ForTREES Colombia



TEFOS“Territorios Forestales Sostenibles”(formerly ForTREES For People)An International Climate Finance Business CaseDepartment for Business, Energy and Industrial StrategySummary SheetTitle: TEFOS (“Territorios Forestales Sostenibles” in Spanish and “Forest, Communities and Sustainable Growth” in English)Project Purpose:To stabilise the deforestation frontier in the areas of Colombia most acutely threatened by deforestation and affected by conflict, by improving land systems and usage rights, building capacity to effectively tackle environmental crime, and promoting sustainable forest livelihoods and enterprises. Programme Value: Up to ?64mCountry/ Region: ColombiaSenior Responsible Owner: Cath BremnerProject Code: Start Date:1 March 2020End Date:31 December 2026 Intervention SummaryWhat support will the UK provide?UK investment of up to ?64 million over seven years (2020-2026) will support the Government of Colombia’s leadership in reducing deforestation in conflict-affected, high deforestation areas of rural Colombia. This is consistent with the high-level political partnership between the UK and Colombia on tackling climate change and will support delivery of HMG international climate outcomes like reduced emissions from avoided deforestation, increased land under sustainable management and increased public or private finance mobilised.What are the main programme activities?BEIS International Climate Finance (ICF) will invest in three main interventions: i) strengthening land registry systems to incentivise sustainable land management, ii) strengthening the criminal justice system to tackle environmental crime in deforestation hotspots and iii) generating innovations for promoting sustainable economic opportunities for communities in deforestation hotspots. These are phased as follows, noting that the third intervention is subject to effective progress in the first two. Across all three intervention pillars, the programme will ensure additionality by prioritising investment in regions that are deforestation hotspots, acutely conflict affected, and do not have the budget or any other source of finance to implement these activities independently.PillarPhase 1Phase 220202021202220232024202520261Strengthening & supporting the Government of Colombia to expand & improve land registry systems and incentivise sustainable land management. (?43m)2Building capacity in multiple agencies to disrupt and prosecute environmental crime, focussing on activities that are driving deforestation. (?10m)3Identify & pilot new sustainable economic opportunities appropriate for conflict-affected forest regions. (?10m)Pillar 1 will be delivered by the World Bank, investing up to ?43 million in mainly capital investments to buy appropriate hardware and software, strengthen human and institutional capability in Colombia’s land registration system, run communications campaigns on land ownership rights for ordinary citizens, and collect and manage new data on land rights, responsibilities and restrictions.Pillar 2 will be delivered by the UN Office for Drugs and Crime (UNODC), investing up to ?10 million in predominantly technical assistance to develop new tools and systems for strengthening criminal investigation capability and, where the evidence meets a bar, support new public prosecutions. It will commence in year two following completion of a successful partnership between UNODC and the UK Conflict, Stability and Security Fund (CSSF). Up to ?10 million will be earmarked for promoting sustainable economic opportunities, the detailed design of which will be undertaken in the first two years of the programme. A decision on scope, volume of investment (at or below ?10 million) and preferred delivery partner will be made by the BEIS SRO Director in or before year three of the programme, following advice from the BEIS programme team. If necessary and the evidence supports it, this timeline could be accelerated to ensure implementation begins before the Purdah period preceding national elections currently scheduled for mid-2022. Finally, up to ?1 million on monitoring, evaluation and learning will be delivered through a procured contract to support strong monitoring oversight and to generate evidence across a range of interventions where the global story remains one of insufficient knowledge about the impact of key interventions. Why is UK support required?Deforestation and unsustainable land use contribute 23% of global greenhouse gas (GHG) emissions. Yet natural climate solutions, particularly reversing deforestation, could deliver over 30% of cost-effective mitigation required by 2030, and significantly contribute to achieving ‘global net zero’. Colombia is a BEIS partner of choice for ICF forest programming and the Colombian government has shown strong domestic and regional leadership. In December 2019, alongside the UK, Germany and Norway, it renewed its ambition by signing the next phase of the Joint Declaration of Intent (JDI), with ambitious objectives for the coming years including aiming to end natural forest loss by 2030.There is no silver bullet to halting deforestation in Colombia; results take time and efforts require a concerted alignment of many different incentives. By working across the three pillars, the benefits from each will complement one other, bringing strong prospects for effectively tackling the complex barriers. While challenging in a peace-building context, property rights and their enforcement in areas where agriculture and forests interact, are key for stopping deforestation. This challenge can be more effectively tackled by improving the enforcement capacity of the Colombian government and demonstrating that an up-to-date and better enforced land system in a stable territory can provide a foundation to reduce deforestation and foster transformational, sustainable growth.What are the expected results?The programme will:Deliver an environmental system of land rights and responsibilities in deforestation hotspots across 2.5 million hectares (ha), providing the foundation for increased land security.Build expertise for at least 3000 community members across 12 deforestation hotspots on the protection of forests and increase capacity for at least 180 institutional staff in the investigation and prosecution of environmental crimes.Incentivising sustainable land use will bring mixed-use forest and agriculture landscapes under sustainable management through the provision of sustainable alternative livelihoods (new ICF KPI under development). The combined impact of all three pillars will avoid deforestation over seven years (reporting on ICF KPI 8) and bring carbon benefits (MtCO2e, ICF KPI 6) as well as emission reductions from other greenhouse gases. ICF KPI targets will be defined once pillar 3 is operational. The programme will also address critical capacity gaps in the target municipalities that will strengthen ambition and implementation of wider climate and peacebuilding efforts in the region (KPI 15).How does the programme fit with the country’s priorities?The programme aligns with key Government of Colombia objectives on land, crime and livelihoods:LAND: The national government aims to accelerate the registration of land rights and simplify the land tenure system and is committed to implementing an updated multipurpose land registry (or ‘cadastre’) with 100% national territory coverage by 2025. Achieving this target in the most remote, environmentally sensitive, conflict-affected areas will be challenging.ENVIRONMENTAL CRIME: The Colombian Government has prioritised strengthening legal systems to dismantle criminal organisations, weaken illegal economies, and verify the lawfulness of land use through, for example, the operation of the National Council to Combat Deforestation (CONALDEF). A new Defence and Security Policy emphasises that defending and protecting natural resources is a national security priority. LIVELIHOODS: Colombia’s National Development Plan aims to transform ‘Territorially-Focused Development Programme’ (PDET – the abbreviation in Spanish) areas, which share common characteristics including high levels of land dispossession, inequality and a lack of government presence. The programme will prioritise working in PDETs which are also deforestation hotspots. The Government of Colombia is building a pipeline of critical, environmentally focussed projects for the PDETs, the most promising of which are likely to be candidates for investment under the programme.What are the key risks to the success of the programme?The programme is assessed to have an overall risk profile of Major; within BEIS’ ICF’s accepted risk threshold. The key risks are i) the disruption to the political commitments vital to supporting this programme and ii) the escalation of conflict and instability in programme areas. The programme will manage these risks by working directly with the Government and with the British Embassy political team to diagnose the political challenges, and by working closely with the Conflict, Stability and Security Fund (CSSF). An associated risk is inter-Ministry coordination between Colombian Government agencies and where capacities and leadership are under heavy strain. The programme will manage this through in-country HMG engagement, policy influencing and high-level engagement through the COL-UK Climate Partnership, establishment of a programme delivery board comprising key Government Ministries and agencies, and partnerships with highly capable and trusted delivery partners. TOC \o "1-2" \h \z \u STRATEGIC CASE PAGEREF _Toc31108935 \h 1The Global Context PAGEREF _Toc31108936 \h 1The Colombian Context PAGEREF _Toc31108937 \h 1Barriers to overcoming market failures PAGEREF _Toc31108938 \h 2Evidence from the Literature PAGEREF _Toc31108939 \h 4Intervention Regions PAGEREF _Toc31108940 \h 6Potential Programme Outputs and Activities PAGEREF _Toc31108941 \h 6Working across HMG PAGEREF _Toc31108942 \h 7Complementarity with Related Colombian Government Activities PAGEREF _Toc31108943 \h 8Programme Approach PAGEREF _Toc31108944 \h 8Results PAGEREF _Toc31108945 \h 9APPRAISAL CASE PAGEREF _Toc31108946 \h 10Economic Summary PAGEREF _Toc31108947 \h 10An overview of delivery models – how to best engage these partners? PAGEREF _Toc31108948 \h 13Ensuring Value for Money (VfM) PAGEREF _Toc31108949 \h 13COMMERCIAL CASE PAGEREF _Toc31108950 \h 20Ability of the Organisations to Deliver in Country PAGEREF _Toc31108951 \h 20Procurement PAGEREF _Toc31108952 \h 22Ensuring results are delivered at agreed cost PAGEREF _Toc31108953 \h 23Legal Considerations PAGEREF _Toc31108954 \h 24Commercial Risk Profile PAGEREF _Toc31108955 \h 24FINANCIAL?CASE PAGEREF _Toc31108956 \h 25An Overview of?Costs PAGEREF _Toc31108957 \h 25Financial?and Fraud Risk Assessment PAGEREF _Toc31108958 \h 28An Assessment?of Monitoring, Reporting?and Accounting?for Funds PAGEREF _Toc31108959 \h 28Financial Accounting Considerations PAGEREF _Toc31108960 \h 28MANAGEMENT CASE PAGEREF _Toc31108961 \h 31Approvals and Assurances PAGEREF _Toc31108962 \h 31Programme Governance PAGEREF _Toc31108963 \h 31Monitoring and Evaluation Strategy PAGEREF _Toc31108964 \h 32Risk Management PAGEREF _Toc31108965 \h 34ANNEXES PAGEREF _Toc31108966 \h iAnnex A – Ground Truthing the Theory of Change PAGEREF _Toc31108967 \h iAnnex B – What type of partner? MCA PAGEREF _Toc31108968 \h iAnnex C – Pillar 1 delivery assessment PAGEREF _Toc31108969 \h iAnnex D – Pillar 2 delivery assessment PAGEREF _Toc31108970 \h iiAnnex E – World Bank VfM Information PAGEREF _Toc31108971 \h iiiAnnex F – UNODC VfM Documentation PAGEREF _Toc31108972 \h vAnnex G – Indicative Budgets for Pillars 1 and 2 PAGEREF _Toc31108973 \h viiiAnnex H – Theory of Change PAGEREF _Toc31108974 \h xAnnex I – Logframe PAGEREF _Toc31108975 \h xiAnnex J – Flow of Funds PAGEREF _Toc31108976 \h xiAnnex K – Governance of Programme PAGEREF _Toc31108977 \h xiiAnnex L – Organograms PAGEREF _Toc31108978 \h xiiiAnnex M – DfID Framework for Due Diligence Self-Assessment - UNODC PAGEREF _Toc31108979 \h xvAnnex N – RPA completed and approved by PIC secretariat PAGEREF _Toc31108980 \h xvAnnex O – Comparison of single version multiple partners PAGEREF _Toc31108981 \h xvAnnex P – BEIS’ FLU Portfolio Summary PAGEREF _Toc31108982 \h xviAnnex Q - Evidence Review PAGEREF _Toc31108983 \h xviiFigures and Tables TOC \h \z \c "Figure" Figure 1 - Summarised Programme Theory of Change PAGEREF _Toc31108984 \h 3Figure 2 - What is an Environmentally Focussed Cadastre? PAGEREF _Toc31108985 \h 4Figure 3 - Timeline of Phased Approach to Programming PAGEREF _Toc31108986 \h 11Figure 4 - Comparison of delivery through a single organisation or multiple. PAGEREF _Toc31108987 \h 11Figure 5 - Summarised Governance Structure PAGEREF _Toc31108988 \h 13Figure 6 - Summary of evidence underlying the Theory of Change PAGEREF _Toc31108989 \h 19Figure 7 - Summary graphic showing the WBs performance in DfID’s 2016 MDR PAGEREF _Toc31108990 \h 20Figure 8 - Total values and CDEL:RDEL split across the programme and within pillars PAGEREF _Toc31108991 \h 25Figure 9 - Table showing expected spend per year across the three pillars and by learning contractor PAGEREF _Toc31108992 \h 26Figure 10 - Expected BEIS Staff Resources for Programme Delivery PAGEREF _Toc31108993 \h 27Figure 11 - Flow of Funds PAGEREF _Toc31108994 \h 27Figure 12 - Financial Risk Assessment PAGEREF _Toc31108995 \h 28Figure 13 - Lines of Accountability PAGEREF _Toc31108996 \h 33Figure 14 - Risk Management PAGEREF _Toc31108997 \h 36Figure 15 - Map of Colombia with Guaviare highlighted PAGEREF _Toc31108998 \h iGlossaryAFOLUAgriculture, Forest and Other Land UseBEISDepartment for Business, Energy and Industrial StrategyBCRBenefit to Cost RatioCDELCapital Departmental Expenditure LimitsCAACentral Assurance Assessment CSSFConflict, Stability and Security FundCSCCritical Success CriteriaDfIDDepartment for International DevelopmentDACDevelopment Assistance CommitteeEOIExpression of InterestFARCThe Revolutionary Armed Forces of Colombia - People's Army (Spanish acronym)FCOForeign and Commonwealth OfficeFCPFForest Carbon Partnership FacilityGNUGermany, Norway, UKGoCGovernment of ColombiaGHGGreenhouse GasHMGHer Majesties GovernmentIBRDInternational Bank for Reconstruction and Development ICFInternational Climate FinanceIDAInternational Development Association IDBInter-American Development BankIDEAMInstitute of Hydrology, Meteorology and Environmental StudiesIGACColombian Land Registry Authority (Spanish acronym)ITTInvitation to TenderJDIJoint Declaration of IntentKPIKey Performance IndicatorMADSColombian Ministry of EnvironmentMCMultipurpose CadastreMCAMulti-Criteria AnalysisMDBsMultilateral Development Banks M&EMonitoring and EvaluationMDRMultilateral Development ReviewMELMonitoring, Evaluation and LearningMINAMBIENTEMinistry of Environment and Sustainable Development (Spanish Acronym)MoUMemorandum of UnderstandingMOPANMultilateral Organisation Performance Assessment Network NDPNational Development PlanNDCNationally Determined ContributionNPVNet Present ValueODAOfficial Development AssistanceOJEUOfficial Journal of the European UnionOECDOrganisation for Economic Co-operation and DevelopmentPDETsTerritorially Focused Development Programmes (Spanish acronym)PMOPortfolio Management OfficePSCProgramme Support CostsPNPromissory NoteREDD+Reduce Emissions from Deforestation & Forest Degradation, enhance forest carbon stocksRDELResource Departmental Expenditure LimitsSIACColombian Environmental Information System (Spanish Acronym)SROSenior Responsible OfficerSPSSilvopastoral SystemsSRSpending Review / Spending RoundTATechnical AssistanceUNFCCCUnited Nations Framework Convention on Climate Change UNODCUnited Nations Office for Drugs and CrimeUPNNAgency of National Parks (Spanish acronym)URPARural Agricultural Planning Agency (Spanish acronym)VfMValue for MoneyWBWorld Bank (the Bank) STRATEGIC CASEThe Global ContextKeeping global warming to well below 2oC, in line with the Paris targets, can only be achieved by reducing greenhouse gas emissions from all sectors including food and land use. An estimated 23% of net global greenhouse gas (GHG) emissions from 2007 - 2016 came from agriculture, forestry and other land-use (AFOLU) and the largest source of CO2 emissions from 2007-16 was tropical?deforestation. Moreover, rates of deforestation appear to be increasing; 2018 saw the fourth-highest level of tropical deforestation since record-keeping began in 2001.While the AFOLU sector is a significant driver of GHG emissions, it could also be one of the most powerful?climate solutions.?The largest potential for reducing emissions from the land sector is from halting and reversing emissions from forest loss which could?cost-effectively?deliver?up to 37% of the CO2 reductions?needed globally by 2030. By 2050, without a global shift toward smarter agriculture and forest management, the associated changes in land use could consume 70% of the total, global GHG budget. ?Deforestation and forest degradation also undermine the livelihoods of 1.6 billion of the world’s poorest people. Without?rapidly?reducing?emissions from deforestation and?unsustainable?land use,?the global?climate and development goals will not be met. BEIS already focusses a significant portion of its International Climate Finance (ICF) support on AFOLU programming, aiming for 20% of the Department’s total ICF spend. This plays a significant role in the sector internationally, with less than 1.5% of climate change mitigation finance from multilateral donors and developed country institutions spent on addressing deforestation and protecting forests in tropical countries. The Colombian ContextOver the past decade, the UK and Colombia have demonstrated pioneering leadership to tackle climate change and both countries have recognised the centrality of climate to economic growth in the form of the UK’s Clean Growth Strategy and Colombia’s Green Growth Policy. Colombia has long been an ally of the climate and environment agenda showing regional leadership by placing 53% of its Amazon region under legal ownership of?indigenous?forest-dependent peoples, among the world’s highest proportions of?indigenous?ownership of forests; and continues to do so through the Leticia Pact, signed in 2019. The UK bilateral cooperation with Colombia is now spearheaded by the UK-Colombia Partnership for Sustainable Growth. The portfolio of BEIS ICF AFOLU projects in Colombia is fundamental to delivering one of three priority areas of cooperation under the Partnership: to halt and reverse deforestation and tackle environmental crime.Colombia is a partner of choice for forest and climate cooperation with BEIS, having committed more than ?130m to forests projects in Colombia. These projects focus on incentivising large-scale action to Reduce Emissions from Deforestation and Forest Degradation, as well as enhance forest carbon stocks (+) (REDD+); an approach agreed under the United Nations Framework Convention on Climate Change (UNFCCC). The UK collaborates with other donors in the region, particularly Germany and Norway through our GNU partnership. A Joint Declaration of Intent (JDI) agreed between Governments of Colombia, Germany, Norway and UK in 2015 outlined plans towards achieving Colombia’s commitment to stabilise and reduce deforestation. Refreshed in December 2019, Colombia’s renewed commitments in the declaration now include: zero natural forest loss by 2030; and increased AFOLU ambition when it submits its Nationally Determined Contribution (NDC) to the UNFCCC Secretariat in 2020. Since the 1960s, conflict has affected Colombia, arising from a variety of complex factors including high levels of social and economic inequality, the lack of a strong state presence especially in rural and remote areas, and an unequal distribution of land. The environmental impacts of this conflict were diverse and have not always been negative. Although the main armed group, the Revolutionary Armed Forces of Colombia – People's Army (FARC the abbreviation in Spanish), directly contributed to some environmental degradation, strict guidelines for their territories in some cases promoted a culture of environmental conservation. The 2016 peace deal created a power and governance vacuum in forested regions areas where the FARC guerrilla relinquished control. Since the peace process, previously inaccessible forested areas have become vulnerable to over exploitation resulting and an increase presence of criminal activity.,, Colombia has experienced higher rates of deforestation since then, particularly in the conflict-affected regions where almost 60% of deforestation occurs., Since 2018 there have been positive signs the tide is beginning to turn, particularly in areas where BEIS is supporting existing programmes, but urgent and effective interventions are still needed, with some regions experiencing a 26% increase in deforestation rates in 2018 alone.Barriers to overcoming market failuresTackling head-on the market and governance failures that drive deforestation through sustainable forest livelihoods and increased business profitability can be effective in the long term. BEIS’ wider portfolio reflects this with impactful livelihoods focussed interventions including, for example, Silvopastoral (mixed cattle and forest) Systems (SPS) and REDD for Early Movers (REM). However, they can be undermined by a lacking or outdated land system and poor enforcement of environment regulations and criminal activity. For information on the rest of BEIS’ Forest and Land Use portfolio, see Annex P.There is no silver bullet to halting deforestation in Colombia and interventions take time before results are seen. Efforts require patient alignment of incentives for a range of stakeholders including governments, indigenous communities, businesses and supply chain actors. Evidence points to a need for additional, complementary instruments to overcome the range of barriers and move faster and more effectively on the ground. Deforestation drivers in Colombia are complex and include expansion of the agricultural frontier, land speculation, illegal mining, illicit crops, illegal logging, and the prevalence of inefficient cattle ranching. These deforestation drivers are exacerbated by conflict, which is positively associated with illicit activities and forest clearing, especially in the Colombian Amazon; weak governance (particularly the lack of coordination between security forces, the judiciary and environmental institutions); an absence of the rule of law in most remote rural areas; and few legal and sustainable economic alternatives for rural communities. A recent report by the Inter-American Development Bank (IDB) recognises that “while it is still a challenge in a peace-building context, the issuing of property rights, and their enforcement in areas where agriculture and natural forests interact, is key for stopping deforestation”. It can and will be strengthened by improving the enforcement capacity of the Colombian government.Poverty is widespread in Colombia’s rural areas. Many communities live on land that is not registered or legally titled, undermining their incentive to invest in long-term, sustainable and legal development of the land. Smallholders also lack access to finance to overcome the upfront costs associated with establishing sustainable productions systems; as such they engage in ‘business-as-usual’ activities, where the returns are instant but often illegal and unsustainable. Outdated land regulations have also created false expectations that local communities will receive land titles if they clear forests on vacant land, making land speculation the main driver of the current deforestation trend. Overcoming these barriersThis Business Case sets out the case for a new investment for up to ?64m of capital investment and technical assistance to help stabilise conflict-affected areas of Colombia’s forest frontier at acute risk of forest loss. An assessment of need based on evidence from BEIS’ extensive ICF portfolio in Colombia, the literature, and outputs from stakeholder engagement and discussions, identified three principle tasks:Develop a multipurpose cadastre in conflict affected deforestation hotspots by strengthening, supporting and expanding land instruments, embedding environmental considerations and incentivising sustainable land management.Address illegal drivers of deforestation by building capacity in local and national authorities to tackle environmental crime with new tools and systems for strengthening criminal investigation capability.-1270560705Deforestation rate stabilise and begin to reduce in conflict affected deforestation hotspots leading to transformational change and contributing to reduction in national deforestation rate & achievement of NDC (KPI 15)Capability of regional/local government to deploy and use multipurpose cadastre to implement land use regulations and strengthen rights in communities increasesTraining & workshops to local & national authorities on land usage and environmental land regulationsMultipurpose cadastre implemented through an environmental lens in deforestation hotspotsCriminal activity associated with deforestation is disrupted through strengthened investigation and enforcement capability Community sensitisation exercises, trust building and awareness raisingTraining delivered to state agencies and tools developed to build enforcement capacityAppropriate sustainable economic alternatives supported and promoted in programme municipalitiesTools, materials & training materials delivered for sustainable economic alternativesTA support for the development of climate smart economic opportunities in target areasImpactOutcomeOutputsEnforcement, incentives and opportunities for authorities and communities to sustainably manage land shift behaviours to reduce deforestation in programme municipalities(KPIs 6, 8 and new KPI under development)InputsFigure SEQ Figure \* ARABIC1 - Summarised Programme Theory of Change0Deforestation rate stabilise and begin to reduce in conflict affected deforestation hotspots leading to transformational change and contributing to reduction in national deforestation rate & achievement of NDC (KPI 15)Capability of regional/local government to deploy and use multipurpose cadastre to implement land use regulations and strengthen rights in communities increasesTraining & workshops to local & national authorities on land usage and environmental land regulationsMultipurpose cadastre implemented through an environmental lens in deforestation hotspotsCriminal activity associated with deforestation is disrupted through strengthened investigation and enforcement capability Community sensitisation exercises, trust building and awareness raisingTraining delivered to state agencies and tools developed to build enforcement capacityAppropriate sustainable economic alternatives supported and promoted in programme municipalitiesTools, materials & training materials delivered for sustainable economic alternativesTA support for the development of climate smart economic opportunities in target areasImpactOutcomeOutputsEnforcement, incentives and opportunities for authorities and communities to sustainably manage land shift behaviours to reduce deforestation in programme municipalities(KPIs 6, 8 and new KPI under development)InputsFigure SEQ Figure \* ARABIC1 - Summarised Programme Theory of ChangeSupport the establishment of sustainable economic activities by identifying and piloting new projects in conflict-affected forest regions that can be scaled by other mechanisms.This Business Case proposes that the implementation of these pillars should be phased. Phase 1 (Pillars 1 and 2), will create an up-to-date land registry in environmentally important deforestation hotspots and disrupt environmental criminal activities. With a better enforced land system, Phase 2 (comprising the addition of Pillar 3) will test new, sustainable economies in this stabilising environment. The evidence suggests that interventions like capacity building and enforcement can increase the likelihood of delivering benefits through livelihoods incentives and opportunities., A summarised Theory of Change is in Figure 1 and expanded on in a detailed version in Annex H.Evidence from the LiteraturePILLAR 1: Develop a multipurpose cadastre in conflict affected deforestation hotspotsIt is difficult to design and implement programmes that reduce deforestation, in the absence of a register of landholders, with which to know who is making land use decisions. Insecure land rights weakens people’s ability to make changes to land that could increase its resilience to climate change and reduce and capture greenhouse gas emissions. Secure land tenure has the potential to benefit programmes across the BEIS ICF forest and land use portfolio; for example Duchelle et al. (2014) note that REDD+ projects almost universally face the challenge of poorly defined and/or enforced tenure rights to forests. Clarifying and formalising land tenure alone can be associated with either more or less deforestation. In those cases where deforestation was successfully reduced, the interventions to support land tenure were tied to other governance or incentive-based instruments. Evidence from Brazil suggests that registration and land-use behaviour are related where approximately 50% of the deforestation slowdown since 2004 can be attributed to changes in the forest governance regime, including land titling. This programme seeks to replicate this kind of ‘combination approach’ in its implementation of three closely linked Pillars of support. 31751015365What is an environmentally focussed Multipurpose Cadastre and why is it needed in Colombia?A Multipurpose Cadastre is a land registry tool that contains information on the physical, legal, and economic aspects of land. Establishing a functional land system is pivotal for a prosperous economy, peacebuilding and equality in Colombia. It enables effective land use planning, formalisation of land tenure (a corner stone of the peace process), and sustainable land management. Colombia currently has several outdated or inaccurate data sets with limited interoperability; these issues are especially prevalent in environmentally sensitive areas like National Parks where 96% of information is out of date. Including environmental considerations in a cadastre alongside enforcement and other incentives can be a powerful tool in the fight against deforestation. In Brazil substantial progress has been made mapping and registering properties; allowing landowners to demonstrate compliance with environmental regulations, providing a mechanism for the government to monitor land-use and significantly reducing deforestation. Figure SEQ Figure \* ARABIC2 - What is an Environmentally Focussed Cadastre?0What is an environmentally focussed Multipurpose Cadastre and why is it needed in Colombia?A Multipurpose Cadastre is a land registry tool that contains information on the physical, legal, and economic aspects of land. Establishing a functional land system is pivotal for a prosperous economy, peacebuilding and equality in Colombia. It enables effective land use planning, formalisation of land tenure (a corner stone of the peace process), and sustainable land management. Colombia currently has several outdated or inaccurate data sets with limited interoperability; these issues are especially prevalent in environmentally sensitive areas like National Parks where 96% of information is out of date. Including environmental considerations in a cadastre alongside enforcement and other incentives can be a powerful tool in the fight against deforestation. In Brazil substantial progress has been made mapping and registering properties; allowing landowners to demonstrate compliance with environmental regulations, providing a mechanism for the government to monitor land-use and significantly reducing deforestation. Figure SEQ Figure \* ARABIC2 - What is an Environmentally Focussed Cadastre?In rural Colombia, lack of land formality has a historical link with deforestation. Traditional and cultural practices in rural areas have focused on inefficient agricultural (particularly cattle-ranching) practices with little understanding of land suitability or sustainability considerations. Moreover, a lack of awareness of the redundancy of historical incentives from the Land Registry Authority (IGAC) that, for example, required farmers to clear two thirds of their land to access a land title still encourage deforestation today. Even if farmers are aware that deforestation is an illegal activity and that it will not lead to a land title, it may not prevent the clearing of forest due to the lack of a formal land system. In Colombia, more 70% of rural municipalities have out-of-date or absent land registries (compared to 54% nationally and up to 96% in National Parks). The perspective of farmers and foresters holding parcels of unregistered land at the deforestation frontier is that they are unlikely to be held personally accountable for clearing the forest. However, if occupancy is formally registered, some evidence suggests that farmers are more conscious of the risks of engaging in illegal activity, are more likely to invest in the long-term development of their land, and believe they have a stronger chance of securing ownership rights.PILLAR 2: Address illegal drivers of deforestation; building capacity to tackle environmental crimeAlthough environmentally focussed land registries are intended to reduce deforestation by facilitating monitoring and application of environmental policies, if there are conflicting incentives, then registries will not necessarily reduce deforestation. The effect of increasing land formality depends on specific socio-political contexts. It is therefore difficult to confidently attribute a direct relationship between a functional land registry system on its own, and deforestation rates. The question of attribution will be a key feature of the monitoring and evaluation of the programme.Evidence suggest that enforcement of forest-conserving policies and laws e.g. protected areas, timber sustainability certification schemes, payments for environmental services schemes and agreements with community projects and farmer cooperatives, can play an important role alongside the formalisation of land rights and systems. In Colombia the lack of an established state and environmental authority presence in recently vacated areas is facilitating the growth of illegal and informal economies and with them increasing environmental degradation, especially deforestation. This situation is not unique to Colombia and has been recorded in other regions facing similar transitional justice processes like the Congo Basin and Guatemala. Deforestation in Colombia today is closely associated with the areas where illegal groups are operating.PILLAR 3: Support the establishment of sustainable economic activitiesThe literature shows that prospects for a sustainable positive change are strongest when both the social and environmental drivers of deforestation are tackled. Support that legitimises and enables the cultural acceptance and scale-up of new sustainable production systems in deforestation hotspot areas, rather than just punitive measures to control unsustainable (but in many cases familiar and traditional) practices is also required. In this way this programme can also drive low-emission rural growth and economic development: boosting productivity, creating jobs and strengthening markets to raise income and lift some of Colombia’s poorest and most vulnerable people out of poverty. And de-couple deforestation and agricultural frontier expansion from this growth by enabling adding value to standing forest though sustainable timber and non-timber forest product harvesting; as well as the intensification of agriculture e.g. in more productive mixed agroforestry systems. There is widespread evidence for the causal relationship between increased security and increased private investment. One study showed that in Colombia 77% of landholders would invest more in their property if they had absolute certainty of not losing the property in the next five years, and this would only happen if the respondent’s confidence in enforcement of property rights raised significantly. Recent global DfID-funded research also found a significant amount of high-quality evidence which supports an association between secure property rights and long-term economic growth and with investment from private firms. Credit access is often important in efforts to intensify production systems.Pillar 3 activities under this business case will pilot sustainable livelihood opportunities that could be scaled up readily either by other existing programmes within BEIS’ ICF portfolio in Colombia (e.g. Partnerships for Forests or the Biocarbon Fund), or new programmes.Evidence from Stakeholder EngagementIn February 2019 the BEIS ICF team facilitated a workshop in Bogota where attendees were invited to identify gaps, issues and opportunities to realising reduced deforestation in hotspot areas. This validated both the assessment of the problem outlined in this business case and the programme’s proposed three Pillars of intervention. The 54 attendees were from national government (35%), NGOs (31%), , Multilateral Development Bank and United Nations representatives (14%), regional representatives (9%), other donors (6%) and the private sector (4%), plus the British Embassy staff and BEIS advisers developing the programme. Local community representatives were from deforestation hotspot areas in the Amazon Departments of Caquetá and Guaviare, as well as the Pacific region.) The diversity of the attendees meant that a range of perspectives helped shape early design and that equity considerations were prioritised.Intervention RegionsIn Colombia the ‘Territorially-Focused Development Programmes’ (PDETs – Spanish acronym) are a key tool for rural development planning which aim to transform the economies of the 170 municipalities most affected by armed conflict. The PDET areas share common characteristics: high rates of deforestation, high levels of insecurity leading to forced displacement of people and land dispossession, above average rates of extreme poverty and inequality, and the lowest levels of institutional (national and local government and environmental authority) presence.Across all three pillars, the BEIS programme will prioritise investment in PDETs, with 24 PDET municipalities identified from a long list of 40 high deforestation municipalities that all three pillars of activity will operate in. These 24 were selected as all are deforestation hotspots, 13 contain restricted use forest reserves (under “Ley Segunda”, the legal basis for these areas in Colombia) and 8 contain National Parks. A large proportion (22% by area, mainly in rural areas) of Colombia’s municipalities do not have funds to contribute to updating their land registry information; the shortlisted 24 also fall into this category.To further support the efforts of this programme and complement the work of BEIS ICF in driving a low carbon transition in Colombia UK PACT is planning to finance the secondments of two staff into the office of the Colombian Presidential Advisor on Peace and Conflict for one year to identify and develop climate-smart, investable projects within the PDETs and connect them with sources of finance. This pipeline of projects could be drawn on by Pillar 3 in this programme. Potential Programme Outputs and ActivitiesThe programme is likely to include a focus on the following activities, confirmation of which will follow during a one-year inception phase within which the logframe will be finalised. Pillar 1:Utilise and build on the Multipurpose Cadastre system to deliver an environmental cadastre faster, over a larger scale, and in environmentally important regions, all of which would have been impossible without ICF funding. This tool can then be managed, shared and replicated across the national territory.Create a collaborative and effective delivery system across multiple institutions (with Colombian Ministry of Environment – MADS – leading several other institutions and agencies) through recruitment and technical capacity building.Gather the data needed with a cadastral sweep in the prioritised, environmentally important regions to accelerate the increase in coverage of up-to-date registry information in deforestation hotspot regions, to include on-the-ground community work with farmers / land users to raise awareness of how their land is recognised and monitored, what land uses are legal and illegal, and what prospect they have of securing legal land titles / usage rights in the future if the land has been managed sustainably.Pillar 2:Build the capacity of national and local authorities particularly within agencies not typically involved with environmental issues (e.g. the national police), to investigate and prosecute environmental crimes.Build the technical environmental knowledge and skills of the Colombian judiciary, especially around the relevance of forests to meeting Colombia’s climate goals and the conflict-environment nexus.Support intelligence gathering on deforestation in the Judiciary on the drivers and links with illegal deforestation. Provide systems to the judiciary and environmental authorities to coordinate more effectively with Colombia’s Ministry of Defence and Armed Forces Build the capacity of community leaders and civil society organisations to challenge failures of transparency and corruption as drivers of deforestation.Pillar 3 will support sustainable livelihoods in some of the following sectors:Ecotourism. Despite Colombia being the second most biodiverse country in the world and one of Latin America’s fastest growing tourist destinations, ecotourism in Colombia is still largely undeveloped. Support is needed to strengthen institutional capacity and develop business models to safeguard protected areas through skills, training, marketing and infrastructure investment.Pisciculture. Fishery enterprises can be an effective means for communities to earn a living while reducing impacts on forests. Support is needed to overcome the initial investment required.Agroforestry. BEIS-supported pilots across Colombia have demonstrated Silvopastoral (mixed cattle and forest) Systems (SPS) deliver triple wins on farm resilience, productivity and poverty reduction; increased biodiversity; and reduced greenhouse gas emissions. Intensive SPS can also reduce deforestation by reducing the pressure and necessity to clear additional land when replacing degraded pastures.Working across HMGThis programme will work collaboratively with the Conflict, Stability and Security Fund (CSSF), ongoing in Colombia since late 2018. CSSF’s specialism in risk management and remit in tackling the drivers of instability and conflict will provide an important source of HMG credentials and technical capability for this and other BEIS forests programme to enter conflict-affected areas.Beyond the CSSF, BEIS has been building a strong, effective network of ICF and FCO programming and policy capability in Colombia. Three staff (2.5 FTE) are funded by BEIS ICF as AFOLU leads and are supported by the wider work of the Embassy’s Economic, Climate and Science team including BEIS ICF-funded staff dedicated to the COL-UK Sustainable Growth Partnership. These staff play an important role in Bogota in building positive relationships with Government and other stakeholders, risk management, local oversight of ICF programme delivery and raising the profile of our work. Complementarity with Related Colombian Government ActivitiesSince 2016 the Government has been developing a new national-scale multipurpose cadastre (land registry system). This project, supported by a $150m loan from the Inter-American Development Bank (IDB) ($50m) and World Bank ($100m), will start the process of formalising land tenure in 80 municipalities. The strategy is supported by the newly refreshed Joint Declaration of Intent (JDI) which reflects that “that legal access to land, land titling and sustainable land use could contribute among other key solutions to halting deforestation in Colombia” and commits, by 2025, to create and update a land registry for at least 1 million hectares in high deforestation areas, significantly more with additional donor funding, which this programme would provide.The Multilateral Development Banks (MDBs), especially the World Bank, have been providing critical technical assistance (TA) and capacity building since the beginning of this process. The Government is ambitious to do more (with a target of 100% cadastral coverage by 2025) however, there are limited resources to implement at scale and significant challenges in rolling out to the most remote, environmentally sensitive and conflict-affected areas of Colombia. A BEIS investment would significantly address land registry gaps in these conflict-affected deforestation hotspots where there is no other available finance, and increase accountability and long-term incentives for farmers to shift towards sustainable investment practices, and create an environmentally-focussed cadastral tool that can be replicated nationally.Beyond the multipurpose cadastre loan operation, there will be additional funding commitments from the Government of Colombia to support this work financially and politically including a portion of the carbon tax estimated at $100m / year through the Fondo Colombia en Paz and a royalty reform from hydrocarbon payments, expected to be worth ~$75m / year and to be invested in environmental issues. This funding will be invested across two environmental themes which will each receive ~25% of the total raised; Payment for Ecosystem Services (PES) and protected area projects. Investment projects have also been identified in the PDET areas. The pipeline longlist now needs developing; work which will be undertaken by HMG-financed (through CSSF) secondees to shortlist bankable projects with appropriate sustainability criteria and connect them to sources of fundingProgramme Approach By the end of the programme BEIS’ investment will have contributed to the stabilisation of the deforestation frontier across the selected conflict-affected municipalities, enabling Colombia to continue tackling deforestation on a purely results-based basis or self-funded/capital raising model in these regions. In line with the recommendation in a recent ICAI report to deliver more technical assistance (TA), this new programme will combine TA with capital grants (and potentially other financial instruments depending on the mechanism for Pillar 3). Resources will be deployed in line with ICF policy, to effectively target concessionality and deliver good VfM.The programme will be implemented in a way that strengthens coherence between and supports the work of other UK ODA financed non-ICF programmes and mechanisms with relevant expertise in Colombia: in addition to close collaboration with the CSSF it will share expertise with programmes such as the Prosperity Fund, the Climate Finance Accelerator and UK-PACT through the political and climate teams in the UK Embassy, building on the UK’s established reputation as a partner of choice for Colombia.Strategic fit of these activitiesThe proposed investment is directly linked to the agriculture, forest and land use commitments in Colombia’s Nationally Determined Contribution (NDC), the Sustainable Development Goals and the 2030 Agenda, the international REDD+ framework, cooperation with Norway and Germany (GNU), the peace process, and wider forest and environment priorities. The proposed investment delivers against other BEIS priorities:Climate Partnerships:?this?programme will support and build upon BEIS’ strategy to focus?ICF support by developing a number of?climate partnerships with ambitious?countries. It will feature as a central part of the UK-Colombia Sustainable Growth Partnership, responding to core priorities within the partnership and Colombia’s NDC?to tackle deforestation.BEIS Agriculture, Forests and Other Land Use: the programme aligns with BEIS’ forest and land use strategy by working on large scale mitigation focussed programmes that support low carbon rural development plans in priority countries.Clean growth:?this?programme?seeks to drive sustainable clean growth in some of the most marginalised communities of Colombia and consolidate the ongoing peace process, making effective use of limited ICF.Delivering Whitehall objectives: including the National Security Council (NSC) strategy for Colombia, Peru and Venezuela, the synergies and collaboration with the work of the CSSF on Serious Organised Crime; HMG has also prioritised Colombia under the ‘Serious Organised Crime Joint Analysis’. Results The programme will:Deliver an environmental system of land rights and responsibilities in deforestation hotspots across 2.5 million hectares (ha), providing the foundation for increased land security.Build expertise for at least 3000 community members across 12 deforestation hotspots on the protection of forests and increase capacity for at least 180 institutional staff in the investigation and prosecution of environmental crimes.This programme will deliver against ICF Key Performance Indicators (KPIs). Expected benefits under these KPIs will be finalised as part of the process of defining Phase 2 – see Appraisal Case.Land under sustainable management (KPI under development): Bring mixed use landscapes of forest and agriculture under sustainable management practices. Reduce emissions and avoid deforestation (KPIs 6 and 8): Address challenges through multi-sectoral solutions at the nexus of sustainable rural development, deforestation and environmental crime.Create wider transformational change (KPI 15): addressing critical capacity and investment gaps in these regions of Colombia and have wider relevance for climate and peacebuilding efforts in the region.Unconfirmed at this stage, however additional private and/or public sector funding (KPIs 11 and 12) could be leveraged.In addition to ICF KPIs, the programme will deliver other benefits including improvement of livelihoods, protection of biodiversity and improved water security. Support will increase UK visibility internationally and show UK leadership by delivering on a strong bilateral partnership with Colombia; a regional leader and climate ally.APPRAISAL CASEEconomic SummaryThe Appraisal Case considers two options for a ?64m ICF investment to stabilise conflict affected forest frontiers in Colombia. To deliver the best overall?value for money and address the need set out in the Strategic Case, it recommends a new programme that will deliver on three themes (improved land systems, disruption of environmental crime, and sustainable forest economies) with multiple delivery partners. The alternative option considered was a new programme but through a single partner; discounted predominantly as no single institution could deliver the breadth of activities required.The programme is a mixture of Technical Assistance (TA) and capital; achieving benefits that will either be indirect, or with a long chain of causality before benefits are seen, or lag periods before impacts can be measured. These lead to considerable uncertainty around establishing causality and attribution of the potential benefits and outcomes such as reductions in GHG emissions resulting from avoided deforestation. As such, due to the difficulty in defining and deriving the benefits of these activities, it has not been possible to appropriately or accurately monetise and attribute the expected quantitative benefits of the programme to ICF or present a cost effectiveness assessment at this stage. Instead the Appraisal Case qualitatively assesses value for money (and the best placed partners) for Phase 1, while the partner for Phase 2 will be decided following a strategic assessment of need and additional value for money modelling towards the end of Phase 1.Programme Structure Delivery will be across three pillars.Pillar 1: Technical (RDEL) and capital (CDEL) assistance to develop a multipurpose cadastre in conflict affected deforestation hotspots by strengthening, supporting and expanding land instruments to add environmental considerations to land registration and incentivise sustainable land management.Pillar 2: Predominantly technical (RDEL) assistance to build capacity in multiple agencies to disrupt and prosecute environmental crime, focussing on activities that are driving deforestation.Pillar 3: Capital (CDEL) assistance to identify & pilot new sustainable economic opportunities appropriate for conflict-affected forest regions.Evidence gathering has led us to adopt a phased approach to programme design since successfully implementing economic opportunities to reduce deforestation in conflict affected regions of Colombia requires a well enforced cadastral system. A first phase of activities will create a stable, enabling environment (Pillars 1 and 2) which will then be tested with livelihood alternatives brought in during Phase 2 (Pillar 3). The total investment value was determined through an evidence-based, bottom up approach. For Pillar 1, the World Bank costed the activities required for 100% cadastral coverage, and the tools and capacity building required to deliver it across the 24 municipalities shortlisted in discussions between BEIS, the Government of Colombia and the World Bank. The ?43m total is based on their expertise in delivering similar scale land registry programmes in the Latin America region and a close working relationship with the Colombian Government to identify additional needs. The ?10m allocated for Pillar 2 is predominantly technical assistance (TA) for capacity building and the value, agreed following discussions with UNODC officials, is set at a level which can be absorbed by recipient agencies without overwhelming them. Pillar 3 value (up to ?10m) has been left with deliberate flexibility and was determined based on discussions with BEIS, British Embassy and FCO officials.Alongside BEIS activities, the CSSF will be working on specific measures around justice and security for environmental crime disruption (complementary to BEIS Pillar 2) at the same time as the BEIS programme is delivering on Pillar 1. CSSF’s higher risk appetite will help to create enabling conditions for this and other BEIS AFOLU programmes to enter conflict-affected areas. The governance approach to managing phased delivery with multiple partners while still ensuring effectiveness, and resource efficiencies is discussed at length in the Management Case. The Appraisal Case focusses on the delivery options for the first phase only, since Phase 2 will be developed later building on, for example, the evidence generated by Phase 1. Figure 3 indicatively shows the timeline of this phased approach. The next Colombian national elections are scheduled to take place in mid-2022. The timing of Phase 2 and the inception of Pillar 3 will take this, and the preceding Purdah period, into account. If necessary and the evidence supports it, the timeline for Pillar 3 could be accelerated to ensure implementation begins smoothly, before any Purdah period preceding a change in government.PillarPhase 1Phase 220202021202220232024202520261One-year inception phase, strengthening & supporting the expansion of land registry systems and incentivising sustainable land management.Aligned with Government targets, pillar closes.2CSSF delivery with UNODCBuilding capacity in multiple agencies to disrupt and prosecute environmental crime, focussing on activities that are driving deforestation.Pillar close3Evidence gathering,Identify & pilot new sustainable economic opportunities appropriate for conflict-affected forest regions and a delivery partnerMELProcure contractorOngoing MEL support, consolidation and reporting of data collected by delivery partners, subcontracting independent evaluations as necessaryFigure SEQ Figure \* ARABIC3 - Timeline of Phased Approach to ProgrammingAppraisal Tier One: Single or multiple partners?The Appraisal Case assesses delivery options (i.e. partnerships). The partner or partners selected to deliver this programme require specialist experience within each of the three themes, convening power and credibility, ideally a familiarity with and a high capacity track record in UK AID delivery, and the ability to deliver quickly and impactfully in a resource effective way.A number of different partners were consulted, and project proposals considered. An assessment of the evidence points to no single institution having the required experience and capability to deliver across all three themes (Figure 4). Therefore, the most suitable way forward requires the expertise of multiple organisationsCriteriaOPTION A:Single Institution(e.g. an MDB)OPTION B:Multiple Institutions(e.g. MDB and others)Trusted partner and convener of Government of Colombia45Experience of delivering one theme of intervention55Experience of delivering two themes35Experience delivering across all three themes15Familiarity delivering climate focussed UK AID45Context of Colombia deforestation55Speed of implementation43Resource implications for BEIS42Potential for innovative learning and improvement24Potential for transformation24TOTAL (/50)3443Figure SEQ Figure \* ARABIC4 - Comparison of delivery through a single organisation or multiple.Criteria are scored 1-5, where 1 = “Very Unlikely” to find a partner(s) to fulfil this criterion fully, 2 = Unlikely, 3 = Possible, 4 = Likely, and 5 represents that the partner(s) are “Very Likely” to fulfil. Pillar 1 – Develop a multipurpose cadastre in conflict affected deforestation hotspots Designing and implementing an environmental cadastre in deforestation hotspots of Colombia is a task that will require significant collaboration with, and execution by, other partners including with the Government of Colombia. Any partner will also need to have the ability to channel resources to a range of downstream delivery partners, have strong fiduciary standards and controls, and tested convening power and trust of government. The World Bank and the IDB are the two main multilateral players in this space, co-financing the new $150m loan operation for the first phase of the national Colombian Multipurpose Cadastre operation and involved in technical assistance provision. They are the only development banks active to this extent and HMG has existing positive relationships with both. However, considering the specific expectations on a partner for this pillar, and under the advice from our political and climate teams in the embassy, these two MDBs were also compared against the private or third sector.An Expression of Interest (EOI) was published with six partner requirements through the CSSF procurement framework; it yielded seven responses. Meetings with the two MDBs targeted the same six requirements to give us the information required to robustly compare delivery partner types [REDACTED – commercial interests).The assessment concluded that the offer from both MDBs is stronger almost across the board, due to their experience of delivering similar programmes in a collaborative way, operating experience in Colombia, and capacity to oversee financially large-scale programmes. One question raised was their relevant experience working with indigenous groups and other ethnic minorities. However, this is something both MDBs have track record in and BEIS has received assurances on expertise that would be provided. In addition, BEIS teams are working to improve performance at a portfolio level e.g. with the World Bank through the Bio Carbon Fund.The seven private sector proposals were from a mixture of single partners and consortiums and included some international and national (Colombian) institutions. Only one offered something close to the convening power, integration with the existing cadastral infrastructure and experience levels of either MDB.Additional Critical Success Criteria (CSC) then compared how the two MDBs (World Bank and IDB) might deliver, with a focus on cost, capacity, capabilities and expertise in Colombia. [REDACTED International relations (S27); formulation of Government policy (S35)]. Pillar 2 – Address illegal drivers of deforestation; building capacity to tackle environmental crimeThe remit and scope of work under Pillar 2 is highly specialised, limiting the number of suitable delivery options. Evidence gathered through discussions with FCO and CSSF colleagues in the British Embassy Bogota and with counterparts in the Government of Colombia highlighted one recommended partner – the UN Office for Drugs and Crime (UNODC). [REDACTED - International relations (S27); formulation of Government policy (S35)].With their level of integration with government, their capacity in country, relationship with CSSF, and expertise and track record working on this theme, the assessment identified UNODC as the best-placed partner for Pillar 2. The advantages of UNODC to manage and deliver this pillar of the programme are discussed in later cases.Pillar 3 – Support the establishment of sustainable economic activitiesA detailed appraisal for delivery of Pillar 3 activities has not been conducted. A rapid assessment confirms a range of promising options that can be appraised before Pillar 3 begins, in year three of the programme. This could include successful programmes currently being delivered within the BEIS ICF portfolio, for example, the Silvopastoral Systems (SPS) programme.An overview of delivery models – how to best engage these partners?With preferred delivery partners identified BEIS sought to understand how to best engage them in the context of this programme. These points are summarised below and discussed at length in later cases.PILLAR 1: A multi-donor trust fund (MDTF) will be set up by the World Bank. Initially the UK will be the only donor, but this will give us the flexibility for other donors to come on board should there be appetite for them to do so. PILLAR 2: UNODC will set up a new trust fund, either single (SDTF) or multi-donor depending on need and additional donor interest. This will be decided during negotiation of agreements in year one of the programme. PILLAR 3: The delivery arrangement is to be determined and could involve procuring a partner through a supplier framework, or through an in-house procurement exercise, or a direct agreement with multilateral bank or agency.During year one, a learning contractor will be procured to oversee the consolidation and communication of monitoring and reporting across all three pillars and assist, where appropriate, with the commissioning or conducting of independent evaluations. This contract will be in place before UNODC begins implementing Pillar 2. CSSF will also assist in the initial set up of Pillar 2, using their experience of the country context and delivering through UNODC. The role of the learning contractor, the governance of this system, its feasibility, challenges, structure and other operational considerations are also discussed at length later in this Appraisal Case and in the Management Case, Figure 5 summarises the model and Annex K shows in full.Figure SEQ Figure \* ARABIC5 - Summarised Governance StructureEnsuring Value for Money (VfM)This section will assess value for money (VfM) in-line with DfID’s 4Es approach (i.e. Economy, Efficiency,?Effectiveness and Equity). As a delivery mechanism has not yet been identified for Pillar 3, the VfM assessment will focus on the overall delivery model and organisations for Pillars 1 and 2. BEIS programme managers will work collaboratively with delivery partners to ensure that the pillars are complementary to increase impact and potential for transformational change. VfM will be continually assessed as part of the Annual Review cycle including through the establishment of VfM indicators. A monitoring and learning contractor will be procured to help with consolidating reporting across the pillars, convening of partners, and oversight of an evaluation and learning function based on the needs of the programme; detail in the Management Case.The capital and technical assistance (TA) provided by Pillars 1 and 2 are expected to have quantitative (e.g. avoided deforestation, finance mobilised) and qualitative (poverty reduction, learning and network effects, institutional strengthening and capacity building) benefits. However, the impact of the TA and capital in achieving such benefits can be indirect and the chain of causality before benefits are seen, long. Moreover, it is possible that lag periods will be observed before impacts can be measured. This leads to considerable uncertainty around establishing causality and attribution of the potential benefits and outcomes (such as reductions in GHG emissions resulting from avoided deforestation).In addition, and specific to Pillar 2, some flexibility remains in the activities which will be fully defined based on the implementation successes and challenges from CSSF’s work with UNODC and an assessment of the current needs during year 1. For Pillar 3, although activities to be undertaken through capital investment in livelihood pilots are more likely to bring direct causality of results, the VfM will be modelled and assessed when the pilot activities are identified after the implementation of pillars 1 and 2 has begun.As such, due to the difficulty in defining and deriving the benefits of these activities, it has not been possible to appropriately or accurately monetise and attribute the expected quantitative benefits of the programme to ICF or present a cost effectiveness assessment at this stage. REDACTED – Commercial interests (S43).Economy (Phase 1)Proposed budgets are provided for activities under Pillars 1 and 2 in Annex G. Where possible, benchmarks were used to ensure that BEIS are paying the right price for inputs. Where this has not been impossible, actions will ensure ongoing economy; this is pertinent especially with funding allocation to UNODC as there are no similar ICF programmes to benchmark against.Delivery partners will produce quarterly reports where the performance, and as necessary budget, can be scrutinised and they will align annual reporting with the BEIS Annual Review cycle. These products will be delivered either directly to BEIS or via the procured learning contractor once in place. The terms of this will be decided by the grant agreements (for the multilaterals) and the Invitation to Tender (ITT) for the learning contractor. All delivery partners will work with the procured learning contractor to allow for the consolidation of monitoring and reporting, and any evaluation work as per the needs of the programme.To source the learning contractor, BEIS will conduct market engagement and run a competitive tender process to ensure the contractor can be procured at the right price. Early engagement will ensure enough bidders and strong VfM. The process will ensure competitive pricing but avoid the constraints of buying the cheapest outcomes and will look at the quality, not just the cost.It is clear from the evidence that there will be a degree of interdependency between each pillar. E.g. data from a land registration will only reduce deforestation if enforcement authorities have the capability and capacity to use the data to identify and prosecute perpetrators. By complementing one another, the pillars will increase the chances of achieving their own and the programme’s desired outcomes. For this to be realised, the learning contractor will provide critical, constructive guidance to ensure that components are working together to realise the desired outcomes. This may include sourcing / procuring additional expertise.Economy (Phase 2):As discussed in the Strategic Case, the creation and promotion of sustainable economic alternatives (Pillar 3) will form the second phase of this programme. This document seeks approval for a total of up to ?64m across all three pillars, allowing up to ?10m for these activities; expected to bring direct avoided deforestation, poverty reduction, learning, institutional strengthening and capacity building benefits. The partner will assist in the provision of evidence (e.g. on efficiency and effectiveness) in order to identify key evidence gaps for Phase 2. This evidence will be partly from Phase 1 results, to the extent they are available, and from an assessment of the current context in our implementation areas. It will be used to point towards appropriate sector, specific scale and locations. Before this pillar of activities is approved, the BEIS ICF team will assess whether we are buying inputs of the appropriate quality at the right price. Once a strategic case and supporting modelling is complete, approvals will be sought from the programme SRO to release the funding for Phase 2 of the programme. However, assuming these activities begin during year 3 of the programme, evidence to support decisions needs to be available around 18-24 months after programme inception. Therefore, there is a need for pragmatism about what results are expected in that time.Delivery Partner Fees?The World Bank and UNODC charge standardised management fees to administer grants and these are calculated as a percentage of the total project value. They will be taken at a set percentage rate at each Promissory Note (PN) draw down. The World Bank charges 5% for all Bank implemented activities (majority of this project) and caps the administrative cost of any Bank executed activities and / or the total downstream delivery chain management fees at 17%. The programme support costs (PSC) for UNODC are 13% of the project value. In contrast to the Bank, UNODC activities will be executed almost entirely in-house by staff located in the UNODC offices in Colombia. Local staff costs are determined by the Colombia UNDP salary scale. Consultants may be engaged for the delivery of specific activities within the project. For further information on budget the Commercial and Financial Cases see Annex G for both delivery partners.EfficiencyTo ensure efficient processes and ongoing value for money, new and existing governance structures will allow BEIS to have influence over funding decisions through our positions in both working level and strategic level structures. The governance structures within and across pillars will be finalised during the inception of each pillar but will ensure additionality, improve investment decisions and drive efficiency to address market barriers/remove distortions. See Management Case for further information.Both delivery partners have implemented similar projects and are experienced, with track records in their respective thematics. Learning from this and from ongoing implementation will be incorporated throughout programme life. UNODC have decades of experience working in Colombia on environmental crime and are a trusted and tested partner for the Government of Colombia. The World Bank have been involved in the design and implementation of several cadastral pilot programmes in Colombia and Latin America and are directly involved in the new national scale Multipurpose Cadastre loan operation that this programme links to.There is potential for further efficiency gains by crowding in other donors to this space with programmatic or policy efforts. [REDACT – International relations (S27); Formulation of Government policy (S35)]. Funding will be disbursed over a total of 7 years (the programme life). The exact points of capital disbursal through PN drawdowns are discussed further in the Financial Case and will be refined during the inception phase (year one). Gradual disbursement allows us to learn lessons and dynamically adapt programming for future spending.The outcome statement for this programme is that “enforcement and incentives related to land regulations, usage rights, responsibilities and opportunities shift behaviours to reduce deforestation and increase sustainable management in communities within, and in authorities affecting, the targeted municipalities”. Key expected outputs are below. Each of the outputs correspond to a pillar of the programme and contain multiple indicators beneath them (see Theory of Change in Annex H and logframe in Annex I for further information). The logframe will be further refined, if necessary, during the inception phase. Output 3 is indicative at this stage and will be defined during the process of evidencing and defining this pillar. It will be reviewed and adjusted as necessary as part of the Annual Review process. OUTPUT 1: Capability of regional/local government to deploy and use multipurpose cadastre to support implementation of land use regulations and strengthen rights in communities.OUTPUT 2: Criminal activity associated with deforestation is disrupted through strengthened investigation and enforcement capabilityOUTPUT 3: (tbc) Appropriate sustainable economic alternatives supported and promoted in programme municipalitiesThese outputs will be delivered across the programme pillars by a combination of delivery partners, BEIS programme staff in BE Bogota and London, seconded individuals, and programme finance. Specifics of activities, outputs and outcomes for Pillar 1 are very well defined, for Pillar 2 moderately well-defined and for Pillar 3 indicative. As discussed, for Pillar 3 solutions will be based on programme evidence and respond to the demand. Programme outputs will be monitored by the learning contractor. For each activity funded there will be baselines and results expectations. As with other ICF programmes, outputs will be tracked using a logframe (Annex I).With the assistance of the learning contractor and through evaluations as needed, the BEIS programme team will determine whether outputs have been delivered efficiently and feed this back to the programme. For example, if delays occur in disbursing funds or if data is not high enough quality. Lessons learned from other programmes and evidence gathered for this programme specifically shows that the most efficient programmes are those that can be flexible and responsive to demand and changes in political economy and that transparently engage with their market of potential suppliers. Efficiency lessons will also come as Phase 1 is implemented and those lessons will be fed into programme design and management. Potential areas to improve efficiency will also come from the work of the learning contractor, who will be tracking outputs and making recommendations as to how to improve delivery of outputs.Ensuring Additionality Additionality will be ensured by delivering complementary instruments to overcome the range of barriers in order to move faster and more effectively on the ground. All three pillars of activity will work in municipalities that do not have any other source of finance available to them. The delivery partners and learning contractor will ensure baselines are developed for each. The structure and governance selected for Pillars 1 and 2 (Multi-Donor Trust Funds) will allow the crowding in of other donor finance to ensure work is also dedicated to municipalities without access to finance, and the interoperable nature of the outputs, particularly from Pillar 1 are designed to be scaled to other regions beyond the direct reach of the programme. The Government of Colombia is building a pipeline of critical, environmentally focussed projects for the PDETs; under Pillar 3 this programme could accelerate the implementation of some of the most promising AFOLU focussed projects, that do not have access to other sources of finance. Effectiveness and Cost Effectiveness:As stated in the VfM introduction, a cost effectiveness assessment of the programme is not provided (for example, through a presentation of Net Present Value or Benefit-Cost ratio). This programme, like all ICF programmes, will also report against qualitative KPIs such as transformational change (KPI 15). Progress will be monitored and evaluated throughout the programme through the ICF’s results collection and annual review process, which will show whether the programme is on track and achieving the outcomes and impacts that are expected in the theory of change. This will be used to continually assess value-for-money throughout the programme lifecycle. Data collected during monitoring and evaluation will be crucial to ensure value-for-money given that a quantitative assessment at this stage is not possible, along with the robust governance structures outlined in the Management Case. Whilst it is not possible to present such an assessment, the transformational change objectives of this programme have been qualitatively assessed. Overall, the programme will drive transformational shifts through improved land systems and the increased effectiveness of environmental laws in order to reduce deforestation; increasing the amount of sustainable production activity in and outside of the target regions. Discussion of the benefits from these transformational change objectives can be found in the evidence review within Annex O.A learning contractor will help develop methodologies to not only attribute quantifiable results to the programme enabling us to report on effectiveness (in terms of quantitative KPIs, for example GHG emissions reduction for Pillar 3 pilot activities) but also provide data and assist in analysis for Pillar 3 VfM modelling at the appropriate time. When the relevant information is available from pillars 1 and 2 then this will point to an activity type to be modelled, e.g. using capital funding for direct interventions in agroforestry. Expected results can then be calculated and fed back in as output and outcome level targets in the programme logframe.Key outcomes from this programme (Pillars 1 and 2) include the following, aligned with pillars 1, 2 and 3 respectively. (See logframe in Annex I for detailed outcomes)Government authorities use data to improve incorporation of environmental considerations into territorial planningGovernment authorities use land use, occupation, ownership and crime data effectively to make decisions on environmental enforcement operations/casesRegional/local government delivers sustainable PDET-aligned projects that guide and incentivise local actors to develop sustainable livelihoods/ businessesThe programme will focus on the combined impact and additionality gained by taking a programme approach across all three pillars. Learning and steering decisions across the programme will be supported by a learning contractor who will work directly with each of the pillar implementers and with BEIS. They will carry out activities that should include convening monitoring and reporting meetings within and if necessary, between partners, consolidating information from delivery partners into a consistent format and reporting back to BEIS as set out in the future terms of reference, contracting out to experts in order to carry out independent evaluations in the mid-term, at set points for specific learnings, and at the end of the programme, again as set out in any future terms of reference. The role of the partner is discussed at greater length in the Management Case. EquityClimate change risks threaten to undermine the development gains and prospects of the world’s poorest countries. 100 million people are at risk of being pushed into poverty by climate change by 2030, and 720 million by 2050.Women and men are differentially affected by climate change. Differing roles and responsibilities, access to information and resources, mobility and voice often mean girls and women are more vulnerable to the impacts of climate and environmental change and have less ability to respond. Failing to consider gender in interventions can perpetuate and even increase these inequalities whereas integrating gender can help reduce them. The relationship between gender and climate change was recognised by the international community in the Paris Agreement which states “parties should, when taking action to address climate change, respect, promote and consider their respective obligations on human rights…gender equality, empowerment of women and intergenerational equity.”The World Bank will deliver specific activities at the community level to inform women of their land and property related rights, providing insights into the specific issues affecting women in each municipality and developing appropriate strategies to mitigate gender imbalances related to land and property rights. UNODC work to facilitate the integration of gender, and other social equity metrics into all policies, programmes, and mechanisms in order to empower women and men, reduce inequalities between and among populations, and promote human rights. The work of UNODC will especially value the participation of women in workshops, trainings and other activities related to public institutions. UNODC has also committed to generating a gender analysis of the project and to consider the gender dimensions of the target population. Understanding the relationship between thematic areas and gender is vital to the overall effectiveness. Where possible gender will be disaggregated across the programme logframe to ensure that benefits are equitably distributed between men and women.As discussed in the Strategic Case deforestation and forest degradation undermine the livelihoods of some 1.6 billion of the world’s poorest people?and disproportionately affect the most vulnerable, including women and indigenous people. A primary aim of the programme, and the ICF, is to avoid and reduce greenhouse gas emissions – in this case from deforestation. The programme will operate in regions in Colombia where there are significant barriers to achieving this, namely lack of land formality and prevalence of environmental crime. Overcoming barriers on these two fronts will create an enabling environment to bring significant economic development benefits for forest dependent people, indigenous communities and farmers in rural Colombia.Overall Value for Money StatementThe appraisal showed that the preferred method for delivery was through a multilateral bank, the World Bank, for Pillar 1 and through the UNODC for Pillar 2. The third pillar will be determined (specific sectors, scale, locations, partner and mechanism) during programme operation.Due to the uncertainty around establishing causality and attribution of potential benefits and outcomes (e.g. reductions in GHG emissions resulting from avoided deforestation) no NPV or BCR has been modelled at this stage. However, the programme is expected to deliver transformational change through climate and development benefits over the programme lifespan. Value for money (VfM) will continue to be assessed and reviewed through the life of the programme as part of the UK’s Annual Review process and distinctly as part of the design of Pillar 3 where BCR and NPV will be modelled, alongside the support of the learning contractor, before approval.Ensuring ongoing VfM through Monitoring and EvaluationMonitoring and Evaluation (M&E) will be conducted throughout the duration of the programme. Further details are discussed in the Management Case. In summary, monitoring will include baseline surveys for each pillar; ongoing KPI results collection, quarterly programme reports provided by the World Bank, UNODC and the partner brought in for the third pillar; annual reviews conducted by BEIS ICF with data provided by delivery partners; all consolidated and communicated where appropriate by the learning contractor. Independent evaluations and wider learning work will provide the evidence needed to define Pillar 3 and maximise impact. These evaluations, based on the needs of the programme, will be delivered through the dedicated learning contractor, either directly or through sub-contracting. This partner will be procured after business case approval. Further information on this in later cases.In anticipation of future work to asses ongoing value for money as part of the annual review process, indicators to track ongoing VfM are under development. These will likely involve assessing the cost of expertise, any tools used, and the ability of these to manifest in tangible outputs (e.g. land rights documentation produced, and campaigns run) which will help deliver the outcomes intended for the programme. They could also assess considerations made for gender equality and poverty reduction. Summary of Available Evidence In depth literature reviews were undertaken to evidence the approach set out in the Strategic Case and test the assumptions in the Theory of Change. The themes of the literature review, and the quality and strength of the evidence, are set out in a series of statements (Figure 6) and the detailed assessments can be found in Annex Q.QuestionQuantity of EvidenceLacking < Med < ConsiderableStrength of SupportWeak < Mixed < StrongLand formalisation and regularisation leads to increased tenure securityMediumMixedImproved land governance and improved tenure security leads to reduced deforestationConsiderableMixedImproved tenure security increases investment in sustainable economic alternativesConsiderableStrongIncreased access to credit incentivises sustainable economic alternatives and avoids deforestation.ConsiderableMixedImproved institutional capacity and enforcement reduces deforestationLacking/MediumMixedFigure SEQ Figure \* ARABIC6 - Summary of evidence underlying the Theory of ChangeCOMMERCIAL CASESummaryThe Appraisal Case presents the economic considerations for establishing a new programme in collaboration with the World Bank and UNODC, including the associated costs and benefits. The following sections (Commercial and Financial Cases) provide further information on the capabilities and capacity of these partners to deliver the programme against the objectives. Global due diligence assessments of the WB have been carried out by DfID and the Multilateral Organisation Performance Assessment Network (MOPAN) within the last three years reflecting their strong track record and the strength of the systems and policies in place to ensure rigorous financial, social and environmental oversight. Although UNODC has not undergone a DfID assessment, its MOPAN assessment is underway, and the BEIS team expect to have sight of it before a BEIS-UNODC Memorandum of Understanding (MoU) is signed. A robust due diligence approach detailed below, and in the Management Case, takes this into account.Ability of the Organisations to Deliver in CountryThe World Bank (WB)1638301539240Figure SEQ Figure \* ARABIC7 - Summary graphic showing the WBs performance in DfID’s 2016 MDRFigure SEQ Figure \* ARABIC7 - Summary graphic showing the WBs performance in DfID’s 2016 MDRDfID’s Multilateral Development Review (MDR), undertaken in 2016, assessed the World Bank’s ability to deliver and tested alignment with UK objectives. It found the them to be one of DfID’s highest performing multilateral partners. They determined that the Bank's global reach, technical capacity, breadth of funding instruments, and convening and influencing role make it central to UK development objectives. It assessed the WB as good in terms of delivery against challenging objectives and that it manages risk well. Since the previous assessment in 2013 they found that the WB had agreed a clearer strategy on gender and commitments on tackling climate change. Summary from DfID’s paper is in Figure 7.The Multilateral Organisation Performance Assessment Network (MOPAN) also assessed the Bank in 2016. The conclusion was that the World Bank is a mature and high performing organisation, which meets the requirements of an effective multilateral, providing strong intellectual leadership on a broad range of issues of global importance. The Bank’s comparative advantage lies in its internal structures, processes and procedures that support efficient and effective delivery. These are critical points for successful delivery of this technical programme in a strategically tailored way.The Bank’s recent reform process, in which the organisation was restructured to optimise delivery of services to an increasingly diverse array of clients, shows evidence of its ability to identify and adapt to changes in an increasingly complex development landscape, and to respond to emerging challenges. The report highlights the Bank’s adaptability to partners at both the country and global level, and the introduction of a new, more streamlined framework for procurement. The World Bank was shown to demonstrate a clear commitment to transparency and accountability in its operations, with a robust internal control architecture, which ensures compliance with fiduciary, social and environmental safeguards.DfID’s Central Assurance Assessment (CAA)In May 2018 DfID carried out a Central Assurance Assessment (CAA) on the World Bank. In conducting this review, DfID drew on the extensive existing assessments alongside its own research and experience of working with the World Bank. The CAA report concluded that the “WB carries no unacceptable fiduciary or reputational risks in terms of its central systems and processes” for the core and non-core funding provided by DfID. However, it flags that non-core funding, under which this programme would fall, carries additional risks on governance and accountability frameworks where oversight arrangements can differ significantly between some trust funds. This risk will be mitigated through strong and flexible governance, reflected in the Management Case.Resourcing and expertiseAs previously discussed, the Bank is co-financing the national Multipurpose Cadastre (MC) loan operation, providing $100m. Specific cadastral expertise has already been brought into the team in the form of a Senior Land Administration Specialist, who will be assigned to the programme. In addition, the World Bank will provide a Team Task Leader (TTL), a Finance Management Specialist, Procurement Specialist, Environmental and Social Specialists and consultants, as necessary from the Land Practice. UNODCThe aim of the United Nations Office on Drugs and Crime (UNODC) is to assist the UN in better addressing through a coordinated, comprehensive response, the interrelated issues of illicit trafficking in and abuse of drugs, crime prevention and criminal justice. These goals are pursued through three primary functions: research, guidance and support to governments. In dealing with environmental crime, UNODC continue to adopt a comprehensive and multidisciplinary response, adding specific expertise to strengthen its existing mandate.UNODC Colombia is a large country office tackling a dynamic and diverse drugs and organised crime agenda that extends far beyond coca to include many illicit environmental activities. It is the largest local office in the world and 99% of its nearly 600 staff are Colombian. This provides capacity to implement on the ground effectively and substantial support functions (legal, compliance, HR, finance, safeguarding etc.). Although DfID has not carried out a CAA or an MDR on UNODC, ODA is being delivered through them effectively. Programmes include the ?50.2m DfID-funded Pakistan Financial Inclusion Programme that received ‘A’ ratings in its Annual Reviews since 2011, a global ?49.7m capacity building programme overseen by the Home Office, and a ?15m DfID programme running to 2021 that will strengthen transnational responses to illicit financial flows, corruption and crime which also received an ‘A’ rating in its last Annual ReviewFeedback from across the DfID and FCO network on performance and experience of working with UNODC Colombia highlighted particular strengths of in-country leadership, maintaining positive political dialogues with Governments (national and sub-national), and high capacity to design and deliver training. Respondents noted the need to clarify the specific support required to ensure the impact of capacity building is measured. The programme will ensure this with a strong learning and evaluation component and early logframe development; see Management Case.UNODC is an active and trusted partner with an extensive track record of working in the sector including with Embassy staff and CSSF colleagues. BEIS officials judge UNODC to be the preferred partner but, since delivery through BEIS ICF is untested and there is no DfID due diligence assessment, this comes with some risks. The approach to managing this is laid out below and in the Management Case:CSSF will finance pilot activities in year 1 which will enable UNODC to demonstrate its leadership and delivery capability. A light touch Delivery Partner Review (DPR) of UNODC’s CSSF-funded activities will be commissioned towards the end of Y1 to inform whether any adjustments are needed. This review will focus on the UNODC Colombia team and be delivered by KPMG through the established DPR call down contract with them.There has not yet been a MOPAN report carried out on UNODC but there is one in development and results are expected early in 2020. These initial results will be used to evaluate the risks associated with UNODC operations before ICF activities begin.Finally, before Y2 activities get underway, UNODC will complete a due diligence self-assessment based on a DfID template (Annex M), with enhanced safeguarding recommendations from the ICF Portfolio Management Office (PMO) team. This has been led by UNODC and they are familiar with both the process and with HMG expectations.ProcurementThe UK is not directly accessing domestic or international markets for programme delivery (except for future decisions on Pillar 3 and the learning contractor). As assessed in the Appraisal Case and in the Management Case, the evidence points to the World Bank and UNODC as the preferred partners to provide the services required with the appropriate level of international influence/leverage for increased likelihood of successful delivery. Since no reasonable alternative exists without a substantial increase in management oversight, and because of the nature of the organisations themselves, open competition is absent; namely for technical reasons. Commercial risk as a result of this lack of competition is mitigated through confidence in the World Bank and UNODC’s reputation, track record and VfM credentials. ?The World BankThe Bank’s procurement policies guide decisions to ensure value for money, economy, integrity, fit for purpose, efficiency, transparency and fairness. To ensure that funds are used only for the purposes that financing was granted, the Bank carries out its procurement functions, including implementation support, monitoring and procurement oversight, under a risk-based approach. The Bank is required to “ensure that due attention… [is given] …to considerations of economy and efficiency and without regard to political or other non-economic influences or considerations.”The World Bank provides funding to its borrowing member countries through a broad range of financial mechanisms. These operations involve procurement processes for goods, works, and services provided by firms and individuals. The World Bank supports borrowers in their effort to strengthen their procurement systems so that they meet international best practices. UNODCThe UN procurement manual provides the guidance to all staff involved in procurement and acquisition and is the legal framework to ensure procurement activities are in full compliance with current policies and industry practice. Procedures ensure that those seeking to do business with the UN can be confident that their proposals are considered and assessed in a fair, objective and transparent manner. The Procurement Manual is subject to periodic updating and refinement by the UN, as and when necessary. It is noted that the United Nations reserves the right to make exceptions to the Procurement Manual, if necessary. Regular meetings will convene the UNODC team in Colombia and Government agencies as necessary to follow-up on the timely delivery of project activities to a high standard. Annual costed work plans will be developed and regularly updated for this purpose. UNODC project managers aim to secure local ownership by guaranteeing the involvement of key stakeholders in all the stages of the project implementation, including in the endorsement of specific outputs.Procuring a Learning ContractorThe programme will procure (likely through a supplier framework) a learning contractor to deliver aspects of the monitoring, evaluation and learning (MEL) work required. This procurement process will begin immediately after business case approval and is expected to take up to six months. The selected contractor will then work with the BEIS team to build on initial MEL arrangements and feed into the design of further work. The Invitation to Tender (ITT) will be designed through a consultative market engagement exercise, based on, and learning lessons from, the UK-PACT approach to securing a contractor. Initial advice from MEL specialists suggests seeking a contractor with expertise in monitoring and reporting for ongoing support, particularly convening and consolidating complex data, and results reporting across what could be eventually three partners. Any additional expertise required more intermittently for evaluation will be brought in as necessary. A total of 0.4 FTE of internal analytical resource will provide ongoing BEIS support to this programme in the form of 0.2 FTE of evaluation adviser and 0.2 FTE economist.Ensuring results are delivered at agreed costTo ensure good value for money for the taxpayer and that the programme can effectively deliver on objectives, the following principles will guide commercial decisions:All programme funds will be delivered transparently, effectively and efficiently, without jeopardising the objectives.Allocation of funding will comply with legal requirements, HMG commercial requirements and principles for ODA spend;Any future programme procurement exercises (e.g. sourcing a delivery partner for Pillar 3 and a learning contractor) must be planned in detail with BEIS specialist teams before proceeding and look to leverage UK and global expertise but must not be designed in a way that distorts the market.Ongoing value for money and delivery at agreed cost will be ensured through continual improvement processes including: lessons learned from this programme and others in the BEIS ICF portfolio, tracking and course correcting based on Value for Money indicators under development, the Annual Review cycle (see Appraisal Case).Promissory NotesThe funding is from the allocated ICF budget and will be paid via Promissory Notes (PNs) to the World Bank and UNODC. Following approval for Phase 2 (Pillar 3), payment may also be made with a PN or via another means depending on delivery mechanism and partner. The delivery partners are responsible for disbursing funds to any executing agencies downstream. The use of PNs is consistent with BEIS’s approach to investment in other multilaterally managed funds. BEIS will agree a cash draw down schedule (encashment schedule) with the beneficiary in writing before the PN is lodged to allow draw down on funds when agreed by BEIS, based on the performance of the programme, and evidence of need. In the case of a procured partner, payments will be based on agreed terms in the contract. See Financial Case for further detail.Value for Money – Summary StatementAppraisal showed that the preferred method for delivery was through a multilateral bank, the World Bank, for Pillar 1 and through the UNODC for Pillar 2. The third pillar will be developed (sector, specific scale, locations, partner and mechanism) during programme operation. Value for money (VfM) will continue to be assessed and reviewed through the life of the programme as part of the UK’s Annual Review process and routine ICF monitoring exercises including for risks every month.Legal ConsiderationsCompliance with the International Development Act 2002Gender equity has been discussed in the Appraisal Case and in accordance with the International Development Act 2002, it is the responsibility of the SRO to ensure that the impact of this development assistance on gender equality receives ongoing consideration. The other requirements regarding the spending power in the International Development Act 2002 are detailed in the Financial Case.State AidSimilarly, detailed State Aid information can be found in the Financial Case. The four ‘tests’ of State aid pursuant to Article 107(1) of the Treaty on the Functioning of the European Union (TFEU) have been applied and it is considered that this programme does not provide State Aid.Using a Memorandum of Understanding (MoU)Governance of the funds will be described and managed through an MoU explaining the roles of each organisation and the deliverables, including BEIS as a member of the Programme Board (potentially alongside other donors) and as such maintaining oversight on management and activities. BEIS legal and commercial teams will have sight of and feed into each MoU before agreement by BEIS and delivery partners and will include provisions with delivery partners that provide for termination of the arrangement if deemed necessary, and the return of unspent mercial Risk ProfileThe concept note for this programme was originally submitted to PIC who approved but flagged that the activities under Pillar 2 were beyond BEIS ICF’s risk threshold. A Risk Potential Assessment (RPA) has since been completed, [REDACT – Formulation of Government policy (S35)] confirming that the programme is not novel, contentious or repercussive. Based on the RPA, and taking into additional consideration, the complexity of delivering in Colombia, this programme has been assessed to have an overall risk rating of “Major”. See the risk register in the Management Case. FINANCIAL?CASE?An Overview of?Costs?The total financial commitment required for this programme is up to ?64m. The encashment period will be over 7 years and the budget commitment is expected to be over ~4 years and confirmed based on the financial mechanism decided for Pillar 3. Rationale for the budget proposed is set out in the Appraisal and Strategic Cases.Costs are split across three pillars, and additionally on Monitoring, Evaluation and Learning (MEL):PILLAR 1: Develop a multipurpose cadastre in conflict affected deforestation hotspots – up to ?43m through the World BankPILLAR 2: Tackle illegal drivers of deforestation; building capacity to tackle environmental crime – up to ?10m through the UN Office for Drugs and Crime (UNODC)PILLAR 3: Identify and establish sustainable economic activities – up to ?10m, partner to be confirmed.MEL: Monitoring, evaluation and learning assistance through a procured supplier – up to ?1mOnce the programme has been approved and a contribution arrangement has been finalised with the World Bank, funds will be transferred from BEIS as per the Promissory Note schedule and drawn down as per the encashment schedule. Once the additional due diligence processes have been completed with UNODC, the same process will follow. Drawdowns will be approved by the Deputy Director and decisions based on the performance assessment in the Annual Reviews. The commercial team will ensure that the Deputy Director, SRO and any contract managers will receive any necessary contract management training, liaising with the portfolio management office as these requirements are defined. All BEIS funding to the programme is drawn from ICF RDEL and CDEL budgets. The CDEL:RDEL ratio over the programme is expected to be ~77:23. The split within pillars is shown in Figure 8.Pillar / PartnerCDEL?m%RDEL?m%TOTAL (?m)World BankImplementation of multipurpose cadastre3991Institutional, policy and system strengthening through capacity building + programme management49.343UNODCForensic tools and other equipment purchased110Capacity building, knowledge management, networks built, community dialogues99010Pillar 3 - LivelihoodsLivelihood work that brings about sustainable land management9.595Management fees0.5510Learning contractorn/a00Monitoring, reporting and evaluation. Ongoing and commissioned out 11001Programme TotalCDEL Total49.577.3RDEL Total14.522.764Figure SEQ Figure \* ARABIC8 - Total values and CDEL:RDEL split across the programme and within pillarsThe funding is from the allocated ICF budget and will be paid via Promissory Notes (PNs) to the WB and UNODC. Following approval for Phase 2 (Pillar 3), payment may also be made with a PN or via another means depending on delivery mechanism and partner. The delivery partners are responsible for disbursing funds to any executing agencies downstream. The use of PNs is consistent with BEIS’s approach to investment in other multilaterally managed funds e.g. the Forest Carbon Partnership Facility (FCPF) and the BioCarbon Fund. A strong commitment of funds is particularly useful when partners are being asked to undertake their own spending and policy work alongside BEIS funding, as are the World Bank and UNODC in this instance.PNs are lodged with the Bank of England and are non-interest-bearing and non-negotiable undertakings by HMG to provide to the named beneficiary any amount up to the specified limit that the beneficiary may draw down on at any time. However, BEIS will agree a cash draw down schedule with the beneficiary in writing (i.e. the ‘encashment schedule’) before the PN is lodged.Cost ProfileUsing the indicative encashment schedule set out below in Figure 9, BEIS will agree with the delivery partners to (in the case of PNs) only draw down on the funds when agreed, based on the performance of the programme, and evidence of need. In the case of a procured partner, payments will be based on agreed terms in the contract. The CDEL:RDEL split over each year within each pillar is yet to be defined and will be finalised during the inception phase (year one). The encashment schedule is based on the current budget available.Agency?m TotalFY20/21FY21/22FY22/23FY23/24FY24/25FY25/26Pillar 1: World Bank434.312.912.98.64.3Pillar 2: UNODC1013321Pillar 3: Partner5-102-41.5-31-20.5-1Learning contractor10.20.250.10.10.10.25For the World Bank the first Promissory Note will be laid in the first quarter of the 2020/21 financial year (FY). This is expected to be for ?43m, the total value for Pillar 1 depending on wider BEIS ICF portfolio and budget requirements. The first draw down will be following programme approval and at the point of finalising a contribution arrangement. Within this Spending Review period it is expected that there will be one further PN to begin activities under Pillar 2 with UNODC. This is expected to be in Q4 2020/21 and will be drawn down on in Q1 of FY 2021/22.Figure SEQ Figure \* ARABIC9 - Table showing expected spend per year across the three pillars and by learning contractorThe budget commitment period is expected to be over 4 years, depending on the financial mechanism and organisation selected to deliver Pillar 3, and the contractual agreement with the learning contractor. The remaining schedule for PNs and encashment will be finalised during year 1, except for those for Phase 2 which will be when the partner for this pillar is brought on board.Triggers for payments The trigger for the first payment (to the World Bank) will be finalisation of the contribution arrangement between BEIS which will be negotiated post-business case approval. The Bank will require funds at this point in order to fully resource their team for delivery and to begin the inception phase of this pillar. The trigger for the first payment to UNODC will be the completion of the Delivery Partner Review based on the activities financed through CSSF, and once the contribution arrangement has been negotiated and finalised. First payment to the delivery partner for the third pillar will depend on the financial mechanism selected, and the type of organisation and agreement. This will be determined after year two. The trigger to make payment to the learning contractor will be once contracted through a competitive process.Scheduling of PNs, encashments and other payments ensures BEIS are not making payment in advance of need.Costs to be incurred directly by BEISFigure SEQ Figure \* ARABIC 10 - Expected BEIS Staff Resources for Programme DeliveryGrade and RoleFTESEO?Programme manager (UK)1C4 Programme Support (COL)0.5G7?Sub-team?Leader0.3G6?Team Leader0.1SEO?M&E Adviser0.2HEO?Economist0.2By outsourcing programme delivery to partners and budgeting for this up-front, the costs to be incurred directly by BEIS are the costs of internal staff resource to support and manage the programme. The analytical resource required, in the initial phase is expected to be up to 0.4 FTE, possibly decreasing in later years once the learning contractor is on board. Although programme delivery is phased it is not expected that overall workload will peak and trough. Discussions with the CSSF Colombia team have meant that some flexible staff time could be made available for advising and for transitioning into BEIS funded UNODC activities. Expected staff resources are shown in Figure 10.All other staff costs associated with delivering this intervention will be incurred by external parties, the primary parties being the World Bank and UNODC, the partner for Pillar 3 and the learning contractor.AffordabilityA portion of this programme is accounted for and affordable within the existing Spending Review (SR) budgets and the yearly allocation for BEIS ICF within this – managed by the BEIS Portfolio Management Office. This portion is currently estimated at ?18.4 million. The remaining will be spent beyond the current SR period and the BEIS programme team will seek approval at Director General level for the remaining amount as required. The proportions depend on the PN schedule agreed with PMO. right399415Figure SEQ Figure \* ARABIC11 - Flow of Funds0Figure SEQ Figure \* ARABIC11 - Flow of FundsFlow of FundsFlow of funds for Pillars 1 and 2, and for the learning contractor is demonstrated in Figure 11. Annex J contains detailed explanation of the steps and recipients. Pillar 3 flow will depend on the mechanism selected.Financial?and Fraud Risk AssessmentGiven that this programme will involve the disbursement of funding to both government and local delivery partners including fiduciaries, government agencies, and potentially the private sector, there is low risk of corruption and financial fraud. However, implementation for Pillars 1 and 2 will be through two trusted partners who have robust risk management frameworks (see Management and Commercial Cases). During delivery partner selection for Pillar 3, one of the criteria for selection will be the capability and track record to mitigate for financial and fraud risk. Figure 12 summarises the key financial risks.Risk SummaryLikelihoodImpactLevelMitigation PlanFunds are not used for their intended purposeLMMinorAlthough UN agencies do not allow financial audits, other downstream funds will be required to allow external audits and make the results available to BEIS as and when necessary.Expenditure is not properly accounted forLMMinorSignificant due diligence has been conducted on the financial systems and processes of the World Bank (CCA and DfID MDR). Due diligence will be carried out on UNODC as part of a multi-faceted approach including assessing the effectiveness of delivery through CSSF funding before BEIS funds are transferred. BEIS requires quarterly reports and full annual reports clearly showing segregated BEIS expenditure.Programme expenditure does not represent good VfMLMModerateA full programme review will be conducted on an annual basis including a VfM assessment. If VfM is no longer being delivered, corrective action can be taken. Should this be insufficient, break points built into the programme may allow funds to be recalled and repurposed (see the management case).Foreign exchange riskMMModerateAll commitments will be made in GBP, so BEIS will not be exposed to this risk financially but exchange fluctuations?could?reduce the total funds in the project and therefore project scope. Equally, funds could increase. This risk may also materialise between the World Bank and their downstream partners. If necessary, the programme team will reassess the scope during delivery, but some risk must be tolerated.Figure SEQ Figure \* ARABIC12 - Financial Risk AssessmentAn Assessment?of Monitoring, Reporting?and Accounting?for FundsAs is standard practice for ICF programming the spend for this programme will be monitored in line with the encashment schedule agreed with partners and using the tested processes within ICF and within BEIS. (See the Performance Management section later in the Management Case.)Independent assessments of how the money has been spent will be provided regularly – annually by the World Bank and UNODC, and as agreed or if recommended by the programme delivery board for the Pillar 3 partner. These reports could be as yearly internal or external audits or after an agreed trigger point to, for example, mitigate a known financial risk. Regarding UN agencies and UNODC specifically, audits are only conducted by the UN oversight bodies i.e. the UN Board of Auditors and the Office of Internal Oversight Services. Financial Accounting ConsiderationsSpending PowersInternational Development Act 2002Section 4(2)(b) of the International Development Act 2002 provides a power for the?Secretary of State (SoS)?to “contribute to any fund that is intended to be used (wholly or partly) for one or more relevant purposes”. A “relevant purpose” is (a) furthering sustainable development in one or more countries outside of the United Kingdom, (b) improving the welfare of the population of one or more such countries, (c) relief aid or (d) a purpose which broadly corresponds to purposes (a), (b) or (c). “Sustainable development” is a broad concept under the Act and is stated to include “any development that is, in the opinion of the Secretary of State, prudent having regard to the likelihood of its generating lasting benefits for the population of the country or countries in relation to which it is provided”. In addition,?in order to?contribute to a fund, the?SoS?must be satisfied that the contribution “is likely to contribute to a reduction in poverty”.This programme meets the development assistance requirements of the International Development Act 2002 as it contributes to sustainable development in Colombia. The main aim of this programme is to reduce deforestation, leading to reduced greenhouse gas emissions, reduced poverty and conservation of biodiversity.?Forests are crucial for sustainable development as reflected in the Sustainable Development Goals. The funding provided by the programme benefits Colombia, an ODA-eligible country, and the TA activities contribute to capacity building within government agencies leading to the development and enforcement of land systems (pillars 1 and 2) and the enabling environments necessary to deploy sustainable economic alternatives through Pillar 3.Equality Act 2010 and gender considerations under the International Development Act 2002As per section 1(1A) of the International Development Act 2002, “before providing development assistance, the Minister shall have regard to the desirability of providing development assistance that is likely to contribute to reducing poverty in a way which is likely to contribute to reducing inequality between persons of different gender”; this programme will meet this requirement along with those of the Equality Act 2010. BEIS is required by the Equality Act 2010 to give due regard to the need to eliminate unlawful discrimination, advance equality of opportunity and foster good relations between those who share a characteristic and those who do not (including in relation to age, gender, disability, race, religion, pregnancy and sexual orientation). The duty applies to?all?of BEIS’ functions. Appropriate social safeguards will be ensured and BEIS expect suppliers and partners to factor equality-related considerations into the use of BEIS funds. See the Appraisal Case section on Equity for how this programme will ensure these considerations are effectively taken into account. Legal Compliance: State Aid [REDACT – legal advice]. MANAGEMENT CASEApprovals and AssurancesFollowing Ministerial approval, the?programme team will?negotiate the terms of agreement with?the delivery partners?in line with this Business Case. This negotiation will be overseen by the relevant specialist BEIS ICF teams in programme, finance, commercial, procurement and legal. Additional legal services will be provided by the external law firm Gowlings, as per existing service arrangements. Implementation will begin at the point of Ministerial approval. At this point, the governance controls embedded in the ICF programme management cycle, detailed below, will commence.?Programme GovernanceBEIS ICF has adopted the programme management approach set up by DfID which ensures a clear separation between those delivering and those checking against compliance and performance. Programme management will be led by the ICF programme manager and Portfolio Management Office (PMO) and structured around Project Delivery Plans (PDPs), Annual Reviews and Delivery Partner Reviews. These products ensure strong risk management, uphold safeguarding best practices, and provide clear governance and reporting processes. PDPs were adopted from DfID as best practice tools for delivering effective aid programmes and are embedded in the management of programmes across the ICF portfolio. The programme PDP, maintained by the ICF programme manager, contains the risk register, an issues log, a workplan, financial management information, the logframe and other important tools critical for the successful delivery of a programme.Monthly meetings will be based on reviewing the PDP to assess performance of the programme. Outcomes of the meetings will feed into the?monthly Dashboard and Quarterly Super Dashboard meetings; held to provide the ICF Senior Responsible Office (SRO) and Senior Management Team (SMT) with an oversight of the performance of this programme.?The three pillars of this programme have a degree of interdependence and complementarity. Programme governance must prioritise both successful delivery at the pillar level and coherence across them. BEIS ICF will ensure this coherence and maintain appropriate day-to-day and strategic control of the programme through the creation of a Programme Board and through regular working level (pillar level) coordination. The governance structure can be seen in Annex K.Subject to Ministerial approval, BEIS officials will establish clear terms of reference for the Programme Board including meeting protocols, frequency, ways of working and channels of communication. Initially the Programme Board will comprise BEIS, the World Bank and Government of Colombia but will be set up with the flexibility to bring other partners on board once the other pillars are active. At a working level, BEIS will convene regular meetings / calls with each delivery partner independently and include representatives from the Government of Colombia as required. The frequency of meetings will be determined by the needs of the programme or pillar but are initially planned to be six-monthly for the Programme Board and monthly at the working level. Both levels of governance will offer challenge, assess performance and provide policy steers. Accountability for allocating BEIS programme budget will rest with BEIS only. Each may incorporate the benefits of independent voices where necessary – both the World Bank and UNODC are open to exploring this. The BEIS staffing resources for the governance structures and programme management are described in the Financial Case. Delivery Partner Capability and GovernanceThe World Bank and UNODC are established multilaterals with the expertise and track record of successfully delivering programmes of this nature. The World Bank has undergone multiple performance and capability assessments (see Commercial Case) and is a tried and tested partner within BEIS’ ICF portfolio. This programme would represent the first BEIS ICF UNODC partnership, but early evidence from delivery teams in DfID and FCO, and BEIS scoping conversations with senior and working level UNODC staff have provided assurances of capability.The World Bank has already assembled a team to implement the national multipurpose cadastre project. This programme will utilise these resources including dedicated technical expertise a Senior Land Administration Specialist, a Team Task Leader (TTL), and the resources of a Finance Management Specialist, Procurement Specialist, Environmental and Social Specialists and consultants, as necessary from the Land Practice [REDACTED personal information]. UNODC will implement Pillar 2 though PROJUST, the existing crime prevention and criminal justice team within UNODC Colombia. The PROJUST team currently has a staff of approximately 50 persons working on illicit economies, protection of vulnerable populations and citizen security including environmental crime reform. Since BEIS ICF have not delivered through UNODC before, additional due diligence processes will be undertaken during year one to confirm the capability of UNODC Colombia. The assessment will include: UNODC completing a due diligence self-assessment based on a standardised DfID template, just as it would for any new DfID programme. The UNODC team is open to incorporating additional safeguarding assurances into as deemed necessary by BEIS requirements.A Delivery Partner Review (DPR) will be commissioned towards the end of year one, to assess UNODC in Colombia and the CSSF-UNODC partnership – essentially testing the approach, capacity and capability, and transferring some of the initial delivery risk.Results from the Multilateral Organisation Performance Assessment Network (MOPAN) review being undertaken on UNODC. Results are due by at the start of 2020.Monitoring and Evaluation StrategyMonitoring, Evaluation and Learning (MEL) work will be led and governed by BEIS’ programme manager and MEL team with the assistance of a learning contractor. The learning contractor will have no management role over delivery partners. This independent role will act as an adviser for reporting information and to lead on commissioned learning and evaluation studies where appropriate. The specifics of this role and how the contractor will fit into the governance dynamics of the programme will be defined as part of market engagement for procuring this partner and can be seen in the governance slide (Annex K) and in Figure 12.Core priorities will be the consolidation and reporting of data from delivery and government partners to BEIS and could also include developing baselining approaches, indicator methodologies and ongoing VfM assessments, where needed. The network of stakeholders developed by UK PACT will be used to engage the market and feed into the design of and scope of this work and the contractor will be secured through an open procurement process (possibly a framework) to ensure efficiency and transparency of process.Monitoring All ICF programming delivered by BEIS, DFID and Defra are subject to a common set of Key Performance Indicators (KPIs). The ICF team conducts a results collection exercise each year, which collates and aggregates results against the common KPIs at a portfolio level. The BEIS programme team will monitor activity and progress against logframe milestones and Annual Review recommendations on a continuous basis. Programme performance is collated and reviewed in BEIS monthly ICF Operational Board meetings and a quarterly Super Dashboard meeting, attended by Deputy Directors and Directors of BEIS specialist teams. These reporting lines and flows of information can be seen in Figure 13. Figure SEQ Figure \* ARABIC13 - Lines of AccountabilityAs discussed, a learning contractor will assist the BEIS MEL team in monitoring this programme. Their primary monitoring role will be to work with the delivery partners and Government of Colombia to collect performance and financial data being reported for each pillar, consolidate it, and communicate it back to BEIS. Quarterly reports will be provided by each delivery partner and contain financial, programme progress and risk information. Annual reports will align with and form the basis for Annual Reviews. All BEIS Annual Reviews are published online. Financial audit reports will be provided annually or as required. In the case of UNODC specifically, financial audits are only conducted on UN agencies by UN oversight bodies (i.e. the UN Board of?Auditors and the Office of Internal Oversight Services). However, any downstream execution of funds will be required to allow external audits and make the results available to BEIS as and when necessary.EvaluationImpact evaluations on the interaction between formalising land tenure, enforcement and the provision of sustainable economic opportunities are lacking but critical for ensuring effectiveness. The ICF programme and MEL teams will commission any mid-term / end-of-programme impact evaluations, as well as any others needed for specific learning outcomes. These evaluations will meet BEIS standards, OECD DAC Criteria on evaluation and DfID’s Ethics Policy for Research and Evaluation. The learning contractor will carry out these functions either internally or by subcontracting to bring in external expertise.Taking a phased approach to this programme provides evaluation and learning opportunities at several logical points. These evaluations will strengthen the evidence base for later phases of the programme, maximise the demonstration and lesson-learning potential, and provide information to support the ongoing programme management. Independent evaluations / learning exercises will be carried out to help refine programme design, make management decisions, course correct, or in extreme circumstances postpone or halt further activity. These evaluations are expected to include:After Phase 1: The BEIS programme team will assess the outputs from pillars 1 and 2, the contextual environment in our target municipalities, and therefore the readiness of the environment Phase 2; for the creation and promotion of sustainable economic alternatives. Specifically, when to begin implementation and point towards the detail around opportunities, sector, scale and location. Mid-term evaluation: At the discretion of the BEIS programme managers, and based on the needs of the programme, an additional mid-term evaluation may be carried out to assess progress, indicatively in year 4.End of programme evaluation: When the programme approaches its end date (currently scheduled for 31st December 2026) BEIS will decide how an evaluation should be delivered for programme closure or extension as necessary.The approach to learning and evaluation taken by this programme is adaptive to ensure lessons learned can be fed back into programme design and implementation. The role of the learning contractor in evaluation and learning will be to, where necessary based on the needs of the programme, undertake these independent evaluations or learning exercises either in house or by sub-contracting.Risk ManagementBased on the Risk Potential Assessment (RPA) (Annex N – REDACTED formulation of government policy), and taking into additional consideration, the complexity of delivering in Colombia, and the uncertainty around Pillar 3, this programme has been assessed to have a risk rating of “Major”.This rating is in line with BEIS ICF’s accepted risk appetite, on the basis that the programme is part of a portfolio with a balanced risk profile and that activities under this programme are critical to reducing deforestation in Colombia. The BEIS ICF portfolio risk appetite reflects the Department’s investment strategy, and priority geographies, including Colombia. The categories of risk reflect the latest DfID risk framework. ICF has a low appetite for fiduciary, compliance, operational and reputational risk, and a higher appetite for delivery risk (the risk of projects failing) and external context risk.The BEIS ICF portfolio includes several existing investments in rural, forested areas of Colombia. By learning lessons from these existing programmes and close partnering with the Conflict, Stability and Security Fund (CSSF) and Embassy security team, BEIS ICF is now much better equipped to incorporate conflict sensitivity into programming.Financial monitoring and risk and issue escalation in the programme will be led by the BEIS ICF programme manager and reported to PMO and the SRO as per ICF process expectations. Risks will either come directly to BEIS from delivery partners, via the learning contractor once procurement is complete, or from the BE Bogota climate and political teams. Programme-level risks will be escalated from risk registers in PDPs as necessary and discussed at the PDP meetings. A portfolio-wide risk register, which captures?portfolio delivery, strategic, policy, reputational and operational?risks will also be assessed. The PMO team will work with the programme manager to?continually strengthen capabilities to align and improve the quality of risk management for this programme.Risk descriptionLikelihoodImpactCategoryMitigation PlanExternal context: Conflict and insecurity deteriorates to such an extent that implementation is prohibited. This could include a deterioration of the security dynamic due to remilitarisation of ex-FARC rebels which could cause the programme municipalities to fall back into conflict. MHMajorOngoing political assessment of security situation in country. Phased approach to programme management and decisions to implement will take the security profile of the programme areas into account. Intelligence suggests chances of this happening at a scale to effect programme implementation is low. Programme is proactively working in areas that have been affected by conflict, so this risk is unavoidable. By working collaboratively with UK CSSF, who have a higher risk appetite, it can to a small extent be transferred. The BEIS portfolio includes several existing investments in rural, forested areas of Colombia, set up during the conflict era.? Through lessons from these existing programmes; and close partnering with the Conflict, Stability and Security Fund (CSSF) and Embassy security team, BEIS ICF is now much better equipped to incorporate conflict sensitivity into programming. Risk mitigation strategy involves working in a variety of municipalities across several departments to reduce the likelihood of this risk affecting at a programme level. Risk identification and management is also through close working with political and security teams in BE Bogota and with trusted delivery partners who will identify and manage these risks in real time and on a local basisDelivery: Poor inter-institutional coordination hampers implementation MMModerateRelationship between MADS (Environment Department – Spanish Acronym) and DNP (Planning Department – Spanish Acronym) can be challenging. As MADS build capacity and take a leadership role in the environmental cadastre, DNP will have to continue to relinquish some control – the steer from the presidency is to allow MADS to lead this work. We will continue working directly with MADS as they build capacity, diplomatic efforts from embassy colleagues will be crucial.External context: Change of government or leadership results in loss of political support for land reform and successful implementation of the multipurpose cadastre operation LHMajorThe programme involves close ongoing political dialogue with the partner government, sub-national leaders and senior officials to support proactive regulatory reform, building on existing BEIS relationships. Diplomatic efforts through the Embassy and policy influencing and high level engagement through the BEIS ICF UK-Col Climate Partnership will be crucial to minimising this risk to ensuring ownership by any new government and commitment to the programme goals. The next national elections are currently scheduled to take place in June/July 2022. The timing of Phase 2 and the inception of Pillar 3 will factor this, and the preceding Purdah period, into account. Delivery: Delivery partners fail to perform to expected standards (UNODC is an untested delivery partner for BEIS and Pillar 3 partner yet to be selected)LHModerateRigorous risk management procedures are in place to regularly review performance of partners throughout the duration of the programme. Fiduciary: Fraud and / or corruption affects programme, reducing ability of programme to deliver outputs effectively and causing reputational damage to programme and wider ICFLMMinorRigorous financial management procedures place by trusted partners limiting the risk of fraud, waste and abuse of finance. Financial audits will be carried out or reported on as necessary, due diligence on new partners, ongoing VfM assessments through annual review processDelivery: Programme fails to have the desired impact of reducing deforestation e.g. BEIS intervention shifts deforestation to other geographies, supporting land registry systems creates a platform for producers to reinvest leading to expansion of activities and further deforestation pressure.LMModerateLeakage is a risk with all investments in climate change mitigation and reducing deforestation. Reducing leakage is part of a long-term transformation and there is little choice but to tackle the problem jurisdiction by jurisdiction (municipality by municipality). The risk will be partially managed by working across whole municipalities in what is a decentralised land system and nesting targeted enforcement support within these municipalities.Fiduciary: Reputational risk from illicit economy (e.g. coca crops in target regions)HLModerateIn order to address deforestation in these regions, we must work where coca production and illegal land clearing is a driver. The mitigation strategy taken by other ICF programmes (e.g. P4F) affected by this risk is to continue to work through a positive relationship with recipient land users, communicating that it is critical our project is not linked by any means to coca cultivation or production.Delivery: Changes caused by the programme during implementation are not sustainedLMModerateIntervention has been designed alongside a national scale government led initiative. This gives it a resilience to change that a smaller scale programme would not have.Delivery: Coordination between delivery partners and relevant GoC agenciesMMModerateRelationships between delivery partners (WB, UNODC and as yet undecided third pillar) and between the agencies of the government of Colombia (notably MADS and DNP) are continually managed by the political and climate team in BE Bogota. There will be a cross-programme platform set up to ensure all partners are working collaboratively where necessary.Safeguarding risk due to focus on sensitive land and resource issues, in areas that are contentious or volatile. HLModerateOngoing work with delivery partners to ensure they are considering ESG during implementation. The programme will undergo an Overseas Security and Justice Assistance (OSJA) assessment, signed off by HMA Colombia to ensure that the programme meets HMG human rights obligations and values.Figure SEQ Figure \* ARABIC14 - Risk ManagementANNEXES39204903166110Figure SEQ Figure \* ARABIC15 - Map of Colombia with Guaviare highlightedFigure SEQ Figure \* ARABIC15 - Map of Colombia with Guaviare highlightedright801500Annex A – Ground Truthing the Theory of ChangeEvidence from a field mission to open a dialogue with stakeholders in GuaviareThere is a current “boom” in the land market in Guaviare and across the Amazon region. However, it often does not benefit local communities as many of the buyers come from outside the region to acquire sometimes enormous amounts of land (some have bought 5.000 ha, displacing an entire Vereda and are now the sole owners of land that was used by 30 families). This land grabbing is mainly used to transform forest into extensive and inefficient cattle-ranching (e.g. one cow for every two hectares), and sometimes for illicit crops. 90% of Guaviare falls under Forest Reserves of Ley Segunda, indigenous reserves and National Parks, so people are buying and selling land owned by the government. Since these territories don’t have a cadastral system, there is no clarity of land ownership or possession.There is a general understanding and agreement of the main drivers of deforestation in this region: land grabbing, cattle-ranching and illicit crops. Every stakeholder understood the gravity of the situation, and deforestation was one of the main concerns in the region. Domestic media attention has also contributed to this, as many recognised that recent articles on deforestation are creating awareness in communities. However, we also heard that there is prevalent misinformation from the media especially on security, and this can negatively impact communities and tourism flows to the region.The best way to describe the current situation in Guaviare is a “tensa calma”. Dissidents and paramilitary groups present in these areas often have agreements on how to informally manage the territories and routes to avoid armed confrontations between them, creating a false “safe environment”. As a result, people are now able to access new territories and move relatively easily across the region. However, there is a culture of silence across stakeholders; land users know who is behind the deforestation but are unwilling to report them to authorities, making control and enforcement difficult to implement.From the many perspectives heard, in order to stop the current land grabbing and deforestation trends, we must prioritise formalising land usage rights and improving control and enforcement measures, as the necessary enabling conditions for sustainable land management.Annex B – What type of partner? MCA [REDACTED - Commercial interests (S43); Formulation of Government policy (S35)]Annex C – Pillar 1 delivery assessment [REDACTED – International Relations interests (S27); Formulation of Government policy (S35)]Annex D – Pillar 2 delivery assessment [REDACTED - International relations (S27); formulation of Government policy (S35)] Annex E – World Bank VfM Information [REDACTED - Commercial interests (S43)]Annex F – UNODC VfM Documentation [REDACTED - Commercial interests (S43)]Annex G – Indicative Budgets for Pillars 1 and 2Pillar 1 – World BankPillar 2 – UNODCAnnex H – Theory of ChangeAnnex I – LogframeSee draft attached separately. To be finalised within three months of programme approval.Annex J – Flow of FundsThe following table and diagram (also in the Financial Case) provides detail on the flow of funds from HMG to eventual recipients1Spending review decision2Business case approval, due diligence and contribution arrangement3Payments made to World Bank via promissory note lodged and drawn down on as set out in schedule4Payments made to UNODC via promissory note lodged and drawn down on as set out in schedule5Payments made to learning contractor as laid out in contract, post ITT. Contract total and additional to cover mid-term, end-term or specified programme evaluations or learning exercises.6Funding managed at World Bank within Multi Donor Trust Fund (MDTF)7Management fees for programme paid including those involving the Advisory Committee8Management fees for programme paid including those involving the Executive Committee9Funding disbursed to and managed by (with Bank oversight) by the National Patrimony Fund or Action Fund, a non-profit-making fiduciary arm of the Government of Colombia in line with schedule10Allowances for role for MADS to play in financial oversight as their fiduciary capacity is built11Payments made to IGAC12Payments made to IDEAM13Payments made to UPNN14Payments made to MINAMBIENTE15Procured contracts to consultants and technical advisors, bound by the policies of the Bank and GoC16Management fees for programme paid including those involving the Steering Committee17Funding disbursed to PROJUST who will implement the programme18Management fees for programme paid including those involving the Technical Committee19Payments made to Humboldt Research Institute (government administered NGO)20Payments made to Office of the Attorney General21Payments made to National Policy (with the Defence Ministry)22Payments made to IDEAM23Payments made to local authorities / local mayors24Payments made to URPA25Payments to consultants of learning contractors, bound by terms in the ITT/TOR and BEIS procurement policies.Annex K – Governance of ProgrammeAnnex L – OrganogramsWorld Bank StructureUNODC StructureAnnex M – DfID Framework for Due Diligence Self-Assessment - UNODCAttached separatelyAnnex N – RPA completed and approved by PIC secretariatREDACTEDAnnex O – Comparison of single version multiple partners [REDACTED – International Relations]Annex P – BEIS’ FLU Portfolio SummaryNamePartner(s)CommitmentObjectiveSustainable Cattle Ranching ProgrammeWorld Bank?15mHas supported 4000 farms, in every region of Colombia, to deploy innovative agroforestry systems that increase milk/beef yields, reduce input costs, and reduce soil erosion?Forest Carbon Partnership Facility – Carbon FundWorld Bank?142mSupporting development and implementation of up to 18 national/subnational low deforestation rural development plans with results-based finance based on tonnes of CO2 emissions reduced?BioCarbon?Fund Initiative for Sustainable Forested LandscapesWorld Bank,?IFC?50mIn Colombia, Mexico, Ethiopia, Zambia and Indonesia implement?‘landscape’ approaches to account for and reduce emissions from agriculture and deforestation, in close partnership with private sector actors, providing a mixture of technical assistance and results-based finance based on tonnes of CO2 emissions reduced???REDD for Early MoversKFW?73mSupporting governments and tens of thousands of farming and?indigenous families with results-based payments in Colombian and Brazilian Amazon,?enabling?them to?grow a sustainable rural economy and halt forest loss?Partnerships for Forests (P4F)Palladium, McKinsey?19mIncubates innovative farming and forestry businesses that, with targeted support from commercial experts and/or by enabling local or?market reforms, can attract commercial investment within two years?Green Climate Fund (GCF)GCFc. ?68m (share of larger investment)Major multi-sector fund that includes a range of support for sustainable land use and REDD+.Annex Q - Evidence Review Several literature reviews were undertaken to evidence the approach set out in the Strategic Case and the assumptions that have been made in the Theory of Change. The themes of the literature review are set out in a series of statements.Land formalisation and regularisation leads to increased tenure security.Improved land governance and improved tenure security leads to reduced deforestation.Improved tenure security increases investment in sustainable economic alternatives.Increased access to credit incentivises the establishment of sustainable economic alternatives and avoids deforestation.Improved institutional capacity and enforcement reduces deforestationThe evidence related to these statements are summarised using two criteria, set out in the table below.Quantity of Evidence reviews the amount of information related to the statement i.e. number of peer reviewed journals, programme results and other grey material.Strength of Support reviews to what extent the evidence consistently supports the statement.LackingOnly a small amount of evidence related to the statement, predominantly grey material rather than peer-reviewed journalsWeakEvidence does not support the statement and the findings are inconsistent.Medium Reasonable amount of evidence related to the statement, including a number of peer reviewed journals.MixedSome evidence supports the statement and the findings are broadly similar.ConsiderableLarge amount of evidence related to the statement, including a good mix of peer-reviewed journals and programme results.StrongMajority of evidence supports the statement and the findings are consistent.Land formalisation and regularisation leads to increased tenure security.Quantity of EvidenceStrength of SupportMediumMixedThe literature notes that it is an oversimplification to equate tenure security with acquiring a land title. However, it is generally true that people with formal documentation display higher levels of security than those with no documents at all. Prindex data observes this overall in Colombia at a national scale and in individual regions. A study in Argentina found that including women in land titles reduced fertility and increased investment in children's human capital, both of which are potential proxies for increased security.The literature also highlights that land titles only increase tenure security when there is also state enforcement of property rights. Even though increased security is one of the main motivators for attaining a title, landowners expect many forms of tenure insecurity to persist, such as theft. It should also be noted that when land titling overturns customary land rights or creates overlapping claims, it can create conflict and decrease tenure security.Improved land governance and improved tenure security leads to reduced deforestation.Quantity of EvidenceStrength of SupportConsiderableMixedEvidence from Brazil suggests that registration and land-use behaviour are related, but the?degree to which?land registration?positively?impacts?land use behaviour is contested.?Early?studies in Mata Grosso suggest that property registration has little impact on avoided deforestation. However, more recently, small but significant reductions in deforestation among small properties were?found in?Par?a. Other studies have found small effects that depended on property size and location. The?most positive evidence for?the relationship between land registration and avoided?deforestation?found that deforestation?would be?approximately?10% higher?in Para and Mata Grosso?in the absence of the Rural Environmental Registry (CAR – Portuguese acronym).The literature overwhelmingly agrees that overall, land rights are fundamental for deforestation outcomes however the quantity and strength of support depends on the targeted group. For example, a large amount of evidence shows positive outcomes from titling or formalising rights on community and indigenous lands. A systematic study of 80 cases of forest management across Asia, Africa, and Latin America, found that community ownership of forests led to lower consumption of forest products, thus greater protection of carbon storage benefits as well as livelihoods benefits. In a review of the REDD+ initiative in Brazil, Cameroon, Tanzania, Indonesia, and Vietnam, Sunderlin et al (2014) found that establishing security of tenure for forest dwellers ensures protection of forests for greater carbon sequestration. Similarly, a study of forests in Bolivia, Brazil and Colombia found that areas managed by indigenous people saw a deforestation rate between 2 and 2.8 times lower than non-indigenous managed over a 12-year period.Evidence of the relationship between land tenure and deforestation outcomes in non-indigenous and non-community lands is scarce. To date,?Assuncao?&?Szerman?(2018) is the only study to look specifically at the effects of titling private land on forest?cover. They found that in Brazil titling reduces deforestation?considerably,?but the effect is not homogenous.?In particular, effects?are smaller in parcels with high initial forest cover and where cattle grazing is the main economic activity.? Moreover, evidence found that titling may even accelerate deforestation in large parcels.An increase in farm productivity, as a result of increased tenure security could theoretically decrease deforestation as higher yields reduce pressure to convert additional forest land; there is a broad evidence base of the channels through which increased tenure security can impact on agricultural intensity, most recently summarised in Lawry et al (2017). However, the longer-term impact on deforestation has been less of a focus in the literature. A greater focus is placed more broadly on the impact on preserving natural habitat, however a handful of studies have shown that higher farm productivity can help reduce the conversion of natural habitat to agricultural land. It is acknowledged within the literature that agricultural intensification is not a silver bullet to conserve tropical forests; effects will vary with the type of intensification and with the institutional and policy contexts. For example, farmers may decide to invest in expansive instead of intensive agriculture and apply more fertilizers that may affect downstream water quality. On the other hand, tenure security has been shown to produce positive externalities such as increased investment in soil conservation activities.Improved tenure security increases investment in sustainable economic alternatives.Quantity of EvidenceStrength of SupportConsiderableStrongThere is widespread evidence for the causal relationship between increased security and increased investment. For example, Prindex data shows that in Colombia 77% would invest more in their property if they had absolute certainty of not losing the property in the next 5 years, although this would only happen if the respondent’s confidence in enforcement of property rights raised significantly. Recent DFID-funded research found a medium-sized, high-quality body of evidence which supports an association between secure property rights and long-term economic growth and with investment from private firms. In a systematic study of 20 quantitative and 9 qualitative studies, Lawry et al (2014) found a 40% increase in investment (corresponds to 15% income increase) if land tenure is secure. A study of 33 countries found that stronger property rights were associated with a 5% increase in GDP growth, while a study of 108 countries found that stronger property rights were associated with an increased average annual growth of per capita income by 6 to 14 percent. Another global study of 101 countries found that more secure property rights were associated with higher private investment. These studies emphasise that the positive economic effects of tenure security rely on wider socio-economic factors such as social polarisation, political stability and quality of financial and product markets, and that effects vary greatly.There is also a large body of evidence supporting the relationship between tenure security and sustainable investment. In a systematic review of 36 quantitative and 23 qualitative studies, Higgins et al (2018) found that land tenure security had positive effects on productive and environmentally beneficial agricultural investments. Programme results also support the relationship, the ProCerrado programme in Brazil led to 38,017 land users adopting sustainable land management (exceeding targets) after having their landholdings enrolled in the CAR. In a Rwandan land tenure regularisation programme, the pilot participants doubled their investment in soil conservation with a larger increase for females. Increased access to credit incentivises the establishment of sustainable economic alternatives and avoids deforestation.Quantity of EvidenceStrength of SupportConsiderableMixedThere is mixed evidence between improving credit access and whether that leads to establishing sustainable alternatives that decrease deforestation. Credit access is often important in efforts to intensify production and can therefore reduce pressure at the forest frontier. Many small-scale farmers in the Cerrado biome mentioned the lack of funds available to for investments in high productivity agricultural production in order to increase profits. Programme evidence suggests that credit incentivises the establishment of sustainable business. For example, by making farmers aware of the availability of credit sources the Colombia SPS programme has led to 2899 ha (end of project target is 4,500) of farm being converted into SPS. However, some studies have found a positive and significant correlation between credit and deforestation. Although when rural credit became conditional upon stricter environmental restrictions in Brazil, deforestation reduced, it was concluded that this was mostly due to the tightened credit constraints for farmers that decreased the availability of capital. Therefore, increased credit access may increase deforestation, especially in cattle farming areas. An increase in the amount of bank branches and in deforestation was also found to be correlated in the Brazilian Amazon.The lack of input access due to bad infrastructure and high transaction costs presents an additional barrier to intensifying production. During the CARE project in Guatemala the lack of markets and the frequency of wildfires were identified as constraints for additional investment for sustainable alternatives. Additionally, the poorest may prioritise stability over profit and therefore not want credit; 40% of those interviewed in Peten, Guatemala said they did not want credit, and seemed to worry about losing their land, increasing interest costs and the risks associated with a loan. Food security is a major concern for small-scale farmers in Peten and therefore they may prioritise stability over profit. Improved institutional capacity and enforcement reduces deforestation.Quantity of EvidenceStrength of SupportLacking/MediumMixedMany studies acknowledge that enforcement is crucial in supporting other forest-conserving policies. Without law enforcement, other forest management policies such as protected areas, timber sustainability certification schemes, payments for environmental services schemes and even community-based management cannot function effectively.The availability of timely and accurate remote sensing data is critical to quick enforcement in new areas of deforestation. Assuncao (2014) estimates that, after the adoption of DETER-based monitoring, increased intensity of law enforcement helped avoid approximately 62,000 square kilometres of Amazon forest clearings from 2007 through 2011. Furthermore, the same study estimated that deforestation from 2007 through 2011 was 75% less than it would have been in the absence of fines.Empirical studies on enforcement show positive evidence. In Brazil a 1% increase in the number of fines per deforested area in a municipality has reduced deforestation by on average 0.2%. The main challenges for enforcement are the high costs of field-based enforcement in the Amazon region and the low collection rate of fines; Less than 9% of fines issued from 2011-2015 in the Brazilian Amazon were collected. For the enforcement to be effective, the fines should be perceived as fair. The public desire not to enforce the law due to the high costs for farmers was identified as one of the key obstacles for optimal enforcement. Additionally, having a centralised enforcement strategy allows for the efficient allocation of resources.Approximately 50% of the deforestation slowdown since 2004 can be attributed to changes in the Brazilian forest governance regime. However, beyond Brazil there is currently limited evidence linking the effectiveness of institutions and deforestation. ................
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