Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Date ISDS Prepared/Updated: 10/02/2009 I. BASIC INFORMATION A. Basic Project Data INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Report No.: AC4566 Country: Senegal Project ID: P113801 Project Name: SN - Economic Governance Project Task Team Leader: Gilberto de Barros Estimated Appraisal Date: October 26, Estimated Board Date: January 19, 2010 2009 Managing Unit: AFTFW Lending Instrument: Specific Investment Loan Sector: Public administration- Industry and trade (40%);Law and justice (40%);General public administration sector (20%) Theme: Legal institutions for a market economy (100%) IBRD Amount (US$m.): 0.00 IDA Amount (US$m.): 10.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: BORROWER/RECIPIENT 0.00 0.00 B. Project Objectives [from section 2 of PCN] The proposed Development Objective for the Economic Governance Reform Project is to help contribute towards improving economic governance through an enhanced investment climate, and an improved performance of the judicial system. The key expected outcomes of the Project are: (a) Improved Investment climate: a decrease in the time and costs for enforcing contracts and closing down a business; (b) Strengthened ability of CEDAF and the greffe du Tribunal regional hors classe de Dakar to implement the Justice Sector Reform and render judicial decisions faster; (c) Improved functioning of key economic governance, notably through an increase in the number of firms which adopt a no-bribes integrity pacts and obtain an ethical business certification coupled with an increased in corruption and laundering cases being prosecuted. C. Project Description [from section 3 of PCN] The proposed Project Components are: (1) Improving the Investment Climate; (2) Supporting the Justice Sector Reform and improving access to Justice; (3) Strengthening Good Economic Governance; and (4) Project Implementation. These are preliminary proposals, at this stage, and
will be reviewed in the course of Project preparation, based on further analytical work to be undertaken and consultations with other development partners, in particular the EC, France, USAID and UNDP. Component 1: Improving the investment climate (US$4.0 million.) This component will focus on legal reforms that are necessary to improve the investment climate, complementing reforms already completed or ongoing, and that aim at making Senegal s Investment climate one of the top ten in Sub Sahara Africa. Possible subcomponents are: (a) Enforcing contracts, (b) Closing down a business, and (c) protecting investors. In addition, this component will finance the review of the legal and institutional framework with the aim of proposing an action plan of measures to be adopted to help foster competition across sector. Under this component, the project would provide technical assistance and capacity building to support legal and institutional reform and implementation to significantly improve the performance for the above-mentioned four aspects. Moreover, the project would provide resources to train judges, public prosecutors, court registrars and bailiffs on relevant aspects of commercial litigation in order to secure better decisions and quicker enforcement. This support would be coupled with training on alternative dispute resolution mechanisms. Additionally, the Project will help support the purchase of Information Technology (IT) equipment and software to help adopt IT solution and quicken the judicial process. The project will also finance consensus-building exercises to ensure the ownership of the proposed reforms which are cross cutting and involve several stakeholders. More specifically, the project assistance will help reduce the time taken and cost for enforcing contracts. Currently, it takes an average of 780 days to enforce a contract (a commercial sale) through the court system and costs - on average - 26.5 percent of the value of the contract. Additionally, the Project will help speed up insolvency procedures, reduce costs and increase the recovery rate (this rate is calculated as cents on the dollar recovered by claimants - creditors, employees, tax authority through the bankruptcy procedure. As for protecting investors, it is worth noting that two out of three sub-indicators are regulated by regional regulations set by OHADA and can only be amended at the regional level. Therefore, the domestic reform efforts to be supported under this project will focus on the shareholders suits index i.e. elements of civil procedure reform. The work in Senegal will be complemented by the regional work being prepared under OHADA which also has the World Bank Group support through a dedicated team with which coordination has been ongoing for over a year. Additionally, the project will provide some targeted technical assistance to the Senegal National OHADA commission which has the mandate to ensure that OHADA regulations are not a hindrance to a better investment climate. Component 2: Supporting the Justice Sector performance and improving access to Justice (US$ 3.0 million). The proposed subcomponents are: (a) Supporting the Justice Sector Reform, (b) improving access to Justice, and (c) improving the availability and analysis of data on the justice sector s performance. (a) Supporting the Justice Sector Reform Under this component, the Project will provide technical assistance and capacity building to support the implementation of activities to
significantly improve the performance of the Tribunal regional hors classe de Dakar, where eighty percent (80 %) of commercial cases are handled. To that end, the project would finance the purchase of IT equipment and network to establish an electronic platform to exchange, process and archive all the documents necessary in judicial processes. This would help improve the exchange and processing of files between the judges and the greffe du Tribunal regional hors classe de Dakar in terms of processing time and cost as well as reliability and availability. To support this electronic platform, the project will finance the establishment of an Intranet and a website to make all judicial decisions available to the general public online. To prepare for the automation, the processes would first be rationalized. For example, the current regulation requires the court registrar to transport files to the tax administration which increases time and creates a risk of loss. The whole circuit of judicial documents and decisions will be mapped out in order to achieve rationalization in the process itself before it is automated. This work will also be complemented with the assistance to be provided under sub component (c) which aims at improving the delivery of data on the justice sector s performance. To ensure that the electronic platform is used effectively, the Project will finance relevant training regarding archiving methods and techniques, and user computer training for all the relevant parties on the different software. The IT solution described above will not address the significant needs of the greffe du Tribunal regional hors classe de Dakar in terms of physical archiving of evidence and objects and documents that are seized in the context of a legal case. Currently, evidence and important documents, such as passports are archived in very precarious, unsealed and unsecured conditions, increasing the likelihood that they would not be available when needed. To address this need, the project will finance filing/archiving cabinets and facilities for both electronic and physical archives of evidence and documents that are related to legal matters. This assistance would be coupled with the appropriate training in archiving evidence and documents included in legal cases. As the greffe du Tribunal regional hors classe de Dakar is expected to move into the newly built Justice Palace in 2009, the project will also finance office furniture for the greffe du Tribunal regional hors classe de Dakar to address the dire lack of office furniture and precarious working conditions under which the Tribunal is currently working. The support under this component is provided to the Tribunal regional hors classe de Dakar because it is critical to the improved performance of the judicial system, as a whole. In fact, the final report of the Justice Sector program established that the poor functioning of the greffes was one of the main weaknesses of the judicial system. The greffes are the main pillar of the justice system, the basis of the judicial pyramid since it is responsible for receiving and handling legal cases, preparing and administering legal proceedings, and ensuring the authenticity of all legal acts, including through their safekeeping and the safekeeping of registries, files and evidences of crimes. However, given that the greffes are operating within inadequate buildings and facilities for archiving records, sealing and storing evidence, and that the development of a Management Information System (MIS) is at an embryonic phase, the performance of the justice system is inadequate. Additionally, during the project preparation, a study to map out all the judicial decisions would be carried out to obtain a better understanding of the different steps involved, and pinpoint the specific areas where there are high costs and time delays, so as to address them by simplifying the procedures and/or adopting good practice procedures, including IT solutions to the constraints identified.
(b) Improving the delivery of data on the justice sector s performance. Data on the sector s performance are critical to assess sector performance across jurisdictions and to provide policy makers with the information to make informed decisions about the strategy to adopt to improve the sector s performance. Currently, the judicial system does not produce key statistics of access, efficiency, time and cost per decision, etc. The project will provide assistance to design, establish and operate a Management Information System that will allow all users to have key data on the sector s performance. This system will allow collecting, producing and analyzing key data related to the entire process leading to a legal decision. The data collection and analysis will pinpoint key constraints to a better sector performance, so as to adopt the appropriate corrective measures to improve the justice system s performance including the necessary reallocation of judicial resources. Component 3: Strengthening Good Governance (US$2.0 million). Proposed subcomponents are: (a) strengthening the Anti Corruption Commission; (b) strengthening CENTIF; and (c) helping business-led actions against corruption. (a) Strengthening the Anti-Corruption Commission (Commission de lutte contre la non transparence, la corruption et la concussion). This would include technical assistance to revise the anti-corruption unit legal authority and institutional arrangements, so as to adopt good practices in terms of institutional arrangements and mandate. The project will also provide institutional capacity building, including through twinning arrangements and on-the-job training for the Commission members, so that they carry out their functions effectively. Additionally, the project will also design and carry out a communication strategy to allow use effective communication as a tool to improve good governance. The Project will also finance targeted funding for the purchase of office equipment and furniture, which are critical to the investigations that the Commission carries out. (b) Strengthening CENTIF. Although the Cellule Nationale de Traitement des Informations Financières (CENTIF) has been established and is operating to monitor, investigate, and report to the judicial system money laundering activities, its impact is below what is expected, due to the lack of adequate resources to carry out its mandate. The project will help address this resource gap by providing targeted capacity building to support CENTIF. Additionally, the project will provide funding for the purchase of office equipment and furniture, as well as two (2) vehicles, which are critical to the investigations that CENTIF has to carry out. The improved performance on tracking of and punishing for money laundering will help create the conditions for businesses to also take action against corruption by helping to provide a level playing field, as well as helping to ensure the reliability of the source of foreign direct investment. The project is not expected to finance operational costs for CEDAF, but rather some key investments which would help CENTIF become more effective in carrying out its mandate. Additionally, the Task team intends to use the Project preparation to help secure counterpart funding, which would fully finance CENTIF's operating cost. (c) Strengthening the Procurement investigation Unit. As envisaged in the public procurement Code, No 2007-545 of April 25, 2007, l'agence de Régulation des Marchés Publics (ARMP) has
a mandate to carry out audits and investigations related to the procurement of publicly funded goods, services and works to ensure that competition conditions are adhered to. ARMP was set up in 2008 and has established in 2009, according to the decree No 2009-501 of May 2009, an Inspection Unit (IU). The project is expected to support the strengthening of investigation capacity of the new unit by providing technical assistance and targeted logistical support with the aim of ensuring that corrupt practices in procurement are investigated and prosecuted in a timely and effective manner, so as to fight corrupt practices in the procurement of goods, services and works. (d) Fostering business-led actions against corruption. In the Senegal Investment Climate Assessment, forty percent (40 %) of the private firms estimated that unreliable justice and corruption were major obstacles to doing business. Given that good corporate governance contributes to sustainable economic development by enhancing the performance of firms and increasing their access to capital, this component will help foster business led actions against corruption. This sub-component will help reduce the acceptance of corrupt practices as a normal course of doing business in Senegal, in line with the World Bank s Governance and Anti Corruption (GAC) strategy. It will use the business organizations and work directly with some firms to support the development of business coalitions for voluntary codes of business conduct which contributes towards mitigating the risks of operating in a corrupt investment climate. This sub-component - which is being prepared in collaboration with WBI - will finance the development and adoption of no-bribe integrity pacts for at least 300 firms during the lifetime of the project. Additionally, the project will finance the development and adoption of ethical business certification for 200 firms, which are willing and able to broaden the scope of their engagement beyond the no-bribe integrity pacts. For both activities, this would include the financing of training, external audits, and issuance of certification, where appropriate. The approach under this subcomponent will emphasize a joint and sustained process of collective action which enables private firms to implement anti-corruption mechanisms together with industry peers and key stakeholders since tacking corruption is more difficult for individual businesses. Additionally, the sub component will finance the drafting of a Code of Corporate Governance and the development of a firm awareness campaign on the importance of adopting good corporate governance and train some director and staff on governance principles. Component 4: Strengthening CEDAF and Project Implementation Support (US$1 million). This component will provide the resources necessary for the implementation of the activities under components 1 to 3 by providing support to Cellule d'exécution Administrative et Financière (CEDAF), which is the technical unit in charge of the implementation of the Justice Sector Reform. Moreover, it will strengthen CEDAF ability to implement the wide-ranging Economic Governance Reform Project. Since CEDAF will support the project's implementation no Project Implementation Unit is going to be set up in line with the Paris Declaration and the increased emphasis on national systems to implement projects. The support under this component will include targeted technical assistance, capacity building, the purchase of office equipment and furniture, the establishment of an intranet, the development
of a digital law library, as well as the setting up of a video conferencing facility and the purchase of one vehicle for CEDAF. This assistance will allow CEDAF to have all the technical capacity and resources necessary to implement the project. This component will also fund the conception and implementation of a communication campaign for all the project components, since an effective communication is going to be critical to the success of the proposed activities. The Project is not expected to finance operational costs for CEDAF, as the Project Implementation Unit, so that the sustainability of the institution is strengthened and not undermined by the financing of its operating costs. The Task team intends to use the Project preparation to secure counterpart funding, which fully finances CEDAF s operating costs. Moreover, the Task team considered an alternative in which the fiduciary functions (procurement and financial management) be carried out by an existing government s agency (API), which is already experienced in managing Bank financed projects. However, the Task team recommends that the project, including its fiduciary responsibilities, be implemented by CEDAF. This approach would allow the fostering of center of excellence beyond the existing ones. CEDAF will provide implementation support for components 1 and 2 when it is not a direct beneficiary. Moreover, CEDAF will have the overall project coordination functions, including monitoring and evaluation. To complement these institutional arrangements, the project will have a steering committee, which will represent the project beneficiaries and provide the strategic orientation to the project, review and approved annual work plan and budget and propose any corrective measures to be adopted in the course of the project s implementation. D. Project location (if known) The project will be implemented in Senegal and will be managed from the capital city Dakar. The project involves mainly institutional capacity and technical assistance for sub sector reforms. E. Borrower s Institutional Capacity for Safeguard Policies [from PCN] The institutional capacity for safeguard policies is moderately satisfactory. However, the project, which is a technical assistance, has no direct or indirect physical investment, and no environmental issue is present. F. Environmental and Social Safeguards Specialists Mr Warren Waters (AFTQK) II. SAFEGUARD POLICIES THAT MIGHT APPLY Safeguard Policies Triggered Yes No TBD Environmental Assessment (OP/BP 4.01) Natural Habitats (OP/BP 4.04) Forests (OP/BP 4.36) Pest Management (OP 4.09) Physical Cultural Resources (OP/BP 4.11) Indigenous Peoples (OP/BP 4.10) Involuntary Resettlement (OP/BP 4.12) Safety of Dams (OP/BP 4.37) Projects on International Waterways (OP/BP 7.50) Projects in Disputed Areas (OP/BP 7.60)
Environmental Category: C - Not Required III. SAFEGUARD PREPARATION PLAN A. Target date for the Quality Enhancement Review (QER), at which time the PAD-stage ISDS would be prepared: 10/20/2009 B. For simple projects that will not require a QER, the target date for preparing the PAD-stage ISDS: N/A C. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing 1 should be specified in the PAD-stage ISDS. Not Applicable IV. APPROVALS Signed and submitted by: Task Team Leader: Mr Gilberto de Barros 09/28/2009 Approved by: Regional Safeguards Coordinator: Mr Warren Waters Comments: No SGP Specialist required if project remains as defined in PCN and ISDS. Later, should project involve land acquisition, construction, or potential environmental or social impacts, consult ASPEN. Sector Manager: Mr Iradj A. Alikhani Comments: 1 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.