Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank FOR OFFICIAL USE ONLY RESTRUCTURING PAPER ON A Report No: 62794-ET PROPOSED PROJECT RESTRUCTURING OF AFRICA STOCKPILES PROGRAMME PROJECT 1 PROJECT GLOBAL ENVIROMENT FACILITY TRUST FUND TF090543-ET June 19, 2007 TO FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA June 20, 2011 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank Group authorization.
ABBREVIATIONS AND ACRONYMS ASP Africa Stockpiles Programme ASP-P1 ASP Project 1 CESA Country Environmental and Social Assessment CLI FAO CropLife International Food and Agriculture Organization GEF Global Environment Facility HSE IPM Health, Safety and Environment Integrated Pest Management MDTF Multi Donor Trust Fund MoARD Ministry of Agriculture and Rural Development NGO Non-Governmental Organization PAD Project Appraisal Document PDO Project Development Objective PMU PSMS TF Project Management Unit Pesticide Stock Management System Trust Fund TSU Technical Support Unit WWF World Wildlife Fund Regional Vice President: Obiageli Katryn Ezekwesili Regional Integration Director: Yusupha B. Crookes Country Director: Kenichi Ohashi Sector Manager: Idah Z. Pswarayi-Riddihough Task Team Leader: Ellen J. Tynan
AFRICA AFRICA STOCKPILES PROGRAMME PROJECT 1 ETHIOPIA P105711 CONTENTS Page A. SUMMARY... 3 B. PROJECT STATUS... 3 C. PROPOSED CHANGES... 5 D. APPRAISAL SUMMARY... 7 ANNEX 1: RESULTS FRAMEWORK AND MONITORING... 9 ANNEX 2: REALLOCATION OF PROCEEDS... 12 ANNEX 3: EXTENSION OF CLOSING DATE... 13
DATA SHEET Restructuring Status: Draft Restructuring Type: Level 1 1. Basic Information Project ID & Name P105711: Africa Stockpiles Programme Project 1 Country Federal Democratic Republic of Ethiopia Task Team Leader Ellen J. Tynan Sector Manager Idah Z. Pswarayi-Riddihough Director (Regional Integration) Yusupha B. Crookes Country Director Kenichi Ohashi Original Board Approval Date June 19, 2007 Original Closing Date: 06/30/2011 Current Closing Date 06/30/2011 Proposed Closing Date [if applicable] 12/31/2012 EA Category A-Full Assessment Revised EA Category N/A EA Completion Date 3/10/2004 Revised EA Completion Date N/A 2. Revised Financing Plan (US$ m) Source Original Revised GEF (through the World Bank) 2.62 2.62 Ethiopia Government 0.42 0.42 Belgium 3.47 3.47 Japan 1.14 1.14 Finland 1.02 1.02 Total 8.67 8.67 3. Recipient Organization Department Location Federal Democratic Republic of Ethiopia Addis Ababa, Ethiopia 4. Implementing Agency Organization Department Location Ministry of Agriculture and Rural Development Crop Protection Department Addis Ababa, Ethiopia i
5. Disbursement Estimates (US$) Actual amount disbursed as of May 18, 2011 Total to-date: 510,000 Fiscal Year Annual Cumulative Through 2011 521,549 1,038,437 2012 1,281,563 2,320,000 2013 300,000 2,620,000 Total 2,620,000 6. Policy Exceptions and Safeguard Policies Does the restructured project require any exceptions to Bank policies? Does the scale-up of restructured projects trigger any new safeguard policies? If yes, please select from the checklist below. N N Safeguard Policy Last Rating Proposed Environmental Assessment (OD 4.01) X X Natural Habitats (OP 4.04) Forestry (OP 4.36) Pest Management (OP 4.09) X X Cultural Property (OPN 11.03) Indigenous Peoples (OD 4.20) Involuntary Resettlement (OP 4.12) Safety of Dams (OP 4.37) Projects in International Waters (OP 7.50) Projects in Disputed Areas (OP 7.60) 7a. Project Development Objectives/Outcomes Original/Current Project Development Objectives/Outcomes Assist the Federal Democratic Republic of Ethiopia to eliminate inventoried publicly-held obsolete pesticide stockpiles and associated waste, and implement measures to reduce and prevent future related risks. 7b. Revised Project Development Objectives/Outcomes Assist the Federal Democratic Republic of Ethiopia to dispose of and/or safeguard inventoried publiclyheld obsolete pesticide stocks and associated waste, and develop a strategy for sustainable management of future accumulations. ii
A. SUMMARY RESTRUCTURING PAPER This Restructuring Paper requests Board approval for (i) the revision of the Project Development Objective (PDO) and PDO Level Results Indicators, (ii) introduction of a project-level Results Framework (RF), (iii) introduction of changes in the description of component B (Disposal of Obsolete Pesticides) and C (Prevention of Obsolete Pesticide Accumulation) and merger of activities under component C and D (Capacity Building), (iv) extension of the Global Environment Facility (GEF) Grant Closing Date; and (v) reallocation of the GEF Trust Fund (TF) proceeds. The PDO and PDO Level Results Indicators require revision in order to reflect a shift from complete elimination of all inventoried publicly-held obsolete stocks and associated waste to elimination overseas and lower-cost in-country safeguarding of the stocks in face of higher than estimated volumes of obsolete pesticides and associated waste resulting in a funding gap for disposal. The revised PDO and related indicators will also reflect a shift from prevention of re-accumulation of stocks to the development of a strategy for the sustainable management of future obsolete stocks. The original objective was based on the assumption that demand for pesticides could be substantially reduced through project-funded prevention activities despite evidence of increasing demand for pesticides as a result of agricultural intensification. A project-level RF has not been prepared for Africa Stockpile Program (ASP)-Ethiopia, (or any other ASP country projects), when it was submitted to Board in May 2007; rather, the Project Appraisal Document (PAD) contained a program-level RF and project-specific Performance Monitoring Indicators. Proceeds reallocations and Closing Date extension are required to accommodate the disposal and/or safeguarding of the additional stocks found, and finalize all remaining project activities, respectively. Activities planned under Component D (Capacity Building) will be merged with the prevention activities under the revised Component C due to their mutual prevention function. B. PROJECT STATUS The Implementation Performance rating for ASP Ethiopia is Moderately Satisfactory; it is held back mainly by delays in signing contracts within the Ministry of Agriculture and Rural Development (MoARD). The PDO is rated Unsatisfactory due to the impossibility of achieving full disposal with available funds. Following the restructuring, the PDO will become achievable and its rating will consequently be upgraded to Satisfactory. The following progress has been made under the project components: Component A: Obsolete Pesticides Inventory: A detailed inventory of the Recipient's publicly-held obsolete pesticides stocks and associated waste was carried out, and all data were entered into a database and validated in May 2010. The database was used for risk profiling of the stocks and the preparation of a final draft Country Environmental and Social Assessment (CESA-2) ready for submission to the Bank. 3
Component B: Disposal of Obsolete Pesticides: The Project Management Unit (PMU) has currently obtained Bank s clearance for the bidding document for the disposal tender following World Bank Regional Procurement Unit s advice. This one stop process is expected to assist the project in meeting the timeline for disposal completion by December 31, 2012. Following a technical review of the inventory database, five sites have been prioritized for full disposal, totaling 250 tons of pesticides. The remaining 200 tons of inventoried obsolete pesticides will be safeguarded at lower cost. A work plan and a budget have been developed for a rapid assessment of pesticide-contaminated soil. The elimination of the 400 tons left-over stocks from a former FAO-managed project is expected to be finalized in June 2011 with the funding of CropLife International (CLI), an ASP partner. It used a CESA (CESA-1) which was prepared for this purpose during project preparation and approved by the Bank during Negotiations in March 2007. Also under this component, the project has commissioned a container management study; the results are expected to provide tailor-made shredder specifications prior to launching the procurement process via ICB. Finally, the project has hired a consultant to review the design of a new pesticide storage warehouse to be funded by the project. An Environmental and Social Impact Assessment (ESIA) for the construction has been prepared. The project is facing an estimated US$4.1 million funding gap for disposal of all inventoried stocks and associated waste as a result of additional 200 tons of obsolete pesticides and 850 tons of associated waste not budgeted during appraisal. Discussions between the Bank and the Government in the past year have resulted in the decision to reallocate GEF proceeds toward disposal, dispose of the highest risk stocks and only safeguard stocks with a lower risk profile. In addition, the Bank will allocate US$500,000 from the ASP Multi-Donor Trust Fund to decrease the funding gap for the disposal and safeguarding work. Component C: Prevention of Obsolete Pesticide Accumulation: A Pesticide Registration and Control Proclamation 1 was approved in January 2010 by the Council of Ministers, proclaimed by Parliament in June 2010 and published in August 2010 in a federal newspaper. Important steps have been made to prepare a national pesticide management strategy for adoption by the Ministry of Agriculture and Rural Development (MoARD), aiming to enhance the sustainability of MoARD s organizational and financial provisions to deal with obsolete pesticide and associated waste. The ASP national Non Governmental Organization (NGO) network has been involved in various awareness raising activities on ASP and the risks of obsolete pesticides mishandling. Component D: Capacity Building: Training has been provided for data entry, CESA and Environmental Management Plan (EMP) preparation and procurement. CropLife Ethiopia provided training on pest/pesticide management and pesticide storage management. Component E: Project Management and Monitoring: The project is managed through a PMU whose performance has been improving gradually since the beginning of the project thanks to project-funded training and the provision of World Bank-funded technical and operational support. Fiduciary requirements, including external audits and 1 Proclamation number 674/2010. 4
safeguards, are being complied with. Disbursement is standing at 19.5% of the GEF Trust Fund with the remaining funds earmarked mostly for the disposal and warehouse construction tender contracts. C. PROPOSED CHANGES Project s Development Objectives The original PDO is: Assist the Federal Democratic Republic of Ethiopia to eliminate inventoried publicly-held obsolete pesticide stockpiles and associated waste, and implement measures to reduce and prevent future related risks. The revised PDO is: Assist the Federal Democratic Republic of Ethiopia to eliminate and/or safeguard inventoried publicly-held obsolete pesticide stockpiles and associated waste, and develop a strategy for sustainable management of future accumulations. The original PDO implied that all inventoried obsolete pesticides would be eliminated. With the discovery of higher than estimated stocks, including associated waste, it is preferable to adopt a blended approach of disposal overseas and lower cost safeguarding in-country based on risk profiling of the inventoried pesticides and associated waste, and availability of satisfactory storage facilities. In addition, the original PDO assumed no new accumulations of obsolete pesticides during the life of the project, which has been proven difficult to achieve in the context of agricultural intensification resulting in continuous new accumulations. Therefore, it is proposed that the project focus rather on developing a strategy for management of future accumulations. Results/indicators The project PDO Level Results Indicators 2 will be reduced in number and revised to focus on the two project objectives (disposal and/or safeguarding and development of a management strategy). All other original PDO indicators will be integrated in the RF as intermediate results indicators as appropriate: The original PDO Level Results Indicators are: 1. The inventory database of Publicly Held Obsolete Pesticide stocks is in place and being used by the PMU and the Recipient's staff; 2. Inventoried Publicly Held Obsolete Pesticide stocks have been disposed of, as a result of the completion of the Disposal Services contract(s) in accordance with national and international laws and regulations; 3. A plan, in form and substance satisfactory to the Bank, for the decontamination of soils in priority sites has been prepared by the Recipient; 4. The legal and regulatory framework for pesticide management has been improved and includes measures to strengthen compliance with the Basel Convention and the Rotterdam Convention; 2 In the GEF Grant Agreement, the term is Performance Monitoring Indicators 5
5. The training program under Part B of the Project has been implemented, and the knowledge so acquired is being used by the PMU and the Recipient's staff; 6. The PMU is functional, and its operation is satisfactory to the Bank. The revised PDO Level Indicators are: 1. Inventoried publicly held obsolete pesticides and associated waste disposed of and/or safeguarded by the end of the project; 2. A strategy for sustainable management of future accumulations adopted by the Steering Committee 3 by the end of the project. In addition, a project-specific RF will be introduced for effective monitoring and evaluation of project progress. The new RF will replace the programmatic one submitted to Board, which did not include country-specific intermediate results indicators. For the proposed RF, please refer to Annex 1. Components The following changes will be introduced to Parts B and C in the GEF Grant Agreement, Schedule 2 (marked in Italic): Part B: Disposal and/or Safeguarding of Obsolete Pesticides and Associated Waste Safeguarding and/or disposal of Publicly Held Obsolete Pesticides stocks and Associated Waste by: (a) carrying out of a technological assessment of available safeguarding and disposal options; (b) implementation of the safeguarding and/or disposal technology selected; (c) improving the operations of Obsolete Pesticide stocks collection centers, including store stabilization and safety measures at those centers; and (d) container management. The changes reflect the addition of safeguarding as an outcome and clearly define associated waste as an integral part of the stocks to be treated. Part C: Reduction of Obsolete Pesticide and Associated Waste Re-Accumulation Carrying out of activities aimed at reducing Obsolete Pesticide and Associated Waste reaccumulation, including: (a) awareness raising activities on the Program, health and environmental hazards of pesticides; (b) a review and update of the legal and regulatory framework to control Obsolete Pesticide accumulation and strengthen enforcement mechanisms; (c) preparation of a sustainable pesticide management strategy; (d) strengthening the pesticide management capacity of storage warehouses; (e) provision of training to relevant staff of the Recipient on health and safety issues, and environmental monitoring; and (f) strengthening awareness on the pesticide management legal framework and homologation systems. 3 The Project Steering Committee is comprised of appropriate line ministries and defined in the grant agreement. 6
The changes reflect the integration of the capacity building component in the revised prevention component as both aim at improved pesticide management practices, and removal of the Integrated Pest Management (IPM) activities where the potential impact is likely to be marginal. Financing o Reallocations A reallocation of the GEF proceeds from the Goods (US$414,000), Consulting Services (US$77,000), Operating Costs (US$47,000) and Unallocated (US$80,000) categories to the Disposal Services (US$600,000) and Training and Workshops categories (US$18,000) is required to accommodate the disposal and/or safeguarding of all the additional stocks and associated waste inventoried and provide additional related training. For the proposed reallocation, please refer to Annex 2. Closing date The GEF TF Closing Date requires extension from June 30, 2011 to December 31, 2012 in order to compensate for start-up delays. By extending the closing date, the revised PDO will become achievable. This will be the first extension of the closing date for a total of 18 months. A procurement plan for the extended period is available. For the proposed extension, please refer to Annex 3. Implementation schedule Given the extension of the Closing Date and start-up delays, the disposal and safeguarding activities are expected to commence in November, 2011 and conclude in December 2012. D. APPRAISAL SUMMARY Technical. The PAD indicates that inventoried obsolete pesticide stocks and associated wastes will be safeguarded and then shipped overseas to approved, high temperature hazardous waste disposal facilities. Under the restructuring and as a result of higher than budgeted stocks of pesticides, 200 tons of lower-risk stocks across 40 sites will be safeguarded in-country by local staff at a lower cost, and will not be shipped overseas for disposal. Safeguarding entails repackaging and storing of stocks in secure storage facilities to which the public has no access. All safeguarding operations will be monitored by the competent national authorities in accordance with national regulation and the Basel and Stockholm conventions, and will follow separate EMPs and associated Health and Safety and Environment (HSE) plans. 7
Table 1. Average Toxicity Value of Pesticides (Sp) Safeguarding monitored by Government 29,672 Safeguarding and disposal operated by the 95,079 contractor Risk. During the preparation of the PAD, a number of country-level risks were identified. The following risks are those that are still valid in terms of their effect on the revised PDO: Table 2. Project Risks Risk Status Rating Weak procurement implementation capacity Lack of clear procurement working arrangement between PMU and the Ministry s Procurement and Property Administration This has been a key impediment to project implementation. The Bank had provided procurement support to the PMU through the ASP MDTF, which has resulted in improved procurement capacity within the PMU Although the procurement working arrangements are clear, procurement has been experiencing significant delays due to delays in approving procurement within the Administration. The Bank team continues to work with the PMU and Ministry to improve process time. Medium-I Medium-I 8
PDO Level Results Indicators* Indicator One: Inventoried publicly held obsolete pesticides and associated waste disposed of and/or safeguarded by the end of the project 4 Indicator Two: A strategy for sustainable management of future accumulations adopted by the Steering Committee by the end of the project. ANNEX 1: Results Framework and Monitoring ETHIOPIA - AFRICA STOCKPILES PROGRAMME PROJECT 1 Project Development Objective (PDO): Assist the Federal Democratic Republic of Ethiopia to eliminate inventoried publicly-held obsolete pesticide stockpiles and associated waste, and implement measures to reduce and prevent future related risks. Revised Project Development Objective: Assist the Federal Democratic Republic of Ethiopia to dispose of and/or safeguard inventoried publicly held obsolete pesticide stocks and associated waste, and develop a strategy for sustainable management of future accumulations. Core D=Dropped C=Continue N= New R=Revised N N Unit of Measure Percent age Qualitat ive Baseline Cumulative Target Values** Data Source/ Actual through YR6 Frequency YR5 Methodology YR4 0 0 40 100 Semi-annual Progress reports, supervision missions, disposal certificate/s No strategy in place Draft strategy prepared and discussed with stakeholders Strategy adopted by SC INTERMEDIATE RESULTS - Semi-annual Semi-annual progress reports, supervision missions Responsibility for Data Collection/ Explanation PMU, Bank PMU, Bank/ The PMU will submit the final draft strategy to the project SC which will adopt it and include its decision in the meeting s minutes 4 The final inventory consists of 450 tons of obsolete stocks and 850 tons of associated waste. 9
Intermediate Result (Component A): Not available Revised Intermediate Result (Component A): Obsolete pesticide stocks and associated waste prioritized on the basis of risk and available funds Intermediate Result indicator One: Percent of validated inventory data entered into PSMS Intermediate Result indicator Two: Approved CESA available for use by the disposal company Intermediate Result indicator One: A final draft container management strategy submitted to the Steering Committee for approval N N Percent 0 100 - - Semi-annually Progress reports and supervision missions Qualitat ive CESA-1 in place Intermediate Result (Component B): Not available A draft CESA(CESA-2) available CESA cleared by the Bank and disclosed at InfoShop and incountry Revised Intermediate Result (Component B): A final disposal tender and an approved container management strategy N Qualitati ve No strategy in place Intermediate Result (Component C): Not available Terms of reference available, consultants CVs obtained A final draft strategy in place and submitted to the SC for endorsement - Semi-annually Progress reports and supervision missions - Semi-annually Progress reports and supervision missions PMU, FAO/TSU PMU and Bank/ CESA approved by the Bank and disclosed incountry and in Infoshop PMU, Bank/ The PMU will forward the final draft report to its SC for endorsement. The meeting s decision will be minuted. Revised Intermediate Result (Component C): Reduction of Obsolete Pesticide and Associated Waste Re-Accumulation Intermediate Result indicator One: Two planned communication tools implemented Intermediate Result indicator Two: A final draft sustainable management plan for obsolete pesticides and associated N N Number 0 0 1 2 Semi-annually Progress reports and supervision missions Qualitati ve No plan in place Consultative process started A final draft strategy finalized and submitted to the SC - Semi-annually Progress reports and supervision missions PMU, ASP NGO network, WWF PMU, Bank/ The PMU will hand the final draft report to 10
wastes prepared and submitted to the SC for endorsement Intermediate Result indicator Three: A Pesticide Registration and Control Proclamation drafted for submission to Parliament Intermediate Result indicator Four: Availability of one new storage warehouse for pesticide management N N Qualitati ve None in place A Pesticide Registration and Control Proclamation approved and proclaimed by Parliament Number 0 Design of a new warehouse in Kality and ToRs for review of design Workshops for updating and merger of ministerial directives into one regulation - Construction work completed the SC, whose decision will be minuted. - Semi-annually Progress reports PMU, Bank/ The PMU will coordinate the planned workshops. The regulation will be in a draft form for Government s End of project Completion report future action PMU, Bank 11
ANNEX 2: Reallocation of Proceeds ETHIOPIA AFRICA STOCKPILES PROGRAMME-PROJECT 1 P105711 TF090543 1. Proceeds for Africa, Africa Stockpiles Programme Project 1, Grant No TF090543, P105711 will be reallocated as follow: Category of Expenditure Allocation (US$) % of Financing Current Revised Current Revised Current Revised Goods Goods 550,000 136,000 100 100 Works Works 310,000 310,000 100 100 Consultancy Consultancy 320,000 243,000 100 100 Services Services Disposal Disposal 600,000 1,200,000 100 100 Services Services Training and Training and 140,000 158,000 100 100 Workshops Workshops Operating Operating 620,000 573,000 100 100 Costs Costs Unallocated Unallocated 80,000 0 Total 2,620,000 2,620,000 2. See sections B and C above for more detail. 12
ANNEX 3: Extension of Closing Date ETHIOPIA AFRICA STOCKPILES PROGRAMME-PROJECT 1 P105711 TF090543 1. The Closing Date for Africa, Africa Stockpiles Programme Project 1, Grant No TF090543, P105711 will be extended from June 30, 2011 until December 31, 2012. 2. This will be the first extension of the project for a total of 18 months. 3. See sections B and C above for more detail. 13
Document of The World Bank FOR OFFICIAL USE ONLY Report No: 62795-ZA RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF AFRICA STOCKPILES PROGRAMME PROJECT 1 PROJECT GLOBAL ENVIROMENT FACILITY TRUST FUND TF055763 August 12, 2005 TO THE REPUBLIC OF SOUTH AFRICA June 20, 2011 This document has restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank Group authorization.
ABBREVIATIONS AND ACRONYMS ASP Africa Stockpiles Programme ASPIC ASP Implementation Committee ASP-P1 ASP - Project 1 AVCASA Agricultural and Veterinary Chemicals Association of South Africa CESA Country Environmental and Social Assessment CLI DAFF DEA DEAT EMP CropLife International Department of Agriculture Forestry and Fisheries Department of Environmental Affairs Department of Environmental Affairs and Tourism Environmental Management Plan FAO Food and Agriculture Organization GEF Global Environment Facility IIWMP Integrated Industry Waste Management Plan IP Implementation Performance MDTF Multi-Donor Trust Fund NEPAD New Partnership for Africa s Development NGO Non-Governmental Organization PAN-UK Pesticide Action Network United Kingdom PAD Project Appraisal Document PDO Project Development Objective PPRI RF RSA TSU WWF Plant Protection Research Institute Results Framework Republic of South Africa Technical Support Unit World Wildlife Fund Regional Vice President: Obiageli Katryn Ezekwesili Regional Integration Director: Yusupha B. Crookes Country Director Sector Manager: Ruth Kagia Idah Z. Pswarayi-Riddihough Task Team Leader: Ellen J. Tynan
AFRICA AFRICA STOCKPILES PROGRAMME PROJECT 1 SOUTH AFRICA P105711 CONTENTS Page A. SUMMARY... 1 B. PROJECT STATUS... 1 C. PROPOSED CHANGES... 3 D. APPRAISAL SUMMARY... 7 ANNEX 1: RESULTS FRAMEWORK AND MONITORING... 8 ANNEX 2: REALLOCATION OF PROCEEDS... 10
DATA SHEET Restructuring Status: Draft Restructuring Type: Level 1 1. Basic Information Project ID & Name P075776: Africa: Africa Stockpiles Programme Project 1 Country Republic of South Africa Task Team Leader Ellen J. Tynan Sector Manager Idah Z. Pswarayi-Riddihough Director (Regional Integration) Yusupha B. Crookes Country Director Ruth Kagia Original Board Approval Date August 12, 2005 Original Closing Date: 11/30/2009 Current Closing Date 06/30/2012 Proposed Closing Date [if applicable] N/A EA Category A-Full Assessment Revised EA Category N/A EA Completion Date 3/17/2004 Revised EA Completion Date N/A 2. Revised Financing Plan (US$ m) 1 Source Original Revised GEF (through the World Bank) 1.70 1.70 RSA Government 2 0.70 0.70 CropLife International 3 0 0.51 Total 2.40 2.91 3. Borrower Organization Department Location Republic of South Africa Pretoria, Republic of South Africa 4. Implementing Agency Organization Department Location Ministry of Water and Environmental Affairs Department of Environmental Affairs Pretoria, Republic of South Africa 1 This is an update to the financing plan identified in the PAD. The one change introduced is parallel financing from CLI as described in footnote 3. 2 Parallel financing for expenditures not financed by the GEF Grant, such as staff salaries, offices and other operating costs. 3 Parallel financing through direct agreement between CLI and DEA for activities not financed by the GEF Grant. Disbursement is managed according to DEA s guidelines. i
5. Disbursement Estimates (US$) Actual amount disbursed as of May 31, 2011 Total to-date: US$ 546,666 Fiscal Year Annual Cumulative Through 2011 700,000 700,000 2012 400,000 1,100,000 2013 600,000 1,700,000 Total 1,700,000 6. Policy Exceptions and Safeguard Policies Does the restructured project require any exceptions to Bank policies? Does the scale-up of restructured projects trigger any new safeguard policies? If yes, please select from the checklist below. No No Safeguard Policy Last Rating Proposed Environmental Assessment (OD 4.01) X X Natural Habitats (OP 4.04) Forestry (OP 4.36) Pest Management (OP 4.09) X X Cultural Property (OPN 11.03) Indigenous Peoples (OD 4.20) Involuntary Resettlement (OP 4.12) Safety of Dams (OP 4.37) Projects in International Waters (OP 7.50) Projects in Disputed Areas (OP 7.60) 7a. Project Development Objectives/Outcomes Original/Current Project Development Objectives/Outcomes To assist the Recipient in: (a) eliminating inventoried Publicly Held Obsolete Pesticide stocks and Associated Waste; and (b) implementing measures to reduce and prevent future related risks. 7b. Revised Project Development Objectives/Outcomes To assist the Recipient in the development and piloting of a sustainable system to identify, collect and dispose of obsolete pesticides and associated waste. ii
RESTRUCTURING PAPER A. SUMMARY This Restructuring Paper requests the Board s approval to make revisions to (i) the Project Development Objective (PDO) and PDO Level Results Indicators, (ii) project description, (iii) proceeds allocation, (iv) financing plan, (v) safeguard requirements, (vi) implementation schedule, and (vii) introduce a project-specific Results Framework (RF). In addition, a formal update of the responsible agency s title is requested. The Project Development Objective (PDO) and PDO Level Results Indicators require revision in order to reflect a shift from complete elimination of all inventoried publiclyheld obsolete stocks and associated waste to the development and piloting of a sustainable system to identify, collect and dispose of obsolete pesticides and associated waste in the private and public sectors. The new PDO and PDO indicators would reflect the South Africa reality where (i) most obsolete pesticide stocks are held by private farmers and not by government, (ii) the discovery of higher than budgeted stocks, and (iii) agricultural intensification leading to continuous accumulation of obsolete stocks and the need to develop an independent sustainable system which would treat them in the future and that would be driven by the pesticides industry. As with all ASP country projects, a project-level RF was not prepared for Africa Stockpile Program (ASP)-South Africa when it was submitted to Board in 2005; rather, the Project Appraisal Document (PAD) contained a program-level RF and project-specific Performance Monitoring Indicators. Proceeds will be reallocated to accommodate the increased disposal budget and the temporary storage of obsolete pesticide stocks safeguarded by the project. The project s financing plan and implementation schedule will be updated, and a revised safeguards instrument agreed to by the Bank safeguard team will be introduced. B. PROJECT STATUS Because of the major differences between the reality on the ground in South Africa and the original PDO as described, the project has been rated Unsatisfactory in its last ISRs. Implementation Performance is rated Moderately Satisfactory. Following the restructuring, there is every indication that the project will begin to perform at a satisfactory level. Project rate of disbursement stands at 32 percent, and is expected to increase significantly (an additional 60 percent) once the disposal and safeguarding of the stocks in two additional provinces commence. 1
The following progress has been made under the project components: Component A: Obsolete Pesticides Inventory This component has not been implemented since at the time the project was launched it became clear that a national inventory using the proposed traditional tools would not be cost-effective to accurately map and quantify obsolete pesticide stocks in a reality where most stocks are held by private farmers and not in the public domain, as is the case in the other ASP-P1 countries. The proposed restructuring will therefore include a revision of this component to the development and piloting of a booking line run by the private sector and supervised by the government, where farmers voluntarily declare stocks in their possession. Component B: Disposal of Obsolete Pesticides A pilot operation was carried out in Limpopo Province to collect obsolete pesticide stocks. A Risk Assessment (RA) Report and an Environmental Management Plan (EMP) were developed for the pilot, peer reviewed by the Department of Environmental Affairs (DEA), an independent consultant and the ASP-South Africa Non-Government Organization (NGO) representative, and cleared by the Bank on November 15, 2010. Disposal of the stocks was funded through CropLife International (CLI), the ASP private sector partner; following all necessary protocols, including the Basel Convention guidelines, the non-hazardous pesticides and associated waste were disposed in-country while the hazardous stocks (approximately 100 tons) were shipped to the UK for disposal by a qualified hazardous waste disposal operator. The pilot confirmed that the majority of obsolete stocks were held by private farmers and not by the public sector, which is the focus of the overall ASP. In addition, it showed that the nation-wide amount of obsolete pesticides had been underestimated and, therefore, under-budgeted (90 tons in Limpopo Province alone compared to a national estimate of 250 tons at appraisal), and that better information on stocks held by farmers was needed. Based on this and other lessons learned during this pilot, it was agreed with the South Africa private sector association, Agricultural and Veterinary Chemicals Association of South Africa (AVCASA), that the remaining disposal budget would be used to collect and dispose of public and private stocks in two additional provinces: Free State and Western Cape, where the amount of stocks was known, through collaboration with the private sector. It was further agreed that the experience from this clean-up operation would help inform the development of an Integrated Industry Waste Management Plan (IIWMP) dictating a private sector-run scheme for collection and disposal as stipulated by national law. The IIWMP will be a key sustainable prevention mechanism against reaccumulation of obsolete pesticide stocks. Bidding documents for this operation are in the final stages of preparation, and a booking line has been established by DEA and AVCASA and introduced in the two provinces. The collection of stocks is expected to commence in August 2011 and all stocks will be disposed of by June 2012. 2
Component C: Prevention of Obsolete Pesticide Accumulation Prevention activities which were to be funded by the project include awareness raising activities on the health and environmental hazards of pesticides, review and updating of the legal and regulatory framework, preparation and implementation of an Integrated Pest Management (IPM) strategy and the preparation and implementation of a training plan. The national Department of Agriculture Forestry and Fisheries (DAFF) indicated that they would not require the funding for these activities, as these have already been carried out by DAFF and the private sector using their own budget since these fall under their mandate. Funds for this component will therefore be reallocated to other components of the project (see Annex 2). Component D: Capacity Building DEA staff have benefited from a study tour to Australia funded by CLI, in which they became familiar with the country s privately-run obsolete pesticide collection and disposal system, which now serves as a model for the intended system in South Africa. Component E: Project Management The project is managed by DEA staff, who coordinates consultancies and audits, prepares reports and communicates regularly with the Bank. C. PROPOSED CHANGES Project s Development Objective The original PDO is: to assist the Recipient in: (a) eliminating inventoried Publicly Held Obsolete Pesticide stocks and Associated Waste; and (b) implementing measures to reduce and prevent future related risks. The revised PDO is: to assist the Recipient in the development and piloting of a sustainable system to identify, collect and dispose of obsolete pesticides and associated waste. The new PDO would reflect the South Africa reality where (i) most obsolete pesticide stocks are held by private farmers and not by government, (ii) the discovery of higher than budgeted stocks, and (iii) agricultural intensification leading to continuous accumulation of obsolete stocks and the need to develop an independent sustainable system which would treat them in the future and that would be driven by the pesticides industry. Results/indicators PDO Level Results Indicators 4 will be reduced in number and revised to focus on the revised outcomes, i.e., the development of a system to manage future accumulations and 4 In the Grant Agreement and PAD these indicators are called Key Performance Indicators. 3
safeguarding and/or disposal of stocks in the three selected pilot sites (Limpopo 5, Western Cape and Free State provinces). All other original PDO indicators will be integrated in the RF as intermediate results indicators as appropriate. The original PDO Level Results Indicators are: 1) Inventory database of Publicly Held Obsolete Pesticides stocks in place and being used by the PMU and the Recipient s government staff; 2) Completion of CESA, and implementation of the measures contained therein; 3) Inventoried Publicly Held Obsolete Pesticides stocks disposed of, as a result of the completion of the Disposal Services contract(s) in accordance with national and international laws and regulations; 4) Legal and regulatory framework for pesticide management improved, including measures to strengthen compliance with the Basel Convention and the Rotterdam Convention; 5) The training program under Part D of the Project is implemented and the knowledge so acquired is being used by the PMU and Recipient s government staff; 6) The PMU is functional and its operation is satisfactory to the Bank. The revised PDO Level Indicators are: 1) A system for identifying, collecting and disposing of private and public obsolete pesticide stocks and associated waste developed through collaboration with the private sector association 6 ; 2) Three pilot safeguarding and/or disposal operations implemented. In addition, a project-specific RF will be introduced for effective monitoring and evaluation of project progress. The new RF will replace the programmatic one submitted to Board, which did not include country-specific intermediate results indicators. For the proposed RF, please refer to Annex 1. Components The proposed revised components reflect the following: (i) A change from a nationwide inventory of publicly-held obsolete pesticides to a voluntary booking line where farmers in selected provinces can declare obsolete pesticides; (ii) A shift from a nationwide clean-up of public obsolete pesticides to developing and piloting an adapted sustainable system for identifying, collecting and disposing of private and public obsolete pesticide stocks and associated waste; (iii) Removing the upgrading of intermediary collection centers as national selected centers meet international standards; 5 The pilot operation in Limpopo has already been finalized as described. 6 Taking into account lessons learnt from Limpopo pilot operation and Australian fact finding mission. 4
(iv) Adjusting prevention activities, including IPM development, to take into account those activities already being carried out by DAFF, the Plant Protection Research Institute (PPRI) and AVCASA under their respective mandates and budgets, and merger with the capacity building component; (v) Adjusting the prescribed safeguards instruments for the safeguarding and disposal work. It has been agreed with the Bank Safeguards team that given South Africa s environmental assessment policies and successful implementation of the EMP and independent review during the Limpopo pilot, a Country Environmental and Social Assessment (CESA, as required in other ASP countries) will not be utilized in the South Africa case. Instead, the proven approach of an EMP and an independent review will be utilized for the operations in the two additional pilot provinces. The following revised project description is proposed: Part A: Identification and Collection of Obsolete Pesticides and Associated Waste Identification and collection of obsolete pesticides and associated waste by: (a) establishing a booking line where farmers in selected provinces voluntarily declare obsolete pesticides and associated waste in their possession; (b) preparing Environmental Management Plans; and (c) collecting and transporting identified obsolete pesticides and associated waste to collection centers. Part B: Safeguarding and/or Disposal of Obsolete Pesticides and Associated Waste Safeguarding and/or disposal of obsolete pesticides stocks and associated waste by: (a) carrying out of a technological assessment of available safeguarding and disposal options; and (b) implementing the safeguarding and/or disposal technology selected in three pilot provinces. Part C: Awareness Raising and Capacity Building Carrying out of activities aimed at raising awareness on the health and environmental hazards of pesticides and strengthening the capacity of the PMU to implement the Project through the provision of training. Part D: Project Management Supporting the PMU in carrying out Project coordination, implementation, monitoring and evaluation through the provision of technical advisory services, equipment and operational support. 5
Safeguards As a condition for disposal, an EA/EMPs will be prepared and submitted for approval by the Bank, followed by disclosure in-country (through DEA website) and in InfoShop. This approach has been agreed with the Bank safeguards team given the successful implementation of the Limpopo EMP and independent review. The list of triggered safeguard policies remains unchanged. Institutional Arrangements The name of the project implementing agency/recipient representative identified in the GEF Grant Agreement and PAD is the Department of Environmental Affairs and Tourism (DEAT), under the Ministry of Environmental Affairs and Tourism. The Ministry has since been replaced by the Ministry of Water and Environmental Affairs and the implementing agency is the Department of Environmental Affairs (DEA). This has had no effect on procurement or financial management capacity since no relevant personnel have been replaced or removed. Financing o Financing Plan The revised financing plan will reflect the parallel financing of the private sector partner, CLI, which has contributed funds toward the disposal of the privately-held hazardous waste stocks from the Limpopo Province, an activity which was not to be funded by the GEF Grant. CLI s contribution was provided through a direct agreement between CLI and DEAT using DEAT s disbursement guidelines. Table 1. Original and Revised Financing Plan (US$ million) Source Original Revised GEF (through the World 1.70 1.70 Bank) RSA Government 0.70 0.70 CLI 0 0.51 Total 2.40 2.91 o Reallocations A reallocation of GEF proceeds is proposed, from the Consultant Services category (US$215,000), Workshops and Training category (US$75,000) and Unallocated category (US$245,000) to the Goods, Works, Disposal Services and Operating Costs categories. The proposed changes are the result of: (i) costs incurred by the temporary storage of obsolete pesticides collected during the Limpopo pilot (Works category); (ii) a smaller than expected number of workshops were needed and necessary training carried out using parallel financing; (iii) an increase in the budget for disposal to fund disposal and/or safeguarding of additional stocks; and (iv) increased operating costs because of the recent extension of the project (approved on May 3, 2011). Since a significant portion of the 6
planned consulting, workshops and training is financed by DAFF, PPRI and the private sector, project performance will not be adversely affected by the proposed reallocation. See Annex 2 for the reallocation table. Implementation Schedule Disposal and safeguarding is expected to be completed in June 2012. D. APPRAISAL SUMMARY Financial Management. GEF Grant allocation and percent of expenditures to be financed will be modified as described in Annex 2. Environment. The original design called for the preparation of a CESA and site- or activity-specific EMPs. As agreed with the Bank for the pilot operation in Limpopo, in the case of South Africa, the two additional pilot operations will be guided by independently reviewed EMPs. Risks. During the preparation of the PAD, a number of country-level risks were identified. The following risks are those that are still valid in terms of their effect on the revised PDO: Table 2. Project Risks Risk Status Rating Inventory is A booking line based on voluntary Medium-L inaccurate declaration of stocks is in place and operating, determining the scale of the collection and treatment operations. However, private sector has good estimates as to the scale of the stocks in the two provinces. The main new risk after restructuring is: there could be a delay in the implementation of the collection and disposal contract. However, the more significant involvement of the World Bank procurement specialist and the recent extension of the Closing Date are expected to successfully mitigate this risk. It will continue to be closely monitored by the team. 7
PDO Level Results Indicators 7 Indicator One: A system for identifying, collecting and disposing of private and public obsolete pesticide stocks and associated waste developed through collaboration with the private sector association Indicator Two: Three pilot safeguarding and/or disposal operations implemented ANNEX 1: Results Framework and Monitoring SOUTH AFRICA - AFRICA STOCKPILES PROGRAMME PROJECT 1 Project Development Objective (PDO): Assist the Recipient in: (a) eliminating inventoried Publicly Held Obsolete Pesticide stocks and Associated Waste; and (b) implementing measures to reduce and prevent future related risks. Revised PDO: Assist the Recipient in the development and piloting of a sustainable system to identify, collect and dispose of obsolete pesticides and associated waste. Core D=Dropped C=Continue N= New R=Revised N Unit of Measure Qualitati ve Baseline No system in place Cumulative Target Values Actual through YR5 YR 6 A booking line is use in the two pilot provinces N Number 0 1. Limpopo Province pilot implemented, stocks were safeguarded and non-hazardous stocks disposed of. This pilot did not follow the recently developed system Private and public obsolete pesticides stocks and associated waste are identified, collected and disposed of 3. Obsolete pesticides from Western cape and Free State Provinces are collected, safeguarded and disposed of Frequency Semi-annually until year 6 Semi-annual Data Source/ Methodology Progress reports, supervision missions, Progress reports, supervision missions, incineration certificates Responsibility for Data Collection/ Explanation DEA, Bank, AVCASA, CLI/ The system includes a booking line where farmers declare their obsolete stocks and have them collected for safeguarding and/or disposal DEA, Bank, AVCASA, CLI INTERMEDIATE RESULTS 7 Performance Monitoring Indicators in the Grant Agreement. 8
Intermediate Result (Component A): Not available Revised Intermediate Result (Component A): Obsolete pesticide stocks identified accurately in two provinces Intermediate Result Indicator One: Booking line established. Intermediate Result Indicator Two: Number of site-specific Environmental Management Plans N N Qualitati ve No booking line in place Intermediate Result (Component B): Not available Established. - Semi-annually until year 6 Progress reports and Bank missions Number 0 3 - Semi-annually Progress reports and Bank mission DEA, Bank, AVCASA/ This activity has been completed by DEA and AVCASA. It is being used to identify location and quantities of obsolete stocks in the two provinces in preparation for their collection, safeguarding and/or disposal. DEA, Bank, NGO representative Revised Intermediate Result (Component B): Identified obsolete pesticide stocks disposed of or safeguarded Intermediate Result indicator One: Number of sites in which identified stocks are collected N Number 0 1 (Limpopo province) 3 (Limpopo, Western Cape and Free State) Intermediate Result (Component C): Not available Semi-annually Progress reports and Bank missions DEA Revised Intermediate Result (Component C): Capacity building activities implemented Intermediate Result indicator One: Two training/study tours implemented N Number 0 1. Study tour to Australia for government staff to learn firsthand about the country s collection and disposal system; project management 2. Auditing and monitoring courses Annually Submitted training plans Bank 9
ANNEX 2: Reallocation of Proceeds SOUTH AFTICA - AFRICA STOCKPILES PROGRAMME PROJECT 1 P075776 TF055763 1. Proceeds for the Africa, Africa Stockpiles Programme Project 1, Grant No. TF055763, P075776 will be reallocated as follow: Category of Expenditure Allocation % of Financing Current Revised Current Revised Current Revised Goods Goods 100,000 150,000 100% 100% Works Works 45,000 295,000 100% 100% Consultant Services Disposal Services Workshops and Training Operating Costs Consultant Services 470,000 255,000 Disposal Services 685,000 850,000 Workshops and Training 105,000 30,000 Operating Costs 50,000 120,000 100% of foreign expenditures 83% of local expenditures 100% 100% 100% 100% 100% 100% 100% of foreign expenditures 83% of local expenditures Unallocated Unallocated 245,000 0 Total N.A. 1,700,000 1,700,000 2. See sections B and C above for more detail. 10