Use of Country Systems for Environmental and Social Safeguards Quality Assurance and Compliance Unit

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Use of Country Systems for Environmental and
Social Safeguards Quality Assurance and
Compliance UnitOPCSMarch 2008
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What is Use of Country Systems?

• Under Paris Declaration March 2005 Use of
  country systems means the use of the borrowers
  (environmental and social safeguard/fiduciary and
  procurement systems in place of the corresponding
  donor (e.g. World Bank) safeguard systems to meet
  donor safeguard requirements.
• Systems refers to the borrowers policies,
  laws, regulations, and formal procedures and its
  institutional capacity, processes and performance
  (track record) in implementing its laws,
  regulations and procedures.

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Potential Benefits of UCS for Environmental and
Social Safeguards

• Enhance borrower ownership and empowerment of
  safeguard policies
• Improve Borrower capacity to implement own
  systems
• Reduce transaction costs to Borrowers and Donors
• Harmonize environmental and social safeguards
  among donors
• Endorsed at High-Level Forums on Aid
  Effectiveness Rome 2003, Paris 2005

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Potential and Perceived Risks of Using Country
Systems

• Dilution of Bank Safeguards
• Loss of transparency
• Loss of accountability
• Higher up-front project preparation costs
• Potential delays in project approval

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Safeguard Policies Applicable to Use of Country
Systems

• Environmental Assessment
• Natural Habitats
• Forests
• Physical Cultural Resources
• Involuntary Resettlement

• Indigenous Peoples
• Safety of Dams
• Pest Management
• Projects in International Waterways
• Projects in Disputed Areas
• Not included in UCS

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Equivalence

• The Bank considers the borrowers
  environmental and social safeguard system to be
  equivalent to the Banks if the borrowers system
  is designed to achieve the Objectives and adhere
  to the Operational Principles set out in Table
  A1.

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Acceptability

• Borrowers Institutional Capacity
• Implementation practices
• Performance (Track record)

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Gap-Filling

• Borrower must be willing and able to fill gaps in
  its legal system and implementation practices so
  as to achieve Equivalence and Acceptability
• Such measures are to be carried out before the
  borrower undertakes implementation of the
  relevant project activities.
• Measures may include Bank-supported efforts to
  strengthen relevant capacity, incentives and
  methods for implementation

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Changes in Borrower Systems during Project
Implementation

• Applies to borrower legislation, regulations,
  procedures or implementation
• If changes signify improvement in country
  systems, possible revision of legal agreement,
  with Board approval, to reflect changes
• If changes inconsistent with agreed legal
  framework, Bank contractual remedies apply

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UCS Pilot Projects Approved and in Implementation

• Bhutan Rural Transport
• Egypt Industrial Pollution Abatement
• Ghana Energy Development
• Jamaica Inner City Basic Services Project
• Romania Municipal Services Project
• Romania Transport Sector Support Project
• Tunisia Municipal Solid Waste Management
• Several Projects Were Co-Financed by Bilateral
  Donors
• and Multilateral Financial Institutions

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UCS Pilot Projects in the Pipeline

• In preparation
• India Electrical Transmission
• South Africa GEF Protected Areas Management
• Uganda Roads Project AfDB-funded
• Morocco Solid Waste Management (DPL)
• Under consideration
• Bhutan Urban Infrastructure
• Ghana Transport sector
• Laos Transport sector
• Tunisia Water Supply
• Brazil Development Finance Institution (FI)

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Results Beyond the World Bank

• Inter-American Development Bank has adopted
  revised safeguard policies that allow for UCS
• Asian Development Bank has proposed that its
  revised safeguard policies allow for UCS
• African Development Bank is using the Bank policy
  as a framework for testing the UCS approach in
  Uganda
• World Bank is actively sharing information on our
  experience with other development organizations,
  professional organizations and CSOs/NGOs

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UCS Website

• Details on the approach to Use of Country
  Systems and on Pilot Projects as well as SDRs and
  project documentation are available at
• www.worldbank.org/country systems