Report No. 55328 POLICY SEA: CONCEPTUAL MODEL AND OPERATIONAL GUIDANCE FOR APPLYING STRATEGIC ENVIRONMENTAL ASSESSMENT IN SECTOR REFORM June 2010 The World Bank Sustainable Development Network Environment Department Report No. 55328 Abbreviations and Acronyms ADP Adaptable Program Loan AMGP Africa Mineral Governance Program CFA Community Forestry Association DAP Detailed Area Plan DfID Department for International Development (UK) DIEWRMP Dhaka Integrated Environment and Water Resources Management Program DMDP Dhaka Metropolitan Development Plan EEU Environmental Economics Unit, University of Gothenburg EITI Extractive Industries Transparency Initiative GoK Government of Kenya GoM Government of Malawi HPCD Hubei Provincial Communication Department HRNP Hubei Road Network Plan IDRC International Development Research Center I-SEA Institution-Centered Strategic Environmental Assessment J4P Justice for the Poor KFS Kenya Forest Service OECD Organisation for Economic Cooperation and Development MSR Mineral Sector Review MTAP Mining Technical Assistance Project NCEA Netherlands Commission for Environmental Assessment NES New Environment Strategy PAM Policy Action Matrix PEI Poverty Environment Initiative PFM Participatory Forest Management PRC Peoples Republic of China RAJUK Dhaka Capital Development Authority SEA Strategic Environmental Assessment SESA Strategic Environmental and Social Assessment Sida Swedish International Development Cooperation Agency TT Task Team TTL Task Team Leader UNDP United Nations Development Program 2 Report No. 55328 UNEP United Nations Environment Program WAMGP West Africa Mineral Governance Program WAMSSA West Africa Mineral Sector Strategic Assessment Vice President: Katherine Sierra Sector Director: James Warren Evans Sector Manager: Michele de Nevers Team Leader: Fernando Loayza 3 Report No. 55328 Acknowledgements In the context of the Paris Declaration on Harmonization and Alignment, this study was a collaborative effort of the Environment Department of the World Bank, the Environmental Economics Unit at the Department of Economics of the University of Gothenburg (EEU), the Swedish EIA Centre at the Swedish University of Agricultural Sciences, and the Netherlands Commission for Environmental Assessment (NCEA.) The team that produced this report regularly informed the OECD DAC SEA Task Team on the progress of the review and received valuable feedback during Task Team meetings and other jointly organized events. It is expected that this report will provide guidance for applying SEA in development cooperation that supports policy and sector reform. The team that produced this report was made up of Fernando Loayza (Task Team Leader, World Bank), David Annandale (consultant), Anna Axelsson and Matthew Cashmore (Swedish EIA Centre, University of Agricultural Sciences), Anders Ekbom and Daniel Slunge (EEU, University of Gothenburg), Mans Nilsson (consultant), and Rob Verheem (Netherlands Commission for Environmental Assessment). This report is based on the findings of the evaluation of pilots of the World Banks SEA Pilot Program which was undertaken by the following members of the evaluation team: David Annandale, Anna Axelsson, Matthew Cashmore, Daniel Slunge, Anders Ekbom, and evaluators Juan Albarracin-Jordan, Jiri Dusik, Ulf Sandstrom, Yin Jian, Wilfred Nyangena and Paul Guthiga. The contribution of Ineke Steinhauer, Sibout Nooteboom and Geske Dijkstra to the framework for the evaluation of pilots is also acknowledged. The team greatly benefited from advice received from Kulsum Ahmed (World Bank), Fred Carden (International Development Research Centre, Canada) and Maria Rosario do Partidario (University of Lisbon, Portugal) who were members of the evaluations Advisory Group. Detailed comments were also provided by peer reviewers Diji Chandrasekharan (World Bank), Peter Croal (CIDA and Chair of the OECD DAC SEA Task Team), Richard Damania (World Bank), and Gary McMahon (World Bank). The team further acknowledges the feedback received by the participants to the meetings and workshops held in Gothenburg (2007 and 2008), Rotterdam (2008), Washington DC (2009), Geneva (2010) and Utrecht (2010). Grace Aguilar, Setsuko Masaki and Juliette Guantai, from the World Bank, provided administrative support to the team. The work was carried out under the general direction of James Warren Evans, Director, and Michele de Nevers, Sector Manager, of the World Bank Environment Department; and, as part of the work program of the World Banks Environmental Institutions and Governance Team led by Kulsum Ahmed. This report would not have been possible without the collaboration of the governments and the World Banks country offices where the pilot SEAs were carried out. The task managers of the SEA pilots, all from the World Bank, ­ Diji Chandrasekharan, Adriana Damianova, Fei Deng, Peter Kristensen, Bryan Land and Muthukumara Mani ­ kindly facilitated data collection, suggested contacts and participated in interviews during the evaluation. Stakeholders from government departments, communities, NGOs, CSOs and the private sector generously provided their time and knowledge both during the SEA pilots, and during their evaluation. The partners in this evaluation are most grateful to all of the stakeholders for their spirited participation. This appreciation and gratitude is extended to the Swedish, Dutch, Norwegian and Finnish governments for their support of this evaluation, and the World Banks SEA pilot program, through the Sida, TFESSD and BNPP trust funds. 4 Report No. 55328 Contents Abbreviations and Acronyms ...................................................................................................... 2 Acknowledgements ....................................................................................................................... 4 Contents ................................................................................................................................. 5 List of Annexes .............................................................................................................................. 7 List of Tables .. ............................................................................................................................... 7 List of Boxes ... .............................................................................................................................. 8 List of Figures ................................................................................................................................ 8 Executive Summary ...................................................................................................................... 9 The World Bank SEA Pilot Program .......................................................................................... 9 Main Findings ........................................................................................................................... 10 Guidance for Applying SEA in Sector Reform ........................................................................ 12 Ways Forward ........................................................................................................................... 13 Section 1: The World Bank's Pilot Programme on SEA......................................................... 16 1.1 The Challenge of Applying SEA to Policy Development .............................................. 16 1.2 The World Bank SEA Pilot Program.............................................................................. 19 1.3 Objectives of the Evaluation ........................................................................................... 20 1.4 The Evaluation Approach ............................................................................................... 22 1.5 Limitations of the Pilot Program, and of the Evaluations .............................................. 25 1.6 Structure of the Report.................................................................................................... 26 Section 2: Influencing Sector Reform for Sustainability ................................................... 27 2.1 Introduction..................................................................................................................... 27 2.2 The Pilots and Policy SEA Outcomes ............................................................................ 27 2.2.1 Raising attention to environmental priorities ........................................................ 27 2.2.2 Strengthened constituencies .................................................................................. 30 2.2.3 Improving social accountability ............................................................................ 33 2.2.4 Supporting social learning ..................................................................................... 36 2.2.5 Policy learning....................................................................................................... 41 2.3 Enabling and Constraining Factors for Achieving Policy SEA Outcomes .................... 45 5 Report No. 55328 2.3.1 Introduction to the issue of context ....................................................................... 45 2.3.2 Ownership ............................................................................................................. 45 2.3.3 Windows of opportunity........................................................................................ 47 2.3.4 Political economy and power elites ....................................................................... 48 2.3.5 The importance of non-formal institutions............................................................ 49 2.3.6 Capacity ................................................................................................................. 50 2.3.7 Sustaining continuous processes of environmental and social mainstreaming ..... 51 2.4 Refining the Conceptual Model of Policy SEA .................................................... 55 2.4.1 Outcomes ..................................................................................................................... 55 2.4.2 Contextual influencing factors ............................................................................. 56 2.4.3 Refined conceptual model of policy SEA ............................................................ 56 2.4.3 Conclusions ........................................................................................................... 58 Section 3: Guidance for Applying SEA in Development Policy and Sector Reform ...... 59 3.1 Introduction..................................................................................................................... 59 3.2 Preparatory Policy SEA Work ........................................................................................ 59 3.2.1 Defining the purpose and scale of policy SEA ..................................................... 59 3.2.2 Agency ownership ................................................................................................. 60 3.2.3 Assessing windows of opportunity ....................................................................... 62 3.3 Implementing SEA in Policy and Sector Reform ........................................................... 63 3.3.1 Introduction ........................................................................................................... 63 3.3.2 Situation Assessment and Stakeholder Analysis ................................................... 64 3.3.3 Multi-stakeholder dialogue ................................................................................... 69 3.3.4 Environmental priority setting .............................................................................. 74 3.3.5 Institutional, capacity and political economy assessment ..................................... 75 3.3.6 Policy SEA recommendations ............................................................................... 78 3.4 Environmental and Social Mainstreaming Beyond Policy SEA .................................... 80 3.4.1 Dissemination and communication of SEA results ............................................... 80 3.4.2 Monitoring and evaluation of policy SEA in environmental mainstreaming ....... 81 3.5 Conclusion ...................................................................................................................... 83 6 Report No. 55328 Section 4: Conclusions and Recommendations for Ways Forward ....................................... 84 4.1 Introduction..................................................................................................................... 84 4.2 Main Findings of the Evaluation ................................................................................... 84 4.3 Promoting policy SEA: A Phased Approach .................................................................. 88 4.4 Promoting policy SEA: Issues to Consider in the Partner Country Context .................. 91 4.4.1 Conveying benefits of policy SEA ........................................................................ 91 4.4.2 Boosting ownership in strategic sectors ................................................................ 92 4.4.3 Dealing with capacity constraints ......................................................................... 93 4.5 Promoting Policy SEA: Issues for Consideration by Development Agencies ............... 94 4.5.1 Alliance building and harmonisation for policy SEA ........................................... 95 4.5.2 Funding of policy SEA .......................................................................................... 96 4.5.3 Awareness raising and ownership in the donor community ................................. 96 4.6 Implications for the World Bank Group and its New Environment Strategy................. 97 4.7 Concluding Remarks .................................................................................................... 100 References ............................................................................................................................. 102 List of Annexes Annex 1: Summary of policy SEA pilots ...................................................................................106 Annex 2: Conceptual Analysis and Evaluation Framework for Institution-Centered Strategic Environmental Assessment .........................................................................................................127 Annex 3: Policy SEA process methods.......................................................................................193 Annex 4: Summary of the international workshop on "SEA for Development Cooperation: Taking Stock and Looking Forward" .........................................................................................198 List of Tables Table 2.1: Summary of policy SEA outcomes (excluding social learning) ................................39 Table 2.2: Summary of the influence of policy SEA pilots on policy capacities, policy horizons and decision regimes .....................................................................................................................43 Table 2.3: Summary of Contextual Factors that Constrain or Enable Achievement of Policy SEA Outcomes............................................................................................................53 Table 3.1: Snapshot from the PAM Produced in the Kenya Forests Act policy SEA ................79 Table 4.1: Phased Approach to Scaling-up of Policy SEA (10 years).........................................89 7 Report No. 55328 List of Boxes Box 1.1: Brief Summary of the policy SEA Pilots ...................................................................21 Box 1.2: SEA for Development Cooperation: Taking Stock and Looking Forward.................25 Box 1.3: How can one generalize from case studies? ...............................................................25 Box 2.1: Outcomes and influence of policy SEA .....................................................................55 Box 2.2: Contextual influencing factors....................................................................................56 Box 3.1: Rapid Policy SEA.......................................................................................................60 Box 3.2: The need for multi-sector ownership of SEA when the counterpart sector agency is not strong ...................................................................................................................61 Box 3.3: Examples of Tools used for Situation Assessment in the WAMSSA and Sierra Leone SESA policy SEA Processes ......................................................................................65 Box 3.4: Framing the SEA Work in the Context of Forest Sector Reform Priorities...............72 Box 3.5: Transforming Relationships for Intercultural Dialogue and Sustainable Development: Las Bambas Mining Project in Peru...........................................................................73 Box 3.6: Selection of Environmental and Social Priorities: Sierra Leone SESA Ranking Methodology...............................................................................................................74 Box 3.7: Institutional and Capacity Assessment in the SESA of the Mining Sector in Sierra Leone...........................................................................................................................76 Box 3.8: Kenya Forests Act SEA Policy Action Matrix ..........................................................82 Box 4.1: Scaling-up and threats to established authority: the Hubei transport planning pilot..91 List of Figures Figure 1.1: The Policy SEA Pilot Programme Evaluation Approach..........................................22 Figure 1.2: Initial Conceptual Model of policy SEA: Process Steps, Process Outcomes and Objectives .....................................................................................................................................23 Figure 2.1: Example of a Long-Term Constituency Proposal: The West Africa Mineral Governance Program Implementation Framework.....................................................32 Figure 2.2 Refined Conceptual Model of Policy SEA: Process Steps, Process Outcomes and Objective.....................................................................................................................57 Figure 3.1: Policy SEA Process Steps ....................................................................63 Figure 3.2: Mapping of Key Stakeholders ...............................................................67 Figure 3.3: Stakeholder Interest and Influence over Decision-making ..............................69 Figure 3.4: Interaction with Stakeholders during the WAMSSA policy SEA ......................71 8 Report No. 55328 Executive Summary Around the world, it is increasingly being recognized that for sustainability goals to be reached, efforts need to go beyond compliance with standards and mitigation of adverse impacts, to identifying environmental sustainability as an objective of the development process. This requires a focus on policies that promote integration of environmental, sustainability, and climate change considerations into development strategies and sector reform. Because sector reform brings about significant policy change involving adjustments in laws, policies, regulations and institutions, it is a sensitive political process often driven by strong economic interests. Policy makers are subject to a number of political pressures that originate in vested interests. The weaker the institutional and governance framework in which sector reform is formulated and implemented, the greater the risk of regulatory capture. In situations such as these, the recommendations of environmental assessment are often of little relevance unless there are constituencies that support them, and with sufficient political power to make their voices heard in the policy process. While strong constituencies are important during the design of sector reform, they are even more important during implementation. It follows that effective environmental assessment in sector reform requires strong constituencies backing up recommendations, a system to hold policy makers accountable for their decisions, and institutions that can balance competing and, sometimes, conflicting interests. Acknowledging the intrinsically political nature of sector reform, and in response to a mandate for strengthening strategic environmental assessment (SEA)1 in its activities,2 in the mid-2000s the World Bank embarked on a testing program for applying SEA at the policy level. Building on experience accumulated in sector reform in middle-income countries, the World Bank proposed an approach known as institution-centered SEA for incorporating environmental considerations in policy formulation (World Bank, 2005 and 2008). This coincided with the development of the OECD Development Assistance Committee SEA Task Teams Good Practice Guidance on SEA for Development Co-operation (OECD DAC, 2006) which describes SEA as a family of approaches using a variety of tools, rather than a fixed, single and prescriptive approach. It acknowledges that SEA applied at the policy level requires a particular focus on the political, institutional and governance context underlying decision making processes. The World Bank SEA Pilot Program The World Bank established a pilot program to test and promote policy SEA applying institution-centered SEA approaches in sector reform beginning in 2005. The main objectives of the program have been to test and validate policy SEA in different sectors, countries and regions; 1 SEA is the application of environmental assessment to plans, programs and policies. 2 This mandate was provided by the Banks Environment Strategy of 2001. 9 Report No. 55328 to draw lessons on the effectiveness of policy SEA; and, to yield tools and operational guidance that could be useful in applying SEA in sector reform. There are two components to the pilot program. The first has provided grants and/or specialized assistance to support eight SEA pilots linked to World Banks activities. Six of these pilots were completed and evaluated as follows: Strategic Environmental Assessment of the Kenya Forests Act 2005; Sierra Leone Mining Sector Reform Strategic Environmental and Social Assessment (SESA); Dhaka Metropolitan Development Plan Strategic Environmental Assessment; Strategic Environmental Assessment for the Hubei Road Network Plan (2002 ­ 2020); West Africa Minerals Sector Strategic Assessment (WAMSSA); and Rapid Integrated Strategic Environmental and Social Assessment (SESA) of Malawi Mineral Sector Reform. The second component of the SEA pilot program consisted of an evaluation of the pilots, conducted in partnership with the Environmental Economics Unit (EEU) at the University of Gothenburg, the Swedish EIA Centre at the Swedish University of Agricultural Sciences, and the Netherlands Commission for Environmental Assessment (NCEA). This report summarizes the main findings and results of this evaluation. Main Findings The lessons drawn from the pilots suggest that policy SEA can, under conducive conditions, contribute to improved formulation and implementation of sector reform. Largely this contribution stems from the ability of the pilots to raise attention to existing priority environmental and social issues affecting stakeholders. The evaluation also confirmed the importance of strengthening constituencies, as the pilots opened up participation in sector reform dialogues to previously sidelined or weakly organised stakeholders. For example, in one of the most promising SEA pilots (WAMSSA), which focused on mining reform in the Mano River Union countries, stakeholders prioritized lack of transparency and weak social accountability linked to mineral resources exploitation as the most critical issue for sustainable development of the mining sector. The WAMSSA policy dialogue involved ten mining communities in three countries; CSOs and NGOs; private mining companies, and government mining sector authorities. This dialogue is expected to continue during mining sector reform through a multi- stakeholder framework recommended by the stakeholders themselves, and later adopted by the countries as the social accountability mechanism for the World Banks major programme that will support mining sector reform in the Mano River Union. In addition, it was found that ownership, capacity and trust are necessary conditions for effective environmental mainstreaming at the policy level. In particular, strong evidence was found that policy SEA only has positive outcomes if it promotes ownership of the policy SEA process by governments, civil society organizations and local communities. The evaluation 10 Report No. 55328 confirmed that country ownership has several dimensions. Government ownership can be viewed both in terms of being mandated to control the reform, including the policy SEA, and being accountable for results. When national agencies are put in charge of designing sustainable policies they are equipped to deliver much more powerful measures than those that the World Bank or other agencies would be able to induce. It is important to note, however, that when weak sector ministries take ownership of policy SEA, there is a risk of regulatory capture and associated rent seeking. The WAMSSA pilot showed that institutions such as multi-stakeholder frameworks can guard against this eventuality. Another dimension of ownership is linked to civil society and to potentially affected stakeholders. With well-designed institutional support and multi-stakeholder frameworks for addressing policy and development decisions in sector reform, policy SEA can help to reconcile different interests, and to deal with regulatory capture by enhancing transparency and social accountability. Another important finding emanating from the evaluation is the need for long-term constituency-building. Policy SEA is but a small and bounded intervention in the continuous process flow of policy making, and so positive outcomes from the pilots could be short-lived. To sustain outcomes over the longer term, it is necessary to build constituencies that can sustain policy influence and institutional changes which take a long time to realize. Constituencies that can demand accountability with regard to environmental and social priorities need to be strengthened. Achieving this requires trust-building and common perception of problems. Under the right conditions, as stakeholders start to deal with the complex problems and responses to sustainable development issues and share policy dilemmas and tradeoffs that emerge, common perception of problems and trust in each others intentions may surface. As a corollary, the evaluation showed that when constituency building was weak in the pilots, the take-up of policy SEA recommendations was limited. A final finding is that contextual factors are of overriding importance in hindering or facilitating the attainment of the main benefits of policy SEA. In some cases, these factors may be aligned in such a way that pursuing policy SEA is not meaningful. This can happen when ­ as in the case of the Sierra Leone pilot ­ a newly elected government decides to postpone reform processes initiated by a previous administration. In all cases, however, preparation and planning must make sure to adapt and adjust the SEA process in view of these factors. In addition, windows of opportunity that close may open over time. In Sierra Leone, for example, interest in mining reform has renewed. Policy SEA may have now an opportunity to influence sector reform as long as there are constituencies that can take up the now three-year-old recommendations. Linking strongly to the issues of ownership and constituency building, a key message is the need to clearly articulate the potential benefits of policy SEA. Developers of policy SEA must recognize that incumbent actors have certain interests when engaging in SEA activities. Their participation will be driven by the benefits from engaging being greater than the risks and costs. First and foremost, policy SEA must be understood as a strategic decision support process that 11 Report No. 55328 will enable governments to put in motion better policy making, and not merely as an environmental safeguard. Speaking directly to the development priorities of the country, policy SEA not only works towards improving policy making from an environmental mainstreaming perspective, but also supports better planning and policy making from an overarching development point of view. As analysis of the potential economic and growth impact of sector reform is undertaken in the "sector review", policy SEA could complement this analysis by exploring the economic and growth implications of environmental and social priorities. With this perspective of policy SEA in mind, it is much easier to establish country ownership. Guidance for Applying SEA in Sector Reform A major driver of the pilot program, and of the evaluation, was the development of operational guidance that policy makers, CSOs, NGOs and SEA practitioners could use for applying policy SEA in sector reform. Despite the fact that sector reform is complex and non-linear, and that policy SEA is a time-bounded process, the evaluation suggests that effective policy SEA could follow three stages, as follows: 1. Preparatory work for policy SEA Before implementation of policy SEA can begin, there is a need to understand the context within which it will take place. Various questions need to be asked to ensure that the goals and intentions of the specific policy SEA process are understood by the major stakeholders. The most important questions relate to: issues, initiatives or questions to be addressed; the scale of the process; and assessing windows of opportunity. As clearly shown in the pilot SEA in Dhaka, a reluctant lead agency can set back the general development of the approach. As a general rule, sector agencies should lead policy SEA. 2. Implementing policy SEA Situation analysis and priority setting. Policy SEA starts with a situation assessment that accounts for the main environmental and social issues prevailing in a region or associated with a sector, to inform deliberations on priorities by stakeholders. Stakeholders are invited to react to the situation analysis; raise specific and relevant environmental and social concerns; and choose the SEA priorities. The choosing of SEA priorities by stakeholders is critical because it opens up the policy process to their influence. On the one hand, policy SEA priorities reflect the concerns and preferences of stakeholders creating a strong incentive for constituency building or strengthening. On the other hand, policy SEA priorities represent a concrete demand for specific environmental and social direction of sector reform from the stakeholders to the policy makers. This sows the seeds for social accountability of sector reform. Accordingly, special care should be taken to ensure that the voices of the vulnerable and weak in society are effectively heard in priority setting. Institutional, capacity and political economy assessment. The next stage in applying policy SEA in sector reform is to assess the extent to which existing systems have been able to manage 12 Report No. 55328 the priorities. A first step is often a thorough review of the policy, institutional, legal and regulatory framework, and of the existing capacities associated with the management of environmental and social priorities. This is followed by an assessment of the effectiveness of these frameworks and capacities for addressing the priorities, and the identification of capacity gaps that affect the management of priority issues. This analysis is complemented by an assessment of the effect that sector reform may have on the identified gaps. This requires consideration of potential reactions of stakeholders or potential conflicts that may adversely affect the effectiveness of the reform.. Finally, the gap assessment is validated by the stakeholders. The main purpose of this exercise is to expose stakeholders to the complexities of sector reform, and to call attention to the need for finding common ground in order to prevent or manage potential conflicts. Recommendations. Finally, policy SEA should formulate specific policy, institutional, legal, regulatory and capacity building recommendations for overcoming the gaps and managing the political economy constraints determined during the gap assessment. Validation of the recommendations by stakeholders further strengthens constituencies because it enhances ownership and encourages participation of stakeholders in follow-up and monitoring. Ultimately, this promotes greater accountability of policy makers. 3. Environmental and social mainstreaming beyond policy SEA After completion of the policy SEA report, certain follow-on interventions should be established to ensure that the recommendations are implemented and environmental and social mainstreaming becomes a continuous process. At a minimum, stakeholders should be informed about the results of the SEA by using mechanisms appropriate for different audiences. To the extent possible, dissemination and discussion of the results by the media should also be promoted. Any monitoring and evaluation framework should be designed as a continuation of the multi-stakeholder dialogue established during the policy SEA. At this point, the dialogue should allow for reflection on what was or was not achieved by the policy SEA and sector reform. Ways Forward Policy SEA can be an effective approach for assisting with the implementation of sector reforms that foster sustainable development. Therefore, the main recommendation of this report is to move forward with further testing and a staged scaling up of policy SEA. It is suggested that scaling-up be undertaken in three phases over approximately ten years. The main expected outcomes are a systematic increase in interest, capacity, country ownership and trust among key stakeholders for undertaking policy SEA in selected countries, where better policy making and successful environmental and social mainstreaming could be featured. The expected development impacts would be contribution to sustainable economic growth, mitigation and adaptation to climate change, and better environmental and social management of key sectors in selected countries. The proposed scaling up would focus on promoting: 13 Report No. 55328 Country ownership. There is strong evidence from the evaluation of the pilots that unless country ownership is ensured, policy SEA is unlikely to be effective. Therefore, the proposed scaling up suggests that donors, multilaterals and the World Bank should encourage partner countries to undertake policy SEA for informing policy dialogue. However, as has happened with environmental impact assessment, financial support to client countries would be required during the first stage of testing and experimentation, until SEA becomes ingrained in the regular process of sector planning and policy making. It is suggested that a policy SEA fund be established where low income countries could gain access to grants, specialized advice, and technical assistance to undertake or to engage in policy SEA for sector reform. Capacity building on policy SEA in sectors that are critical for economic growth and climate change. The evaluation also provides ample evidence that policy SEA effectiveness is constrained by the punctuated, short-lived nature of sector reform design when policy SEA typically takes place. In this new phase of piloting policy SEA a more strategic approach is consequently suggested. Capacity building should focus on raising awareness on SEA as an approach for improving planning and policy making by supporting the accumulation of SEA skills in key sectors of the economy at the level of public agencies, consultants, and civil society. The idea is to set in motion a process that ensures that proposed institutional, legal, regulatory, capacity and policy adjustments originated in individual policy SEAs reinforce each other, thereby creating a virtuous cycle of environmental, social and climate change mainstreaming. Countries could participate in the program on a self selection basis provided that they are interested in applying SEA in sectors critical for economic growth and climate change. A system of incentives that reward successful reform and gradual environmental, social and climate change mainstreaming. The evaluation has also shown that unless there are incentives for sustaining the mainstreaming effort and strong constituencies that demand it, the process may be derailed or thwarted by vested interests. An alliance of donors and partner countries for environmental, social and climate change mainstreaming. In the context of the Paris Declaration on Aid Effectiveness, the proposed program aims at seizing the window of opportunity that seems to be opening for fostering policy SEA with the development of the World Bank Groups New Environment Strategy, the scaling-up of the UNDP/UNEP Poverty and Environment Initiative (PEI), and environmental and climate change mainstreaming initiatives being undertaken by other multilateral and bilateral development agencies. It seems that the time is ripe for the establishment of a broad "environmental mainstreaming alliance", which would clarify the roles and niches of the different interested parties. The World Bank could add its more specialized experience in sector reform to a potentially influential alliance. The alliance would promote exchange of experiences across partner countries in applying policy SEA in sector reform to address common and global 14 Report No. 55328 challenges such as climate change. This will render policy SEA implementation globally more efficient. If this proposal for scaling up is not fully realized, policy SEA could still make an important contribution to enhancing sector reform. Based on the evidence provided by this evaluation, it is suggested that donors and partner countries join efforts to foster policy SEA in sector reform under the following conditions: country ownership is ensured; policy SEA is undertaken along with sector reform design and not as an isolated exercise; and, follow-on activities recommended by the SEA can be supported during sector reform implementation. For the World Bank a possibility would be that SEA is included as an environmental assessment instrument in the Operational Policy on Environmental Assessment (OP 4.01) thus allowing that countries can fulfil the requirement for environmental assessment in technical assistance and adjustable program loans by undertaking SEA at the policy level3. Also, Operational Policy on Development Policy Lending (OP 8.60) allows the use of SEA in development policy loans to assess significant effects on countries environment, forests and other natural resources, and on their shortcomings for addressing these impacts. However, in contrast to OP 4.01 where environmental assessment is the responsibility of the borrowing country, SEAs associated with development policy loans are often part of the due diligence undertaken by the World Bank as it happened in the Sierra Leone SEA of the mining sector. As shown in this report, this situation adversely affects the effectiveness of the policy SEA. It is suggested, therefore, that in the case of development policy loans, country ownership of the SEA process should be ensured. Finally, when SEA is undertaken associated with technical assistance, adaptable program and development policy loans, the SEA recommendations should be included in specific recommendations for the components or triggers of these loans. It follows that the new Environment Strategy for the World Bank Group should maintain SEA as a key tool for promoting sustainable development, including adaptation and mitigation to climate change. 3 Of course, SEA is also applicable to plans and programs. 15 Report No. 55328 Section 1: The World Bank's Pilot Programme on SEA4 1.1 The Challenge of Applying SEA to Policy Development Environmental degradation continues to be a consistent concern around the world. In addition, other converging challenges associated with surging food prices, global climate change and species extinctions have made it clear that current economic development trends are unsustainable. The predominant approach to dealing with environmental and climate change problems has been to treat them as unwanted side effects of economic development. This has worked to some extent, where it has been possible to effectively regulate commercial and domestic activities. However, in most developing countries, administrative infrastructure has not been able to keep pace with economic activity and so ecosystems are suffering. It is increasingly being recognized that for sustainability goals to be reached, efforts need to go beyond compliance with standards and mitigation of adverse impacts, to gradually decoupling environmental degradation from economic growth. This requires a focus on policies that promote environmental and climate change mainstreaming5into development strategies and sector reform6. This idea has been recognized at a high level, for example, in Millennium Development Goal 7/Target 9 which requires countries to "integrate the principles of sustainable development into country policies and programs and reverse the loss of environmental resources". Environmental mainstreaming requires consideration of the environment in the earliest stages of the decision-making cycle, when development challenges as well as proposed interventions are framed. In this conception, environmental issues are thought of as a cross-cutting dimension of development. Within European and national policy debates, environmental mainstreaming at the policy level is more often referred to as environmental policy integration. Over the last decade, substantial experience has developed both within governments and in the research community as to how to best promote such integration, and in particular in the preparation of national and European policy7. 4 In fiscal year 2006, the World Bank established a Pilot Program on Institution-Centered SEA (I-SEA) to test SEA approaches applicable to policies. In this report, I-SEA is considered to be a version of policy SEA that has been applied to sector reform by the World Bank. During the course of this evaluation, it became clear that many of the observations and conclusions emanating from the six pilot studies are relevant to the wider concept of policy SEA. Consequently, the terms "policy SEA" and "I-SEA" are used interchangeably in this report. . 5 "Environmental mainstreaming" is the consideration of environmental implications alongside traditional economic concerns in high-level strategic planning. 6 It is recognized that climate change issues are closely linked with environmental concerns. Throughout this report, the term "environment" will be defined as incorporating climate change concerns. 7 See Jordan and Lenschow (2008), and Nilsson and Eckerberg (2007). 16 Report No. 55328 Integration of environmental concerns into strategic decision-making requires an understanding of the complexities of policy-making. Policies are made by governments and the institutions8 that surround them. Consequently, attempts to take better account of the environment in the making of economic development decisions require turning attention to the sometimes opaque and messy areas of governance and institutional reform. There are numerous tools or approaches that can be used to integrate environmental concerns into strategic decision-making9, and one of the most promising is strategic environmental assessment (SEA). SEA has its roots in environmental impact assessment of development projects. In the late 1980s, environmental assessment practitioners began to turn their attention to the environmental impacts of policies, plans, and programmes (PPPs). Many countries began to experiment with the use of strategic environmental assessment (SEA) applied to plans and programmes, and some jurisdictions produced guiding SEA policies, laws or regulations 10. In Europe, this new development was given significant impetus with the coming into law of the European Directive on SEA11. International development agencies also began to test SEA in the 1990s, with the World Bank leading the way with a range of sector and regional environmental assessment initiatives12. Environmental assessment of policies began to take hold around the turn of the new millennium. At that time, 30 years of experience with project-level EIA, and with other environmental "safeguarding" approaches to environmental improvement such as end-of-pipe pollution control, had taught that treating the symptoms of existing pollution was not helping enough in the struggle to design more environmentally benign, or sustainable development. Instead, the idea began to grow that the driving forces of environmental damage could be most effectively addressed by integrating environmental considerations into the design and adoption of policies in all sectors. The argument goes that cumulative environmental change, environmental opportunities, and potential interactions between different sectors, can best be considered 8 The term "institutions" is defined broadly in this report, and is based on the definition provided in the Evaluation Framework that is introduced in Section 1.4, and which supports this evaluation. In that definition, institutions are defined as being made up of formal constraints such as rules and laws, and informal constraints such as norms of behaviour and self-imposed rules of conduct. The Evaluation Framework makes the point that the concept of institutions is thus much broader than that of organizations. While institutions design and implement rules, organizations are the players. The distinction between institutions and organizations is important since there is a tendency to equate the two concepts in discussions on institutional capacity building for improved environmental management. A too limited focus on environment sector organizations (such as environment Ministries and agencies) risks diverting attention from other institutions which may be equally or more important for environmentally sustainable development (Slunge et al, 2009). 9 See, for example, Dalal-Clayton and Bass (2009) 10 Dalal-Clayton and Sadler (2005). 11 Directive 2001/42/EC. 12 Kjorven and Lindhjem (2002) review 20 examples of sector and regional EA undertaken by the World Bank between 1997 and 2001. See, also, Annandale et al (2000) for examples of SEA initiatives in other multi-lateral agencies. 17 Report No. 55328 upstream in the selection and design of development and sector policies, rather than downstream through project-management and end-of-pipe solutions13. This was a major conclusion of the World Summit on Sustainable Development in Johannesburg in 2002, and is also reflected in the Millennium Development Goals, and the Paris Declaration on Aid Effectiveness. One of the outcomes of this new way of thinking is that economic efficiency could be improved if environmental and social issues are considered alongside traditional economic concerns when new policies and strategic plans are developed. As a consequence of this realization, national governments and development agencies have begun to experiment with approaches that attempt to integrate environmental concerns into the making of new and redrafted policies. In international development, most notable has been the initiation of environmental mainstreaming programmes by agencies such as multilateral development banks, UNDP and UNEP, and others. The UNDP/UNEP Poverty and Environment Initiative has done much to promote the idea of environmental mainstreaming in national and sector development policy, plans, and budgets14. Similarly, the multi-agency network known as the Poverty Environment Partnership is attempting to mainstream environmental concerns into development aid in support of national and sector development planning15. Another notable initiative from the early 2000s was the OECD Development Assistance Committees SEA Task Team. This was established by the donor community to promote the development and harmonization of SEA approaches, and is made up of the majority of donors, and a number of leading NGOs, consultants and academics with an interest in SEA for development cooperation. In 2006, the Task Team produced the Good Practice Guidance on SEA for Development Co-operation (OECD DAC, 2006), which has been followed up by four specific Advisory Notes. This was a timely response to the 2005 Paris Declaration on Aid Effectiveness which calls upon donors and partners to work together to "develop and apply common approaches for strategic environmental assessment at sector and national levels" (OECD, 2005). The OECD DAC SEA Guidance describes SEA as a "family of approaches which use a variety of tools, rather than a fixed, single and prescriptive approach"16. It acknowledges that "SEA applied at the policy level requires a particular focus on the political, institutional and governance context underlying decision making processes"17. The Guidance also acknowledges the need for different approaches to SEA for plans and programs, on the one hand, and policies, on the other. 13 See, for example, Brown and Tomerini (2009). 14 See www.pei.org. 15 PEP is a group of donor agencies, multilaterals and research-focused INGOs. See http://www.povertyenvironment.net/pep/ 16 OECD DAC (2006), p.17. 17 OECD DAC (2006), p.18. 18 Report No. 55328 The World Bank first pointed to the need for SEA to include institutional and governance dimensions in its 2005 report titled, "Integrating Environmental Considerations in Policy Formulation: Lessons from Policy-Based SEA Experience"18. This report set the groundwork for the World Banks interest in policy SEA and was, in part, a response to the requirement of the Environment Strategy for focusing work on strategic environmental assessment (World Bank, 2001), and subsequently to the application of Operational Policy 8.60 on development policy lending (World Bank, 2004). The policy SEA approach originated in experience accumulated in middle income (IBRD) countries as part of the World Banks work on environmental mainstreaming by developing and applying country environmental analysis (CEA) to inform dialogue on environment with borrowing countries19. The World Bank suggests that SEA at the policy level merits consideration of political-science insights about policy formation20. It points out that policies are the result of competing interests in the political arena that are influenced by the historical, economic, social, cultural and institutional context present in a given jurisdiction21. Further, it suggests that effective SEA at the policy level has to be responsive to windows of opportunity and should raise attention to environmental priorities; strengthen stakeholder constituencies; and contribute to enhancing the capacities of institutions to respond to environmental priorities. These ideas are extended in a 2008 World Bank book, titled "Strategic Environmental Assessment for Policies: An Instrument for Good Governance" 22 where the analytical foundations for policy SEA are discussed in detail. 1.2 The World Bank SEA Pilot Program Acknowledging the tentative nature of policy SEA, the Bank established a pilot program in 2005 to test this approach and to promote SEA in the Banks policy related operations.. The main objective of the program has been to test and validate policy SEA in different sectors, countries and regions. Ultimately, the pilot program seeks to draw lessons on the effectiveness of policy SEA and to yield tools that could be useful in applying SEA in development policy and sector reform more broadly. The pilot program was planned to be undertaken over a five year period (fiscal year 2006 to the end of fiscal year 2010) 23. The pilot program originated in middle 18 World Bank (2005). 19 Pillai (2008), Sanchez Triana, Ahmed and Awe (2007). 20 Policy formation is the continuous process of policy formulation and implementation. While policy formulation has well defined boundaries, policy formation does not. See "Chapter 3: The Continuous Process of Policy Formation" by Martha Feldman and Anne Khademian in World Bank (2008). 21 For example,see Cohen, March and Olsen (1972), Sabatier (1975), Kingdon (1995), Feldman and Khademian (2008). 22 Ahmed and Sanchez-Triana (2008). 23 Documentation describing the work undertaken in each of the pilots is available at the World Banks SEA Toolkit webpage: 19 Report No. 55328 income countries. This report shows that the same concepts can also be applied to low income (IDA) countries. There are two components to the pilot program. The first provided grants and specialized assistance to support eight SEA pilots linked to the Banks activities. Box 1.1 provides a brief summary of each of the six pilots24 that have been completed and evaluated25. The second component of the policy SEA program consisted of an evaluation of the pilots, conducted in partnership with the Environmental Economics Unit (EEU) at the University of Gothenburg in Sweden, the Swedish EIA Centre at the Swedish University of Agricultural Sciences, and the Netherlands Commission for Environmental Assessment (NCEA). 1.3 Objectives of the Evaluation Given the sparse experience with environmental assessment of policies, the main objective of the evaluation was to draw lessons from the pilot cases to further refine policy SEA, thereby increasing its effectiveness as an approach for environmental mainstreaming in development policies, and thus contributing to sustainable development outcomes. The specific objectives of the evaluation were to: * make an assessment of how policy SEA was applied in the pilot cases; * make policy SEA more effective from an operational perspective; * further develop methods and guidance for policy SEA (this is a common goal of the program and of the OECD DAC SEA Task Team); * allow the donor community, and SEA specialists, to reflect on the pros and cons of policy SEA as a tool for enhancing the environmental sustainability of development policies; * inform the implementation and updating of the OECD DAC SEA Guidance on SEA as it relates to policy-level SEA; and * inform the preparation of the World Banks New Environment Strategy, as it progresses during 2010. http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/ENVIRONMENT/0,,contentMDK:21911843~pagePK:1 48956~piPK:216618~theSitePK:244381,00.html. 24 More detailed summaries of the six pilot projects are presented in Annex 1. Documentation describing the work undertaken in each of the pilots is also available at the World Banks SEA Toolkit webpage referred to in the previous footnote. 25 A pilot focused on trade policy was delayed due to the political instability affecting Pakistan, and was therefore not included in the evaluation. Another pilot on climate change in Orissa, India, started when the evaluation of the pilots was being completed. For this reason, this pilot was not included in the evaluation. 20 Report No. 55328 Box 1.1: Brief Summary of the policy SEA Pilots 1. Strategic Environmental Assessment of the Kenya Forests Act 2005 The objectives of the SEA were to inform and influence the implementation of Kenyas Forests Act of 2005, and to inform the policy dialogue between the World Bank and the Government of Kenya (GoK) on sustainable natural resource use. The SEA also fed into the preparation of a Forestry Reform Support component of the World Banks Natural Resource Management Project (NRM). 2. Sierra Leone Mining Sector Reform Strategic Environmental and Social Assessment (SESA) This SEA originated in a policy development loan that was adapted during its implementation to inform the preparation of the Mining Technical Assistance Project (MTAP). SESA´s main objective was to help meet long-term country development by integrating environmental and social considerations in mining sector reform. 3. Dhaka Metropolitan Development Plan Strategic Environmental Assessment This SEA aimed at incorporating environmental considerations into Detailed Area Plans (DAPs), which make up the lowest tier of the Dhaka Metropolitan Development Plan (DMDP). The SEA was also intended to inform the preparation of the World Banks Dhaka Integrated Environment and Water Resources Management Program (DIEWRMP). 4. Strategic Environmental Assessment for the Hubei Road Network Plan (2002 ­ 2020) This pilot assessed the impact of the Hubei Road Network Plan (HRNP) on environmental and social priorities in Hubei province (China). The HRNP proposed a system of 5,000 km of expressways and 2,500 km of highways (class I and II) which provided road links between all major cities in the Province. 5. West Africa Mineral Sector Strategic Assessment (WAMSSA) The purpose of this pilot was to identify the regional policy, institutional and regulatory adjustments required to integrate social and environmental considerations into minerals sector development in the Mano River Union countries. It was undertaken with a view to informing the preparation and implementation of the West Africa Mineral Governance Program, an adjustable program loan for supporting mining reform in West Africa. 6. Rapid Integrated Strategic Environmental and Social Assessment (SESA) of Malawi Mineral Sector Reform As part of the Malawi Mineral Sector Review that assessed the need for mining reform in Malawi, a rapid integrated SESA was undertaken, the main purpose being to review the mining sectors environmental and social regulatory framework. The rapid SESA also attempted to incorporate critical environmental and social considerations into the ongoing discussion of Malawis Mines and Minerals Policy. 21 Report No. 55328 1.4 The Evaluation Approach The pilot program evaluation was designed as a three-stage process, and is presented in a schematic form in Figure 1.1. The first stage (the boxes on the left hand side of Figure 1.1) consisted of a detailed literature review, the purpose of which was to strengthen the analytical basis of the evaluation and to provide guidance for the evaluators. The outcome of this literature review is a document titled, "Conceptual Analysis and Evaluation Framework for Institution- Centered Strategic Environmental Assessment" (the "Evaluation Framework")26 which is included as Annex 2 of this report. The objectives of the literature review were to "summarize and critically discuss the analytical underpinnings of institution-centered SEA (policy SEA) and to provide an analytical framework for the evaluation of the pilot SEAs". Figure 1.1: The Policy SEA Pilot Programme Evaluation Approach The first part of the Evaluation Framework outlines a proposed conceptual model of policy SEA, which includes process steps, process outcomes and objectives. This conceptual model is presented as Figure 1.2. Its purpose was to guide the evaluations of the pilots, and to present an 26 The formal reference for this work is: Slunge et al (2009). 22 Report No. 55328 approach for undertaking future policy SEA activity. At the time that this conceptual model was developed, it was expected that lessons learned from the evaluation of the six pilots would lead to refinements of the model. Figure 1.2: Initial Conceptual Model of Policy SEA: Process Steps, Process Outcomes and Objectives27 Six steps of I-SEA: I-SEA Objective: 1. Understanding policy formation and Integration of key environmental issues windows of opportunity to influence in (sector) policy formulation and decision making implementation, in order to enhance environmental sustainability. 2. Initiation of stakeholder dialogue 3. Identification of key environmental issues: a. Situation analysis b. Stakeholder analysis 4. Environmental priority setting Process Outcomes of I-SEA: 5. Institutional assessment i) raised attention to environmental 6. Formulation of policy and institution priorities adjustments ii) strengthened constituencies a. Validation analysis iii) improved social accountability iv) greater ability for social learning Contextual influencing factors: i) historical, political, social, economic, and cultural ii) political economy of reform iii) windows of opportunity for policy influence and institutional reform iv) luck 27 Slunge et al (2009), p.12. 23 Report No. 55328 The second part of the Evaluation Framework consists of an extensive literature review of policy processes, environmental prioritization, stakeholder representation, institutional capacity, social accountability and social learning. All of these aspects are part of the policy SEA conceptual model. The third and final part of the document proposes an approach for evaluating the policy SEA pilots which includes a set of generic questions that evaluators can adapt given the context of each pilot, and a possible structure for each evaluation report28. The second stage of the evaluation process consisted of the evaluation of the different SEA pilots. Each evaluation included initial literature review followed by a period of field work, usually taking from one-to-three weeks. Extensive interviews were undertaken with stakeholders who had participated in the SEA pilots. Interviews were guided by a generic protocol contained in the Evaluation Framework, which was customized by each evaluator and determined by the particular context of the evaluation. In some of the evaluations, interviews were extensive. For example, the evaluators of the Kenya Forestry Act SEA individually interviewed 45 stakeholders, and an additional 21 participants in a group meeting. The final outcomes of these six separate evaluations were substantial reports consisting ­ on average ­ of 40 pages of analysis and recommendations. These evaluation reports became the main resource for the final stage of the pilot program evaluation. Summaries of the evaluations are contained in Annex 1. The third and final stage of the evaluation was the "cross-analysis " of the findings from all six pilot cases (as shown by the boxes on the right hand side of Figure 1.1). The cross-analysis was undertaken at two levels. The first level focused on the strengths and weaknesses of the policy SEA approach with regard to influencing policy processes through achieving policy SEA outcomes. The second level of analysis drilled down deeper to examine the methods that can be used to make policy SEA effective. The outcomes of both levels of analysis are recommendations to refine the policy SEA approach, including guidance for applying SEA in policy and sector reform. Preliminary results of the evaluation were discussed, and feedback received, at an international workshop on SEA held on April 7, 2010, in Geneva, Switzerland, jointly organized by the OECD DAC SEA Task Team and the World Bank (See Box 1.2 and Annex 4.) 28 The Evaluation Framework was discussed at two workshops in Europe in late 2008, and at a meeting in Washington, D.C. in June 2009. 24 Report No. 55328 Box 1.2: SEA for Development Cooperation: Taking Stock and Looking Forward The OECD DAC SEA Task Team and the World Bank held a joint workshop at the 30 th International Association for Impact Assessment (IAIA) conference in Geneva on April 7 th, 2010. The workshop was designed to review and discuss the overall progress of policy SEA, and to discuss the relevance of SEA in the New Environment Strategy of the World Bank Group. A process known as "dialogue mapping" was used to focus discussions on four topics: a) Obstacles and enabling factors for SEA effectiveness in development cooperation and poverty reduction. b) The role of the World Bank on strengthening environmental governance and institutions for sustainable development. c) SEA as a tool for strengthening environmental governance and institutions. d) Main steps for scaling up SEA in development policy. The workshop broadly supported the idea of policy SEA and the relevance of further promoting it as an approach for environmental mainstreaming at the strategic level in developing countries. Much attention was devoted to the issue of country ownership for SEA and how this links to the role of development agencies and the implications for future inter-donor discussions. Furthermore, the workshop highlighted the need to show evidence of benefits and added value that policy SEA brings to existing processes, and how such benefits can be sustained in processes that extend beyond the completion of the SEA. 1.5 Limitations of the Pilot Program, and of the Evaluations The evaluation is focused on six completed policy SEA pilots that do not pretend to be representative of specific sectors, regions or groups of countries. The analytical value of the sample is that each pilot focuses on a different aspect of SEA application at the strategic level. Following accepted principles of case study research strategy, this approach allowed for a systematic comparison of the results of policy SEA application in a variety of contexts and circumstances, thereby enabling generalizations to be made. While the cases and consequent evaluations were carefully designed and undertaken, care should be exercised in making generalizations (see Box 1.3). Box 1.3: How can one generalize from case studies? "The answer is not simple. However, consider for the moment that the same question had been asked about an experiment: How can you generalize from a single experiment? In fact, scientific facts are rarely based on single experiments; they are usually based on a multiple set of experiments that have replicated the same phenomenon under different conditions. The same approach can be used with multiple case studies but requires a different concept of the appropriate research designs... The short answer is that case studies, like experiments, are generalizable to theoretical propositions and not to populations or universes. In this sense, the case study, like the experiment, does not represent a "sample", and in doing a case study, [the] goal will be to expand and generalize theories (analytic generalization) and not to enumerate frequencies (statistical generalization)." Source: Extracted from Yin R. (2003, p: 10) 25 Report No. 55328 In addition, although special efforts were made to engage governments in these pilots, they were all "driven" by the World Bank. This may limit the applicability of the lessons learned for future policy SEA activity undertaken by developing countries. However, this limitation does not undermine the principles underlying the application of policy SEA. In fact, if policy SEA were driven by developing countries, the effectiveness of the outcomes would likely increase. This issue is further discussed in Section 2 and Section 4 of this report. It is widely understood that policies are rarely implemented as originally defined. During implementation, policies are often reformed as a consequence of contextual influences. As the majority of the policy processes (four out of six) that the pilots attempted to influence had not yet been implemented when the evaluation was carried out, the effect of the pilots during policy implementation could not be fully and conclusively evaluated. The focus of the evaluation was on the influence of the pilots on policy formulation, and on their potential to impact policy implementation. Finally, the purpose of the pilot program and its evaluation was not to compare the relative effectiveness of policy SEA and other SEA approaches. Consequently, the results of the evaluation presented in this report do not provide evidence for or against the effectiveness of other SEA approaches. The case for the relevance of policy SEA was made in World Bank 2005 and 2008. 1.6 Structure of the Report The remainder of this report presents the outcomes of the cross-analysis of the six pilots. The body of Section 2 consists of a detailed cross-case analysis. It examines whether the pilots have influenced policy interventions in their jurisdictions, and if so, how. It also examines the extent to which policy SEA has led to the four identified "outcomes" of environmental prioritization, environmental constituency building, improved social accountability, and strengthened social learning. A special attempt is made to examine the contextual factors that either enable or constrain the ability of policy SEA to integrate environmental considerations into policy-making. Section 3 of the report presents guidance for applying policy SEA in policy and sector reform. Using the pilot cases as a basis, this section describes the policy SEA process steps. The main objective of this section is to provide guidance to practitioners as to how methods for policy SEA might be adapted for their specific purposes. Section 4 of the report summarizes the findings of the evaluation and addresses the practical challenges of scaling-up SEA in sector reform. It argues that policy SEA approaches can assist countries in developing more environmentally sustainable policies. This section draws out the policy implications of the evaluation for SEA systems in developing countries; for development cooperation; and for the World Banks New Environment Strategy. 26 Report No. 55328 Section 2: Influencing Sector Reform for Sustainability 2.1 Introduction The policy SEA conceptual model introduced in Figure 1.2 assumes that by following a series of procedural steps, policy SEA can result in one or more of four "outcomes" (raised attention to environmental priorities; strengthened environmental constituencies; improved social accountability mechanisms for policy implementation; and, greater ability for social learning). The conceptual model also suggests that by following the procedural steps, the potential for achieving integration of key environmental issues in policy formulation and implementation could be greatly enhanced. Figure 1.2 recognizes that contextual factors in given jurisdictions will likely influence the ability of policy SEA to affect outcomes and influence policy formulation. In this section of the report, the impact of the six pilots on policy SEA outcomes is reviewed. This is followed by an analysis of the "contextual factors" that either enable or constrain the attainment of the four outcomes. The section concludes with suggestions for refinement of the policy SEA conceptual model. 2.2 The Pilots and Policy SEA Outcomes All six evaluations assessed the influence that each pilot had on the four outcomes. This was not always an easy task, as the Terms of Reference for the actual SEA pilots did not necessarily mention the need to seek the four outcomes. However, all evaluations did address the question by focusing on changes in behavior, relationships, activities or actions of people, groups, organizations, and institutions that came into contact with the SEA pilots. The next four sub-sections analyze the extent to which the pilots managed to achieve these outcomes. Constraints to achievement are dealt with in Section 2.3. 2.2.1 Raising attention to environmental priorities Evaluators were asked to address four questions, the answers to which would enable conclusions to be made about whether each pilot had succeeded in raising attention to environmental priorities. These questions were: - Are priorities more clearly defined, and how has this been documented? - Have environmental priorities been placed on the policy agenda and linked to growth, poverty reduction or other key development issues? - To what extent are priorities shared among key stakeholders? - How has the pilot contributed to raise attention to priorities? This outcome is intimately connected with public participation, as priorities are social choices that ultimately reflect the social preferences of interest groups and communities. Priorities cannot 27 Report No. 55328 realistically be uncovered without interaction with stakeholders. The process of prioritization involves first identifying key issues through some kind of scoping exercise, and then sorting and possibly ranking the issues in order of importance. In some cases, the sheer act of awareness-raising can have a positive impact on prioritization. In the Hubei pilot, for example, the SEA provided an overall holistic picture of the possible environmental impacts of planned transport projects. This outcome was sufficient to increase the awareness of senior managers at the Hubei Provincial Communication Department (HPCD) about macro-level environmental implications of the proposed development of road transport. The HPCD management now pays more attention to environmental issues in detailed investigations that are done during the design stage of each road project. The SEA also indirectly contributed to a new circular, issued by the HPCD management, which encourages the enforcement of environmental protection requirements during expressway construction. All of the evaluations showed evidence that the pilots had contributed to improved dialogue over environmental and social issues, although the extent of this dialogue and its potential to influence policy reform varied significantly across the pilots. In one case, the Malawi Rapid SESA, time restrictions constrained the ability of the SEA specialist to fully examine priorities. The rapid assessment focused on the system and capacities for environmental and social management in the mining sector. The assessment identified major gaps and made it possible to make the case for including environmental and social issues in the reform agenda. It also recommended that a fully-fledged policy SEA be undertaken during the formulation of mining sector reform to properly assess key issues and select priorities in a participatory and well-informed way29. Other pilots, for example WAMSSA and the Sierra Leone SESA, included quite elaborate techniques for involving stakeholders in the ranking of environmental and social priorities30. Perhaps more important than the approach taken to prioritization is the effect that it had on policy dialogue, and the likelihood that it would produce a long-term impact on the movement towards environmentally sustainable policies. In two of the cases, WAMSSA and Malawi Rapid SESA, there is evidence that raised attention to environmental priorities may well have moved environmental and social issues upwards in the reform agenda broadening mining policy horizons. For example, WAMSSA has had a substantial impact on how stakeholders view the concept of regional harmonization of mining policy, which is important for addressing transborder environmental and social impacts of mining activities such as the deforestation of the Upper Guinean forest, as well as migration of miners and people attracted by mining discoveries. This may well be the most important influence that WAMSSA has had on regional mining reform. 29 At the time of preparing this report, the Government of Malawi has requested the World Bank for assistance to prepare a mining technical assistance project to reform the mining sector. This will include a full policy SEA (SESA). 30 The techniques used to prioritize issues are discussed in Section 3. 28 Report No. 55328 Prior to WAMSSA, most stakeholders were skeptical about regional approaches. Their negativity tended to be based on the idea that minerals are traditionally owned by individual states, who will always assert sovereignty over their valuable resources. This is a difficult viewpoint to challenge. However, by making regionalism and the associated concept of mining "clusters" the focus of the process, the SEA team managed to change the majority of stakeholder views. On the whole, stakeholders saw the benefits in reforms that would integrate regulatory frameworks and the provision of infrastructure. This change of perspective tied in with the outcomes of extensive consultation exercises that saw "insufficient transparency and consistency of government decision-making" as a highly ranked priority. Detailed one-on-one interviews undertaken during the evaluation suggested that underlying this acceptance of regional harmonization and mining cluster development is the idea that harmonization might reduce the incidences of illegal trade, and may also reduce rent-seeking behavior. In the another example, the Malawi Mineral Sector Review (of which the Rapid SESA is a part) showed specific evidence of environmental issues being pushed onto the political agenda. A longitudinal comparison showed that environmental issues in the mining sector were low on the political agenda some three to five years prior to the Review. The current situation is very different in this respect, largely driven by the development of uranium mining and prospective iron ore and rare earth mines. The Review provided another opportunity for concerns about environmental hazards to be openly discussed. According to the evaluation, another important indicator of raised attention to environmental priorities is the Government of Malawis explicit ambition to ensure compliance by small, medium and large-scale miners to environmental and occupational health and safety standards as indicated in the national strategic plan (Growth and Development Strategy 2010-2011). The cases where priority setting was more successful in politicizing environmental and social issues also indicated that priorities are not uniformly shared among stakeholders. In the Malawi case, it became obvious that the various stakeholders did not share the same view of the relevance, magnitude and risks associated with the different environmental problems associated with mining. By extension, there were differences of opinion about the relative importance of environmental issues vis-ŕ-vis other social and economic issues in the broader policy discussion. In the WAMSSA case, not all stakeholders shared a positive view of regional harmonization. Many of those consulted pointed out that the governments of the three Mano River Union countries were not driving the regional approach. Government representatives appeared to be supportive of the harmonization concept, but skeptical stakeholders claimed that this position was presented for "public relations" purposes only. Political economy analysis suggests that government agencies susceptible to rent-seeking behavior would want to maintain the status quo. Even in these successful examples, it is clear that the impact of prioritization can be temporary and punctuated, rather than permanent and sustained. The Malawi evaluation pointed to the fact that there is a need to sustain dialogue among key stakeholders over a considerable period of 29 Report No. 55328 time. Such dialogue also need to be based on solid environmental information which is communicated widely across stakeholders to encourage equitable participation. Pilots where prioritization did not work well also provide useful examples for future practice. The Dhaka case pointed to the fact that influential groups can be unduly prioritized in stakeholder analysis, and therefore during the consultation process. The reverse side of this situation is that vulnerable groups are often under-represented. In the Dhaka case, this resulted in issues such as vulnerability and health being effectively ignored. Ahmed and Sanchez-Triana (2008) and World Bank (2005) make much of the need for prioritizing activities to include the viewpoints of vulnerable groups, who disproportionately bear the burden of environmental degradation and who have less of a voice in policy formulation31. Even in pilots where considerable energy was expended on consultation processes, it was clear that some vulnerable groups were not properly included. For example despite undertaking ten separate consultation exercises in mining communities in Liberia, Guinea, and Sierra Leone, WAMSSA still did not find a way in which the artisanal mining sector could be included in what was otherwise a very effective dialogue. The conclusion from this brief analysis is that policy SEA should always include a careful analysis of the obstacles to full representation, and should propose mechanisms by which unorganized stakeholders can be reached. On the whole, this kind of analysis was not part of the six pilot studies. Finally, for policy SEA to have an impact in the long term, there is a need for local capacity development for environmental priority setting. While some SEA teams used local consultant partners to organize consultation activities, there is not much evidence of determined local capacity development in the pilot studies. This is not necessarily the fault of consultant teams. Terms of Reference for policy SEA should include a substantial local capacity building component. 2.2.2 Strengthened constituencies Another precondition for the development of environmentally sustainable policy is the strengthening of constituencies. The policy SEA approach assumes that a critical force for integrating environmental considerations in the continuum of policy formation are groups organized around a common environmental interest or concern directly or indirectly affected by the policy process. As stated in the Evaluation Framework, "...without strengthened and effective environmental constituencies, the [policy SEA] model assumes that environmental mainstreaming in policy making would be short-lived. Laws, presidential decrees or regulations 31 See, in particular, World Bank (2005, pp.47-49). 30 Report No. 55328 eventually adopted when policies are formulated risk being partially applied, reverted, distorted or even ignored during policy implementation"32. In their Terms of Reference, evaluators were asked to address the following questions: - Which constituencies have been strengthened (civil society organisations, private sector organisations, networks within the bureaucracy, networks involving many different kinds of actors)? - Have stakeholder engagement and networks been maintained after completion of the SEA report? This policy SEA outcome is closely connected with the goal of raising attention to environmental priorities. Both require engagement with stakeholders, although this second outcome relates more generally to the building or strengthening of constituencies that can demand accountability. Again, the pilots varied in the extent to which they were able to actively strengthen constituencies. In some instances, a pilot showed evidence of constituency strengthening, even when other aspects of the policy SEA project were not all that influential. For example in the Dhaka metropolitan development planning pilot, actions taken by civil society organisations suggest that the SEA may well have contributed to strengthening constituencies. In late 2008, one year after the completion of the policy SEA, a committee was established by an alliance of civil society groups to review the Detailed Area Plans (DAPs) produced by the Capital Development Authority, for which the SEA was undertaken. They highlighted, among other things, inconsistencies between the higher level Dhaka Metropolitan Development Plans (DMDPs) and the DAPs, for example with regard to the protection of low lying flood flow zones. When the committee presented its findings, it delayed the approval of the DAPs by at least six months. Several members of the committee also participated in the SEA stakeholder consultation process. It is possible that the SEA consultation process catalyzed the joint action taken by these civil society organizations on this issue. Another example of strengthened constituencies is evident in the WAMSSA pilot, where the policy SEA appears to have "opened up" examination of the institutional mechanisms used to deal with regional planning and harmonization. A considerable amount of time was spent in final validation workshops discussing the proliferation of regional initiatives. This was a source of some concern and confusion. A number of stakeholders were keen to see WAMSSA or at least its outcomes carried through beyond the completion of the World Bank project. The argument made was that WAMSSA had created a substantial momentum for regional mining policy harmonization, and that this collaborative energy should not be lost. Participants then discussed how best to institutionalize this new policy dialogue. There was a strong call from the stakeholder group for some kind of permanent, multi- stakeholder constituency to keep the policy dialogue going. Participants made clear their 32 Evaluation Framework, p.11. 31 Report No. 55328 frustration with the fact that the outcomes and recommendations of many previous reports and consultations seem to be instantly forgotten once the donor-funded project has been completed. Even work that has high-level government support can be stalled or shelved with changes in political leadership. A policy or program may have the backing of a development partner or a particular administration, and then a change of decision-makers cause those priorities to shift. An example is the Sierra Leone pilot SESA, which provided useful recommendations, but saw mining reform set aside for around two years when a new government was elected. The proposal put forward by WAMSSA stakeholders is worthy of brief discussion. Figure 2.1 presents an example of an approach to building long-term environmental and social constituencies through the establishment of an implementation framework for the proposed World Bank $300 million West Africa Mineral Governance Program (WAMGP). During consultation workshops, stakeholders called for the constituency mechanism established during WAMSSA to be expanded and adapted to become part of an advisory and social accountability role within the management of the WAMGP. This would be the purpose of the Regional Multi- stakeholder Steering Committee placed in the top right hand corner of Figure 2.1. Figure 2.1: Example of a Long-Term Constituency Proposal: The West Africa Mineral Governance Program Implementation Framework 32 Report No. 55328 This is one of the few examples from the six case studies of a carefully thought through attempt to build long-term constituency engagement linked to the task of environmental mainstreaming, which was also supported by a wide array of stakeholders. Other pilots did tackle this issue, but with limited success. For example, the Malawi Mineral Sector Review, and the incorporated Rapid SESA, managed to strengthen constituencies through the consultations and stakeholder workshop conducted relevant to specific mining sites. According to the evaluation, the Rapid SESA workshop created a more level playing field across actors, and encouraged some weaker and more vulnerable communities and NGOs to claim larger stakes in the development of the mining sector, generally, and in specific mining operations. However, the strengthening of constituencies was considered to be temporary and had already tapered off at the time of the evaluation. Other pilots had relatively little success in strengthening broad-based, long-term constituencies. In the Hubei road transport planning case, for example, consultations only involved government agencies. Recommendations from the SEA team relating to the establishment of a standing committee on environmental management of road networks were not met with enthusiasm by the responsible authority (the Hubei Provincial Communication Department)33. Finally, one outstanding and consistent conclusion from the cross-case analysis is that consultation and constituency-building requires considerable time and effort if it is to lead to changes in the way policies are developed. Concerns were often expressed that "one-off" consultation exercises, where consultants run "single-day-one-room" workshops, may not be the most effective approach for dealing with local people. In the three mining pilots, it was suggested that consultation in mining communities that are remote from cities, and with a significant proportion of illiterate people, may require more preparation, longer "face-to-face" time and less intimidating surroundings. The most frustrating example of poorly designed consultation strategy comes from the Dhaka metropolitan development planning case, where the evaluators found that a number of people who participated in SEA meetings could not remember ever having attended. 2.2.3 Improving social accountability Social accountability is defined in the Evaluation Framework as "bottom-up", or demand-side accountability34. Demanding social accountability mechanisms is a task for environmental constituencies. Reinforcing social accountability is a key mechanism for improving environmental governance, and ensuring that policy SEA can have an influence beyond a discrete policy intervention. According to World Bank (2005), specific social accountability mechanisms are required in order to ensure that commitments made through policy design are implemented and last over 33 The impact of institutional and cultural constraints on policy SEA outcomes will be examined in Section 2.4. 34 Evaluation Framework (p.37). 33 Report No. 55328 time. The Evaluation Framework and Ahmed and Sanchez-Triana (2008) make it clear that social accountability can be reinforced by the following methods: - strengthening underlying legislation and implementation practices on information disclosure, public participation and access to justice; - establishing institutions that create more transparency and supporting scrutiny of policy and implementation; - institutionalizing participatory elements in the implementation of policies or management of natural resources; and - strengthening long-term constituencies and policy advocacy networks. World Bank (2005) makes it clear that the mere balancing of stakeholder interests is not enough to guarantee improved social accountability. In order to ensure that commitments made through policy design are implemented and last over time, specific social accountability mechanisms are required. Evaluators were asked to address improvements in social accountability by posing the following questions: - is there evidence of new or improved legislation on access to information, public participation or justice on environmental matters? - have institutional mechanisms for the implementation/enforcement of legislation on access rights been strengthened? - have mechanisms been put in place for stakeholder participation or involvement in strategic decision making, particularly weak and vulnerable stakeholders? - is there evidence of enhanced transparency and media scrutiny of policy decision making? Given that even the longest pilot was undertaken over a period of just less than two years, it is difficult to claim that the processes had a direct and permanent impact on social accountability. However, it is possible to consider the role of policy SEA as a catalyst of an institutional setting that makes policymakers more accountable for their decisions. Some of the countries in which the pilots took place have not always been amenable to public pleas for greater social accountability. For example, the evaluation of the Hubei Road Network Plan SEA points out that decision-making in China is fundamentally centralized and highly political. According to the evaluation, "all plans prepared depend on political instructions ... and the leaders of various government departments would determine every key aspect of the plan. 34 Report No. 55328 The ultimate principle is that the leaders determine everything and this creates an unfavorable atmosphere for independent thinking, stakeholder consultations and impartial assessments"35. Other policy SEA pilot countries exhibit different problems that could inhibit attempts to improve conditions of social accountability. Some African countries, especially those recovering from conflict, were described by interviewed participants as being "low-trust" societies. It can be very difficult to build social accountability mechanisms in such countries, although on the positive side, there is sometimes considerable public demand for greater accountability and excitement when it actually takes place. Two examples from the pilots show small but significant steps forward in overcoming cynicism in the move towards improved social accountability. In Malawi, against a background of deep mistrust, the efforts to collect and share information on key environmental and social concerns in the rapid SESA had a positive influence in terms of advancing the accountability agenda of civil society organizations working in the mining sector. Stakeholders also welcomed the recommendation to investigate the possibility for Malawi to join the Extractive Industry Transparency Initiative, which was seen as an important way of enhancing accountability. In the WAMSSA case, stakeholders from Liberia and Sierra Leone appreciated the policy SEA process because it had the potential to "take decisions away from mining companies and governments". It is a matter of fact that large mining companies often end up working directly, and in secret, with governments in their attempts to negotiate contracts that would allow favorable access to mineral deposits. While powerful stakeholders are within their rights to negotiate under their own terms, public commitments to social accountability mechanisms such as multi-stakeholder processes can make it more embarrassing for mining companies, and possibly governments, to back out and resort to bilateral negotiation. The literature surrounding social accountability often focuses on the need to build or strengthen institutional mechanisms for ensuring that policy decisions are made in a more transparent fashion. As was the case with constituency-building, such mechanisms need to be strong enough to ensure that there is long-term engagement with the idea of mainstreaming environmental concerns into policy development. Figure 2.1 presented a sophisticated proposal for an accountability framework associated with the upcoming West Africa Mineral Governance Program. This kind of accountability mechanism shows promise, because it would be closely associated with a program management system that is internal to the state36. As the Evaluation Framework argues, institutionalization is important as a way of overcoming one-time participation exercises which can perpetuate the idea that participation is a punctuated process. 35 Dusik and Jian (2010), p.19. 36 The Evaluation Framework argues that social accountability initiatives tend to be most effective if they are combined with accountability mechanisms "internal" to the state, i.e. they are institutionalized and systematically implemented by a civil society, state, or "hybrid" institution (p.37). 35 Report No. 55328 While the proposed West Africa Mineral Governance Program accountability framework is encouraging, there are other more simple steps that can be taken to begin the process of improving social accountability. For example, much was made in the evaluation of the Dhaka metropolitan development planning pilot of the fact that the final SEA report was not disseminated to stakeholders. In failing to provide feedback to the participants in the consultation process, the SEA missed an opportunity to strengthen learning, accountability and environmental constituencies, and might have contributed to a sense of frustration among participants that their input was not taken seriously. A direct quote from a civil society representative interviewed during the Dhaka pilot evaluation amplifies this point: "[a]fter [the SEA], they should involve all the parties [...]; lets make it an issue to government [...] and let them know that this is our common analysis [but] because of the fact that we were not involved in the afterward activities of this SEA, we dont own it anymore, this is the bad side. We were involved, we were very eager and we were very optimistic, but my involvement was not taken into consideration [...] so that I dont believe [the interviewees organisation] is anymore strong part or strong participant or strong owner of that report. We could not pursue it because we dont have a copy of it [...]; we thought that this particular report will give us a tool for our movement" Somewhat surprisingly, given the amount of money, time, and energy poured into SEA, this problem seems to be quite common. SEA proponents often talk about the importance of consultation and constituency-building, but continue to treat participation exercises as discrete, one-off events. A cynic would suggest that all the proponent wants out of consultation is to prove that it has been undertaken, and to show as much in a final SEA report. Clearly, this kind of approach to participation is counterproductive if the idea is to improve social accountability in the long term. Policy SEA is also likely to indirectly influence social accountability. In the SESA pilot in Sierra Leone, the evaluator discovered that the SEA process had influenced the Justice for the Poor (J4P) initiative. This J4P program is examining practical interventions at the mining community level for promoting social accountability, such as improving knowledge about interactions between mining companies and local communities; and, strengthening institutional arrangements for structuring and governing relationships between mining companies and communities. According to the director of the program, "SESA was incredibly useful in providing sound arguments about the importance of developing further research and practical interventions to strengthen the accountability of the mining industry at the local level". In conclusion, some of the pilots exhibited tentative moves towards greater social accountability, but it is too early for the required institutional mechanisms to be put in place. 2.2.4 Supporting social learning Social learning, the fourth of the key outcomes of policy SEA, relates to the broad processes of changing perceptions, values and priorities in society. More precisely, policy SEA attempts to 36 Report No. 55328 facilitate learning processes among key policymaking actors and stakeholders, either through incremental or technical learning (so-called single loop learning) or through more transformative and conceptual learning (so-called double loop learning) (see also Ahmed and Sanchez-Triana, 2008). It is inherently difficult to measure the type and extent of social learning through a given intervention because of the slow nature of learning (which usually takes place over a period of several years). As a result, and as we shall see below, of the four outcomes of policy SEA, social learning has been the most complex one to demonstrate. Evaluators were asked to address the following questions of the pilots: 1. Who has learned? Is it primarily government officials and policy makers, or a broader set of societal actors? 2. What has been learned? Is it mainly technical learning, or have more fundamental problems and strategies been re-conceptualized? 3. Has the policy SEA pilot initiated or strengthened mechanisms for learning through: * inter-sector or multi-sector coordination procedures? * dialogues on policy reform that includes environmental and social perspectives and involves multiple stakeholders? * compensating potential losers of policy changes? * monitoring and evaluation creating feedback for policy and planning fine-tuning? * linking policy making with research communities? The pilot cases provided some limited answers to these questions. In the Hubei road transport planning pilot, all those interviewed during the evaluation agreed that data sharing with regard to baseline analyses was the most useful aspect of this SEA pilot, and that learning was facilitated through this sharing. Part of the contextual background to this case is that institutional control of decision-making in China makes access to data very difficult. Data is often treated as "privately" owned by government agencies, and SEA teams are required to purchase it from the relevant agency. This privatization of data was considered by the Hubei pilot evaluators to be an issue that could significantly constrain social learning in China. Consequently, the relatively open sharing of baseline data in the Hubei case was considered to be unusual, and led to technical learning on the part of participating institutional stakeholders. While institutional analysis was considered to be controversial in the Hubei pilot37, three respondents found it to be a useful part of SEA. Some stakeholders who participated in workshops indicated that they used aspects of the institutional analysis in their daily work, especially the overview of relevant laws and obligations for environmental management in road 37 See Section 2.5.4 for more explanation. 37 Report No. 55328 planning. A similar situation was evident in the Dhaka metropolitan development planning pilot, where the evaluation suggests that the policy SEA has had an indirect influence on the urban development process. It appears to have contributed to raising some limited awareness within the Capital Development Authority of the need for environmental assessment in order to take a more holistic approach to planning and urban development. Two of the African cases highlighted the role that policy SEA can play in enhancing social learning that is already underway. For example in the evaluation of the Malawi policy SEA, interviews with government officials indicated that there was an increased understanding of: (i) the need for improved coordination between ministries in order to manage mining sector risks and opportunities; (ii) the fact that civil society organizations cannot be ignored, but need to be brought into the development process; and, (iii) the need for mechanisms for sharing of benefits from mining with local communities. The evaluators make it clear that this is evidence that a learning process has taken place, although it is difficult to distinguish the role played by the Rapid SESA. Interviews with stakeholders during a validation workshop in Sierra Leone provided evidence that WAMSSA had promoted new ways of thinking about the development of high-level policy. For example, institutional stakeholders from Guinea were confident that WAMSSA will provide a methodological approach for dealing with environmental and social issues in that country, and beyond the minerals sector. This brief summary of the role that the pilots have played in activating some form of social learning has shown that it is a difficult concept to operationalise, partly because it is broad and abstract. What is needed is a more tangible concept of what learning means in the context of policy making, and how it can be measured. This is elaborated in the following section. Table 2.1 summarizes the outcomes of the policy SEA pilots on raised attention to environmental and social priorities, strengthened constituencies and improved social accountability. The issue of social learning is redefined in the next section (2.2.5). 38 Report No. 55328 Table 2.1 Summary of Policy SEA Outcomes (excluding social learning) Pilot Raised attention to environmental Strengthened constituencies Improved social accountability priorities Sierra Leone Environmental and social priorities Initiated a multi-stakeholder dialogue on the SESA has influenced the Justice for the Poor Strategic informed preparation of a loan to support environmental and social dimensions of (J4P) initiative in Sierra Leone. J4P´s Environmental mining reform. Priorities were selected by mining sector reform. However, program has acknowledged SESA´s important and Social stakeholders in provincial workshops involvement of local mining communities contribution to its approach, which will foster Assessment informed by the results of case studies and and customary authorities in the dialogue public debate on issues of accountability. interviews. National priorities were drawn was limited. from the provincial priorities, and validated by stakeholders in a national workshop. Hubei road Produced an overall holistic picture of the No substantial impact on constituencies, No substantial impact on social accountability. transport possible environmental impacts of planned although the relatively open sharing of planning transport projects. This outcome increased baseline data in the Hubei case was the awareness of senior managers at the considered to be unusual, and led to Hubei Provincial Communication technical and social learning on the part of Department (HPCD) about macro-level participating institutional stakeholders. environmental implications of the proposed development of road transport. West Africa Contributed to improve dialogue over SEA process appears to have "opened up" Stakeholders proposed a sophisticated ongoing Mineral Sector environmental and social issues, including examination of the institutional mechanisms "multi-stakeholder framework" that would Strategic quite elaborate techniques for involving used to deal with regional planning and become a "home" for the policy dialogue Assessment local, national and regional stakeholders in harmonization. begun during WAMSSA consultations. It the ranking of priorities. would include a series of multi-stakeholder Strengthening of civil society organizations bodies formed at the regional, national and Built support around a regional approach working in the mining sector by promoting for addressing environmental and social local level to ensure transparent stakeholder discussion on a regional agenda for mining participation and social accountability for priorities in the context of mining reform. reform. mining development decisions. 39 Report No. 55328 Pilot Raised attention to environmental Strengthened constituencies Improved social accountability priorities Dhaka Identification of environmental priorities The limited length of consultation initiatives SEA recommendations regarding institutional metropolitan was based on a combined ranking of the provided little time for individual reflection reform and improved accountability do not development SEA teams analytical assessment and and mutual understanding to develop. appear to have been taken forward by the planning selected stakeholders ratings of Capital Development Authority, or any other By not providing feedback to participants, environmental concerns. However, these national actor. the SEA process missed an opportunity to were not used to guide subsequent empower constituencies by providing them consultations and have not been addressed with a tool to demand accountability. in the DAPs. Vulnerability and health aspects were poorly considered. Kenya Forests Nation-wide stakeholder workshops By bringing in local and arguably less Stakeholder workshops and open discussions Act SEA facilitated ranking of environmental and powerful/influential stakeholders in the brought up accountability issues as well as social issues and priorities, and reinforced SEA-process (such as NGOs, CBOs, local encouraged development of practices which the need to adequately address these community representatives) a more level may improve social accountability.With the priorities. playing field was created for the discussions formulation of the Forest Policy Action Matrix and prioritization of actions. (in which government ministries and agencies National consensus and validation by the commit themselves to a set of actions), the formulation of the nation-wide Forest Marginal contribution to strengthening local SEA provided stakeholders with a tool to hold Policy Action Matrix. constituencies through Community Forest government and other stakeholders to account. Associations. Malawi Rapid Environmental and social priorities were The stakeholder workshop encouraged Against a background of deep mistrust the SESA discussed by stakeholders during a some weaker stakeholders, notably from efforts to collect and share information on key stakeholder workshop. However, time civil society, to claim larger stakes in the environmental and social concerns in the rapid restrictions constrained the ability to fully mining sector reform process and in specific SESA were small but highly relevant for examine priorities as part of the rapid mining operations. strengthening social accountability. SESA. 40 Report No. 55328 2.2.5 Policy learning Social learning involves broad societal and collective processes of reframing and developing new understandings, as well as engaging in dialogue and reflection. The cross analysis of the pilot evaluations suggest that social learning in the context of policy SEA is better framed as "policy learning". Policy learning involves reflection and rethinking about policy making and problems, goals and strategies by those actors who are engaged as stakeholders in a policy process. The mechanism of policy learning can be understood as a cumulative process involving at least three stages: a) knowledge acquisition, b) knowledge interpretation, and c) knowledge institutionalization (Huber, 1991). A tangible way of conceptualizing policy learning in relation to SEA is to discuss its influence on policy capacities, policy horizons, and decision regimes. Changes in these underlying conditions of policy processes may be considered as concrete manifestations of policy learning taking place. Reflection and rethinking, for example, will expand policy capacities. Incorporating new ideas in the framing of policy problems will broaden policy horizons, and the evidence of this happening can be seen in concrete changes in specific decision regimes.38 Affecting these underlying conditions of policy processes will in the end enable long term changes in actual policy decisions. Carden (2009) states: "The crucial point about these three categories of influence is that they go well beyond changing particular policies. The most meaningful and lasting influence is less about specific policy change than about building capacity to produce and apply knowledge for better development results. This kind of influence can take years, or even decades, to take effect or become apparent. But it is no less important for that". In this report it is argued that the main process behind this influence is the learning mechanism. In other words, the policy learning process, involving knowledge acquisition, interpretation and institutionalization cumulatively helps to broaden policy horizons, enhance policy capacities and affect decision regimes. Based on this conceptualization, Table 2.2 tentatively applies, ex post, these categories to the pilots. Examples of expanded policy capacity from the pilots include fostering interaction across organizations and considering policy tradeoffs. Broadening policy horizons was evident in the pilots through the framing of policy problems in innovative ways (for example, WAMSSAs regional approach); creating opportunities for dialogue through public participation processes; and the acknowledgment of policy ideas, values and perspectives from multiple stakeholders by establishing a process in which SEA priorities and recommendations were selected and validated by all stakeholders. Affecting decision regimes 38 The typology of expanded policy capacities, broadened policy horizons and affected decision regimes is based on a five year study (2001-2005) undertaken by the International Development Research Centre (IDRC), an inquiry into how IDRCs support for research influences public policy in developing countries. The results of this study have affected how IDRC research projects are designed and evaluated. See Carden (2009). 41 Report No. 55328 through changing incentives and modifying decision rules affecting behavior was more a potential than an actual impact of the pilots given the short time span between the conclusion of the pilots and their evaluation. However, significant potential was identified for the WAMSSA and Malawi pilots, moderate potential for the Hubei and Sierra Leone pilots, and moderate actual impacts were already identified for the Kenya pilot. Table 2.2 presents a snapshot view of the influence that each of the pilots may have had on these three categories. 42 Report No. 55328 Table 2.2 Summary of the Influence of the Policy SEA Pilots on Policy Capacities, Policy Horizons and Decision Regimes Pilots Expansion of policy capacities Broadening of policy horizons Affecting decision regimes Sierra Leone SESA had a significant impact on the design Discussions on key environmental and social May affect decision regimes on access to Strategic of the proposed World Bank Mining issues in the context of preparing the mining land and water for mining activities, Environmental Technical Assistance Project (MTAP), which reform incorporated multiple perspectives of environmental management and benefits and Social aims at facilitating the sustainable growth of mining and environmental sector authorities, distribution of mining activities through Assessment the sector. The SESA has also provided donors, and civil society stakeholders at implementation of the MTAP. important data and information to the World provincial and national levels. Banks J4P initiative, aimed at strengthening community-level accountability. Hubei road The SEA helped to strengthen environmental Although controversial, the institutional The HPCD management now pays more transport management at the HPCD which has analysis provided suggestions for inter and attention to environmental issues during planning established new criteria to examine intra institutional coordination which may the design stage of each road project. environmental performance of its various influence HPCD organization over time. The SEA also indirectly contributed to a departments. HPCD now also requires new circular, issued by the HPCD Data sharing with regard to baseline analyses developers of various expressway projects to management, which encourages the was the most useful aspect of this SEA pilot, pay more attention to environmental issues. enforcement of environmental protection and learning was facilitated through this The pilot SEA stimulated more detailed requirements during expressway sharing. monitoring of the overall development of the constructions. road network West Africa The added value of a multi-stakeholder WAMSSA clarified the link between regional West African governments accepted the Mineral Sector consultative framework at the local, national harmonization/coordination and, enhancing WAMSSA proposal for a multi- Strategic and regional levels has been established. governance by empowering national and local stakeholder framework which would Assessment stakeholders. become the World Banks West Africa Stakeholders discussed and validated policy Mineral Governance Program recommendations to promote regional Stakeholders became committed to the idea of (WAMGP) accountability framework. harmonization and transborder management of a regional cluster-based approach to mining key environmental and socioeconomic issues policy in the three Mano River Union associated with mining in West Africa. countries. 43 Report No. 55328 Pilots Expansion of policy capacities Broadening of policy horizons Affecting decision regimes Dhaka The Capital Development Authority (RAJUK) The World Bank Country Office and RAJUK SEA process highlighted that RAJUK metropolitan did not consider the SEA recommendations now recognise the need for capacity had a long way to go before it could development relevant. The Policy Note prepared for policy development within RAJUK through continued fulfil its land use planning planning makers has yet not been approved by the technical assistance. No technical assistance responsibilities and may thus have Government of Bangladesh. has however been offered to RAJUK to date. helped to narrow the focus of the proposed World Bank intervention. Kenya Forests The SEA offered stakeholders an opportunity The SEA contributed to increased Informed implementation of new Forest Act SEA to better understand the possibilities and understanding of the need for stakeholder Act, and gave impetus to finalization of innovations in the new Forest Act, especially involvement in planning and implementation of the new national forest policy. the opportunities for rural communities to actions identified by key government ministries Facilitated interpretation and awareness take charge of new forest user rights, and and agencies addressing forestry issues. raising on the content of the new Forest invest in enhanced forest management. Awareness raising of the need for inter- Act ("devolution of user rights, sectoral/ministerial collaboration and investments, forest management for implementation of the new Forest Act via sustainable development" etc.) implementation and follow-up of the Forest Supported long-term strengthening of Policy Action Matrix. Kenyas ability and capacity to manage and monitor forests sustainably. Malawi Rapid No substantial impact on policy capacities Increased understanding of: (i) the need for There were no tangible changes in laws SESA improved coordination between ministries in or policies at the time of the evaluation. order to manage mining sector risks and However, the prospect for the rapid opportunities; (ii) the fact that civil society SESA and the broader Mineral Sector organizations cannot be ignored, but need to be Review to have an influence on brought into the development process; and, (iii) subsequent policy developments is the need for benefit sharing from mining to substantial. local communities. 44 Report No. 55328 2.3 Enabling and Constraining Factors for Achieving Policy SEA Outcomes 2.3.1 Introduction to the issue of context The analysis presented in the previous section indicates that policy SEA outcomes varied substantially across the countries. Examining why policy SEA appears to have succeeded in some circumstances and not in others requires an analysis of the context within which each pilot took place and how the pilot adapted to that context. The World Bank literature that helped to establish the concept of policy SEA stresses the importance of understanding contextual factors as the "drivers" that either enable or constrain the ability of policy SEA to influence outcomes. This is also true for other SEA approaches. This argument is supported by recent reviews of other attempts to mainstream environmental thinking into development policy. For example, Dalal-Clayton and Bass (2009) have undertaken an international survey of the use of mainstreaming tools in developing countries. Mid-way through their work, however, they realized that the "main lesson from the country survey work was that respondents were more exercised on issues of context ­ the mainstream drivers of change, the constraints to influencing them, and the associated political and institutional challenges ­ than the technical pros and cons of individual tools"39. In another recent case study of environmental mainstreaming, Brown and Tomerini (2009) argue that effective environmental mainstreaming within a developing country has to involve understanding of both structure and process of policy and plan making within the country. The rest of this section focuses on discussing the contextual factors that either enable or constrain achievement of policy SEA outcomes. The cross-case analysis suggests that there are at least six contextual factors that are worthy of discussion. These are a mix of historical, political, economic, social, cultural and institutional determinants. 2.3.2 Ownership All of the pilot evaluations comment on the importance of ownership of the SEA process in some fashion (see table 2.3). Ownership needs to be addressed in the relationship between the donor/multilateral and the partner countries on the one hand, and internally in partner countries within governments and key constituencies on the other. It also needs to be addressed internally within the donor/multilateral agency that promotes policy SEA. As pointed out by the evaluators, lack of ownership has had a negative impact on the effectiveness of some of the pilot SEAs in terms of their influence on the policy process. In addition, national ownership of the policy SEA process is important in the light of agreements under the Paris Declaration on Aid Effectiveness, where partner countries commit to "exercise leadership in developing and implementing their national development strategies" (§14) and donors to "respect partner country leadership and help strengthen their capacity to exercise it" 39 Dalal-Clayton and Bass (2009), p.10. 45 Report No. 55328 (§15). It is also important in relation to the commitment of donors to "increase alignment with partner countries priorities, systems and procedures" (§3). Turning first to the partner governments, the evaluations indicate a continuum of interest in the policy SEA processes from the partner governments, ranging from polite acceptance at one end, through to thinly veiled hostility at the other. Unfortunately in none of the pilot cases was there evidence of strong local ownership, with the possible exception of WAMSSA where ownership of the policy dialogue opened up by WAMSSA was found in civil society organizations. This leads to the question as to what the prerequisites might be for good local ownership, and how can they be met? In the Dhaka metropolitan development planning case, local ownership was clearly missing. This led the evaluators to suggest that there are three main preconditions before a country can be considered to be "ready" to accept the responsibilities of running effective policy SEA. These are: sufficient capacity and training to understand the concept of SEA; incentives to consider the results and recommendations of SEA; and, sufficient capacity to allow for adequate process integration of the SEA in policy and sector reform. This is setting a high bar for some of the less robust partner countries, although it does provide donors and multilaterals with direction for targeting capacity building assistance and determining whether policy SEA would be the most effective way to achieve environmental mainstreaming objectives. Sector ownership is a critical condition for policy SEA effectiveness. In the pilots, for example, the Sierra Leone SESA was steered by an inter-sectoral committee led by the environment agency, NACEF. Ownership of SESA by mining authorities was further weakened because the decision to house the SEA in NACEF came from the Presidents office. WAMSSA, on the other hand, was steered by a Committee made up of sector national authorities and sector representatives of regional integration organizations. This greatly facilitated the support provided by mining authorities in West Africa to the WAMSSA process and recommendations. For example, in a meeting held in Ouagadougou40, the WAMSSA multi-stakeholder process was adopted as the social accountability mechanism for the West Africa Mineral Governance program to support mining reform in West Africa. Another example of the importance of identifying a suitable "owner" of policy SEA processes is illustrated by lessons from the Dhaka metropolitan development planning case. Here, the evaluators claimed that the unwillingness of the Capital Development Authority (RAJUK) to fully cooperate with the SEA team was a contributing factor in the reorientation of the SEA process away from its initial impact-centered approach, to a greater focus on planning institutions. The evaluation goes on to state that the failure by the World Bank to seek a new local counterpart agency at this stage was a key weakness of the overall policy SEA process. It is important to determine up front in the SEA process, that the policy proponent ­ who should be 40 December 3, 2009. 46 Report No. 55328 the owner of the SEA process ­ has the capacity and commitment to integrate the SEA process and recommendations with the policy formulation process and to take responsibility for uptake and implementation of the recommendations. Since the policy SEA approach has only recently been conceptualized, the Bank needs to take a careful approach in balancing its interest in promoting policy SEA with wider alignment objectives. The Bank is at a difficult stage where it wants to advocate for the concept, but not alienate partners by pushing too hard. The fact that benefits of policy SEA are not immediately obvious further merits a cautious approach, in order to let partner countries gain experience in the application of the new concept over a considerable period of time (for a further discussion, see Section 4). Finally, issues of ownership also exist within the World Bank itself. In the pilots, this was addressed by linking policy SEA with proposed Bank interventions. This linkage has proved to be a crucial determinant of successful environmental mainstreaming in the medium term, but requires that concerned staff are familiar with the expected benefits of policy SEA and are prepared to take the recommendations emerging from policy SEA processes into account. 2.3.3 Windows of opportunity The idea of windows of opportunity is fundamental to the policy SEA process. They provide entry points for effective policy interventions. They are, however, not easy to predict, and they can also close unexpectedly. A good example from the pilot studies is the Sierra Leone SESA, where at the time that the SESA was undertaken, there was extraordinary global demand for minerals and strong interest from foreign investors. Emerging from a long period of impoverished internal conflict, the Sierra Leone government of the day acknowledged this exceptional opportunity and was apparently enthusiastic about mineral sector reform. However, this window did not remain open for long, as a new government was elected soon after the completion of the SESA, and it placed agricultural investment at a higher priority than mining. In addition, this change of government coincided with the sharp global economic downturn that began in 2008. At least the Sierra Leone SESA was originally designed with a window of opportunity in mind. According to the evaluators of the Hubei road transport planning pilot, the policy SEA team was not directed to determine decision windows through which the Hubei Road Network plan could be influenced. As a consequence, this did not take place. The Dhaka metropolitan development planning case exhibited a different problem. The evaluation argues that the counterpart agency was not the most appropriate local leader for the policy SEA process because it had a narrow and inappropriate mandate. In this case, windows of opportunity were significantly less likely to open. In conclusion, correctly identifying what might be an appropriate window for influencing a policy formation process through SEA is clearly an important enabling factor. Predicting when future windows of opportunities might occur is a difficult task. One option, presented by the 47 Report No. 55328 evaluators of the Dhaka case, is to think of policy SEA as a staged process. When a window of opportunity is first recognized, undertaking a preliminary institutional analysis to generate an overview of the prevailing institutional circumstances is suggested. This initial work could identify a partner who has the capacity to take ownership of the SEA process and its recommendations. It could also check if the objectives of policy SEA can be achieved through the identified window of opportunity. 2.3.4 Political economy and power elites For the most part, the literature considers strong public institutions as enabling rather than constraining the achievement of policy SEA outcomes. On the whole, this is a reasonable conclusion, especially when institutional strengthening means building environmental constituencies that can foster social accountability and policy learning. However, it needs to be borne in mind that public institutions can sometimes be constraining, in particular when they exist to protect power elites and provide cover for rent-seeking. The pilot studies indicate that using policy SEA to mainstream environmental concerns in development policy is fundamentally a task of changing attitudes and cultures within organisations and professional disciplines. A result of these endeavors will be structural changes in power relationships inside governments. In conservative government organizations, these kinds of radical reforms will be fought against with intensity. The pilots provide some examples of how organisational culture in public institutions can be a constraint to the achievement of policy SEA outcomes. In the Hubei road transport planning case, policy SEA ran up against the legal processes prescribed for Plan EIA in Chinese law. The evaluators describe these processes as being "very rigid" and with corresponding institutional arrangements that do not necessarily support the flexibility and inclusiveness sought by policy SEA approaches. In addition, the SEA team prepared an institutional analysis and action plan for strengthening the management of social and environmental issues in provincial road planning. The evaluators state that these proposals were presented to stakeholders at a workshop, but that debate was constrained by resistance from the Hubei Provincial Communication Department. The following quote from the Hubei pilot evaluation further describes this situation: "The final proposals prepared by the SEA team regarding institutional strengthening were appreciated by three important stakeholder groups but they were never fully accepted by the HPCD leaders. On the contrary, the institutional proposals became one of the key reasons for HPCDs hesitation to formally disseminate the SEA report"41. Ahmed and Sanchez-Triana (2008) discuss the related problem of dealing with power elites. They point to the tenacious manner in which elites can hold on to the status quo, and how difficult this can make institutional change. In the WAMSSA pilot, the SEA team undertook extensive consultation and built up a strong case for regional harmonization of minerals policy in 41 Dusik and Jian (2010), 48 Report No. 55328 Liberia, Guinea, and Sierra Leone. The SEA team concluded that the majority of stakeholders supported the concept of regional harmonization. However, as the evaluator points out, the minority of stakeholders who do not support the idea may well be more powerful42. Elite interest groups would not see a move to regionalism as being to their advantage. A move towards cluster development and regional harmonization would tend to lead to a more transparent system of governance that would threaten existing privileges to make discretionary decisions. In the Dhaka metropolitan development planning case, SEA influence was disadvantaged by the informal power exercised by the elite in relation to the responsibilities of the Capital Development Authority. The authority has strong links with private sector development companies, which hampers its accountability and its incentives to pay attention to advice concerning institutional reform43. One of the most interesting examples of a challenge to elite power is the multi-stakeholder framework proposed in the WAMSSA pilot, and outlined in Figure 2.1. If this framework is implemented by the West Africa Mineral Governance Program (WAMGP), it will establish a long-term constituency building process that is outside of existing national and regional institutions, and has the potential to outlast changes in governments. If combined with long-term program loans, it could be all the more influential. In conclusion, changing organisational cultures and navigating the currents of political economy in the context of sector reform is a major challenge that requires sensitivity, long- term engagement, and a great deal of political skill. It is an undertaking that will tax the abilities of policy SEA teams. Moreover, it requires building inclusive policy dialogue that indirectly threatens the opaqueness of policy making regimes prevalent in many countries. These are neither skills nor capabilities that are usually included in SEA teams. 2.3.5 The importance of non-formal institutions Much attention was paid in the pilot SEAs to the role of formal institutions, such as laws and regulations; organizations such as government ministries or agencies; and non-government and civil society organizations. Government departments were the policy SEA counterparts, and with some notable exceptions, consultation processes tended to call on government officers and representatives of known civil society organizations and the private sector. This focus on formal organizations was understandable, given the Banks remit to work directly with governments, and because this has been the natural tendency of SEA activity in the past. However, some of the evaluations, particularly of the three African pilots, indicated that informal organizations and institutions were important influences on policy development, implementation, and reform. For example the evaluation of the Sierra Leone pilot suggested that the SESAs emphasis on formal institutions had left a "somewhat unbalanced view of what really occurs in everyday life 42 Annandale (2010). 43 Axelsson A., et al. (2009) 49 Report No. 55328 at the local level"44. The evaluation argued that Sierra Leones pre-colonial political administration was dominated by a patrimonialistic system controlled by "paramount chiefs". Chiefdoms continued in parallel with colonial systems of government, and are still a powerful influence on the daily politics of all of the African countries that were part of the pilot program. Moreover, conservatism also prevails in the non-formal local governance system of chiefdoms. For example, public consultation is not free and open. The Chiefs have considerable say over who participates in consultation exercises. Clearly this would substantially affect the ability of policy SEA to encourage constituency-building, and improve social accountability. While the African pilots did make mention of this informal system of social organization, they tended not to fully engage with it. The evaluators of the Malawi Rapid SESA stated that there was no focus on, or analysis of, informal institutions and the role played by traditional leaders and traditional systems of belief. No system of policy reform can succeed without taking account of the power and influence of informal institutions. 2.3.6 Capacity Low capacity for environmental policy integration in developing countries is most definitely a constraining factor in achieving policy SEA outcomes. It is a consistent problem, and one that is constantly stressed by the international cooperation community. Commitments are made in the Paris Declaration on Aid Effectiveness to strengthen partner countries capacity to exercise leadership and build their national development strategies and systems. For policy SEA, capacity building is also required for civil society organizations and the media. An issue that is not often addressed, however, is capacity building needs within SEA consulting teams, and within donors agencies. While a number of the pilot projects exhibited extraordinary dedication on the part of consulting teams working in very difficult circumstances, the analysis thus far has shown that some SEA teams lacked the appropriate skills with which to understand the contexts within which they were working. For example in the Dhaka metropolitan planning pilot, the evaluators pointed out that the SEA team did not recognize the 30% to 40% of Dhakas population that live in slums and informal settlements as important stakeholders because of their limited political influence. As a result they were not properly included in the consultation process. In addition, as previously noted, the SEA teams responsible for the Sierra Leone SESA and Malawi Rapid SESA did not fully account for the influence of the informal power of chiefs. It is recognized that these problems are sometimes caused by tight timelines, lack of sufficient budget, and Terms of Reference that were not well crafted. At the same time, however, it does seem that more thought should be given to the make-up of consulting teams, and to their preparation prior to undertaking policy SEA projects. 44 Albarracin-Jordan (2009). 50 Report No. 55328 SEA consulting has tended to be dominated by people and firms who built their experience in the project-EIA arena. These are often environmental professionals, engineers, and technical specialists. While policy SEA requires some of the skills used in project EIA, it also needs to draw on new disciplines to be able to make sense of the complex world of policy-making, political economy, and institutional analysis. Examples of disciplines that could possibly be drawn on to a greater extent include political economy, anthropology, sociology, and political science. It may also be that donors should turn to policy analysis consulting firms for overall policy SEA project management. 2.3.7 Sustaining continuous processes of environmental and social mainstreaming Probably the strongest and most consistent refrain from participants in the pilot projects was for policy SEA processes to be continuous in some sense. The "one-off" nature of most SEA activity was considered to constrain the achievement of policy SEA goals and process outcomes. The following quotes from a selection of policy SEA pilot evaluations appear to strongly support this argument: "Ideally the engagement of SEA-specialists should not be confined to writing an assessment report but also cover communication and dialogue of the findings and recommendations of the assessment and preferably also different types of follow up activities". (Malawi Rapid SESA evaluation). "Many actors (SEA team as well as public sector and civil society representatives) in the SEA process expressed the view that a single study or a few workshops are not enough to address the issues at stake. Rather, they felt that a long term approach to addressing environmental concerns in urban development in Dhaka is required" (Dhaka Metropolitan Development Plan SEA evaluation). Clearly, there is strong evidence on this point. Some possible responses are relatively straightforward. For example, the engagement of SEA specialists should not be confined to writing an assessment report, but should also cover communication and dialogue of the findings and recommendations. In some cases SEA teams may also be retained to lead follow-up activities such as the outcomes of stakeholder action plans. This is an area in which the donor community can be more proactive. As discussed in World Bank (2005, p.61), the Bank can help countries transition from one administration to the next through conveying consistent messages, either through policy notes, or long-term programmatic loans. More substantial responses to the problem of lack of continuity depend on the policy SEA process being driven by the partner country government, and owned by a suitable national actor. The policy proponent needs to be committed to taking responsibility for the recommendations emanating from the SEA process. The kind of multi-stakeholder framework proposed by WAMSSA for the West Africa Mineral Governance Program is entirely positive, but requires high-level commitment from a number of national governments and regional organizations if it is to become functional. 51 Report No. 55328 The WAMSSA proposal is an example of a deliberative institution which may well assist in building semi-permanent environmental constituencies that could then lead to improved social accountability and learning. A similar recent example from a developed country is Australias Resource Assessment Commission (RAC), which was established in the early 1990s by the Federal government as a response to intense conflicts over resource development projects such as pulp mills. The RAC was seen by the Australian government as depoliticizing information and scientific data by filtering a wide range of inputs at the evaluative stage, whilst attempting to reconcile hitherto irreconcilable interest groups from the development and environment sides of the land-use debate. The RAC was supported by an act of Parliament, and undertook high-level resource assessments on the request of the Prime Minister. Public inquiries were staffed by appointed Commissioners who were often impartial judges, and focused on issues such as forests and timber; fisheries, coastal zone management; and mining. While it is recognized that the level of sophistication attained by the RAC would not be appropriate in most developing countries, the idea of a politically mandated, open public inquiry process taking place over a long period of time, could be possible in some developing countries. Table 2.3 summarizes the contextual factors that constrain or enable the achievement of policy SEA outcomes. 52 Report No. 55328 Table 2.3: Summary of Contextual Factors that Constrain or Enable Achievement of Policy SEA Outcomes Pilot Country ownership of Seizing windows of Political economy and power The role of non-formal Sustaining environmental the policy SEA process opportunity elites institutions and social mainstreaming Sierra Leone Limited as the process The SESA was linked to Political economy factors had The role of Chiefs in When the mining reform Strategic was led by the World the reform agenda a major role in delaying regulating access to and use process became dormant, the Environmental Bank. The change of because it informed the mining sector reform. of land was only partially J4P program and WAMSSA and Social government after preparation of a mining analyzed. This limited the carried forward the policy Assessment completion of the SESA loan. However, the effectiveness of SESA's dialogue on mining reform and aggravated this newly elected recommendations for social accountability initiated situation. administration left the addressing gaps on social by the SESA. mining reform dormant and environmental priority for around 2 years. issues. Hubei road Ownership was accepted Prefectural and While the pilot promoted The SEA provided transport by the Hubei Provincial municipal authorities better-than-usual stakeholder consolidated baseline analyses planning Communication should have been engagement, the highly and general recommendations Department (HPCD). involved to increase the hierarchical power structure which are now being used by effectiveness of the prevailing in China limited the the HPCD in the continuous SEA. effectiveness of the policy process of decision-making on components of the SEA. development of the road network. West Africa Strong ownership of the The Policy SEA Extensive consultations built Powerful rent-seeking The proposal of a multi- Mineral Sector policy dialogue process capitalized on a growing up a strong case for regional interests within stakeholder management Strategic by civil society recognition that poverty harmonization of minerals governments, combined framework was accepted by Assessment organizations and the alleviation in the West policy in Liberia, Guinea, and with "middle men", and West African governments. WAMSSA Steering Africa could best be Sierra Leone which has the non-formal customary This will establish a long-term Committee. attacked through potential to positively institutions (Chieftains) may constituency process that has regional approaches to influence the political threaten the long-term the potential to outlast changes mining reform. economy prevailing in the success of the proposed in governments. region. reforms. 53 Report No. 55328 Pilot Country ownership of Seizing windows of Political economy and power The role on non-formal Sustaining environmental the policy SEA process opportunity elites institutions and social mainstreaming Dhaka Initially very weak. The By attempting to use RAJUK is not accountable to The SEA didnt consider the The SEA report was not metropolitan Capital Development spatial planning as a higher administrative levels historically ingrained disseminated to stakeholders development Authority (RAJUK) window for wide- because it generates much of patron-client behaviour that nor was any other kind of planning staff apparently ranging policy reform, its own funds through land affects the system of checks feedback provided. This considered the SEA the SEA had less development, and for the same and balances within the caused a sense of frustration entirely as a World Bank opportunity to address reason has very little interest administration. among stakeholders. project. some of the underlying in reform or change. causes of urban degradation in Dhaka. Kenya Forests Limited as the process The SEA offered an The SEA addressed Non-formal institutions only The impacts of the SEA were Act SEA was led by the World opportunity to reinforce underlying political economy play a minor role, if any, in mainly temporary and not Bank. Abolition of the momentum in the issues such as political the forest sector. sustained despite the Interim Forest Reform practical interpretation pressures on weaker forest implementation of the Forest Secretariat further and implementation of stakeholders, which drive Policy Action Matrix. reduced ownership. the new Forest Act (e.g. use/misuse of Kenyas forest formulation of the resources. Policy Action Matrix) Malawi Rapid Limited. The exercise The rapid SESA was A full policy SEA was SEA was led by World Bank timely and fed into the recommended, and is planned staff. process of developing a for implementation. new mining sector policy and legislation as well as into the process of developing a new growth and poverty reduction strategy. 54 Report No. 55328 2.4 Refining the Conceptual Model of Policy SEA 2.4.1 Outcomes The analysis of policy SEA outcomes presented above suggests that the "process outcomes" box that is part of Figure 2.1 should be refined as indicated in Box 2.1. Policy SEA outcomes are now defined as raised attention to environmental priorities; strengthened constituencies; improved social accountability and policy learning. Social learning is thus removed as an outcome and replaced by the concept of policy learning. Through these outcomes, policy SEA influences policy processes by expanding policy capacities, broadening policy horizons, and modifying decision regimes. The long-term expected impact is better policy making that integrates environmental and social issues in policy formulation and implementation. Refined Outcomes of Policy SEA i) Raised attention to environmental priorities ii) Strengthened constituencies iii) Improved social accountability iv) Policy learning Influence on policy processes expanded policy capacities broadened policy horizons modified decision regimes Box 2.1 Outcomes and Influence of Policy SEA 55 Report No. 55328 2.4.2 Contextual influencing factors The analysis of contextual factors presented in section 2.3 suggests that the "contextual influencing factors" box that is part of Figure 2.1 should be refined as indicated in Box 2.2. Box 2.2: Contextual influencing factors * Country ownership of the policy SEA process * Windows of opportunity * Power elites and political economy * Consideration of non-formal institutions * Sustaining continuous process In this refinement, the most important constraints emanating from the evaluation of the pilot cases are: the way in which ownership of policy SEA is achieved in a given country; the ability of policy SEA promoters to seize windows of opportunity; resistance to change presented by conservative organizational culture and other power elites; the role of non-formal institutions; and the various influences that work against sustaining continuous environmental and social mainstreaming process. It also needs to be recognized that policy SEA is but one discrete intervention in the chain of environmental and social mainstreaming. 2.4.3 Refined conceptual model of policy SEA Taking into account these revisions, Figure 2.2 presents a new policy SEA model, with refined process outcomes and contextual influencing factors. The right hand side of the figure summarizes the discussion and findings of the evaluation presented in this section regarding process outcomes of policy SEA contextual influencing factors, and the potential influence of policy SEA.. The left hand side of the figure is developed in the next section of this report. Its aim is to provide guidance for undertaking SEA in sector reform. 56 Report No. 55328 Figure 2.2: Refined Conceptual Model of Policy SEA: Process Steps, Process Outcomes and Objective OBJECTIVE INTEGRATION OF KEY ENVIRONMENTAL AND SOCIAL ISSUES IN SECTOR AND Preparatory policy SEA work POLICY REFORM TO IMPROVE THE * Defining the purpose and scale of SEA EFFECTIVENESS OF POLICY MAKING FOR SUSTAINABLE DEVELOPMENT. * Agency ownership * Analysis of windows of opportunity Influence of policy SEA - Expanded policy capacities Four steps of policy SEA (time bounded - Broadened policy horizons intervention) - Modified decision regimes 1. Situation and stakeholder analysis 2. Environmental priority setting 3. Institutional, capacity and political Process outcomes of policy SEA economy assessment i) Raised attention to environmental 4. Formulation of policy, legal, institutional priorities and regulatory adjustments ii) Strengthened constituencies iii) Improved social accountability iv) Policy learning Environmental and social mainstreaming after completion of policy SEA * Dissemination and communication Contextual influencing factors: * Monitoring and evaluation * Country ownership of the policy SEA * Other complementary interventions process * Windows of opportunity * Power elites and political economy * Consideration of non-formal institutions * Sustaining continuous process * Other factors 57 Report No. 55328 2.4.3 Conclusions This section has presented a comparison of the six evaluated pilots. It shows that the hoped-for outcomes of identified environmental priorities, strengthened constituencies, improved social accountability, and policy learning varied across the cases. This variety is largely due to contextual factors such as: country ownership; windows of opportunity; power elites and political economy; consideration of non-formal institutions; and, sustaining continuous processes. It is not possible to make substantial claims about impact attribution. To say that policy SEA has exerted an influence in a particular case is only to say that it is one of several influences. As Carden (2009) aptly puts it: "the thread between cause and effect in a policy decision invariably gets tangled in the coalitions and contradictions of policy processes in any country. This is transparently true of democratic governments, and less transparently, but no less true, of dictatorships and oligarchies". This report suggests the use of the revised model of policy SEA when policy makers and practitioners contemplate undertaking policy SEA activities. The aim of the next section of this report is to provide specific step-by-step guidance to practitioners, by focusing on "preparatory policy SEA work", "steps of policy SEA", and "continuous environmental and social mainstreaming after completion of policy SEA", as outlined in the left-hand box of Figure 2.2. 58 Report No. 55328 Section 3: Guidance for Applying SEA in Development Policy and Sector Reform 3.1 Introduction Meeting the goals prescribed for policy SEA requires the implementation of a methodology of some kind. Usually, this would entail the following of a series of procedural steps. It is important to point out, however, that policy SEA proposes to influence policy and promote institutional change, and that these intentions cannot necessarily be reduced to a consistent formula. Section 2 has already made it clear that the success or failure of policy SEA is context- dependent. This means that whatever procedural steps or tools are used to reach the goals of the policy SEA process outcomes, these must be designed to work with a highly specific set of institutional contexts, entry points and drivers. Nevertheless, it is possible to illustrate the kinds of basic steps that can be followed to incorporate environmental considerations into policy and sector reform. This was an important issue for the pilot program and the evaluation because there was a need to compare results across the cases, and replicate them in the future. Operational experience accumulated during the pilot program led to the following suggested procedure for policy SEA, consisting of three stages: (i) preparatory work for policy SEA; (ii) implementation of policy SEA; and, (iii) environmental and social mainstreaming beyond the completion of policy SEA. 3.2 Preparatory Policy SEA Work Before implementation of SEA at the policy level can begin, there is a need to understand the context within which SEA will take place. Various questions need to be asked to ensure that the goals and intentions of the specific policy SEA process are understood by the major stakeholders. The most important questions relate to: issues, initiatives or questions to be addressed; the scale of the process; assessing windows of opportunity; and agency ownership. 3.2.1 Defining the purpose and scale of policy SEA There may be a number of reasons why policy SEA might be applied in a particular context, and stakeholders may well have different perceptions as to the purpose of the exercise. It is important for the success of the initiative that different views as to the purpose of SEA be clear. Other important questions that require clarification before policy SEA is implemented include: * what is the particular policy that is being addressed? * are there any interventions being planned that the SEA process should influence? * why are policy SEA approaches being applied? 59 Report No. 55328 * what is the SEA exercise expected to deliver, and does the answer to this question depend on the perspectives of specific interest groups? In this preparatory phase of SEA, it is also important for the scale of the exercise to be clear. There is no required template for policy SEA. Inputs of time and resources can vary significantly in different contexts. For example, sometimes a rapid policy SEA could be used, such as in the Malawi policy SEA pilot (Box 3.1). This might require the professional time of one expert for 4 or 5 weeks. It is important to note, however, that the main outcomes and benefits of policy SEA are unlikely to be achieved through a rapid policy SEA. Therefore, this option should only be applied only when the alternative is "no action". As in the case of the Malawi pilot, the general rule is that a full-fledged policy SEA should follow a rapid policy SEA. The point to stress here is that stakeholders should all be aware of the scale and expected outcomes that have been chosen in a given circumstance. Box 3.1: Rapid Policy SEA Objective: The objective of a rapid policy SEA is to include environmental and social issues in the reform agenda and engage key stakeholders in the earliest stages of policy dialogue. Process: Analytically, the focus of a rapid policy SEA is on assessing existing laws, regulations, codes of practice, and institutions for environmental and social management of the sector to be reformed. The stakeholder analysis and consultations are tailored to engage key constituencies in the policy dialogue about the need for sector reform. Expected outcome: There are two expected outcomes. First is the broadening of policy dialogue on sector reform by raising the awareness of stakeholders about key environmental and social issues affecting the sector.Second is the development of a road map of environmental and social actions to be undertaken during formulation of sector reform, including a full policy SEA. Source: Adapted from World Bank 2010. 3.2.2 Agency ownership As was analyzed in section 2.3.2, identifying a suitable owner for the policy SEA process is vital. A reluctant lead agency can set back the general development of the approach. Accordingly, a preliminary institutional analysis would be warranted to identify a lead agency that has the capacity and incentive to take ownership of the SEA process and recommendations. Securing ownership at an early stage is partly dependent upon the identified partner/policy proponent having: sufficient capacity and training to understand the concept of SEA and the specifics of policy SEA; incentives to consider the results and recommendations of the policy SEA; and, sufficient capacity to allow for adequate integration of the SEA in the policy process. In general, for SEA to be effective, sector and planning agencies should be in charge of undertaking SEA instead of environmental agencies.. The latter should not be operationally active, but should 60 Report No. 55328 participate through inter-ministerial consultation or steering groups governing the SEA. Box 3.2 presents a case study of a weak sector agency, as faced by the forestry sector in Liberia, which suggests that establishing a multi-sector approach could be the appropriate response to this situation. Box 3.2: The Need for Multi-Sector Ownership of SEA when the Counterpart Sector Agency is not Strong In post-conflict Liberia natural resources are viewed as an engine for kick-starting the economic development of the country. The forest sector ­ traditionally dominated by commercial forestry ­ has played an important economic role in Liberia. Due to the connection between forestry and armed conflict, the United Nations Security Council decided in 2003 to impose three years of sanctions on Liberian timber exports. The Liberian government used the sanction period to reform forestry practices, and pave the way for restoring the rule of law. Liberia embarked on forest reform which involved development of a new forest policy, revising the forest legislation and putting in place a chain of custody system governing all commercial log and wood export. Reforms in the sector recognized that economic and environmental values of forests extend beyond commercial forestry. A new National Forest Reform Law was passed in 2006 and the next year a Forest Strategy was developed. In 2007, the World Bank began engagement in Liberia. As part of this engagement, the World Bank financed the implementation of a policy SEA of the forest sector, primarily to inform the development of community rights to forest lands, and secondly to assess capacity and institutional adjustments that may be needed in the implementation of the Liberian National Forestry Reform Law of 2006. The Forest Development Authority (FDA) was the main counterpart for the SEA team. However, key social and environmental issues associated with community rights to forest lands and the forest strategy often required institutional and capacity measures in other sectors such as mining, agriculture and planning. While the SEA task-force included staff of the FDA and the Environmental Protection Agency (EPA), to enhance buy-in and capacity development, the core members of the SEA task- force were occasionally supplemented by representatives from the Office of the Chairman, House Committee on Agriculture and Forestry, Ministry of Planning and Economic Affairs, Ministry of Land, Mines and Energy, Ministry of Internal Affairs and the National Investment Commission. The engagement of additional ministries strengthened information sharing and awareness raising, but the impact on buy-in for jointly identified actions to address the institutional and capacity needs was marginal from these ministries. This experience pointed to the need to create a multisectoral lead or counterpart for policy SEA when the sector agency has limited influence on other relevant ministries, and issues cut across sector lines. Source: Personal communication (Diji Chandrasekharan Behr) As the policy SEA process unfolds, new roles and responsibilities will often present themselves and a strong leader is required to ensure that the process is kept on track. Care needs to be taken to ensure that weak sector agencies are not subject to regulatory capture and the rent seeking behaviour that can accompany conflicts of interest. Methods for ensuring that such problems do not eventuate include the establishment of multi-stakeholder frameworks as outlined in the WAMSSA pilot. With well-designed institutional support, policy SEA can help to reconcile different interests, and can deal with regulatory capture by enhancing transparency and social accountability. This is because stakeholders choose policy SEA priorities (see section 3.3.3 and section 3.3.4), and transparency is enhanced because legal, regulatory and capacity gaps 61 Report No. 55328 assessment are validated openly.Equally important is that policy SEA is able to address issues that are seen as relevant by the policy proponent. Initial and ongoing awareness raising and training about the outputs and benefits of policy SEA may be required if the partner does not have previous experience in addressing environmental and social concerns at strategic levels of decision making. Unless this can be secured, contribution to policy SEA outcomes and influence on policy processes can only realistically be expected to be limited. Within development cooperation agencies, it is important that there is adequate understanding of the results and recommendations that can be expected from the policy SEA at an early stage, so that these can be more widely taken onboard and integrated in relevant agency interventions. There is therefore a need for good internal communication, capacity development, and coordination, to ensure that policy SEA is applied effectively. 3.2.3 Assessing windows of opportunity Another consideration at this early stage is assessing windows of opportunity. As discussed in section 2.3.3, windows of opportunity can be difficult to predict. They can also open and close unexpectedly and at short notice. However, there are some indicators that could be taken into account that are favourable for applying policy SEA in sector reform, for example: * a change of government to one that is more open to deliberation, and to the incorporation of environmental issues in development policy; * a governments development strategy prioritizes specific sectors for development. Usually this would lead to policy and sector reform of these same sectors. Where these sectors have potentially significant impacts on the environment and natural resources, such as is the case with mining and forestry, policy SEA would be needed to enhance the sustainability of the reform; * the government has decided that a specific sector should be reformed in response to economic and/or political pressures; * economic conditions change radically to favour improved environmental outcomes. Examples might include steeply rising oil prices that drive the introduction of renewable energy technologies, or economic stimulus packages that favour green jobs; * changing market conditions for certain commodities drive regulatory reforms; * civil conflicts are resolved and a new desire for development presents itself; and * civil society organisations are given more freedom to participate and advocate. 62 Report No. 55328 3.3 Implementing SEA in Policy and Sector Reform 3.3.1 Introduction As indicated in Figure 2.2, implementation of policy SEA generally includes most of the following steps: (i) situation and stakeholder analysis; (ii) environmental priority setting; (iii) institutional, capacity and political economy analysis; and (iv) formulation of policy, legal, institutional, regulatory and capacity recommendations. Figure 3.1 outlines these steps, and makes it clear that multi-stakeholder dialogue is a common touchstone throughout the process. Moreover, it shows that policy SEA is linked to a discrete policy intervention by influencing its formulation and implementation. Ideally, but not necessarily, the policy SEA process should be integrated into the policy process. Discrete policy intervention Outcomes Raised attention to environmental Step 1 Step 3 and social priorities Situation assessment and Institutional, capacity, and political stakeholder analysis economy assessment Strengthened Analytical environmental constituencies Work Step 2 Step 4 Improved social accountability Environmental Recommended policy, and social institutional, legal, Policy learning Priorities regulatory and capacity adjustments Public Multi-Stakeholder Dialogue Participation Figure 3.1: Policy-SEA Process Steps (adapted from World Bank, 2010). These steps are not necessarily followed in a linear fashion. For example, sometimes a policy SEA process will begin with intensive stakeholder dialogue as a method for undertaking situation, stakeholder, and political economy analysis. In other cases, environmental priority setting will be undertaken in parallel with components of the institutional analysis. For example, in the WAMSSA national workshops, stakeholders combined selection of priorities with a discussion of enabling and blocking factors for addressing these priorities. The point being made 63 Report No. 55328 is that there is no entirely "correct" way in which policy SEA should proceed. What is important is that the four steps outlined above are undertaken in some fashion. In what remains of Section 3.3, each step is briefly outlined by presenting its objectives, process to be followed, and expected outcomes. Details of specific methods that can be applied at each step are contained in Annex 3. 3.3.2 Situation Assessment and Stakeholder Analysis Situation Assessment Objectives The objective of situation assessment is to account for the key environmental and social issues prevailing in a region, or associated with a sector, so as to inform deliberations on priorities by stakeholders. Most policy SEA views situation assessment as a process that provides an overview of the sector or geographic area that is the subject of the SEA, highlighting key environmental and social issues45. Process to be Followed In policy SEA, situation assessment does not need to be as detailed as a baseline study. It should be based mainly on information from secondary sources and expert opinion. The depth of the assessment would depend of the issues identified and the expected information requirements of the audience46. For example, in WAMSSA the situation analysis (Box 3.2) focused on the notion of three potential mining-infrastructure clusters. Because the clusters affected at least two countries, the situation assessment attempted to make a detailed case for the efficiency of a multi-country approach for mining development. However, key economic and financial information for making a strong case was neither available nor accessible. Some approaches to policy-SEA, however, view situation assessment as a second phase, where it takes the role of detailed "baseline" assessment of the kind that it is an integral part of traditional project-EIA, with the exception that it focuses much more intensely on understanding fundamental political economy issues. This alternative view of situation assessment was followed in the Kenya Forests Act SEA. The important point here is that the purpose of situation assessment is to sharpen the strategic focus of the assessment by identifying key environmental and social issues associated with the sector to be reformed or with development policies under formulation in a region. 45 Hence the use of the term "assessment" rather than the more careful and detailed "analysis". 46 More detailed information on methods used in situation assessment can be found in Annex 3 64 Report No. 55328 Examples of Situation Assessment from the Pilots Box 3.3 presents examples of situation assessment taken from the two West African policy SEA pilots. The Sierra Leone Minerals Sector Mining in Sierra Leone consists of large-scale, small-scale, and artisanal mining. The situation assessment contained in the SESA included an overview of the socioeconomic and environmental situation in the country, which provided the general context for the mining sector. The analysis then focused on the mining sub-sectors through case studies at the three different levels of scale. These assisted in identifying the most important environmental and social issues. The list of key issues informed the presentations and discussions held at workshops in four regions of the country. The case-study approach used in the situation assessment showed that a distinct set of issues was linked to each sub-sector. The West Africa Mineral Sector Strategic Assessment The West Africa Mineral Governance Project (WAMGP) proposes to assist countries in the Mano River Union (Guinea, Liberia, Sierra Leone and Cote DIvoire) to use their large untapped mineral wealth for promoting sustainable development. A "mining-infrastructure cluster" approach was used by WAMSSA to assess "the common, overlapping environmental, social, economic, and sector governance issues". The following methodology was used to identify the clusters: 1. Construction of a base map (first layer), using information on geological provinces, operating mines, major mineral occurrences, and potential new mining projects. 2. Mapping of geopolitical, infrastructure, environmental, and community features (layer 2). 3. Identification of proposed road, rail, and electrical projects under investigation or implementation by the African Union and other multilateral agencies (layer 3). 4. Cross-examination of layers 1-3 helped identify potential clusters where new projects would create sustainable opportunities in the region. 5. Economic analysis focused on the differential costs of developing regional facilities versus taking a project-by-project based infrastructure development approach. The scope and depth of this analysis was constrained by insufficient information available on planned projects. Source: Adapted from World Bank 2008a, 2009a, and 2010 Box 3.3: Examples of Tools used for Situation Assessment in the WAMSSA and Sierra Leone SESA Policy SEA Processes Expected Outcomes The expected outcome of the situation assessment is a clearer understanding of the key environmental and social issues affecting a region, or associated with a sector to be reformed. This will usually be presented in a report that will be discussed by the stakeholders when policy SEA priorities are selected. 65 Report No. 55328 Stakeholder Analysis47 Objectives A thorough understanding of the interests, concerns, and power-basis of stakeholders is a fundamental part of any SEA process, and is especially important in policy SEA. The purpose of the stakeholder analysis is to identify all key stakeholders that have an environmental or social stake in the sector to be reformed, and then engage them in a meaningful policy dialogue. It assists in identifying those vulnerable stakeholders whose voices are not usually heard, and provides information that helps the SEA team to involve them effectively in policy SEA. It is, therefore, critical to achieving the outcome of strengthened environmental constituencies. Process to be Followed Stakeholder analysis informs almost all stages of policy SEA. With information on stakeholders, their interests, and their capacity to support or oppose reform, the policy SEA team can better involve stakeholders in priority selection; in the assessment of gaps for effectively managing priorities; and, in validating policy SEA recommendations. Stakeholder analysis is also a major input into political economy analysis (discussed in section 3.3.5 below) because it provides an idea of the impact of reform on political and social forces; illuminates divergent viewpoints and the potential power struggles among groups and individuals; and helps identify potential strategies for negotiating with opposing stakeholders. Four major attributes are important for stakeholder analysis: the stakeholders position on the sector and on the reform issue; the level of influence (power) they hold; the level of interest they have with regard to key issues identified in the situation assessment; and the group/coalition to which they belong or can reasonably be associated with. These attributes are identified through various data collection methods, including interviews with country experts knowledgeable about stakeholders or with the actual stakeholders directly. More information on methods for stakeholder analysis is provided in Annex 3. For policy SEA, stakeholder analysis identifies the key social actors in the sector who should be engaged in SEA and in the selection of SEAs priorities. The historical, social, political, economic, and cultural factors that influence the web of relationships among stakeholders need to be carefully examined. This was clearly a requirement for all of the pilots, but particularly those undertaken in Sierra Leone, Dhaka and Malawi. Stakeholder analysis deepens the understanding of power relations, networks, and interests associated with the proposed policy or sector reform. 47 This material is partially adapted from the World Bank website dealing with stakeholder analysis as part of anti- corruption work. (http://www1.worldbank.org/publicsector/anticorrupt/PoliticalEconomy/stakeholderanalysis.htm). 66 Report No. 55328 Expected Outcomes The main expected outcome of stakeholder analysis is the mapping of stakeholder interests, an analysis of the obstacles to stakeholder representation and, a public participation plan for the policy SEA process. This plan should explicitly consider how vulnerable groups such as women, youth, local communities and the poor who have a stake in environmental issues will be engaged in the policy SEA. Ultimately, stakeholder analysis is a critical tool in clarifying the micro- political economy of a policy area and can help identify interested parties who should be incorporated in the decision-making process, in addition to understanding the basis for their inclusion. Examples of Stakeholder Analysis from the Pilots Two examples from the policy SEA pilots show the mapping of stakeholders. Figure 3.2 is taken from the stakeholder analysis contained in the Hubei road transport planning pilot. This matrix was produced from a set of worksheets provided by the World Bank and based on Rietbergen- McCracken and Narayan (1998)48. Degree of influence High influence low influence Box A Box B high importance Hubei Provincial Development and Hubei Forestry Bureau (HFB) Reform Committee (PDRC) Enshi Prefecture Women's Hubei Provincial Environmental Federation Protection Bureau (EPB) Road Transport Trade Association The Department of Land and of Hubei Province(HBRTTA) Resources of Hubei Province Highway and Transportaion (DLRH) Society of Hubei Province Degree of importance Hubei Bureau of Highway Hubei Chutian Expressway Co. Ltd Hubei Provincial Tourism Bureau Hubei Highway Industry (HTB) Development Co. Ltd Box C Box D Hubei Water Bureau (HWB) Hubei Environment Science Institute (HESI) HZAU GREEN ASSOCIATION Low importance Green Han River- Environment Protection Association of Xiangfan City, Hubei Province Figure 3.2: Mapping of Key Stakeholders (Source: World Bank 2009b) The second example, shown in Figure 3.3, is taken from the WAMSSA pilot, and shows the relative influence and interest that different stakeholder groups have over decision-making associated with regional mining sector reform. The vertical arrow measures the "effect of the 48 The worksheets are part of the World Bank Labor Toolkit, and are available at: http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/ENVIRONMENT/0,,contentMDK:21324896~menuPK:5 065940~pagePK:148956~piPK:216618~theSitePK:244381~isCURL:Y,00.html 67 Report No. 55328 reform", and the horizontal arrow measures the "influence over decisions" held by the different groups. Groups situated in the bottom right-hand quadrant would want to oppose reform, but have relatively little power to do so. Those groups situated in the lower left-hand quadrant would view reform more favourably, but are also not that powerful. Stakeholders sitting in the upper left hand quadrant have more influence, and also happen to be more powerful. The WAMSSA matrix was built up from the following series of questions asked of each group through interviews and expert observation: * Influence: the power a stakeholder has to facilitate or impede the design and implementation of mining sub regional and cluster-based policies and approaches. * Interest: the perceived level of interest that each stakeholder has in the cluster-based mineral development, along a continuum from commitment to status quo, to openness to change. * Impact: the degree to which the cluster-based mineral development will impact on each stakeholder. * Power: the level of coercive power that the stakeholder has to command compliance in the policy process. * Resources: the level of resources that stakeholders possess and are able to bring to bear in the policy process. * Legitimacy: the degree of legitimacy of each stakeholder,,s interest, i.e. the extent to which the stakeholder,,s claims are seen as appropriate by other stakeholders. 68 Report No. 55328 Figure 3.3: Stakeholder Interest and Influence over Decision-making (Source: World Bank 2009a) The two grids can help policy SEA teams determine appropriate responsive strategies (e.g. which stakeholders to target for negotiations and trade-offs, or which to buttress with resources and information, etc.). 3.3.3 Multi-stakeholder dialogue Objectives It is clear from the analysis contained in Section 2, and from the literature that makes a case for policy SEA, that multi-stakeholder dialogue is a prerequisite for effective policy SEA. As was indicated in Figure 3.1, the objective of maintaining a multi-stakeholder dialogue is involving stakeholders in selection of environmental and social priorities; enriching the gap assessment on systems to manage these priorities; and, validating the policy SEA recommendations to address these gaps. Consequently, it should take place throughout policy SEA implementation. Process to be Followed Multi-stakeholder dialogue is not a separate implementation "step", but rather is a necessary support for the four steps. In project-EIA, and to a certain extent in other SEA approaches, engagement tends to be restricted to discrete events and where the point is either to elicit 69 Report No. 55328 information or seek stakeholder approval for important decisions. As has already been made amply clear, dialogue in policy SEA ideally takes place on a regular basis and over a long period of time. Its purpose is to provide a mechanism for stakeholders, especially the vulnerable who are traditionally sidelined from policy decision making, to influence the policy process. This implies the need to establish some kind of institutional structure within which to house dialogue initiatives. Special thought and effort needs to be applied to the issue of how to involve unorganized stakeholders in policy dialogues. This was a problem for the WAMSSA and Sierra Leone SESA pilots, where it was admitted that artisanal miners were an important stakeholder group, but that they were not easily accessible, as they had no representative association. Policy SEA can only be genuinely effective if it can find a method for dealing with unorganized stakeholders. This activity will often take time, and it raises the question as to whether organizing of such interests needs to take place before SEA is initiated. Expected Outcomes The expected outcome of multi-stakeholder dialogue is a robust discussion on key environmental and social issues associated with the sector to be reformed. It opens the policy and reform process to the influence of stakeholders, and particularly to those vulnerable stakeholders who often bear the environmental and social brunt of the reform process. Without a strong multi- stakeholder dialogue, the preconditions for the SEA outcomes of improved social accountability and policy learning cannot be met. Examples of multi-stakeholder dialogue from the pilots Policy dialogue needs a focus. Proponents should not use participation/dialogue forums merely to talk, or stakeholders will rapidly lose commitment. Figure 3.4 present an example of how stakeholder dialogue was established in the WAMSSA pilot. 70 Report No. 55328 Figure 3.4: Interaction with Stakeholders during the WAMSSA Policy SEA The schematic shows how stakeholders had an input to situation analysis; stakeholder analysis; scenario analysis; and institutional analysis; through interviews, focus groups, surveys and workshops. Worthy of special note is the area below the dotted line in the diagram, which is the process envisaged for continuance of multi-stakeholder dialogue as part of the development of the Africa Mineral Governance Programme49. The proposal for this post-WAMSSA dialogue activity was presented in section 2.2.2 as a long-term, multi-stakeholder program implementation framework. Another important part of the multi-stakeholder dialogues established by policy SEA is informing and influencing decision makers. Early engagement of policy makers can stimulate ownership, assist in coordinating the timing of the study with regard to the relevant policy dialogue and process, and identify potential windows of opportunity in the policy process for sharing preliminary findings/information. Engaging policy makers early also provides initial 49 Section 2.4.2 indicates that the proposed World Bank intervention is now titled "West Africa Mineral Governance Programme" (WAMGP). 71 Report No. 55328 insight into areas of concern. In the pilots, SEA steering committees were used as the main mechanism to involve policy makers with varied degrees of success, as discussed in section 2. Lessons learned from the policy SEA of the Kenya Forest Act indicate that effective approaches for engaging policy makers in policy SEA should include: Sharing of the draft concept note and terms of reference for the study. The concept note must clearly articulate how the SEA will contribute to the reform process. Request for meetings to discuss input and key issues such as: status of the policy dialogue; mechanisms and timing for including information into the policy dialogue process; other relevant activities (prior, ongoing, and upcoming) with which the SEA should coordinate; and the role and involvement of the key policy makers in the SEA process. Work with opportunities and/or around constraints within the sector. These could be related to or originate in the economic, social, environmental, political, legal, and/or political economy context of the sector to be reformed (see Box 3.4). In the case of Kenya, the SEA made a direct contribution to the work of the Forest Sector Reform Committee, which was established by the Government of Kenya under the direction of the Ministry of Environment and Natural Resources (MENR). This committee was made up of senior representatives from across government, representatives from the forest industry, nongovernmental organizations, conservationists, forest users, and development partners. It was chaired by the Permanent Secretary of the Ministry of Environment and Natural Resources (PS MENR) and was regarded as the main organ for driving the reform process. A Forest Reform Secretariat was established in the Forest Department to serve this committee and carry out tasks as requested by the committee. One of the first tasks of the secretariat was to develop a roadmap for implementation of the new Forests Act with a clear timeframe and outline for budget resource requirements. The SEA team was mandated by the PS MENR to work with the Forest Reform Secretariat. The Government of Kenya recognized that these processes were complementary and should seek to strengthen each other. The Ministry of Environment and Natural Resources and the Department of Forestry agreed that the SEA would be able to further strengthen the roadmap and would also help to ensure donor support to the reform process. Source: World Bank, 2009. [Environment Note No 1] Box 3.4: Framing the SEA Work in the Context of Forest Sector Reform Priorities In selecting methods for public participation, attention should be paid to power relationships that could suppress the voice of weak and vulnerable segments of society. Consultation with local 72 Report No. 55328 indigenous groups, for example, may require the use of the local language and local traditional systems for building community consensus. The Las Bambas case, discussed in Box 3.5 illustrates good practice of culture-sensitive approaches relevant to policy SEA approaches. Mining in the Andean region has a legacy of socio-environmental conflict. The Apurímac Department, where the Las Bambas project operates, is one of the poorest regions in Peru. The region was also one of the five most affected areas during the armed conflict generated by Sendero Luminoso (a Maoist guerrilla organization), between 1980 and 1992. Nine indigenous, Quichua- speaking communities are located within the direct area of influence of the Las Bambas copper- mining project. With the goal of improving its relationship with local communities and other stakeholders, the project developers (Xstrata) developed a regional dialogue around the project. The construction of dialogue was divided into three phases: (i) awareness raising and diagnosis; (ii) strengthening of capacities; and (iii) follow-up of dialogue processes and spaces. The first phase consisted of a series of workshops and interviews with the local communities, performed in Spanish and Quichua (the local language) to gather information about the cultural characteristics of the indigenous actors, as well as their perceptions of power relationships with other stakeholders. Similar workshops and interviews, yet adapted to the respective cultural context, were carried out with other stakeholder groups. The analysis showed that local communities employ internal constituency mechanisms to instill dialogue, mediated by local authorities, fictive kin, or high-status elders. Following these practices for building dialogue and consensus, a culture-sensitive approach to negotiating issues, including the identification of potential environmental and social impacts of the project, was implemented. Similar forums were established to discuss local development programs and a dispute resolution mechanism that allows individuals and communities to set formal complaints against the mining company. The second phase aimed at strengthening the capacity of negotiation, community organization, environmental issues, human rights, leadership, and social development opportunities. The expected outcome includes stronger local constituencies, able to demand, implement, and oversee sustainable development interventions. Source: ProDiálogo (2006); Rees and Vermijs (2008); and Albarracin-Jordan (2009) Box 3.5: Transforming Relationships for Intercultural Dialogue and Sustainable Development: Las Bambas Mining Project in Peru Finally, it is worth remembering that proposals for long-term policy dialogues are not always openly accepted by governments, especially those with cultures that do not encourage challenging of government authority. In cases such as these, policy dialogue needs to take place within government, by firstly extending the number of agencies that are included in consultations, and then by gradually encouraging the involvement of non-government stakeholders. 73 Report No. 55328 3.3.4 Environmental priority setting Objectives A useful early focus for policy dialogue is the environmental priority-setting stage of policy SEA. The purpose of this task is to invite stakeholders to react to the situation assessment; raise specific and relevant environmental concerns; and select the SEA priorities. Priority-setting opens up the policy process to the influence of stakeholders, because policy SEA priorities reflect their concerns and preferences. The policy SEA priorities represent a strong demand for specific environmental and social direction of sector reform from the stakeholders to the policy makers. Process to be Followed and Examples from the Pilots Priority-setting focuses dispersed environmental and social concerns and presents them as specific policy demands and requests for government intervention supported by constituencies and groups of interest. For this reason, special care is required to ensure that the voices of the vulnerable and weak in society are effectively heard in priority-setting. The seeds of social accountability from policy SEA are also sown in this step. For the same reason, priority-setting is critical to strengthen constituencies with environmental stakes in policy and sector reform. Specific methods for priority setting in policy SEA can be found in Annex 3. Box 3.6 presents an approach to the ranking of environmental priorities that was used in the Sierra Leone policy SEA pilot. The ranking methodology for selecting environmental and social priorities in the SESA of the mining sector in Sierra Leone involved horizontal and vertical classification of the issues. Nominal scales and preferred responses were used to establish a cross-comparison of issues. This method aimed at removing some of the potential survey biases and ensured that equal weight was given to the voice of vulnerable groups in the ranking procedure. Horizontal ranking used five dimensions for each of the issues that were considered. These included, (i) health, ecological and socioeconomic/cultural risk; (ii) number of affected people; (iii) political will; (iv) remediation cost; and (v) technological difficulties. Initially, stakeholders were asked to rank these dimensions in a low-medium-high scale. "Low" scored 3 points, "medium" received 2 points, and "high" received 1 point. The lowest scores corresponded to the potential priorities. In addition, a vertical ranking process involved the selection of five issues from a list of between 22 and 25 (depending on the region) that stakeholders thought were the most significant. Each time an issue was included in a person´s top-five list, it received one point. Potential priority issues, then, were those that received the highest scores. A cross-analysis of horizontal and vertical ranking was undertaken in order to identify the SESA priorities. Five cross-regional priorities were established: (i) land and crop compensation and village relocation; (ii) sanitation and water pollution; (iii) deforestation and soil degradation; (iv) child labor; and (v) post-closure reclamation. Nonetheless, there were issues that pertained, specifically, to each region. These regional priorities included: (i) Mine employment (southern region); (ii) provision of infrastructure (especially paved roads and electricity) (southern region); (iii) community development and participation (southern and western regions); and (iv) regulations to mitigate the negative impacts of blasting (eastern region). Source: Adapted from World Bank (2010). Box 3.6: Selection of Environmental and Social Priorities: Sierra Leone SESA Ranking Methodology 74 Report No. 55328 Expected Outcomes The expected outcomes from priority setting include a ranked list of environmental and social priorities associated with the sector to be reformed. They represent key issues that stakeholders consider are affecting their lives and need to be addressed by the reform. Another outcome of priority setting is strengthening or building constituencies around these key issues. 3.3.5 Institutional, capacity and political economy assessment Institutional and Capacity Assessment Objectives The purpose of this task is to assess the policy, institutional, legal, regulatory and capacity gaps so as to address environmental priorities determined in previous step of policy SEA implementation. Clearly, analyzing and contributing to strengthening institutions and governance is a key feature of policy SEA. Strong institutions have increasingly been recognized as critical contributors to sustainable development, particularly as they perform the three fundamental functions of assessing needs and problems; balancing interests; and implementing solutions50. Process to be Followed Institutional and capacity assessment consists of the following main stages: A first step is a thorough review of the formal legal and regulatory framework associated with the management of environmental and social priorities. This is followed by an assessment of why the relevant policies, laws and regulations have failed to address, or have only partially addressed, the priorities. Mechanisms considered in the assessment include (i) review of procedures for environmental and social assessment, especially focusing on monitoring and compliance mechanisms; (ii) capacity to enforce compliance with environmental and social regulations and avoid regulatory capture; (iii) assessment of preparedness of relevant ministries/departments/entities, including local governments, to identify and manage environmental and social risks, and to safeguard the interests of affected, vulnerable and marginalized groups; (iv) assessment of existing grievance handling systems for environmental damage and social disruption; (v) analysis of inter-institutional linkages; (vi) analysis of organizational capacity of disadvantaged and vulnerable stakeholders; and, (vii) assessment of the role of civil society groups/institutions, media, etc. to support, facilitate and monitor environmental/social safeguards. The assessments results are the identification of the policy, institutional, legal, regulatory and capacity gaps affecting the management of the environmental and social priorities. 50 World Bank, 2003. 75 Report No. 55328 The next step is to assess the effect of the proposed policy or sector reform on the identified gaps. Finally, an assessment of the potential reaction of stakeholders to this situation is carried out and the difficulties inherent in addressing these gaps complete the analysis. The assessment should be presented to the stakeholders and validated by them. Box 3.7 presents a summary example of institutional and capacity assessment identified in the Sierra Leone mining sector SESA. The failure of existing policies to effectively address environmental and social priorities in Sierra Leones mining sector was considered to have arisen from: mining legislation and regulations that lacked specificity, and left interpretation to be determined on a case-by-case basis; poorly defined responsibilities of various ministries and between central, provincial and local authorities; lack of monitoring of companies and specific mine sites; and, consistently weak implementation of laws and regulations that resulted in enforcement having to rely on voluntary initiatives and pressure from civil society. The SESA concluded that some of these shortcomings could be addressed by the proposed mining reform. However, it also identified that additional critical institutional and governance adjustments would be needed, outside of the mining sector. These adjustments revolve around land tenure issues and general cross-government concerns about lack of monitoring and enforcement. They include, for example: asymmetries in power among stakeholders (for example Chiefs) which are magnified due to lack of transparency and accountability; customary relationships which have evolved out of the needs of an agrarian society and are ill- equipped to address temporary and high-risk environmental activities such as mining; and the existence of powerful individuals such as middlemen and traders who could easily take advantage of open, nonexistent, or inconsistent negotiation frameworks. Source: Adapted from World Bank (2010) Box 3.7: Institutional and Capacity Assessment in the SESA of the Mining Sector in Sierra Leone Expected Outcomes The expected outcomes of this step are the identification of key policy, legal, regulatory and institutional (formal and non-formal) capacity gaps. While identification and assessment of gaps and constraints would usually be made by the SEA team, involving stakeholders in their analysis will not only refine the assessment, but also will expose stakeholders to the complexities, trade- offs and dilemmas of policy making, enhancing their capacity to influence policy constructively. Accordingly, another expected outcome of this step is enhancing stakeholders capacity for contributing to policy formulation and increasing their awareness of the challenges posed by the reform (World Bank, 2010). 76 Report No. 55328 Political Economy Analysis Objectives Critical for policy SEA is sound political economy analysis. The main objective of political economy analysis is to assess the political feasibility of the recommendations proposed by policy SEA. It provides information related to who benefits from maintaining the status quo, and who loses in the short-and-medium term as a consequence of adjustments recommended by the policy SEA. In doing so, it takes into account the patterns of incentives that lead political actors to support or resist change. Process to be Followed Common aspects of political economy analysis include the following: 1. stakeholder analysis; 2. analysis of the political context (focusing on factors that shape the major features of a political system, such as: the history of state formation; influence of colonialism; social structures; influence of conflict; and sources of revenue); 3. analysis of formal and informal institutions (focusing on the nature and extent of political competition; distribution of power; relationship between formal and informal institutions; extent of civil society involvement in politics; role of the media; and the significance of the rule of law); and 4. identification and management of risk (analysis of "winners" and "losers"; relative impacts of reforms on different stakeholder groups; possible triggers of tension and conflict; degree of resistance to change). In policy SEA, these aspects of political economy analysis should be focused on the gaps associated with the management of environmental and social priorities. This makes the analysis manageable and useful. Expected Outcomes and Examples from the Pilots The outcomes of political economy analysis can be particularly illuminating with respect to the constraints facing sector reform. In the Sierra Leone SESA, for example, two political economy issues were identified as critical for a successful tripartite relationship between the government, the industry and the mining communities to promote sustainable development driven by mining: the land tenure system and the secrecy of mining contracts. The fact that the Chiefs could grant access to land that was collectively owned created a major risk for weak stakeholders who were users but not owners of land. Land reclamation was also discouraged because access to land is facilitated by the state to holders of mining rights and Chiefs had little effective power to oppose this entitlement. The result was that many Chiefs found themselves in a more comfortable situation by accommodating to the system in exchange for short-term compensation. The SESA flagged these problems but fell short of suggesting solutions. In addition, this is a politically 77 Report No. 55328 sensitive issue in Sierra Leone. In this context, the evaluation of the Sierra Leone SESA pointed to the fact that the policy SEA had barely touched on the importance of the patrimonial, non- formal local governance system of paramount Chiefs. In a detailed piece of political economy analysis undertaken to inform the World Banks review of its Country Assistance Strategy in Sierra Leone, it is stated that while the Bank has, correctly, fostered decentralization, the reform process needs to be deepened and complemented by the reduction of executive autonomy, the strengthening of Parliament and the introduction of greater democracy into the institution of "chiefship". This confirms the overriding importance of this institutional and political economy issue for the development of Sierra Leone. It also confirms the limitations that sector reform and, moreover, policy SEA may have in tackling some key political economy constraints to sustainable and equitable development. However, it must be acknowledged that this is an area in which policy SEA could be significantly improved. 3.3.6 Policy SEA recommendations Objectives The objective of the last step in the implementation phase of policy SEA is to make policy, institutional, legal, regulatory and capacity building recommendations for overcoming the gaps, and the political economy constraints determined during the stage of institutional and capacity assessment. It has been made clear that the outcomes of policy SEA processes are hopefully meant to influence policy design. This means that recommendations need to be organised in a fashion that facilitates action and implementation. Process to be Followed and Examples from the Pilots Three of the pilot policy SEAs, the Kenya Forests Act SEA, the SESA for the Sierra Leone Mining Sector Reform and WAMSSA used a "policy action matrix" approach to present recommendations and encourage action. Table 3.1 presents a small snapshot taken from the Kenya Forests Act SEA policy action matrix. 78 Report No. 55328 Harmonization of Kenya Forest Management Legal Framework Policies/Actions Milestones Indicative list of Expected Status (including time- Stakeholders to be Outcomes based Involved milestones) The Kenya Forest Service should An internal KFS, private National forest pending establish an internal working group KFS working sector, NGOs, management to ensure that a program for group universities. standards in complying with international established by conformity with standards is introduced. This is June 2008. international important for improving standard. compliance and other initiatives (for example, carbon sequestration; avoidance of invasive species in dry lands; and link to other initiatives at provincial, regional, and international levels). Table 3.1: Snapshot from the Policy Action Matrix Produced in the Kenya Forests Act Policy SEA The Kenya policy action matrix contained the SEA findings and recommendations to support the implementation of the Kenya Forests Act. Priority areas were broken down into issues identified by stakeholders together with the necessary actions required to ensure that the issues could be addressed. Milestones, along with an indicative list of stakeholders to be involved in the action, were also identified. The use of a transparent consultative process to reach agreement on action points and milestones meant the policy actions listed in the matrix were identified and prioritized by a broad range of forest sector stakeholders. Recommendations of policy SEA should be shared with stakeholders and validated by them. Dialogue, at this stage, builds consensus as to what solutions are achievable, as well as effective and sustainable. Expected Outcomes51 The expected outcomes include validated recommendations and an action matrix that includes monitoring indicators to assess the progress of reform in the short, medium, and long terms. Validation of recommendations and use of the action matrix by the stakeholders further strengthens constituencies, because it enhances ownership and encourages participation of stakeholders in follow-up and monitoring. Ultimately, this increases the accountability of policy makers. 51 The text of this subsection was extracted from World Bank (2010), page 9. 79 Report No. 55328 3.4 Environmental and Social Mainstreaming Beyond Policy SEA The evaluation of the pilots has made it clear that for environmental and social mainstreaming to be achieved, interventions need to follow on from policy SEA activity to ensure that mainstreaming becomes a continuous process. To achieve this, to the extent possible there needs to be agreement up front in the SEA process about who is responsible for taking the SEA recommendations forward. At a minimum, effort needs to be applied to the dissemination and communication of SEA results, and monitoring and evaluation of outcomes. 3.4.1 Dissemination and communication of SEA results Objectives A number of the pilot evaluations showed that stakeholders can become frustrated with lack of feedback and follow-up from policy SEA activities. This is a fairly simple problem to deal with, but ignoring such concerns can lead to a considerable challenge to the legitimacy of policy SEA. The main objective of this activity is, therefore, to disseminate the results of SEA activities as widely as possible. Process to be Followed It is important to acknowledge that dissemination and communication of SEA results is not an area that SEA practitioners or government sponsors of SEA traditionally specialize in. The tendency has been for SEA to be supported only up until the completion of the SEA report, with little thought given to the possible benefits of communication and dissemination. A remedy is to ensure that Terms of Reference for policy SEA activities include follow-up. ToRs should require consulting teams to organise consultation exercises post final reporting, so that stakeholders can see how their views have been addressed. Communication of SEA results can be more difficult in some jurisdictions than others. For example, lack of media freedom and poor communications infrastructure can inhibit wide dissemination in some developing countries. These problems, and others such as lack of access to funds, mean that communication strategies will probably vary depending on the jurisdiction, the particular political economy context, and the interests and perspectives of stakeholder groups. A general model for developing a policy SEA communications strategy would consist of the following steps: 1. Identification of the overall objectives of the strategy. 2. Refinement of the objectives for each stakeholder group. 3. Development of the communication channels and budget. 4. Development of communication materials. 5. Implementation of the communication activities. 80 Report No. 55328 6. Monitoring and evaluating the impact of the communication strategy52. SEA practitioners who are not schooled in communication strategies tend to choose the form of communication materials and channels, without thinking about the ultimate purposes of communication, or of the specific needs of different stakeholder groups. In general, there tends to be an over-dominant focus on dissemination in document form at a cost of engagement with multiple stakeholders. The main disadvantage of the document form of dissemination is its limited audience. In order to reach other stakeholders, greater emphasis should be placed on the production of non-technical reports and non-documentary modes of dissemination. Expected outcomes Stakeholders are informed on the results of the SEA by using mechanisms appropriate for different audiences. Producing a SEA report and handed it to the development agency and country partner is only a part of this process. To the extent possible, results should be also disseminated and discussed by the media. 3.4.2 Monitoring and evaluation of policy SEA in environmental mainstreaming Objectives The objective of these activities is to monitor and evaluate, on the one hand, the contribution of policy SEA to enhancing policy making and, on the other hand, environmental and social mainstreaming beyond policy SEA. Process to be Followed and Examples from the Pilots Policy SEA informs and influences policy making which is a dynamic and messy process. Policy SEA recommendations are inputs to this process, which implies that not all them will be accepted and implemented. Some recommendations may take time to percolate into the policy making process, and others may fade away. Policy SEA recommendations are a means of achieving policy SEA outcomes and influence underlying conditions.. They would likely have to be adapted to the specific circumstances that frame policy and sector reform over time. Accordingly, policy SEA monitoring should focus mainly on policy SEA outcomes and environmental and social mainstreaming in sector reform. This was attempted with the policy action matrix of the Kenya Forests Act SEA which is discussed in Box 3.8. 52 Adapted from UNDP (2008). 81 Report No. 55328 Box 3.8: Kenya Forests Act SEA Policy Action Matrix The policy action matrix was designed to be a key guide and monitoring device for the implementation of the Forests Act. The SEA findings and recommendations were presented as a policy action matrix to support widespread implementation of the Kenya Forests Act. Endorsed by all the different groups of stakeholders (including Permanent Secretaries representing both the Ministry of Finance and the Ministry of Environment and Natural Resources), the matrix is an important tool for stakeholders to monitor progress on implementation and hold government accountable. According to the evaluation, several interviewees testified that the policy action matrix had provided them with an important lever in their advocacy work. For example, the Kenya Forestry Working Group has published two Policy Briefs assessing the implementation of the Forests Act through using indicators developed for the policy action matrix. The matrix is also accessible via the internet (www.policyactionmatrix.org). However, the dismantling of the Kenya Forest Sector Reform Secretariat and some other contextual factors limited a broader use and influence of the policy action matrix. Moreover, the expectation that the same wide group of stakeholders that was consulted during the SEA should be reconvened at appropriate intervals to review progress against this matrix has not been fulfilled. Source: Slunge et al, 2010 Ultimately, however, policy SEA contributes to improved policy making if it expands policy capacities, broadens policy horizons and affects policy regimes towards promoting more environmentally and socially friendly behaviour. It is suggested that evaluation should focus on how these underlying conditions of policy processes have changed over time. This requires finding appropriate indicators. It should also be borne in mind that these effects will be the result of many different causes. Some could be related to the SEA recommendations, others to the reform itself and there will be effects that originate in external factors. The attribution problem is of paramount importance for evaluating policy SEA. It follows that it would be misleading to evaluate the added value of policy SEA independent of other actions and circumstances affecting policy and sector reform. For example, in the future it would be misleading to attempt to separate the impacts on social accountability of EITI and WAMSSA in mining reform in West Africa. While there may be elements amenable to that distinction, attempting to make it with respect to social accountability outcomes is likely to be futile. The case study approach and framework developed for this evaluation (see section C of Annex 2) is a tested approach for evaluating policy SEA. It can also be adapted to evaluate environmental and social mainstreaming in sector reform. One would expect that this information would contribute to undertaking better policy SEA as a means of enhancing the quality of sector reform. It is suggested, therefore, that the evaluation framework for the pilot program should be revisited to allow for the inclusion of environmental and social mainstreaming. 82 Report No. 55328 Expected Outcomes The main expected output of the proposed monitoring and evaluation framework would be continuation of the multi-stakeholder dialogue set during the policy SEA. This dialogue will allow for reflection of what was or was not achieved by the policy SEA and sector reform with regard to addressing gaps in managing environmental and social priorities. 3.5 Conclusion Earlier it was mentioned that policy SEA is fundamentally focused on changing incentives, attitudes and cultures inside organisations and social groups, so as to foster increased environmental and social awareness. The result of such changes should ultimately allow for strengthened constituencies, more carefully identified environmental priorities, and improved social accountability and policy learning. This section of the report has focused on the methods that can be used in each stage of implementation of policy SEA. It has provided guidance for policy makers, donors and practitioners who might want to experiment with introducing policy SEA. Some words of caution are relevant at this point. Policy-making is far more fluid than the design and implementation of development projects. As a consequence, the accepted step-wise methodological approach applied in most project-EIA is not relevant to policies. While this reports attempts to provide some methodological guidance, practitioners should not be wedded to this. Earlier studies that attempted to derive "cookbooks" of tools for environmental mainstreaming have rapidly come to the realization that dealing with institutional and contextual challenges is generally considered by stakeholders to be far more important than choice of technical tools. In fact, in their review of the challenges associated with environmental mainstreaming, Dalal-Clayton and Bass (2009) claim that there are indications that an exclusive focus on tools is part of the problem ­ technical safeguards and conditionalities ,,pushed by environment interests on development interests ­ rather than strategies to link mutual interests. The final word on this issue is perhaps best left to the evaluators of the Hubei road transport planning pilot SEA who stated that: "Terms of Reference for such processes (i.e., policy SEA) should stipulate only basic requirements for analytical approach, leave the actual choice of specific methodology to those who undertake the SEA; and require SEA consultants/facilitators to duly consider stakeholders needs and preferences when choosing or developing the actual methodology used in the SEA"53. 53 Dusik and Jian (2010, p.8). 83 Report No. 55328 Section 4: Conclusions and Recommendations for Ways Forward 4.1 Introduction This report has drawn lessons from policy SEA related literature, the six policy SEA pilots, their evaluations, and finally the cross-analysis of the evaluations presented in section 2. This concluding section first presents the key findings, messages and recommendations from the pilot programme. In particular, it reviews the mains benefits and added value of carrying out policy SEA as emanating from the cross-analysis of the evaluations. Having made the case that further advancement of the concept appears warranted, the remainder of the section focuses on how a wider application of policy SEA could be promoted (section 4.3), and what particular issues should be considered for this purpose, by partner countries (section 4.4) and the development cooperation community (section 4.5) respectively. It then examines more closely the linkages with, and implications for, the World Banks proposed New Environment Strategy (NES) (section 4.6). Some concluding remarks are made in section 4.7. 4.2 Main Findings of the Evaluation As discussed in Section 1, SEA is a family of approaches with the common purpose being to mainstream environmental considerations in strategic decision making. These approaches are not in competition, so the argument in favour of an expanded use of policy SEA examined in this report does not in any way preclude the continued use of traditional (impact-centered) SEA approaches. There is, however, a need for more integrative use of analytical tools such as policy SEA to provide knowledge for environmental mainstreaming in sector reform. The lessons drawn from the pilots largely support this need for knowledge, and suggest that policy SEA can, under conducive conditions, contribute to improve formulation and implementation of sector reform. The different pilots contributed, in different ways and with differing extent, to raising attention to environmental and social priorities, strengthening of environmental constituencies and enriching policy learning. The evaluation also found that the pilots contributed to the expansion of policy capacities, the broadening of policy horizons, and the modification of decision regimes. By influencing these three underlying conditions of policy making, policy SEA can enable long-term changes in actual formulation and implementation of sector reform. Specific tools for use within policy SEA that assist in reaching these outcomes already exist, and were presented as guidance in Section 3. Taking account of environmental concerns in sector reform requires a different emphasis for SEA, and draws upon the use of specific tools grounded in economics, political science, sociology and adaptive decision making. 84 Report No. 55328 It is important to note that experiences with environmental mainstreaming in the policy SEA pilot programme have reached conclusions similar to those held by other researchers, both in the context of development cooperation and in OECD policy processes.54 In addition, it was found that ownership, capacity and trust are necessary conditions for effective environmental mainstreaming at the policy level. Ownership: In particular, strong evidence was found that policy SEA only has positive outcomes if it promotes ownership of the policy SEA process by governments, civil society organizations and local communities. The evaluation confirmed that country ownership has several dimensions. There is government ownership, both in terms of being mandated to control the reform, including the policy SEA, and being accountable for results. When national agencies are put in charge of designing sustainable policies they are equipped to deliver much more powerful measures than those that the World Bank or other agencies would be able to induce. It is important to note, however, that when weak sector ministries take ownership of policy SEA, there is a risk of regulatory capture and associated rent seeking. The WAMSSA pilot showed that institutions such as multi-stakeholder frameworks can guard against this eventuality. Another dimension of ownership is linked to civil society and to potentially affected stakeholders. With well-designed institutional support and multi-stakeholder frameworks for addressing policy and development decisions in sector reform, policy SEA can help to reconcile different interests, and to deal with regulatory capture by enhancing transparency and social accountability. Capacity: environmental mainstreaming requires capacities to engage in knowledge dissemination, assimilation, interpretation, strategic thinking and interactions with different stakeholders. This takes time and requires qualified staff. Presently, day-to-day affairs often absorb existing staff capacities. Trust: environmental mainstreaming implies that different stakeholders within and outside government engage in a policy learning process. This means taking risks: accepting that ones arguments might not be robust and might require a change of position. For stakeholders to take risks, they need to have full trust in the process and in the process leadership. It also means opening up the policy process to a broad array of stakeholders from the local up to the national levels. Policy makers should be more receptive to the needs and concerns of weak and vulnerable stakeholders and their decisions need to become accountable to wider constituencies. Another important finding emanating from the pilot projects is the need for long-term constituency-building. Policy SEA is but a small and bounded intervention in the continuous process flow of policy formation. To sustain outcomes over the long term, it is necessary to build constituencies that can sustain policy influence and institutional changes which take a long time to realize. Constituency-building requires considerable time and effort. Therefore, policy SEA 54 See, for example, Nilsson and Eckerberg (2007) 85 Report No. 55328 can only provide the first trigger for long-term constituency building as an on-going and continuous process. Some aspects of constituency building are relatively easy to address, such as ensuring follow-up activities that keep things going after the SEA process has been completed. Other aspects will be more difficult, especially when they challenge the way established power elites usually make decisions. Given the amount of time it can take for SEA to influence changes in incentives, attitudes, organisational cultures, professional disciplines, and power relationships within government, effective environmental constituencies can have the potential to outlast changes in government. Governments will need demonstrable benefits from the establishment of constituencies as well as supporting structures and processes such as long-term stakeholder engagement. One model presented in Section 2 was the multi-stakeholder framework proposed during the WAMSSA pilot. While this is a potentially excellent model, it focuses only on one sector, and in relation to a specific intervention. A more general, politically-mandated, open public inquiry process capable of dealing with a range of natural resource management conflicts could be a more appropriate model for deliberative institutions that would support continuous environmental mainstreaming. This kind of institutional model would also help to guard against "regulatory capture", which is a distinct possibility in countries where sector Ministries may be weak, and where rent seeking is prevalent. This kind of approach however, depends on country-specific conditions such as the development of democratic institutions, or a culture of involving stakeholders in natural resource management. Constituencies need to be strengthened across sectoral agencies and interests. Achieving this requires trust-building and joint-problem perceptions. Under conducive conditions, as stakeholders start to deal with the complex problems and responses to sustainable development issues and share policy dilemmas and tradeoffs that emerge, joint problem perceptions and trust in each others intentions may surface. This may result in breakthroughs in understanding between people from traditionally opposing organizations. As a corollary, the evaluation showed that when constituency building was weak in the pilots, the take up of the policy SEA recommendations was limited. A final main finding is that contextual factors are of overriding importance in hindering or facilitating the attainment of the main benefits of policy SEA. Section 2 highlighted one set of factors identified through the pilots. In some cases, these factors may be aligned in such a way that pursuing policy SEA is not meaningful. This can happen when social tensions are extreme, or ­ as in the case of the Sierra Leone pilot - when a newly elected government decides to postpone reform processes initiated by a previous administration. In all cases, however, preparation and planning must make sure to adapt and adjust SEA process in view of these factors. Some could be very difficult to influence through policy SEA, so other types of intervention would have to be sought. Others are partly amenable, such as ownership, cultures and traditions of organizational coordination in the administration, and the capacity to engage in a SEA process. Yet others can be shaped through how policy SEA is conducted, such as building 86 Report No. 55328 trust among different stakeholders in the process, or establishing follow-up measures to sustain outcomes past the duration of the policy SEA. In some cases contextual factors may be identified through proper initial scoping, but political and social events, such as elections, may drastically change situations in unforeseen ways. Linking strongly to the ownership and trust issue, a key message is the need to clearly articulate the potential benefits of policy SEA. Developers of policy SEA must recognize that incumbent actors have certain interests when engaging in SEA activities. Their participation will be driven by the benefits from engaging being greater than the risks and costs. First and foremost, policy SEA must be understood as a strategic decision support that will enable governments to put in motion better policy making, and not as an environmental safeguard. Speaking directly to the development priorities of the country, policy SEA not only works towards improving policy making from an environmental mainstreaming perspective, but also supports better planning and policy making from an overarching development point of view. As analysis of the potential economic and growth impact of sector reform is undertaken in the "sector review", policy SEA could complement this analysis by exploring the economic and growth implications of environmental and social priorities. With this perspective in mind, it is much easier to establish country ownership (further discussed in section 4.3). This framing of policy SEA also requires a different kind of professional expertise. To date, SEA practitioners have tended to come from a background in EIA, with technical skills associated with EIA tasks and environmental safeguards. As a consequence, they tend to treat SEA in a similar way. Given the strong focus of policy SEA on institutions, governance, political economy and policy issues this is not the most appropriate skill background. Policy SEA teams need to include expertise in policy-science related disciplines such as economics, sociology, and political science. Recommendations: 1. Policy SEA should be understood as an action-oriented approach that will enable countries to perform better policy making and strategic planning, rather than as another environmental safeguard mechanism imposed by donors. Dialogues in preparing for policy SEA should focus strongly on the benefits for the decision maker in addressing the concerns and interests of key stakeholders, including the weak and most vulnerable. 2. The preparation and scoping of policy SEA must carefully consider contextual factors, including economic and political conditions, organizational cultures and traditions, ownership, trust, access to environmental and social information by civil society, and baseline capacities in the government organization. Terms of Reference for policy SEA should include requirements for expertise in policy analysis, grounded in disciplines such as economics, sociology, stakeholder engagement and political science. 3. Policy SEA activities need to put emphasis on trust and constituency building/strengthening. Resources and time should be applied to this task whenever policy SEA is undertaken. The aim is to 87 Report No. 55328 create communities of practice that go beyond particular policy processes, projects, or personalities and that can exist over long periods of time. 4. Sustaining the contribution to environmental mainstreaming of policy SEA should be built into the implementation of policy and sector reform, and in the broader policy environment likely to affect this implementation. This includes providing detailed feedback to participants on the recommendations and follow-up activities included in the SEA. 4.3 Promoting policy SEA: A Phased Approach Given the potential benefits that policy SEA could bring to policy and sector reform and, indirectly, to growth, climate change adaptation and mitigation, and poverty alleviation, the main recommendation of this report is to move forward with further testing and scaling-up of policy SEA. Since this scaling-up involves attaining buy-in from a wide group of donor agencies and partner/client countries, the case needs to be based on a firm footing. Unfortunately, both in the North and South, systematic studies of the relative effectiveness of different environmental mainstreaming activities are lacking. Yet, developing countries are increasingly adopting SEA legislation55. Moreover, the policy SEA approach lends itself to the incorporation of climate change considerations in sector reform by including climate change concerns in priority setting, and/or by prioritizing activities that are vulnerable to climate change or significantly affect emissions of greenhouse gases.. It is suggested nevertheless that a pragmatic, cautious and phased approach is needed to ensure successful scaling up of policy SEA. The last policy SEA pilot completed under the program (WAMSSA), benefited from the learning accumulated by the pilot program, and testifies to this potential. It is suggested that scaling-up be undertaken in three main phases over approximately 10 years. The main expected outcomes of these three phases are a systematic increase in interest, capacity, country ownership and trust among key stakeholders for undertaking policy SEA in selected countries where better policy making and successful environmental and social mainstreaming could be featured. The expected development impacts would be stronger economic growth, poverty alleviation and improved environmental and social management of key sectors in selected countries. During scaling-up of policy SEA, there is a need to identify, monitor, analyse and follow-up sector-specific indicators of successful outcomes. The preparation phase (Table 4.1) would focus on awareness raising and capacity building for policy SEA in selected developing countries, as well as donor coordination and alliance building. This phase would focus on assessing the pre-conditions for successful introduction of policy SEA in a country; identifying partners who have the capacity and will to take on ownership ("champion") the SEA process; and assessing possible windows of opportunity. More specific criteria for selecting countries need to be developed, but would likely include good 55 See, for example, Ahmed and Fiadjoe (2006), 88 Report No. 55328 governance aspects; willingness of countries to participate and to reform their policy processes; as well as basic public administration capacities. . In selected countries the focus of awareness raising and capacity building should be in the most strategic sectors for environmental sustainability, economic development and climate change adaptation and mitigation. Examples would likely include forestry, mining, energy, industrial development, or agriculture. Table 4.1: Phased Approach to Scaling-up of Policy SEA (10 years) Preparation Phase Implementation Phase 1 Implementation Phase 2 (1-2 years) (2-6 years) (7-10 years) 1. Preparing technical guidelines 5. Preparing policy SEA by 8. Country-driven and awareness raising materials for initiating constituency-building and institutionalization of policy SEA scaling-up multi-stakeholder dialogue in selected partner countries 2. Establishing donor alliances and 6. Undertaking policy-SEA 9 Situating policy SEA within partnerships, and raising awareness processes, in 2-4 strategic economic national and sector development sectors in selected partner countries policy 3. Assessment of windows of 7. Evaluation and lessons learned 10 Development of a follow-up opportunity and selection of 8-10 and learning system for continuous partner countries improvement of policy making and environmental and social mainstreaming 4. Building partner country commitment and ownership for implementation The first implementation phase would consist of selected countries undertaking specific and detailed analytical work to be followed by the development and implementation of a number of policy SEA processes. It is expected that between 8-10 countries would be self-selected to carry out between two-to-four policy SEAs in key development sectors to reach a critical mass of experience and capacity for environmental, social and climate change mainstreaming in sector reform. This phase would be completed by an evaluation and "lessons learned" exercise. The second implementation phase would consist of a country-driven process with gradual institutionalization of policy SEA, thereby positioning policy SEA as an approach for policy making at the sector level. As countries continue testing policy SEA in the implementation phases, they will need to keep in the forefront the idea that the purpose of SEA is not to meet some regulatory requirement, but instead to improve policy making to promote sustainable development. In particular, policy SEA should be seen as an approach for strengthening institutions and making governance changes that enable governments to enhance integration of environmental, climate change and social considerations in sector reform. 89 Report No. 55328 If this proposal for scaling up is not fully realized, policy SEA could still contribute to enhance sector reform. Based on the evidence provided by this evaluation, it is suggested that donors and partner countries join efforts to foster policy SEA in sector reform under the following conditions: country ownership is ensured; policy SEA is undertaken along with sector reform design and not as an isolated assessment; and, follow-on activities recommended by the SEA can be supported during sector reform implementation. For the World Bank a possibility would be that SEA is included as an environmental assessment instrument in the Operational Policy on Environmental Assessment (OP 4.01) thus allowing that countries can fulfil the requirement for environmental assessment in technical assistance and adjustable program loans by undertaking SEA at the policy level56. Also, Operational Policy on Development Policy Lending (OP 8.60) allows the use of SEA in development policy loans to assess significant effects on countries environment, forests and other natural resources, and on their shortcomings for addressing these impacts. However, in contrast to OP 4.01 where environmental assessment is the responsibility of the borrowing country, SEAs associated with development policy loans are often part of the due diligence undertaken by the World Bank as it happened in the Sierra Leone SEA of the mining sector. As shown in this report, this situation adversely affects the effectiveness of the policy SEA. It is suggested, therefore, that in the case of development policy loans, country ownership of the SEA process should be ensured. Finally, when SEA is undertaken associated with technical assistance, adaptable program and development policy loans, the SEA recommendations should be included in specific recommendations for the components or triggers of these loans. It follows that the new Environment Strategy for the World Bank Group should maintain SEA as a key tool for promoting sustainable development, including adaptation and mitigation to climate change. 56 Of course, SEA is also applicable to plans and programs. 90 Report No. 55328 Recommendations: 5. During scaling up, policy SEA should be applied in a more strategic way than was the case in the pilot program, focusing on a set of key sectors within a country that are critical/strategic for growth and poverty alleviation. Undertaking policy SEAs in these sectors will contribute to the building of a critical mass of capacity for economic reform that is environmentally and socially sustainable. Priority should be given to to countries that show an interest in ownership through a self-selection process. 4.4 Promoting policy SEA: Issues to Consider in the Partner Country Context The outcomes of the comparative analysis of the policy SEA pilots indicated that the scaling-up of policy SEA in developing countries needs to focus on conveying the benefits of policy SEA, boosting sector ownership of the policy SEA process, and dealing with capacity constraints. These issues are discussed in more detail below. 4.4.1 Conveying benefits of policy SEA In all countries, established authority and elite interests can seriously constrain the uptake of new ideas. This situation can be even more problematic in cultural contexts where challenging authority is traditionally discouraged. In such places, policy SEA promoted by development agencies on a test basis could be tolerated. But scaling-up will sometimes be considered as a threat to the policy-making power of established authority, in particular when the policy SEA addresses strategic economic development sectors. There is then a risk that policy SEA could be seen by powerful ministries as being a "break on development", championed by external interest groups and donors, and a threat to strategic development interests. There is evidence that this kind of situation existed in Hubei, and Box 4.1 presents a brief summary. Box 4.1: Scaling-up and threats to established authority: the Hubei transport planning pilot In the Hubei road transport planning case, the SEA approach for policy ran up against the legal processes prescribed for Plan EIA in Chinese law. The evaluators describe these processes as being "very rigid" and with corresponding institutional arrangements that do not necessarily support the flexibility and inclusiveness sought by policy SEA approaches. For example, the evaluators pointed out that if SEA points to flaws in plans, the outcome will often be rejection of the SEA report, rather than redrafting or rejection of the plan itself. In addition, the SEA team prepared an institutional analysis and action plan for strengthening the management of social and environmental issues in provincial road planning. Even though this was appreciated by three important stakeholder groups, it was never fully accepted by Hubei Provincial Communication Department, because it proposed changes to authority structures that had not been earlier discussed and agreed with the HPCD. Source: Adapted from Dusik, J. and Y. Jian (2010) 91 Report No. 55328 This situation could be approached in two ways. One strategy is to attempt to structure the policy dialogue to ensure that SEA is not seen as "just another regulatory hurdle". The benefits and added value of incorporating environmental and social dimensions in sector reform through policy SEA should be spelled out. This should include, but be not limited to: enhancing risk management in the sectors; enhancing policy capacities; and broadening policy horizons. As mentioned at the beginning of this section, the main challenge is to ensure that potential benefits of policy SEA are continually stressed and constituencies built around them. Champions of policy SEA must seek out ways to align the environmental agenda with other key development themes higher up on the political agenda (economic growth, poverty reduction, health, employment etc.) and with the dominant existing perceptions and interests. Stakeholders are often indeed willing and able to mainstream environmental issues, but will only be supported in political decision-making if they align, or create alliances, with important shorter-term interests within the sector. Another complementary strategy could be to use regulation and guidelines in overarching (long- term) development plans as a lever. Many developing countries still use five-year or ten-year national development plans as the main focus for prioritizing investment decisions and channelling donor funds. In these countries, the plans become a strong focus for sector ministry activity, and considerable effort is put into compiling them, implementing them, and evaluating their outcomes. Placing requirements for policy SEA into guidance for national and sector planning documents could favourably impact on environmental mainstreaming. 4.4.2 Boosting ownership in strategic sectors The evaluations of the policy SEA pilots have made it clear that ownership of policy SEA is a necessary pre-condition for successful implementation. When policy SEA is applied in a specific sector, then care also needs to be taken in the choice of an appropriate counterpart agency. In at least one of the policy SEA pilots, a reluctant counterpart agency resulted in a problematic outcome. Insights about the importance of sector ownership and responsibility have also been gained in the work on impact assessment and policy integration in OECD countries. Policy SEA is an approach, amongst others, that sector planners and policy makers could use in formulating and implementing policies. The importance of sector agencies/ministries as actors in the process of moving towards sustainable development cannot be overestimated. As has been clearly articulated in the Brundtland Commission in 1987 and the Rio Summit in 1992, sustainable development that attempts to integrate economic, environmental, and social goals cannot logically be championed by environment agencies, but must occur in the sectors where economic, industrial, and development activities are being decided and implemented. However, as discussed in section 3, care needs to be taken to ensure that sector agencies that accept responsibility for ownership of policy SEA have the strength and support to resist regulatory capture. With well-designed institutional support and multi-stakeholder frameworks for addressing policy and development decisions, as those proposed in the WAMSSA pilot, policy 92 Report No. 55328 SEA can help to reconcile different interests, and can help to deal with regulatory capture by enhancing transparency and social accountability. Sector ownership should not be interpreted narrowly. It includes sector authorities and public agencies, but it should also involve civil society, the private sector, and the media. The pilots have shown the importance of involving all key stakeholders in the SEA process, particularly vulnerable and weak. The role of the private sector and the media cannot be underestimated. Their participation in policy SEA enhances the legitimacy of the contributions of SEA to sector or policy reform, helps to prevent misunderstandings that could be costly during policy implementation, and assists in guarding against regulatory capture and rent seeking. It should also be noted that sector ownership also implies a different role for the environmental agency: in policy SEA processes there is no operational role for environmental agencies beyond contributing expertise, guarding consistency with environmental policy, regulation and commitments and participating in inter-ministerial consultation groups or steering committees. However, the results of policy SEA may well result in specific changes in environmental regulation, law or policy, the further preparation of which involves environmental agencies. 4.4.3 Dealing with capacity constraints Lack of adequate capacity has long been discussed as a constraint to development in general. This problem can be even starker in developing countries when it comes to the introduction of a new concept, practice or analytical approach, such as policy SEA. Concerns about lack of capacity were raised on a number of occasions in the pilots, sometimes implying that it might be unwise to establish SEA systems in countries that are still coming to terms with EIA. The skills required for policy SEA, however, are quite different from those needed in EIA. Capacity constraints are related to skills in policy analysis rather than EIA technical skill gaps. The pilot evaluations indicated that for policy SEA to have an impact in the long term, there is a need for local capacity development in governments and civil society. While some SEA teams used local consultant partners to organise consultation activities, there was not much evidence of local capacity development in the pilot studies. To remedy this, policy SEA studies should include a substantial local capacity building component. In addition, one of the aims of policy SEA is to put environmental concerns on the policy agenda. Evidence from the pilots indicated that agenda setting is facilitated when communities of practice are established to work over long periods of time. This requires strengthening capacities for policy analysis and representation in the policy dialogue of civil society. Otherwise environmental prioritization and follow-up of SEA recommendations during policy implementation tends to be temporary and punctuated, rather than permanent and sustained. Important issues for scaling-up and dealing with capacity constraints are the identification and nurturing of policy SEA "champions" and ongoing institutions for assisting with SEA capacity building. In resource-scarce developing countries, much momentum for policy SEA can be obtained through encouraging individual policy entrepreneurship. A good model could be the 93 Report No. 55328 "poverty and environment champions" system being tested by the Poverty and Environment Initiative. It selects people in its pilot countries who take on the role of advocating for the integration of poverty-environment considerations into development planning at national, sector, and sub-national levels. In return for taking on this role, the chosen "champions" receive high- level recognition and other benefits such as training and being part of an international community of practice. There may also be a role for some kind of "SEA help desk", that could provide resources, direct assistance, and capacity building to ensure that momentum is maintained after donors leave. One possibility, in some countries, could be for SEA follow-on and monitoring to be incorporated into EITI/EITI++ secretariats to further promote transparency and social accountability in countries relying on extractive industries to jump start development. Recommendations: 6. Governments need to be proactive in their search for the right "owner" of SEA. There needs to be clarity with regard to the criteria for choosing counterpart agencies. For effective SEA, agencies and ministries in charge of planning and sector reform, rather than environmental agencies, should be in charge of undertaking SEA. Environmental agencies and ministries should not be operationally active but participate through inter-ministerial consultation groups or steering groups governing SEA. Care needs to be taken to ensure that weak sector agencies are not exposed to regulatory capture and associated rent seeking by involving stakeholders in sector reform through multi-stakeholder approaches for planning and decision making. 7. When regulatory requirements for SEA exist - for instance in guidelines for national development planning - they can be used as "levers" to implement policy SEA. However, policy SEA should be adopted on its own merits as contributing to better policy making. Making policy SEA mandatory during the scaling up phase risks bringing a negative connotation to the process as a potential regulatory hurdle. Whether or not policy SEA at some point is made mandatory is a question that can only be answered in view of the specific legal and institutional context at the national level. 8. Policy SEA requires substantial investment in local capacity building within governments, civil society organization, the media, and to some extent the private sector to ensure that SEA champions, government officials, and stakeholders can apply this approach effectively in policy formulation and implementation. 4.5 Promoting Policy SEA: Issues for Consideration by Development Agencies Another crucial aspect of scaling-up policy SEA is to create an international constituency, through strategic alliances and network building in the development cooperation community, that can further develop and explore the potential of policy SEA. Many synergies can be realized through such coordination efforts. Results from the World Banks policy SEA pilot program have many commonalities with the agenda of the OECD DAC SEA Task Team, and those of the UNDP/UNEP Poverty and Environment Initiative. This section discusses issues and identifies possible ways forward in a coordinated approach to scaling-up among multilateral and bilateral 94 Report No. 55328 donors. It focuses on alliance building, funding, and the building of awareness and harmonisation in the donor community. 4.5.1 Alliance building and harmonisation for policy SEA A key question regarding alliance building for policy SEA is: what are the most effective networks and alliances for scaling-up policy SEA, and how can they be most efficiently mobilized and organized? A critical issue here is that a "window of opportunity" seems to be opening for fostering policy SEA with the development of the World Bank Groups New Environment Strategy and the scaling-up of the UNDP/UNEP Poverty and Environment Initiative (PEI). PEI supports capacity building in environmental mainstreaming in developing countries by providing technical assistance to planning, finance and environmental ministries. Given the lessons learned by PEI about environmental mainstreaming, other development agencies promoting this agenda could benefit from a partnership. The OECD SEA Task Team plays an active role as a broad-based SEA support network. It has been recognized as such in the international development community after the publication of the SEA Guidance for Development Cooperation. Since publication of that document, the Task Team is refocusing its efforts on supporting implementation and capacity building. Other development agencies are also active in the areas of environmental mainstreaming and policy SEA. For example, a number of the so-called "like-minded" bilateral agencies such as DfID, GTZ and Sida have actively investigated the potential for mainstreaming in their aid programmes, and multilateral agencies such as the Asian Development Bank and the Inter- American Development Bank have incorporated environmental mainstreaming processes into their programme cycles. It is clear that there is now a "critical mass" of experience in the linked areas of policy SEA and environmental mainstreaming, emanating from a range of bilateral and multilateral development agencies. It seems that the time is ripe for the establishment of a broad "environmental mainstreaming alliance". This would clarify the roles and niches of the different interested parties. Alliance building not only requires donors to team up and bring added value to the implementation process according to their comparative advantages; it also requires involvement of partner countries and the formation of a critical mass for a policy SEA alliance across countries engaging in policy SEA for reform in strategic sectors. This would enable exchanges of experiences across countries and render policy SEA implementation globally more efficient. Thus, alliance building would enhance country ownership, as discussed in section 4.3.2. The World Bank could add its specialized experience in sector reform to a potentially influential alliance. The World Bank has more than 20 years of experience assisting developing countries in sector reform in agriculture, forestry, mining, oil, water, energy, transport, rural development, etc. It also has significant experience in assisting countries in using SEA, and has accumulated a pioneering capacity in policy SEA. Policy SEA to support sector reform is being applied in 95 Report No. 55328 mining and forestry57 (and), and ­ less widely ­ in the water, transport, agriculture and tourism sectors. 4.5.2 Funding of policy SEA Scaling-up of policy SEA will require alignment and mobilization of resources. What human, institutional, and financial resources will be needed to support the process of "going to scale," as suggested in section 4.2, and what needs to be done to ensure that these resources are available? There is no question that scaling-up of SEA in general, and policy SEA in particular, will require a substantial commitment in resources from both development agencies, and partner countries. For example, prior to the scaling-up of the UNDP/UNEP PEI, the two UN agencies undertook an analysis of scaling-up requirements58. It showed that because environmental mainstreaming is relatively new and seeks to change priorities, and involves a number of ministries, it requires a great deal of staff time, and technical and political support at different levels to succeed. The joint program funded focal points in environment, planning, and finance ministries; a national project manager in each country; a technical advisor; a finance assistant, and specialized teams for integrated ecosystem assessments and economic analyses. Because policy SEA activity is still very new, and until countries are able to take over SEA as part of regular policy making, the World Bank together with international and bilateral development agencies would need to continue to fund such work. Although country ownership should be expressed with country resources directed to policy SEA, external funding is still required for several purposes. One is to support low income country governments to enhance capacities that allow them to fully own and adopt the approach. Second, it is necessary to provide support to enable stakeholders within civil society, academia and other groups and the media to become involved in policy SEA processes, in both low and middle income countries. At present, World Bank supported SEAs are part of the Banks due diligence for project preparation, rather than partner country work. As a consequence, SEA is undertaken by Bank staff and consultants to inform policy dialogue with countries. However, this evaluation shows that there are negative impacts of Bank-led work on ownership of SEA processes and recommendations. Moreover, these negative effects extend to follow-up and monitoring activities, exacerbating the punctuated influence of SEA exercises. This needs to change to enhance policy SEA effectiveness. In the context of the New Environment Strategy of the World Bank Group a proposal to this end is made in section 4.6. 4.5.3 Awareness raising and ownership in the donor community The issue of capacity building in developing countries has been discussed. A precondition for successful scaling up is that additional capacity development and awareness-raising occur also 57 Guidance for undertaking policy SEA at the sector level is available for these sectors. (see World Bank 2009 and 2010). 58 See UNDP/UNEP Poverty-Environment Initiative (2007) and UNDP/UNEP (2009). 96 Report No. 55328 within the donor community, including inside the World Bank. First, there is a need for awareness-raising beyond environment departments within donor groups. Operational departments are responsible for designing interventions and activities. The outcomes of policy SEA will likely not be taken into account unless managers responsible for designing interventions are fully cognizant of the purpose of SEA work. The benefits of policy SEA therefore need to be clearly articulated and discussed in relation to the objectives and goals of the donor community, and of partner countries. As discussed earlier, the ultimate development impact associated with policy SEA is stronger and more robust economic development in conjunction with reduced environmental and social pressures. The immediate impact is better policy making, which is achieved through four key outcomes; better priority setting; constituency building; enhanced accountability; and policy learning. The effectiveness of policy SEA in achieving these outcomes needs to be carefully evaluated during the scaling-up process. To this end, the preparation phase, and awareness-raising within it, needs to include the development of a framework with operational indicators for follow-up. As is always the case with new policy initiatives, policy SEA requires "champions" to advocate its case. Ideally, these would be both individual policy entrepreneurs, and government agencies prepared to argue in its favour. Sometimes, positive movements towards ownership do take place in developing countries, as agencies see the benefits of new policy innovations. Similarly, within donor organizations, it is necessary to establish policy SEA champions, potentially linked together in some kind of international network arrangement possibly within the umbrella of the OECD DAC SEA Task Team. Recommendations: 9. Development agencies should ensure that Terms of Reference for policy SEA activities supported by them include some aspect of follow-up. They should also aim to design and fund environmental mainstreaming activities that reach beyond the policy SEA process, and explore incentives to incorporate policy SEA in the culture and standard operations of policy making. 10. Several development agencies have interests and specific niches in the linked areas of environmental mainstreaming and policy SEA. It is recommended that a broad environmental mainstreaming alliance be established that would explore the synergies as well as clarify the roles, comparative advantages and niches of the different interested parties. This should include awareness raising about policy SEA within operational departments. 4.6 Implications for the World Bank Group and its new Environment Strategy59 The "green economy" as an alternative to existing unsustainable fossil fuel and natural resource intensive economies is receiving growing political attention by both developed and developing countries. This concept has been prominent in the fiscal stimulus packages of G20 countries, the OECDs Green Growth Initiative and the United Nations advocacy for a "Green New Deal". 59 Currently, the World Bank Group is preparing a New Environment Strategy (NES) that will articulate a set of principles, identify priority action areas, and propose an approach for achieving environmental sustainability of the World Bank Groups portfolio. 97 Report No. 55328 Different visions appear to be converging on the notion that the green economy is an approach that should encourage public and private investment in order to improve the sustainability of key sectors of the economy that have significant environmental impact and are critical for growth and poverty reduction. Policy SEA has the potential to make a significant contribution in the move towards a green growth path. This potential stems from the ability that policy SEA has to (i) raise attention to environmental and social priorities associated with sector reform; (ii) help build or strengthen constituencies around these priorities; (iii) enhance social accountability by opening sector reform to multiple stakeholders, and hence making policy makers more accountable for their decisions; and, (iv) increase policy capacities, broaden policy horizons and affect decisions regimes for environmental and social sustainability. Were it not for the punctuated and time- bounded effect of policy SEA, one would be tempted to consider policy SEA as the key approach for greening growth and greening the economy. However, as evidenced by the evaluation, although policy SEA has the potential to jump-start the process of greening sector reform, unless there is strong country ownership and specific investments are made to follow-on from the policy recommendations, environmental and social mainstreaming will be short-lived. Critical for achieving a green economy is the need for policy SEA to be followed by a stream of investments, policy or legal reforms, or other kinds of interventions that make environmental and social mainstreaming a continuous process beyond the completion of policy SEA. Consequently, the main recommendation of this evaluation to the NES is the need to support policy SEA as a key approach for promoting a green economy by mainstreaming environmental, social and climate change considerations in sector reform. The following action plan for applying policy SEA in the World Banks activities is suggested: Policy SEA is undertaken to support sector reform in sectors that are critical for growth or poverty alleviation and that pose significant environmental risks, including climate change. These reforms include specific interventions and/or investments identified through policy SEA exercises whose implementation is encouraged by facilitating recipient countries to access resources such as loans and grants but also specialized advice and technical assistance. As this evaluation has shown for the Kenya policy SEA pilot, for example, unless the institutional, regulatory and policy recommendations are backed with financial resources and capacity building, the promise of reform and environmental mainstreaming is unlikely to be fulfilled. Policy SEA is applied in all strategic sectors to ensure that a critical mass of mainstreaming capacity is reached and the proposed institutional, legal, regulatory and policy adjustments of are reinforced by creating a virtuous cycle of environmental and social mainstreaming. A system of incentives that reward successful reform and gradual environmental and social mainstreaming is established. Donor countries and multilateral development banks should pay special attention to the implementation challenges of policy SEA recommendations that require sustained effort and fine tuning over the medium and long term. Unless there are 98 Report No. 55328 strong incentives for sustaining the mainstreaming effort and strong constituencies that demand it, the process may be derailed or thwarted by vested interests. As a consequence of the close alignment of the NES priorities with the objectives of policy SEA, the NES preparatory work could benefit from taking close account of the findings and recommendations of the World Banks pilot program on policy SEA reported here. The pilot programme has improved our understanding of the conditions that impede or facilitate environmental and social mainstreaming in a variety of institutional contexts. However, little is known about the relative effectiveness and efficiency of policy SEA compared to other SEA approaches, and to other environmental mainstreaming strategies. Therefore, there is a need to extend learning on environmental mainstreaming and policy SEA to more countries and sectors. To some extent, this is already happening as Bank staff learn about the benefits of policy SEA and apply it to policy reforms taking place in client countries. In this regard, a recommendation from this review is that the World Bank should continue supporting policy SEA work in client countries but the focus of its support should shift from Bank due diligence to client country preparatory work. The World Banks operational policy (OP) 4.01 applies to technical assistance and adjustable program loans that support policy and sector reform. This implies that when policy SEA is undertaken to inform the preparation of these loans, an additional environmental impact assessment is also prepared by the client country. This creates confusion and in some cases duplication of work that adversely affects the taking up of environmental considerations in sector reform. A straightforward way to address this problem would be to include SEA in OP 4.01 as an environmental assessment (EA) instrument. Since a significant focus of the pilot program has been on strengthening institutions and governance to provide a stronger basis for the integration of environmental and social concerns into development policy, the approach and perspectives of policy SEA fit well with the NES agenda. Just as the World Banks 2001 Environment Strategy encouraged the development of SEA and environmental mainstreaming, so the New Environment Strategy of 2011 can become a powerful lever for increased concentration on policy SEA as an institutional and governance- strengthening approach to promote green growth and the green economy. In particular, it is suggested that the NES takes account of the policy SEA recommendations relating to the following: The framing of environmental mainstreaming and policy SEA as a means towards "better policy making" rather than merely protecting the environment. The establishment of alliances and partnerships for environmental mainstreaming and policy SEA with other development partners, including awareness-raising and capacity building requirements inside the Bank and with the wider donor community. This would include new joint models for funding of institution strengthening and governance activities in the area of mainstreaming and policy SEA. 99 Report No. 55328 The introduction of policy SEA in a staged fashion. For the World Bank it is specifically suggested that consideration should be given to support client countries to undertake policy SEA when they are preparing technical assistance loans, adaptable program loans and policy development loans. The support could be provided through a recipient executed trust fund from which governments and civil society organizations of developing countries could receive grants for undertaking and participating in policy SEA. Conditions for accessing these funds would be consistent to the scaling-up approach discussed in section 4.2. The critical importance of ownership, capacity building, trust and contextual factors for the effectiveness of policy SEA and environmental and social mainstreaming. Recommendations: 11. Policy SEA should be taken up by the New Environment Strategy (NES) as an approach for promoting green economies and the greening of growth. Beyond specific policy SEA activity, investments and interventions are needed to implement policy SEA recommendations. A system of incentives based on providing assistance for capacity building and financial resources is required to foster environmental and social mainstreaming associated with sector reform over the medium and long term. 12. The World Bank should consider establishing a recipient executed trust fund that would provide grants to client countries to enable them to undertake policy SEA in the context of preparation of sector reform loans. These grants should be complemented by other grants to facilitate the engagement in policy SEA process of vulnerable stakeholders and civil society. 13. Inclusion of SEA in the Banks Operational Policy 4.01, applicable to technical assistance and adjustable program loans that support sector reform is recommended. 4.7 Concluding Remarks There is no question that policy SEA has evolved significantly in the last few years, but it is in its early days yet. The evaluations of the six pilots, and related recent environmental mainstreaming activity, suggest that the policy SEA approach has the potential to contribute to better policy making and strengthened governance overall; efficient allocation of resources; and de-coupling of economic growth from resource degradation and climate change. Moreover, the tools and methods that can assist with reaching these outcomes already exist, and especially within the realm of policy analysis. As is the case with most development activities, it is likely that policy SEA will develop deeper roots if it is championed by developing countries. The building of local ownership will take time, and will require constant reiteration of the benefits of the approach, but also trust, constituency building, financial support and capacity building. Also, the point has been made that promoting policy SEA needs to be addressed both within countries, and across development cooperation more generally. There is enough evidence now to suggest that a significant scaling-up of policy SEA should be undertaken by development agencies and partner country governments. However, scaling-up of 100 Report No. 55328 policy SEA needs to occur in a cautious and step-wise fashion, and supported by evidence that preconditions have been met. Scaling-up of new concepts such as policy SEA should be through "leveraging" alliances and partnerships with other development agencies. Development agencies can continue to build capacity for policy SEA in many different ways, and this involvement will be necessary for some time to come. The World Bank, multilateral regional development banks, UN agencies and many bilateral donors, have all accumulated significant experience in assisting countries to develop capacity for sector reform, including mainstreaming and institutional strengthening on environmental issues. Learning from and building upon this kind of experience is critical for the further development of policy SEA. It brings added legitimacy, and meets the requirements of aid effectiveness as expressed in the Paris Declaration and the Accra Agenda. This report has attempted to draw analytical and operational lessons from the pilot testing of policy SEA, and sketches a way forward for scaling-up policy SEA. 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World Bank (2010), Mining Sector Strategic Environmental and Social Assessment (SESA), Fernando Loayza and Juan Albarracin-Jordan, Environment Note, Number 4, Environment Department Washington DC. Yin, Robert, K. 2003. Case Study Research, Design and Methods, Third edition, Sage. 105 Report No. 55328 Annex 1: Summary of the policy SEA Pilots THE SIERRA LEONE MINING SECTOR REFORM STRATEGIC ENVIRONMENTAL AND SOCIAL ASSESMENT (SESA) The Proposed Intervention The Strategic Environmental and Social Assessment (SESA) of the Mining Sector in Sierra Leone stands out as an SEA originating in a policy development loan (World Bank´s Programmatic Governance Reform and Growth Grant series). SESA´s main objective is to help assist with long-term country development by integrating environmental and social considerations into mining sector reform. This will be supported by a loan that will establish the Mining Technical Assistance Project (MTAP). SESA was undertaken in 2006 ­ 2007 along with the preparation of the MTAP, which was originally planned to be approved by the Board of the World Bank by the end of 2007. However, in 2007 a newly elected Sierra Leonean government put mining reform on hold and left the MTAP dormant for approximately two years. Brief Description of the Pilot The SESA process consisted of three stages. The first of these included a situation analysis that examined general environmental and social issues in Sierra Leone, and in each of the mining subsectors (large- scale, artisanal and small-scale). The analysis was aided by three case studies in each of the subsectors. The situation analysis informed a first round of workshops held in all four provinces of Sierra Leone to select environmental and social priorities in the mining sector by applying a ranking methodology. The ranking procedure aimed at removing some of the potential biases and ensured that equal weight was given to the voice of vulnerable groups in selecting environmental and social priorities. This method may serve as a "good practice" example and should be considered in future policy SEA consultation components. A few ideas to improve the consultation process, however, are proposed in the evaluation of SESA. These refer mainly to culture-sensitive approaches to effective communication and intercultural dialogue. After environmental and social priorities were established, the second stage of the process involved the analysis of the institutional, governance and political economy issues that influence the way policies translate into stakeholder behaviours and development outcomes. The first analytic undertaking involved the review of the legal and regulatory framework for managing environmental and social priorities. The second analytic task involved the assessment of the transmission mechanisms from new mining policies to environmental and social priorities. Mechanisms considered in the analysis included (i) institutional and organizational capacity and coordination; (ii) potential influence of stakeholders on the reform; and (iii) coordination among stakeholders. In the second round of regional workshops, stakeholders were shown the preliminary results of this analysis, and were given the chance to discuss and comment on them. A series of recommendations comprised the third stage of the SESA, aimed at transforming a situation of weak institutional capacity and weak governance. SESA´s recommendations, which were validated in a national workshop that included representatives from provincial workshops, encompassed institutional 106 Report No. 55328 and organizational adjustments to consolidate a policy framework aimed at inducing sustainable development in the mining sector, and in the country at large. SEA Outcomes At the provincial level, environmental and social priorities included mine employment, provision of infrastructure, community development and participation, and mitigation of the negative impacts of blasting. At the national level, environmental and social priorities consisted of land and crop compensation and village relocation, sanitation and water pollution, deforestation and soil degradation, child labor, and post-closure reclamation. In choosing SESAs priorities and validating the institutional analysis and recommendations, vulnerable segments of society were given an opportunity to voice their concerns. Attention was paid to the situation of poor and vulnerable stakeholders, such as mining communities, and women and children in some mining areas. Thus, SESA helped in expanding and deepening the dialogue on mining sector reform that informed the preparation of the MTAP, particularly in relation to the projects institutional and governance components. However, due to the scope of public participation was constrained to provincial and national workshops, involvement of local mining communities and traditional authorities in this dialogue was limited. SESA has also influenced the Justice for the Poor (J4P) initiative in Sierra Leone that is examining more practical interventions at the local level, based to some extent on SESA´s analysis and recommendations. J4P´s program has acknowledged SESA´s important contribution to its approach, which will foster public debate on issues of accountability to inform and help shape mining reform. In addition, important methodological and analytical components of SESA were introduced into the West Africa Minerals Sector Strategic Assessment (WAMSSA), another policy SEA pilot (see below). SESA has also served as a stimulus for incorporating policy SEA processes into other World Bank sponsored mining policy projects around the world. Whereas SESA´s contribution to policy dialogue has been significant, its influence on the existing mining policy of Sierra Leone ­ in terms of incorporating environmental and social considerations ­ has yet to materialize. This, however, cannot be attributed directly to factors that were inherent to the SESA process. External political, historical, and institutional factors played a significant role in attenuating the short-term impact of SESA. A newly elected government that took over shortly after the completion of SESA considered that some sort of diversification of the economy was necessary. The new administration prioritized the review of existing mining contracts, and left broader issues of mining sector reform dormant for approximately two years. Constraining or Enabling Factors Of the six identified enabling or constraining factors discussed in Section 2.4, the issues of windows of opportunity, dealing with power elites and sustaining environmental and social mainstreaming beyond the completion of the policy SEA report, were especially evident in the Sierra Leone SESA. The literature puts the idea of "windows of opportunity" at the heart of a process in which policies might be influenced. However, they are not easy to predict, and they can also close unexpectedly. When SESA was undertaken, there was extraordinary global demand for minerals and strong interest from foreign investors. Emerging from a long period of impoverished internal conflict, the Sierra Leone government 107 Report No. 55328 acknowledged this exceptional opportunity and was apparently enthusiastic about mineral sector reform. However, this window did not remain open for long, as a new government was elected soon after the completion of the SESA, and it placed agricultural investment and review of mining contracts as a higher priority than mining sector reform. In addition, this change of government coincided with the sharp global economic downturn that began in 2008. While SESA´s analysis of formal institutions and the political economy is undoubtedly comprehensive, non-formal institutions, such as the chiefdom, are given less attention. While numerous opportunities for successful mining reform may open, overlooking the underlying principles of customary institutions and how its non-formal codes extend over more than three quarters of Sierra Leone´s ethnic landscape could lead to a limited understanding of the potential challenges of reform. In informing the preparation of the MTAP, the significance of this traditional institution, as far as access to land, compensation and reclamation associated with mining activities are concerned, was captured only partially by SESA. SESA´s report included a risk analysis that incorporated latent threats to the proposed actions. This constitutes a distinguishing SESA feature that was introduced into the process and that it is not typical of the I-SEA archetype. In this analysis, the economic and political power that particular interest groups may employ to interfere with the process ­ thus, distorting the sought after outcomes ­ was examined. In the national workshop, this analysis and the corresponding recommendations were validated. However, dissemination of SESA´s findings and recommendations was not extensive. SESA could have expanded the dissemination process in order to highlight the importance of considering environmental and social issues in mining sector reform. In this manner, a more concrete testimony of the process, broadly and effectively disseminated, would have had a more enduring effect on the collective memory of stakeholders, as well as on the strengthening of environmental constituencies and on policy learning. Conclusion Even though SESA accomplished its objective of informing mining sector reform on key institutional and political economy concerns, the issue of transferring the ownership of the process to specific constituencies raises some important questions. The following recommendations derive from the evaluation of SESA; however, they may also have implications for the general policy SEA model. 1. Although the one-day/one-room consultation format, under certain circumstances, may be an adequate method to involve stakeholders, social settings that include indigenous constituencies may require longer periods of time and, therefore, the process of negotiating environmental and social priorities may have to be adapted to the local cultural scenario. 2. Establish mechanisms, on the basis of a culture-sensitive approach to dialogue, to transfer the ownership of the process to stakeholders, including vulnerable social segments. 3. In the analytic component, explore the possibility of considering alternative scenarios, such as best- case and worst-case, and how these may influence institutional reform and its inter-linkages. 4. Incorporate an analysis of the non-formal institutions, particularly if indigenous constituencies are part of the social interaction sphere included in the policy process. 5. Ensure that the evaluation results and recommendations are effectively disseminated among all stakeholders. 108 Report No. 55328 STRATEGIC ENVIRONMENTAL ASSESSMENT FOR THE HUBEI ROAD NETWORK PLAN (2002 ­ 2020) The Proposed Intervention In 2007, the World Bank and the Hubei Provincial Communication Department (HPCD) embarked on an ambitious project to assess impacts of the Hubei Road Network Plan (HRNP) on environmental and social priorities in Hubei province. The HRNP proposed a system of 5,000 km of expressways and 2,500 km of highways which provided road links between all major cities in the Province. This plan was approved by the Hubei provincial government in 2004 but it was not subject to formal plan-EIA, which has been required in the PRC since 2003 by the EIA Law. The HPCD requested the Banks support to conduct a strategic environmental assessment (SEA) for the HRNP, and the World Bank positively responded to this request. Since the HRNP was already under implementation, the assessment aimed to incorporate environmental considerations into the 2020 long- term road transport plan. It also aimed to help by building the capacity of the HPCD for mainstreaming environmental and social considerations into infrastructure plans and programs; and by facilitating inter- institutional coordination among agencies associated with transport development. Brief Description of the Pilot This pilot project was the first SEA for a provincial transport sector plan supported by the World Bank in the PRC. As such, it combined SEA approaches promoted by the Bank with those used in contemporary SEA practice in China. It has also tried to combine assessment approaches used in EIA of plans with selected elements of policy SEA. This pilot hence offers lessons that may be of interest in future similar processes in China or other countries. The SEA was undertaken by a team made up of experts from a highly reputed think-tank dealing with SEA in China, which was assisted by international consultants. The SEA team operated under a comprehensive ToR elaborated by the World Bank and HPCD, and undertook work in Hubei province for a period exceeding one year. Specifically, the team (i) identified and engaged the relevant stakeholders; (ii) gathered information related to the environmental baseline; (iii) analyzed consistency of the HRNP with relevant plans and policies; (iv) elaborated scenarios for future development of road transport in the province, and assessed their implications on environmental and social priorities; and (v) evaluated existing policies and arrangements for managing environmental and social effects of roads and proposed relevant institutional strengthening measures. Within this process the SEA team held numerous meetings with relevant stakeholders; prepared multiple working documents summarizing their findings; and undertook three rounds of consultations to obtain stakeholder feedback on the draft conclusions and recommendations. Since some of their findings were still under discussion when this SEA was evaluated, the entire assessment process has not yet been formally concluded by the public dissemination of the final SEA report by HPCD. 109 Report No. 55328 SEA Outcomes The SEA provided an overall holistic picture of the possible environmental impacts of planned transport projects. This outcome was sufficient to increase the awareness of senior managers at the Hubei Provincial Communication Department (HPCD) about macro-level environmental implications of the proposed development of road transport. The HPCD management now pays more attention to environmental issues in detailed investigations that are done during the design stage of each road project. The SEA also indirectly contributed to a new circular, issued by the HPCD management, which encourages the enforcement of environmental protection requirements during expressway constructions. With respect to social learning, all those interviewed during the evaluation agreed that data sharing with regard to baseline analyses was the most useful aspect of this SEA pilot, and that learning was facilitated through this sharing. Part of the contextual background to this case is that institutional control of decision- making in China makes access to data very difficult. Data is often treated as "privately" owned by government agencies, and SEA teams are required to purchase it from the relevant agency. This privatization of data was considered by the Hubei pilot evaluators to be an issue that could significantly constrain social learning in China. Consequently, the relatively open sharing of baseline data in the Hubei case was considered to be unusual, and led to technical and social learning on the part of participating institutional stakeholders With respect to the building of constituencies, however, the Hubei road transport planning case was less successful. Recommendations from the SEA team relating to the establishment of a standing committee on environmental management of road networks were not met with enthusiasm by the responsible authority (the Hubei Provincial Communication Department). It appears that the institutional strengthening proposals, and especially those that challenged current internal arrangements within the responsible authority, were the most sensitive topics that arose during this SEA. Constraining or Enabling Factors The most obvious constraining factors in this case related to the organisational culture of government authorities. For example, while the pilot promoted better-than-usual stakeholder engagement, the evaluation indicated that these consultations ­ which were appreciated by all the relevant agencies ­ could have been enhanced by involving the relevant local (prefectural or municipal) authorities in the assessment process. These authorities exercise significant influence on decisions related to road network development and also control detailed environmental data which could have be used in the assessment process. However, such consultations may not have been realistically achieved within the scope of this specific assignment and its implementation modalities. The evaluation makes it clear that policy SEA approaches ran up against the legal processes prescribed for Plan EIA in Chinese law. The evaluators describe these processes as being "very rigid" and with corresponding institutional arrangements that do not necessarily support the flexibility and inclusiveness sought by policy SEA approaches. In addition, the SEA team prepared an institutional analysis and action plan for strengthening the management of social and environmental issues in provincial road planning. The evaluators state that these proposals were presented to stakeholders at a workshop, but that debate was constrained by resistance from the Hubei Provincial Communication Department. The following quote from the Hubei pilot evaluation further describes this situation: 110 Report No. 55328 "The final proposals prepared by the SEA team regarding institutional strengthening were appreciated by three important stakeholder groups but they were never fully accepted by the HPCD leaders. On the contrary, the institutional proposals became one of the key reasons for HPCDs hesitation to formally disseminate the SEA report". Conclusion Overall, it can be concluded that despite the lack of its formal closure, the SEA process has positively influenced wider decision-making on road planning in Hubei province. While the pilot has not triggered any formal changes in the HRNP, it increased awareness of leaders at the HPCD and at other authorities about the major environmental issues associated with the development of the road system in the province. It has also provided a consolidated baseline analysis and general recommendations which are now being used by the HPCD in the continuous process of decision-making on the road network development. The SEA has also helped to strengthen environmental management at the HPCD which established new criteria to examine environmental performance of its various departments. HPCD now also reportedly requires developers of various expressway projects to pay more attention to environmental issues. The pilot SEA had stimulated more detailed monitoring of the overall development of the road network. It also helped to establish new contacts between the HPCD and the relevant provincial authorities. Some respondents believe that recommendations of the assessment process indirectly triggered improvements in consultations with stakeholders during the detailed planning of individual roads and also enhanced compensation schemes for those adversely affected by these projects. A concluding observation made by the evaluators is that SEA process needs to focus on the key decision making dilemmas and concerns of the relevant stakeholders. It should use a methodology which allows for those taking part to provide their data and either jointly undertake the analysis or at least thoroughly debate the draft findings prepared by the assessment team. The recommendations obtained through the assessment should not create direct opposition to their implementation or continuation of the SEA process. If the SEA needs to formulate ambitious recommendations, it should determine immediate priorities which can be realistically implemented in the near future and supplement these with a proposed agenda for improvements that can be made in mid-term and long-term time perspective. Excessive striving for achievement of a maximum immediate outcome may endanger overall success of the entire process. 111 Report No. 55328 THE WEST AFRICA MINERAL SECTOR STRATEGIC ASSESSMENT (WAMSSA) The Proposed Intervention The West Africa Mineral Sector Strategic Assessment (WAMSSA) aimed at informing the preparation of a West African initiative to support mining reform. This initiative, known as the West Africa Mineral Governance Program (WAMGP), initially attempted to support West African countries to catalyze development opportunities from mining sector growth by i) enhancing donor coordination, ii) harmonization of policies, laws and regulatory frameworks, and iii) strengthening regional capacity to negotiate contracts with mining companies. The WAMGP and WAMSSA were endorsed by Mano River Union governments, West African regional integration organizations, and donors at the West Africa Mining Forum held in Conakry, Guinea, on February 11-12, 2008. Currently, the WAMGP proposes a $300 million adaptable program loan (APL) made up of a number of smaller APLs designed for individual countries and focused on good governance; information systems and investment promotion; and, value addition to national and regional economies. The strong intention of WAMSSA was to influence whatever large-scale regional mining governance project/program is finally adopted by the West African governments. Brief Description of the Pilot WAMSSA has its origins in the period of rising commodity prices immediately prior to the economic collapse of late 2008. A combination of resource availability, rising commodity prices and mining sector experience suggested that minerals and oil could be one of the few existing options for jump-starting development, especially in Sierra Leone and Liberia, both of which had been ravaged by civil war during the 1990s. WAMSSA consisted of four phases: Phase 1: The project was launched at a West African conference on mining and sustainable development in 2008. This resulted in the delivery of an Inception Report that outlined the approach and methodologies to be employed in the study; Phase 2: Focused on the collection of background information (through stakeholder engagement and desktop-level data collection) and aimed to identify key opportunities and constraints for environmentally and socially sustainable regional mineral sector development through a mineral clustering approach; Phase 3: Presented the findings of Phase 2 to national-level stakeholders with a view to ensuring that the outcomes were in line with expectations, and that a regional approach makes logical sense, along with the determination of appropriate scenarios for mineral development and an institutional analysis for implementing sustainable development associated with the minerals sector; and Phase 4: Convened a final round of consultations, including a Regional Validation Meeting and final meeting of the WAMSSA Steering Committee to provide input into the final WAMSSA report. WAMSSA as a policy dialogue involved an extensive and detailed consultation process. It consisted of focus group meetings in all three national capitals, community surveys undertaken in ten mining communities in the three countries; national workshops used to select and rank environmental and social 112 Report No. 55328 priorities, as well as to identify key policy and institutional adjustments to be incorporated in mining reform; and a final regional validation workshop. SEA Outcomes WAMSSA showed evidence that it had contributed to improved dialogue over environmental and social issues, and this included quite elaborate techniques for involving stakeholders in the ranking of priorities. The highest ranked priorities were: "insufficient transparency/consistency of decision-making", "deforestation and biodiversity", and "poverty in mining areas". Perhaps more important than the approach taken to prioritization is the effect that it had on development issues, and the likelihood that it would produce a long-term impact on the movement towards environmentally sustainable policies. There is evidence that raised attention to environmental priorities may well have set environmental and social priorities in the policy reform agenda, and by extension, may lead to better final outcomes. For example, it is clear that WAMSSA has had a substantial impact on how stakeholders view the concept of regional harmonization of mining policy. This may well be the most important influence that WAMSSA has had on regional mining reform. There is also evidence of environmental constituency-building in the WAMSSA pilot, where the SEA process appears to have "opened up" examination of the institutional mechanisms used to deal with regional planning and harmonization. A considerable amount of time was spent in final validation workshops discussing the proliferation of regional initiatives. This was a source of some concern and confusion. A number of stakeholders were keen to see WAMSSA ... or at least its outcomes ... carried through beyond its completion. Workshop participants discussed how best to institutionalize this new policy dialogue. There was a strong call from the stakeholder group for some kind of permanent, multi-stakeholder constituency to keep the policy dialogue going. Participants made clear their frustration with the fact that the outcomes and recommendations of many previous reports and consultations seem to be instantly forgotten once the donor-funded project has been completed. Even work that has high-level government support can be stalled or shelved with changes in political leadership. A policy or program may have the backing of a development partner or a particular administration, and then a change of decision-makers cause those priorities to shift. The stakeholders proposed a sophisticated ongoing "multi-stakeholder framework" that would become a "home" for the policy dialogue begun during WAMSSA consultations. It would include a series of multi- stakeholder bodies formed at the regional, national and local level to ensure transparent stakeholder participation and social accountability for mining development decisions. Regarding improved social accountability, WAMSSA presents an example of small but significant steps forward in overcoming cynicism. Stakeholders from Liberia and Sierra Leone appreciated the I-SEA process because it had the potential to "take decisions away from mining companies and governments". It is a matter of fact that large mining companies often end up working directly, and in secret, with governments in their attempts to negotiate contracts that would allow favourable access to mineral deposits. While powerful stakeholders are within their rights to negotiate under their own terms, public commitments to social accountability mechanisms such as multi-stakeholder processes can make it more 113 Report No. 55328 embarrassing for mining companies ... and possibly governments ... to back out and resort to bilateral negotiation. With regard to policy learning, many interviewed stakeholders agreed that data sharing was a useful aspect of the policy SEA process, and that learning was facilitated through this sharing. In addition, interviews with stakeholders during the validation workshop in Sierra Leone provided evidence that WAMSSA had promoted new ways of thinking about the development of high-level policy. For example, institutional stakeholders from Guinea were confident that WAMSSA will provide a methodological approach for dealing with environmental and social issues in that country, and beyond the minerals sector. Constraining or Enabling Factors Three of the six identified constraining or enabling factors discussed in Section 2.4 were evident in WAMSSA. First, this pilot was one of the few where strong ownership of the policy dialogue process opened by WAMSSA was found in civil society organizations. Second, with regard to power elites, the SEA team undertook extensive consultation and built up a strong case for regional harmonization of minerals policy in Liberia, Guinea, and Sierra Leone. The consultants concluded that the majority of stakeholders supported the concept of regional harmonization. However, as the evaluator points out, the minority of stakeholders who do not support the idea may well be more powerful. At least four elite interest groups would not see a move to regionalism as being to their advantage. Senior politicians and senior Mines Ministry bureaucrats in the three countries have often been accused of rent-seeking behavior. A move towards cluster development and regional harmonization would tend to lead to a more transparent system of governance that would threaten existing privileges to make discretionary decisions. Finally, one of the most interesting examples of a challenge to elite power is the multi-stakeholder framework proposed in the WAMSSA pilot. If this framework is accepted by the West Africa Mineral Governance Program intervention, then it will establish a long-term constituency process that is outside of existing national and regional institutions, and has the potential to outlast changes in governments. In a consultation meeting of the WAMGP held in Ouagadougou on December 3, 2009, countries supported WAMSSAs multistakeholder framework as the basis for the accountability framework of the WAMGP. Conclusion The engineering of the existing linkages between the WAMGP and WAMSSA is one of WAMSSAs strengths. Other benefits of WAMSSA include: the extensive process of policy dialogue developed through the consultation program which led to general acceptance of the concept of regional harmonization; the solid work produced on mining sector development opportunities that supported the mining-infrastructure cluster concept; and, the establishment of groundwork for enhancing transparency and accountability in managing mineral resources. However, there are some limitations that are worthy of note. First, the reports may have overplayed the support for the idea of regional harmonization. Entrenched interests, especially those associated with rent- seeking behaviour, are quite likely to oppose regional cluster development when they fully understand that it might make mining policy more transparent, and hence threaten their illegal profit-making. 114 Report No. 55328 Second, while WAMSSA does discuss the problems of artisanal mining, the chosen reform option of mining clusters tied to regional harmonization is clearly focused more on large mines and small-scale mines. Artisanal mining is essentially left out of this new equation. Because the approaches needed for dealing with artisanal mining problems are so different, it may be that this sector should not have been included in the WAMSSA process, and a separate/parallel study should have been commissioned. Third, large mining companies will always be tempted to enter into bilateral arrangements with governments. This kind of activity tends not to provide the best outcomes for local communities and the disenfranchised. While WAMSSA did attempt to involve mining companies in the policy dialogue, not many participated. This is a limitation that could possibly have been overcome with more concentrated effort. 115 Report No. 55328 DHAKA METROPOLITAN DEVELOPMENT PLAN STRATEGIC ENVIRONMENTAL ASSESSMENT The Proposed Intervention Dhaka is one of the ten mega-cities in the world. Growing at a very fast rate, the population of Dhaka urban area is predicted to increase to about 21 million by 2015. Dhakas rapid development, its fast- changing urban landscape and associated critical environmental challenges, call for holistic urban planning and thestrengthening of institutions responsible for urban development and good governance. In this context in 2006, the Dhaka development authority, RAJUK, was preparing what are called Detailed Area Plans (DAPs), which make up the lowest tier of the Dhaka Metropolitan Development Plan (DMDP). A Strategic Environmental Assessment (SEA) was commissioned by the World Bank and RAJUK, to incorporate environmental considerations and provide strategic direction to the DAPs. The SEA was also intended to inform the preparation of the World Bank Dhaka Integrated Environment and Water Resources Management Program (DIEWRMP) which supports integrated pollution management and reduction of industrial pollution in the watershed of Greater Dhaka. It was expected that the SEA could inform the DIEWRMP design as to the institutional responsibilities and regulations with regard to industrial developments in the watershed. Brief Description of the Pilot The SEA was understood by the Government of Bangladesh to add value to the technically-oriented output of the ongoing local level planning (DAPs). Therefore, the SEA attempted to provide a platform for dialogue and interaction between policy makers, planners, stakeholders and civil society at large on environmental priorities, and on how these priorities could be affected by the implementation of urban development plans. The SEA study was launched in 2006 and completed in 2007. It was initially intended to be a conventional impact-centred assessment with some elements of institutional analysis. As an adaptation to constraining factors in the institutional framework for DAP preparation, the analytical focus of the SEA was changed. The higher level plans of the DMDP planning framework did not provide the strategic guidance needed for the DAPs and the urban development framework was highly fragmented with responsibilities divested amongst a multitude of government agencies. The objectives were revised to focus on institutions and governance conditions, and to provide overall direction to the DAP preparation process. The analytical component of the SEA was constituted according to the following three areas of concentration: 1. An analysis of the key environmental problems in the DMDP area based on secondary information available in various published studies and documents, and an analysis of their linkages to policies, legislation and plans. 2. An assessment of the adequacy of existing urban plans and the planning process at the strategic level in order to make recommendations for improved planning and governance. 116 Report No. 55328 3. An assessment of the efficacy of the on-going DAP formulation process, review of the design and technical planning capacity in RAJUK; and identification of the areas and needs in RAJUK where interventions for capacity development would be beneficial to overall urban management. Political economy issues and historical aspects of urban development were only indirectly addressed and superficially covered in the institutional analysis. The analysis did not address, for example, the driving forces behind rural to urban migration, and the consequent increase in informal settlements in the urban area, where people live under extremely harsh conditions. The findings of the SEA addressed two main themes: the weaknesses in the strategic level planning framework in terms of overarching plans and organisational set-up; and, problems at the implementation level. The recommendations focus on improving the DAP planning process. The participatory component of the SEA involved one-on-one meetings, an initial stakeholder workshop, a sensitization meeting with the DAP technical management committee, a sectoral stakeholder workshop, six DAP area meetings, and a final consultation workshop. Many of the stakeholders interviewed for the purpose of the evaluation in 2009 had only vague recollections of the SEA process and their participation therein. Those who did remember participating argued, amongst other things, that: insufficient information was provided in the workshops; the purposes of consultation exercises were not adequately explained; workshops were not very interactive; and, the consultation exercises were too short. SEA Outcomes Due to constraining factors related primarily to a lack of "ownership", the Dhaka pilot did not achieve anything substantial in relation to policy SEA outcomes. The identification of environmental priorities was based on a combined ranking of the SEA teams analytical assessment, and selected stakeholders (government and civil society organisations) ratings of environmental concerns. Vulnerability and health aspects were not considered in the analytical ranking and identified environmental priorities were not reflected as changes to the DAPs. The SEA appears to have contributed to raising some limited awareness within RAJUK of the need for environmental assessment in order to take a more holistic approach to planning and urban development. The World Bank Country Office and RAJUK now recognise the need for capacity development within RAJUK through continued technical assistance. Finally, the results of the SEA informed the preparation of a policy note that had not been decided on by the government at the time of the evaluation of this pilot in 2009. Constraining or Enabling Factors Windows of opportunity: The evaluators suggested that, due to contextual factors, the DAP preparation process proved not to be an appropriate window of opportunity for policy SEA. Firstly, attempting to use spatial planning as a window for wide-ranging policy reform restricted the possibility for the SEA to address some of the underlying causes of urban degradation in Dhaka. Secondly, as a seller of plots, RAJUK generates its own revenues and is not dependent on government funds and thus less accountable to higher administrative levels. RAJUK has strong links with private sector development companies, which also hampers its accountability and incentive to pay attention to advice concerning institutional reform. The urban (as well as national) governance context in Bangladesh is highly politicised. This had 117 Report No. 55328 implications for the local ownership of the SEA and resulted in a lack of integration with the DAP preparation process. Ownership and understanding of policy SEA risks and benefits: Evidence from the Dhaka pilot suggested that securing ownership at an early stage is partly dependent upon the identified partner/policy proponent having: sufficient capacity and training to understand the concept of SEA; incentives to consider the results and recommendations of the SEA; and, sufficient capacity to allow for adequate process integration of the SEA in the policy formation process. Initial and ongoing awareness raising and training about the outputs and benefits of SEA may be required if the partner does not have previous experience of addressing environmental and social concerns at the strategic level of decision making. The evidence further suggests that it is important that the development cooperation agency beyond the SEA team has adequate understanding of potential political economy risks associated with the expected results and recommendations of a policy SEA, in order to ensure that these can be effectively taken into account in their recommendations and actions. In the case of the Dhaka SEA, recommendations have influenced World Bank program and policy to a very limited extent. Consulting stakeholders: The failure of the SEA to pay particular attention to the interests of vulnerable groups highlights the need for: a careful and thorough stakeholder analysis that is sensitive to various types of vulnerabilities, in order to meet the objectives of policy SEA; and, to clearly communicate the purposes of policy SEA to the consultants, provide them with clear terms of reference, and to give them adequate methodological guidance and training. Civil society organisations with an interest in urban development in Dhaka are limited in number, but appear reasonably vibrant and influential. They have strong networks amongst each other and with the media, and several seem to have links with politicians. Awareness about environmental issues and the need for an integrated approach to urban development appears high, and seem to have been so for quite some time. The SEA consultation process certainly provided another venue for these constituent groups to get together and discuss urban environmental issues, and also an opportunity to present their views to people in decision making positions. On the other hand, for some the SEA consultations were probably just one workshop among many. Underestimating the role that civil society and government representatives could play in the SEA process and neglecting to provide feedback to participants in consultations compromised the potential of the SEA to contribute to improving accountability and strengthening environmental constituencies. Follow-up: With regard to strengthened constituencies, limited consultation provided little time for individual reflection and the development of mutual understanding. In addition, the final SEA report was not disseminated to stakeholders, and so an opportunity was missed to strengthen environmental constituencies by providing them with a tool for learning, advocacy and demanding accountability. Conclusion In a national context where a politicised and weak governance system is the main constraint to effective environmental management, institutional reform is key for addressing the causes of environmental degradation. It is important to recognise the lack of incentive and capacity to regulate the use of natural resources and polluting activities, and to enforce these regulations, as the underlying causes of 118 Report No. 55328 environmental degradation, instead of overexploitation and pollution per se. In that regard, the objectives of policy SEA are relevant. Policy SEA, or elements thereof, could be used by a development cooperation agency as a tool to scope out the strategic direction for support to national or sectoral development. To ensure that development cooperation contributes to sustainable development, however, requires that there are systems in place to pick up the recommendations of the policy SEA and incorporate them in a timely manner into relevant processes and strategic documents. This applies both to the national context in which the SEA is undertaken and the development agencys systems. As concluded above, it further requires: that an appropriate window of opportunity in the national/sectoral policy making context is used as an entry point for the SEA; that there is ownership by a national partner as well as within the development cooperation agency; and, that the SEA exercise is seen as a starting point for a long term commitment to support for environmental mainstreaming. 119 Report No. 55328 STRATEGIC ENVIRONMENTAL ASSESSMENT OF THE KENYA FORESTS ACT The Proposed Intervention For many years forest legislation and practice in Kenya failed to protect the countrys indigenous forests or ensure sustainable use of plantations and other areas of forest and woodland. Most forest communities have felt disadvantaged in being excluded from forest management and there was a history of poor management and abuse of powers. In 2005, a new Act received parliamentary approval and endorsement from the President. The new Act contains many innovative provisions to correct previous shortcomings, including strong emphasis on partnership working, devolution of forest user rights, organizational and institutional changes at the national and local level, the engagement of local communities and promotion of private investment. It also extends the concepts of timber management to farm forestry and dry land forests. The adoption of new legislation and establishment of a semi-autonomous Kenya Forest Service (KFS) opened a major opportunity to address the inequalities of the past and to improve the quality and sustainability of Kenyas forests, trees and woodlands. The role of the policy SEA of the Kenya Forests Act carried out between 2006-7 was to highlight areas where the reform process should concentrate its activities in order to achieve real and lasting social and environmental benefits. It also aimed at informing the policy dialogue between the World Bank and the Government of Kenya (GoK) on sustainable natural resource use by feeding into the preparation of the World Banks Natural Resource Management Project (NRM). Brief Description of the Pilot The SEA team worked closely with the Forest Reform Committee and Secretariat established by the Ministry of Environment and Physical Planning. A crucial element of the SEA was its reliance on the active participation of a wide range of stakeholders, through workshops and one-to-one discussions. This dialogue was essential in identifying key issues and priorities for action. The SEA also examined conditions within two forest areas: Hombe Forest and Rumuruti Forest. The policy SEA responded to local circumstances through a rapid appraisal of the political economy and other situation assessments. The main sequence of activities included four phases as follows: Screening and scoping: this initial phase entailed a rapid assessment of the political economy relating to the forest sector in Kenya. It also involved determining who should be approached as stakeholders and it identified the environmental and social considerations that would need to be taken into account in later phases of the work. Situation assessments provided a baseline description of the governance and institutional, economic, financial, social and environmental factors that need to be taken into account in implementing the Forests Act. Environmental policy priorities were selected by the stakeholders in two workshops. Key forest issues related to the implementation of the Act were discussed in the first workshop. The second workshop brought together findings from the various assessments and agreed on priorities for action. The final stage of the SEA involved the preparation of a Policy Action Matrix (PAM) which captures policy issues and priority areas and sets these out with clear timetables, milestones, stakeholders, expected outcomes, status of progress and responsibilities for action. These actions were discussed at 120 Report No. 55328 the third workshop, with the intention of obtaining commitments from key stakeholders to taking forward the various initiatives. SEA Outcomes A clear message from the evaluation was that the SEA process had raised attention to environmental priorities and reinforced the need to adequately address these priorities. Examples of key environmental priorities included: protection of watersheds and biodiversity; sustainable forest management (in particular arid and moist forests); and, payment for environmental services provided by forests and forest ecosystems. However, the environmental assessment was rather shallow, and devoid of a high level of detail of the complexity of Kenyas forest resources. The evaluation also found that the SEA contributed to strengthening of constituencies. By involving local and arguably less powerful/influential stakeholders in the SEA-process (such as NGOs, CBOs, local community representatives) a more level playing field was created for the discussions and prioritization of actions. Besides some likely effects of the SEA, a larger and arguably much more important impact on strengthening constituencies has been achieved by the adoption and implementation of the Forests Act. It has generated considerable focus and expectations on Participatory Forest Management and encouraged CSOs and NGOs to take an active part in supporting local communities to take more responsibility for local forests through formation of Community Forests Associations. Given Kenyas historical record of mismanagement of forestry resources there is a need to strengthen mechanisms for holding government and other stakeholders to account regarding their forest use. The SEA process, including its stakeholder workshops and open discussions, discussed accountability issues as well as encouraged development of practices which may improve social accountability. The most tangible and operational evidence of the efforts to enhance social accountability, within the context of the SEA, was the formulation of the PAM. This tool is updated regularly and published on the internet (www.policyactionmatrix.org). It offers a comprehensive, flexible and easily accessible framework that provides stakeholders with a method for holding government and other stakeholders to account. A majority of stakeholders interviewed during the evaluation acknowledged individual learning from their participation in the SEA. They learned about the SEA method as well as from discussions with a broad range of actors and stakeholders. However, the evaluation showed that the SEA exercise was too limited in time and in the number of participants to initiate broad-based policy learning. The interest expressed by local communities on forest use, and the rapid increase in registration of community forest associations (CFAs), indicate that there is generation of new information and knowledge ("policy learning") on policy change related to forest management. As a result of the SEA, the World Banks NRM project, which was developed in parallel, developed a stronger emphasis on governance issues and community engagement in forest management. However, due to lack of financial and human resources set a-side for follow-up of the SEA, and staff changes within the World Bank and GoK, the NRM has not been a sufficient vehicle to take on board the Kenyan stakeholders expectations of substantial engagement of the World Bank in the forest sector reform. The SEA also influenced World Bank activities outside Kenya, including the design of other forest sector related SEAs and the drafting of guidelines for undertaking strategic environmental and social assessments in relation to the Forest Carbon Partnership Facility. 121 Report No. 55328 Constraining or Enabling Factors Timing: Although evaluation interviewees differed in their opinions about the timing of the SEA, it is clear that it was conducted at a time when there was a window of opportunity for policy change. However, the SEA would most likely have been more influential if it had been conducted during (instead of after) the process of formulating the Forests Act and if it had provided for clear follow-up support for the implementation of the Act. Ownership: The SEA was initiated and financed by the World Bank. Although serious attempts were made to link the SEA to the governments planning process for the implementation of the Forests Act, the ownership for the SEA remained firmly with the World Bank. Many stakeholders sensed that the World Bank has not fulfilled the expectations generated by the SEA process on stepped-up World Bank support to the forest sector reform process and follow-up of the PAM and other elements in the SEA. There were also important factors outside the control of the World Bank and the SEA-team that decreased the GoK ownership of the SEA process. Notably, the dismantling of the Forest Sector Reform Committee and Secretariat just after the SEA was completed led to changes in staff and loss of "SEA-champions". Resources: The limited human and financial resources for follow-up and communication of the SEA findings and recommendations have severely constrained the effectiveness of the SEA. A broader contextual factor is the political history of the Forest Department which has had severe implications on the possibilities of KFS to generate sufficient funds to adequately follow up on the PAM and implement the Forests Act. Since most of KFS-staff are former staff at the Forest Department, KFS has not been able to change the public image of inefficiency and mismanagement associated with the previous Forest Department. This is one explanation as to why financial support from the treasury and donors has been low. It is also one of the reasons behind the political resistance against lifting the ban on logging, something which could generate resources for the KFS. Political commitment: Forest sector reform in Kenya is highly politicized and involves entrenched vested interests at high political levels. Successive governments have used forest land to influence people to vote for incumbent governments or even for political rewards as a form of patronage. The ambition of the SEA to integrate environmental and social concerns in such a reform context is clearly challenging. Obvious factors beyond the control of the SEA-team, but with implications for the implementation of the Forests Act, include the post-election violence of early 2008 and associated government restructuring, and the more recent high-level political attention to the Mau forest. However, against this contextual background, it would have been vital to ensure that the SEA included elements that catered for a more sustained change-process (ownership, resources, follow-up etc). Many stakeholders stated that the SEA became a too-punctuated intervention. After its completion there was a void, and there was a need for a much more long-term engagement and swift follow-up on the findings and conclusions. Conclusion The SEA of the Kenya Forests Act was influential in several ways: it spread knowledge about the Forests Act and intentions from planners to a broader audience; it put structure to knowledge which had been scattered and was only partial across agencies, ministries and other key stakeholders; and, it created a lever for civil society advocacy for implementation of the Forests Act. The SEA also assisted in identifying the need for the formulation of guidelines for promotion of Participatory Forest Management 122 Report No. 55328 (PFM), formation of Community Forestry Associations, and a manual on preparation of forest management plans. For some stakeholders, particularly among CSOs, the workshops provided important forums for articulating their concerns. The SEA contributed to an understanding of many of the complexities, challenges and opportunities embodied in the new Forest Act. It also emphasized the necessity to re-think forest management in Kenya, and that new innovative tools for Sustainable Forest Management were available through the new Act. Generally, the SEA facilitated broad but not full stakeholder participation, environmental priority setting, and strengthening of some constituencies. According to some stakeholders, the SEA contributed to improved (government) accountability on forest reform and learning across key stakeholders. However, these impacts have been insufficiently sustained largely due to limited political support to the forest reform process and to lack of follow-up activities associated with the SEA. 123 Report No. 55328 RAPID INTEGRATED STRATEGIC ENVIRONMENTAL AND SOCIAL ASSESSMENT (SESA) OF MALAWI MINERAL SECTOR REFORM The Proposed Intervention In July 2009, the World Bank completed a mineral sector review for Malawi (MSR) with the purpose of informing the mineral sector reform process in Malawi and the World Bank level of engagement in the sector. Between 2008 and 2009, as part of this review, a rapid integrated Strategic Environmental and Social Assessment (rapid SESA) was undertaken with the main purpose of reviewing the environmental and social regulatory framework for the mining sector. The rapid SESA also attempted to incorporate critical environmental and social considerations into the ongoing discussion of Malawis Mines and Minerals Policy and the dialogue between the World Bank and the government of Malawi for reforming the mining sector. Brief Description of the Pilot Mining has traditionally been of limited importance in Malawi. However, large scale mining developments, including uranium mining, have recently been initiated and the potential for future investments in the sector is significant. This development has strained the very limited capacity in Malawi for managing the environmental and social risks and opportunities associated with large scale mining. The objective of the rapid SESA was to include environmental and social issues into the initial dialogue between the government of Malawi and the World Bank on mining sector reform. Also, the rapid SESA aimed at opening this dialogue to civil society stakeholders and the mining industry aiming at contributing to building trust among key policy players. The rapid SESA had two phases. During the first phase through a desk review, one-on-one interviews with representatives of stakeholders and fieldwork undertaken in Lilongwe, an assessment on existing environmental and social systems to manage key environmental and social issues in mining activities was drafted. In the second phase, the preliminary results of the first phase of the SESA and the draft MSR were discussed and validated with stakeholders in a workshop held in Lilongwe on March 17-18, 2009. It is expected that the rapid SESA will be followed by a full SESA during the mining sector reform preparation project to be supported by the World Bank. The rapid SESA was undertaken by a policy SEA specialist in approximately 20 working days. SEA Outcomes In line with its limited scope, the outcomes of the rapid SESA are punctuated rather than lasting, and much more thorough approaches are needed in order to substantially strengthen institutions and governance capacity. Nevertheless, the evaluation found that the rapid SESA made relevant contributions towards several broader outcomes. Environmental and social priorities related to mining sector development in Malawi have been very high on the political agenda during the last few years. In particular, the first large scale mining development in Malawi, the Kayelekere uranium mine, ignited a confrontative dialogue around social and environmental risks associated with uranium mining between civil society organizations, government and the mining company. Based on stakeholder interviews, the evaluation found that the rapid-SESA contributed to 124 Report No. 55328 further raising attention to environmental priorities. Without ranking or rating the various environmental priorities raised by the interviewees, key environmental priorities include: i) water pollution from uranium mining as well as small-scale coal mining; ii) occupational health and safety in uranium, coal and limestone mining; iii) air pollution from coal and limestone mining; iv) risks of loss of biodiversity and degradation of eco-system services, and the risks of drainage of water from uranium mining into river systems and eventually into Lake Malawi. However, it was clear that stakeholders do not share the same view of the relevance, magnitude and risks associated with the different environmental priorities related to mining. The Mineral Sector Review and the rapid SESA reportedly managed to strengthen constituencies relevant to specific mining sites or specific mining operations. However, this impact was mainly temporary and had already tapered off at the time of the evaluation. The strengthening of some constituencies also started from a very low level. Nevertheless, the consultation conducted as part of the MSR, and the stakeholder workshop in particular, contributed to the strengthening of some constituencies. Reportedly, the workshop created a more level playing field across actors, and encouraged some weaker and more vulnerable communities or NGOs to claim larger stakes in the development of the mining sector generally, and in specific mining operations particularly (eg Kayelekere uranium mine). However, if this impact is to be sustained, there is a need to: i) review the tools and interventions necessary to strengthen constituencies, and ii) to reinforce the efforts to targeted and broad-based strengthening of constituencies. Against a background of deep mistrust, the efforts to collect and share information on key environmental and social concerns in the rapid SESA were highly relevant in terms of improving accountability. Civil society representatives interviewed welcomed the opportunity to dialogue with government and private sector representatives provided through the stakeholder workshop and would welcome further initiatives in this direction. They also welcomed the recommendation to investigate the possibility for Malawi to join the Extractive Industry Transparency Initiative, which was seen as an important way of enhancing accountability. Finally, being a relatively new issue in Malawi, the rapid increase in mining activity has generated a lot of knew knowledge and learning among individuals and organizations. Government departments as well as civil society organizations have gone through a process of technical learning on a range of mining issues, especially relating to large-scale mining. Interviews with government officials indicate that there is an increased understanding of: (i) the need for improved coordination between ministries in order to manage mining sector risks and opportunities; (ii) the need to bring civil society organizations into the development process; and (iii) the need for mechanisms for sharing of benefits from mining with local communities. The MSR and the rapid-SESA were a relevant impetus to the learning process through providing an overview of international good practice as well as key opportunities and challenges for mining sector reform in Malawi. In a situation of mistrust and value conflicts between stakeholders, dialogue and deliberation may be as important for learning as new information. The stakeholder workshop represented an important but very limited platform for dialogue and learning in this respect. 125 Report No. 55328 Constraining or Enabling Factors With regard to capitalizing on "windows of opportunity", the rapid SESA was timely and fed into the process of developing new mining sector legislation and policy, as well as a revised growth and poverty reduction strategy. The SESA formed an integrated part of the broader Mineral Sector Review. As such, environmental and social concerns formed part of the overall assessment and dialogue on key mining sector reform priorities. Arguably, this integrated approach mitigated against the risk of marginalizing the findings of the environmental assessment. However, there is a risk that in the continued reform process, the fact thatthe Ministry of Natural Resources, Energy and Environment is in charge of both mineral sector development and environmental protection will favour activities promoting mineral sector growth and will disregard SESA recommendations for strengthening environmental and social management practices. Certain political economy factors (e.g. vested interests in the mining sector) were identified as constraining the development of environmentally safe mining operations, broad-based sharing of benefits, and securing the rights of local communities. It is also worth noting that the rapid SESA focused entirely on formal institutions, and not at all on informal institutions. There is a need to better understand the role and perspectives of traditional leaders and local communities. Finally, while the rapid SESA put forward many pertinent recommendations, a key concern is that these recommendations had not been properly communicated to stakeholders. Another concern is the punctuated nature of the MSR and the rapid SESA. If the rapid-SESA is followed by a more thorough assessment, it could be viewed as an important stepping stone, or agenda setting device, for the integration of social and environmental concerns in mining sector development60. Conclusion In summary, the rapid-SESA was timely, integrated and highlighted key concerns to be addressed in order to promote sustainable mining development. However, a more substantive environmental and social assessment should follow to generate a deeper understanding of the environmental and social concerns related to mining sector development. A deepened stakeholder analysis and consultation process would also have the potential to result in a more marked effect on the envisioned process outcomes of policy SEA. If the rapid-SESA is followed by a more thorough assessment during preparation of mining reform it can be viewed as an important stepping stone, or agenda setting device, for the integration of social and environmental concerns in mining sector development. The proposed full SESA as an input to the preparation of the recent Mining Technical Assistance Project (MTAP) requested by the government to the World Bank is a positive development in this direction. If, on the other hand, the rapid-SESA encourages policy-makers (within GoM and the World Bank) to consider that environmental and social concerns have already been properly addressed through the rapid-SESA, then the rapid-assessment runs the risk of being used as a "green alibi" for the sector reform process. 60 Currently, the government of Malawi has requested World Bank support for a mining technical assistance project (MTAP) to support mining reform. Among other activities for the preparation of the MTAP, the government intends to undertake a full SESA of the mining sector. 126 Report No. 55328 Annex 2: Conceptual Analysis and Evaluation Framework for Institution- Centered Strategic Environmental Assessment By Daniel Slunge61 Sibout Nooteboom62 Anders Ekbom63 Geske Dijkstra64 Rob Verheem65 61 Environmental Economics Unit, Dept of Economics, Univ. of Gothenburg (daniel.slunge@economics.gu.se) 62 Dept of Public Administration, Erasmus University Rotterdam (nooteboom@fsw.eur.nl) 63 Environmental Economics Unit, Dept of Economics, Univ. of Gothenburg (anders.ekbom@economics.gu.se) 64 Dept of Public Administration, Erasmus University Rotterdam (dijkstra@fsw.eur.nl) 65 Netherlands Commission for Environmental Assessment (Rverheem@eia.nl) 127 Report No. 55328 Acknowledgements This document has greatly benefited from discussions at three different workshops. The first workshop, which took place in Rotterdam on September 8, 2008, identified key issues and literature to be included in the conceptual analysis. It was arranged by the Department of Public Administration, Erasmus University, with the following participants: Joachim Blatter (University of Lucerne), Jan Kees van Donge and Lorenzo Pelligrini (Institute of Social Studies), Fernando Loayza (World Bank), Rob Verheem (Netherlands Commission for Environmental Assessment), Anders Ekbom and Daniel Slunge (University of Gothenburg), Arwin van Buuren, Steven van der Walle, Geske Dijkstra and Sibout Nooteboom (Erasmus University). The second workshop, in Gothenburg, October 27-28, 2008, discussed a first draft report and identified key gaps to be addressed. It was arranged by the Department of Economics at the University of Gothenburg and included the following participants: Kulsum Ahmed and Fernando Loayza (World Bank), Maria Partidario (University of Lisbon), Neil Bird and John Young (Overseas Development Institute), Mĺns Nilsson (Stockholm Environment Institute), Anna Axelsson and Mat Cashmore (Swedish EIA Centre), Rob Verheem (Netherlands Commission for Environmental Assessment), Sibout Nooteboom (Erasmus University), Anders Ekbom and Daniel Slunge (University of Gothenburg). The third workshop, arranged by the World Bank in Washington D.C, June 12-13, 2009, focused on presenting and discussing the report with the evaluators and revising the proposed evaluation methodology. It included the following participants: Fred Carden (IDRC), Ineke Steinhauer (Netherlands Commission for Environmental Assessment), Anna Axelsson and Ulf Sandström (Swedish EIA Centre), Anders Ekbom and Daniel Slunge (University of Gothenburg), David Annandale and Juan Albarracin-Jordan (consultants), Kulsum Ahmed, Fernando Loayza, Dora N. Cudjoe, Setsuko O. Masaki and Sunanda Kishore (World Bank). Valuable comments during the workshops as well as on several draft versions have greatly assisted in developing the content of the document. Financial support from the Swedish International Development Cooperation Agency and Dutch Development Cooperation (through NCEA) is greatly acknowledged. 128 Report No. 55328 EXECUTIVE SUMMARY 131 A. INSTITUTION-CENTERED SEA 134 1. INTRODUCTION 134 2. INSTITUTION-CENTERED SEA ­ A CONCEPTUAL MODEL 136 B. KEY ISSUES IN I-SEA 141 3. UNDERSTANDING POLICY PROCESSES 141 3.1 Perspectives on Policy Processes 141 3.2 SEA and Policy Processes 144 4. IDENTIFYING ENVIRONMENTAL PRIORITIES 146 4.1 Perspectives on Environmental Priority Setting 146 4.2 SEA and Environmental Priority Setting 150 5. STRENGTHENING STAKEHOLDER REPRESENTATION 152 5.1 Perspectives on Stakeholder Representation 153 5.2 SEA and Stakeholder Representation 156 6. ANALYZING INSTITUTIONAL CAPACITIES AND CONSTRAINTS 157 6.1 Perspectives on Institutions 157 6.2 SEA and Institutions 161 7. STRENGTHENING SOCIAL ACCOUNTABILITY 163 7.1 Perspectives on Accountability 163 7.2 SEA and Accountability 166 8. ENSURING SOCIAL LEARNING 167 8.1 Perspectives on Social Learning 168 8.2 SEA and Social Learning 172 C. EVALUATING I-SEA 174 9. FRAMEWORK FOR EVALUATING I-SEA PILOTS 174 9.1 Evaluation Objectives 174 9.2 Evaluation Considerations 174 9.3 Evaluation Process 176 9.4 Evaluation Questions/Evaluation Criteria 178 References 183 129 Report No. 55328 References on Introduction 183 References on Institution-Centered SEA ­ A Conceptual Model 183 References on Understanding Policy Processes 183 References on Identifying Environmental Priorities 185 References on Stakeholder Representation 186 References on Institutional Capacities and Constraints 186 References on Strengthening Social Accountability 188 References on Social Learning 189 References on Evaluating I-SEA 191 Appendix: Checklist for analyzing institutional capacity for environmental management 192 130 Report No. 55328 EXECUTIVE SUMMARY The objectives of this report are to summarize and critically discuss the analytical underpinnings of institution-centered Strategic Environmental Assessment (I-SEA), and to provide an analytical framework for evaluation of pilot I-SEAs conducted in a World Bank program in several developing countries. The analysis mainly focuses on the policy level, but findings are also expected to be of relevance for SEA at the plan and program level. As outlined in World Bank (2005) and Ahmed and Sánchez-Triana (2008)66, the principal objective of I-SEA is to integrate key environmental issues in (sector) policy formulation and implementation. In order to successfully integrate key environmental issues in policies, the World Bank assumes that it is vital to put a particular focus on the role of institutions while performing an SEA. This report is structured in three parts. In part A of the report a conceptual model of I-SEA is outlined comprising six steps: The first step calls for understanding formation and formulation of policies for a certain sector or theme in a specific country or region. It is assumed that policy formation takes place along a continuum without start or an end. Policy formulation may take place as a discrete (time bounded) intervention along the policy formation continuum. Arguably, policy formulation offers a rare opportunity to incur specific influence on a policy. Consequently, I- SEA aims at incorporating environmental concerns during this "window of opportunity". The creation of a dialogue is the second step of the I-SEA approach. It aims at bringing all relevant stakeholders together in a discussion on the environmental issues relevant to the proposed policy. To inform this dialogue, the third step is the identification of key environmental issues facilitated by a situation analysis and a stakeholder analysis. The stakeholder analysis should inform the identification of the legitimate stakeholders to the key environmental issues in the sector identified through the situation analysis. The fourth step calls for environmental priority setting, which implies that the legitimate stakeholders are invited to react to the situation analysis, raise specific and relevant environmental priority concerns and choose the I-SEA priorities. Institutional analysis of the strengths and weaknesses, constraints and opportunities to address these environmental priorities is the kernel of the fifth I-SEA step. 66 World Bank, 2005. Integrating Environmental Considerations in Policy Formulation: Lessons from Policy-Based SEA Experience. Report 32783, Washington, DC; Ahmed, Kulsum and Ernesto Sánchez-Triana (Ed.), 2008, Strategic Environmental Assessment for Policies ­ An Instrument for Good Governance, Washington DC. 131 Report No. 55328 Finally, in the sixth step adjustments to the proposed policy and the underlying institutional conditions are suggested and recommended. Part B of the report covers strands of research literature that are relevant to the I-SEA steps outlined above: On understanding policy processes the report presents various metaphors of policy processes, e.g. policy making as rational linear planning, a cyclic process, networking; and policy making as action-flow, respectively. It is critical to adjust the I-SEA approach to the particular policy process it is trying to influence. I-SEA can facilitate the solution to complex societal problems through organizing interaction and dialogue between stakeholders and by bringing a greater variety of perspectives into the policy process. On identifying environmental priorities the report presents perspectives on environmental priority setting, and emphasizes the need to understand that environmental priorities are a sub-set of a larger set of other (political, social, economic etc.) priorities in society, and must be identified in relation to them. A key message in this section is that priority setting should not be the exclusive domain of experts, nor of public opinion, but rather of both. The report emphasizes the need for an I-SEA team to address key questions like: what are the political economy aspects related to environmental priority setting? Who sets the priorities for environmental management? Who sets the environmental agenda? Strengthening stakeholder representation is presented as a key component of integration of environmental and social concerns in policy formulation. Variety in stakes and preferences in society, and complex policy processes, require that many contrasting stakes and views are represented in planning and decision-making as well as in implementation. Of particular importance is the need to promote and ensure representation of weak and marginalized groups in society in policy formulation processes. At a general level this is promoted by strengthening social constituencies and institutions for good governance and transparency. Specifically, I-SEA can facilitate strengthened stakeholder representation by ensuring broad and multiple stakeholder involvement in planning and implementation of policies. Conducting institution-centered SEA also requires analyzing institutional capacities and constraints, as well as measures to strengthen institutions capacity to integrate environment in policy planning and implementation. Following North (1994)67, institutions may be made up of formal constraints (e.g., rules, laws, constitutions) and informal constraints (e.g., norms of behaviour, conventions, codes of conduct); they are slow to change, distinct from organizations and influenced by social capital such as trust, shared values and religious beliefs. Key institutional features to be assessed are the ability of institutions to pick up signals about social and environmental issues, to give citizens a voice, to foster social learning and public 67 North, Douglas. C., 1994. Economic Performance Through Time, The American Economic Review, Vol. 84, p. 359-368. 132 Report No. 55328 responsiveness, to balance competing interests by negotiating change and forging agreements, and to execute and implement solutions by credibly following through on agreements. In order to ensure integration of environment in policy formulation, it is argued that SEA needs to identify and understand the role of key institutions, and assess needs and possibilities for institutional strengthening and change. Strengthening social accountability includes ensuring public participation in policy formulation and promoting voice and rights to access to information and justice (especially among weak and vulnerable groups), and social inclusion in key planning and decision-making fora. Key to strengthening social accountability in general, and in I-SEA in particular, is the need to create iterative processes (between the state and the public) in which implementation is assessed by the public in order to ensure accountability of the state vis-ŕ-vis society and its stakeholders, and facilitate adaptive planning, which is sensitive to the preferences and needs of the public. Ensuring social learning presupposes that the state and the public bureaucracy learn from experiences and modify present actions on basis of the results of previous actions. It is emphasized that social learning is a subset of learning which also includes e.g. technical, conceptual and political learning. Social learning builds on both technical and conceptual learning but focuses on interaction and communication among actors. In ensuring social learning in the integration of environment in policies it is necessary to understand and utilize (the role of) research and science-based evidence. In promoting social learning an I-SEA should: (i) "politicize" environmental issues, by linking them to broader development issues and integrating agendas of environmental ministries with those of more influential ministries; (ii) strengthen policy advocacy networks and creating public forums for policy debate to ensure that diverse perspectives are repeatedly placed on policy makers agendas; and (iii) put effective transparency mechanisms in place and support media scrutiny of policy formulation and implementation (Ahmed and Sanchez-Triana, 2008). Based on this conceptual analysis, a framework for evaluating I-SEA pilots is also proposed as part C of this report. This framework aims at: i) establishing joint objectives and a joint methodology for the pilot evaluations; ii) forming a shared understanding of the objectives, concepts and methodologies used in institution-centered SEA; and iii) facilitating the cross analysis of the results of the different pilot evaluations. It proposes a specific evaluation methodology, comprising objectives, process steps, evaluation questions and report narrative. Instead of providing a benchmark to assess success or failure of specific I-SEA cases or experiences, the purpose of the evaluation framework is to assist the evaluators in studying concrete attempts to influence policy for environmental sustainability. Ultimately, the objective is learning from the cases in order to enrich the I-SEA framework and improve the integration of environment in policy formation. The value of this report therefore depends on its effectiveness to convey clear guidance for the evaluators to achieve this learning objective through an analysis as comprehensive and objective as possible. 133 Report No. 55328 A. INSTITUTION-CENTERED SEA 1. INTRODUCTION Strategic Environmental Assessment (SEA) originated as an extension of project level environmental impact assessments (EIA) to the plan, program and policy level. Many of the SEAs being conducted today are still largely focused on assessing impacts and based on EIA- type methodologies. Limitations to using this approach, especially at the policy level, have however been identified and focus of much debate (Ahmed and Sánchez-Triana, 2008; Fischer 2007; Partidario, 2000). A range of alternative approaches have been proposed and used, and there is an ongoing debate among scholars about their respective limitations and merits. For example Partidario (2000) distinguishes between a "decision-centred model of SEA" and an EIA-based SEA model, and Fischer (2007) distinguishes between "administration-led SEA" and "cabinet SEA". Based on experiences with integrating environmental considerations in development policy, the World Bank has put forward an institution-centered approach to SEA (I-SEA) (World Bank, 2005; Ahmed and Sánchez-Triana, 2008). Initiating analytical as well as practical work on I- SEA stems mainly from two sources: it is a response to the World Banks broadening of lending focus from projects to development policy loans (World Bank, 2004) and to its Environment Strategy mandate to focus work on strategic environmental assessment (World Bank, 2001). It also stems from OECDs Guidance on SEA in development cooperation (OECD, 2006), which suggests I-SEA as an approach for assessing the complex interactions between political, social and environmental factors in policies. Central to the I-SEA approach is that in order for SEA to be effective at the policy level, it should be centered on assessing institutions and governance systems that underlie environmental and social management rather than on predicting impacts of alternative policy actions. However, in line with the OECD DAC SEA Guidance, it is recognized that approaches to conduct SEA are varied, and lie on a continuum. While at the policy level a particular focus on institutions may generally be an appropriate SEA approach, in other circumstances more impact oriented SEA approaches may be appropriate. Acknowledging the tentative nature of I-SEA as well as the limitations of traditional SEA approaches, the World Bank has launched a pilot program on I-SEA. The main objective of this program has been twofold: i) to support mainstreaming of environmental and social considerations in the Banks activities supporting policies and sector reform and, ii) to test and validate the I-SEA approach in different sectors, countries and regions. Ultimately, the pilot program seeks to draw broader lessons on the effectiveness of I-SEA and to yield tools that could be useful in applying this approach. The pilot program comprises two components. One component provides grants and specialized assistance to support SEA pilots linked to Banks activities such as development policy loans, technical assistance lending, adaptable program loans, etc. The other component is the evaluation of the pilots to draw lessons on approaches, methods and processes for effective institution-centered SEA. 134 Report No. 55328 Scope: The conceptual analysis and evaluation framework outlined in this report is part of the broader World Bank pilot program on I-SEA. The World Bank coordinates the evaluation of the SEA pilot program with the Environmental Economics Unit at the Department of Economics of the Gothenburg University (EEU), the Swedish EIA Centre at the Swedish University of Agricultural Sciences, and the Netherlands Commission for Environmental Assessment (NCEA). The report has been developed in a process based on collaborative work among the authors, and has been subject to peer review by the programme partners outlined above and external resource persons. The peer review has been facilitated by discussions in workshops held in Rotterdam (Sept. 8, 2008) and Gothenburg, Sweden (Oct. 27-28, 2008), respectively. This conceptual analysis and evaluation framework will guide the evaluation of the I-SEA pilots. In order to optimize the dissemination of the evaluations results to a broader audience, a steering committee of international resource persons and practitioners (e.g. from the development and SEA community, developing country partners etc.) would be established. This committee would provide feedback on the evaluation design and the draft report and assist the evaluation team in the dissemination of the evaluation results. Objectives: This report has the following objectives: i) to summarize and critically discuss the analytical underpinnings of institution-centered SEA; ii) to provide an analytical framework for the evaluation of the pilot SEAs of the World Bank program on institutions centred-SEA. The analysis mainly focuses on the policy level, but findings are expected to be of relevance for SEA at the plan and program level as well. The report does not intend to cover all issues pertaining to the broad subject of SEA and institutions. Rather it covers strands of research literature relevant to institution-centered SEA and issues relevant to guide the evaluation of the pilot I-SEAs. Report structure: The report is structured in three parts. In part A of the report a conceptual model of I-SEA comprising six steps is outlined. Part B of the report contains a conceptual analysis of the issues and aspects relevant to the I-SEA steps outlined in Part A. The following issues are analyzed: policy processes, environmental priority setting, stakeholder representation, institutional capacities and constraints, social accountability, and social learning. Perspectives of each issue as well as links to SEA are presented and discussed. The framework for evaluating I- SEA pilots constitutes Part C of the report. 135 Report No. 55328 2. INSTITUTION-CENTERED SEA ­ A CONCEPTUAL MODEL Integrating the environment in strategic planning and decision-making implies that key environmental issues are taken up in formation of policies in general and in policy formulation in particular. Arguably, formulation of a new policy implies a window of opportunity over a specific time period during which key environmental issues and concerns have extra-ordinary possibilities to be addressed and considered. Once a policy is formally adopted the possibilities to integrate environmental concerns are considerably smaller (Cohen, March and Olson, 1972; Kingdon, 1995). In order to successfully integrate key environmental issues in policies, the World Bank (2005) suggests that it is vital to focus on the role of institutions while performing an SEA. In addition, some other key issues also warrant specific focus to ensure environmentally and to some extent socially sustainable outcomes. These issues include understanding the policy process, identifying environmental priorities, strengthening stakeholder representation, analyzing and strengthening institutional capacities, analyzing and mitigating institutional constraints, strengthening social accountability, and ensuring social learning. In order to be effective, the actual application of I- SEA for a certain (sector) policy needs to be adjusted to the location-specific context. The World Banks approach to assess and strengthen institutions in integrating environment in policies ­planning as well as implementation ­ builds on 6 steps: 1. Understanding policy formation and potential windows of opportunity for influencing decision making: The first step calls for analysing and understanding formation as well as formulation of policies for a certain sector or theme in a specific country or region. As illustrated in Figure 1 it is assumed that policy formation takes place along a continuum without a start or an end. However, policy formulation may take place as a discrete (time bounded) intervention along the policy formation continuum. Such an intervention is an act of power, which may be associated with a policy paper that justifies that act. An act of power can also be a public announcement about the way power will be used in the future (e.g. giving permits, allocation of property rights, environmental entitlements etc.). The time period in which policy formulation takes place implies a rare opportunity to incur specific and arguably additional influence on a policy compared to other times along the policy formation continuum. Hence, I-SEA has as its goal to incorporate environmental concerns in policy formation in general, and focuses its attention on influencing the policy formulation process in particular. 136 Report No. 55328 Figure 1. Schematic Representation of I-SEA in Policy Formation. The purpose of I-SEA is to integrate environmental considerations in the continuous policy formation Policy Formation Learning Learning (feedback) (feedback) Discrete Policy Intervention I-SEA entry point is the opportunity to integrate environmental considerations in discrete (time bounded) policy interventions Source: World Bank, 2008 2. Initiation of stakeholder dialogue: The second step in the I-SEA approach calls for creation of a dialogue. The dialogue aims at bringing all relevant stakeholders together in a discussion on the environmental issues relevant to the proposed policy. "Relevant stakeholders" implies actors in society which claim a stake in the policy, its implementation and the associated environmental issues. The dialogue may be facilitated and coordinated by a (formal/informal) inter-sectoral SEA steering committee. The ultimate objective of the dialogue is to seize the opportunity to incorporate environmental considerations in the continuum of policy formation created by the commitment to formulate a new or reform an existing policy (a discrete policy intervention). 3. Identification of key environmental issues: The third step calls for identification of the key environmental issues upon which the dialogue, assessment and I-SEA recommendations will be focused. The identification builds on two components: a situation analysis and a stakeholder analysis. The purpose of the situation analysis is to identify the key environmental issues relevant to the sector or policy process under consideration. Rather than assessing the potential impacts of the proposed policy or plan, the situation analysis focuses on identifying the key environmental issues currently affecting the sector or region that will be influenced by the proposed discrete intervention. The key question guiding the situation analysis is: what are the existing key environmental issues affecting the sector or region? Likewise, the aim of the stakeholder analysis is the identification of the legitimate stakeholders to these key environmental issues in the sector or policy process. The I-SEA model assumes that it is critical 137 Report No. 55328 for environmental sustainability that these voices be identified and heard during policy formation and planning. It requires therefore that the following questions are addressed: Who are the legitimate stakeholders ("are those claiming stakes jointly perceived as legitimate stakeholders?"), and what are their interests and motivation? 4. Environmental priority setting: The fourth step calls for identification and selection of environmental priorities. This implies that the legitimate stakeholders are invited to react to the situation analysis and have a leading role in the final environmental priority setting, raising in the process their environmental priority concerns. This is a critical stage of I-SEA because, on the one hand, it attempts to promote a process by which social and environmental preferences are brought into the policy dialogue aiming at influencing policy and planning formulation and implementation. On the other hand, it also attempts to facilitate or assist in the creation or strengthening of constituencies with an environmental stake in the policy process. Following recent thinking on political science (e.g. Blair, 2008), the I-SEA model assumes that a critical force for integrating environmental considerations in the continuum of policy formation are groups organized around a common environmental interest or concern directly or indirectly affected by the policy process. Without strengthened and effective environmental constituencies, therefore, the I-SEA model assumes that environmental mainstreaming in policy making would be short-lived. Laws, presidential decrees or regulations eventually adopted when policies are formulated risk to be partially applied, reverted, distorted or even ignored during policy implementation. 5. Institutional assessment: The fifth step calls for an institutional analysis of strengths and weaknesses, constraints and opportunities to address the key environmental issues and priorities identified in the fourth step. The scope of the institutional assessment covers sector and environmental organizations that are responsible for the formulation and implementation of the policy under consideration. It also covers the prevailing formal and informal rules that shape conditions affecting or constraining the behaviour of social actors affected by the policy such as property and customary rights, checks and balance mechanisms for decision making, access to information and justice, etc. Important questions to address in this part of the I-SEA approach are: How do existing systems, organisations and institutions in the country, region or sector manage the environmental priorities identified by the I-SEA? Is there adequate capacity to identify and address environmental priorities? Are there underlying rules that constrain or reinforce the effective implementation of the policy changes under consideration? 6. Formulation of policy and institution adjustments: Lastly, in the sixth step adjustments to the proposed policy and the underlying institutional conditions affecting the formulation and implementation of the policy are suggested and recommended. The adjustments aim at complementing the policy under consideration to promote or improve environmental mainstreaming and at addressing institutional gaps i.e. making appropriate adjustments based on the strengths and weaknesses, constraints and opportunities of the existing institutions. Proposed 138 Report No. 55328 adjustments are taken back to the stakeholders for review and assessment in a validation analysis. As outlined in Figure 2, the World Banks model assumes that by following the six steps discussed above the possibilities to achieve the objective of integrating environmental considerations in policy formulation and implementation could be greatly enhanced. Important process outcomes of the I-SEA approach are assumed to be i) raised attention to environmental priorities; ii) strengthened environmental constituencies; iii) enhanced accountability mechanisms for policy implementation, and iv) greater ability for social learning. Admittedly, however, contextual factors would influence goal achievement. Six steps of I-SEA: I-SEA Objective: 1. Understanding policy formation and Integration of key environmental issues in windows of opportunity to influence decision (sector) policy formulation and making implementation, in order to enhance environmental sustainability. 2.Initiation of stakeholder dialogue 3.Identification of key environmental issues: a. Situation analysis b. Stakeholder analysis 4.Environmental priority setting Process Outcomes of I-SEA: 5.Institutional assessment i) raised attention to environmental 6.Formulation of policy and institution priorities adjustments ii) strengthened constituencies b.Validation analysis iii) improved social accountability iv) greater ability for social learning Contextual influencing factors: i) historical, political, social, economic, and cultural ii) political economy of reform iii) windows of opportunity for policy influence and institutional reform iv) luck Figure 2. Conceptual Model of I-SEA: Process Steps, Process Outcomes and Objectives 139 Report No. 55328 Although the steps outlined above are suggested to be included in practical applications of I-SEA there is no blueprint for how each step should be undertaken. Conducting I-SEA implies an ability to take advantage of windows of opportunity for influencing policy, flexibility to adapt to circumstances beyond the control of the I-SEA team and a great dose of common sense. The I- SEA approach is a theoretical construction based on a dearth of practical experience. The validity of this model needs empirical testing and evaluation. That is the purpose of the World Banks I-SEA pilot programme based on the methodological framework for evaluating the I- SEA pilots outlined in this document. 140 Report No. 55328 B. KEY ISSUES IN I-SEA This part of the report elaborates on issues of key importance in I-SEA, including some of the steps and process outcomes outlined in the conceptual model of I-SEA (figure 2). Different perspectives on each key issue are presented before factors to be taken into account when doing an I-SEA are discussed. 3. UNDERSTANDING POLICY PROCESSES An important prerequisite for influencing policies through I-SEA is to understand policy formation and adjust the I-SEA approach to the particular policy process it is trying to influence. This section discusses critical aspects of policy processes and outlines key factors that need to be taken into account when trying to influence policy formation through an I-SEA. 3.1 Perspectives on Policy Processes A policy may be defined as a course of action, based on some declared and respected principle or set of principles. Public policies can be defined as the use of state power to change organizational or individual behaviour in order to effectuate their national responsibilities and objectives (see Hill, 2005 for a discussion of various definitions). However, policy making is multi-faceted and subject to considerable debate and analysis. Partly contesting perceptions and definitions are suggested to explain what policy making is, and how policy changes can be explained (Hill, 2005). So instead of one comprehensive and exclusive description, policy making is currently best explained in terms of metaphors. Key metaphors of policy making include (i) policy making as rational linear planning; (ii) policy making as a cyclic process; (iii) policy making as networking; and (iv) policy-making as action- flow: (i) Policy making as rational planning, describes policy planning in terms of a "linear model" with certain "stages", like problem definition, policy formulation, decision-making, and implementation. Many impact assessment manuals are structured according to the rational planning perspective. (ii) Policy making as a cyclic process: a policy paper is prepared, implemented, evaluated and updated. This is closely related to the political process, where the elected government leaders answer to parliament. The need to periodically evaluate and review policy papers may be required by law; (iii) Policy making as networking postulates that decisions about the use of resources emerge in multi-actor policy networks (e.g. Kickert e.a. 1997) at multiple levels and scales; (iv) Policy-making as action-flow: social streams of problem owners (complainers), proponents of solution (builders) and political parties (selectors) which, if they coincide, form windows of opportunity for policy entrepreneurs (e.g. Kingdon 1984, 1995). In a way, problems, 141 Report No. 55328 possible solutions and parties find themselves in a "garbage can" from which real solutions may or may not emerge (Cohen, March and Olson 1972). Although governments cannot fully control policy processes they can play an important role in them by stimulating the emergence of windows of opportunity for the social streams of actors to interact and find solutions. Facilitating factors for this to happen include skills of social learning and building of trust (e.g. Nooteboom, 2006). The ambiguity of policy processes: Complex policy processes may be ambiguous, largely because of contradictions between existing legislation and political aspirations and objectives (Ritter and Webber 1973; Schön and Rhein 1994). Clearly, uncertainties and risk also create (or aggravate existing) ambiguities. Moreover, conflicts between short-term and long-term objectives tend to introduce ambiguities in the policy process, as well as trade-offs between incompatible objectives (such as hydro-power investments and sustained ecosystem functions in a watershed). Ambiguities may also occur as a result of different lock-ins. Such lock-ins may be of institutional character (power relations, vested interests) or of physical character (e.g. energy systems which cannot be easily changed within the short term). Such lock-ins constrain the range of opportunities and introduce ambiguities between political objectives (e.g. ecologically sustainable energy production) and practices (ecologically unsustainable energy production) (Beck 1992). Tension caused by ambiguities in the policy making process may have profound repercussions on the possibility to pursue some sort of rational policy planning and use technical analytical tools for priority setting. Ambiguities have to be identified and sorted out, usually in a process of intensified stakeholder participation and a focus on social issues (preferences, constraints, opportunities) rather than technical issues only (e.g. Feldman and Khademian 2008; Kornov and Thissen 2000). The risk of a technocratic approach: The metaphors above are not necessarily inconsistent with each other; in fact they symbolize different aspects of policy processes. However, it is important to understand that the nature of complex policy processes depends deeply on how the system reacts to the limited understanding of individual policy makers (cf. Herbert Simons (1957; 1991) bounded rationality). Policy makers may either be primarily led by limited one- sided understanding (or rationality), or acknowledging the complexities of policy making and try to merge their own knowledge with that of others (policy making as "battle of ideas"). The former approach to policy making may be dominated by conflict in the networks and garbage cans layer of policy processes, while the latter may be more dominated by cooperation. The first would often be referred to as a technocratic approach, which interprets policy making only as rational linear or circular planning, failing to acknowledge that complex policy making implies many actors in networks and that policies are formed in a flow of actions, which can not be anticipated in pre-planned sequences. A technocratic approach focusing on the production of a policy paper may thus be a misguided effort if it is disconnected with the realities of real planning and practice in a sector or subject-matter area. As indicated by Gould (2005), an overly 142 Report No. 55328 technocratic approach to policy making may lead to two "disjunctures": between policy formulation and policy implementation, and between policy and politics, respectively. In addition to relatively useless "paper tigers" it may also lead to policy proposals that are not politically accepted. Many scholars underline the importance of policy formation that is sensitive to social realities and complexities and argue for an understanding of policy formation as occurring in networks of interdependent actors, which all exercise influence at various degrees, and that it is a continuous process without beginning or end (e.g. Feldman and Khademian, 2008; Kickert e.a 1997). Policy processes, power and knowledge: Descriptions of policy making as networking typically also address the role and influence of power and knowledge on the policy making process. Here, power and knowledge are purported to be held by many (rather than few) actors, although the influence may vary considerably across the actors. Individual actors are tied in a larger web of actors, who relates to a complex society. This implies that individuals (e.g. leaders representing an elite) who are trying to influence the agenda are constrained by other powers held in the wider system of (local, national and international) actors and institutions. Nobody is really fully in charge of the system, i.e. of sectoral development. This description represents a stark contrast to other descriptions of policy making as a rational issue determined by a select group of influential actors (typically "decision-makers and experts") interacting in a well- structured society of tangible institutions. Hence, in most countries, power is shared in networks of actors (e.g. Lindquist 2001; Kickert et al., 1997), which may cut across the formal structure of ministries, agencies and other government organisations. One way of describing how policies emerge is therefore the existence of a web of small decisions emanating from the actors, which add up to larger decisions on policy formulation. Therefore, steps to resolve policy issues (formulated in political goals) are often incremental (Lindblom, 1959). Whether influence can be exercised depends on the perceived benefits among the key influential actors in the political process; it helps if interests are organized and alliances (advocacy coalitions) are established based on these interests (Sabatier and Jenkins-Smith, 1993). In developing countries such advocacy coalitions typically consist of a mix of international and national organizations. The policy process becomes a "battle of discourses", in which arguments are sought to support positions already taken. The incremental steps of policy formation are also parts of a social learning process, which may lead to a state of balance between (organized) interests ("countervailing powers"). Through social learning, subjects become aware that balance is needed to prevent one interest dominating over the other, preventing change. These public organizations and associated institutions (for example the sharing of power in a democratic system among judicial, legislature and executive bodies, but also between planning authorities and implementing authorities), cannot be changed overnight, but incremental actions may add up to significant and sometimes sudden changes. Implementation of policies: Arguably, policies are often poorly implemented (Pressman and Wildawsky, 1973); official government policies create higher political expectations than can be 143 Report No. 55328 met in practice. A large set of reasons may explain this. Besides lack of commitment and resources among actors, responsible for development and implementation of public policies, often lack sufficient knowledge on the local conditions in which the policy is to be implemented. The existing incentive structure may also be biased towards rewarding opportunistic (overly ambitious) policies rather than realistic policies. Realistic policies may look less ambitious and include fewer promises, and in democratic systems such policies may not be rewarded in re- elections. Causes behind failed implementation are not only found in the political system. They are also found in the inertia in actors beliefs and preferences, in societys institutions and in the realities on the ground, e.g. the functioning and structure of the local markets (e.g. Lipsky, 1980). A significant challenge is therefore to find levers that actually can influence these beliefs and preferences, strengthen institutions and meet the demands and realities on the ground. Enabling Leadership: Theories about complexity and leadership indicate that new forms of enabling leadership may emerge under complex conditions. Politicians who position themselves "above the battle of discourses", and can reconcile social dilemmas (as the battle between discourses expresses) display enabling leadership (Uhl-Bien et al., 2007). Enabling leaders stimulate interaction and dialogue among many groups in order to identify a larger variety of possibilities. They are in fact increasing the number and variety of actors and ideas in the policy process, which is a requisite for adaptability to changing conditions (Ashby, 1956; Uhl-Bien et al 2007). Practical methods have been developed to achieve variety in policy processes, of which joint fact finding, process management are a few (e.g. De Bruin et al., 1998; Susskind et al., 2001). 3.2 SEA and Policy Processes In general, the World Bank I-SEA approach (World Bank, 2005; Ahmed and Sánchez-Triana, 2008), and Feldman and Khademian (2008) in particular, is in line with modern public management theories about policy processes as described above. Central observations are that policy making is a continuous process and that individual policies mainly represent snapshots of ongoing policy processes. Influencing concrete policy interventions is a means to influence the policy process at large. Just as policy processes are continuous, so should be the process of integrating environmental considerations. A few key issues that need to be paid special attention to when trying to influence policy formation through an I-SEA are outlined in the following paragraphs: Context sensitivity: Research suggests that a critical success factor for SEA is the ability to adjust its scope and methodology to contextual factors (e.g. Hilding-Rydevik and Bjarnadóttir, 2007). Hence, I-SEA practitioners need to understand which knowledge and actions are timely and useful in each specific policy formulation context. Developing such context sensitivity is primarily a learning process occurring at the level of individuals, but valuable experiences and tools for context mapping should also be essential elements to document in the evaluation of the I-SEA Pilot Program. 144 Report No. 55328 Discrete Policy Processes may provide Windows of Opportunity for institutional change: Ahmed and Sánchez-Triana (2008) and Feldman and Khademian (2008) put the idea of ,,windows of opportunity at the heart of influencing policies. However windows of opportunities are often not easy to discover when they open and may close before opportunities are seized. Discrete policy processes should be seen as an opportunity for interaction which may or may not lead to important policy and institutional changes. Many times discrete policy processes are subject to substantial lock-in and domination by vested interests and provide only limited opportunities for larger change processes towards sustainable development. A key challenge for I-SEA is to utilize the opportunity provided by the policy process to move beyond assessing potential impacts of policies and assess the broader institutional constraints to environmentally sustainable development. In order to know which institutions to focus on the I-SEA team may first identify the policies which seem unsustainable and then assess which institutions "control" these policies. Since institutions tend to change slowly a key challenge for an I-SEA team is to come up with proposals that may facilitate a long term change process. Sometimes this will entail a particular focus on strengthening networks or long term constituencies which are needed to demand institutional change. Research on public management indicate that through building powerful environmental organizations (i.e. public environmental agencies, civil society organizations) environmental issues may penetrate the agenda of sectoral actors and authorities. These environmental organizations can form a kind of countervailing power to other sector interests and force other sector agencies to listen more carefully to affected stakeholders, and approve/disapprove public policies, which will stimulate adjustments along the policy formation continuum. For example, introducing legal requirements for environmental assessment in a country might promote environmental agencies to serve as a countervailing power in policy processes. A challenge for I-SEA is that it is difficult a priori to identify or explain the link between small steps and envisaged large institutional change that can lead to environmentally sustainable development. In evaluating the effectiveness of I-SEA, it is hence particularly important to assess the relationship between the immediate influence of an action (triggered by a specific opportunity occurring at a point in time) and the future influence of that action on institutions and on sustainable development. The supposition of I-SEA is that (smaller) opportunities in early stages of proposed policy change enable dialogue about the role of institutions and the need for change of them. Interaction and Social Learning: Clearly all policies have unexpected side effects, which may be adverse. Good policies are therefore developed in interaction with those who may be affected, being aware that adverse side effects cannot be completely prevented or compensated. I-SEA may ideally encourage policy makers to reach out to a broader range of stakeholders and prolong the interaction in the future, with the aim of minimizing adverse effects of new policies. In this process incremental concessions or changes can be made by policy makers and different 145 Report No. 55328 stakeholders, which themselves may seem symbolic in terms of economic significance, but that may be effective levers in the policy process. Interaction and a sense of interdependency between stakeholders is a key prerequisite for social learning to occur. A key issue to address for an I- SEA team is hence how policy processes can become more reflexive and stimulate interdependency between stakeholders. Variety in policy processes: Since societal problems are complex, and therefore create ambiguity, it is assumed that they can only be solved by a policy process that meets the complexity (variety) of the problem (Ashby, 1956; Uhl-Bien et al 2007). This means that many possible solutions should be brought to the fore in policy processes for serious consideration. In reality there is rarely only one unique first -best solution. Hence, it is unwise a priori to decide on or assess a single solution. Those influencing the organization of the policy process (e.g. through institutions), should allow for more variety, so more groups are challenged and invited to participate and develop solutions. They should advice decision-makers to be inspired by many groups, and to organize interaction and dialogue with many groups to identify a variety of possibilities (De Bruin et a, 1998; Susskind et al, 2001). We learn from this that whatever I-SEA does, to be effective it should bring more variety in policy processes. Obviously there is a tradeoff, since variety costs. Implications for I-SEA are that it should facilitate action and policy change in at least two respects: 1) Creating variety: Imagine how a policy process could develop more variety, for example by creating transparency, participation and enhance knowledge; 2) Stimulate policy entrepreneurship: Look for opportunities in the policy process to intervene effectively in order to achieve the changes imagined at the first level. In other words, I-SEA practitioners should ideally act as policy entrepreneur(s) (Kingdon 1984), by e.g. attempting to understand the policy process and the actor networks they are trying to influence, and offer their knowledge. 4. IDENTIFYING ENVIRONMENTAL PRIORITIES This section presents perspectives on environmental priority setting, and emphasizes the need to understand that environmental priorities are a sub-set of a larger set of other (political, social, economic etc.) priorities in society, and must be identified in relation to them. A key message is that priority setting should not be the exclusive domain of experts, nor of public opinion, but rather of both. Economic and scientific tools that can be used to prioritize among environmental issues and environmental interventions are briefly outlined before priority setting is discussed in relation to SEA. 4.1 Perspectives on Environmental Priority Setting Identifying environmental priorities requires an understanding of priority setting in general because these are a sub-set of a larger set of other (political, social, economic etc.) priorities in society. Hence, identifying environmental priorities must be done in relation to other societal 146 Report No. 55328 issues and is thus a highly political process that cannot be reduced to a purely technical matter, or be isolated in an independent process. Politicizing environmental assessment and environmental priority setting68 may thus be an effective way of influencing policy formation and formulation from an environmental perspective. Moreover, serious efforts to identify environmental priorities create opportunities to escape from environmentally unsustainable path dependencies. Research on environmental priority setting can be structured into two broad areas: prioritization of environmental issues and prioritization of environmental interventions, respectively. The analytical approaches and processes for these two areas of research vary greatly. Specific related issues addressed in the research include: What tools are/can be used to prioritize among environmental issues, and environmental interventions, respectively? What are the political economy aspects related to these issues? Who sets priorities for environmental management? Who sets the environmental agenda? Due to limited financial resources, competing general political priorities (health, education, environment, employment etc.) and competing specific environmental interests and preferences, priorities have to be set in environmental management and in identification of environmental interventions. Who sets priorities for Environmental Issues? In the identification of who is setting environmental priorities, it is critical to assess who is providing the environmental information. Research on this issue has inter alia focused on testing the agenda setting hypothesis, which claims that governments provision of environmental information is generally a very strong and influential means to set the environmental priorities, specifically in relation to other political actors and the public opinion (Stephan, 2002). Empirical studies by Lynn and Kartez (1994) and Hamilton (1995), who test the hypothesis in cases where government discloses pollution information, indeed find that information disclosure correlates with media coverage, determines the importance placed upon the issue by citizens and shareholders, and facilitates collective action. They also find that environmental NGOs act as mediators and conduits of the information, and assist in increasing public interest. Further knowledge obtained from this strand of research indicates that transactions costs may hamper public involvement in environmental priorities proposed by the government. However, explicit efforts to reduce transactions costs counteract this negative relationship and increases citizens collective or private actions as well as buy-in on the governments proposed priorities (Stephan, 2002). Although governments rightly have a crucial role to play in environmental priority setting there is always the risk that it misuses its powers and mandates. Bias towards scientific analysis and government-led expert-based planning and environmental priority setting increases the risk of "benevolent despotism" as opposed to environmental planning based on public involvement, ownership and priority setting. Arguably, too much focus on quantitative priority setting tools 68 Putting environmental issues on the broader political agenda and linking them with key development issues, e.g. poverty reduction and economic development (World Bank, 2005; Ahmed and Sánchez-Triana, 2008). 147 Report No. 55328 and policy making creates a "closed loop" between scientific experts and policy makers, which increases the risk of leaving the public outside priority setting, planning and decision-making. Hence, striking the right balance between public involvement and scientific underpinnings are crucial to adequate and sustainable environmental policy making and policy implementation. A point of departure for the analysis provided in this report is the stated objective (World Bank, 2005, Ahmed and Sánchez-Triana, 2008) to identify prioritization of environmental issues in the policy agenda according to their effects on economic development and poverty alleviation. Although important, economic development and poverty alleviation are not always used as criteria or references for environmental prioritization. In reality other issues and interest may dominate. Nevertheless, economic development and poverty alleviation are key development objectives of development cooperation agencies, including the World Bank, as well as among governments in developing and developed countries. Hence, a rationale for identifying environmental priorities in terms of their effects on economic development and poverty alleviation is the assumption (World Bank, 2005) that the these issues are politicized, i.e. that they are placed firmly in the policy agenda and catches the attention among key politicians. In the section on policy processes, we have seen that priority setting feeds into the policy process, where the agenda of influential actors may change on the basis of substantive arguments, but where often substantive argument (i.e. the result of analysis which may be supported minorities) do not influence the agenda of influential actors. Further, prioritization among bio-physical environmental issues (air pollution, water contamination, deforestation etc.) is closely linked with the existing (and often competing) environmental interests. These interests are typically communicated by various interest groups, which can be relatively more or less influential ("stronger/weaker") in the final priority setting made in the policy process. Increasing awareness of the power of information has stimulated increased use of it among actors outside the ruling government as a means to influence the environmental agenda and priorities. This applies to government opponents in the political sphere, business companies, environmental NGOs, media, labour unions etc. In this context it is also evident that the extent and quality of the scientific evidence behind the disseminated environmental information vary a great deal across actors. Although not always perfectly clear or delineated, a dividing line can be drawn between priority setting based on expert knowledge, on the one hand, the preferences expressed by public opinion, on the other. Expert knowledge presupposes involvement of experts, who are expected to prioritize (or alternatively, suggest prioritization of) environmental issues under scrutiny in an objective (neutral and impartial) manner by use of technical assessment tools (see examples below). Alternatively, preferences among the public opinion are obtained by consulting various stakeholders; as opposed to expert judgment, environmental priorities of the public are defined as the sum of individual subjective (intuitive) preferences. 148 Report No. 55328 Depending on the level of democratic governance characterizing the prioritization process, expert knowledge and public opinion may be integrated to a more or lesser extent. This is partly driven by the fact that knowledge and expert assessments seldom provide only one solution or represent neutrality or impartiality (Owens et al, 2004). As pointed out by Wilkins (2003), increasing acknowledgment of practical knowledge and wisdom among the public has increased the need for, and attention to, negotiation between experts and public stakeholders in priority setting. This is reinforced by the fact that application and influence of technical methods depends on the institutional and cultural context. Many specific technical approaches exist, but due to contextual differences there is no generalized way of determining a priori the best method or approach. Knowledge and priorities need to be negotiated and contextualized. Hence, priority setting is conducted in arenas involving different stakeholders (including experts and project/reform proponents), who possess different analytical and knowledge capacities, and different negotiating powers (Rijsberman and van de Ven, 2000). Who sets priorities for Environmental Management? Much like the priority setting of environmental issues, priority setting for environmental interventions is subject to stakeholder preferences, power relations, belief in technical rationality, and the relative influence of proclaimed technical experts. However, there is not necessarily a direct correspondence between environmental issues and environmental interventions. Priority environmental issues (defined in terms of the largest environmental threats or impacts) do not always translate into priority environmental interventions for various reasons. Some of the key environmental problems may be too difficult or too costly to address at present. Interventions for mitigation may have to wait until costs are reduced, or until political, social, scientific or other issues and responsibilities are sorted out. Consequently, environmental priorities might focus on picking "low-hanging fruits" to achieve cost-effective and politically possible interventions in the short run. Admittedly, there is a vast literature on tools for environmental analysis. While it is outside the scope of this report to present it, we present below some tools to prioritize among environmental issues, and tools to prioritize among environmental interventions, respectively: Tools to prioritize among environmental issues: The tools to identify, analyse and prioritize among environmental issues can broadly be divided into bio-physical assessments and economic assessments. Bio-physical assessment tools include, but are not limited to, comparative risk analysis, geo-based mapping, modeling and forecasting analysis, quality of life assessments, carrying capacity analysis, ecologically based Multi-criteria Analysis and vulnerability analysis. Economic assessments tools to prioritize among environmental issues include e.g. economic damage assessment, opportunity-cost analysis, loss of productivity assessment, preventive expenditure analysis. Tools to prioritize among environmental interventions: Tools to prioritize among environmental interventions include expert judgment, public opinion surveys; public participation ("popular voting") based rankings and ratings, comparisons or combinations of bio-physical and monetary assessments, which attempt to reconcile pros and cons of a particular 149 Report No. 55328 proposed reform or policy (process). Specific issues and key concepts to consider in priority setting pertaining environmental interventions include: (i) time horizon/inter-temporal aspects, (ii) risks and uncertainties, (iii) distributional aspects; across geographical regions, different income groups, impacts on the poor or disadvantaged (vulnerable groups such as handicapped, women, children, ethnic/cultural/religious minorities etc.); (iv) ecological, social and economic sustainability, efficiency and effectiveness, and transparency. Principal tools for economic assessments, which are used to set priorities for environmental interventions, are cost-benefit analysis, cost-utility analysis, and cost-effectiveness analysis. Provided that it is appropriately undertaken, cost-benefit analysis (CBA) provides information on the allocative efficiency of an investment, and take into account all costs and benefits relevant to the investment, distribution effects as well as (costs and benefits of) future impacts. In essence, CBA investigates societys gains of a project, program or policy reform in relation to its costs. Advantages of conducting CBA for priority setting is that it provides the decision-maker with alternatives which use the same (monetary) unit for comparison and transparency. Although criticized (see e.g. Hausman and Diamond, 1994; (Hughey et al, 2003), modern techniques for non-market valuation (e.g. contingent valuation), offers opportunities to identify environmental costs and benefits. Cost-effectiveness analysis (CEA) is typically used to identify the least cost alternative to meet a certain (environmental) objective. In the context of priority setting CEA is in some respects more attractive than CBA since it avoids some of the controversies associated with CBA in the measurement of environmental benefits in monetary units. On the other hand CEA still requires data for each alternative under investigation, costs of each alternative and bio-physical or other some other non-monetary indicators representing the objective. The fact that CEA does not harmonize program/reform benefits into comparable units (unlike CBA) reduces the comparability across alternatives, compared to CBA. Cost-utility analysis (CUA) is used to identify and compare project/reform alternatives when there is agreement on attaining a specific utility objective (e.g. an environmental health quality standard) and when there are several options and costs associated with achieving it. A slightly different approach to understand and use CUA in the identification of priorities is to maximize an agreed environmental outcome within a given budget envelope. This has been applied in the area of biodiversity conservation (Weitzman, 1998; van der Heide et al, 2005). 4.2 SEA and Environmental Priority Setting Priority setting can be influenced through the application of analytical tools, which provide insights as to what the impacts of sectoral development are, and how these can be compared with alternative development. Priority setting can and should arguably also be influenced by stakeholder dialogue in an open political process. For this to happen the proposed analytical and process tools for environmental priority setting in World Bank (2005) may be useful means in SEA to "politicize" key environmental issues in the broader policy agenda. The suggested focus 150 Report No. 55328 on risks, costs and public participation creates links to (impacts on) to economic development and poverty alleviation. Specifically, by making comparative risk assessments and cost of environmental damage-studies, and using various (complementary) participatory techniques, there are certainly opportunities that key environmental issues can be identified and aligned with other key development themes in the policy process, largely due to political sensitivity to risks, economic costs and ­ in most cases ­ popular consent. Consider a broader set of environmental analyses for priority setting: Provided that an SEA involves the right type of competence and capacity for the kinds of assessment tools alluded to above and in World Bank (2005), such analyses facilitate priority setting and may create opportunities for political uptake. However, it should be kept in mind that these proposed tools only form a sub-set of a larger set of analytical and priority setting tools used in SEA (OECD DAC, 2006). As indicated above, other priority setting tools, which potentially can be used in the analytical step of an I-SEA process tied to a specific policy process, also include e.g. bio- physical assessments such as quality of life assessments, carrying capacity analysis, ecologically based Multi-criteria Analysis and vulnerability analysis, or other economic assessments like opportunity-cost analysis, loss of productivity assessment, preventive expenditure analysis, which may be components of cost-benefit analysis, cost-utility analysis or cost-effectiveness analysis. There is thus a large set of analytical tools to chose between, and a priori no first-best assessment tool for priority setting; the choice has to be made depending on the terms of reference and broader conditions framing the I-SEA process e.g. political acceptance and buy-in, availability of data and other information for quantitative (bio-physical and economic) assessment, links with poverty and other key development themes, availability of expertise to undertake the assessment, etc. and coupled with stakeholder representation techniques, see further in chapter 5. Regarding economic assessments as part of an I-SEA process it may be that other economic analytical tools are effective in politicizing the environmental issues than the proposed cost of environmental damage studies. Examples of such analyses include benefits of environmental management-studies for prioritizing various environmental interventions, or public revenue assessments for using/depleting various natural resources, or studies of cost-effectiveness of various environmental economic policy instruments such as environmental taxes, fees, levies or subsidies. Such (studies of) policy instruments may be compared with other policy instruments (e.g. command and control like environmental regulation, norms and standards, or environmental information disclosure, environmental education) as part of the I-SEA process. Local capacity development for environmental priority setting: A common feature for applying proposed tools for environmental priority setting is the need for strong local capacity. Hence, applying any of the quantitative tools above requires significant elements of capacity and continuous learning in local institutions, which are subject to policy reforms and I-SEA. Hence, strengthening the use of tools for environmental priority setting in I-SEA also requires strengthening local institutions' capacity to carry out such analyses, understand the results and 151 Report No. 55328 implications for policy design/reform, and an increased ownership among local actors of the analyses underpinning policy processes. Today, many of the impact centered SEAs conducted in low income countries are operationalised by foreign experts and resource persons with limited transfer of knowledge to local expertise. This constrains the possibilities for local analysis and local priority setting. Although the proposed I-SEA methodology recommends use of both quantitative and participatory methods (to facilitate a combination of expert judgment and broad-based popular involvement and prioritization in the policy process), there is a need to also stress the need for structured, institutional learning and capacity building for locally owned and locally implemented analysis for priority setting. This provides the rationale for posing the questions: Who conducts the I-SEA? Based on whose analysis are the priorities set? Too often the technical analysis is carried out by expatriate experts, who typically fail to facilitate local learning in their prioritization analyses. Increasing the involvement of local resource persons in the prioritization analyses contributes not only to enhanced local ownership and buy-in, but also functions as a cost-effective means to strengthen local analytical capacity and institutions (e.g. government agencies) Selectivity, timing and sequencing of I-SEA is critical: In many instances, local capacity and government resources are limited for making environmental policy analysis. Hence, as indicated in World Bank (2005) and in Ahmed and Sanchez-Triana (2008) there is a need to be selective in the choice of I-SEAs in relation to proposed and envisioned discrete policy changes. Although policy formation is a continuous process, there are windows of opportunity for discrete interventions, and in order to have identified and (publicly) endorsed the official environmental priorities, there is a need to select key policy processes strategically and very selectively. From an environmental point of view, some policy processes or reforms are more important than others. Although some aspects or elements of I-SEA are continuous, the timing and sequencing of discrete I-SEA interventions are critical to achieve impact in the policy formation process. Linked to this is the fact that priorities arrived at in a policy based I-SEA are certainly not eternally valid, and may have to be revisited and redefined. Hence, as indicated in World Bank (2005), priority-setting processes should take place periodically in light of policy revisions, new information, new research knowledge, changing preferences, and changing institutions. Accordingly, tools and criteria for priority setting should be revisited and possibly also redefined. 5. STRENGTHENING STAKEHOLDER REPRESENTATION As indicated in the section on policy processes, the involvement of a variety of stakeholders in decision making increases the likelihood that solutions to complex problems like sustainable development will emerge. This section begins by briefly discussing different types of stakeholder representation before identifying common obstacles to "sound" participation and how these can be overcome. The section ends with identifying key challenges for I-SEA in relation to stakeholder representation. 152 Report No. 55328 5.1 Perspectives on Stakeholder Representation Participation or representation? Representation of stakeholders in policy processes may be defined as the way in which affected groups can have an influence on public policy. There is a gradual difference between participation by representation and direct participation: representation can also be indirect participation by means of actors (organizations or people) who represent a stakeholder group. For example, a non-governmental organisation or a ministry of indigenous people may represent indigenous people. Different types of Stakeholder Representation: Five intensities of involvement of stakeholder groups which have an increasing degree of influence on the outcomes of a public policy process, can be distinguished (Edwards 2007)69: Information exchange: citizens are informed and may ask questions during hearings; there is no commitment to take them into account; Consultation: citizens are invited to comment on government proposals; this may occur through surveys or in hearings; government commits itself to take them seriously but they cannot be held accountable for it; Advising: citizens may come up with their own problems and suggest solutions; government takes it seriously and promises accountability on how the suggestions have been used; Co-production: stakeholders representing different interests co-design policies with public officers and politicians; in principle these solutions are taken over but well- accounted for amendments are possible; Co-decision-making: stakeholders jointly design solutions and these are adopted. Direct influence can only occur from the third intensity onwards, because only in those cases policy makers are responsive to results of stakeholder involvement. Information exchange and consultation may have a more indirect effect; it may be the first step in a learning process that may have visible results only in subsequent policies. Stakeholders may also participate uninvited in the policy process, for example by demonstrating or lobbying, or by implementing or ignoring public policies if they can. Obstacles to Stakeholder Representation: The extensive literature on participation in policy processes has revealed that positive effects of participatory approaches to public policy making cannot be taken for granted. A ladder of participation has been suggested, ranging from "manipulation" and "therapy" (in fact, non-participation), to "partnership", "delegated power" and "citizen control". In between there are different degrees of stakeholder involvement: 69 The number of possibilities, forms and techniques for stakeholder representation is large. For an overview see for example Kende-Robb and Van Wicklin (2008) or Innes and Booher (1999). 153 Report No. 55328 "informing", "consultation", and "placation", in which participation is an "empty" exercise, not meant to have any real consequences (Arnstein 1969). Common obstacles to sound stakeholder representation include: Weak interests are difficult to identify: It is not always clear ex ante who the "weak interests" are and whose voice needs to be enhanced. In relation to for example SEA there is a considerable amount of uncertainty of environmental effects of policies so it is not always known which groups will be affected and which groups should be involved. Their voice is often weak: Local communities, municipalities or national arenas are typically not level playing fields. Organizing participation in unequal initial settings may give the most powerful most voice. According to Edwards (2007) the following measures help promote public participation or and stakeholder representation: (a) give participants access to all available information, b) allow participants to question witnesses and to consult experts, c) use an independent moderator, and (d) secure checks and balances in governance (as elaborated in the section on institutions). It is difficult to involve larger groups that are not organized: Weak groups, let alone future generations, are often excluded from the current policy debate. It is widely known that this gets worse as public policies become more strategic and abstract, because it is difficult for people at large to imagine the links between abstract policy proposals, the individual situation and individual and local/global impacts. A next best option can be to consult national advocates such as civil society organizations, but these organizations may have their own agendas and not adequately represent (individual) stakeholders interests or communicate with the group they are supposed to represent. Policy makers' intentions may not be sincere: Policy makers may use "participatory speak" without attaching any real content to it. Legislation or other mechanisms may require them to invite stakeholders for participation, but in reality there is no willingness to use their input, at least visibly in the short term. Vested interests do not participate in the process: If powerful groups with great stakes in a certain policy process do not participate in the policy formulation phase there is a risk that implementation will be obstructed by these groups, since they in fact control it when it comes to implementation. If these types of obstacles to sound stakeholder representation are not addressed, then this "empty participation" may lead to participation-fatigue and increasing distrust between government and civil society, or between government and society at large (Molenaers and Renard 2006). Addressing Obstacles to Stakeholder Representation: Stakeholder representation is severely restricted in policy making in many countries (e.g. Transparency International, 2008). A completely open and transparent society is probably unrealistic, and since it is always painful for 154 Report No. 55328 those who are forced to open up, the development towards more transparency and participation will most likely be a gradual shift towards a more democratic culture and procedures. Ways to address common obstacles and increase opportunities for stakeholder representation include: Institutionalize formal laws that require participation or representation: Laws requiring governments to engage with stakeholders when developing certain policies can be an important basic institution for sound stakeholder representation. The basic rationale is that the existence of such laws provides a lever for national advocates to demand more openness. For example laws on Environmental Impact Assessments (EIA) normally require some form of stakeholder representation. However, while EIA laws have been implemented in countries all over the world, its contribution to enhanced stakeholder representation and influence on actual decision making vary a lot. Wood (2002) asserts that EIA and SEA may be effective to mitigate some smaller effects, but there is little evidence that it actually leads to a fundamental change of strategies and policies required for attaining sustainable development. Although introduction of EIA laws may promote increased participation and stakeholder representation, it is not a warrant of success. Unless the legislation is backed up by adequate institutions for its implementation it risks being encapsulated and be made harmless by opponents (Dijkstra (2005), p. 461). Propositions for public participation formulated in manuals and guidance developed by the World Bank and other institutions may be significant contributions to improved stakeholder representation. However, governments adhering to international treaties70 can also be a step towards institutionalizing environment-related stakeholder representation. Strengthen Accountability: Bekkers et al. (2007) argue that participation processes should be linked to formal democratic organs or decision-making institutions such as elected councils or parliaments. These formal representative organs can hold governments to account and may make governments responsive to stakeholders interests. Such a strengthening of institutions that make states more accountable to citizens demands may create incentives for both policy makers and the public for increased participation. Stakeholders may be more inclined to participate since they know the policymakers have an incentive to take them seriously. Conversely, policy makers may be more inclined to listen to stakeholders since they know stakeholders with opposing views have been granted greater possibilities to issue complaints at later (and more costly) stages of the policy making process (see also separate section on Social Accountability below). Involve weak and other stakeholders: Beierle and Konisky (2001) conjecture that one of the reasons of implementation failure was that neither all socio-economic groups nor all relevant interests have been represented in the participation process; some excluded groups were apparently able to prevent the implementation of the agreed solutions. Possible remedies include 70 E.g. the Espoo convention on trans-boundary environmental assessment (UNECE 1991), the Aarhus convention granting the public rights regarding access to information, public participation and access to justice in governmental decision-making processes (UNECE 1998), and the Kiev protocol on SEA implementing the Espoo convention (UNECE 2003) 155 Report No. 55328 enhancing the voice of the weak interests in participatory processes and (to promote) involvement of all inter-dependent socio-economic groups and all possible interests. Strengthen networks that can demand improved stakeholder representation: The emergence and growth of influential organizations which claim a stake in policy processes, can be an important move towards improved representation. Supporting such a development can be seen as a form of network management (e.g. Kickert et.al. 1997). In the longer run these organizations can be important for the creation of institutions, which assure future continued representation of weak interests or enforcement of transparency laws. Focus on small improvements when the opportunities for broad stakeholder representation are limited: In some cases - where the possibilities for broad stakeholder representation are limited - it may be possible to take small but important steps towards broadening perspectives in a policy process. It might for example be possible to, for the first time, moderate a dialogue between two ministries, which are not accustomed to listening to each other, or to discuss options that seemed impossible to address before. It might also be possible to get politicians, who represent sectoral interests, to raise questions in public about sustainable development, or to raise the need of considering certain institutional changes, like subscribing to international treaties. These small steps may be important, especially if they facilitate more long term changes. 5.2 SEA and Stakeholder Representation Ahmed and Sánchez-Triana (2008; p.189) suggest that I-SEA based participatory approaches should identify weak and vulnerable groups and amplify their voice in policy formation. In this way the likelihood increases that policy planning and implementation are responsive to views and preferences of multiple stakeholders, including the weak and vulnerable in society. The creation and maintenance of a community of participation is seen as central to assure that a variety of perspectives are represented in policy formation (World Bank, 2005). While it is clearly difficult to prescribe in general how stakeholders ought to be identified and represented in highly context dependent SEAs, the following key issues merit specific attention in I-SEA: More people or more perspectives? Public participation is a key ingredient in most SEAs. It is important to note that the World Bank approach to stakeholder representation does not necessarily suggest a larger number of people participating in the policy process, but rather ensuring representation of a larger number of perspectives, especially those of the weak and vulnerable. How are the perspectives of the weak and vulnerable identified? As stated above it is not always clear ex ante who the "weak and vulnerable" are. How can an I-SEA team go about to assure that the "right" perspectives are represented in the process? Specific attention may be paid to assuring that perspectives represented are not biased with respect to gender, age, ethnicity or religious beliefs. 156 Report No. 55328 How can communities of participation be created and maintained? World Bank (2005) suggests that the creation of a community of participation is central to facilitate inclusive management in an iterative policy process. Communities of participation are not fixed entities but "any particular policy problem/choice opportunity is an occasion to create or modify the community of participation" (ibid, p. 36). Specific attention needs to be paid to how such communities of participation can be created and maintained during and after an I-SEA of a discrete policy formulation process. 6. ANALYZING INSTITUTIONAL CAPACITIES AND CONSTRAINTS Analyzing and strengthening institutions and governance dimensions are put forward as key features of institution-centred SEA by the World Bank (2005). This shift in thinking about environmental assessment can be seen as a reflection of the remarkable growth in attention to the role of institutions for economic and social development within the social sciences during the last decades. This chapter discusses how the concept of institutions can be disentangled, understood and analyzed in the context of SEA. 6.1 Perspectives on Institutions What are institutions? The study of institutions has a long tradition, but a new institutionalism emerged in the late 1980s as a reaction to the then dominating actor centered analyses in the social sciences (Nilsson, 2005; Vatn, 2005). The literature on institutions is very rich and complex and several different definitions of institutions exist. One of the most famous is put forward by Nobel laureate Douglas North: "Institutions are the humanly designed constraints that structure human interaction. They are made up of formal constraints (e.g., rules, laws, constitutions), informal constraints (e.g., norms of behaviour, conventions, self-imposed codes of conduct), and their enforcement characteristics. Together they define the incentive structure of societies and specifically economies." (North, 1994) 71 The concept of institutions is thus much broader than that of organizations. While institutions make up the rules, organizations72 are the players. The distinction between institutions and organizations is important since there is a tendency to equate the two concepts in discussions on institutional capacity building for improved environmental management (OECD, 1999). A too limited focus on environment sector organizations (such as environment ministries and agencies) risks diverting the attention from other institutions which may be equally or more important for environmentally sustainable development. 71 For alternative definitions, see for example the book by Arild Vatn, 2005 "Institutions and the Environment". Norths definition can be said to be a form of rational institutionalism which emphasise incentives and how rational individuals act within the constraints of rules. A normative institutionalism on the other hand stresses that values and norms and "a logic of appropriateness" are the central factors in explaining behaviour and choice (March and Olsen, 1989). 72 According to North (1990:5) organizations can be thought of as "groups of individuals bound by some common purpose to achieve objectives". 157 Report No. 55328 There are various attempts to disentangle the broad view of institutions as formal and informal constraints or rules into more tangible analytical units. In its World Development Report (2003) the World Bank depicts institutions as a continuum where on the informal end they go from trust and other forms of social capital to networks for coordination. On the formal end institutions include codified rules and laws as well as formal organizations such as courts and government agencies (figure 3). The World Bank (2003:37) suggests that "institutions must perform three key functions in order to contribute to a sustainable development: (i) pick up signals about needs and problems ...(which) involves generating information, giving citizens a voice, responding to feedback, and fostering learning; (ii) balance interests by negotiating change and forging agreements, and by avoiding stalemates and conflicts; (iii) execute and implement solutions by credibly following through on agreements" Figure 3: Institutions as formal and informal rules Social Institutions capital Rules Organi- Informal Formal zations Rules Regulations Trust Govt Easy to change Networks agencies Shared Firms Laws values NGOs Norms Difficult to change Police Religion Traditions Constitutions Courts Source: World Bank, 2003 Williamson (2000) identifies different levels of institutional analysis (figure 4)73. In this framework, the institutions at higher levels constrains choices at lower levels, but changes at lower levels can also occur through different feedback mechanisms, generating changes at the higher levels. 73 The Institutions and Development framework (IAD) is an analogous layered framework for institutional analysis developed by Elinor Ostrom and colleagues (Ostrom, 2005). The levels of analysis in the IAD framework are the constitutional arena, the collective choice arena and the action arena. The IAD framework is much more elaborate than the one discussed by Williamson but it has not been possible to go into details here. 158 Report No. 55328 The first level identified by Williamson is Social Embeddedness, which comprises informal institutions such as norms, religion and culture. Institutions at this level have evolutionary origins and normally change very slowly (100-1000 years according to Williamson)74. The second level is the Institutional Environment or the formal rules of the game, including constitutions and the executive, legislative, judicial and bureaucratic functions of government. The definition and enforcement of property rights and contract laws are important elements at this level. Changes in the Institutional Environment normally happen slowly (10-100 years), but sudden crises can occasionally produce a sharp break from established procedures. The third level is the Institutions of Governance where much of the day to day policy making takes place. Institutions at this level include the different parts of the government bureaucracy and laws and regulations. Changes in institutions at this level normally happen more rapidly (1-10 years). The fourth level is Resource allocation and employment where incentives resulting from the institutions on the other levels affect the choices of the different actors in society. Change at this level is continuous. Figure 4: Levels in Institutional Analysis Level Frequency of change Customs, Customs, traditions, norms, 100-1000 yrs. religion Formal rules of the game: (judiciary, bureaucracy etc) judiciary, etc) 10-100 yrs. Governance: Governance: Play of the game: (contracts, aligning structures) contracts, structures) 1-10 yrs. Resource allocation and employment (budget, policy) continuous Source: Adapted from Williamson, 2000 Which institutions are important for sustainable development? There is a growing consensus that good institutions matter greatly for economic and democratic development as well as social and environmental sustainability. Institutions are for example increasingly seen as one of the key fundamental causes of long-run growth and cross-country differences in economic performance (Acemoglu et al., 2004). Similarly institutions are viewed as essential to the 74 Chang (2007, chapter 9) however describe how cultures can change more rapidly when incentives and/or transaction costs change. 159 Report No. 55328 solution of many environmental problems which require "...motivating individuals to take a long-term perspective and the interest of a wide diversity of unknown individuals into account when making choices (Ostrom et al., 1993, p.214). There are however a number of different perspectives on what institutions need to be put in place to generate these favourable outcomes, for example: Institutions for economic development: Rodrik (2000) identifies five types of non-market institutions necessary for supporting a flourishing market economy: property rights; regulatory institutions; institutions for macro- economic stabilization; institutions for social insurance; and institutions of conflict management. Institutions for good governance: The for cross-country comparisons widely used governance indicators produced by Kaufman et al (2008)75 include six different dimensions: Voice and Accountability; Political Stability and Absence of Violence; Government Effectiveness; Regulatory Quality; Rule of Law; and Control of Corruption. These indicators can be seen as pointing to the kind of institutions considered to be essential for good governance. Institutions for environmental sustainability: OECD76 (2008) identifies specific environmental institutions, such as constitutional provisions for a right to a clean environment, environmental protection laws and public environmental agencies as key prerequisites for environmentally sustainable development. Building on the broader framework from the World Development Report 2003 (World Bank, 2003) Pillai and Lunde (2006) develops a checklist for assessing the institutional capacity for environmental management in different countries (Appendix 1). For several reasons it is however problematic to identify a generic set of good institutions that contribute to sustainable development. Since informal norms matters greatly for the outcomes of formal rules the institutional solutions to specific problems will be highly context dependent. Conversely, the same institutional function (e.g. picking up signals) can take many different institutional forms. A meaningful answer to which institutions are important for sustainable development, must thus first involve an identification of the specific obstacles to sustainable development in a particular context. An institutional analysis should begin by identifying "institutions for what". How can institutions be transformed? If institutions are so crucial for development, why do countries not improve them? This simple question has puzzled researchers. North (1994) notes that institutions are not necessarily or even usually designed to be socially efficient. Formal rules are rather created to serve the interests of those with the bargaining power to create new rules. Acemoglu et al (2004) portray institutions as having long historical roots (or "colonial origins") and being persistent to change since powerful groups block reforms and possess de jure and/or 75 Published by the World Bank Institute, www.govindicators.org 76 OECD DAC/EPOC Task Team on Governance and Capacity Development for Natural Resource and Environmental Management 160 Report No. 55328 de facto political power. The search for a general theory on how to improve institutions is by some seen as the Holy Grail of social sciences (Acemoglu et al 2004). The slow changing nature of norms as well as their importance in the enforcement of formal rules is one important factor explaining the difficulties involved in changing institutions. While formal rules may be changed overnight, informal norms usually change only gradually. Since norms provide "legitimacy" to a set of rules, societies that adopt the formal rules of another society will have very different performance characteristics because of different informal norms and enforcement (North, 1994). The difficulties in transferring the formal political and economic institutions from Western market economies to Eastern European economies in the 1990s is a commonly cited example where the same formal institutions resulted in very different outcomes (North, 1994; Rodrik, 2000). Rodrik (2000:11-14) distinguishes between a "blueprint approach" and a "local knowledge (or experimentalist) approach" for institutional change. In the blueprint approach best practice solutions from elsewhere are identified, imported and implemented. However, given the many different perspectives of what best practice institutions are, the current attention to "getting the institutions right" may lead to a long wish lists of policy reforms that is impossible to fulfill for poor countries (Grindle, 2004; Rodrik, 2006)77. The local knowledge approach to institutional change on the other hand stresses that institutions need to be developed locally relying on hands on experience, local knowledge and experimentation. This view can however serve privileged interests who want to conserve a certain set of institutions despite that there are clearly better institutions elsewhere. It can also be quite costly to develop all the institutions locally when imported blueprints may serve just as well in some cases. Rodrik suggests that the blueprint approach may be appropriate for more narrow and technical issues, while large scale institutional development by and large requires a process of discovery of local needs and capabilities. Participatory political institutions can be seen as a "meta-institution" that can assure that institutional development is grounded in local knowledge (Rodrik, 2000). They also can be seen as levers that stimulate a social learning process, over time creating more legitimacy (democratic support) of making new steps in institutional development (Nooteboom, 2007). 6.2 SEA and Institutions Despite the central role of institutions in I-SEA the concept is not explicitly defined or discussed in the World Bank publications on Policy Level SEA (World Bank, 2005; Ahmed and Sanchez- Triana, 2008). However several aspects that should form part of an institutional analysis as part of an I-SEA are identified: (i) historical analysis to understand how current policies become locked in: (ii) political economy analysis including goals, values behaviors and incentives of stakeholders involved in policy formulation and implementation; (iii) analysis of inter-sectoral 77 Or as Rodrik (2006) notes "telling poor countries in Africa or Latin America that they have to set their sights on the best-practice institutions of the U.S. or Sweden is like telling them that the only way to develop is to become developed ­ hardly useful policy advice!". 161 Report No. 55328 (horizontal) and vertical coordination mechanisms within government to better understand implementation hurdles; (iv) analysis of mechanisms to promote social accountability and learning; (v) identification of efficient and politically feasible interventions to overcome priority issues (Ahmed and Sánchez-Triana, 2008, page 189). This implicit definition captures the Banks idea that an SEA needs to go beyond assessing the potential social and environmental impacts of policies and address the forces that drive policies (and their implementation). It also suggests that institutional analysis as part of an SEA should take a broad focus and not be limited to specific institutional arrangements for environmental management. However, there seems to be a need for further and more specific guidance and learning on how to perform good institutional assessments as part of SEAs. Important lessons can be learnt from the growing focus on governance and institutional factors in "SEA-literature". For example Turnpenny et al. (2008) undertook a layered form of institutional analysis, based on a framework similar to Wiliamsons above, to analyze capacities and constraints for integrated policy assessment in four different European countries. On the micro level the analysis concerned the individuals involved in doing assessments in the bureaucracy and the availability of resources (time, money staff) and human resources (skills, educational background etc) for doing the assessments. On the meso level organizational issues such as management structures, coordination procedures and incentive systems were analyzed. Finally, on the macro level the analysis focused on wider issues such as the administrative and legal context as well as the role of stakeholders in the decision making process. These types of layered framework could be a way of structuring institutional analyses conducted as part of SEAs as well. Lessons can also be drawn from the rapidly growing body of broader literature on environmentally related institutional assessments. A recent review of institutional assessments conducted as part of World Bank Country Environmental Analyses indicate that institutional assessments need to: (i) move beyond an analysis of organizational mandates, functions and gaps in formal rules, to include informal rules, political-economy issues and power relationships; (ii) put a stronger focus on the demand side of environmental governance and the role of private sector and civil society institutions; (iii) include sub-national levels and resource flows between national and sub-national levels; and (iv) focus on specific themes and sectors (Pillai, 2008). The importance of including an analysis of budget processes in institutional assessments is highlighted by Lawson and Bird (2008). Based on a four country comparative study78 they conclude that while the environmental policy and legislative frameworks were generally well articulated and clear the most important obstacle to implementation lie in deficient financing of public environmental actions. The study identifies the existence of three essentially parallel budget processes determining the level and direction of environmental financing: (i) a national budget process limited essentially to the recurrent budget; (ii) a process for the allocation of 78 Tanzania, Mozambique, Mali and Ghana. 162 Report No. 55328 external project finance; and (iii) a process of negotiating rights to collect revenues and fees and retain control over their use. This fragmented budgetary system resulted in generally very low budgets for recurrent expenditures to cover core functions such as monitoring, control and supervision and relatively large portfolios of externally financed projects79. This was found to have lead to a diversion from addressing national environmental priorities. Another consequence of this fragmented budgetary system is that a large part of the resources available for environmental action are beyond the control of the Ministry of Finance and ultimately also the Parliament undermining accountability and public management capacities. While it may be appropriate to assess the institutional capacities and constraints for environmental management on a national level, for many SEAs of sector reforms a more focused assessment of institutions of particular relevance for the sector is more appropriate. For example in relation to forestry or mining reforms a thorough assessment of the institutions for land tenure may be more important than assessing the formal mandates of different environmental functions on a national level. The scope and priorities for institutional assessments to be conducted as part of an SEA will thus always be important to discuss. A good understanding of the context of the particular reform process will be key for making good judgments on what institutions with environmental relevance to prioritize. 7. STRENGTHENING SOCIAL ACCOUNTABILITY Promoting social accountability as part of an I-SEA is identified by the World Bank (2005) as a key mechanism to assure that I-SEA can have an influence beyond a discrete policy intervention and contribute to more long term improvements of environmental governance. Accountability is however a broad concept with different interpretations and has been described as "probably one of the most basic yet most intractable of political concepts" (Hill, 2005, p. 259). This section begins by relating social accountability to other types of accountability and then discusses accountability in relation to SEA. 7.1 Perspectives on Accountability Accountability basically concerns preventing and redressing the abuse of political power through three general dimensions: i) by subjecting power to the threat of sanctions (enforceability); ii) by obliging it to be exercised in a transparent way; and iii) by forcing it to justify its acts (Schedler, 1999). Accountability refers to a relationship between two parties80 and a first step to understanding this relationship is to identify: i) who is the agent being held accountable? ; ii) who is the agent demanding accountability? iii) for what type of activities or duties are organizations or people being held accountable?; iv) in what forum are they being held to account?; and v) how is accountability being delivered? 79 As an example: in 2005/06 the Ghanaian Environmental Protection Agency was managing 28 separate projects financed by 10 different funding agencies. 80 A is accountable to B when A is obliged to inform B about As actions and decisions, to justify them, and to suffer punishment in the case of eventual misconduct. 163 Report No. 55328 Political Accountability refers to the role of political institutions in facilitating for the public in holding government, civil servants and politicians accountable. A distinction is often made between vertical and horizontal accountability. The existence of free and regular elections is often viewed as the most basic mechanisms for assuring vertical accountability in a democratic system. In theory elections allow citizens to punish politicians and the credible threat of losing office in the next period compels policy makers to respond to voters interests (Adsčra, 2003). Information asymmetry (i.e. differences in access and capacity to interpret information) between the public and politicians however severely limits the possibilities for citizens to hold politicians accountable through elections81. Another type of vertical accountability, which is a top-down relationship, is when elected representatives are to appoint and hold the public servants in the bureaucracy accountable for the implementation of different policies. A similar problem of information asymmetry is present also here since it is difficult for the politicians to know exactly how the civil servants go about implementing policies (see section on policy processes above). This is in one way a classical public administration problem where there is a tension between rule based control of the administration and the discretion of public servants necessary to do a good job. Civil service reform, improvement of internal auditing, evaluation and surveillance are normally central elements of pro-accountability public administration reforms. This is sometimes referred to as administrative accountability and professional accountability. In weaker political economies these are many times highly contentious issues since, as noted by Batley (2004) "...the bureaucratic arena is itself highly politicized and inter-connected with societal interests; it is where power, employment and patronage are concentrated, so the stakes are high". Horizontal accountability refers to a relationship between more or less independent state agencies that monitor and discipline each other and presupposes an internal functional differentiation of the state (Schedler, 1999). The sharing of powers between the executive, legislative and judiciary together with checks and balances between different branches of government constitute the most typical mechanism for horizontal political accountability. In practice this balancing of powers is weak in many countries. Veit et al. (2008) pay specific attention to the need to strengthen the role of the legislature in many African countries in order to address the often neglected environmental priorities of rural populations. The lack of autonomy and authority of many African parliaments in relation to the executive, severely undermine accountability. Other examples of horizontal accountability mechanisms are the creation of independent Pro- Accountability Agencies, such as corruption control bodies, Ombudsmen and auditing agencies which have been set up in many countries during recent years. These agencies are normally 81 This is often analyzed in terms of a principal agent framework, where the principal (the public) delegates an instrument to accomplish certain goals to the agent (the politicians or policy makers). In the next step, the principal is the politician and the agent the civil servant in the bureaucracy (Batley, R. 2004; Adsčra 2003). 164 Report No. 55328 responsible for holding the government accountable in specific issue areas (Ackerman, 2004; 2005). Social accountability: Despite the implementation of many different measures to improve top- down accountability, corruption and other types of bad governance are persistent problems, not least in many developing countries82. Many analysts suggest that approaches to improve top- down accountability need to be complemented by bottom-up approaches to accountability that emphasise the demand side of good governance (Ackerman, 2005). Social accountability is a broad term for this type of demand side approaches to accountability. While Blair (2005, p. 128) refers to social accountability as "the accountability of the state to the society as a whole (as opposed to some individual sector of society), Malena, et al. (2004) defines it as "an approach towards building accountability that relies on civic engagement, i.e. in which it is ordinary citizens and/or civil society organizations who participate directly or indirectly in exacting accountability". Social accountability mechanisms refer to the broad range of initiatives that citizens can use to hold the state accountable, including citizen monitoring of public services, participatory expenditure tracking, social auditing and civil society monitoring of the impacts of public policies83. Public participation and Voice: Some social accountability initiatives focus on enhancing public participation and giving voice to people to express views and interests and demand action of those in power. The focus is not on the creation of voice for its own sake but on enhancing the capacity to access information, scrutinize and demand answers in order to influence governance processes (ONeil et al., 2007). Voice can be exercised directly by poor people through for example elections but many times it is channeled through indirect mechanisms such as civil society organizations or media. This is clearly related to the opportunities and constraints discussed in the section about participation above. A general observation is that social accountability initiatives tend to be most effective if they are combined with accountability mechanisms "internal" to the state, i.e. are institutionalized and systematically implemented by a civil society, state or "hybrid" institution (Malena, 2004). This institutionalization is important to overcome the "event culture" that tends to prevail when concepts of societal participation and civic engagement are brought to the table (Eberlei, 2001 in Ackerman, 2005). It should also be noted that there is disagreement on how much and what kind of participation that is good for a democracy. For example Kaufman (2003, in Ackerman, 2004) argue that ...some forms of inclusion such as partnerships with NGOs may enhance capacity, other such as popular assemblies may be a step backward in terms of the efficiency, effectiveness and even the accountability of state organizations". Ackerman (2004) on 82 It should be noted that corruption is often linked to natural resources management (Veit et al, 2008; Transparency International, 2008). 83 For an overview see the World Bank Social Accountability Sourcebook, ftp://ftp.worldbank.org/pub/asyed/socacc.htm 165 Report No. 55328 the other hand argues for the merits of full inclusion of the citizenry as a whole in the core activities of government. Rights to access to information and justice: In order for people to be able to exercise their voice and demand accountability from public authorities, legal rights pertaining to access to information, participation and justice are essential. For environmental matters these "Access rights" are stated as commitments in Principle 10 in the Rio Declaration as well as in the Aarhus convention which turns these commitments into legal obligations. Access to information can include the right to examine public records, obtain data from environmental monitoring or reports from environmental agencies. At a more general level access rights are rooted in civil and political human rights and part of international law on these issues. Using a human rights based approach, accountability can be expressed as relations between the public as having rights to access to information and justice and the state being the bearer of duty to fulfill these rights. Freedom of press: The degree of citizen information has been shown to be a significant factor in explaining the level of corrupt practices in different countries (Adsčra et al., 2003). 7.2 SEA and Accountability Reinforcing social accountability as part of an SEA is put forward by the World Bank (2005) as a key mechanism for improved environmental governance. Ahmed and Sanchés-Triana (2008, p 192) note that in addition to the disclosure of information and public participation which are encouraged in traditional SEA methodologies, institution-centered SEA should in particular focus on strengthening the underlying legislation and implementation practices on information disclosure, public participation and access to justice on environmental matters. This is consistent with Principle 10 of the Rio Declaration and the 1998 Aarhus Convention84. Moreover, small steps in increasing accountability by putting in place institutions that create more transparency can be seen as levers for social learning that eventually create legitimacy for next steps in developing accountability. The focus on access rights is likely to be an important evolution in SEA approaches since these rights can become an important lever for public demands. The rapidly growing Access Initiative is one example of how a network of civil society organizations can utilize access rights for political mobilization85. While many governments have made progress in establishing legal frameworks for access rights the implementation of these frameworks is often weak (Foti et al., 2008). This highlights the need for I-SEA to focus on the mechanisms for enforcing access rights. As stated in the beginning of this chapter, subjecting power to the threat of sanctions through effective enforcement mechanisms is a crucial element of accountability. At least parts of these 84 Aarhus Convention on Access to Information, public participation in Decision-Making and Access to Justice on Environmental Matters 85 www.accessinitiative.org 166 Report No. 55328 enforcement mechanisms are likely to be found within the government system. It can be questioned whether increased transparency and participation will lead to improved governance without a system of checks and balances and strengthening of competing agencies (or countervailing powers) which can challenge the interests dominating for example a sector (Fung, 2002; Galbraith, 1952). It should thus also be considered if I-SEA can analyze and strengthen "government internal" horizontal accountability systems. An analysis of horizontal (cross sector) and vertical mechanisms for coordination and sanctions as well as incentive systems within the public administration may very well be performed as part of an SEA. While the focus on access rights is clearly relevant, one could discuss whether an I-SEA could also strengthen other types of social accountability mechanisms. For instance it may be possible to institutionalize different types of participatory elements in the implementation of sector policies or management of natural resources. Although the form these institutions take will be highly context dependent, there seem to be a great need for further studies on how these types of arrangements can be influenced as part of an SEA. The importance of strengthening long term constituencies that can demand accountability and improved environmental governance is analyzed by Blair (2008) and recognized as important for I-SEA by Ahmed and Sánches-Triana (2008). Environmental Civil Society organizations, the media and the legislature are examples of actors that may form important parts of constituencies for environmental change. Finally, how to prioritize between and sequence different types of initiatives to improve accountability and environmental governance merits further attention. Is it preferable to begin by strengthening environmental constituencies and a system of competing interests and checks and balances that then can demand transparency and improved environmental governance? Or should the primary focus be on improving transparency which then allows environmental constituencies to get engaged? 8. ENSURING SOCIAL LEARNING Strategic Environmental Assessments commonly involve both analytical and participatory approaches (OECD, 2006). In institutions centered SEA the role of learning is emphasized and this is an important feature distinguishing I-SEA from impact centered SEA approaches (Ahmed and Sánchez-Triana 2008, p 183). However understanding what type of learning takes place in a policy process is a complex endeavor. First of all social learning is conceptually difficult since it is a very broad term that bring together several of the other key aspects of institution-centered SEA discussed in this literature review. Secondly, it is empirically difficult to evaluate if social learning has taken place and the effect it has had on specific policy outcomes (Bennett and Howlett, 1992). This section discusses how learning can be conceptualized in the context of SEA and how it may be evaluated. 167 Report No. 55328 8.1 Perspectives on Social Learning A learning approach to understanding policy changes generally claim that states (and public bureaucracies) can learn from experiences and modify present action on basis of the results of previous action. A learning approach should be viewed as a complementary rather than an alternative hypothesis to theories emphasizing the importance of power and conflict for policy change (Bennet and Howlett, 1992). While policy processes always take place in a context of power struggles and political conflicts, learning can be an important factor for change as well. Different types of learning: In the literature different types of learning that may take place in policy processes are identified (Ebrahim, 2008) 86: Technical learning involves a search for new policy instruments in the context of fixed policy objectives and change occurs without fundamental discussion of objectives or basic strategies. Conceptual learning involves a more fundamental redefinition of policy goals, problem definitions and strategies. In for example the energy sector conceptual learning can imply a redefinition of the policy goals from energy production to energy security and that this new policy goal is shared by key actors that may have opposing political interests (Nilsson, 2005). Such a redefinition of policy goals is often crucial for environmental improvements, since implementation of environmental policies often require the collaboration between different sectors (Fiorino, 2001). The distinction between technical and conceptual learning has connotations to the distinction between single loop learning and double loop learning in organizational theory (Argyris and Schön, 1996). Single loop learning is "concerned primarily with effectiveness: how best to achieve existing goals and objectives" while double loop learning involves "inquiry through which organizational values and norms themselves are modified" (Argyris and Schön 1996: 22, as quoted by Ebrahim, 2008, p 160). Social learning builds on both technical and conceptual learning but focuses on interactions and communications among actors (Forino, 2001). With its emphasis on relations among actors and the quality of the dialogue, social learning is clearly linked to stakeholder participation in policy processes as well as accountability. The extent to which stakeholder participation and other types of social interactions result in learning is influenced by formal and informal institutional rules related to the policy process. Institutional rules shape power relations and determine how and where decisions are being made, who is in charge and who gets to participate. Thus changing institutional rules can affect the possibilities for learning to occur (Nilsson, 2006, p 4). In addition, the concept of political learning is used by some analysts to describe situations where new concepts are introduced and strategies improved but with the purpose of 86 This conceptualization follows Glasbergens (1996) work on environmental policy in the Netherlands and is used by several analysts, including Fiorino 2001, page 324; Ebrahim, 2008, and Nilsson, 2006 (with some modifications). Other concepts in the "learning literature" include government learning, lessons drawing and political learning (Bennett and Howlett, 1992). 168 Report No. 55328 strengthening fixed policy positions and objectives. The use of the political learning concept ...allows for an often-neglected distinction to be made between strategic behavior and genuine shifts in beliefs" (Nilsson 2005, p 209). The role of research and evidence for learning and policy making: Research may be very influential on policy (recent examples include the bio-physical and economic research on climate change; see e.g. IPPC, 2007; Stern et al, 2006). However, as pointed out by e.g. Carden (2005), Owens (2005) and Neilson (2001), more information generated through research, policy assessments or evaluations does not automatically translate to improved decisions or learning. Factors such as incentives, timing, costs, capacity (to absorb or understand research knowledge) and public opinion can constrain transfer of knowledge to policy making. Tracing the influence of research knowledge on policy processes is associated with difficulties, partly due to the multitude of indirect links between research and policy processes, and time lags. It may be that policy processes internalize research knowledge years or decades after the original research was undertaken (Neilson, 2001). The research-policy links are also obscured by the fact that most research is incremental and cumulative, and requires translation, interpretation and adaptation in the policy process. Disentangling research knowledge from other knowledge, information and opinion in the policy process is therefore an additional difficulty. Some go as far as claiming that there is a cultural gap between the academic and the political spheres ("communities"), which substantially inhibits policy uptake of research (Caplan, 1979). This view is somewhat moderated by Weiss (1977) who claim that we should not generally expect research to have a direct and immediate (linear) impact on policy. Rather, policy uptake of research knowledge is slow and incremental, and determined by organizations (the political spheres) openness towards new scientific knowledge. Research has an enlightenment function which slowly creeps into the policy sphere and gradually changes the mind set of politicians/policy makers. Research can suddenly change political priorities if other actions and events have worked in favor of taking the research knowledge on board. Time is thus an important factor to consider when discussing the role of research and assessments for learning and policy making. Although new evidence in many cases may have little impact on policy making in the short run, the impact in the long run may be greater. Learning in different types of policy processes: Among the factors that determine the scope for evidence and learning to play an important role in a policy process, Lindquist (2001) underlines the importance of the decision mode of the organizations or networks involved in the policy process. He distinguishes between routine, incremental and fundamental decision modes. Routine decision regimes focus mainly on matching and adapting existing programs to emerging conditions, and are generally not receptive to research or analytical work suggesting major changes. Incremental decision-making processes deals with selective issues as they emerge and can be receptive to policy analysis that identifies alternatives that address selective issues that do not involve wholesale rethinking of existing policies. Fundamental decisions are relatively infrequent opportunities to re-think approaches to policy problems, for example as result of crisis 169 Report No. 55328 or new governments. In anticipation of fundamental policy decisions, or following sharp regime shifts, a large openness and demand for research and new information can be expected. These fundamental decision regimes provide windows of opportunities for social learning as well as change in a broader perspective. The scope of learning in relation to knowledge base and degree of social conflict: Several analysts use a simple typology displayed in Table 1 to discuss how learning (Nilsson and Persson, 2003), the role of policy assessments (Kornov and Thissen, 2000) and implementation of policies (Matland, 1995) depend on the availability of substantive knowledge and the degree of social conflict in a decision making process. Table 1. Typology of problem situations with indicated support approach Low conflict of Strong conflict of values/interests values/interests Good knowledge base Rational problem solving Mediation approach Low uncertainty/ambiguity Negotiation support Technical learning Weak knowledge base Risk approach, Catalytic and entrepreneurial Experimentation approaches High uncertainty/ambiguity Additional research Source: adapted from Kornov and Thissen, 2000. In situations where a high degree of social consensus is combined with a good knowledge base, rational problem solving based on facts and technical (rather than conceptual) learning is more likely to occur. When a high degree of social consensus is combined with a weak knowledge base additional research can play an important role. Experimentation and learning during the implementation of decisions becomes important due to ambiguity involved at the decision stage. Ambiguity "provides an opportunity to learn new methods, technologies, and goals" (Matland, 1995). In situations where there are strong social conflicts the prospects for learning are bleaker, especially if this is combined with a weak knowledge base. Political learning rather than genuine shifts in beliefs are more likely since actors tend to have clearly defined and incompatible goals and are less willing to interact. More analytical inputs are unlikely to result in improved decisions since actors act strategically and power rather than learning govern the outcome of decision making in these situations (Matland, 1995). Approaches focusing on stimulating interaction, dialogue and negotiation between different interests may be more fruitful feeding 170 Report No. 55328 more new information to the stakeholders (Nilsson and Persson, 2003; Kornov and Thissen, 2000). This basic and rather crude typology may involve a risk of oversimplification, but the point is to illustrate that the level of knowledge and degree of social conflict matters greatly not only for the opportunities for learning to occur but also for how to design an appropriate SEA approach (Kornov and Thissen, 2000). Institutions for learning: Different institutions may be more or less conducive for social learning processes to take place. Formal and informal rules for how and where decisions are made and who gets to participate are important determinants for learning outcomes. For example many central governments can be characterized as being based on a bargaining model where each ministry is looking out for its core interests in an interdepartmental negotiation process. Instead of being conducive to learning this institutional set up often lead to positional wars and strategic use of knowledge. Parliamentary committees, or cross sector working groups created around certain themes are examples of institutions that have been more conducive for learning (Nilsson, 2005; Pillai, 2008). Organizational research has shown that the ability of organizations to learn and incorporate new understandings is often limited. Organizations tend to accept knowledge that confirms their world views and resist such knowledge that challenges them (Nilsson, 2006). March (1991) claim that organizations face a trade-off between "the exploration of new possibilities and the exploitation of old certainties". The essence of explorations is experimentation with new alternatives and the resulting returns from this learning endeavor are often long term. Since the essence of exploitation is on the refinement and extension of existing competences, technologies and ideas whose pay offs are more immediate, there are strong incentives for organizations to favor exploitation over exploration (March, 1991). Given these incentives that restrain learning it is often held that a force from outside is necessary in order to induce learning (Sabatier and Weible, 2007 and Nilsson, 2006). Such a force from outside is often viewed in terms of external shocks leading to changes in power relations among influential actors or networks (Sabatier and Weible, 2007). Network theory states that learning occurs when actors with different interests and beliefs interact in the policy arena. The literature does however not give any clear guidance on how to design institutions that create the type of interactions that result in social learning. For example Nooteboom (2007) claims that EIA, as an example of a formal institution, has contributed to a learning process with far reaching effects in The Netherlands. The effects on learning of institutionalizing mandatory participation systems, requiring governments to involve civil society, in the development of Poverty Reduction Strategy Papers are mixed. In some countries like Honduras it has given NGOs a more important role and contributed to political openness (Seppanen, 2005). But in many other countries this mandated participation did not seem to deliver a lot of visible result (IEO, 2004; OED, 2004). For example, in Bolivia it resulted in a larger gap between expectations and results, frustrating the poor population (Dijkstra, 2005). 171 Report No. 55328 8.2 SEA and Social Learning Social learning is important in the World Bank I-SEA approach since it is seen as a key mechanism to assure that I-SEA can have an influence beyond the discrete policy intervention. The World Bank (2005, p 56) suggests that "improving policy learning ­ technical, conceptual and social - relies on enhancing communication and dialogue among actors and constant evaluation". While "systems for monitoring and evaluation that are publicly available are crucial not only for technical learning but also for democratic legitimacy and public confidence" promoting social learning in environmental policy is more about "creating a culture of stakeholder involvement and scrutiny among policy makers and implementers". Ahmed and Sanchez-Triana (2008, p 193) suggest that in order to promote social learning an I-SEA should focus on aspects such as: "Politicizing" environmental issues, by linking them to broader development issues and integrating agendas of environmental ministries with those of more influential ministries Strengthening policy advocacy networks and creating public forums for policy debate to ensure that diverse perspectives are repeatedly placed on policy makers agendas Putting effective transparency mechanisms in place and supporting media scrutiny of policy and implementation to strengthen accountability. The suggested aspects an I-SEA should focus on in order to promote social learning illustrate that social learning is viewed as an outcome resulting from the implementation of many different activities. The World Bank approach to social learning seems to be well grounded in modern theories of adaptive management, collaborative planning and interactive policy making (See for example Feldman and Khademian, 2008; Healey 1997; and Innes and Booher, 1999). There is no single best way to stimulate social learning, and it is extremely sensitive to context. It may be more an art than a science, and I-SEA should primarily consider what is feasible given the specific context. An interesting development of the framework would be an explicit discussion of how I-SEA best can contribute to social learning in different types of decision making contexts (in line with the discussion above (Kornov and Thissen, 2000; Lindqvist, 2001). It would be interesting if the evaluation of the I-SEA pilots could explore if there may be a tradeoff between making an SEA process as open as possible on the one hand and maximizing learning on the other. Do stakeholders need an environment that is not completely open to media and public scrutiny for being willing to challenge old positions? The broad nature of the social learning concept may be the main weakness of this part of the I- SEA approach. The broad concepts used related to learning and the slow nature of learning processes are likely to make it difficult to empirically evaluate if learning has taken place and to 172 Report No. 55328 attribute possible changes to I-SEA. Aware of this, the World Bank (2005) suggests that the effects of learning should be studied over long time frames and that one should have conservative expectations about the potential for actual learning (World Bank, 2005). But even so, as Bennet and Howlett (1992) note, "it may be impossible to observe the learning activity in isolation from the change requiring explanation and that "we may only know that learning is taking place because policy change is taking place". In relation to SEA it seems important to distinguish the learning activities more clearly from the objective of integrating key environmental concerns into policy formation. As a starting point it would be desirable to further disentangle the concepts related to policy learning and I-SEA and clarify (Bennet and Howlett, 1992; Nilsson, 2006): Who learns? is it primarily government officials and policy makers or a broader set of societal actors?; What is learnt? is it mainly technical learning or are more fundamental problems and strategies re-conceptualized?; What are the key elements of learning? is it mainly new knowledge acquisition, lessons drawing or institutionalization?; What are the results of learning? what effect does learning have on policy outcomes? Finally, social learning is something that the social actors should do themselves, if they want. Interventions cannot force any actor to learn. As the saying goes, "one can bring a camel to a well, but one cannot force him to drink". Instruments that create accountability may increase a sense of interdependency, but the actors may still refrain from agreeing on joint interests. Therefore, progress on social learning should in the first place be observable as changes in the attitude of individuals toward others who ask attention for the environment. 173 Report No. 55328 C. EVALUATING I-SEA 9. FRAMEWORK FOR EVALUATING I-SEA PILOTS This section provides guidance for the evaluation of the different I-SEAs in the World Bank Pilot Program. For each Pilot to be evaluated there will be separate Terms of References developed containing more detailed information and guidance. The evaluation framework87 aims at: i) forming a shared understanding of the objectives, concepts and methodologies used in Institution-centered SEA; ii) establishing joint objectives and a common scope for the pilot evaluations; iii) facilitating the cross analysis of the results of the different pilot evaluations. Although these are some general objectives to attain, the evaluators should be flexible in applying this framework adjusting the evaluations to the unique contextual factors that set the stage for each pilot that will be evaluated. 9.1 Evaluation Objectives The general objective of evaluating the SEA Pilots is to learn how effective the I-SEA approach is to integrate environmental and social considerations in policies, plans and programs, and understand the contextual factors that explain its influence or lack thereof. The specific objectives of the evaluation of an I-SEA pilot are the following: (i) To evaluate the pilots actual and potential influence on a concrete policy, plan or program and on the underlying institutional framework in which this policy, plan or program has been formulated and implemented. (ii) To evaluate how and to what extent contextual influencing factors and processes explain the influence or lack of influence of the Pilot. (iii) To evaluate how the pilot used the I-SEA methodological framework while adapting to contextual influencing factors and processes. (iv) To evaluate to what extent the Pilot has achieved the process outcomes of I-SEA. 9.2 Evaluation Considerations The evaluation of the I-SEA pilots involves several challenges. The evaluators should especially consider the following issues88: 87 The evaluation framework presented in this section builds partly on the section on evaluation in the OECD DAC SEA Guidance (OECD, 2006, p. 123-128). It contains however less of "SEA quality control check-elements" which is one of the two part evaluation checklist presented by the OECD DAC or benchmarks for good practice as can be found in a recent proposal of a Generic SEA Quality Review Methodology (Sadler, B. and Dalal-Clayton, B., 2009). 88 More elaborate information on these and other challenges in evaluating complex change processes can be found in e.g. Weiss, 1998; and Yin, 1994. 174 Report No. 55328 Evaluating outcomes rather than impact: Since the evaluations will take place shortly after the completion of the different I-SEA Pilots, the more long term impacts89 on the underlying institutional framework and political economy context will not be evaluated. A more tangible scope for the evaluation than to evaluate impacts is therefore to assess the outcomes of the I-SEA Pilots. Outcomes can be defined as changes in the behaviour, relationships, activities or actions of people, groups, organizations and institutions with which the I-SEA Pilot has engaged with (Earl et al 2001)90. The evaluation should thus focus on detecting the many different types of expected and unexpected outcomes (or changes) that may have evolved in the limited time frame since the initiation of the SEA Pilot. The I-SEA model as outlined in this report suggests that important expected outcomes would be raised attention to environmental priorities, strengthened environmental constituencies, enhanced social accountability and greater capacity for social learning. For some pilots it may also be possible to find that key environmental issues have been incorporated in policy formulation and implementation. More examples of what expected outcomes can be and suggestions on how these can be detected are found in the evaluation questions below. The key challenge of not having access to a baseline or counterfactual when mapping these kinds of outcomes would be at least partially addressed by building a sound narrative on how the I- SEA pilot intended to incorporate environmental and social considerations in specific interventions, what actually happened and discussing why this may have happened (See Evaluation Report in subsection 9.3 below). The evaluator may as well consider other experience in the sector for influencing decision making and institutional strengthening in an attempt to anticipate conclusions on "what may happen" in the future as a result of the I-SEA being evaluated. There is a wealth of experience on capacity building and influencing strategic decision making that can be brought to bear at least to point out potential strengths or weaknesses of the pilot I-SEA being evaluated. Analysing the contribution of I-SEA to outcomes rather than establishing causality: A second challenge in evaluating the influence of the I-SEA pilots concerns the difficulty to determine if observed changes are caused by the I-SEA or by other factors. Changes are likely the result of many contributing factors and an I-SEA can at best be one of these. Rather than attempting to establish a direct causality between the I-SEA and the observed outcomes the evaluation should analyse if it is likely that the I-SEA Pilot has made an important contribution to these outcomes. The evaluation may trace logical links between I-SEA activities and outcomes, but should be careful in not framing this in terms of causality. 89 Impacts refers to the effects of a development intervention on local social, economic, environmental and other development indicators (OECD DAC, 2008) 90 This definition of Outcomes comes from IDRCs and others work on Outcome Mapping as an evaluation methodology. The term Institutions has been added for the purpose of this evaluation, but is not included in the definition of outcomes suggested by Earl et al (2001). Earl et al uses the term Boundary Partners for the individuals, groups and organizations with whom a program interacts directly. 175 Report No. 55328 Analysing the interaction between contextual factors and I-SEA in explaining outcomes: A critical success factor for SEA-effectiveness is the ability to adjust the scope and methodology of an SEA to contextual factors (e.g. Hilding-Rydevik and Bjarnadóttir, 2007). The interaction between the pilot and its context should therefore merit attention when evaluating the contribution of an I-SEA Pilot to observable outcomes. The evaluator should distinguish between factors under control of the SEA team and external factors. Formal as well as informal institutions in the country91, windows of opportunity for policy reform, and political economy conditions affecting the implementation viability of reforms, are examples of external factors that could define favourably or unfavourably I-SEA outcomes. It is difficult to identify ex-ante which contextual factors are most important in explaining I-SEA outcomes. As a rule of thumb the evaluator should intend, early in the evaluation process, to get a broad overview of the historical, political, economic, social, cultural and institutional factors that may be crucial to the policy intervention at hand. The evaluator should then try to narrow the focus to those contextual factors that seem to be most important in explaining the influence or lack of influence of the I- SEA pilot. In evaluating the interaction between the pilot and its context, the evaluator should also analyze the role of the factors potentially under control of the SEA team. Among them merit consideration the ability to access and involve key stakeholders and decision makers in the I- SEA process, communication of I-SEA findings and results, and the ability to take advantage of windows of opportunity for influencing decision making and effecting institutional change. 9.3 Evaluation Process Evaluation Team: The evaluation of pilots will be carried out by specialists independent of the World Bank92. Evaluators are encouraged to team up with local expertise or seek assistance from local specialists to undertake the evaluation of the I-SEA pilots. Evaluation Steps: The evaluation of each pilot will involve the following steps: Preparatory work: Thorough preparations will be key for successful field work. Preparatory activities suggested include (i) document review, (ii) development of a plan for the field work including an interview guide, and (iii) draft context analysis. Field work: Each pilot evaluation would include at least one trip for carrying out fieldwork activities. 91 See discussion in section 6.1 on the importance of informal institutions for the actual performance of formal institutions. 92 EEU and NCEA will each evaluate two pilots and the Swedish EIA Centre will evaluate one pilot. The remainder pilots will be commissioned by the World Bank to individual consultants with expertise in policy/institutional analysis, case study research strategy and, preferable, experience in SEA. 176 Report No. 55328 Report writing: A draft evaluation report may be written during the field trip. This may allow for a validation of some of the findings already during the field trip. The final report should incorporate comments received on the draft report. Documentation of findings: Each evaluation team should establish an electronic database including documents, interview protocols and other sources of information on which the findings of the evaluation report are based. The database is one way of strengthening the reliability of the different evaluations. Evaluation Materials: The evaluation will build on the following material: Documents: The evaluators will have access to the documentation of the pilots including concept notes, ToRs, inception reports, mid-term reports, final reports and lessons learnt reports. In addition, the evaluators are expected to collect additional documentation necessary for fulfilling the objectives of the evaluation. Interviews: Three sets of actors should be interviewed in order to base the evaluation on different points of view and multiple sources of evidence: (i) The I-SEA team: From the I-SEA team the evaluators are expected to interview (i) the task manager of the project to which the pilot was associated; (ii) World Bank staff that actively participated in the implementation of the pilot; and (iii) the main consultant(s) in charge of the implementation of the SEA. The World Bank would provide the evaluators with names and contact addresses of these interviewees. (ii) Policy makers and implementers: For the group of policy makers and implementers, the evaluators would interview government officials involved in the implementation of the policy and the use of the SEA recommendations at the strategic decision level like Ministers, Directors, Principal Secretaries, policy advisors, policy think tanks, etc. (iii) Key stakeholders: The evaluators will prepare a list of potential interviewees based on the stakeholder analysis of the I-SEA. This list should include but not be limited to representatives of civil society stakeholders, grassroots organizations, lobbyists, local communities, relevant sector organizations such as professional organizations and the private sector significantly affected directly or indirectly by the intervention assessed through the I-SEA. By using and describing (in the evaluation report) broad-based soliciting, the list should strive at attaining representativeness of key stakeholders and appropriate consideration of multiple visions and perspectives. The interviewee list would be cleared by the World Bank prior to fieldwork. Evaluation Report: The evaluators will prepare the evaluation report as a narrative comprising four parts. (i) The first part (actual and potential influence of I-SEA) will discuss the discrete intervention (policy, plan or program) and the extent to which the I-SEA pilot has contributed to integrating environmental and social considerations into this intervention through: 177 Report No. 55328 - influencing decision makers and constituencies with a stake in the policy, plan or program formation in the sector, country or region; - influencing country work supported by the World Bank (i.e, preparation of loans), and, more broadly, World Bank staff working across the region or the world on similar sectoral interventions (i.e. mining reform, forest reform, urban planning, etc.) This analysis should identify policy and institutional changes that may have already taken place and processes that may lead to future policy and institutional changes. (ii) The second part (context and application of I-SEA) will contain a discussion of the context in which the I-SEA was undertaken, including historical, political, economic, social, cultural and institutional factors that may explain the influence or lack of influence of the I-SEA pilot. The evaluator should then discuss how I-SEA methods and tools were applied in undertaking the pilot, given the constraints and opportunities of the context. (iii) The third part (achievement of I-SEA process outcomes) will discuss the extent to which the I-SEA process was able to raise attention with respect to environmental and social priorities associated with the discrete intervention, strengthen constituencies and improve social accountability and social learning. (iv) In the fourth part (I-SEA effectiveness and analysis of strengths and limitations) the evaluator should draw conclusions and recommendations for effective I-SEA discussing the strengths and limitations of the I-SEA pilot evaluated. The discussion should include an analysis of the interaction between the I-SEA process and its historical, political, economic, social, cultural and institutional context. In addition, the evaluation report should contain information about how the evaluation was conducted and how the findings are substantiated. This "approach" section of the evaluation report should make a clear distinction between findings that are derived directly from document reviews or interviews, and the expert opinions of the evaluation team. Detailed information on the sources of information for the evaluation should be provided in appendices to the main evaluation report. 9.4 Evaluation Questions/Evaluation Criteria This section outlines a set of evaluation questions which are intended to guide the evaluation teams in fulfilling the evaluation objectives. The questions are posed to the evaluators and should not be interpreted as interview questions that should be posed to different respondents. In order to assist the evaluators in answering the general evaluation questions, detailed evaluation questions are specified. The detailed evaluation questions can also be seen as interim markers of 178 Report No. 55328 progress93 in relation to the influence of the SEA pilot (evaluation question 1) and the achievement of envisaged process outcomes of the SEA pilots (evaluation question 3). GENERAL QUESTIONS FOR THE EVALUATION OF I-SEA PILOTS 1. How and why has the I-SEA pilot influenced decision making processes? In relation to policy, plan or program formation in the sector, country or region? - In relation to country work supported by the World Bank? - In relation to other actors and processes? - What are the factors that may explain the pilots influence or lack thereof? - Which trends or processes may favor or hinder the influence of the I-SEA pilot in the - future? 2. How was the pilot undertaken given the context? - How were key contextual factors identified and taken into account? - How were analytical and participatory tools and methods used? - How were stakeholders vulnerability aspects considered? - Appropriateness, strengths and weaknesses of tools and methods used? 3. To what extent did the pilot achieve key I-SEA process outcomes? How and why? Intended outcomes: - Raised attention to environmental and social priorities for policy reform, plans and programs - Strengthened constituencies - Improved social accountability - Enhanced social learning Other outcomes of the I-SEA pilot? 4. What were the strengths and weaknesses of the I-SEA pilot for influencing decision making processes? 93 Weiss, C.H. (1998), page 127-129. 179 Report No. 55328 DETAILED QUESTIONS FOR THE EVALUATION OF I-SEA PILOTS 1. How and why has the I-SEA pilot influenced decision making processes? A. In relation to policy, plan or program formation in the sector, country or region? - Increased integration of environmental and social priority issues? - Specific policy decisions including, if relevant, the preparation of laws, executive power or judiciary decisions and regulations? B. In relation to country work supported by the World Bank? - The preparation of a World Bank project or loan to support a client countrys policy, plan or program? - The dialogue between the client country and the Bank? - Other processes and actors within the World Bank such as staff working across the region or the world on similar sectoral interventions? C. In relation to other actors and processes? - Other expected or unexpected changes in the behaviour, relationships or actions of people, groups, organizations and institutions with which the I-SEA Pilot has engaged with? D. What are the factors that may explain the pilot's influence or lack thereof? E. Which trends or processes may favor or hinder the influence of the I-SEA pilot in the future? - How has the I-SEA pilot attempted to assure that its influence reaches beyond the discrete policy intervention? 2. How was the I-SEA pilot undertaken given the context? A. How were key contextual factors identified and taken into account? - Historical, political, economic, social, cultural and institutional factors (formal/informal) critical for the decision making process? - Political economy factors affecting the viability of the proposed intervention? - Seizing windows of opportunity for influencing the decision making process related to the discrete intervention or dealing with the effects of the closing of these windows of opportunity? B. How were analytical and participatory tools and methods used for: - Stakeholder dialogue - Identifying and selecting environmental and social priorities? 180 Report No. 55328 - Institutional and political economy analysis? - The validation of pilot recommendations and dissemination? C. How were stakeholders' vulnerability aspects such as gender discrimination, youth unemployment, weak land titling/property rights of farmers, etc, considered? D. Appropriateness, strengths and weaknesses of tools and methods used? 3. To what extent did the pilot achieve intended I-SEA process outcomes? How and why? A. Raised attention to environmental (and social) priorities - Are priorities more clearly defined? How is this documented? - Have environmental priorities been "politicized" and linked to growth, poverty reduction or other key development issues? - To what extent are priorities shared among key stakeholders? - How has the Pilot contributed to raise attention to priorities? B. Strengthened constituencies - Which constituencies have been strengthened (CSO CBO, Private sector, networks within the bureaucracy, networks involving many different kinds of actors)? - Have stakeholder engagement and networks been maintained after completion of the I-SEA report? C. Improved social accountability - New or improved legislation on access to information, public participation or justice on environmental matters? - Strengthened institutional mechanisms for the implementation/enforcement of legislation on access rights? - Mechanisms for stakeholder participation or involvement in strategic decision making, particularly weak and vulnerable stakeholders? - Enhanced transparency and media scrutiny of policy decision making? - Other accountability mechanisms that have been strengthened through the I-SEA pilot? D. Enhanced social learning - Who has learned? Is it primarily government officials and policy makers or a broader set of societal actors? - In the Bank, is it just at the level of an individual task team leader (TTL) or broader among sectoral TTLs that learning has occurred? 181 Report No. 55328 - What has been learnt? Is it mainly technical learning or have more fundamental problems and strategies been re-conceptualized? - Has the I-SEA pilot initiated or strengthened mechanisms for: inter sector or multi sector coordination? dialogue on policy reform that includes environmental and social perspective and involves multiple stakeholders? compensating potential losers of policy changes? monitoring and evaluation creating feedback for policy and planning fine- tuning? linking policy making with research communities? E. What other outcomes did the I-SEA pilot lead to? 4. What were the strengths and weaknesses of the I-SEA pilot for influencing decision making processes? 182 Report No. 55328 References References on Introduction Ahmed, Kulsum and Ernesto Sánchez-Triana (eds.), 2008. Strategic Environmental Assessment for Policies ­ An Instrument for Good Governance, Washington DC. Fischer, Thomas B., 2007. Theory and Practice of Strategic Environmental Assessment, Towards a more Systematic Approach, Earthscan, London, UK. OECD, 2006. Applying Strategic Environmental Assessment. Good Practice Guidance for Development Cooperation, DAC Guidelines and Reference Series, OECD Publishing. Paris. Partidário, Maria, R., 2000. Elements of an SEA framework ­ improving the added value of SEA, Environmental Impact Assessment Review, 20, 647-663. World Bank, 2001. Making Sustainable Commitments. An Environment Strategy for the World Bank, The World Bank. Washington D.C. World Bank, 2004. Operational Policies. 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Case Study Research, Design and Methods, Third edition, Sage. 191 Report No. 55328 Appendix: Checklist for analyzing institutional capacity for environmental management Source: Pillai and Lunde, 2006 192 Report No. 55328 Annex 3: Policy SEA Process Methods Methods used in Situation Assessment In most cases situation assessment can be desk-based, drawing on existing literature and the expert knowledge of SEA team members. A significant component of the situation assessment should be an environmental study akin to a baseline study but based mainly on secondary information and expert judgement. Its main purpose is to inform the identification of key environmental and social issues preferably related to economic growth and poverty alleviation. Depending on the size of the policy SEA exercise, and available resources, establishment of an environmental/social baseline should involve the development of a "pressure-state-impact- response" indicator framework for the area in question. Such a system may already exist at the national level as part of State of the Environment reporting. It needs to be stressed that development of PSIR indicator systems can be a time-consuming and expensive endeavour. For the purposes of the situation assessment task, the environmental and social baseline work should be simple and rapid. Indicators could be adapted either from an existing PSIR framework, or developed through public consultation. The World Banks "Generic ToR for Environmental and Social Baseline Development in a River Basin" provides some guidance94. An economic profile should be produced to indicate the nature and extent of current and proposed stresses on the natural resources of the jurisdiction or sector in question. This would include some indication of potential industrial, agricultural, and urban development envisaged for the area. This profile could be accompanied by a social study which would enable conclusions to be made about the structure, geographical distribution, income levels, income and asset endowments distribution, and land tenure arrangements in the jurisdiction. Box 3.3 presents examples of situation assessment methods used in the Sierra Leone SESA and the WAMSSA The situation assessment should also include a brief description of the policy, legislative and institutional framework associated with management of the policy regime in question. Selective analysis of historical and cultural issues associated with the sector to be reformed is also important to describe the context within which I-SEA approaches would be applied. This would help to understand path dependency factors affecting policy formulation and implementation. Methods used in Stakeholder Analysis Several methods can be employed to collect data on stakeholders in a comprehensive and efficient manner. Prior to the actual collection, a brief review of background literature and country studies can provide a useful understanding of the countrys political economy. One 94 Available at: http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/ENVIRONMENT/0,,contentMDK:20874777~menuPK:2 462263~pagePK:148956~piPK:216618~theSitePK:244381~isCURL:Y,00.html 193 Report No. 55328 method of collecting data is to conduct interviews directly with the stakeholders involved in the specific policy area. The second method is to interview local experts in the field who are knowledgeable about the issue and the important groups and individuals involved in the policy area. Country SEA team members will often hold extensive local knowledge and can provide a critical first hand understanding of which stakeholders are relevant to the reform area. However, unless resources and time do not permit, interviewing of local and international experts in the policy area or country and/or the stakeholders themselves is imperative. Broad, all-inclusive interviews will lead to an effective stakeholder analysis process since it will uncover many facets of the sectors political economy. The content and questions used in the interviews should focus on background information on the policy making process, information that identifies key stakeholders from a variety of groups in the reform process, and clarifying assumptions about stakeholders power and interest in the decision-making process. Data from interviews ­ including scaled values assigned to the attributes and relative rankings calculated accordingly ­ can be catalogued and presented in charts and/or matrices, highlighting the following attributes: * group * their interest (or salience) * influence (power) * position on the reform An important measure called "effective power" (degree of power the stakeholder holds over other groups in relation to a reform area) can be determined by weighting a combination of a stakeholders salience and influence. The level of influence depends on the quantity and type of resources and power the stakeholder can marshal to promote his or her position with respect to the existing policies and proposed reforms. The level of interest or salience is the priority and importance the stakeholder attaches to the sector or reform area. Broadly, these attributes signal the capability the stakeholder has to block or promote reform, join with others to form a coalition of support or opposition, and lead the direction/discussion of the reform. Stakeholder analysis therefore provides a sufficient understanding of the potential impact of reform on interested groups, the hierarchy of authority and power among different groups and the actual perceptions of the reform among different groups, all of which are important for the reform and policy SEA to be effective. Stakeholder data can be organized according to relative power/influence and salience of each stakeholder to understand their potential support or opposition for the proposed reform. Often, a matrix can be used to organize and classify the stakeholder data. One form is to map salience/interest and influence on the axes. This kind of matrix provides a shorthand categorization and analysis of 194 Report No. 55328 which stakeholders will gain or lose from a proposed reform and whether they can significantly impact the process. Methods used in Environmental Priority Setting Environmental and social key issues, identified in the situational analysis, are presented to the stakeholders for the selection of policy SEA priorities. There could be different ways in which to do this. For example, in Sierra Leone the SESA team employed a ranking method to define which environmental and social issues were most important. Larger-scope SESAs, such as WAMSSA, involved a combination of methodologies for the selection of environmental and social priorities, including: Focus group meetings for government, industry, and civil society that took place in the capital cities of Guinea, Liberia, and Sierra Leone. Mining community surveys were performed in 10 communities representing the range of features that characterize communities affected by mining and infrastructure development. Between 22 and 25 respondents, representing a broad range of stakeholders, were selected in each community. Afterward, WAMSSAs environmental and social priorities were chosen in national workshops. Another way of selecting priorities could be to generate scenarios based on different underlying assumptions. For example, policy SEA can be used to investigate the environmental and social impacts of different land use policies to be applied in a river basin. As a focus for policy dialogue, a small number of likely growth scenarios could be developed considering different assumptions in the following variables: increase in domestic demand for food, power and water; global demand for the countrys exports; urban development; migration and, industrialization. Scenario building can be an important part of the environmental priority setting step, because proper analysis of alternative scenarios can convince stakeholders that the proponent is serious about examining the different ways in which policies might be developed and implemented. In other words, scenario analysis can build legitimacy for policy SEA, especially when stakeholders are asked to present their own scenarios. Tools such as multi-criteria analysis exist to help stakeholders sort through scenario alternatives when there are many alternatives and many criteria that can be used to compare them95. Methods used in Institutional Assessment In some countries, an assessment of non-formal institutions will be necessary. This would address issues related to behaviours that stem from traditional values, which can play an important role in how stakeholders organize their economic, social, and political systems. A first step is to review available ethnographic information on the cultural attributes of the target population or indigenous group. A second step consists of workshops and focus groups that 95 See, for example, Annandale and Lantzke (2000). 195 Report No. 55328 would be carried out in a sample of representative communities. The purpose of these exercises would be to collect information on local perceptions of power relationships and the traditional ways of establishing dialogue. This is important, since a culturally sensitive approach to dialogue will reinforce local "ownership" of the reform process. Important political (e.g., ranking of authorities, their scope of influence, and local dispute resolution mechanisms), social (e.g., gender roles), economic (e.g., land tenure system, natural resource management, redistribution of benefits), and ideological features (e.g., religious system, sacred places) of these groups or communities can also be gathered at these focus group meetings and workshops. Finally, similar analysis could be applied to assess the influence of non-formal institutions on the management of priority issues, and to examine the potential impact on environmental priorities of the proposed policy change. Methods used in Political Economy Analysis In practice, there is a close connection between stakeholder analysis and political economy analysis. Stakeholder analysis provides an initial "mapping" of the degree of influence and importance of different groups. Political economy analysis goes a step further to explain what drives the behaviours of stakeholders. In fact, some of the recent research done in this area uses the alternative term "power and drivers of change analysis" to more clearly define the focus of this work96. Political economy studies supplement standard assessment methods with thorough diagnostics covering both formal and informal aspects of economic and political processes. There are substantial differences in the methods that different development agencies use when they undertake political economy analyses. World Bank studies often tend to involve extensive field work, while other studies rely primarily on literature review and the experience of local consultants. Recent reviews of how political economy analysis has been undertaken by development agencies, such as the 2005 report by the OECD Network on Governance, indicate that the most effective methodologies use a combination of quantitative and qualitative methods to enhance the depth of their analyses and understanding of the political economy of the reform process. The recent escalation of interest in political economy analysis has brought with it an excellent collection of methodological tools. Examples, among others, include DfIDs work on "Drivers of Change"; SIDAs work on "Power Analysis"; the World Banks report on the "Political Economy of Policy Reform"; the Netherlands Foreign Ministrys "Strategic Governance and 96 See, for example, OECD Network on Governance (2005). 196 Report No. 55328 Corruption Assessment (SGACA)"; and the OECDs "Survey of Donor Approaches to Governance Assessment"97. Methods used in Defining Policy SEA Recommendations In general, recommendations can be framed in a policy action matrix that includes short-term (1- 2 years), medium term (3-5 years), and long-term (more than 5 years) actions, as well as monitoring indicators. In this manner, expected outcomes in each period can be monitored to assess the progress of reform. It is also possible to conclude with an assessment of the risks associated with the recommended actions. Risk analysis might include the potential deliberate actions that certain interest groups may take in order to bend or halt reform. Thus, possible mechanisms to safeguard the proposed institutional and governance changes should be contemplated in the analysis. 97 All of this guidance, and more, is available at the Governance and Social Development Resource Centers website: http://www.gsdrc.org/go/topic-guides/political-economy-analysis/tools-for-political-economy-analysis 197 Report No. 55328 Annex 4: Summary of the International Workshop on "SEA for Development Cooperation: Taking Stock and Looking Forward" 1. Introduction The OECD DAC SEA Task Team and the World Bank held a combined workshop on the margins of the 30th International Association for Impact Assessment conference in Geneva on April 7th, 2010. The Convenors of the workshop were Dr Fernando Loayza of the World Bank, and the current Chair of the SEA Task Team, Mr Peter Croal from CIDA. The objectives of the workshop were to: Review progress made in the application of SEA, focusing on the recent experience of the OECD DAC SEA Task Team and the World Bank's Pilot Program on Institution- Centred SEA (I-SEA). Receive feedback from workshop participants on how SEA can be used more effectively for environmental integration in development policy and poverty reduction. Discuss the relevance of SEA in the new Environment Strategy of the World Bank Group (IDA, IBRD, IFC, MIGA.) The rest of this Annex presents the Agenda for the day; an outline of the process used to direct the afternoons workshop session; a summary of the workshop outcomes; and a full transcript of comments made by break-out groups during the workshop. 2. Agenda 09.00 ­ 09.15 Welcome and introduction Peter Croal (CIDA and OECD SEA Task Team) and Fernando Loayza (World Bank) Session 1: OECD SEA Task Team Progress and News on the Implementation of SEA for Development Cooperation. Session chair: Peter Croal 09.15 ­ 09.30 Introduction and SEA Task Team overview Peter Croal (CIDA and OECD SEA Task Team, Canada) 09.30 ­ 09.45 SEA Quality tool Barry Dalal-Clayton (IIED, United Kingdom) 09.45 ­ 10.05 SEA in Practice in Development Co-Operation Peter Nelson (Land Use Consultants, United Kingdom) 10.05 ­ 10.25 SEA Activities in China Kin Che Lam (Centre of Strategic Environmental Assessment for China, Chinese University of Hong Kong, China) 10.25 ­ 10.45 Questions and answers 198 Report No. 55328 10.45 ­ 11.15 Coffee break Session 2: SEA and the New Environment Strategy of the World Bank Group. Session chair: Anna Axelsson (Swedish EIA Centre, Swedish University of Agricultural Sciences, Sweden) 11.15 ­ 11.30 The World Banks Pilot Program on SEA Fernando Loayza (World Bank, USA) 11.30 ­ 11.55 Main findings of the evaluation of the pilot program David Annandale (Consultant, Canada) 11.55 ­ 12.05 Scaling-up SEA in development cooperation Anders Ekbom (Environmental Economics Unit, Gothenburg University, Sweden) 12.05 ­ 12.25 Questions and answers 12.25 ­ 12.45 Environmental Governance and Institutions Urvashi Narain, (World Bank, USA) 12.45 ­ 13.00 Questions and answers 13.00 ­ 14.00 Lunch Session 3: Break out groups. Session chair: Daniel Slunge (Environmental Economics Unit, Gothenburg University, Sweden) 14.00 ­ 15.10 Groups focused on answering questions presented in "dialogue maps". 15.10 ­ 15.30 Coffee break Session 3: Plenary. Session chair: Rob Verheem (Netherlands Commission for Environmental Assessment, The Netherlands) 15.30 ­ 16.30 Reporting back from break out groups 16.30 ­ 16.45 Wrap up and conclusion Rob Verheem (Netherlands CEA, The Netherlands) 16.45 ­ 17.00 Next steps and closure Fernando Loayza (World Bank) and Peter Croal (OECD SEA Task Team) 3. Process Used for the Workshop Break-Out Groups The afternoon workshop session used a process known as "dialogue mapping" to focus discussion on the following four topics: a) Obstacles and enabling factors for SEA effectiveness in development cooperation and poverty reduction. 199 Report No. 55328 b) The role of the World Bank on strengthening environmental governance and institutions for sustainable development. c) SEA as a tool for strengthening environmental governance and institutions. d) Main steps for scaling up SEA in development policy. Groups were organised around these topics, and participants were asked four questions under each topic heading. Approximately 70 people attended the morning session, and 45 stayed to participate in the afternoon workshops. 4. Summary of the Workshop Outcomes Analysis of the dialogue maps, combined with observations made of the group discussions, suggests that the following hold true: No indication of "objection" to the idea of I-SEA, or to its possible scaling-up. Discussions tended not to focus specifically on policy SEA ... but on SEA more generally defined. SEA is predominantly thought of by participants as a "product" ... ie ... use of the term "doing a SEA". Some uncertainty as to the idea of SEA as a process. Some uncertainty about purpose and distinction from other "varieties" of SEA. Policy SEA is quite different from impact-centered SEA. Real inefficiencies eventuate when policy or plan making take place in addition to policy appraisal (reference the English system of SA/SEA). The issue of ownership is important. Disagreement as to the role of development agencies. Do they have a mandate to encourage demand? Some discussion of the idea that I-SEA/policy SEA is just "taking account of the environment in policy-making". With regard to the issue of "obstacles and enabling factors for SEA effectiveness in developing countries", the following comments were made by participants: Need to (widely) show evidence of benefits ...eg: - SEA leading to economic efficiency (good example ...the hydropower plan SEA in central Vietnam). - improving the lot of the poor (WAMSSA regionalism?). - SEA as a forum for conflict resolution. Capacity building - the idea of policy SEA "champions". - should tap into networks of finance, budget and planning people (reference to the recent phases of PEI). The need to "convert" traditional sector and national planners. 200 Report No. 55328 With regard to the issue of the "role of development agencies: main components and steps for scaling-up SEA in development policy", the following comments were made by participants: Policy SEA should be "sold" by recognising that it is often adding value to existing processes. consider role of SEA in inter-group donor discussions. be clear about what donors should not do, as well as what they should do. Finally, with regard to the issue of "SEA as a tool for strengthening environmental governance and institutions", the following comments were made by participants: Policy SEA is most appropriate with: new/weak governments, post-conflict situations; and new sectors. Do we need to differentiate between "SEA" and "decision-making"? How can SEA contribute to a policy dialogue that extends beyond the completion of the SEA report? - involve stakeholders post-SEA follow-up. - set up process/responsibility for following up plan/SEA outcomes. - record institutional memory. - SEA becomes a key component of policy-making, not a separate track. 5. Full Transcript of the Workshop Outcomes The dialogue maps used by each of the four groups were collected and transcribed. The full transcription is presented below. Group A: Obstacles and Enabling Factors for SEA Effectiveness in Developing Countries Question 1: What kind of value-added must SEA demonstrate for developing countries to want to use SEAs? * long-term cost savings; * success stories from other countries; * show evidence of SEA leading to economic efficiency; * show evidence that SEA can deal with cumulative impacts and overcome the limitations of EIA; * show evidence of SEA improving the lot of the poor. WAMSSAs influence on regionalism should result in cheaper shared physical infrastructure, and hence help alleviate poverty. * risk reduction; * lead to wellbeing; 201 Report No. 55328 * solidify the power base of politicians; * the answer will differ depending on the country;; * improved and more efficient policy-making; * show that it can become a process/forum for overcoming conflict over resource management (the example was given of public protest in China); Question 2: What kind of capacity (individual, organizational, institutional) needs to be developed for successful use of SEAs in developing countries? * individual practitioner, auditors, politicians * identify champions with the ability to influence and empower; * matching knowledge needs with the different groups; * organisational bodies to coordinate SEA work at the national level; * doing SEA: technical ability; getting the message across; diplomatic skills; understanding needs; * using SEA: environmental understanding; * public: how is SEA related to the daily lives? Question 3: What activities, mechanisms and networks already exist that can be used to advance SEA practice in developing countries? * should tap into networks of finance, budget and planning people. These are the people that we need to influence. There are existing networks for these people. UNDP/UNEP PEI phase 2/3 is already working with environmental mainstreaming in budget and planning processes at the national level. * example given of Planning Secretary in a developing country who became an environmental mainstreaming "convert" when sent to a mainstreaming workshop. * examine the UNDP/UNEP PEI "champions" model. Non-environmental people are nominated as PEI champions and sent to short-course training. A fuss is made of these people when nominated. This is a competition. * make use of networks for insurance corporations; banks; NGOs. * use social network media to get to young people. * legal frameworks; * EPA-type agencies; * professional associations; * regional organisations; 202 Report No. 55328 * SEA roadshows. Question 4: What could be priority actions to promote developing country use of SEA? a) SEA practitioners - build capacity with respect to communication skills, understanding policy-making processes, and technical analysis/best practice. - incentives. - pilot SEAs. - capacity strengthening. b) Government agencies - link to national priorities - solicit more public support - media - international obligations and legal agreements c) Other actors - media: successful stories - champions - big corporations. - EITI. - industry bodies Group B: The Role of the World Bank on Strengthening Environmental Governance and Institutions for Sustainable Development Question 1: The World Bank has traditionally not done as much to increase the demand for better environmental governance and institutions. What role can it realistically play in this area? * In the past, poorly defined goals may have increased demand in an untested fashion. * Need to overcome the limitations of individual project lending focus. * increase local level partnerships with other development agencies. * need more outreach for follow-up after lending. 203 Report No. 55328 * WB may well have a "global mandate" to strongly encourage the use of policy SEA as an institutional strengthening tool (due to significance of global problems that are not taken on board by national governments). Question 2: How can the World Bank do a better job of measuring the effectiveness of its interventions aimed at strengthening environmental institutions and governance? * find means to show that SEA is subject to participation and public hearings. * degree of compliance of governments with own legislation. * make sure that clear disclosure rules are widely known. * audit country systems. Question 3: Should World Bank engagement in strengthening environmental governance and institutions differ between countries? * yes ... political economy analysis is extremely important. * priorities based on issues of global concern. Not all engagement needs to be demand- driven. Group C: SEA as a Tool for Strengthening Environmental Governance and Institutions Question 1: In which situations should institutional and governance strengthening be an important focus of an SEA? * new/weak governments * post-conflict * new sectors Question 2: How can SEA best contribute to multi-stakeholder participation in strategic decision-making? * differentiate between "SEA" and "decision-making"; * train SEA practitioners re "participation" continuum; * connection to governance and accountability: will decision-maker allow stakeholders a "participatory role in decision-making? Question 3: How can SEA contribute to a policy dialogue that extends beyond the completion of the SEA report? * involve stakeholders post-SEA follow-up. * set up process/responsibility for following up plan/SEA outcomes * record institutional memory * SEA becomes a key component of policy-making, not a separate track. 204 Report No. 55328 Question 4: Indicate three outcomes that SEA should achieve in order to contribute to strengthening of environmental governance and institutions? * Change! New becomes normative. * raising awareness ­ widely, beyond politicians/bureaucrats * stronger ownership/accountability. Group D: The Role of Development Agencies: Main Components and Steps for Scaling-up SEA in Development Policy Question 1: What kind of value added must SEA demonstrate for development agencies to want to support the development of SEA capacity and use of SEAs? * demonstrate that the environment has been considered. * local buy-in * work with poverty agenda * peer group support * recognize that SEA is often adding value to existing processes ­ simply enhancing. Question 2: What can different development agencies (both bilateral and multilateral) do to support the use of SEA at the policy level in developing countries? * example of Finland/Denmark giving sector support in Zambia. * honouring the outcomes of SEA, after validation. * ensure real ownership within the developing country and clarify individual roles. * be clear about what donors should not do, as well as what they should do. * consider role of SEA in inter-group donor discussions (a good model is the SEA Donor Framework in Vietnam which has been recognised as a good example of donor harmonisation by the Accra Aid Effectiveness meeting). Question 3: How should different development agencies (both bilateral and multilateral) work together to promote SEA at the policy level? In other words, what are the partnership options for development agencies? * rotation of ideas between agencies (less formal dialogue) * cooperation, such as WB example with SIDA, NCEA and GU. * SEA as a way to manage environmental risks. 205