BTC/SCP and WREP Community Development Initiative Report for January-March, 2013

Transcription

1 BTC/SCP and WREP Community Development Initiative Report for January-March, 2013 GEORGIA BP s business activities in Georgia BP has been in Georgia since Our main business is all about the safe transportation and delivery of energy through our pipeline operations, where we are the lead investor and operator in three major oil and gas projects: Baku-Tbilisi-Ceyhan (BTC) pipeline The Baku-Tbilisi-Ceyhan (BTC) pipeline began operating in June With a total construction cost of circa $4 billion, the BTC pipeline is the first direct transportation link between the Caspian and the Mediterranean seas. At full capacity, it can deliver one million barrels of oil per day to market, generating important revenues for the Georgian government for decades to come. South Caucasus gas pipeline (SCP) The South Caucasus gas pipeline (SCP) started delivering gas from the Shah Deniz field in the Caspian to markets in Azerbaijan and Georgia from December 2006, and in Turkey from July 2007, representing an important new source of gas supply for the region. Western Route Export Pipeline (WREP) The Western Route Export Pipeline (WREP), also known as the Baku-Supsa pipeline, was our first investment in Georgia. This 830 km pipeline transports oil from the Chirag field in the Caspian Sea, via the Sangachal terminal in Azerbaijan, to the Supsa terminal in western Georgia, with just under half of the pipeline located in Georgia. WREP, which became fully operational in 1999, is capable of transporting up to 100,000 barrels of oil a day. BP Georgia Community Development Initiative (CDI) overview Community development along BTC/SCP pipelines The Georgia CDI was initiated in early 2003 in 77 communities along the SCP and BTC Pipeline route. Initially the program started with the title of Community Investment Program 1 (CIP 1). Later, in 2010 the title of the program changed into the Community Development Initiative (CDI). 1

2 CDI 1 The goal of CDI 1 during the construction phase was to enhance positive relations between BP and communities along the pipeline route through sustainable socio-economic development. The overall program budget during pipeline construction phase was $8 million over a threeyear period ( ). Similar program were created for Azerbaijan and Turkey. After the completion of construction of BTC/SCP pipelines and moving into the operations phase (2006), BP as operator of BTC and SCP, continued financing of the phase II of the CDI for additional 3 years ( ) with the aim to strengthen/solidify positive relationships with communities along the route of the BTC/SCP pipelines. CDI 2 The overall goal for Phase II of the CDI (CDI 2) was to enhance positive relations between BP and communities along the BTC/SCP pipelines route by investing in communities that demonstrate a commitment to become models for sustainable community development. The aim is to support communities to become increasingly able to implement and sustain self help projects with minimal external support, and to thereby improve the livelihoods and opportunities for the pipeline affected communities through a partnership relationship with BP. In the beginning of 2008 implementation of the marketing component of the CDI 2 - Farmers to Markets project (FtM) has started in addition to on-going activities. The initiative to start the project was prompted by the need to address and fill in a significant gap by assisting small farmers in getting their goods to market. For this reason the project was named as Farmers to Markets. Implementation of project activities was scheduled for three year period ( ). Due to the saving in the project budget at the beginning of 2011, No- cost extension of the project was approved. FtM project was prolonged by four months until the end of July, 2011 to fulfill the planned activities with the funds remaining in the project budget. Recognizing commitment of BP and its co-venturers to support enhancement of the quality of life of the communities in the countries of the three pipeline projects (BTC/SCP/WREP), and based on the company stakeholder development strategy the decision was made to continue supporting Community Development Initiative along the BTC/SCP and WREP pipelines in Georgia beyond Y2009. CDI 3 Third phase of the Community Development Initiative on BTC/SCP pipeline (CDI 3) started in May 2010 with CARE international as the lead partner. Smooth transition between the CDI 2 and CDI 3 was achieved through extending some of the activities of CIP2 until commencement of the new phase. The proposal submitted by CARE international for the CDI3 was reviewed both internally by BTC/SCP team and externally by an Advisory Board made up of representatives of key donor organizations active in the country - United Nations Development Program (UNDP), US Agency for International Development (USAID), the European Union (EU) and Swiss Cooperation Office for the South Caucasus (SDC) 2

3 In May, 2010 formal agreement was signed with CARE international in the Caucasus to lead the program implementation together with two local organizations: Center for training and Consultancy (CTC) and Constanta Bank (micro loans). Program duration was planned till the end of January 2012 with the total budget of $ 1.865,081 million. Due to the saving in the program budget, the program was prolonged within the no-cost extension procedure by two months until the end of March 2012 to fulfill the planned activities with the funds remaining in the project budget. The goal of the third phase of the Community Program was to enhance and strengthen positive and harmonious relationships with communities along the pipelines route through sustainable social and economic development. Two main areas - agriculture and civil society capacity building - have been identified as the most suitable areas for further intervention taking into consideration country specifics and the results already achieved through the 1st and 2nd phases of the Community Development Initiative. During the first months of the project, CARE investigated alternative options for a local NGO to pick up responsibility for significant components of the project during the second year of the project implementation, in particular, rural infrastructure rehabilitation support, the agricultural advisory services and small business development. CARE international announced tender for selecting local NGOs to implement the field activities under the CARE supervision. Regional Development Association was selected in the West section communities, Center for Training and Consultancy was selected to implement activities in the East section communities. After the 8 months of the start-up of CDI phase three, CARE started handover process to the mentioned organizations, although CARE retained the oversight and guidance throughout the 2 year lifespan of the program. To maintain the existing level of relationship and impact on the communities affected by the business, as well as to ensure the business continuity and managing the reputation in the country, the 4th phase of CDI implementation was initiated. The Final External Evaluation of CDI 3, done by BP at the end of CDI 3, considered nationalization strategy process as correct step for further operation, considered local NGOs CTC and RDA capable to manage implementation of the next phase of the project and recommended to request the proposals from them via tender for CDI4 implementation. Community Development Initiative phase 4 (CDI 4) In March, 2012, BP Georgia announced Request for Proposals from CTC and RDA for the three - year CDI implementation (CDI 4). The proposals submitted for the CDI4 was reviewed both internally by BTC/SCP team and externally by an Advisory Board made up of representatives of key donor organizations active in the country - the European Union (EU) and Swiss Cooperation Office for the South Caucasus (SDC) 3

4 Both proposals were considered relevant to handle the implementation of CDI 4, CTC in the Eastern part and RDA in the Western part communities. Program duration is May, 2012 May 2015 with total budget of the program 3,044,094 USD. The main goal of the 4 th phase of the project is to deepen the positive relations between BP communities along the BTC/SCP pipelines route, by investing in communities to provide positive contribution for sustainable improvement in communities and maintain and enhance sustainability of social-economic development. Main areas of the program include agricultural support, business development as well as community development through capacity building and sustainable activities. Such as rehabilitation of rural infrastructure as well as Social enterprise establishment by Community Based Organizations. The specific objectives of the CDI 4 are to promote sustainable forms of social cooperation and initiatives for community sustainable development and to enable economic opportunities for the pipeline communities to develop regional agro-business and provide public goods and services through established small and medium scale businesses. Community development Initiative Management and Coordination The CDI programs are managed by the Social Responsibility team in BP Georgia Tbilisi office. Community Development Initiative Adviser is dedicated full time to monitoring and evaluating the work of the NGOs through regular participation in field activities and review of monthly, quarterly, annual and final reports, trace the expenditure of the Projects contracts budget and other social sub-contracts through the recording of corresponding invoices, ensure that implementing partners practices and procedures are aligned with those of BP, that, those partners adhere to the principles of company Code of Conduct, including a contractual requirement to act consistently with the code when working on company behalf. The CDI Adviser reports to Social Responsibility Manager The NGOs that implement programs send to BP monthly reports, which provide a brief summary of activities for the month and outlines any issues or actions. Quarterly reports that are provided each calendar quarter go into more depth on financial management issues. An annual report focuses on results, monitoring and evaluation, programmatic changes, etc. Final report provides achievement and their resulting impacts, program overview and impact assessment, strength and weaknesses, lessons learned. 4

5 Community Development Initiative for BTC/SCP 4 th phase Objectives and key components Social / Institutional Objective and its components complementing the overall goal - Sustainable forms of social cooperation and initiatives for sustainable community development are promoted - 31 community infrastructure projects are implemented - 11 Community Based Organizations (CBO s) establish Social enterprises to generate income to deliver services to their communities - More than 25,000 residents benefit from improved infrastructure and social enterprises Economic Objective and its components complementing the overall goal - Enabled economic opportunities for development of agro businesses in the communities and public goods and services are provided through established of small and medium scale businesses small and medium scale business are established with participation of at least 40% of women - 70% of funded start-up businesses achieve the profitability in 12 month from the start - 3 Financial and legal Service Groups are established in Adigeni, Akhaltikhe and Borjomi districts - 36 services are rendered by each Financial and Legal Service Group to project beneficiaries on farm demonstration are established - At least 150 farmers /producers ( 30% of women) linked to the urban channels to sell their products farming households achieved higher production margins as a result of use of modern technologies Subsidized agro loans are provided to the pipeline farmers - 20% increase is achieved in target household income 5

6 Project Specific examples of summarized outcomes include: Main challenges Government s new initiative to launch interest free commodity loans program resulted in suspension of one of the CI component subsidized agricultural loan provision to the farmers. Action: program is observing the progress of the initiative to shape the new strategy within CDI. Strengthen institutional capacity in the community, CBO activities Community infrastructure projects All 12 rehabilitation projects are completed within the first round of the activities. Total of community contribution is average 34-51%. total of 2,641 households benefited from the implemented rehabilitation projects: about 230 ha land plots are being irrigated as a result of the irrigation systems rehabilitation During the reporting quarter the project has announced the second round of community infrastructure rehabilitation competition. 26 communities have applied with project proposals. Similarly to the results of the previous quarterly progress survey, the main emphasis from the communities is made on potable water and irrigation as well as on bridges. The received proposals were discussed and scored by the selection committee presented by the project staff members in CDI East. 6

7 The priorities were given to economic infrastructure projects and to the ones submitted by the new CBOs in order to cover as much target population as possible. At this stage 7 community infrastructure projects were selected in the East. After the monitoring and assessment of the rehabilitation sites, the project will sign agreements and make first stage money transfers to these CBOs. CDI West will finalize the selection process in a near future. Social Enterprise One of the challenges concerning social enterprise is lack of control from community side. In order to increase the community participatory monitoring, CBOs were asked to present a document verifying that 60% of community members are aware about establishment of social enterprise and its social obligations. This measure ensures that community will be more actively involved in monitoring of social enterprise performance and social projects financing. Within the Social enterprise competition process, 9 CBOs from the East have submitted business ideas. The project has conducted two trainings in Business administration for all participant CBOs After the trainings the CBOs have elaborated and submitted business plans. The business plans were reviewed, assessed and discussed by the selection committee, which resulted in selection of four CBO projects. Respective agreements were signed with CBOs. CDI West is working with the two newly established CBOs of Ivlita and Agara. Both Social Enterprises provide discounted agricultural machinery services to their communities. Ivlita has 54 households and 23 of them participate in the project, meaning that they are contributing funds according to the size of plots of land owned. Agara has 78 households and 21 committed their funds for matching. The machinery started to service farmers with 25% discount (compared to commercial service) in March and both enterprises already provided services to 35 member households and seven socially vulnerable families (75% discount). Total area covered by end of quarter reached 16.65ha. The Machinery provided within the SEs, gave opportunity to member farmers to take advantage of state vouchers, which arrived late to use machinery services; machinery vouchers were exchanged into the ones for purchasing inputs and seed materials instead. This has been the unexpected benefit of efficient complementation of two types of assistances from donors and the state. 7

8 Agricultural support, new business start-up activities and subsidized agricultural loans will support the communities to improve their livelihoods Agriculture The reporting quarter was busy with seasonal activities in livestock breeding and crop production. The project has arranged one more demonstration plot in Mzianeti. That demonstration plot includes technology of drip irrigation. The farmer intends to use this technology to irrigate vegetable and vineyard. Two more demonstration groups of livestock breeders in village Jinisi and Avranlo were created. The farmers jointly cultivate land, prepare fodder, and have the same pasture. New demonstration group was created in the village Tori. The village Tori, which has only 8 permanent resident households, expressed high motivation to co-operate with the project and practice On-Farm Demonstration in the village. The 8 member demo group has been staffed and consulted about potato farming with modern technologies. 0.4ha area was selected to demonstrate high class potato seedlings. At present total number of individual demo farms are 68 and group demo farms are 38. The total demonstration area has expanded in the West due to new farmers joining demonstrations and reached hectares of land (18.18ha in previous quarter). By the end of the last quarter of the year, number of farmers engaged in 30 demonstrations in the West section is 130 (92 in previous quarter). The main accents of the project in the East were made on creating fodder base for livestock and thus increase productivity. In the West, 175 farmers purchased 33,440 kg of combined feed with 30% discount funded by CDI. There has been significant success in technology transfer from apple orchard demos as up to the end of this quarter. 39 farmers in the West reported sharing the practice. 8

9 Total of 57 group trainings and 930 individual consultations were conducted in both section of the projects implementation areas. Consultation sessions were on Combined feed advantages, norms of usage and effects of micro elements, winterization of bees", "preparing beehives for the season", "fertilizing and cultivating the soil", "general rules of using vet preparations", "influence of infection diseases on livestock"; "cultivating soil for spring activities", etc. The Farmers Association Samtskhe has been developing its capacity continuously and the results are evident. With the proceeds from sale of 4t of seed potato, Samtskhe invested in purchasing of new agricultural accessories to complement the machinery acquired through CDI4 grant. These accessories will help the organization to reduce per hectare cost of activity by 200 GEL. In addition to this, having more mechanization means more capacity to serve new members and the outreach to attract these has begun. Marketing Marketing activity ran smoothly over the quarter. All target village farmers in the West are aware of CDI assistance in linking to local markets and no additional outreach in these villages is necessary. CDI West staff assisted 119 farmers of 15 villages to sell kg of agricultural goods for Lari. Within the demo farming component, 175 farmers were attracted to purchase 33,440 kg of combined feed with 30% discount funded by CDI. Marketing activity is not just linking farmers to the buyers, but also assist farmers with consultations about norms of use and storage of combined feed, provides information about the prices in the market and best location for the sale. The priorities of marketing support is provided in figures in table 1. Table 1. 9

10 Products sold via CDI marketing Q1/13 Product Volume kg Sales GEL Price Business start-up Table Potato Meat Seed potato Cheese Wheat seed Onion rush Onion seed Cabbage Beet ,55 Total: All businesses financed within the project are operational. All the grantees are following the planned schedule and objectives and are gaining some revenues. As monitoring showed in the east communities, the average monthly income is 700GEL (52% profit). Second round of the competition started in the West. 55 business ideas were submitted (46 individual and 9 group projects) by 66 applicants where 13 were women. The number of passing applicants for training is 43. Finalists will be selected next quarter. Case study BP s contribution to Communities Ketevan Bochorishvili, the Deputy Minister of Economy and Sustainable Development of Georgia accompanied with BP Georgia and Regional Development Agency representatives visited several small and medium enterprises, within the frameworks of Community Development Initiative (CDI) in Akhaltsikhe District The guests visited a recently-opened dental clinic - the only dental service provider in Tsnisi and its neighbouring villages. With BP s support we opened the dental clinic in January where we frequently receive the patients from our village as well as from the nearby villages. Previously, this kind of medical service was not available in the neighbourhood and people had to go to the town for dental treatment, said Lamzira Mikava, the owner of the dental clinic. The other successful CDI-supported enterprises, the guests visited, were a newly-opened grocery in Tsnisi, fleece processing, egg production enterprises in Klde and Accounting Services Group in Akhaltsikhe, which provides financial and legal services to the start-up entrepreneurs. The Deputy Minister emphasized that small and medium business development in the region is the high priority for the country. Small and medium business development in the regions should become the backbone of economic development in the country. This is the only way to create employment, generate additional income and keep the youth in the regions. The way BP leads corporate social responsibility activities in Georgia is truly 10

11 exemplary. And it largely contributes to creating new enterprises in the region that are oriented to sustainability and self-development. Service Group CDI West intensified its outreach efforts and re-announced second round grant application solicitation for Financial and Legal Service group component right after completion of the first one. As a result Adigeni and Borjomi initiative groups applied and Adigeni was selected. Borjomi failed to present sufficient matching for the project. Adigeni FLSG registered as legal entity and finalized procurement of office equipment. Count Service, the round 1 winning project rendered consulting services to all seven CBOs engaged in round 1 projects of CDI4 and to up to 20 external customers. Main requests were about closing financial year 2012 (March 31). To increase its revenues, Count Service introduced training module in Oris accounting software and recruited 5 trainees for a 2 month module. Total revenues for this quarter reached 1560 GEL whereas 1000 GEL was received solely from trainings. Next Quarter CDI 4 East The following activities are planned for the next quarter: Sign agreements with CBOs and start the implementation of community infrastructure rehabilitation activities Assist SEs in procurement procedures and monitor their activities 11

12 Launch the second round competition for startup businesses Continue working with farmers in order to establish group demonstrations CDI 4 West Sign agreements with CBOs and start the implementation of community infrastructure rehabilitation activities Provide funding to the Second round winner startup businesses and start the operations. Launch the third round competition for SE s Community Development Initiative in the villages along WREP In 2009 the decision was made to bring WREP Georgia community Development initiative under the same management framework as for the BTC/SCP, which resulted in engaging local NGO in project implementation through the Request for Proposal (RFP) process, with focus on youth capacity building component defined as a target area for investment. The Youth Capacity Building Project was launched in May, Georgian Organization of the Scout Movement (GOSM) was selected as the project implementing partner through the tender process. Georgia organization of the Scout Movement co-operating with local NGO Center for Training and Consultancy as with sub-partners within the project framework. The project was due to May, Total budget was 482, 013 USD out of which the amount requested from BP for the implementation of the proposed project was 299,923 USD. 173, 490 USD was contributed by (GOSM) and its partner NGO - Center for Training and Consultancy (CTC) as well as by the project with the Swiss Guide and Scout Movement. During the implementation of the project additional 55,500 USD was allocated for the additional activities, which included establishment of the second summer camp, and civic education training course for the teachers in target schools. All mentioned activities were included into the project scope based of the need assessment of the target schools and youth group members. To fulfill the new activities, project was extended till the end of June The project ended within the reporting period. To continue the project interaction in the communities along WREP, company announced A new RfP in the 3Q 2012 to identify the IP for the new CDI along the WREP. Georgian organization of the Scout Movement was selected to implement the project Small Business development Project ( SBDP) along the entire length of WREP. 12

13 The project is intended to implement small business start-up activities in the communities along WREP pipeline located within 2 km corridor (1km from each side) also, in communities located within 4 km corridor (2km from each side) along the Access Roads to the BP above ground facilities as well as affected due to some increased company operational activities. In addition to the target villages, the project will be also implemented in 4 IDP camps, located along WREP pipeline within 2 km corridor (1km from each side). The main initiatives conducted at IDP camps should be focused only on empowering the youth at IDP schools. Description of the Key objectives and main themes of Small Business Development Project are represented in below paragraphs/chapters. Small Business development Project (SBDP) - Objectives and key components: Enable the opportunity-driven process for the pipeline communities to develop small scale agro and off farm-businesses through equipping them with necessary skills, knowledge and tools. Support the environmental educational achievements of the secondary school students only in 4 target IDP settlements by enabling life long learning and influence on behavior of youth towards natural environment. Increase GOSM capacity to diversify the portfolio of quality service provision. Some of the key achievements of the program will be: Creating opportunities for 275 start-up businesses to emerge and at least 75% of them become financially sustainable, reinvesting the profits for expansion and further development; At least 275 new jobs created; 50% of the disbursed grants managed by women; IDP settlements further prioritized and supported by working closely with schools and introducing a World Environmental Programme. Project Specific examples of summarized outcomes include: Main challenges Very Small villages were not motivated to participate in the competition. Action: as a result of intensive consultations population of all small villages have submitted at least 3 projects per village. In several villages it was very hard to convince the population that this is grant money and no pay backs will be demanded; 13

14 Action: Additional meetings and consultations were conducted to dispel such wrong assumptions. In some villages it was a big challenge for the population to write the proposal (especially budget part of it); Action: additional consultations were made to support them; in budget writing. The following section provides detailed overview of the project activities and describes major accomplishments, impact and outcomes: Business grant competition has been announced in 116 villages during the reporting period. Announcement was communicated orally during the group or individual meetings and both hard copies and electronic versions of the call were distributed through different channels. 113 change agents (previous project - YCBP youth group members) were instructed in 31 target villages. Most of the change agents were actively helping to distribute the call among the village inhabitants. They were also helping the population to fill in the applications. Consultation meetings were made in all 116 villages during the reporting period. Mobilizers have consulted the interested population on the specifics of the competition and writing the project proposal. In some villages, very intense door to door visits were necessary to raise the interest and to convince the population that this is not a loan and we are not demanding any pay backs; 1670 business project proposals have been submitted by the inhabitants of all 116 villages. 616 business ideas have been reviewed in March, reviewing committee comprised of the project staff members. Submitted business ideas were assessed against initially planned criteria, keeping the gender and geographical balance. At this stage, 270 applicants have already been selected to take part in Business Proposal writing trainings. 4 Youth groups have been created in IDP settlements. 70 youth have already joined the youth groups; 4 project cycle management trainings were implemented in target IDP settlements for 30 participants. On the first day training participants have analyzed problems existing in their settlements and selected some of the problems that can be solved by their efforts. The rest of training days were dedicated to formulating projects, its aims and objectives, activities, implementation scheme, budget and other aspects of project cycle management. 1 cleaning action was implemented by Sveneti IDP settlement youth group. 10 students have taken part in the activity. Safety instruction was made to the group members before the event and special gloves and waste bags were provided by the mobilizer. 5 small scale environmental activities: "My carbon footprint" and "Catch the carbon dioxide" were implemented by the IDP youth groups (educational games, raising children s environmental awareness). Participants have emphasized that their attitude towards carbon cycle has significantly changed as a result of these activities. Leaders of all four youth groups have prepared presentation about BP, its activities, work ethics, pipelines, BP Georgia s work, safety culture, environment protection attitude, development projects, etc. Youth Group members have attended the presentations and took part in the discussions. Call for micro-grant project proposals have been announced in all 4 IDP settlements. 14

15 Case study Leaders of the IDP youth groups have prepared presentations about BP, its activities, work ethics, priorities, pipelines, BP Georgia s work, safety culture, environment protection attitude, development projects, etc. Presentations were made in March 6 28, 2013 in all 4 IDP settlements (Tserovani, Sveneti, Shavshvebi and Khurvaleti). About 66 members of the IDP Youth Groups have attended the presentations and took part in the discussions. Youth were actively involved in the sessions and found the presentations very interesting. BP is foremost among the organizations, which contribute to public welfare by its human and financial resources. Therefore I m motivated to be somehow related to this organization. I m happy to be involved in SBDP and will try to do my best, in order to follow guiding principles of BP. Dato Kakhniashvili, Shavshvebi IDP Settlement. It s so pleasant to see that someone cares for your health, your future and your development. ve learnt today that BP is exactly the one, concerned about future generations and wellbeing of the society. I m happy to be involved in the project initiated and funded by BP. Nino Khochishvili, Tserovani IDP Settlement. Next Quarter Reviewing submitted business ideas and selecting shortlisted contestants Business proposal writing trainings 15

16 Second round of submitting business proposals Reviewing submitted business ideas and identifying finalists Award and Implementation of the Micro-Grant Environmental Projects Preparation Activities for the Summer Camp List of acronyms BTC/SCP WREP CDI CIP FtM YCBP SBDP NGO RDA CTC RFP CBO FLSG Baku Tbilisi Ceyhan/South Caucasus Pipeline Western Rout Export Pipeline Community Development Initiative Community Investment Program Farmers to Market Youth capacity Building Project Small Business development project Non-Governmental Organization Regional Development Association Center for Training and Consultancy Request for Proposal Community Based Organization Financial and Legal Service Group END 16