1. FUNCTIONAL REVIEW IN CAMBODIA SHELLEY FLAM CONSULTANT German Technical Cooperation Administrative Reform and Decentralization Program Implemented by GTZ

2. About this Presentation This presentation –  Looks at how functional review fits into D&D reform process  Presents ideas about designing an overall process to review government functions in order to identify which functions to transfer to sub-national councils  Discusses some guiding concepts for deciding what functions to transfer and how  The presentation expands on the legal framework (Organic Law), but does not come from the law

3. Where does functional review fit in D&D reform?

4. Background  In 2001, the Law on the Administration and Management of Communes/ Sangkats was approved  1,621 commune/sangkat councils were elected and established in early 2002  Councils have general role to serve the interests of their citizens, to improve socio-economic development  Councils have some specific decentralized functions, i.e. to protect and conserve the environment & natural resources  But councils have focused almost exclusively on infrastructure  Councils also delegated functions (i.e. civil registration delegated by MoI)

5. Functional Review and D&D Reform  In May 2008, the National Assembly/Senate approved the Organic Law that establishes councils for Phnom Penh, provinces, towns, districts and khans  Elections for these councils are expected around April 2009  The Organic Law provides that councils for Phnom Penh, provinces, towns, districts and communes will receive specific sectoral functions to implement  The Organic Law provides for these councils to have a unified administration aiming at coordination of sectors in the jurisdiction of the councils

6. … Functional Review and D&D Reform  Every sector (i.e. education, health, NRM) must be reviewed to decide which functions to transfer to which councils, or which to retain at the national level  When a council receives a function, it must also receive the corresponding resources to implement the function effectively (resources = finances, personnel, assets) Each council, therefore, will be transferred and will implement specific functions, and will have corresponding resources to do so

7. Definitions of Key Terms Will look next at definitions of –  decentralization  delegation  deconcentration  functional review

8. Definitions of Key Terms Decentralization = the transfer/”assignment” of functions and resources to elected sub-national councils that have local discretion to implement the functions and utilize the resources, and that are accountable to citizens (highest level of local discretion) Delegation = the transfer of a function to sub-national councils to be carried out on behalf of the delegating authority, i.e. a ministry (less local discretion) Deconcentration = the transfer of tasks from a ministry to its sub-national units, i.e. provincial departments or district offices (often no/little scope to make decisions)

9. Examples DECENTRALIZATIONDELEGATIONDECONCENTRATION EXAMPLE 1 MoE decentralizes the function of providing primary education to district councils (administration implements) MoE delegates the function of providing primary education to district councils, on behalf of the Ministry (administration implements) MoE deconcentrates the task of providing primary education to its provincial departments of education EXAMPLE 2 MoH decentralizes the function of immunizing infants to commune councils (administration implements) MoH delegates the function of immunizing infants to commune councils, on behalf of the Ministry (administration implements) MoH deconcentrates the task of immunizing infants to its district units

10. Definition: Functional Review Process The process of analyzing a sector in order to identify its functions, then determining whether each function should be allocated to a level of sub-national council For functions that are to be allocated to councils, the process determines whether the function is obligatory or permissive, whether it should be assigned (decentralized) or delegated, and what resources & capacity development are required

11. Definition: Functional Review Process The process also identifies what functions should be retained as national level functions, and which of those national level functions should be deconcentrated to line ministry sub-national units

12. Why is functional review important to sector ministries?

13. Implications for Sector Ministries  The Organic Law establishes a National Committee to implement the law (NCDD)  A responsibility of the NCDD is to oversee the review of each sector to determine which functions and resources should be transferred to councils  That process will require participation of concerned ministries and should also involve councils  Which functions are best decentralized / delegated / deconcentrated / retained at national level ?  What are resources correspond to a function to be transferred?

14. What are some key considerations for designing a process for functional review?

15. Key Considerations  Space for political buy-in and consensus at all levels  Membership of new NCDD and its structures, and other informal opportunities at national level  Mechanisms to engage stakeholders at sub-national levels (councils, line ministry departments/offices)  Mechanisms to engage civil society  Long term vision –  predominant roles for each level of council  strategy for decentralization versus deconcentration

16. … Key Considerations  Continuity  Critical that the process of transferring functions does not unduly disrupt currently provided services  Equity issues  Strategic Framework and Organic Law stress the promotion of equity for women & men, children, youth, the poor, minority and ethnic groups  Equity must be considered in the functional review process - this will require conscious effort

17. … Key Considerations  Sectors, not Ministries  Not all ministries correspond to a single sector  Not all sectors correspond to a single ministry  Specifying exclusions  The NCDD may choose to identify matters that are ‘off the table’  If so, how to ensure that the list is appropriate  Creating in-country capacity  Functional review will be an intensive exercise for ~10 years, then an on-going task

18. … Key Considerations  Phasing  Critical in terms of capacity to review sectors at national level, and capacity of councils to absorb new functions  Which sectors first? (Organic Law and NSDP)  Geographic sequencing?  Sequencing by sub-national level?  First package of functions in each sector?  Issue of symmetry (significant differences in size of jurisdictions)?

19. What entry points for consensus building (key consideration #1) might the NCDD offer in terms of its composition and the composition of its structures?

20. New NCDD  NCDD is at the centre of implementation of the Organic Law, including functional review  NCDD’s central role in functional review should be considered when determining its leadership and membership –  What are options for NCDD leadership?  What are options for NCDD membership?  What are options for NCDD structures? …

22. What might a functional review process look like?

23. Proposed 3-Step Process for Functional Review Three-step process is proposed here for functional review –  Preparatory phase  Technical component  Political component

25. Proposed 3-Step Process for Sector Studies

26. Actors Involved in Sector Studies  Proposed that sector studies be conducted by sector technical working group under the Functions & Resources Commission  Sector technical working group members are technical officials from concerned ministries plus the ministries that are involved cross-sectorally  Proposed that a sector technical working group periodically consult with a sector-specific resource group (sub-national stakeholders, including sub- national administrations; relevant depts/offices, and councils; civil society; academia)

27. First Sectors for Review The Organic Law (Article 215) suggests that the following sectors will be reviewed first –  Agriculture  Education  Forestry, natural resources, environment  Health, nutrition and related services  Industry and support to economic development ….

28. First Sectors for Review And –  Land use  Electricity production &distribution  Water management  Infrastructure and facilities related to the above  Special needs (i.e. Phnom Penh, Siem Reap) These sectors are consistent with the priorities set out in the National Development Strategic Plan

29. End of Part 1 of the presentation Thank you

30. PART 2 FUNCTIONAL REVIEW IN CAMBODIA: KEY CONCEPTS

31. Key Concepts for Functional Review Part 2 of the presentation looks at the following key concepts –  unbundling functions  obligatory functions/minimum basic services  concept of subsidiarity  functions common across sectors (if time permits)  corresponding resources

32. Unbundling Functions  A function is an action that delivers or contributes to the delivery of a service. If refers to a responsibility or a set of responsibilities that can be allocated to a governance unit primary education versus building primary schools  The first exercise in functional review is to identify what are the functions in a sector

33. … Unbundling Functions  Functions are identified by ‘unbundling’ a sector  Unbundling is the process of dividing a sector into its parts until a function can be identified for allocation to a level of council (or it is determined that there are no functions that can appropriately be transferred to councils)

34. … Unbundling Functions  Once functions are unbundled and allocated to the appropriate levels, different levels of governance will have their own functions within the same sector  For instance –  commune councils might be responsible for health posts  district councils might be responsible for district hospitals  provinces might be responsible for provincial hospitals and to inspect health posts and district hospitals  National level might be responsible to legislate minimum standards for health posts and hospitals

35. … Unbundling Functions The RGC database on powers and functions, supported by ARDP, will be an important tool to assist in identifying functions, determining where they are currently implemented, and, where applicable, for suggestions about future arrangements

36. Obligatory Functions/Minimum Basic Services  Once a function is identified, the Organic Law requires that the function be identified as obligatory or permissive  An obligatory function is one that the council MUST implement  A permissive function is one that the council may choose to implement or choose not to implement  It may also be desirable to indicate what are the basic expectations (minimum basic services) for a function, i.e. a health post for every xx families

37. Concept of Subsidiarity  Concept of subsidiarity is set out in the Strategic Framework (June 2005)  Concept of subsidiarity is a guide for deciding where to transfer a function  The concept of subsidiarity is that a function should be transferred to the lowest level that can effectively implement the function  When thinking about where to transfer a function, consideration starts at the lowest level

38. Criteria for Concept of Subsidiarity Some criteria for applying the concept of subsidiarity include –  economy of scale (where the unit cost is lowest)  population size/service benefit area  cost-benefit (balancing cost and benefit to citizens)  equity issues (where equitable outcomes are more likely)  need for high level of accountability (i.e. potable water) …

39. … Criteria for Concept of Subsidiarity  local preferences (difference across jurisdictions)  local conditions (differences across jurisdictions, i.e. geography)  spillover (negative consequences to other jurisdictions)  traditional local functions (i.e. conflict resolution)  local information (i.e. whether teachers attending class) …

40. … Criteria for Concept of Subsidiarity  inter-jurisdictional and local coordination/cooperation (scope/reason for councils to cooperate, i.e. drainage system)  sectoral coordination (need for strong cross-sectoral coordination, i.e. land use planning)  international lessons learned  weighing and balancing all the criteria

41. Common Functions Across Sectors  Every sector will have its own distinct functions  Every sector will also have generic management functions in common with other sectors, for instance –  Policy setting  Regulation (i.e. setting standards)  Legality control/enforcement  Planning, budgeting, M&E  Determining beneficiaries at local level  Ensuring public participation  Implementation of services, management of assets  Corresponds to RGC Powers and Functions Database

42. … Common Functions Across Sectors  With certain common functions across sectors, it may be possible to have rules of thumb (but not stringent rules!) about where those common functions should typically be transferred  For instance, overall policy setting = national function?  Implementation of services = sub-national function?  Ensuring public participation = commune function?

43. Corresponding Resources  Transferring a function without the corresponding resources (finances, personnel, assets) = empty mandate  When a function is transferred, at the same time its corresponding resources must be transferred  Just as functions will be re-allocated, therefore, finances, civil servants and state assets will be re-allocated/re- deployed  Finances, personnel and assets will follow functions  Part of the functional review process is to identify what resources correspond to a function to be transferred

44. Big Picture  Clear that functional review is an immense, complex and politically sensitive task that will take years  Yet, governments around the world have introduced D&D reform Why?

45. Why Introduce D&D Reform? Rationale was discussed in another presentation. To summarize the potential benefits –  More opportunities for citizens to participate in governance and influence decision-making  Government more responsive to real local needs  More responsive and effective service delivery  More sustainable development activities  More transparent and accountable governance  Contribution to poverty reduction efforts

46. Big Picture How to maximize chances that the benefits will be realized?  Make good decisions about which level should receive functions (subsidiarity as a guide)  Ensure that functions are accompanied by their corresponding resources, and capacity development  Include mechanisms to require councils to practice principles of good governance

47. Thank you