CONTENTS (click here for download full version)
Program Development Objective
The PDO for PNPM Peduli is: “Improved capacities of Indonesian CSOs to reach and empower marginalised groups to improve their socio-economic conditions”. The Program has three components with objectives that reflect the chain of influence described above:
- Component 1: To create partnerships between CSOs and community based groups to address development priorities of marginalised groups;
- Component 2: To strengthen local CSO capacities to implement participatory and gender inclusive development programs; and
- Component 3: To strengthen capacities of Executing Organisations to manage grants, build CSO capacity and engage with GoI.
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PNPM Peduli Theory of Change
The theory of change explains how PNPM Peduli is expected to achieve its PDO through an intended chain of influence. The premise of the program is that certain groups are not reached by ‘mainstream’ development programs because of social and economic exclusion, together with internalised and external stigmatisation. As a result, their needs remain invisible and their opportunities for participation is severely limited. However, through opportunities to build their capacities and awareness of rights, marginalised people are more able to enagage with others to take collective action to better use their limited assets for livelihoods, increase their skills to mobilise other resources and demand better services. This contributes to improvements in governance, social and economic opportunities, access to and quality of services and citizen empowerment. Engagement with the broader community and government in turns influences perceptions about the potential of marginalised people to contribute to development and helps to build social cohesion and social capital. Specific attention to marginalised women has a multiplier effect as it not only promotes gender equality, a Millenium Development Goal in its own right, but also brings about exponential social and economic benefits for their families and wider communities.
Local CSOs in Indonesia are regarded to have comparative advantage in working with marginalized groups because they work at the grass roots level. PNPM Peduli can leverage this potential and scale up change by strengthening CSO capacities and helping them to become more effective and sustainable organisations. This will be done through financial, capacity building and knowledge management support for their programs. This leveraging can be done most efficiently by working through national CSOs as implementing teams, with back up support from PSF.
: Chain of Influence
Figure 1 describes the influence chain between different actors in the program. Using a values- and assets-based approach to promote transparency, accountability, participation and gender and social equity will encourage a two way flow of influence rather than simply top-down.
Clearly some impacts will not be substantially felt by beneficiaries for a number of years after the Program ends. Through the monitoring, evaluation and learning (MEL) system, knowledge will be generated to better understand the potential and limits of the program in being to influence the well being of marginalised groups and the dynamics of the interplay of external factors. This knowledge allows PNPM Peduli to identify the more appropriate strategic interventions and to report realistically on its results.
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PNPM Peduli Values and Principles
Selected Executing Organizations in the pilot phase (June 2011 – December 2012) developed and agreed to the following values and principles that they believe guide the way that they work:
- Transparency and Accountability
- Social and gender equity
- Social justice
- Tolerance and pluralism
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Grant and Sub-grant Partners
- Executing Organizations (picture above in green): are national partners that have been awarded a grant from the World Bank to partner with local organizations working with marginalized groups. EOs award and administer sub-grants to Primary Partners and Tertiary Partners. Their role is outlined in the section below. In the pilot phase there are 3 EOs
- Primary Partners (pictured above in blue): are local CSOs/branches that have received a sub-grant from an Executing Organization and are conducting activities at the local level with marginalized groups.
In the pilot phase there are 56 Primary Partners
- Intermediary Partners: are national partners that have been awarded a sub-grant from an Executing Organization to award and manage sub-grants to Tertiary Partners. IPs fulfill the same role as the EOs including coordinating the provision of capacity support, monitoring and evaluation of activities : In the pilot phase there are 3 IPs It is intended that well performing IPs will graduate to EO status in Phase II (Jan 2013)
- Tertiary Partners: are local CSOs/branches that have received a sub-grant from an Intermediary Partner and are conducting activities at the local level with marginalized groups. Ø In the pilot phase there are 10 TPs Ø In Phase II, TPs will become Primary Partners under an EO.
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Anti Corruption Policies
- The “World Bank Guidelines on Preventing and Combating Fraud and Corruption in Projects” dated October 15, 2006 and revised in January 2011, outline the need to prevent and combat fraud and corruption, including in recipient-executed trust fund grants.
- All CSO staff involved in PNPM Peduli must sign the PNPM Peduli Integrity Pact that outlines ethical standards of practice expected by the program.
- The following anti-corruption provisions apply at the grant and sub-grant level:
Enhanced Disclosure Provisions and Transparency
- Executing Organizations are required to simplify disclosed materials and make them readily available to the public. This can be through the Executing Organization’s website. Specific disclosure measures related to information will include, but not be limited to:
- Overview of activities and locations of the project;
- Public disclosure of annual procurement plans and schedules (and their updates);
- All short lists of consultants contracted for the project will be made publicly available in accordance with World Bank consultant guidelines (Guidelines Selection and Employment of Consultants Under IBRD Loans and IDA Credits and Grants by World Bank Borrower or Recipients - January 2011 (herein after referred to as “Consultant Guidelines”);
- All information regarding contracts awarded will be publicly disclosed;
- Disclosure of audit reports and mid-term reviews;
- Available conduits/channels for complaints.
- PNPM Peduli recognizes that greater oversight by communities is likely to reduce the risk of corruption and misuse of power. Beneficiary participation and empowerment are core values of PNPM Peduli that will be operationalized by putting in place mechanisms for enabling the active participation of program beneficiaries in all phases of the sub-project cycle, including design, monitoring and evaluation. Mechanisms are also in place to enable beneficiaries’ access to key information regarding the program and its sub-projects.
- Opportunity for collusion and fraud exist in any project. However, due to the participatory and transparent nature of PNPM Peduli, many of the possible risks are significantly reduced. Transparent procurement under the program with appropriate oversight is the starting point for reducing the likelihood of collusion. Performance of project consultants/contractors/suppliers will be monitored and evaluated by the PNPM Peduli team. Interim audits by the Bank will be conducted if necessary in addition to EO’s internal control arrangements.
- A complaints handling system is housed in the program Management Information System (MIS) to allow beneficiaries and other stakeholders at all program levels (including sub-grantees, EOs and the general public) to lodge complaints and receive feedback and resolution on aspects related to project implementation.
- The complaints handling system is currently being tested to ensure it is accessible to a range of stakeholders and different groups (including indigenous people) engaged in PNPM Peduli and ensure it is responsive and accountable to them and other relevant stakeholders. It is intended it will use an SMS gateway. The system builds on lessons learned from programs including PNPM Mandiri.
- The PSF is responsible for coordinating and managing the complaints handling system and providing program implementers with training. This includes managing the database of complaints lodged, follow-up actions taken, and sanctions applied and this will be publicly available. The aim is to increase participants’ involvement in the program and increase the likelihood of them raising concerns. The PSF will ensure that complaints will be addressed and resolved in a professional and timely fashion, and without risk of reprisal to 'whistleblowers' in public.
- Important lessons learned from resolved issues will be communicated through discussions and/or website to reduce the likelihood of recurrence.
Sanctions and Remedies
- Clear sanctions and remedies are an important final step in the effort to fight corruption. This project will apply a zero-tolerance policy to corruption. Evidence of corruption, collusion or fraud will be grounds for terminating the relevant grant agreement, possibly with additional penalties. In cases of corruption, disbursement can be suspended or stopped completely if cases are not dealt with effectively.
- Local CSOs and sub-national branches follow the systems of their Executing Organization partner in applying sanctions and remedies related to mismanagement or corruption in sub-grants and funds allocated for PNPM Peduli supported projects. Where necessary, Executing Organizations may amend their sub-grant agreement or in extreme circumstances, terminate the agreement.
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Social and Environmental Safeguards
- Executing Organizations are responsible for ensuring that the CSOs partners comply with World Bank safeguard policies and have systems in place to mitigate environment and social safeguard risks. The World Bank provides training and ongoing support to assist Executing Organizations in establishing their capacities, systems and tools to identify and reduce potential safeguard risks.
- Below is the list of activities that are banned under the World Bank and Social Environmental Safeguard Policies:
(a) Activities related to the military or army; activities related to political practices or parties.
(b) Building/rehabilitation of government offices or religious facilities.
(c) Purchase of chainsaws, weapons, explosive materials, asbestos, or other environmentally destructive materials (such as pesticides, herbicides, prohibited drugs, etc.)
(d) Purchase of any fishing boat with capacity above 10 tons and any related equipment (e.g. drag nets).
(e) Government officers' salary.
(f) Activities using child labor (below working age) per regulations of the Borrower.
(g) Activities related to the production, storage or sale of goods with tobacco content.
(h) Activities in locations which are stated as a natural preserve per the regulations of the Borrower, except in any case in which there is a written permit from the official responsible for management of any such locations.
(i) Activities for mining or collecting or usage of reefs.
(j) Activities related to management of water resources from any river that flows from or to a country other than the territory of the Borrower.
(k) Activities related to relocating river lines.
(l) Activities related to reclamation of land of more than 50 hectares.
(m)Building any new irrigation network with an area of more than 50 hectares.
(n) Activities to build a dam or water tank with large capacity of more than 10,000 cubic meters.
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Executing Organization Eligibility Criteria
- Have existed as an organisation for the past two years and have documented external audit reports for the past two years;
- Have an Operation Manual outlining clear standard financial and operational procedures for program and financial management;
- Be willing and able to establish a separate account in the name of the Project or have an accounting system to adequately separate Project funds; and
- Be willing and able to be audited by an external independent auditor on an annual basis for the duration of the Grant Agreement.
Grant Model A: Capacity and Experience
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Role of Executing Organizations
The role of Executing Organizations is to:
Manage primary sub-grants/funding to local CSO/branches
- Supporting local CSO/branches to develop high quality proposals;
- Administering and managing sub-grant/funding agreements with local CSOs/branches in accordance with the Operational Manual;
- Submitting quarterly Financial Monitoring Reports (FMR) according to World Bank guidelines including reporting on expenses, procurement and activity components;
- Receiving and reviewing financial and activity reports from local CSOs/branches that will form the basis for FMR reporting to the PSF;
- Assess to what extent the mechanisms and processes used by CSOs or branches are adequate to ensure that sub-grants are managed in a way that: (a) is fully participatory; (b) mitigates against the risk of fraud, corruption, or elite capture; (c) ensures full transparency and accountability to the end users and to the CSO over the use of resources; (d) provides recourse to beneficiaries to complain in case of (perceived) abuse of funds; and (e) allows for systematic follow up and supervision of the use of sub-grants.
- Strengthen the capacity, systems, and processes of CSOs and Branches to ensure the mechanisms and processes for the administration of sub-grants are adequate.
Support activities of local partners working with CSOs/branch partners
- Selecting suitable partners (local CSO/branches) and project activities utilizing the Operational Manual guidelines to ensure that the right partners are selected and the target marginalized groups are reached;
- Oversight to activities conducted by local CSO/branches including collection and review of activity reporting, monitoring progress towards set project objectives.
Strengthen capacities of sub-grantees
- Conducting an initial assessment (combining self-assessment) of local CSO/branches’ financial and programmatic capacities;
- Developing Capacity Development Plans together with each CSO/branch that identify institutional capacity needs and plans for implementation of relevant support;
- Implementing and managing capacity building to partners, including contracting external training providers where required.
Contribute to project knowledge sharing and learning
- Through project implementation, testing the Operational Manual throughout the pilot phase and providing feedback during review sessions to fine tune the Manual and project implementation;
- Ensuring experiences and lessons learned are shared across the local CSO/branch network supporting documentation of good practices and lessons learned;
- Engaging in periodic Knowledge Sharing sessions across the Peduli network to promote cross-sharing of information and learning.
Receive Capacity Support
- Identifying their organizational needs and engaging in capacity support throughout the duration of the Grant Agreement in order to strengthen their management capacity and sustainability.
- Based on their expertise, experience, lesson learned and good practices, Executing Organizations play crucial role in selecting quality partners in implementing PNPM Peduli, actively initiate and engage in capacity building activities and monitoring and evaluation of their partners.
- Executing Organizations actively engage in the learning environment, with the other Executing Organizations and their local networks, to enhance project results, promote sustainability and maximize project impacts.
- Executing Organizations demonstrate a commitment towards strengthening their management capacity through identification of relevant and sustainable capacity building needs and provide capacity support to their sub-grant partners for the duration of the funding agreement.
- Executing Organizations are responsible to carry monitoring and evaluation activities throughout the life of PNPM Peduli. With their own monitoring and evaluation system, Executing Organizations and their sub-grant partners promote participation, gender inclusivity, downward accountability, learning and focus on emerging changes.
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Selection of Executing Organizations
Executing Organizations were selected through a competitive process outlined below:
- Initial Mapping and Shortlisting of Potential Executing Organisations. Under two type of models (Model A – traditional grant making organizations that provide grants to local CSOs, and Model B – mass membership based organizations that provide funds to local branches of their own organization). These organizations were invited to join design process of the program so that systems and mechanisms were appropriate and responsive to the way CSOs work as well as meeting core World Bank requirements.
- Verification Process (with CSO experts and practitioners). The list of eligible organizations was reviewed by an external list of CSO experts and practitioners to ensure those on the list were eligible and that there were no potential organizations missing from the list.
- Pre-Proposal Submission Stage: Shortlisted organizations were invited to submit a form of expression of interest where they outlined why PNPM Peduli supported their mission and the types of activities they would support if they were selected as an Executing Organization.
- Appraisal and shortlisting. Eligible organizations were shortlisted based on pre-proposals under Model A and B and invited to submit full proposals.
- Pre-proposal Meeting and Writing Clinics (including sharing of selection criteria and scoring) All shortlisted organizations were provided with support to finalize their proposals. This included the opportunity to present and discuss their draft technical proposal with the task team, and draft budget with the fiduciary team.
- Selection of final EO candidates (Model A and B were appraised separately). The selection panel comprised external CSO experts and practitioners.
- Selected EOs approved by the Joint Management Committee (JMC). The organizations selected by the Selection Committee were submitted to the JMC for final approval.
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Disbursement of Funds to Executing Organizations
- Executing Organizations are required to open a designated bank account (DA) in Indonesian Rupiah (IDR) for PNPM Peduli grants at a local commercial bank (acceptable to the World Bank). Executing Organizations are advised to choose a nation-wide bank to ensure efficiency in receiving and disbursing the funds.
- Executing Organizations prepare and submit to the World Bank a disbursement plan for approval. Disbursements are made on a six monthly basis in line with projected needs outlined in the approved disbursement plan. Disbursement is triggered based on submission and World Bank approval of the Quarterly Financial Monitoring Report. Refer to the FMR section below.
- Monthly meeting are held between the EOs together with the financial management team in the PSF to discuss progress, ensure disbursements are on track and to help early identification of any issues.
- Copies of documentation for expenditures submitted for disbursement will also be retained at the EO office and shall be made available to the auditors for the annual audit and to the Bank and its representatives if requested.
For further details see the PNPM Peduli Operational Manual Section 2.5
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Financial Monitoring Reporting
- Executing Organizations are required to submit Quarterly Financial Monitoring Report (FMR) to the World Bank, at the latest 45 days after end of each quarter.
- The FMR should consist of supporting documents as follow:
(1) Interim Financial Report – in IDR (Refer to PNPM Peduli Operation Manual: Appendix 2)
(2) Account Statement
(3) List of expenditures
(4) 6 months cash forecast
(5) Procurement Report (in IDR)
(6) Activity Progress Report
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Financial Audit Arrangements
- Executing Organizations contract an external auditor to audit PNPM Peduli project activities at the EO and local CSO/branch levels. The budget for the auditor is included in the EOs project budget.
- The audit will be carried out at the EO and local CSO/branch levels. For organizations that currently do not have external audits of their organization, the World Bank will provide capacity support to these organizations and contribute to the costs of an organizational audit. The objective being that in the second year the organization carries out an organizational audit as well as a project level audit.
- Executing Organizations must submit the audit report to the World Bank at the latest 6 months after the end of each fiscal year (January – December). In addition to this, the World Bank conducts supporting mission to do random spot checks.
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Sub Grant Types
· EOs provide sub-grants to local CSOs/branches implementing activities targeting marginalized group and they will report to their respective EOs
· There are 4 types of sub-grants under PNPM Peduli
1. Primary sub-grants are provided by EOs to local CSOs/branches;
2. Intermediary sub-grants are provided by EOs, on an exceptional basis and subject to World Bank approval, to other large national CSOs (Intermediary Parners – IPs). These IPs then sub-grant to local CSOs/branches;
3. Tertiary sub-grants are the provided by IPs to local CSOs/branches;
4. Block grants can be provided by EOs, IPs, and local CSOs/branches to marginalized; community or groups of individual to implement activities;
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Eligibility Criteria for Sub-Grantees
To be eligible to receive PNPM Peduli sub-grants, the organization must follow bellow requirements:
1. Fiduciary Requirements
o Registered entity and have legal basis for operation;
o Required to show account for the past year;
o Required to be externally audited by independent auditor on annual basis during the Sub-Grant Agreement duration;
o Required to follow EOs’ grant instrument (Project Management Manual) and to meet their fiduciary and reporting requirements;
o Required to open a separate bank account in the name of the Project;
2. Capacity and Experience
o Demonstrated strong community partnership by long term engagement and strong understanding of poverty issues;
o Currently engaged in activities with marginalized communities;
o Proven good track record by showing reference letter from local partners;
o Have a clear strategy on target and how to work with marginalized groups;
o Propose activities that implement the logical strategies and budget;
3. Governance and Accountability Requirements
o Have clear organizational structure;
o Have clear mechanism on involving beneficiaries in decision making and planning of activities.
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(a) Eligible Activities
· All activities must be planned in Work Plan with realistic budget, timeline and completed with monitoring and evaluation framework that link to the result. Activities maybe in the sectors of:
(1) Livelihood support
(2) Access to governance
(3) Access to justice
(6) Water and Sanitation
· There are 3 broad types of eligible activities under PNPM Peduli that will be implemented by Primary and Tertiary Sub-Grants and Intermediary Partners as follows:
For Primary and Tertiary Sub-Grants
1. Needs Based
o Address specific and identified need(s) of marginalized community and directly provide for this needs
o The ultimate objective is to assist the marginalized community to improve their situation
2. Skills Strengthening
o Training and capacity building activities to marginalized individuals and or groups.
o The ultimate objective is to strengthen the capacity of marginalized community to improve their situation.
3. Advocacy Based
o Activities that empower marginalized community to participate and articulate in advocating their needs effectively.
o The ultimate objective is to have the specific need or aspiration of marginalized communities heard and address, also helping them to fulfill their rights and facilitating their societal integration
(b) Ineligible Activities
· Any activities or expenditure on PNPM Peduli Negative List (Refer to Safeguards Section above or POM Section 2.11, Table 1);
· Political (including rallies) and religious activities and facilities and related material;
· Banned activities by PSF donor policies or Indonesian law;
· Government programs financed by PSF through Window 1&2;
· Purchase large items that are not part of PNPM Peduli activities.
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Marginalized individuals and groups supported by sub-grant projects may include, but are not limited to:
· Adult and children victims of trafficking
· Boatless fisherfolk
· Homeless and landless ethnic minorities
· Landless farmers
· Male and female sex workers
· Migrant workers
· People living with HIV and AIDS
· Plantation laborers
· Poor ethnic minorities
· Poor farmers
· Poor female-headed households
· Poor indigenous people
· Poor people in the state border area
· Poor women micro-entrepreneurs
· Poor youth
· Scavengers/garbage collectors
· Sexual minorities
· Street beggars
· Street children
· Transgender people
· Victims of conflict
· Victims of domestic or community abuse
· Youth in conflict with the law
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Social and Economic Characteristic of Marginalization
- PNPM Peduli beneficiaries are those who experience different kinds of discrimination that result in them being treated in a less favourable way. They are poor, but they are not necessarily the poorest. They are excluded from economic life, social services and civic life. They reflect characteristic of both economic and social exclusion:
o Cannot access basic services available to others
o Are not present in government data
o Face stigma and negative stereotyping
o Do not participate in the community
o Cannot access the justice system
o Are at risk of being exploited or abused
o Have no individual bargaining power
o Lack basic skills to improve their livelihood
o Have no access to credit for small scale enterprise
o Have no productive assets
o Engage in livelihood activities that reinforce their marginalized status
o Face development-related exploitation
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Capacity Building to Sub-Grantees
- EOs are responsible for providing capacity building support to all grant partners based on needs and areas identified together.
- EOs use their existing procedures to assess capacity building needs for their sub-grantees in a participatory manner and develop capacity building plans that outline specific trainings to their local partners.
- IPs conduct capacity building assessments and develop capacity building plan of their tertiary sub-grantees. The EOs provide oversight of this process and final approval of the proposed capacity building plans.
- Capacity Building activities conducted may include improvements to core systems, such as fiduciary management, monitoring and evaluation, public accountability and transparency, also governance aspect of the organization.
- Capacity building activities should also focus on strengthening development practice in working with the most marginalized. This includes ensuring a rights-based holistic approach and strengths based approach to working with target communities.
- In the case of IPs, capacity building activities will likely include strengthening their capacity as grant-making institutions.
- It is expected that the EOs will source suitably qualified experts to provide capacity support to local partners where the expertise does not exist in-house within the EOs.
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