1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized OFFICIAL DOCUMENTS, PSF GRANT NUMBER TF PNPM Support Facility Trust Fund (PSF) Grant Agreement (National Program for Community Emp)werment in Rural Areas - Healthy and Bright Generation (PN PM Generasi) Project) between REP1 JBLIC OF INDONESIA and 0 2 AUG 2013 BY: INTERNATIONAL BA,N K FOR RECONSTRUCTION AND DEVELOPMENT acting as administrator of grant fun Is provided by donors under the Support Facility for the National Program for Community Empowerment (PNPM) Multi Donor Trust fund (PSF) Public Disclosure Authorized June 25, 2013
2 TF01476) 2 of 27 June 25, 2013 PSF GRANT NUMBER TF PSF GR knt AGREEMENT AGREEMENT dated June 25, 2013, ente red into between: REPUBLIC OF INDONESIA ("Reci:ien "); and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT ("World Bank"), acting as administrator of grant ft nd. prc vided by donors under the Support Facility for the National Program for Community Empowcrm,-nt H lulti Donor Trust Fund (TF070967) ("PSF"). The Recipient and the World Bank hreb, agree as follows: Article I!ita idai d Conditions; Definitions The Standard Conditions fo Gr, nts Made by the World Bank Out of Various Funds, dated February 15, 2012 ("Stan,lard Co riditions") constitute an integral part of this Agreement Unless the context requires othei wise, the capitalized terms used in this Agreement have the meanings ascribed to thea in the Standard Conditions or in this Agreement. Article II The Project The Recipient declares 11s comrr itment to the objectives of the project described in Schedule 1 to this Agreem,nt ("Proje:t"). To this end, the Recipient, through MOHA, shall carry out the Project in accordanct with tbhe provisions of Article II of the Standard Conditions Without limitaticn upon the pro iisions of Section 2.01 of this Agreement, and except as the Recipient and the World Bank shall otherwise agree, the Recipient shall ensure that the Project is carried out in a ccordaice with the provisions of Schedule 2 to this Agreement. Article III The Grant The World Bank agrees to exte ad to the Recipient, on the terms and conditions set forth or referred to in this Agreeme it, a grant in an amount equal to thirty one million seven hundred thousand United States Dol ars US$31,700,000) ("Grant") to assist in financing the Project.
3 TF014761) 3 of 27 June 25, The Recipient may withdaw the proceeds of the Grant in accordance with Section IV of Schedule 2 to this Agreemint The Grant is funded out o th e abovementioned trust fund for which the World Bank receives periodic contributions from the doi tors to the trust fund. In accordance with Section 3.02 of the Standard Conditions, the World B, nk's payment obligations in connection with this Agreement are limited to the amount cf fe nds nade available to it by the donors under the abovementioned irust fund, and the Recipiei it's rigl t to withdraw the Grant proceeds is subject to the availability of such funds. Article IV Recipient'; Representative; Addresses The Recipient's Representative r.ferred to in Section 7.02 of the Standard Conditions is the Recipient's Minisler of Fiaarce The Recipient's Address ieferred to in Section 7.01 of the Standard Conditions is: Ministry of Finance c/o Directorate General o Dibt M lanagement Gedung Frans SecLa Jalan DR. Wahidin No. 1 Jakarta Indonesia Cable: Facsimile: FINMINISTRY Jakarta The World Bank's Address refer -ed to in Section 7.01 of the Standard Conditions is: International Bank for Rcconstru ction and Development 1818 H Street, N.W. Washington, D.C United States of Americcl Cable: 'lele c Facsimile: INTBAFRAD 248z.23 (N4CI) or Washington, D.C. 641z-5 (MCI)
4 TF01476) 4 of 27 June 25, 2013 AGREED at Jakarta, Repu blic of Indonesia, as of the day and year first above written. REPUBLIC OF INDONESIA By Authorized Representative Name: Robert Pakpahan Title: Expert Staff of the MOF on State Revenue With Full Manchp as DG of Debt Management IS TERNAT ION AL BANK FOR RECONSTRUC FlON AND DEVELOPMENT acting as admir istrator of grant funds provided by donor under the Support Facility for the National Program for Community Empowermcnt M fulti Donor Trust fund (PSF) By Authoriz R rsentative Name: Josephine Bassinette Title: Acting Country Director, Indonesia
5 TF of 27 June 25, 2013 SCHEDULE 1 F roj ect Description The objective oft ne Projcct is to empower local communities in poor, rural sub-districts in Project Provinces to increase utilizat on < f health and education services and foster accountability in local service delivery. The Project consists of thc fo low ng parts: Part 1: Kecamatan Grants (a) Providing grants to Project K.ecainatans to finance investment activities that improve the use of and access to health and educai ion ser ices. (b) Providing support to finaice: (i) the planning and preparation of Sub-project proposals; and (ii) training and capacity building acliviti s for communities. Part 2: Community Empowerrrien an Facilitation Support Providing technical assislance for: (a) community empowerment and facilitation, including training to improve community skill levels iii dia inosing and overcoming constraints to health and education service utilization; (b) improving coinmt nications with, and linkages to, local government health and education offices and service provid(:rs and communities; and (c) the management of the Management Information Systerr databa e. Part 3: Implementation Support arid 1 echnical Assistance (a) Providing support for sti engthei ang the management and oversight capacity of the PNPM Generasi Secretariat, including the car rying out of workshops, coordination activities with line ministries and field supervision activities. (b) Providing technical assis tan-:e f(,r health and education planning and database management, including the financing of salar ies, tra- el and field supervision costs of PNPM Generasi National Specialists and PNPM Generasi "ro iinc al Specialists. (c) Providing trainin: for Fa cilitatoi s, PNPM Generasi National Specialists and PNPM Generasi Provincial Specialists at all lenels of )rogram delivery, including refresher training for existing facilitators and specialists, pre-seivice training for new facilitators and specialists, specialized training for district database ope ators, a.d carrying out regional evaluation workshops.
6 TFO of 27 June 25, 2013 SCHEDULE 2 Project Execution Section 1. Institutional and Other,rrangements A. Institutional Arrangemerits 1. At the National level, the Recipient shall: (a) ensure that the Project hall be implemented under the umbrella of PNPM, and subject to i-he ovei all guidince of Pokja Pengendali PNPM; (b) (c) through MOHA, les gna e PMD to be responsible for the overall management and monitoring of the Prcject; and except as the Wo-ld Ban,, and the Recipient may otherwise agree in writing, cause PMD to: (i) (ii) (iii) maintain, L ntl the completion of the Project, the PNPM Generasi Secretariat, wita a mar date, st ff composition, filled staff positions and terms of reference acceptable to the World Bank and the Recipient, to be responsible for the manageme nt and monitoring of the Project; ensure tha the PTIPM Generasi Secretariat shall be provided with adequate resources, and su:pported by qualified personnel in adequate numbers as needed to iccomp ish the objectives of the Project; ensure tha the ap pointment letter (surat keputusan) for the PNPM Generasi Secretariat is issu.d in a timely manner in the first quarter of each calendar yezr; (iv) emure that t ie I roject shall be supported by suitably qualified Project Manager ind PN]'M Generasi National Specialists to oversee the quality of Project irrplenen:ation in accordance with the Operations Manual, in each case with -:erras o reference satisfactory to the Recipient, through PMD, and the World Bank; (v) (vi) (vii) ensure cocrdi -atic n, as necessary, with the National Management Consultants; ensure coordi iati( n, as necessary, with the Pokja Pengendali PNPM; and utilize, uni:il ihe completion of the Project, the Joint Secretariat comprised of representalivcs ol the relevant directorates in PMD to improve coordination and prognmr-ing including budget, of the PNPM activities.
7 TF of 27 June 25, At the Province level, the Recipint shall, except as the World Bank and the Recipient may otherwise agree in writing: a) ensure that the Project be supported by suitably qualified PNPM Generasi Provincial Specialists to ov(rsee th,- quality of Project implementation in the Provinces in accordance with t-te Dpe. ations Manual, with terms of reference satisfactory to the Recipient, througl PMD, md the World Bank; 'b) cause to be establ she d in each Province prior to the disbursement of any Kecamatan Grant in such Pr)vince, and/or maintained until the completion of the Project, a Provincial Satker, to be r,,sponsible for the day-to-day implementation of the Project at the Province-level, with a mandate, composition, filled staff positions and terms of reference acceptabile :o th- World Bank and the Recipient, through PMD, and set out in the Operations Ma aual (c) ensure that eace P-ovincial Satker be provided with adequate resources, and supported by qualified p,.rsonnel in adequate numbers as needed to accomplish the objectives of the Project, ncluding, a Province-level PJOProv; (d) (e) ensure that each Prcvincial Satker shall coordinate Project activities, as necessary, with the Provincial Po rerty Alleviation Coordination Team responsible for its respective Provin,:e; and ensure that the appointment letter (surat keputusan) for each Provincial Satker is issued in limely ianaer i the first quarter of each calendar year. 3. At the District (Kabupai:eni le- cl, the Recipient shall, except as the World Bank and the Recipient may otherwise ag -ee i i writing: (a) (b) (c) (d) cause to be established :n each Project Kabupaten prior to the disbursement of any KecamatEn Gran in such Project Kabupaten, and/or maintained until the completion of the Project, a Ka )upaten Satker, to be responsible for the day-to-day implementation of the Project at the Kabupaten and Kecamatan levels, with a mandate, compo: ition and terms of reference acceptable to the World Bank and the Recipient, as set iut in tl e Operations Manual; ensure that each K bup iten Satker shall be provided with adequate resources, and supported by quilif ed personnel in adequate numbers as needed to accomplish the objectives of th, Project, including, a Kabupaten-level PJOKab and at least two Facilitatcrs (incl iding o ie financial Facilitator)except as may be otherwise agreed in writing on a case by cas: basis between PMD and the World Bank; ensure that each Kabup iten Satker shall coordinate Project activities, as necessary, with the Kabuiaten P )verty Alleviation Coordination Team responsible for its respective area; nd ensure that the apr oint nent letter (surat keputusan) for each Kabupaten Satker is issued in timely ma iner in the first quarter of each calendar year.
8 TFO of 27 June 25, At the Sub-District (Kecaman an) evel, the Recipient shall, except as the World Bank and the Recipient may otlerwise :gr-e in writing, ensure through PMD that all Sub-project activities are supported by at leasi. one Facilitator and, when necessary, an assistant Facilitator to support communiies wit' P.-oje(t implementation in the field, except as may be otherwise agreed in writing on a case b ' ca, e basis between PMD and the World Bank. 5. At the Sub-District (Ke..anatar) and Village level, the Recipient, through PMD, shall, except as the W:rld Bank and the Recipient may otherwise agree in writing, maintain implementation and institational irrangements in accordance with the Operations Manual. 6. The Recipient, th-ough PMD, shall ensure that the PNPM Generasi National Specialists are in place in a timely manner es ne :essary to facilitate implementation of the Project. B. Implementation Arrang ements 1 The Recipient shall, throi igh the "MD: (a) (b) (c) (d) (e) implemen: the Pr,)je(t in accordance with Operations Manual, including all annexes and supplements thereto. acceptable to the World Bank and the Recipient, giving details of: (i) imp [er entz Lion arrangements; (ii) procurement procedures as set forth in Section III of t-is 'chedule and standard procurement documentation; (iii) reporting -equirerments, f nancial management procedures and audit procedures as set forth in Section I.E of this Schedule; (iv) project performance indicators; (v) the Implementation Guideli:ies on Social and Environmental Safeguards, which constitutes a sup,)lenent to the Operations Manual; (vi) Eligibility Criteria for the selection :f Sub-pro ects and the terms and conditions of governing the Kecamatan Grants and Loca' Gover iment Participation, including the terms and conditions set forth in Annex to thi; Schedule; (vii) maintenance provisions for works to be carried out under a Sub project; (viii) the Better Governance Action Plan; (ix) the Management Informatioi System description and procedures; and (x) the Complaints Handling System de,.crip :ion and procedures; implemer,t Sub-])ro ects in accordance with the PNPM Generasi Supplemental Manual, acceptable o th,- Recipient and the World Bank, as necessary to set out the incremental scope of activities, eligibility criteria, implementation arrangements and disbursement me:harisrr s; not amend, susr enc., at rogate, repeal or waive any provisions of the Operations Manual or the IPN"'M Generasi Supplemental Manual without the prior written agreement of the World 3ank and the Recipient; ensure that the Oper itior s Manual including all annexes and supplements thereto, and the PNPM Generas. Su)plemental Manual, as applicable, is made available, at all times unil com-,letion of the Project, to each Local Government and all PNPM Generasi Provini:ial Spceialists and Facilitators, and applied in the carrying out of Sub-projects; and with the prior wi:ittn al,reement of the World Bank, update the Operations Manual, and the PNPM 3eneras i Supplemental Manual, as necessary, at all times ensuring compliance thercof 'vith the terms of this Agreement.
9 TF of 27 June 25, In the event of any conflict betw -en the provisions of the Operations Manual or the PNPM Generasi Supplemental M an tal a id the provisions of this Agreement, the latter shall prevail. 3. The Recipient, through I'MD, saall ensure that only Sub-projects prepared, selected and implemented in accordarce witl the Eligibility Criteria and the terms and conditions for Sub-Projects and Kecamitar Gn nts set forth in Annex 1 to this Schedule 2, the Operations Manual, and the PNPM Centrasi Supplemental Manual shall be financed out of the proceeds of the Grant. 4. The Recipient, t'.rough PNID, shall ensure that the promotional job advertisement for consultants under the Project and Facilitators includes encouragement for women participation. 5. The Recipient, through P [IE, sh; ill ensure that: (a) (b) (c) (d) Facilitators are assig.ied ind trained by no later than June 30 in each year of Project implemenation ir ac -ord ince with the Operations Manual; during Project irrplemen:ation, adequate budget is made for training of Facilitators consultanis based on a tr 3ining plan agreed in writing between the World Bank and the Recipient; monthly salary payment for PNPM Generasi National Specialists, PNPM Generasi Provincia, Speciilisis, s aff of the PNPM Generasi Secretariat and Facilitators is made in timely nianaer each month and operational and travel expenses are paid in timely manner during Project implementation; and prior to the corner.cement of each Sub-project, the Technical Facilitator(s) for the Kabupaten or Ke cariatan of the Beneficiaries responsible for such Sub-Project shall have completed ; technii-al review of each such Sub-project in accordance with the Operations Manu al a nd t ie PNPM Generasi Supplemental Manual, as applicable, and the requirements of Ann,-x I to this Schedule 2. The Recipient, through PMD, shall ensure that the appli,ablc Kabupaten Satker shall retain records of each such review. 6. The Recipient, through PMD, shall, during implementation of the Project, continue to develop an updated Ma iag eme it Information System based on performance indicators and control data agreed in w itiig b tween the Recipient and the World Bank. 7. The Recipient, through PMD, s iall ensure that a list of Project Kecamatan, a list of amounts of each Kecamatan Grnt, the Operations Manual and the PNPM Generasi Supplemental Manual are made avai able to the public through the PNPM Website, at all times until completion of the Project. 8. The Recipient, Ihrough thc PN D, shall ensure that the relevant Camat and Bupati in each Project Kecamatan and Proje :t Kabupaten shall make publicly available, in a manner acceptable to the Recipient ind the World Bank, a report on the results of Project implementation and accounts for funds used during each year of Project implementation, by no later than May 15 of each subsequent year.
10 TF of 27 June 25, The Recipient, through FMD, si,all ensure that: (a) all annual audit reports referred to in Section II.B of this Schec ule 2, i icluding Kabupaten audit reports, shall be published on the PNPM Website by no later than 5 eptember 30 in each year of Project implementation for the prior year annual audit repcrts, :ommencing on September 30, 2014 for the 2013 annual audit reports; and (b) ap proprial e action to follow up on any audit findings is taken at the National, Provincial, Kabupaten or Kecamatan level, as applicable, and reported as part of the regular quarterly repo it a id n ade available on the PNPM Website. 10. The Recipient shall ensuie that, :xcept as the World Bank and the Recipient shall otherwise agree in writing: (a) BPKP shat carry out a continuous audit of the Project in partnership with Local Government iiispecto ates; and (b) the terms of reference of said continuous audit shall include the percenlagc of audit samples agreed among PMD, BPKP and the World Bank. 11. The Recipient shall ensure that l Sub-projects, whether financed by the Grant or by other sources, shall be carriec out ir accordance with the Operations Manual and the PNPM Generasi Supplemental Nanial. 12. The Recipient shall ensure that expenditures financed out of the proceeds of the Grant, including Sub-projects, shell n)t have been financed by sources other than the Grant, including from the budgt o!'the Recipient. 13. The Recipient ard the World B nk may, from time to agree in writing that the transfer of Kecamatan Grants may he cxcluded from the Project on an interim basis, including, without limitation, in situations vhcre: (a) one or more Facilitator position has remained vacant for more than four months, (t) a problem related to fraud or corruption as defined in the Operations Manual remain, un resolved for more than the period specified in paragraph 13(c)(i) of Secticn I.B o 'th,s Schedule; and/or (c) decisions with respect to the allocation of Kecamatan Grarts or a iy actil ities related thereto are not taken in accordance with the eligibility, the Kecamatin Grant size formula and/or the selection criteria set out in the PNPM Generasi Suppl,.-mcntal Manual, or in another relevant policy document of the Recipient regarding PNI'M. U1 on such an agreement between the Recipient and the World Bank, the Recipient, throug ri M )HA, shall not transfer funds to the Kecamatans which have been temporarily exclud,,d by w itten agreement between the Recipient and the World Bank. 14. Complaints Handling. Th- Re,-ipient, through PMD, shall ensure that: (a) (b) (c) the Complaints Jandlin. System is operated, maintained and consistently updated throughout Project Imp]ementation in accordance with the Operations Manual and terms of reference agree, in writing between the Recipient and the World Bank; tracking of all active coi nplaints cases continues to be made available on the PNPM Website; the servize standard an-i mechanism for its implementation includes the following except as may be, otherv ise agreed in writing between PMD and the World Bank and reflected in the Standard Operating Procedures:
11 TF of 27 June 25, 2013 (i) (ii) (iii) with respei t to Ke -amatan Grants, if a problem related to fraud or corruption (as define& in the Operations Manual) is reported to the PMD in Jakarta by any Facililatcr oi official of the Recipient charged with supervising the Project and no a propriate response (as determined by reference to the Standard (pe -atin Procedures) is taken by PMD, by the within thirty (30) days after Ihe repc rt thereof, then the Provincial Coordinator shall ensure that disbursement and transfer of Kecamatan Grant funds is excluded on an interim bat is in the location in question until further notice issued by PMD; with respect to any Facilitator, if a problem related to fraud, corruption or a breach of Ihe :ode of ethics (as defined in the Standard Operating Procedures) is reported tc the Provincial Satker and central Satker and no decision on appropriat:, a-tior (as determined by reference to the Standard Operating Procedure.) is tak -n by the relevant Provincial Satker within thirty (30) days after the r port th reof, the Facilitator shall be automatically released from all du:ies witliout pay on an interim basis until a final decision related to the Facilitator is reac ied by the ethics tribunal (as defined in and operating in accordanc with th e Standard Operating Procedures); and these arrai ige nen s shall not be construed to waive any rights that the World Bank or tie Reciy ient may otherwise have under the terms of this Agreement with respe'ct :o tl e ensuring that the proceeds of the Grant are used for the purposes of the Pi oject and for Eligible Expenditures; and (d) each Prov Incial S itker ar d Kabupaten Satker arranges for the local public disclosure of complaints ar d case! related to the Project, if any, and their handling and resolution C. Anti-Corruption 1. The Recipient shall ensure that tl e Project is carried out in accordance with the provisions of the Anti-Corruption Guic elines z nd the Better Governance Action Plan, which reaffirms the Recipient's comnmitment o good governance in PNPM. 2. The Recipient shall ensuie tiat r o activities under the Project shall involve activities related to political practices or parties. D. Environmental and Social Safe guards 1. (a) The Recipient, hrough PMD, shall ensure that each Sub-Project is prepared, implemented and m nit red in accordance with the Implementation Guidelines for Social and Environrment il Safeguards, which form a supplement to the Operations Manual, and all luic elin,s and checklists set out therein, including those specifically provided for Indi.enous 'eoples and land donation, and the Negative List. (b) In the event of any c onflct between the provisions of the Implementation Guidelines for Social and Erivir nm ntal Safeguards and those of this Agreement, the latter shall prevail.
12 TF of 27 June 25, The Recipient, through PA, sh ill apply the section of the Implementation Guidelines for Social and Environmental Safeguards in each Sub-Project that may affect Indigenous Peoples, in a manner to ensure that the Sub-Project shall: (a) avoid, and. if not p)os:;ible minimize cultural, social and economic adverse effects on Indigenous Peoples, cau;ed or likely to be caused by the Project, by taking appropriate mitigat:ing me isures; and b) through a process of free, prior and informed consultation, involve concerned Indigenous Peoplcs ii the design and implementation of Sub-projects in which such people reside or rr ake the r living and design and implement measures so as to ensure that the benefits rcceived )y the Indigenous Peoples under the Project are in harmony with their econoinic, so,:ial and cultural preferences, and likely to protect their customary user right; andi reduce, mitigate and offset any adverse impacts of Subprojects. 3. The Recipient, through PMD, sha 11 ensure that the proceeds of Kecamatan Grants shall not be used to finance th. acquisiticn ol land or compensation for involuntary resettlement and that no Sub-Project shall req,irt or permit the involuntary acquisition of land or involuntary resettlement. The Reciplent, thr )ugh PMD, shall ensure that in any Sub-Project involving land donation, the plannirg and verification procedures for land donation (voluntary donation and donation with compo-nsatior) set out in the Implementation Guidelines for Social and Environmental Safeguardi stall I ave been followed and documented in a manner satisfactory to the World Bank and th, PMD )rior to the commencement of the Sub-Project. 4. The Recipient shall ens ire that the proceeds of the Grant are not used to finance any activities or materials or the N:gative List as set out in Section A.2 of Annex I to this Schedule The Recipient shall ensure that tl e terms of reference for any consultancies related to studies, technical assistance and/or cipac ty building under this Agreement shall be satisfactory to the World Bank following its review thereof 6. Without limiting the obligalions under Section II.A of this Schedule 2, the Recipient shall include in each Project Repor: (a) information on the status of compliance with the Implementation Guidelines for Social and Environmental Safeguards; (b) details of measures taken for each Sub-Projet in th. implementation of such guidelines; (c) conditions, if any, in any Sub-Project whic i irterf:re or threaten to interfere with the implementation of such guidelines; and (d) remedial r ieasures taken or required to be taken to address such conditions. D. Donor Visibility and Vi!it 1. The Recipient shall takc oi cat se to be taken all such measures as the World Bank may reasonably request to ideatily publicly the Donors' support for the Project. 2. For the purposes of Secior. 2.0) of the Standard Conditions, the Recipient shall, upon the World Bank's request, tke all i ieasures required on its part to enable the representatives of Donors to visit any part of the R.cipient's territory for purposes related to the Project.
13 TF of 27 June 25, 2013 Section 1. Project Monitoringy Rep) rting and Evaluation A. Project Reports; Completio i R port 1. The Recipient shall monitor and evaluate the progress of the Project and prepare Project Reports in accordance witl.i the pr :visions of Section 2.06 of the Standard Conditions and on the basis of indicators accep able to the World Bank. Each Project Report shall cover the period of one calendar qu; arter, an I shall be furnished to the World Bank not later than fortyfive (45) days after the end ofthe period covered by such report. 2. The Recipient shall prep ire the Completion Report in accordance with the provisions of Section 2.06 of the Stand ard Coiiditions. The Completion Report shall be furnished to the World Bank not later than six mo iths after the Closing Date. B. Financial Management; Fin anc al Reports; Audits 1. The Recipient shall ensure that a financial management system is maintained in accordance with the provisions of Sec tion 2.07 of the Standard Conditions. 2. The Recipient shall ens ire tha interim unaudited financial reports for the Project are prepared and furnished tc th, World Bank as part of the Project Report not later than fortyfive days after the end of each c, lendar quarter, covering the quarter, in form and substance satisfactory to the World _3ark. 3. The Recipient shall have its Finz ncial Statements for the Project audited in accordance with the provisions of Sectio i 2.07 (b) of the Standard Conditions. Each such audit of the Financial Statements shall cover the period of one fiscal year of the Recipient. The audited Financial Statements for each such period shall be furnished to the World Bank not later than six months after the end cf such 1 eriod. Section III. Procurement A. General 1. Procurement and Consaltant Guidelines. All goods, works, non-consulting-services and consultants' services req,iircd fcr the Project and to be financed out of the proceeds of the Grant shall be precured iii ac corc ance with the requirements set forth or referred to in: (a) (b) Section I of the "C uidt lines: Procurement of Goods, Works and Non-consulting Services under IFRD Lo ins and IDA Credits and Grants by World Bank Borrowers" dated January 20 [ 1 ("Pr(curement Guidelines") in the case of goods, works and nonconsulting services, and Sections I and IV of the "Guidelines: Selection and Employment of Co isull ants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011 ("Consultant Guidelines") in the case of consultants' serv:ces; and the provisions of this Se :tion III, as the same shall be elaborated in the procurement plan prepared ard iipda:ed from time to time by the Recipient for the Project in accordance with par igra.)h 1.18 of the Procurement Guidelines and paragraph 1.25 of the Consultant G aid linc s ("Procurement Plan").
14 TF of 27 June 25, Definitions. The capitaized t(rms used below in this Section to describe particular procurement methods or methods of review by the World Bank of particular contracts, refer to the corresponding method desc -ibed in Sections II and III of the Procurement Guidelines, or Sections II, III, ]V and V o 'the Consultant Guidelines, as the case may be. B. Particular Methods of Pr ocuren ent of Goods, Works and Non-consulting Services 1. National Competitive Bioldiiig. except as otherwise provided in paragraph 2 below, goods, works and non-consulting service; shall be procured under contracts awarded on the basis of National Competitive Bid:iin., st bject to the additional procedures set out in the Annex to this Schedule. 2. Other Methods of Procire ment of Goods, Works and Non-consulting Services. The following methods, other tha i Ni tional Competitive Bidding, may be used for procurement of goods, works and non-consultiig services for those contracts specified in the Procurement Plan: (a) Shopping; (b) Direct Contracting; and (c) Community Participation procedures which have been found ac,ep :abl to the World Bank. C. Particular Methods of Prociiren ent of Consultants' Services 1. Quality- and Cost-basec Sclect on. Except as otherwise provided in paragraph 2 below, consultants' services shall be pro, ured under contracts awarded on the basis of Quality- and Cost-based Selection. 2. Other Methods of Proctremeni of Consultants' Services. The following methods, other than Quality- and Cost-baied Sek ction, may be used for procurement of consultants' services for those assignments which are specified in the Procurement Plan: (a) Selection based on Consultants' Qual'Ificatiors: ib) S ingle-source Selection of consulting firms; (c) Selection of Individual Consultants; e nd (d) Single-source procedures for the Selection of Individual Consultants. D. Review by the World Bank of Procurement Decisions The Procurement Plan shall set forth those contracts which shall be subject to the World Bank's Prior Revie,w. All other c )ntracts shall be subject to Post Review by the World Bank. Section IV. Withdrawal of G rar t Pr oceeds A. General 1. The Recipient may withd -aw the proceeds of the Grant in accordance with the provisions of: (a) Article III of the Star dar( Conditions; (b) this Section; and (c) such additional instructions as the World Ba:ik n ay specify by notice to the Recipient (including the "World Bank Disbursement Guid-lines f )r Projects" dated May 2006, as revised from time to time by the World Bank and ai made applicable to this Agreement pursuant to such instructions), to finance Eligible ExpenditLres.s set forth in the table in paragraph 2 below.
15 TF of 27 June 25, The following table speciies the categories of Eligible Expenditures that may be financed out of the proceeds of the Grant ( 'Category"), the allocations of the amounts of the Grant to each Category, and the per certage of expenditures to be financed for Eligible Expenditures in each Category: Category Amount of the Grant Percentage of Allocated (expressed Expenditures to be in USD) Financed (inclusive of Taxes) (1) Kecamatan Grants under Part ] of the 25,500, % of Grant amount Project disbursed (2) Goods, Consultants' Services, Ti aini ig 3,700, % and Workshops* and Incremental Op -rati ig Costs* under Part 2 of the Project (3) Goods, non-consulting service;,., 2,500, % consultants' services, Training andl Workshops*, and Incremeatal Opcrating Costs* under Part 3 of the Project TOTAL AMOUNT 31,700,000 *For the purposes of this Table, the falloliing terms shall have the following meanings: (i) "Training and Workshops" means Project-rclated re isonable expenditures related to the carrying out of training and workshop activities conducted in the territory of the Recipient, including purchase and publication of materials, rental oi faciliti -s, course fees, and travel and subsistence of trainees; and (ii) "Incremental Operating Costs" mean; reasonable incremental costs arising under the Project on account of local contractual suppo 1 st iff salaries; travel and other travel-related expenditures; equipment rental and maintenance; veh1cle operation, maintenance and repair; office rental and maintenance; materials and supplie;; a id utilities and communications expenses, but excluding salaries and honoraria of c fficials anc stal f of the Recipient. B. Withdrawal Conditions; Withd -awal Period 1. Notwithstanding the pronisions (f Part A of this Section no withdrawal shall be made for payments made prior to tl e dite (f this Agreement. 2. The Closing Date referred to in Section 3.06 (c) of the Standard Conditions is December 31, 2013.
16 TF of 27 June 25, 2013 ANN X 1 to SCHEDULE 2 Terms aind Condlitions lor Sub-projects and Kecamatan Grants A. Eligibility Criteria for Sub-proj!cts 1. 1a) Kecamatan Grantsi may be provided for: (i) planning; (ii) training; and (iii) investment to suppor[ in estment proposals presented on behalf of communities to finance Sub-projects othei than those which are prohibited pursuant to paragraphs 2-6 of this Sec ion A, -ro vide,, however, that such Sub-projects: (i) (ii) (iii) are technically and financially feasible, and capable of being implemented by the conumnities t iemselves with only locally available technical assistance; are of benefit to tf e communities, and to the poor in particular; and respond to a public nced: and art in accortanc, with the Operations Manual and the PNPM Generasi Suppleme ital Mai ual. 'b) The amount of e,tch Ke amatan Grant shall be calculated in accordance with the PNPM Generasi Supplemntal Manual. 2. Negative List. No Kecar iatan Grant shall be made to finance expenditures pertaining to or involving the follcwing: (a) (b) Activities related to the military or army; activities related to political practices or parties. Building/rehabilil ation ol government offices or religious facilities. (c) Purchase of chair saw;, weapons, explosive materials, asbestos, or other environmentally destruc ive materials (such as pesticides, herbicides, prohibited drugs). (d) (e) (f) (g) (h) (i) Purchase Df any fish:ng t oat with capacity above 10 tons and any related equipment. Government officers' sal iry. Activities using c hild lab :r below working age per regulations of the Recipient. Activities related to he r roduction, storage or sale of goods with tobacco content. Activities in loca ior.s which are stated as a natural preserve per the regulations of the Recipient, excepi in an) case in which there is a written permit from the official responsible for rr anagerr ent of any such locations. Activities for mining or ( ollecting or usage of reefs.
17 TFO of 27 June 25, 2013 (j) (k) Activities related to man, gement of water resources from any river that flows from or to a country other 1han the territory of the Recipient. Activities related o r :loca iting river lines. (1) Activities related o r:clairation of land of more than 50 hectares. (in) In) Building any new irrigation network with an area of more than 50 hectares. Activities to build a c am >r water tank with large capacity of more than 10,000 cubic meters. 3. No Kecamatan Grant seall finnce the acquisition of land or the resettlement or the compensation therefore. No K(:camatan Grant shall require or permit involuntary land acquisition or involuntary resittle nent. 4. No Kecamatan Grant shall b, eli ;ible for financing out of the proceeds of the Grant unless the Facilitator(s) is/are en,aged aid carry out their functions in such Kecamatan accordance with the Operations Man,jal, for a cumulative period of at least eight (8) months in each Fiscal Year. 5. No Kecamatan Giant shall be eligible for financing out of the proceeds of the Grant for a Sub-project with a value high.r thn the Sub-project ceiling set out in the Operations Manual. B. Sub-project Review and :Selecti n 1. The Recipient, through PN/D, ;hall ensure that each Sub-project is the subject of a corresponding proposal 1or a 1ecamatan Grant that has been prepared, submitted and reviewed in accordance with the.uidelines, procedures and selection criteria set forth in the Operations Manual, the PNP4 G(nerasi Supplemental Manual and this Annex. 2. The Recipient, through PMD, shell ensure that, with respect to each Sub-project and prior to the carrying out of Sub-pr)ject works, a technical Facilitator shall have completed a technical review of each Sub-project in iccordance with the Operations Manual and the PNPM Generasi Supplemental Mar.ual and the requirements of this Annex to ensure that all requirements have been complie I with, including, except as may be otherwise agreed in writing by the World Bank ard th Recipient, though PMD: a) necessary funding tc fully finance the proposed Sub-project has been obtained, including a Kec umatan Grant, any Local Government Participation and any additional contribations :o be made by communities themselves or from other sources; tb) the provisions of the hi plementation Guidelines for Social and Environmental Safeguards have beer cot nplied with and appropriate measures adopted in design of the Sub-Project ind in implementation and monitoring planning prior to the commencement ol thc Sul i-project;
18 TF of 27 June 25, 2013 (c) id) the requirements f r i nde taking and documenting land donation (voluntary donation and donation with corpei sation) set out in the Implementation Guidelines for Social and EnvironmentEl Safeg.iards have been complied with, and where any land has been donated, the lon ation has been verified to be voluntary and documented as such prior to the commenccrmei it of the Sub-Project; the provisions of the Ir iplementation Guidelines for Social and Environmental Safeguards pertairing to ndigenous Peoples, if applicable, have been followed and free, prior and in ormo-d consultation has been documented prior to the commencement of the Sul-Project; and e) a maintenance progran, a id the budget therefor, for works to be carried out under the Sub-project and relatcd gc ods has been prepared. 3. The Recipient shall enstre that the Kabupaten Satker shall retain records of each such review. C. Terms and Conditions of Sub-p -oject Agreements 1. Prior to the com mencemeit (f any' Sub-project or the disbursement of any Kecamatan Grant, each of the follow ng Sub project Agreements shall be signed: (a) (b) between the releani PJOK, on behalf of the Local Government, and the Project Kecamatan, through :he I JPK, with respect to the transfer of funds from the central government accot nt to th, UPK, and between the UPK andl the Beneficiary, setting forth the respective obligations of the parties thereunder, in,lud ng: (i) (ii) (iii) that the B ene fici ry shall carry out the Sub-project in accordance with this Agreemer t, tie C perations Manual including the Implementation Guidelines for Social and Environmental Safeguards, the PNPM Generasi Supplemental M,mual, 1 he pro isions of the Better Governance Action Plan, and the provisions of the -Anti-Corruption Guidelines applicable to recipients of Grant proceeds othcr th, n the Recipient; the requir.:ment t* iat each Beneficiary procure the goods, works and services to be finaiced out of the Sub-project in accordance with provisions that are fuly consistent with the provisions of Section III of Schedule 2 to this Agreemert; that the B :neficia y shall monitor and evaluate the progress of the Sub-project in accord,,nc! wit i the Operations Manual;
19 TF014761) 19 of 27 June 25, 2013 (iv) (v) (vi) that the 3eneficlary shall maintain a financial management system in accordancc with t ie Operations Manual and prepare financial statements in accordanco with consistently applied accounting standards acceptable to the World Baik and t ie Recipient; in a manner adequate to reflect the operations, resources and exp -nditures related to the Sub-Project and at the World Bank's or the R:cipient s request, have such financial statements audited by independeat audilors acceptable to the World Bank and the Recipient in accordanc, with zonsistently applied auditing standards acceptable to the World Ba nk, an. promptly furnish the statements as so audited to the Recipient nd the World Bank; that the Bine icia y shall enable the Recipient and the World Bank to inspect the Sub-p:-oject, i:s operation and any relevant records and documents; and prepare ar d fhrnim h to the Recipient and the World Bank all such information as the Recipi -nt ir the World Bank shall reasonably request relating to the foregoing: ar.d rights adequate tc protect the interests of the Recipient and the World Bank, including the rigl t of the PJOK to: (A) suspend or terminate the right of the UPK or tlme Ben:ficiary to use the proceeds of Kecamatan Grant; or (B) obtain a r,fu:id of the Kecamatan Grant upon the failure of the UPK or the Beneficiary to perform any of its obligations under the Sub-project Agreemer t.
20 TF01476) 20 of 27 June 25, 2013 A NN EX 2 to SCHEDULE 2 National Competitive Bidding: Modifications to Procedures The procedures applicable to the procuri ment of goods, works, and non-consulting services under contracts awarded on the basis cf 1b atio ial Competitive Bidding shall be those of the Pelelangan Umum (Public Tendering) and Pcmiihar Langsung / Pelelangan Sederhana (Simplified Tendering) methods as set forth in the Recipi,:nt s Pr:-sidential Regulation No. 54/2010 as amended through July 31, 2012, including amendments set fo-th in the Presidential Regulation No. 70/2012, with the modifications set out below in order :o ensure economy, efficiency, transparency, and broad consistency with the provisions of S ectio in I of the Procurement Guidelines, pursuant to paragraph 3.3 of said Guidelines. The Pemi"ihn Lt ngsung /Pelelangan Sederhana method shall apply to such procurement up to the firancial Ihreshol Is specified in said Regulation. In the event of a conflict between the Recipient's proceduris and tiese modifications, the latter shall govern. 1. Procuring entities shall use the ippropriate standard bidding documents acceptable to the Recipient and the Bank. The I rovisions of Section 1.16 (Fraud and Corruption) of the Procurement Guidelines s4all apr ly, and each bidding document and contract financed out of the proceeds of :he GrE nt shal include provisions on matters pertaining to fraud and zorruption as defined in r aragrap h 1.16(a) of said Guidelines and the contract provisions set out in paragraph 1.16(e) o f sa id G uidelines. 2. Foreign bidders shall not be precluded from bidding. If a registration process is required, a foreign firm determined to be the lowest evaluated responsive bidder shall be given reasonable time fcr regist ation. -oreign bidders shall not be required to form a joint venture or sub-contract pat of the sulply of goods, non-consulting services, and works as a condition for submitting bids or the award (if the contract. Bidding documents shall be made available, by mail or in person, to al in ern tional bidders who are willing to pay the required fee. 3. No preference of any kinc shall b- given to any bidders. 4. Under the Pelelangan Umun me hod, bidders shall be allowed at least twenty-one (21) days from the date of the in','ita:ion to bid or the date of availability of bidding documents, whichever is later, to pre par - an I submit bids; this period shall be ten (10) days under the Pemilihan Langsung / Pe,ela uga Sederhana method. 5. Bids invited under the Pe!elc nga i Umum method shall be submitted in one (1) envelope and evaluated using post-qualific itior. 6. No bidder shall be rejecticd ner ly on the basis of a comparison with the owner's estimate and budget ceiling without ttl e B nk's prior written concurrence. 7. Bid security, at th. bidder's optic n, shall be in the form of a letter of credit or guarantee from a reputable bank or othe:r reputa )le financial institution and shall without exception follow the form provided for this purpos in the bidding documents. 8. All bids shall not be rejected and new bids solicited without the Bank's prior written concurrence.
21 TF of 27 June 25, Government-owned enterpris.-s ir Indonesia shall be eligible to participate in bidding only if they can establish that they ; re legally and financially autonomous, operate under commercial law, and are rot depe ident agencies of the Recipient or sub-recipient.
22 TF01476) 22 of 27 June 25, 2013 APPENDIX Definitions 1. 'Anti-Corruption Guideliies' m ;ans the "Guidelines on Preventing and Combating Fraud and Corruption in Projecis Finai ced by IBRD Loans and IDA Credits and Grants", dated October 15, 2006 and revised in.inuary 'BAPPENAS" means Ba Ian Per ncanaan Pembangunan Nasional, the Recipient's National Development Plarning Agen:-y, c r any successor thereto. 3. "Beneficiary" means a Vi lage, represented by its PNPM implementation team (tim pelaksanaan kegitan, or IPK) or other entity meeting the requirements set out in the Operations Manuzl and ir the PN PM Generasi Supplemental Manual which is the beneficiary of a Kecamatan Grant aad part i to a Sub-project Agreement, and "Beneficiaries" means more than one (1) Benefic iar. 4. "Better Governance Action Plat " means a stand-alone chapter of the Operations Manual designed to integrate th, c )nte its of the Anti-Corruption Guidelines and to give effect thereto, and giving detail of a pi ogram of actions, measures and policies designed to reduce or eliminate fraud and corruption in all its forms under the Project, including enhanced information disclosure ptovi3ion;, civil society oversight provisions, mitigation measures to deal with the risks assc cia:ed vith collusion, forgery and fraud, a complaints handling mechanism, and an apprc priate r :gime of sanctions and remedies, and included as applicable in each Sub-projcct Agrcement, as such chapter may be revised from time to time with the prior written agreement )f the World Bank and the Recipient, and such term includes any annexes or schedules to such cha ter. 5. "BPKP" means badan P:?ngawa ;an Keuangan dan Pembangunan, the Recipient's Financial and Development Superv isory A Yency, or any successor thereto. 6. "Bupati" means the head of a Ka upaten. 7. "Camat" means the Kabtpaten o 'ficial who is the head of a Kecamatan. 8. "Complaints Handling Sysi em" means the system described in the Operations Manual and related annexes/s tandard Op,rati ig Procedures, and the technical system it describes, designed to track complaiits regardiag tie use of Kecamatan Grant funds at any level of PNPM implementation, guide resolution of such complaints, track resolution of such complaints, and if warranted in accordance A ith,uch system, as an interim measure exclude use of Kecamatan Grants in a particular Kzbupater, Kecamatan or Province, or the participation of responsible individuals or other actions autt orized by the Complaints Handling System, as such system may be updated fr-om tirr e to tirr e by written agreement between the Recipient, through PMD, and the World Bank. 9. "District" means a district, an ad mninistrative sub-division of a Province. 10. "Eligibility Criteria" means the criteria for a Kecamatan Grant, as set out in this Agreement, the Operations Manual aid te P slpm Generasi Supplemental Manual.
23 TF of 27 June 25, "Facilitator" means a Dis1rict or ;ub-district specialist financed by the proceeds of the Grant and assigned to work wa ith Vil ages to facilitate their participation in the Project, and "Facilitators" meais more the n or e Facilitator. 12. "Fiscal Year" means the f isczl ye;ar of the Recipient. 13. Implementation Guidelir es on S )cial and Environmental Safeguards" means the supplement to the Operations Manual, incl iding all annexes thereto, containing standard operating procedures, technical guideliies ind Sub-Project checklists (Panduan Penerapan Kebijakan Pengamanan Sosial dan Li gkuigan Hidup Dalam PNPM Mandiri Perdesaan), including references as required to th- m in text of the Operations Manual, for environmental and social assessmeni and rianager ient designed to maximize the benefits of the Project, eliminate, offset or mitigate an adverse environmental or social impacts, or reduce such impacts to acceptable levels, inc uding: the Negative List; specific procedures applicable to Sub-Projects inv3lving or aff,-cting Indigenous Peoples; and procedures related to undertaking and cocumei ntina th, voluntary nature of any land donation, as such guidelines may be amended from timne :o tine with the prior written agreement of the World Bank and the Recipient, through PMD. 14. "Indigenous Peoples" me ans tho e social groups in Indonesia that have a distinct social and cultural identity, and that are sus 2eptible to being disadvantaged in the development process affected by the P-oject or any p rt thereof as follows: (a) masyarakat adat (customary law communities) based on 1 netge cr locality and bound by customary law with characteristics including: (i) self-identification as a distinct indigenous cultural group; (ii) collective attachment to ancestral erritori,,s and to the natural resources in the territories; and (iii) customary cultural, eco:ionic, social, or political institutions; and (b) Komunitas Adat Terpencil (KA T) (Isolat:,d and Vulnerable communities), a category of customary law communities designated by the Recipient that live in isolated areas with characteristics including: (i) collective attachmnt to ancestral territories and to the natural resources in the territories; (ii) customary cult iral, economic, social, or political institutions; (iii) an indigenous language; (iv) hav ng a subsistence economy, (v) using simple tools and technology, (vi) having.i h'gh <ependence on the environment and local natural resources, and (vii) having restricted access to social, economic, and political services. 15. "Joint Secretariat" meanm th- secretariat, established by PMD, to coordinate PNPM activities across PMD directors, as d,-scri bed in paragraph 1(c) of Section I.A of Schedule 2 to this Agreement. 16. "Kabupaten" means a Distri-t. 17. "Kabupaten Poverty Allevlatiol Coordination Team" means the local government-level working group establislied un ler Perpres 15/2010 in each Project Kabupaten, Project Kecamatan or Project Vi llate, o: any successor thereto. 18. "Kabupaten Satker" meins eac 1 project management unit established and operating at the Kabupaten level in accordance with paragraph 4 of Section I.A of Schedule 2 to this Agreement. 19. "Kecamatan" means as ib-distr ct.