (iv) integration of cross-border citizen ID/verification into customs and immigration management IT platforms to facilitate border crossing. The benefits of digital IDs include easier, more reliable and more transparent delivery and access to services from government and private sector. Regional integration of digital ID systems and related databases can facilitate customs and immigration management and online and offline commercial and financial transactions across borders. The subcomponent will support execution of elements of the forthcoming East Africa Digital Identity Assessment and Roadmap and accelerated registration of targeted groups as part of ongoing and planned national digital ID programs. d)sub-component 2.3. Enabling cross-border digital payments: This subcomponent will focus on (i) analysis of potential legal and regulatory interventions at the regional and national levels needed to encourage crossplatform and cross-border mobile payments; and (ii) support integration of mobile/e-payment modules into national single windows to help ease the customs process, reduce scope for bribes. While use of mobile money has grown exponentially across the region, electronic payments are still difficult and costly to complete across borders and across proprietary payment platforms in EAC. This impedes cross-border e-commerce transactions as well as cross-platform transactions within countries. This subcomponent will help address these constraints, as well as enabling use of mobile payments for border crossing and certification fees to enable greater transparency, convenience and reduce scope for bribes. It will also build upon momentum under the One Network Area (ONA) program as part of the Northern Corridor Initiative which includes plans reduce barriers to cross- border mobile payments. Component 3: Upgrading Core Trade Infrastructure and ICT platforms to enhance trade integration ($25m) This component will address infrastructure bottlenecks identified through extensive stakeholder consultations. The investments will be in facilities and systems to minimize border delays. The project proposes to establish (i) fast-track lanes for perishable produce equipped with dedicated inspectors and instruments needed for SPS and other safety inspections; and ii) pedestrian (STR) lanes and inspection facilities to facilitate small-scale trade at selected border posts. In addition, the project would finance the (iii) improvements in border management especially application of risk based procedures and (iv) upgrading and accreditation of national and regional testing laboratories as a step toward mutual recognition of quality marks and SPS certificates in the five countries. The specific border posts (approximately 5) where interventions will be supported will be selected using objective criteria including volume of agricultural trade and of small scale traders, need for improvements and reform, and state of infrastructure and IT connectivity. The investments would include the provision of critical equipment to the regulatory agencies for testing products and equipping of farmer groups with the ability to carry-out tests based on standards requirements, and training of rural communities in product grading. The sub-component will be implemented to complement the warehouse receipt programs now being implemented in the EAC. Component 4: Capacity enhancement for accelerating trade integration Page 4 of 7

5 Component 4 would provide support for the institutions of regional integration to complement the country interventions developments and policy reforms. As part of this project, the project would support in the main the EAC Secretariat, its capacity ability to monitor the common market and to assess the impacts, especially on the poor, of current and proposed rules and regulations on trade at both the country and regional level. Proposed activities may include: i) Regional communication strategy to raise awareness on the key activities covered by the operation, including support for translation and ad-hoc re-design (tailored to target audience) of communication materials on the EAC Common Market Protocol, Simplified Trade Regime (STR), etc; ii) Regional coordination of training programs for farmers, standard bureaus, professional services players, small-scale traders and officials including development of training materials, best practices and training of trainers; iii) Regional gathering, and related dissemination, of key data and statistics on a) agricultural trade, b) smallscale trade, c) trade in services and d) ICT; and iv) Training of selected EAC Secretariat staff, both at managerial and non-managerial level, in areas including, among others, a) management of ICT tools, b) data collection & analysis, c) communication & communication and d) inclusive policy dialogue. D. Project location and Salient physical characteristics relevant to the safeguard analysis (if known) To be determined during project preparation. E. Borrowers Institutional Capacity for Safeguard Policies To be assessed once finalized during project preparation. F. Environmental and Social Safeguards Specialists on the Team Gibwa A. Kajubi( GSU07 ) Mary C.K. Bitekerezo( GSU07 ) Svetlana Khvostova( GEN01 ) II. SAFEGUARD POLICIES THAT MIGHT APPLY Safeguard Policies Triggered? Explanation (Optional) Environmental Assessment OP/BP 4.01 Yes The Project does not envisage any significant or irreversible environmental/social impact. The environmental impacts of the project are expected to be mostly construction related and limited within the project boundaries. These impacts can be mitigated through implementation of appropriate environmental code of practice and environmental management plan. In view of nature of the interventions, the Project is classified as a Category B and the safeguard policy OP/BP 4.01 has been triggered to ensure that the design and implementation will be focused on reducing adverse impacts and enhancing positive impacts. An environment and social assessment will be carried out for proper environment/social management. Page 5 of 7

6 .. Natural Habitats OP/BP 4.04 TBD It is possible that some of the border posts to be improved are located in natural habitats and the policy may be triggered. Appropriate EMPs covering conservation and mitigation measures will be prepared and disclosed for any such locations. Forests OP/BP 4.36 No The project will finance improvements to existing facilities and would not impact on areas where the Policy would be triggered. Pest Management OP 4.09 TBD The project includes trade in agricultural products and the Policy may be triggered for specific commodities. Criteria that are part of the policy will be applied in selecting intervention measures. Physical Cultural Resources OP/BP 4.11 No This policy is not triggered as the project will focus on improving existing facilities. It is highly unlikely to have any adverse impacts on archaeological, paleontological, historical, architectural, religious, aesthetic, or other cultural resources resulting from Project activities. Indigenous Peoples OP/BP 4.10 No The project will finance improvements to existing facilities and would not impact on areas where the Policy would be triggered. Involuntary Resettlement OP/BP 4.12 TBD Physical interventions will be focused mostly at improving existing facilities within the customs control zones at border posts and on public land. However, a determination will be made once the final list of facilities to be improved has been agreed. Safety of Dams OP/BP 4.37 No There are no dams at any of the border posts that will be improved through the project. Projects on International Waterways OP/BP 7.50 No The project will not include sites on international waterways. Projects in Disputed Areas OP/BP 7.60 No The project will finance interventions at existing and designated border crossing points. III. SAFEGUARD PREPARATION PLAN A. Tentative target date for preparing the PAD Stage ISDS: 30-Jun-2017 B. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing should be specified in the PAD-stage ISDS. Launching around 15 Jan 2017 after mission in Dec V. Approval Task Team Leader(s): Name: Charles Kunaka,Jean Lubega-Kyazze,Rosanna Chan Page 6 of 7

7 Approved By: Safeguards Advisor: Name: Nathalie S. Munzberg (SA) Date: 20-Mar-2017 Practice Manager/Manager: Name: Catherine Kadennyeka Masinde (PMGR) Date: 26-Mar Reminder: The Bank's Disclosure Policy requires that safeguard-related documents be disclosed before appraisal (i) at the InfoShop and (ii) in country, at publicly accessible locations and in a form and language that are accessible to potentially affected persons. Page 7 of 7