Forest Carbon Partnership Facility Participants Committee Meeting (FCPF PC3) Montreux, Switzerland June 16-18, 2009 Application of World Bank Safeguard Policies to Readiness Fund Operation

PC discussion in Panama asked: When do Safeguards apply, at what stage? How will they be applied, e.g., for consultation? Bank internal discussions suggest: Build on international good practices for consultations, environmental and social safeguards Reviewing how Safeguards apply to FCPF stages, suggesting: Development of overarching frameworks first, then Specific Safeguards applied once the REDD strategy and activities become known Working to Clarify How and When World Bank Safeguards Apply

Phase 1 Working Towards Readiness: Phases, Documents, Milestones, Legal Agreements PhaseFCPF DocumentMilestoneWB Legal Agreement Phase 1: Formulation Proposal Readiness Plan Idea Note (R-PIN) Assessment of R-PIN by Participants Committee, leading to selection of country into partnership All 37: Participation Agreement : Grant Agreement ($200,000) to prepare R- Plan/R-PP (optional) Readiness Preparation Proposal (R-PP) Readiness Plan (R- Plan) Assessment of R-PP by Participants Committee, leading to approval of Readiness Grant (subject to completion of due diligence by World Bank) Selected countries: Grant Agreement (up to $3.6 million) to implement contents of the R-Plan/R- PP and prepare R-Package Phase 2: Preparing for Readiness Readiness Package (R-Package) Assessment of R-Package by Participants Committee, leading to recognition of progress made towards REDD readiness Further work may be necessary to reach Readiness

World Bank Assistance & Due Diligence PhaseFCPF Document Assistance & Due DiligenceWB Legal Agreement Phase 1: Formulation Proposal Readiness Plan Idea Note (R-PIN) Review R-PIN, as a courtesy Participation Agreement Grant Agreement Readiness Preparation Proposal (R- PP) Readiness Plan (R-Plan) Assistance: -Comment on R-PP drafts -Contribute to R-PP text Due diligence: -FCPF-wide: Design and fine-tune environmental and social due diligence framework (Safeguard Policies) -Countries where grant would be allocated: Review consistency with framework Selected countries: Grant Agreement Phase 2: Preparing for Readiness Readiness Package (R- Package) Assistance (in countries where grant is allocated): Comment on draft components of readiness; contribute to component design Due diligence (in countries where grant has been allocated): Review consistency with framework

Phase 1 – Before Readiness Preparation Grant is signed: – Conduct diagnostic work: initial analysis of environmental and social context E.g., assessment of land use, forest policy and governance in R-PP – Present expected outcomes, opportunities and risks related to the program E.g., stakeholder analysis – Conduct initial consultations with representatives of key stakeholder groups in a transparent manner Information exchanges ≠ Consultations Community level consultations are not required at this stage – Finalize Terms of Reference for Phase 2, which would have been consulted upon Phase 1 A Framework for Environmental and Social Due Diligence: Candidate Approach: Strategic Environmental and Social Assessment (SESA)

Phase 2 – While the R-Package is being prepared: execute the ToR prepared in Phase 1 – Continue and complete the diagnostic work required, including a more structured and detailed stakeholder analysis – Conduct transparent consultations involving representatives of key stakeholders and interest groups (including indigenous peoples and forest dwellers, based on the principle of free, prior and informed consultation, seeking to build broad community support among concerned groups) – Finalize environmental and social management frameworks These frameworks incorporate procedures for ongoing consultations with concerned stakeholder groups; capacity building measures as needed; and procedures for project specific environmental and social impact assessments and action plans A Framework for Environmental and Social Due Diligence: Candidate Approach: Strategic Environmental and Social Assessment (SESA)

We are pioneering and learning together If approach is adopted, would it affect first 3 R-Plans? If so, how? Other next steps: – More detailed discussion at October meeting – Learn and adjust if necessary – In the meantime, World Bank ready to provide clarifications and help countries design their national framework as they prepare and implement their Terms of Reference – Training on SESA and its application to REDD readiness as part of workshops on R-PPs Further Thoughts on Environmental and Social Due Diligence Framework