Document of The World Bank
FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: 36104 - RU
PROJECT APPRAISAL DOCUMENT
ON A Public Disclosure Authorized PROPOSED LOAN
IN THE AMOUNT OF US$50 MILLION
TO THE
RUSSIAN FEDERATION
FOR A
JUDICIAL REFORM SUPPORT PROJECT Public Disclosure Authorized January 19,2007
Poverty Reduction and Economic Management Department Europe and Central Asia Region
This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective October 3 1,2006) Currency Unit = Russian Ruble (RUR) 26.75 Ruble = US$1
FISCAL YEAR January 1 - December31
ABBREVIATIONS AND ACRONYMS BEA Bureau of Economic Analysis BEEPS Business Environment and Enterprise Performance Survey CAS Country Assistance Strategy cc Constitutional Court ofthe Russian Federation CGJ Courts ofGeneral Jurisdiction CIDA Canadian International Development Agency CPS Country Partnership Strategy CQ Selection based on Consultants' Qualifications DO Development Objective EC European Commission EU European Union FMR Financial Management Report FTP Federal Targeted Program GTZ German Agency for Technical Cooperation IACC Inter Agency Coordinating Council IBRD International Bank for Reconstruction and Development ICB International Competitive Bidding ICT Information and Communications Technology IFC International Finance Corporation IFR Interim Unaudited Financial Report JET Judicial Education and Training JP Justice(s) ofthe Peace JRSP Judicial Reform Support Project LCS Least Cost Selection LRP Legal Reform Project MOEDT Ministry ofEconomic Development and Trade of the Russian Federation MOF Ministry ofFinance ofthe Russian Federation MOJ Ministry of Justice ofthe Russian Federation NCB National Competitive Bidding PIU Project Implementation Unit QCBS Quality and Cost Based Selection RF Russian Federation RFP Request for Proposals SAC Supreme Arbitration Court SBD Standard Bidding Document sc Supreme Court of the Russian Federation SH Shopping SIL Specific Investment Loan sss Single Source Selection USAID United States Agency for International Development
Vice President: Shigeo Katsu Country Director: Kristalina Georgieva Sector Directormanager: Cheryl W. GrayRonald E. Myers
~ Amitabha Mukhe 'ee FOR OFFICIAL USE ONLY RUSSIAN FEDERATION Judicial Reform Support Project
CONTENTS
Page A . STRATEGIC CONTEXT AND RATIONALE ...... 1 1. Country and sector issues ...... 1 2 . Rationale for Bank involvement ...... 3 3 . Higher level objectives to which the project contributes ...... 3 B. PROJECT DESCRIPTION ...... 4 1. Lending instrument ...... 4 2 . Program objective and Phases ...... 4 3 . Project development objective and key indicators ...... 4 4 . Project components ...... 5 5 . Lessons learned and reflected in the project design...... 6 6 . Alternatives considered and reasons for rejection ...... 6 C. IMPLEMENTATION ...... 7 1. Partnership arrangements ...... 7 2 . Institutional and implementation arrangements ...... 8 3 . Monitoring and evaluation ofoutcomes/results ...... 8 ... 4 . Sustainabillty...... 9 5 . Critical risks and possible controversial aspects ...... 9 6 . Loadcredit conditions and covenants ...... 11 D . APPRAISAL SUMMARY ...... 12 1. Economic and financial analyses ...... 12 2 . Technical ...... 12 3 . Fiduciary ...... 13 4 . Social...... 14 5 . Environment ...... 14 6 . Safeguard policies ...... 14 7 . Policy Exceptions and Readiness ...... 14
This document has a restricted distribution and may be used by recipients only in the performance of their official duties . Its contents may not be otherwise disclosed without World Bank authorization . Annex 1: Country and Sector Background...... 1 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ...... 22 Annex 3: Results Framework and Monitoring ...... 26 Annex 4: Detailed Project Description...... 34 Annex 6: Implementation Arrangements ...... 43 Annex 7: Financial Management and Disbursement Arrangements ...... 46 Annex 8: Procurement Arrangements ...... 51 Annex 9: Economic and Financial Analysis ...... 61 Annex 10: Safeguard Policy Issues ...... 62 Annex 11: Project Preparation and Supervision ...... 67 Annex 12: Documents in the Project File ...... 69 Annex 13: Statement of Loans and Credits ...... 71 Annex 14: Country at a Glance ...... 74 Annex 15: Enforcement of Judicial Decisions .Issues and Challenges ...... 77 Annex 16: Judicial Reform .Social Development. Gender & Inclusion Issues ...... 84 Annex 17: Maps...... 86
IBRD No. 33470 RUSSIAN FEDERATION
JUDICIAL REFORM SUPPORT PROJECT
PROJECT APPRAISAL DOCUMENT
EUROPE AND CENTRAL ASIA
ECSPE
Date: January 19,2007 Team Leader: Amitabha Mukhejee Country Director: Kristalina I.Georgieva Sectors: Law and justice (50%); Information Sector Managermirector: Cheryl W. Gray technology (50%) Themes: Access to law and justice (P); Judicial and other dispute resolution mechanisms (P); Legal institutions for a market economy (S) Project ID: PO89733 Environmental screening category: Not Required Lending Instrument: Specific Investment Loan Project Financing Data [XI Loan [ 3 Credit [ ] Grant [ ] Guarantee [ 3 Other:
For Loans/Credits/Others: Total Bank financing (US$m.): 50.00 ProDosed terms: Variable SDread Loan (VSL)
Source Local Foreign Total BORROWER 122.41 0.00 122.41 INTERNATIONAL BANK FOR 0.00 50.00 50.00 RECONSTRUCTION AND DEVELOPMENT Total: 122.41 50.00 172.41
Borrower: Ministry of Finance Ilyinka Street 9 109097 Moscow Russian Federation Fax: 7-495-925-0889
Responsible Agency: Ministry of Economic Development and Trade 1-st Tverskaya-Yamskaya Str., GSP-3, MOSCOW,A-47 Russian Federation Tel.: 7 (495) 694-0353; Fax: 7 (495) 25 1-6965; http://www.economv.g;ov.ru Bureau of Economic Analysis 27/26, Bldg. 3, Zubovsky Blvd., Moscow 119021 Russian Federation Tel.:7 (502) 937-6750; Fax: 7 (502) 937-6753; http://www.beafnd.orq
Project implementation period: Start June 1,2007 End: September 30,201 1 Expected effectiveness date: June 1, 2007 Expected closing date: March 30, 2012 Does the project depart from the CAS in content or other significant respects? [ ]Yes [XINO Ref: PAD A.3 Does the project require any exceptions from Bank policies? Ref: PAD D. 7 [ ]Yes [XINO Have these been approved by Bank management? [ ]Yes [ IN0 Is approval for any policy exception sought from the Board? [ ]Yes [XINO Does the project include any critical risks rated “substantial” or “high”? [XIYes [ ]No Ref:a PAD C.5 Does the project meet the Regional criteria for readiness for implementation? [XIYes [ ]No Ref:~~ PAD D. 7 Project development objective Ref: PAD B.2, Technical Anna 3 The project development objective is to strengthen judicial transparency and efficiency in courts financed by the JRSP. This will be done through the implementation ofinformation systems and related judicial training aimed at transforming the judiciary into an institution that is more transparent, efficient, accountable and worthy ofpublic trust and confidence.
Pragmatically, the limited goals are to help (a) put the judicial modernization process on an appropriate path, (b) reformers build and sustain momentum for further change, and (c) establish a results framework whereby progress on project implementation and impact can be objectively and transparently assessed and publicly disseminated. Project description Ref: PAD B.34 Technical Annex 4
The JRSP will finance the following components: A. InstitutionalizingJudicial Transparency and Accountability (US$7.15 million) This component will finance: (i)periodic surveys ofusers ofjudicial services on access to, quality ofand satisfaction with judicial services and enforcement ofjudicial decisions, and public dissemination ofthe survey results; (ii)research and analysis on further development of transparency, publication, openness and accessibility ofjudicial decisions, processes and practices, including obligatory publication ofjudicial decisions; and analysis on the introduction ofmodem information and communication technologies in judicial systems and on the further integration ofthe RF judicial system; (iii)the creation, implementation and dissemination of common case management standards, guidelines and processes; (iv) the development and piloting ofcriteria, indicators and a policy to assess and periodically report on the effectiveness ofthe judicial system, and related capacity-building; and a needs assessment for human capital development in the judiciary to inform policy and strategy updates; and (v) development and implementation ofcommunications and change management strategies to promote judicial reform.
B. Harnessing ICT for Judicial Transparency and Effectiveness (US$146.10 million) This component will finance activities to: (i)modernize, develop, and deploy integrated information systems for courts to facilitate document flow, record management, information collection, and internal knowledge sharing; (ii)improve public access to and availability of judicial information through enabling the online publication ofjudicial decisions and other relevant information; and (iii)more effectively link courts, Judicial Department offices, and relevant entitiedfacilities through integrated information systems by enhancing mobile capabilities ofaccess to electronic information and video-conferencing.
C. Strengthening Human Capital (US$10.10 million) This component will finance: (i)information technology-related education and training for judges and court personnel for the Constitutional Court, the Courts ofGeneral Jurisdiction, the Supreme Arbitration Court and the Judicial Department, and (ii)knowledge exchange, including seminars, workshops etc. for the judiciary.
D. Project Management and M&E (US9.06 million) This component will finance: (i)logistical and secretarial support for the Inter-Agency Coordination Council and the operating costs ofthe Bureau of Economic Analysis; (ii)expert technical ICT support for the judiciary; and (iii)the implementation ofthe project results framework. Which safeguard policies are triggered, if any? Re$ PAD 0.6, Technical Annex IO None.
Significant, non-standard conditions, if any, for: Re$ PAD C.7 Board presentation: None
Loadcredit effectiveness: 1. The Project Implementation Agreement, acceptable to the Bank, has been executed between the Borrower, represented by the MOEDT and the MOF, and the PIU, and is legally binding upon the Borrower and the PIU in accordance with its terms.
2. The Inter Agency Coordination Council for strategic project oversight and management, with composition, resources, duties and responsibilities agreed between the MOEDT and the Bank, has been established by the Borrower.
3. The Project Operational Manual acceptable to the Bank has been adopted by the Borrower.
Covenants applicable to project implementation: 1. At all times during the implementation ofthe project the Borrower shall maintain the IACC with a composition, resources, duties and responsibilities for successful implementation ofthe Project, acceptable to the Bank. 2. The Borrower shall ensure that, until the completion of the project, the PIU at all times fhctions in a manner and with staff, consultants, facilities and other resources necessary for the management and implementation ofthe project, all acceptable to the Bank.
3. The Borrower, through the PIU, shall carry out the project in accordance with the requirements, criteria, organizational arrangements and operational procedures set forth in the Operational Manual and shall not assign, amend, abrogate or waive any provisions ofhe Operational Manual without the prior approval ofthe Bank.
4. The Borrower shall ensure that at all times during project implementation, adequate allocations are made in the participating courts' budgets for the operations and maintenance of the information and communications technology systems.
5. The Borrower shall monitor and evaluate the progress ofthe project and prepare project reports in accordance with the provisions ofSection 5.08 ofthe General Conditions and on the basis ofthe indicators agreed with the Bank. Each project report shall cover the period ofone calendar semester, and shall be furnished to the Bank not later than 45 days after the end ofthe period covered by such report.
Financial Covenants: 6. The Borrower shall maintain, or cause to be maintained, a financial management system in accordance with the provisions of Section 5.09 of the General Conditions.
7. Without limitation to item 5 above, the Borrower shall prepare and furnish to the Bank not later than 45 days after the end ofeach calendar quarter interim unaudited financial reports for the project covering such quarter, in form and substance acceptable to the Bank.
8. The Borrower shall have its Financial Statements audited in accordance with the provisions of Section 5.09(b) ofthe General Conditions. Each audit ofthe Financial Statements shall cover the period ofone fiscal year ofthe Borrower. The audited Financial Statements for each such period shall be furnished to the Bank not later than six months after the end ofsuch period.
Procurement: 9. All goods and technical services required for the project and to be financed out ofthe proceeds ofthe loan shall be procured in accordance with the requirements set forth or referred to in Section Iof the Procurement Guidelines, and with the provisions ofSchedule 2 ofthe Loan Agreement.
10. All consultants' services required for the project and to be financed out ofthe proceeds of the loan shall be procured in accordance with the requirements set forth or referred to in Section Iand IV ofthe Consultant Guidelines and with the provisions ofSchedule 2 ofthe Loan Agreement. A. STRATEGIC CONTEXT AND RATIONALE
1. Country and sector issues
1. The Russian Federation (RF) Constitution explicitly provides for an independent judiciary to protect the rights and freedoms guaranteed by it, and the international obligations entered into by the RF. Among other things, it enshrines an independent judiciary as a branch of state power (Article lo), guarantees judges’ independence and subordinates them only to the Constitution and federal laws (Article 120), and grants judges personal immunity in exercise of their powers (Article 122).
2. Significant modernization steps have been undertaken in the last decade and a half. Numerous substantive and procedural laws have been enacted’ , including Codes on Civil Procedure, Criminal Procedure, Family Law and Labor. Trial by jury has been re-introduced in criminal cases. A trio ofjudicial structures, employing more than 120,000 personnel, is now in place. It comprises the Supreme Court, which oversees Courts of General Jurisdiction (CGJ); the Supreme Arbitration Court (SAC); and the Constitutional Court. A 45 billion ruble Federal Targeted Program (FTP) for 2002-2006 has financed substantial increases in judges’ salaries2; renovation of judicial infrastructure; research on substantive and procedural law reform; and training. New positions have been created, including 2,500 court administrators and 14,000 judicial assistants. However, despite this massive infusion of financial resources, the judiciary continues to be under-trained, overloaded and technologically under-resourced: as a result, the judiciary has not been able to achieve its true potential.
3. The 2005 CGJ annual case load comprised more than 6 million civil cases, more than 1 million criminal cases and over 4 million “administrative” cases (petty offences). The SAC system hears 1.5 million cases annually; these are growing rapidly. The total number of cases filed with arbitration courts nearly doubled between 1995 and 2000, with tax and bankruptcy cases doubling between 1995 and 2000. Recent changes in laws will further increase the number of cases filed in arbitration courts. Moreover, the use of information technology (IT) is still evolving, court staff remain underpaid, and “the housing of courts and the state of the premises they occupy are so unsatisfactory as to compromise the whole institution ofjustice. Some courts have no premises of their own3. The result is massive violation of the principle of open court hearings because lack of space turns open hearings into virtually in camera hearings to which
’ The World Bank-financed Legal Reform Project (LRP), which closed December 3 1,2005, supported, among other things, the drafting of several federal laws. Though primarily supporting modernization of the legal framework and legal education, one LRP component also financed judicial reform activities, notably alternative dispute resolution and piloting the application of information technology for selected judicial functions and processes, including the online publication ofjudicial decisions. ’According to the 2006 Report of the Council of Europe’s Commission for the Efficiency of Justice (CEPEJ 2006), the starting salary of a district court judge was 29,700 rubles (about $1,105) and that of a Supreme Court judge was 70,047 rubles (about $2,605). The extent ofthe rise in salaries can be seen from a Vedomosti December 2004 report about the monthly salaries of judges: that of a district court judge in 2004 was about $978, of a Supreme Court Justice about $1,470 and of a Supreme Arbitration Court Justice about $1,133. The Ministry of Economic Development and Trade estimated in 2004 that for CGJ buildings, 719 (or 34 percent) were unfit for use while 162 (or 7.8 percent) needed repairs; for arbitration courts, 10 buildings required reconstruction, 28 courts needed new buildings, and 20 percent ofjudges were in need of housing,
1 access is perforce limited. After Russia joined the Council of Europe several thousand Russian citizens appealed to the European Human Rights Court complaining about the unsatisfactory administration ofjustice in the Russian Federation” ‘. A Soviet-era ‘inferior status overhang’- compounded at times by physical insecurity-continues to impair judicial dignity and morale.
4. Judicial independence, integrity and competence are widely perceived as unsatisfactory, by both the authorities and the public. Indeed, President Vladimir Putin declared in a November 30, 2004 speech to the All-Russia Congress of Judges: “First is to ensure that the principle of judicial independence is implemented in it’s fullest. This is a vital principle and it has always been the cornerstone ofjudicial reform over these past years. Today it remains an issue ofutmost importance. Independence of the judiciary is not some kind of honorary privilege, but is a prerequisite for the judicial system to be able to carry out its constitutional hnctions within the system of division of powers”. This echoes the anecdotal prevalence of ‘telephone justice’, whereby judges allegedly prefer to get instructions from the prokuratura, higher courts or extra- judicial authorities (e.g. governors) rather than risk having their decisions reversed5. In an October 2004 Public Opinion Foundation poll, two thirds of respondents described judges as “corrupt, on the take, always willing to be bribed”.
5. Data from Transparency International and BEEPS generally reiterate this impression. In 2002, the BEEPS results indicated that 26 percent of respondents perceived the functioning of the judiciary as a problem; in 2005, the figure increased to 31 percent. The BEEPS results show that more firms in Russia think that courts are honest in 2005 than in 2002. However, even in the improved 2005 data, only about 20 percent of the firms surveyed considered that courts were frequently, usually, or always “honest and uncorrupted.” This is quite low compared to the response levels in such countries as Germany (approximately 85 percent), Estonia (exceeding 60 percent) and Turkey (exceeding 50 percent). A little more than 40 percent ofresponding Russian firms believe that courts are able to enforce judicial decisions. By comparison, the same figure for Greece is about 80 percent, for Turkey over 70 percent, for Germany 70 percent, and for Estonia over 60 percent. The overall lack of confidence in the judiciary in Russia seems to be due in part to rising expectations, in part to judges’ knowledge gaps in the wake of rapid and large-scale adoption of new laws and, importantly, in part to perceived judicial corruption, ineffectiveness, non-transparency and patronage in judicial appointments compounded by the lack ofan effective judicial disciplinary process.
6. Judicial competence is at issue too: under-trained and lacking consistent access to latest legislation and case law, judges are often unable to apply the relevant law and precedents, leading at best to decisional unpredictability and lack of confidence and, at worst, creating opportunities for corruption.
7. Overall, the reform focus has mainly been on legal modernization, and somewhat less on capacity-building and mindset change. Not surprisingly, these reforms have only begun to re- orient Russian jurisprudence and the judiciary to the growing needs and rising expectations of a vibrant economy, a pluralist society and a democratic polity. The authorities now feel that
Government Resolution (GR) No. 805 of November 20, 2001, which established the Federal Targeted Program (FTP), updated by GR No. 49 of February 6,2004. 5 Part of the reason could be that a key element ofjudges’ appraisal is the number of decisions reversed on appeal.
2 building a modern state based on the rule of law calls for ‘radical changes in the way justice is administeredy6,most appropriately through a three-pronged strategy comprising the following: i) Harnessing the power of IT to improve the quality and accessibility of information to strengthen transparency and efficiency and reduce opportunities for corruption; ii) Raising judicial competence and independence through education and training; and iii)Institutional development.
8. Several ongoing and planned programs address key constraints impeding judicial functioning and credibility. The most notable is the 2002-2006 FTP and its successor 2007-201 1 FTP, which was approved by the Russian Government on September 21, 2006. The 2007-2011 FTP has a budget of48.4 billion rubles and aims to: raise the quality ofjudicial decisions; ensure the openness and transparency of the judicial system; raise public confidence in the judicial system; improve access to the judicial system; ensure the independence ofjudges; and strengthen the enforcement ofjudicial decisions.
9. The new FTP will finance an expansion in the use of information and communications technology (ICT), including the creation of websites for CGJ and arbitration courts for the publication ofjudicial decisions and other public information. The FTP envisages the preparation of new legislation to increase transparency and judicial accountability, including by introducing obligatory declarations ofincome and assets for judges. The FTP will also finance the expansion and improvement (including security) of court premises and the provision ofhousing for judges. In addition, the National Project on Education is envisaged to provide resources for judicial education. Development partners are also supporting various facets ofjudicial reforms.
2. Rationale for Bank involvement
10. The authorities have cited the Bank’s international experience in judicial reform and its added value in the development of coherent judicial modernization programs. The project is seen as a first step in a longer-term engagement on judicial modernization.
3. Higher level objectives to which the project contributes
11. The JRSP will contribute to improving governance and the rule of law through increased transparency and reduced corruption in the functioning ofthe judiciary. It will also help foster a better business environment conducive to private sector growth by improving the efficiency and predictability ofthe arbitration court system.
12. Relationship with the Country Assistance Strategy (CAS): The 2007-2009 Country Partnership Strategy, endorsed by the Board on December 14, 2006, supports enhanced transparency, increased public dissemination of information and combating corruption through
6 GR No. 805 ofNovember 20,2001, updated by GR No. 49 of February 6,2004.
3 strategic improvements in public sector management and overnance, including through judicial reform. The proposed project fully conforms to this visionEi .
B. PROJECT DESCRIPTION
1. Lending instrument
13. The US$172.4 million project is proposed to be financed from the proceeds of a US$50 million Specific Investment Loan (SIL) on standard IBRD terms, and government budgetary resources amounting to US$122.4 million. The project will provide an umbrella for introducing and locking in major policy and process reforms across the judiciary; finance key investments and technical support; and catalyze complementary grant-financed technical support from Russia and its development partners.
2. Program objective and Phases
Not applicable.
3. Project development objective and key indicators
14. The project development objective is to strengthen judicial transparency and efficiency in courts financed by the JRSP.
15. This will be done through the implementation of information systems and related judicial training aimed at transforming the judiciary into an institution that is more transparent, efficient, accountable and worthy of public trust and confidence. Pragmatically, the limited goals are to help (a) put the judicial modernization process on an appropriate path, (b) reformers build and sustain momentum for further change, and (c) establish a results framework whereby progress on project implementation and impact can be objectively and transparently assessed and publicly disseminated.
16. The key results indicators comprise: i) Periodic stakeholder surveys verify an increase in user satisfaction with transparency in judicial functioning in selected courts; ii) 100 percent of eligible decisions in the arbitration court system are published online within the prescribed period; iii) 100 percent of eligible decisions of the CC, SC and selected CGJ under the project are published online within the prescribed period; iv) Periodic surveys of judges and staff in courts covered by the JRSP show increasing satisfaction with use ofnew information systems compared to the 2006 baseline.
7 The February 15, 2005 CAS Progress Report included the JRSP as one of the proposed investment projects in the context of the CAS priorities of strengthening public sector governance and service delivery, and improving the business environment: the May 14, 2002 CAS stated that better governance and service delivery would be key to improving business confidence, sustaining growth and reducing poverty.
4 4. Project components
17. The JRSP will finance the following components:
A. Institutionalizing Judicial Transparency and Accountabilitv (US$7.15 million) This component will finance: (i)periodic surveys of users of judicial services on access to, quality of and satisfaction with judicial services and enforcement of judicial decisions, and public dissemination of the survey results; (ii)research and analysis on further development of transparency, publication, openness and accessibility of judicial decisions, processes and practices, including obligatory publication ofjudicial decisions; and analysis on the introduction of modem information and communication technologies in judicial systems and on the hrther integration of the RF judicial system; (iii)the creation, implementation and dissemination of common case management standards, guidelines and processes; (iv) the development and piloting of criteria, indicators and a policy to assess and periodically report on the effectiveness of the judicial system, and related capacity-building; and a needs assessment for human capital development in the judiciary to inform policy and strategy updates; and (v) development and implementation of communications and change management strategies to promote judicial reform.
B. Hamessing ICT for Judicial Transparency and Effectiveness (US$146.1 million) The objectives of this component are to: (i)improve judicial transparency through the publication and public dissemination ofjudicial decisions at every level in the three branches of the judiciary; (ii)improve judicial effectiveness through the implementation of shared (or standardized) ICT solutions for such key activities as case flow management, document flow management, facilitating access to justice in remote locations, and judicial electronic archiving.
This component will finance activities for the CC, SC, JD/CGJ and the SAC to: (i)modernize, develop, and deploy integrated information systems for courts to facilitate document flow, record management, information collection, and internal knowledge sharing; (ii)improve public access to and availability of judicial information through enabling the online publication of judicial decisions and other relevant information; and (iii)more effectively link courts, Judicial Department offices, and relevant entitiedfacilities through integrated information systems by enhancing mobile capabilities ofaccess to electronic information and video-conferencing*.
C. Strenpthening Human Capital (US$lO. 10 million) This component will finance (i)information technology-related education and training for judges and court personnel for the Constitutional Court, the Courts ofGeneral Jurisdiction, the Supreme Arbitration Court and the Judicial Department, and (ii)knowledge exchange, including seminars, workshops etc. for the judiciary.
The training to be financed under the JRSP will supplement a much larger financial outlay for judicial education and training envisaged under the Russian government’s National Project for Education and the state budget.
* Including improving the enforcement ofjudicial decisions through studies to facilitate information exchange and interface capabilities between the Courts ofGeneral Jurisdiction and the Federal Bailiff Service.
5 D. Proiect Management and M&E (US$9.06 million) This component will finance: (i)logistical and secretarial support for the Inter-Agency Coordination Council and the operating costs of the Bureau of Economic Analysis (which is responsible for project implementation); (ii)expert technical ICT support for the judiciary and (iii)the implementation ofa project results framework and M&E indicators.
18. The component-wise cost allocation is shown below (all figures are in million US$).
I A I -- I -- I 0.30 I -- 1 6.85 I 7.15 I B 26.10 65.65 48.50 5.85 -_ 146.10 C -_ 5.20 2.60 0.30 2.00 10.10 D 0.60 2.47 0.50 0.35 5.14 9.06 Total 26.70 73.32 51.90 6.50 13.99 172.41
5. Lessons learned and reflected in the project design
19. Key lessons from the implementation experience ofsimilar projects worldwide, including that ofthe Russia Legal Reform Project, have been applied to the project design. These comprise the following: Judicial reform is a highly complex, political and risky process. Therefore, projects to support such reform have a greater possibility ofachieving their goals if based on explicit consensus between key stakeholders in the judiciary and the executive on goals and objectives. Each project component needs a strong champion to produce lasting and sustainable results. iii)The project will have a better likelihood of success if based on a rigorous assessment, during preparation, of the issues to be addressed-the process of conducting such assessments can help build consensus and identify potential champions. iv) Each component should have a clearly defined goal and intermediate results indicators, against which progress can be measured. v) Information systems, where part of the project, should ideally be integrated and interoperable. vi) Transparent and competitive procurement, with awards publicly declared and deliverables subject to publication and external monitoring can significantly increase the likelihood ofproject success.
6. Alternatives considered and reasons for rejection
20. Two alternatives were considered: (a) an Adaptable Program Loan (APL) and (b) a Sector-Wide Approach (SWAP). The APL alternative was considered and rejected because the
6 RF authorities’ preference was for a stand-alone project that would address very specific investment needs to strengthen judicial transparency and competence.
21. A Sector-Wide Approach (SWAP) was also considered for supporting the judicial modernization agenda. The project incorporates a number ofelements ofa SWAP approach, e.g. the activities complement a significantly larger Federal Targeted Program and the progress ofthe entire program will be monitored by the authorities. SWAPS can be effective in strengthening coordination, open policy dialogue for the entire sector, facilitate sector-wide rational resource allocation, scale up benefits and reduce transaction costs. However in this case the SWAP option was not adopted for several reasons: i) The project covers only part ofthe modernization requirements ofthe judiciary; ii) It does not cover the entire justice sector. It excludes for instance the bailiffs service; the entire justice sector, not the judiciary alone, would have been a more appropriate unit for SWAP purposes; and iii)There are fiduciary considerations that militate against using a SWAP approach at this point. Use of country systems for a SWAP would have meant using RF procurement legislation, which has significant rigidities and could delay implementation.
22. Overall, given the authorities’ desire for rapid preparation and implementation and the fact that there is now a strong consensus between the judiciary and the executive on the project objectives and scope, a Specific Investment Loan (SIL) was considered to be most appropriate instrument under the circumstances.
C. IMPLEMENTATION
1. Partnership arrangements
23. Two potentially powerful partnership modalities are relevant, one explicit and the other implicit:
a) To support the broad project objectives and to complement the 2007-2011 FTP, the authorities and the Bank are developing a Multi-Donor Trust Fund for Governance (MDTF-G) with an amount of about US$26 million, of which about US$19 million will support complementary judicial modernization initiatives. The Russian authorities have offered to contribute up to 50 percent ofthe MDTF-G amount, if the rest is committed by other partners; and b) Numerous development partners have been working with the RF authorities to support various aspects of the judicial modernization and reform agenda (Annex 2). The authorities and the Bank have closely coordinated with development partners to maximize synergies between different projects and initiatives. In several components and subcomponents, the JRSP complements and supplements support fkom other development partners. Development partners whose projects will continue to be implemented during JRSP implementation will be included in the circulation of project reports and will be consulted during supervision missions.
7 2. Institutional and implementation arrangements
24. In accordance with Russian legislation the Ministry ofEconomic Development and Trade (MOEDT) has been designated as the general controller of federal budget financing for JRSP implementation. An Inter-Agency Coordination Council (IACC) created by order ofthe MOEDT will undertake high-level strategic project oversight and management. The IACC will be chaired by a designated MOEDT representative. It will include representatives fiom all participating judicial entities (SC, JD, SAC and CC) and the Ministry of Finance (MOF). The Bureau of Economic Analysis (BEA), a non-commercial foundation, has been selected by the RF as the Project Implementation Unit. The BEA will act on the basis of a Project Implementation Agreement, signed on behalf ofthe RF by the MOF and the MOEDT on the one hand, and by the BEA Foundation, on the other. It will be responsible for project procurement and financial management, provide secretarial and logistical support for the IACC and undertake other project implementation functions.
25. Each of the JRSP participating entities will ensure that their relevant respective organizational structures will be designated to undertake functions such as designing technical specifications and terms of reference for project activities, participating in bid evaluation and other procurement processes, and overseeing project activities under their respective remits.
26. The current trend in the Bank and current policy in the ECA Region is to avoid using stand-alone PIUs for project implementation, especially those not organically or structurally connected with beneficiary entities. The key reason is that such a practice militates against true ownership and accountability on the part of the beneficiary entities and limits long-term institutional capacity-building in the beneficiary entities for designing and implementing modernization plans. Implementation of recent Bank-financed judicial reform projects, for instance those in Azerbaijan, Romania and Ukraine, is being undertaken directly by the beneficiary entities through their organic structures. Where necessary, the capacity ofbeneficiary entities is supplemented in the short term with specialist consultant skills in, for example, procurement and financial management,
27. In Russia, however, implementation of projects financed by the Bank has historically been managed by foundations such as the BEA, which - over more than a decade - have built up knowledge and expertise in Bank procedures and processes. In addition, there will be high demand under this project for coordinated, consistent and expert support to address the. diverse needs of the participating judicial entities. The BEA, given its expertise, is expected to respond effectively to such demand through its designated role of facilitating day-to-day operational issues such as procurement, financial management, fiduciary compliance, and provision of logistical and secretarial support. On the other hand, strategic, substantive and quality assurance activities will be implemented and overseen directly by the participating judicial entities. Thus, the proposed implementation arrangements are somewhat hybrid in nature, specific to the Russian institutional context, and therefore not likely to inhibit ownership, accountability for performance or mainstreaming ofcapacity development.
3. Monitoring and evaluation of outcomeshesults
28. The IACC and the MOEDT will be responsible for overall monitoring ofthe project. The
8 BEA will be responsible for consolidating information provided by various project counterparts in order to track progress against the monitoring plan. This information will be provided regularly to the IACC, the MOEDT, the MOF and the Bank.
29. A results framework with project-specific indicators and actionable monitoring arrangements is provided at Annex 3. However, JRSP results will be monitored in parallel with the results and indicators from the 2007-201 1 FTP so as to provide a broader assessment of the achievement ofkey RF judicial reform goals and objectives.
30. There will be a comprehensive evaluation of progress against project indicators on an annual basis. For these purposes the mechanisms will be used as set out in the Results Framework. The results of the evaluation will be used for analyzing the intermediate outcomes ofthe project and adjusting project activities or priorities, if needed. To the extent possible, the results ofmonitoring will be widely publicized within the judicial community and for the general public as well.
4. Sustainability
31. Sustainability of project outcomes is likely for the following reasons: (a) the LRP financed several pilots for the automation of case management; the JRSP expands existing automation; (b) numerous courts are already publishing their decisions and some, such as the ones in St. Petersburg, have developed an explicit policy for the publication ofdecisions; (c) the Supreme Court has proposed new legislation on the publication ofjudicial decisions, including through the internet; (d) there is an ongoing initiative within the government to develop a generic law on the freedom of information; and (e) strong champions in the executive and judiciary have ensured that the judicial reforms have been adequately financed and kept moving forward.
5. Critical risks and possible controversial aspects
32. This is a very high-risk project. Judicial reform is always challenging: this is more so in the RF with its complex political economy, evolving organizational structures in the judicial and executive branches (and the resulting flux at times from shifts in responsibilities between entities) and continental geographic spread. Nevertheless, the potential gains are so large that this is a risk worth taking.
Risk I Risk Mitigation Measure 1 Rating ] I Political risks are unavoidable. These arise from I Consultative design, clear communications, explicit I I the complex interplay and sometimes conflicting inter-agency agreements and transparent agendas ofmajor actors: different elements ofthe implementation. judiciary, the executive and the legislature. Such H conflicts may be manifested in inter-agency turf battles, coordination gridlocks, backtracking on reforms, and delays in project design and implementation. Reputational risk. The ability ofRF reformers and Appropriate stakeholder representation on IACC. the World Bank to influence the modernization Posting IACC meeting minutes on the official websites agenda is limited. This creates a high reputational (accessible to the public) ofthe participating project H risk for both. entities. Transparent procurement.
9 v Risk Risk Mitigation Measurn Adaptation ofglobal lessons and good practice to project design and implementation. Multiple agencies, differing priorities. Clarity on activities to be financed, implementation Implementation and sustainability risks increase arrangements and assurance ofquality control. with the number ofagencies involved, more so H when agencies have different priorities: this lesson was reinforced in the LRP. This risk is high, given the number ofagencies involved in the JRSP9. Lack ofeffective cooperation and communication Extensive discussions and explanation ofroles under between the main implementing agencies and the JRSP with all beneficiaries leading to a clear beneficiaries under the Project. definition ofresponsibilities between all stakeholders H with regard to particular project components, to be reflected in a Project Operations Manual. An IACC will be established with representatives of the relevant agencies. Ineffective ICT investment. The project will Rigorously determined technical specifications derived finance substantial ICT-related expenditures. This from business needs and accompanied by relevant M investment could prove ineffective. investments in ICT-related training and practical use of ICT-based business processes. Weak implementation capacity in beneficiary Applying the lessons learned from the implementation entities may adversely affect the speed and quality experience ofthe LRP and other projects in the RF. ofimplementation. BEA project implementation experience will mitigate this risk somewhat. H Capacity augmentation in the IT units ofthe JD, SAC and CC. This is to be achieved through expert technical support and through IT-related training and peer-to- peer learning to be financed through the proposed kSP, FTP, and other governmentbudgetary resources. Lack ofsufficient budgetary Government funding Adequate fimding requirements will be discussed with for the operation, maintenance and support of new RF authorities as part of the ongoing dialogue. or upgraded ICT systems. Government commitment to provide adequate L budgetary resources for operation and maintenance of the ICT systems installed under the project. . Ignoring lessons learnt from the implementation Applying key lessons fromjudicial reformprojects and experience ofcomplex multi-beneficiary projects the Russia-specific LRP implementation and ICT M straddling different branches of the state. procurement experiences to JRSP design and implementation arrangements (outlined in section B.5 above). Overlap and/or lack ofcoordination between JRSP A series of coordination meetings have been held with activities, FTP activities and those of development development partners during project development and partners. design. M Continued close coordination and collaboration between the RF authorities, the Bank and development partners to closely align JRSP support with ongoing and planned efforts. An MOEDT-chaired IACC will monitor coordination efforts. Overall Risk Rating H
The Supreme Court, the Judicial Department, the Supreme Arbitration Court, the Constitutional Court, the Ministry ofEconomic Development and Trade and the Ministry ofFinance.
10 6. Loadcredit conditions and covenants
Loan Effectiveness: 1. The Project Implementation Agreement, acceptable to the Bank, has been executed between the Borrower, represented by the MOEDT and the MOF, and the PIU, and is legally binding upon the Borrower and the PIU in accordance with its terms. 2. The Inter Agency Coordination Council for strategic project oversight and management, with composition, resources, duties and responsibilities agreed between the MOEDT and the Bank, has been established by the Borrower. 3. The Project Operational Manual acceptable to the Bank has been adopted by the Borrower.
Covenants applicable to proiect implementation: At all times during the implementation ofthe project the Borrower shall maintain the IACC with a composition, resources, duties and responsibilities for successfid implementation of the Project, acceptable to the Bank. The Borrower shall ensure that, until the completion of the project, the PIU at all times functions in a manner and with staff, consultants, facilities and other resources necessary for the management and implementation ofthe project, all acceptable to the Bank. The Borrower, through the PIU, shall carry out the project in accordance with the requirements, criteria, organizational arrangements and operational procedures set forth in the Operational Manual and shall not assign, amend, abrogate or waive any provisions of the Operational Manual without the prior approval ofthe Bank. The Borrower shall ensure that at all times during project implementation, adequate allocations are made in the participating courts’ budgets for the operations and maintenance ofthe information and communications technology systems. The Borrower shall monitor and evaluate the progress of the project and prepare project reports in accordance with the provisions of Section 5.08 ofthe General Conditions and on the basis of the indicators agreed with the Bank. Each project report shall cover the period ofone calendar semester, and shall be furnished to the Bank not later than 45 days after the end ofthe period covered by such report.
Financial Covenants: 6. The Borrower shall maintain, or cause to be maintained, a financial management system in accordance with the provisions ofSection 5.09 ofthe General Conditions. 7. Without limitation to item 5 above, the Borrower shall prepare and furnish to the Bank not later than 45 days after the end of each calendar quarter interim unaudited financial reports for the project covering such quarter, in form and substance acceptable to the Bank. 8. The Borrower shall have its Financial Statements audited in accordance with the provisions of Section 5.09(b) of the General Conditions. Each audit of the Financial Statements shall cover the period of one fiscal year of the Borrower. The audited Financial Statements for each such period shall be furnished to the Bank not later than six months after the end of such period.
Procurement: 9. All goods and technical services required for the project and to be financed out of the proceeds of the loan shall be procured in accordance with the requirements set forth or
11 referred to in Section Iof the Procurement Guidelines, and with the provisions of Schedule 2 ofthe Loan Agreement. 10. All consultants’ services required for the project and to be financed out of the proceeds of the loan shall be procured in accordance with the requirements set forth or referred to in Section Iand IV ofthe Consultant Guidelines and with the provisions of Schedule 2 of the Loan Agreement.
D. APPRAISAL SUMMARY
1. Economic and financial analyses
33. The benefits from improvements in judicial performance are both economic and financial. The JRSP is expected to strengthen the capacity and incentives among RF judges for more transparent fhctioning, higher quality judicial decisions and increased efficiency. It is difficult to quantify the economic benefits of the anticipated improvements. However, a review of the current impact ofthe inefficient functioning of the system on the costs of doing business suggests that costs associated with a poorly functioning judiciary are significant.
34. Project implementation is expected to: (i)improve judicial transparency, performance and efficiency; (ii)result in better utilization and maintenance ofjudicial information systems.
35. Improved delivery ofjudicial services and other project outcomes would help lower the costs of doing business in the RF, notably by accelerating and reducing the cost of litigation. In turn, this would help increase access to and confidence in the judicial system. More effective judicial decision-making will help to appropriately balance commercial relationships and maintain a level playing field for all businesses. Speedier resolution of disputes and improved oversight ofthe functioning ofthe judiciary through the ICT systems proposed to be established will help lower the cost of doing business and reduce corruption. Indirect benefits would therefore include more predictable and uniform application of the rule of law, a more stable investment climate and strengthened business confidence. Taken as a whole, these factors could help spur investment and promote economic growth.
2. Technical
36. Three technical issues merit attention: i) The JRSP will complement the RF authorities’ 2007-2011 FTP for the judiciary. The project beneficiaries will need to ensure coordination between JRSP and FTP activities to avoid duplication or double financing, and to ensure that synergies can be reaped wherever possible. ii) JRSP support for information technology investments will help ensure effective coordination, compatibility and integration of various information systems belonging to different elements of the judiciary. This will enhance the functionality, integration, usability and access of several systems and the rollout of some of these systems to a wider range ofcourts.
12 iii)Significant risks arise from ICT procurement, implementation and integration activities. It will be desirable for the key beneficiaries to strengthen their respective ICT capacities as rapidly as possible to mitigate these risks.
3. Fiduciary
37. The BEA has been selected as the PIU with responsibility for the fiduciary arrangements. The BEA has been implementing several Bank-financed projects, including the Bureau of Economic Analysis Project (closed in March 2005), the State Statistical System Project and the Hydromet Modernization Project (ongoing). Based on this experience, the BEA has the necessary capacity to implement Bank-financed projects.
(a) Financial management
38. The financial management arrangements of the BEA have been reviewed periodically as part of previous and existing project supervisions and have been found satisfactory. An assessment of the financial management arrangements for the project was undertaken during appraisal and updated thereafter. Some financial management weaknesses earlier identified have been fully addressed by the BEA. The financial management arrangements of the project are now acceptable to the Bank. The overall FM risk for the project is moderate.
39. The BEA is in compliance with its audit covenants in existing Bank-financed projects. Its previous and current project financial statements and auditing arrangements are satisfactory and will be replicated for the JRSP. The annual audited project financial statements will be provided to the Bank within six months ofthe end of each fiscal year and also at project closing. In accordance with Bank audit policy, the first and final audits will cover a period up to 18 months.
40. Based on current Bank audit policy, the CFAA recommends maintaining current arrangements for the annual audit of Bank-assisted projects, which involve audit by private sector audit firms competitively appointed among those pre-selected by the Bank in consultation with the MOF.
41. The significant strengths that provide a basis of reliance on the project financial management system include: (i)the experience ofthe BEA and its financial management staff of implementing Bank-financed projects and satisfying Bank financial management requirements; (ii)the unqualified audit reports issued on the BEA and projects’ financial statements during the last three years; and (iii)a sound internal control system within the BEA.
(b) Procurement
42. The BEA has sufficient experience in procurement cycle management. It maintains up-to- date records according to the regulations approved by the general director. All documents are available and are kept on bookshelves in files with clear indication and in chronological order.
13 43. The key procurement issues and risks emanate mainly from an uncertain political, legal and financial environment. In view of the high volume of ICT-related procurement, the specific risks and the approach relating to ICT procurement have been specifically outlined in Annex 8. 44. The general level of risk connected with procurement activity in Russia is considered to be high. Accordingly, the overall project risk for procurement is also rated as high.
4. Social
45. The JRSP focuses on strengthening transparency in judicial functioning and promoting transparency as the window for greater accountability and access to justice. However, the project includes several activities which will enhance access to justice, especially for the poor and marginalized: (a) periodic surveys will reveal citizens’ satisfaction with the performance of the judicial system, including access to justice; (b) component B includes activities such as videoconferencing facilities to enable faster hearings for those in detention facilities and mobile capability for courts in remote and under-served areas to strengthen access to justice; (c) component C will include knowledge exchange and sensitization ofjudges and court personnel to prevailing social issues such as juvenile justice and domestic violence.
5. Environment
46. The project has been rated as Category “C” for environmental purposes. None of the envisaged activities will require any special permission on environmental issues. Hence the JRSP will not be subject to the national Environmental Impact Assessment procedure or any permission relating to environmental protection aspects. An environmental assessment has been prepared and is included at Annex 10.
6. Safeguard policies
Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OPBP 4.01) [I [XI Natural Habitats (OPBP 4.04) [I [XI Pest Management (OP 4.09) [I [XI Cultural Property (OPN 11.03, being revised as OP 4.1 1) [I [XI Involuntary Resettlement (OPBP 4.12) [I [XI Indigenous Peoples (OPBP 4.10) [I [XI Forests (OP/BP 4.36) [I [XI Safety of Dams (OP/BP 4.37) [I [XI Projects in Disputed Areas (OPBP 7.60)* El [XI Projects on International Waterways (OPBP 7.50) [I [XI
7. Policy Exceptions and Readiness
47. There are no policy exceptions. The project meets readiness criteria: (a) fiduciary (financial management and procurement) arrangements are substantially in place and identified
* By supporting the proposed project, the Bank does not intend to prejudice the$nal determination of the parties’ claims on the disputed areas
14 issues have been addressed; (b) the project implementation unit has been selected and staffed with experienced personnel; (c) the MOF has allocated adequate funds in the 2006 budget and proposed an adequate allocation in the 2007 draft budget currently under preparation; (d) tender documents for the first year’s procurement are under preparation for priority activities, and key procurement packages will be ready by effectiveness; (e) a results framework has been prepared.
15
Annex 1: Country and Sector Background RUSSIAN FEDERATION: Judicial Reform Support Project
1. Overview 1. The Russian Federation has a long history, rich culture and a diverse society. Its population of about 140 million is multi-ethnic and multi-confessional, and spread over vast geographic temtories, time zones and climatic conditions. About 70 percent of the population resides in urban centers. The literacy rate is 99 percent; women constitute 51 percent of the population; and about 30 percent ofthe population is under 30 years ofage.
2. Since the dissolution of the former Soviet Union, Russia has undergone significant political changes, including the adoption of a new Constitution in 1993, and the launch of far- reaching legal, organizational and institutional reforms restructuring the basic foundations ofthe country and its governance arrangements. The federal legislative power is comprised of the Federation Council (the upper house with 178 members who serve 4-year terms) and the Duma (the lower house with 450 members who serve 4-year terms). The federal executive power is headed by the President, who appoints the Prime Minister, Ministers and heads of Federal Services and Federal Agencies". The federal judicial power has three branches or court systems: the Constitutional Court of the RF; the Courts of General Jurisdiction, with the Supreme Court at the apex; and Courts ofArbitration, with the Supreme Arbitration Court at the top. These court systems are independent ofeach other organizationally and in the administration ofjustice are guided by independent sources ofprocedural law.
3. The following sections place the judiciary in context, outline its key achievements and identify significant challenges.
2. The Judiciary in Context The Structure of the Justice System
4. Legal Framework. Russia's legal system has undergone fundamental restructuring during the last decade and a half, a process still ongoing. Presently, the legal kamework for the operation of courts (constitutional, commercial and general) is comprised of the 1993 Constitution of the RF (see, for example, Articles 125, 126 and 127); the Federal Law on the Justice System (1998); procedural codes regarding civil (2003), criminal (1996), and arbitration (2002) matters; the Federal Law on the Justices of the Peace (1998); and other laws and regulations, including the Tax Law (which regulates court fees and exemptions).
5. Key Institutions. Box 1 provides a simplified diagram ofthe federal justice system which highlights the three court systems and their interplay with other justice sector actors. The many institutions that comprise the federal justice system are principally organized around three distinct court systems: the Constitutional Court, the Supreme Arbitration Court and the Supreme court.
10 According to the current constitution, the President and the executive branch have more powers than the legislative branch. The President heads the National Security Council, the armed forces, and appoints the highest state officials and can promulgate decrees without parliamentary approval.
1 ,
!
i ! The Judiciary: Structure and Organization
8. The three court systems comprising the judiciary ofthe RF are structured as follows”:
a) The Supreme Court of the RF oversees the Courts of General Jurisdiction (CGJ), which handle all criminal cases and most civil cases. Civil disputes include labor, family, inheritance, divorce, land and administrative/traffic cases. The CGJ include the military courts and comprise 89 oblast (region) and republic-level courts; 2,569 district and city courts, including 147 military courts; and 6,558 justices of the peace’*. The 2005 CGJ annual case load comprised more than 6 million civil cases, 1 million criminal cases and more than 4 million “administrative” cases (petty offences subject to fines or short jail terms). The Supreme Court of the RF has the right of legislative initiative and may submit its conclusions concerning the interpretation of laws and issue guiding instructions which are binding on all lower courts. The Supreme Court has 118 judges; oblast (regional) courts and republic-level courts 3,718 judges; district and city courts 13,855 judges; and military courts 717 judges13. In early 2006 there were about 4,500 vacant judicial positions. The JD (modeled on the Administrative Office of the U.S. courts) was established in 1998 and administers all CGJ below the Supreme Court. The JD negotiates the CGJ budget with the MOF and the Duma. The CGJ budget has increased 5-fold in 5 years and reached a billion dollars in 2004. b) The Supreme Arbitration Court (SAC) administers the arbitration court system, which has jurisdiction over disputes between businesses, between a business and a government agency, and other disputes such as landlord-tenant disputes and debt collection. The SAC has the right oflegislative initiative; it reviews and summarizes the practice of arbitration courts and issues interpretations of court practice binding on all arbitration courts. The arbitration court system employs 3,500 judges (40-60 at the SAC) in 102 courts and hears more than 1.5 million cases annually. In addition to the federal SAC, 82 Subjects of the RF have arbitration courts; there are 10 appellate arbitration courts and 10 federal circuit arbitration courts. As the economy expands, this fast-growing court system has become stretched, with a case growth rate of 15 percent per annum. The establishment of
‘I Law no.1-FKZ, adopted on 21 December 1996, amended on 15 December 2001 and 4 July 2003. See the report ofthe Council ofEurope: Honouring of Obligations and Commitments by the Russian Federation (May 2005). The institution of the Justice of the Peace (JP), the first level judicial entity at the community level, is relatively recent in Russia, and represents in some ways a return to the pre-Soviet justice system. Current laws regulating the JPs provide that the federal government is responsible for their salaries, while the respective regions are responsible for all other costs such as accommodation, equipment, staff support and communications. The JRSP does not finance any activity relating to JPs. There is only one appeal from a JP’s decision, to the Oblast court, whose decision is final. Some reform activists have been using this relatively quick process to file cases in the JPs’ courts, appeal to the oblast court, and thereafter directly lodge a second appeal before the European Court ofHuman Rights, if not satisfied with the oblast court decision. Currently there are about 6,500 JPs across the RF; this number is expected to increase to about 8,500. There are also proposals to amend the Law on the JPs to make all JP-related expenditures a federal responsibility. l3 According to the 2006 Report by the Council of Europe’s Commission for the Efficiency of Justice (CEPEJ 2006), there were a total of 23,172 judges in CGJ. appellate arbitration courts is ongoing: 6 appellate courts started functioning in 2006 and 10 more are due to be set up (to reach 20 in total) in 200714. c) The Constitutional Court is vested with the responsibility of constitutional review. There are also a number of “constitutional” or “charter” courts of the Subjects of the Russian Federation (St. Petersburg, for example, has such a charter court).
9. While the three court systems have their own distinct organizational structures, they share a structure of professional bodies with defined decision-making functions. According to the federal law ‘On the bodies of the judicial community in the RF’ of 2002, these professional bodies are the following:
The All-Russia Congress ofJudges is composed ofrepresentatives of courts of all levels and jurisdictions. The Congress meets every four years, when it elects the members ofthe Supreme Judicial Council. The Congress has the power to adopt decisions regulating the activities of the judiciary (except those falling under the competences of the Supreme Judicial Qualifications Collegium), especially professional ethics.
The Supreme Judicial Council (SJC) meets at least twice a year in a plenary session; its more compact working structure, the Presidium, meets at least four times a year. The SJC oversees the work of the Supreme Court’s JD on matters of court organization, human and material resources, and issues relevant recommendations. Representatives of the SJC participate in the preparation of the draft law on the federal budget.
The Supreme Judicial Qualifications Collegium (SJQC) is responsible for examining candidacies, certifying promotions and conducting disciplinary procedures for federal judges except district court judges15. 18 of the 29 members of the SJQC are elected by judges; 10 members are appointed by the Federation Council and one member by the President. Appointments, promotions and disciplinary procedures ofregional and district court judges are the responsibility of the Judicial Qualifications Collegia of the Subjects ofthe RF.
Caseload and Employment Structure
10. The judicial system handles about 8.3 million cases annually. Of these, about 13,000 cases are reviewed by the Supreme Court, 633,000 by the Supreme Courts of the Subjects, 6.2 million by district courts (about 74 percent of the total caseload) and 1.5 million by Justices of the Peace (about 18 percent ofthe total caseload). Civil cases comprise 60 percent ofthe general courts’ total caseload, criminal cases 20 percent and administrative cases 20 percent. Arbitration courts handle about 638,000 cases annually (about 7 percent of the total cases of the overall judicial system). Apart from the arbitration court system, there are no courts of special jurisdiction in Russia-such as those handling domestic relations, tax or probate disputes. As
l4Supreme Arbitration Court www.arbitr.ru. Judges have already been appointed for 8 of the appellate arbitration courts to be created. l5Supreme Court Judges are appointed by the Federation Council following a recommendation by the President of the RF; federal judges are appointed by the President ofthe RF. However, a candidate may be appointed only in the presence ofa positive conclusion by the SJQC.
4 trial courts of general jurisdiction, the district courts handle the majority of all civil and criminal cases.
11. As of December 2005, the judiciary as a whole employed about 135,000 personnel (Le. about 790 employees per million of population)16. Of this, court employees number more than 76,000, including more than 58,500 in the CGJ, more than 9,000 in arbitration courts and more than 8,500 in JP courts. The JD employs about 21,000 personnel, of whom 16,000 are at the central office and the rest in the JD’s 89 regional offi~es’~.
Budget, Revenues and Cost Recovery
12. The courts are largely financed out of the general tax revenue of the Russian Federation. Typically, about 90 percent of expenditures are for staff salaries and benefits, and the rest for building maintenance, utilities, and other operational expenditures. According to 2003 data, the actual combined budget expenditure of the general and arbitration courts was 25.3 billion rubles’*. Of this, 21.7 million rubles was spent by the general courts and 3 billion RUR by the arbitration courts.
13. Although information on court revenues is not complete, rough estimates indicate that Russian courts generate 10-12 billion rubles annually from various types of fees and charges. The practice of charging court fees is motivated by two basic considerations: (i)to provide financial resources to the government in order to offset (in part) the expenses associated with the disposition ofprivate disputes, and (ii)fees operate as an incentive or disincentive for using the courts. In Russia, all fees and charges collected are channeled directly to the federal treasury. Court fees were standardized in 2000 in the Tax Code of the RF (Chapter 25.3, Arts. 333.16- 333.42). All organizations and citizens must pay legal fees acting as either plaintiffs or respondents, excepting those who are exempt”. Overall, Russia’s general courts generate income
l6 Sources: Judicial Department at the Supreme Court, Supreme Arbitration Court, Council of Europe reports, USAID. 17 Sources: Judicial Department at the Supreme Court; Supreme Arbitration Court, MOEDT, and Vasiliy A. Vlasihin, Introduction to the Legal System ofRussia, October 2000. 18 The breakdown of expenditures within the court systems was as follows: (a) general court system: SC 504 million rubles; JD 1,002 million rubles; regional courts 3,692 million rubles; district courts 14,180 million rubles; and JPs 1,415 million rubles; and (b) commercial court system: SAC 258 million rubles, and first instance and courts of a peal the remainder. 1g Fees are charged when applying to the Constitutional Court, general courts (including the justice of the peace courts), and commercial courts. Most of the fees are charged in advance ofthe legal proceedings. Exemptions can be obtained from the judge by persons of limited means. The oversight and control of proper payment of legal fees is led by the Tax services of the Russian Federation. Legal fees in the courts of general jurisdiction vary from 100 rubles to over 6,000 rubles, depending on the estimated value of the suit. (The value of suit is decided by the plaintiff, or, in cases determined by the legislation, by the judge.) Fees in the arbitrage courts range from 500 to over 16,000 rubles. Arbitrage judges, depending on the social condition of the payer, are authorized to lower the fees due. For matters discussed at the Constitutional Court, fees range from 200 to 4,500 rubles. Registration of a marriage or a divorce costs about 200 rubles. According to the Tax Code (Chapter 25.3, Art. 333.39, several groups of citizens are exempt from most of the legal fees: the disabled of categories Iand 11; war veterans; decorated war heroes; and plaintiffs, if they are applying for reinstitution oftheir salary, for damage caused by criminal act, personal injury, or death of a bread-winner. Exemption of retirees from legal fees is limited to cases involving disputes regarding their pensions. Source: Tax Code.
5 covering about half their operating expenses, while arbitration courts have a cost recovery of about two-thirds.
3. Key Achievements
14. It may be argued that key judicial reform achievements to date comprise (a) the promotion of the concept of a hierarchy of laws and reduction of inconsistencies in the laws of different levels ofgovernment in Russia; (b) the adoption and implementation ofnew procedural codes (criminal, civil and arbitration) with many positive features; and (c) a dramatic and continuing increase in the funding of the courts. This increased funding has been strategically used to raise judges’ salaries, establish the JP system and thereby reduce numerous judges’ caseload, introduce jury trials, significantly increase court staffing (especially clerks), repair court buildings, and move towards wider use of ICT. Many of these institutional and technological reforms were piloted or supported by the recently completed Legal Reform Project, whose achievements the JRSP seeks to build upon. The LRP has also contributed to forging a collaborative process between the judicial and executive branches to determine reform and financing priorities and shape them into two successive FTPs, with increasing emphasis on monitorable indicators of progress and assessment of impact through instruments such as surveys, opinion polls and research.
Institutional Reforms
15. The restructuring of the judiciary in 1998 into a separate, self-governing branch of the state was an important development. The Constitutional Court was established in 1991, and specialized arbitration (commercial) courts in 1992. Important new legislation has been adopted (e.g. the Arbitration Procedure Code) or old legislation totally revamped (e.g. the Criminal and Civil Procedure Codes). Russia also ratified the European Convention of Human Rights in 1995. Trial by jury has been re-introduced. In December 2004, the All-Russia Congress of Judges adopted a more substantive Code of Ethics. New positions have been created, including 2,500 court administrators, 14,000 judicial assistants, and court press relation officers2’. Judges’ salaries have been significantly raised2’.
16. The prosecution service was reformed and reorganized in 1992. In 2004, the Federal Bailiff Service was formed under the MOJ for the enforcement ofcourt decisions and security of courthouses. The MOJ also supervises the Federal Penitentiary Service (set up in 2004), which manages correctional facilities nationwide.
Initiatives to Strengthen Transparency, Accountability and Public Confidence
17. Numerous initiatives are in place to strengthen transparency and accountability in judicial functioning. Only a few are mentioned here:
2o Source: USAID *’ According to the 2006 Report by the Council of Europe’s Commission for the Efficiency of Justice (CEPEJ 2006), the starting salary of a district court judge was 29,700 rubles (around $1,105) and that of a Supreme Court judge was 70,047 rubles (around $2,605). An indication ofthe rise in salaries comes from the Vedomosti December 2004 report about monthly salaries: that of a district court judge was about $978, of a Supreme Court Justice about $1470 and ofa Supreme Arbitration Court Justice about $1 133.
6 i) One of the earliest was a 2000 initiative to publish judicial decisions, begun by the Garrison Military Court in St. Petersburg. This gradually broadened to all the courts in St. Petersburg. The Council ofJudges of St. Petersburg has already adopted criteria to guide publication of decisions. All decisions are published on a web portal (established with technical support from the Faculty of Law of St. Petersburg State University) except those prohibited by law, which are flagged by the President of the relevant court. Software for the publication ofdecisions has been installed and is being used. ii) The Supreme Arbitration Court is also moving swiftly to publish all its decisions online. The SAC itself and numerous arbitration courts already publish their decisions. More than 30 arbitration courts are now also using case management software. iii)The Supreme Arbitration Court is also partnering with the US Judiciary in an innovative colloquium series. This dialogue process establishes bi-national teams, pairing Russian arbitration court judges, private sector practitioners, law faculty, institute experts, and business people with US. counterparts. The teams analyze legal principles and practice in selected commercial law topics at the Supreme Arbitration Court and Arbitration Cassation court levels. Briefing materials, largely prepared by the Russian side, enable the U.S. judges and other participants to understand the parties’ positions, legal issues and applicable laws for courts’ decisions. This allows for a series of interactive dialogues, initially conducted by e-mail and ultimately leading to face-to-face meetings for further discussions. Selected topical summaries will be published in both Russian and English. iv) In the CGJ, automation of case management has been piloted in numerous locations. Indeed, the scale of the pilots dwarfs the size of the judicial systems of many countries. More than 800 CGJ have been piloting, some for several years, case management software developed at the initiative ofthe Judicial Department and customized to courts’ needs. And more than 180 CGJ have been using some form of self-developed software for case management. Thus, in 2005, more than 980 CGJs out of some 2,800 were using case management software and are now familiar with its advantages. Likewise, more than 700 JPs out of some 6,500 are reported to be using some form of commercially developed and customized case management software. Some of these pilots have been financed by development partners (e.g. EU and USAID), some by the JD and some by regional governments. This is fertile ground for modernizing the CGJ information system. v) Rules of Conduct for Court Personnel were approved and adopted by the Council of Judges in April 2006. Developed by a Working Group established by the JD and supported by USAID, these set standards of ethical behavior and specify ethnical norms of conduct for court personnel when performing their judicial duties and during extra- judicial activities. These Rules apply to more than 76,000 court employees. vi) Pilot Instructions for Case Management were tentatively approved by the JD and the Council of Judges in late 2005. These make radical changes, including random case assignment, a consolidated case docket record, and an enhanced role for the court administrator. These Instructions are being piloted in four cities during 2006: Kaluga, Krasnodar, Nizhni-Novgorod and Khabarovsk, as part of the Russian-American Judicial Program (RAJP). At present, the President ofa Russian court personally assigns cases to judges within a court. Recently Chief Justice Lebedev ofthe Supreme Court has publicly
7 expressed support for random case assignment as a means of increasing public confidence in the judiciary. vii) Several draft laws promise to improve judicial functioning: (a) mandatory declaration of incomes and assets for judges; (b) prevention of conflict of interest arising from close relations of judges practicing in the same or subordinate courts; (c) regulating the publication ofjudicial decisions including on the internet.
Human Capital Development
18. With the establishment of the Russian Academy of Justice (RAJ) in 1998, the Russian judiciary enhanced its human resource capability and built capacity to gradually meet its training requirements. During the past five years, about 3,000 judges and 10,000 staff and other professionals have been trained each year in new laws and other court-related topics. However, the demand for professional development still outpaces supply by a factor of three or four; A growing number of enlightened and innovative judges have seized upon transparency as the window to usher in accountability and integrity. However, their number remains relatively small and mindset change in the rest of the judiciary continues to be slow. There is an urgent need to develop carefully tailored change management and communications programs to change the hearts and minds ofjudges and court staff.
Modernization Initiatives
19. The RF is now pursuing an ambitious judicial modernization program. The objective is to build a modern, competent and effective federal justice system based on the rule of law, judicial independence and transparency. An important goal is to ensure timely, fair and equal access to justice to replace the old system embedded in socialist jurisprudence. However, the size and complexity ofRussia and its judicial system add many challenges to the modernization efforts.
20. The 44.9 billion ruble FTP for 2002-200622 is currently the key instrument to achieve the above objective. This FTP sought to attain: (i)greater independence ofjudges; (ii)enhanced prestige of the courts; (iii)enhanced accountability of judges; (iv) upgrading professional standards of judges, court staff and the Supreme Court’s Judicial Department; (v) consistent implementation of the constitutional principles of justice; (vi) development of the material- technical basis of the law courts and the JD; (vii) creation of an effective information and communication system for the judiciary. The 2007-2011 FTP for the Development of the Judicial System in Russia, approved on September 21, 2006 will largely be a continuation ofthe current FTP.
21. The 2007-2011 FTP has a budget of 48.4 billion rubles. The FTP envisages the preparation of new legislation to increase transparency and judicial accountability, including by introducing obligatory declarations of income and assets for judges. Other draft laws to be prepared under the FTP will include bills on the caseload ofjudges and court staff and on the clarification ofjurisdiction between district courts and JPs.
” The Federal Targeted Program “Development of the Judiciary System in Russia 2002-2006“, as updated by Russian Federation Government decree No. 49 of February 6,2004.
8 22. The new FTP sets the following targets: (i)raising public confidence in the judicial system to 50 percent from the current 19 percent; (ii)improving efficiency: by reducing the rate of cases completed beyond the prescribed deadlines from 12.8 percent to 5 percent; and (iii) increasing the rate of enforcement ofjudicial decisions from the current 52 percent to a target of 80 percent. The new FTP will finance an expansion in the use of ICT. Specifically, it will hnd 43,000 additional computerized work stations in CGJ and arbitration courts (an increase of 93 percent) and the creation ofwebsites for all CGJ and arbitration courts for publication ofjudicial decisions and other public information. The FTP also sets targets for the expansion and renovation ofcourt premises, improved court security, and provision ofhousing for judges23.
23. The RF also has ongoing programs with development partners (e.g. CIDA, USAID, EU, GTZ, UK, Finland, etc) for piloting court automation, continuing education, and legal drafting. More than 1,000 Russian judges have traveled to the USA under USAID and Open World (a Library ofCongress initiative) programs. Annex 2 has more details.
4. Challenges Ahead
24. The authorities ofthe RF have stated their desire to rapidly transform the judiciary into one that is worthy of public trust and confidence, and which can enforce the rule of law by (a) helping to define the rules of a market economy; (b) resolving complex commercial disputes effectively; (c) protecting economic and social rights; and (d) holding the other branches of government accountable to the law. And - also relevant for Russia - well-functioning judicial systems play a critical role in constraining elites in market economies.
25. It has been argued that the substantial achievements to date have focused mainly on legal reform, and less on capacity-building and mindset change, resulting in continuing lack ofpublic trust and confidence in the judiciary. Furthermore, several initiatives seem to threaten these achievements, such as proposals to change the composition and way of selecting members of judicial qualification collegia; an attempt to end life appointments for judges; a challenge to the power ofthe Constitutional Court to declare laws invalid; reported efforts to tame jury discretion in sensitive cases; and widespread perceptions about corruption in the courts.
26. These and other constraints, which continue to hobble judicial effectiveness, are outlined in two separate but inter-connected categories - internal challenges and external challenges. Internal challenges relate to constraints falling under the courts’ operational scope. External challenges relate to issues beyond the immediate scope ofcourt operations, and correspond to the broader justice sector. The figure overleaf and the following paragraphs summarize the key challenges.
Internal Challenges
27. Transparency. Judicial institutions in Russia are typically not accustomed to being scrutinized by society and the existing control mechanisms are very weak. Currently, very few judicial decisions are published. Many of these are only available to the judicial profession. The Supreme Court publishes a sample of its rulings, as well as ‘explanations’ on matters of
23 Decree of the Russian Government No. 583 of September 21, 2006 approving the FTP “Development of the Judiciary System in Russia 2007-2011”.
9 I Internal and External Challenges of Russian Courts
jurisprudence. However, the selection of materials for publication does not follow any formal procedure, resulting in certain arbitrariness in the issues given prominence at any given time. Moreover, ad hoc judicial explanations handed down to lower courts often end up becoming matters of doctrine in the sentencing practices of lower court judges (for example informal recommendations on sentences or the burden ofproof to be applied in criminal detentions, even when these recommendation run contrary to statute.) The Soviet-era system had a very limited requirement for disseminating legal information or judicial decisions. Russia’s transition to democratic governance and a market economy, however, has exponentially magnified the need for the publication of laws and judicial policy decisions given the explosion of legislative and institutional changes in recent years. The need for information is a matter ofpublic interest and an important criterion in the performance ofjudges, the legal profession and policy-makers.
28. Knowledge gap and lack of qualiJied human capital. To a certain extent, the heavy workload of courts is explained by inadequate personnel. About 8 percent ofjudges’ positions are vacant. Human capital flight due to more attractive and lucrative options in the private sector further contributes to the shortage of personnel. The biggest problem, however, exists in the regions, where instead of qualified jurists; former representatives of law enforcement agencies are often hired. The recruitment of former law enforcement personnel in the judiciary reinforces a tendency in the profession towards a presumption of guilt in the judicial process. Moreover, in remote regions it is difficult to find qualified legal professionals. The continuing lack ofprestige of the judicial profession means that the courts do not attract the better graduates from law schools. In spite of this grim outlook, there are indications that the profession is beginning to acquire more prestige, at least within its own ranks. The Judicial Qualifications Commission,
10 which was created to oversee the evaluation and selection of candidates to the judicial profession, has reported increasing competitiveness for senior posts among judges.
29. Difficult economic conditions, low financial compensation and gloomy career prospects also result in considerable human capital flight. In many cases, staffs with comparable job profiles and skills are offered twice or three times higher salaries in the private sector. Since there are at best limited options for professional development and training, the judiciary is handicapped in attracting and retaining staff.
30. The RAJ, set up in 1998, has made major efforts to train judges and staff, but there are no comprehensive training programs for new and sitting judges (including JPs) that can meet the overall needs, including and especially continuing education carefully developed to changing judges’ mindsets. Except for some law schools, discussions indicate that changes in law school curricula in recent years have focused almost exclusively on the new fields of law, and have neglected important areas ofthe broader social and cultural context ofjustice administration. The lack of adequate training mechanisms negatively affects the performance ofjudges and also of judicial staff (court secretaries, bailiffs, notaries, and registrars) who provide indispensable support services.
3 1. Performance. Measuring the performance of justice systems is problematic. In Russia, where transition and judicial reform are both works-in-progress, performance measurement is all the more challenging. However, taking these limitations into account, and using available data, some efficiency and quality indicators can be estimated24.
a) The clearance rate25 (within a year) of commercial courts has been high and improving for the last few years, having increased from about 65 percent in 1995 to about 87 percent in 2005. The clearance rate ofgeneral courts is low (about 59 percent), though increasing with the gradual introduction ofthe JP system since 1998. b) In terms of backlog26, it is estimated that currently (2006), there are about 1.2 million cases pending in the commercial courts which were created in 1992. In the case of CGJ, numbers are difficult to estimate but it is known that thousands of cases are added to the backlog each year. Even well-functioning judicial systems may have cases pending at the end of the year. What is important is that the constant growth in the pending caseload is perceived to be delaying justice and reducing the effectiveness and credibility of the judicial system. c) Data on frequency and duration of delay27 is limited. Anecdotal evidence suggests that commercial cases take about 1.2 years from filing to disposition. After a court decision is pronounced in commercial cases (depending upon the complexity of the case), it may take another year to enforce the decision, mainly due to the weak enforcement ofjudicial decisions by the Federal Bailiff Service under the Ministry ofJustice.
24 Given the unique situation, international comparators would be provided after hrther analysis of available data. 25 The clearance rate is defined as cases disposed of as a percentage of cases received within a given period. 26 The backlog is defined as the number of pending or outstanding cases in the system. ’’ Delay is defined as the length of time the cases are in the courts.
11 32. From the point of view of judges, delays are caused by improper compilation and completion of legal documents by the plaintiffs; delayed implementation of inquiries and assignments by the staff; absence of the parties to the case during the pre-trial discussions; lack oftraining to keep pace with constant changes in legislation; heavy caseloads; and weak support systems.
33. Delays in criminal courts are modest compared to the slow pace of the administration of criminal justice in other countries. However, several factors contribute to make them appear acute to Russians2*. In addition, the imperative to conclude the trial within the prescribed time period, combined with the recently introduced jury trial process and judges’ lack of access to past decisions, can often pressure judges, and seems to result in more frequent appeals and resultant pressure on the criminal justice system. In most civil trials delays are not excessive, especially from a comparative perspective. But as judges have very little time to prepare and then to try cases (7 and 10 days respectively) according to the guidelines (which are strictly enforced by the chairmen and the JD), there is a rush to decision-making that may cause delays if the case is appealed. This is reflected in the increase in the number of appeals and reversals that add to the length oftime the cases are in courts, thereby frustrating users and raising quality concerns.
34. Resources and Incentives. The inefficiency of the great majority of courts is due to inherent weaknesses of institutional structures. Key deficiencies include a lack of coordination among units, weak planning and oversight of human resource hctions, weak checks and balances, a lack of physical infrastructure (courthouses and judicial offices), uneven resource allocation, and weak technological capacity. The legacy of under-investment in judicial infrastructure (now being remedied through the Federal Targeted Programs) means that there is still a shortage of courtrooms, technical support staff, stenographical and basic clerical supplies, not to mention ICT equipment on which the courts depend for their everyday functioning. Many courts are housed in facilities ill-suited to trial hearings. According to a government document, “the housing of courts and the state of the premises they occupy are so unsatisfactory as to compromise the whole institution ofjustice. Some courts have no premises of their The result is the violation of the principle of open court hearings due to limited court space, which severely restricts access to court hearings.
35. Files are often incomplete or misplaced, resulting in added contention in the resolution of cases. As a result, judges are required to dedicate much oftheir time to mundane administrative tasks, which divert valuable time from jurisdictional duties.
28 First, the pre-trial investigation often takes a long time (the average is 10 months, and for complicated cases well over a year), and the conclusion of the investigatory stage thus brings with it an expectation of imminent resolution. Trials, therefore, no matter how quickly they are concluded, inevitably appear to prolong the agony and uncertainty of defendants. Second, a large proportion ofdefendants are remanded into custody; even minor delays thus make the trial process appear cruel and interminable. Third, adjournments give an excessively bureaucratic face to the courts. Fourth, the law requires speedy handling of criminal trials-14 days to decide whether to commit the case to trial and another 14 within which the trial must begin. See Peter Solomon Jr. and Todd Fogelsong, “Courts and Transition in Russia”, Westview Press (2000). 29 The Ministry of Economic Development and Trade estimated in 2004 that for CGJ buildings, 719 (or 34 percent) were unfit for use while 162 (or 7.8 percent) needed repairs; for arbitration courts, 10 buildings required reconstruction, 28 courts needed new buildings, and 20 percent ofjudges were in need ofhousing.
12 36. Though judges’ salaries have been increased, court staffs continue to remain underpaid. And as more and more courts embrace automation, the number and skills of IT staff to maintain and service the IT equipment and networks could emerge as a serious constraint.
37. Corruption. The highest authorities in the country acknowledge corruption as one ofthe worst scourges affecting Russian society3’. According to an opinion poll carried out by Transparency International (TI Russia) between January 2002 and January 2003, 75 percent of respondents consider the law enforcement agencies to be dishonest. A recent opinion poll carried out by the Public Opinion Foundation in October 2004, showed that two thirds of respondents described judges as “corrupt, on the take, always willing to be bribed”. The overall TI “Corruption Perceptions Index” for 2005 ranks Russia 127th out of 137 countries.
38. Though cases of outright corruption (acceptance of bribes) appear to be limited to commercial cases in which large sums ofmoney are at stake, the system’s opacity (exacerbated by the fact that judicial decisions are not published) leads to the perception that judges are prone to submit to pressure either from local authorities or private interests.
39. Social law enforcement mindset. As noted, the mindset of socialist law enforcement and judicial administration was inherently contrary to the notion that a judiciary exists to protect the rights of citizens and to provide checks and balances in public governance. The role of legal institutions and of public law (the regulation of the relationship between individuals and the state) had previously been understood as the protection of the interests of the state and the state economy. Private law (the regulation of the relationships between individuals or groups) was thus very limited in its scope, chiefly related to the resolution of family disputes and a limited range of economic transactions. The notion that a citizen could appeal the actions of a state agency under administrative law was virtually inconceivable.
40. In spite of the reforms, the legacy of this mindset can still be seen in the tendency that persists, for example in criminal law, to view the efficiency of the justice administration system as an index of the number of convictions secured rather than rate of case resolution. The prevailing mindset ofjudicial operators is one ofresults-oriented decision-making, including the toleration ofwhatever means are necessary to achieve those results. Between 1996 and 2002, 53 percent of judges who were removed from the bench were deposed due to violations of procedural legislation in case handling, 12 percent due to falsification of court documents, and 14 percent due to dilatory actions.
41. Powerful pressure from higher courts3’. The hierarchical subordination ofRussian courts remains powerhlly in effect, both in institutional procedures and in entrenched practices and expectations. In spite of constitutional provisions and legislation, the independence of the lower courts is still a distant goal. The higher courts are perceived to influence the decisions of the
30 The Federal Interior Minister said on 16 February 2005 that “the likelihood of receiving a prison sentence for corruption is minimal and the higher the rank of the official involved, the smaller that likelihood is.” Only 5 percent of those arrested in bribery cases are high-ranking officials and only one bribe-taker in 10 is ever convicted in Russia, ITAR-TASS reported. See Council ofEurope report supra. 3’ Sources: Field discussions and reports including Diagnostic Review of the Court System in Russia, Report Prepared by Robert Lipsher, Samuel Conti, Richard Hoffman, and Thomas Dibble Courts and Transition in Russia: The Challenge ofJudicial Reform. Peter H. Solomon and Todd S. Foglesong. Westview Press: Colorado, 2000.
13 lower courts at all levels, from the methods of appointment ofjudges, to procedural issues in case management and policy guidelines regarding case resolution. Higher court judges, court chairmen and even the procedural instruments ofjudicial self-governance (such as the judicial qualifications collegia) all exert influence on the conduct of judges in the lower courts (a pervasive culture ofconformity).
42. The pressure on lower court judges to conform to accepted wisdom and guidelines from the higher courts is procedurally reinforced by the appellate system. Performance evaluations of judges continue to be determined by the rate ofreversal ofjudges’ decisions, otherwise known as the ‘stability of sentences.’ Reversal rates have a powerfbl influence on attitudes and practices about securing convictions. Appellate proceedings in criminal cases give a very wide scope to superior courts to review and reverse decisions, given that they are not limited only to scrutinizing errors oflaw in the appealed decision.
43. Appellate courts are instead expected to review the entire proceedings and may find grounds for reversal on grounds such as the ‘non-correspondence of the decision to the factual circumstances of the case’ or to ‘incomplete judicial investigation of the evidence’, which leave a broad scope for interpretation. Lower court judges are therefore highly motivated to give serious consideration to the opinions ofsuperiors about specific cases to attempt to pre-empt the possibility ofreversal. This practice extends to consulting with peers and superiors about specific cases and their appropriate outcome. The fact that superior court judges are assigned to lower court judges as official mentors in matters of skills and training exacerbates the situation. Developing institutionalized modern training mechanisms can help reduce dependence on these programs and help change judicial culture, mindsets and practices.
44. Jurisdictional and administrative decision-making in the management of the courts is concentrated in the hands of court chairmen. This means that individual judges depend on the court chairman for the allocation of cases as well as for their career advancement, salaries and benefits, including housing. The absence of a normative framework for the allocation of cases feeds public perceptions of undue influence. Case-flow management procedures, including the automated allocation of cases could address this problem. They could also help alleviate the burden of cases and delays in the courts, a critical problem exacerbated by the sharp increase in litigation over the last decade.
45. Safety of judges. As a result of a spate of physical attacks against judges and thefts at courthouses in the 199Os, a 1997 law established the services of armed bailiffs to protect the courts. Budget shortfalls mean that in practice the implementation of these services is highly inadequate. Judge safety is insufficiently supported on two levels. First, inadequate bailiff services typically fail to provide even minimal security for judges during court proceedings. Moreover, the security ofjudges outside the courthouse is an area of increasing concern. Judges are often threatened by organized crime units, particularly as regards private economic interests in litigation.
46. Procedural delays. The broadening ofthe social role ofthe courts in the 1990s brought a massive growth in the demand placed on the judicial system. The judiciary was quite simply overwhelmed by the demand and by the expectation that it would simultaneously adapt its institutional structures and behaviors to the new status quo. The number of civil, criminal and
14 administrative cases heard by the courts doubled in the first half of the decade. Backlogs are common, particularly in criminal cases. In spite of numerous reform initiatives, the capability gap of the courts is far from bridged. Sociological data provided by the Glasnost Foundation show that two-thirds of the respondents mention procedural delays and backlogs as the main shortcoming of Russian courts. In 2000, a fifth of criminal and civil cases were considered to have unlawful delays. Sometimes arrested persons have to wait for trial for 2 or 3 years in inhumane prison conditions. Delays are generally attributed to inefficient procedures; failure to appear in court by the petitioners, witnesses (especially police officials), experts, lawyers; uneven workload distribution; lack of qualified personnel, etc. These delays exacerbate already negative perceptions of the courts. The occurrence of delays is also due to the inability of the courts to comply with the strict requirements ofthe Code of Criminal Procedure, which now sets a limit of 28 days for criminal trial proceedings to commence.
47. Imperfect legislation. One of the key reasons for gaps in due process in Russia are imperfections and contradictions within the Russian legislation itself. Moreover, the public is not educated about the existing normative acts and their constant revisions, though public access to legal texts is now improving. The creation of new judicial mechanisms in the last 15 years has required in some instances the drafting of entirely new procedural codes, in other cases, the revision of existing laws. In either case, the situation has created a new legal landscape with some inevitable gaps and inconsistencies. Improved knowledge-sharing across the judiciary and among legal professionals, as well as the dissemination and public availability of legal information, are indispensable to ensuring that any comprehensive review of the law is accurate and involves the participation of all stakeholders. In some cases substantive revisions may be called for. In other cases, simple remedial amendment may be enough to reap considerable benefits.
48. High percentage of appeals. Legislative inconsistencies and weaknesses in the effective and efficient handling of cases in the court system contribute to the currently enormous incidence of appeals. In 2000, appellate court judges considered approximately 450,000 appeals. While the right of appeal requires legal provision and protection, standardized norms and channels for judicial review need to ensure and promote maximal efficiency in case handling and allocation. It is also generally acknowledged that limiting the powers of appellate courts, or placing limits on the ease ofrequesting appeals, can produce compensatory effects by placing a greater burden on the quality of the earlier phases of trial proceedings. The Supreme Court encompasses four divisions including one that exclusively handles appeals, which is obligated to review, for example, any appeal requested of any decision ofregional courts and of the Supreme Courts in the regions. The Presidium ofthe Supreme Court ofthe Russia Federation, moreover, can review any ruling, decision or verdict made by any court in Russia, and in effect any dissatisfied litigant can obtain an audience with a member of the panel. Inadequate judicial training and skills also contribute to the number of appeals. According to BEA, in 2000-2001, 53 percent ofjudges had between 10 and 30 percent of their decisions overturned by a higher court. The absence of standardized norms or mechanisms for publishing judicial decisions also contributes to these conditions.
49. Inadequate distribution and mapping of courts. The current framework of the general courts was established in 1996. The organic law has subsequently undergone revision and been the source of intense debate regarding the relative autonomy of the court systems of the SRF.
15 Regional leaders of the SRF have questioned whether the courts in the SRF should be independent. Given the exponential growth in demand (caseload) and increase in complexity of cases, many believe that the current mapping of courts needs to be reviewed to better deploy current resources and right-size the judiciary (see Figure 3).
Figure 3 RUSSIA STRUCTURE AND EVOLUTION OF CASELOAD (ALL COURTS) Millions
1990 1994 1996 2001 Civil administrative 1 'Sources:Judicid Departenmi and ComcialCourts
50. Lack of knowledge sharing mechanisms about good practices in judicial reform. A number of new institutions were created in the early 1990s to strengthen the coordination and management of the judicial function and to support the independence of the judiciary. The largest of these, the Congress of Judges, whose delegates are elected by regional conferences of judges and has the mandate ofrepresenting the whole judicial community, meets once every four years. The Congress of Judges elects members of the smaller Council ofJudges, which meets at least twice a year. These bodies have provided channels for discussion of a wide range of issues affecting the judicial profession, including for example the judicial Code ofEthics.
51. These bodies have contributed in some measure to greater public and government awareness of the judicial profession and the courts and their related concerns. However, these bodies depend for their existence on ad hoc funding. Consequently they suffer from a shortage of operational staff and basic resources for effective functioning. The Council of Judges' ability to advance substantive discussion of draft legislation, or proposals for the improvement of the courts, for example, is hampered by inadequate access to information including the unavailability of court information and statistics, and knowledge about good practices in judicial reform. Any impact that these bodies might have is also limited by the absence of mechanisms for disseminating their findings and thereby promoting further dialogue within the judiciary.
52. Reform coordination and management. The judiciary has also experienced reform coordination and change management challenges. Where legal reform processes have been led from the outside, the reform process has been marked by starts and stops; reforms were effectively suspended in 1996. Yet the RF has seen phenomenal growth in the demand for justice services as a result of economic growth, social changes and the loosening of administrative controls. The evolution of the market for legal services (law schools, bar associations, notaries,
16 public and private lawyers etc.) has affected incentive arrangements for attracting and retaining judges and staff. The re-starting of judicial reform in 2001 and the establishment of an inter- agency council in December 2004 improved inter-branch coordination and promotion ofjudicial leadership, participation and ownership.
External Challenges
53. Lack ofpublic trust and conJidence. User satisfaction can be one ofthe quality measures ofperformance. Lack ofpublic trust and confidence remains a key impediment to higher judicial stature and credibility. In a 2004 poll, 67 percent ofRussian citizens responded that the majority ofRussian judges are corrupt. 62 percent said that judges do not base their decisions purely on the law, but on “other considerations” as well. 40 percent of the 62 percent said that the considerations include the judge’s personal interests32.
54. Data from BEEPS generally reiterate the above impressions. In 2002, the BEEPS results indicated that 26 percent ofrespondents perceived the functioning ofthe judiciary as a problem; in 2005, the figure increased to 31 percent33. The BEEPS results show that more firms in Russia think that courts are honest in 2005 than in 2002. However, even in the improved 2005 data, only about 20 percent ofthe firms surveyed considered that courts were frequently, usually, or always “honest and uncorrupted”. This is quite low compared to the response levels in such countries as Germany (approximately 85 percent), Estonia (exceeding 60 percent) and Turkey (exceeding 50 percent). A little more than 40 percent ofresponding Russian firms believes that courts are able to enforce judicial decisions. By comparison, the same figure for Greece is about 80 percent, for Turkey over 70 percent, for Germany 70 percent, and for Estonia over 60 percent. The percent of firms stating they have used courts to solve an overdue payment is low compared to the ECA average, though higher than that for CIS countries. However, improvements are also evident from the 2005 BEEPS data, most notably in the sharp increase in the proportion of firms responding that information on laws is easy to obtain. And the percent of firms stating that the implementation of laws is consistent and predictable increased over 2002, as did the proportion of those saying they are confident the legal system will uphold property and contracts rights. Key 2005 BEEPS results relevant to judicial functioning and credibility are depicted overleaf.
55. The overall lack ofconfidence in the judiciary in Russia seems to be due in part to rising expectations, in part to judges’ knowledge gaps in the wake ofrapid and large-scale adoption of new laws, and, importantly, in part to perceived judicial corruption, ineffectiveness, non- transparency and patronage in judicial appointments. These perceptions are compounded by the lack ofan effective judicial disciplinary process.
56. In another survey, Russia showed steady improvement in perceived independence from 1998 to 2001 and then declined for the next two years, compared with other countries in the survey34. Perceptions of “telephone justice” are frequent as well: many judges allegedly prefer to
32 Public Opinion Fund, reported in Zzvestiya, October 19,2004. 33 Llkewise, in terms of corruption (although this does not relate to the courts specifically), the 2002 figure of 30 percent for Russia increased to 38 percent in 2005 (see h~://rm.worldbank.orgiInvestmentClimate/~. 34 In the Executive Opinion Survey (EOS), conducted annually by the World Economic Forum, fmwere asked about the legal framework for challenging government decisions. Discussed in Judicial Systems in Transition Economies - Assessing the Past, Looking to the Future (World Bank, 2005).
17 use of courts Legal Framework Summary Assessments Percent of tirms that have been to court in Percent of lims stating that intonation on Percent saying tne functioning of the me past three years Ia7wis easy to obtain judiciary is a problem doing busness
.. . .. Rw CIS ECA Rus CIS ECA Rm CIS ECA Percent of Rnns that have used courts to Peacent of firms stabng that Percent saying they are confident the legal sdve an overdue payment (of those firms impfernentabon of law Is consistent and system will uphoM property and contract with overdue payments) predtctable rights - ”* 42 4I 75% 40 39 38 37 36 35 Rus CIS ECA RUB CIS ECA Rw CIS ECA
get instructions rather than risk having their judgment overturned, apparently because judges’ appraisal is based on the number oftheir judgments reversed35.
57. According to a 2004 survey in three cities conducted by the BEA36,about 70 percent of court users are satisfied with “court decisions”. But 75 percent are not satisfied with “the organization of the courts”. When asked to identify the main problems, they reported: administrative problems (17 percent); negligence and inactivity of court bailiffs (12 percent); lack of legal explanations by judges (12 percent); unavailability of information (1 1 percent); shortness ofmeetings with judges (10 percent); subjectivity and negligence ofjudges (7 percent). The level of citizen confidence has a bearing on whether people consider going to the court to resolve disputes and exercise their rights. Citizens say they are reluctant to go to court due to long court delays (40 percent); distrust towards judges (22 percent); high legal fees (23 percent); and previous negative experience (13 percent).
58. This mind-set of citizens towards courts and judges is also reflected in the views of practicing lawyers, who are generally dissatisfied with court functioning. Procedural delays are mentioned as the main source of problems, for which they fault the heavy case-load ofjudges, the lack of professionalism of judges, the organizational inefficiency of the courts, and the perceived lack ofdisciplinary action against errant or corrupt judges.
35 Council of Europe report, supra. 36 The survey was conducted in three Russian cities from the Sverdlovsk Oblast (Ekaterinburg, Nizhny Tagil, Sukhoy Log) with a sample of 642 individuals having experience with the court process. For the general survey, the sample comprised 1820 individuals.
18 59. Weak enforcement of judicial decisions. This is a key factor affecting the effectiveness and credibility of the judiciary, and arises from a combination of issues. In Russia, the Federal Bailiff Service (FBS) is responsible for enforcing judicial decisions. Typically, however, the bailiff service or pristav is mainly understood to be responsible for court security (their other function). Collection of outstanding utility bills, taxes and other economic recoveries are part of bailiffs’ functions. Since they receive a portion ofthese proceeds, there is unhealthy competition among bailiffs to pay more attention to such enforcements and less to other important tasks for which monetary recovery is more complex.
60. Deficiencies in bailiff services remain a serious problem in many regions. For example, many district courts of the Kurgan oblast (region) still lack permanent bailiff services for everyday court hearings. At the same time, Ministry of Interior police units are in many cases unavailable to provide timely security in case of emergency during court proceedings. The 1997 law establishing the FBS provided for two kinds ofbailiffs, bailiff-enforcers responsible for the implementation of civil and commercial court decisions, and regular bailiffs stationed at courthouses for the protection of the facilities and staff. The latter also deliver summonses and are responsible for transporting defendants, and sometime witnesses to the courts. Bailiffs operate under the administrative aegis of the Ministry of Justice, not the courts. Their numbers and resources are inadequate, and their training insufficient or non-existent. The need for adequate and specialized training of bailiffs in the enforcement of commercial case decisions is also a growing priority. This complex issue has been separately examined in Annex 16.
61. Lack of a single information resource for the public. Persons in need ofjustice need to have information resources that allow them to seek legal services without prohibitively high costs in terms of time, effort and extra financial resources. This is an important shortcoming in the system. The creation of a unified information center in court premises, law schools, andor other public and private institutions to help citizens with their choice of legal professionals, courts and services would be desirable. The problem is made more acute by the fact that many regional courts are so irregularly and widely dispersed throughout the region, that many citizens do not even know where the courthouse is located. It would be helpful to complement the newly introduced information resource with radio, TV, and internet resources.
62. Dependence on local governments (e.g. for court facilities and supplies). As a result of the shortfalls in federal funding of the courts in the 1990~~a practice of obtaining discretionary and unregulated funding from local governments became a standard necessity for many courts. This dependence ofthe courts on local sources of funding represents a potential threat to judicial independence. It opens the door to extraneous influence on judges by representatives of local government or private interests and exacerbates perceptions of external influence on judicial decisions. Although no formal quidpro quo has ever been attached to these funds, the threat to judicial independence is clear. Polls of judges conducted by international experts some years back have revealed that in some cases specific demands have informally accompanied the provision of funds. Incidents involving “private investments” into the regional and district courts are numerous, in clear contradiction of the financial requirements set by the Constitution. An added threat ofthis practice is that it potentially undermines the system of checks and balances on local governments by undermining transparency in legal cases against local authorities.
19 63. Lack of information, oversight and quality of the legal profession (market for legal services). Information on the number of law schools, law graduates, notaries, and lawyers in public and private practice is limited37. According to the most recent report (2006) by the Council of Europe’s Commission for the Efficiency of Justice, there were 56,100 lawyers registered with regional authorities. The legal community is organized in several bar associations but membership is not obligatory. Only in the case of defense counsels, is membership required. The actual numbers of notaries and other legal experts are also not available. Publication of information on the operation of bar associations, their oversight and disciplinary mechanisms and pro bono services is also limited. As regards law schools, estimates indicate that there are about 262 higher education establishments spread all over the country. Over the last decade the demand for legal services has exponentially increased, especially in the private sector, causing imbalances, distortions and opportunities in the market for legal services. Assessments on the evolution of this market, its quality and culture are needed for unbundling the problems ofcitizens’ access to legal and justice services.
64. Lack of mechanisms for inter-institutional coordination and communication. Weaknesses in coordination add to the burden of the courts and exacerbate the delays in case resolution and decision enforcement. Inefficient coordination between the courts and the Ministry of Internal Affairs, for example, to ensure the arrival of defendants or witnesses at trial often results in the postponement of hearings. Another area of concern for inter-institutional coordination with direct bearing on the operation of the entire judicial system is the bailiff service which is under the aegis ofthe MOJ (see Annex 16). Since enforcement of all decisions of courts (general and commercial) depends on this service, citizens are frustrated when delays occur and blame the overall system for negligence and poor justice. From the users’ and institutional points of view, the inefficient operation of the bailiffs is a key constraint to judicial effectiveness.
65. Inadequate mechanisms to cater to the needs of vulnerable groups (e.g. high courts, legal aid, defender services, legal clinics). Defense counselors are in short supply: effective protection ofrights is therefore unavailable to the poor in criminal cases. This continues to be an important deficiency in spite ofthe groundbreaking legal requirement instituted in 1990 ofthe right to legal counsel within 24 hours of arrest. Defense counsels were also entitled for the first time in 1990 to participate in the pre-trial phase of criminal prosecutions, a significant normative shift from the prosecutorial and inquisitorial bias of the Soviet era (which nonetheless still permeates the legal culture). The critically under-funded legal counsel services and the limited scope of the legal aid services provided by advocates through regional law faculties and NGOs mean that significant participation in constructing a defense is still inadequate. Discussions indicate that the new bar associations, on the whole, are not required to provide legal aid services. All these gaps point to the need for an urgent review ofthe cost ofjustice and the development ofmechanisms for addressing the needs ofthe vulnerable in society (see Annex 17).
5. Role of the Judicial Reform Support Project
66. The JRSP will complement the 2007-201 1 FTP in strengthening judicial transparency and competence. Given that judicial reform is a long-term process, the Bank’s support forms
37 Some information is available on the MOJ website; Magazine “Russian Justice”; and legal web-portal “legist”
20 part ofthe broader investment program. JRSP preparation has been completed, including studies and activities where the results have impacted JRSP design. These activities have been funded from the LRP and from RF budgetary funds for project preparation.
67. The 2007-2009 Bank Group Country Partnership Strategy, endorsed by the Board on December 14, 2006, supports enhanced transparency, increased public dissemination of information and combating corruption through strategic improvements in public sector management and governance, including through judicial reform. The proposed project fully conforms to this vision. And it provides continuity with the previous CAS of May 14, 2002, which stated that better governance and service delivery would be key to improving business confidence, sustaining growth and reducing poverty: the February 15,2005 CAS Progress Report included the JRSP as one ofthe proposed investment projects.
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.I Y ea YQ me .I9 4 cCI z 4 u9 0 0 E,I 5 H W3 w yr 5 g m 8 .IY 9 a, .I2- 3 c, Q)E Y .Im c, 0 .In Y s 0 - I 4, c;l5 E1 c, $ Q) I n 6 I L e 0 E .I W co Y m E g 4, .I Y .Im E Ya, 3 E Y W L a L- e m e m F- I 3 0 P E 5 Y E 8 w c u 3 C n 2 0 .I 2 m.. Y k c,a, .Im 4,.. m u 41 j; 5: E B 2 k .IY L 5 z 09 .-L ; 4 h vr N Annex 3: Results Framework and Monitoring RUSSIAN FEDERATION: Judicial Reform Support Project Results Framework utcome ato Use of Outcome Information Overarching framework for progress 1. Periodic surveys show improved private reporting and judicial sector and public ratings for judicial performance review. transparency and efficiency Judicial decisions can be monitored for Improvedjudicial transparency and 2. Judicial decisions and case statistics in all consistency in the efficiency in courts financed by the arbitration courts, all Courts of General application ofthe law Jurisdiction financed by the JRSP, and in the JRSP Faster disposition of Supreme Court are routinely collected, cases and reduction of published and publicly accessible case backlogs indicate increased efficiency 3. Training ofjudges and judicial staff and greater access to demonstrates increased proficiency in justice technological competence. Intermediate Results Results Indicators for Each Use of Results Component Monitoring Component A. Institutionalizing Judicial Transparency and Accountability a) A baseline survey of user satisfaction with court administration and case management provided Increase in user satisfaction with in 2005 Provides feedback on transparency in judicial functioning stakeholder (court user) (over 2005 baseline) b) Periodic surveys verify increase in user perspectives satisfaction with transparency in judicial functioning in selected courts B.l Constitutional Court a) Periodic surveys of CC Judges and staff show a) Improve transparency and increasing satisfaction with use ofnew ICT efficiency through: Provides information systems compared to 2006/2007 baseline An integrated system to reduce to track the change in timehesources for accessing b) Percent of CC decisions, resolutions, the extent of usage of datdinformation required for CC definitions, opinions and legislative initiatives available information deliberations as well as special opinions ofthe CC judges Online publication ofCC published online within 2 weeks (in line with Indicates the level of decisions, resolutions, etc, existing CC regulations) transparency achieved b) Enhance ITnetwork infrastructure Assess the efficiency gain attained B.2 Supreme Court Increase in the number of search inquiries and a) Strengthen transparency and a) Provides feedback on page views made to E-library and E-archive internal efficiency through: satisfaction of (from internal and external users) over stakeholders Conversion ofdatdSC decisions 200612007 baseline into digital format Pubic access to information at SC b) Periodic surveys of SC Judges and staff show complex (kiosk, panel) increasing satisfaction with use ofnew ICT 26 b) Modernize case management and systems compared to 2006/2007 baseline legal information systems c) Increase in the number of information inquiries made through kiosks per month c) Improve SC access from remote locations through videoconference d) Percent of SC decisions published online capability for remote judicial within 5 days of confirmation of decision procedures e) Steady reduction in the number of pending or outstanding cases in the system (backlog) B.3 CGJandJD a) 20 percent reduction in average time to a) Increase the efficiency of CGJs publish court decisions and JD through roll-out of an 20 percent reduction in time for court integrated system with enhanced b) processing cases in remote areas sub-functions c) 20 percent reduction in the number of pending b) Improve transparency and public or outstanding cases in the system (backlog) access through online publication ofjudicial decisions d) Increase in the number of information inquiries made to the databanks c) Improve access to justice in e) Periodic surveys of judges and staff of CGJ remote areas through enhanced covered by the project show increasing mobile capability satisfaction with use of new ICT systems compared to 2006/2007 baseline f) Percent ofjudicial decisions published within 5 days after effectiveness of decision g) Periodic surveys ofjudges and staff of CGJ covered by the project show increasing satisfaction with use of mobile systems B.4 Supreme Arbitration Court 100 percent of AC decisions published a) Strengthen the efficiency of a) Arbitration Courts through: b) 90 percent reduction in time needed to publish Enhancementhpgrade of existing court decisions systems - case management, Steady reduction in the number of pending or search function, etc. c) outstanding cases in the system (backlog) b) Improve pubic access and d) Periodic surveys of arbitration judges, court availability of information staff and court users show increasing through: satisfaction with use of new ICT systems Intranet and external portal compared to 2006/2007 baseline Replication of online publication system to arbitration courts e) Increase in the number of information inquiries made through portals and kiosks per month a) Evaluations ofjudges and court staff trained3' a) IT-related training for judges and demonstrate increased technological court personnel competence Provides feedback on effectiveness of IT- b) Capacity building for IT staff in the b) IT staff of courts and Judicial Department related training for courts and Judicial Department to demonstrate knowledge of operation and judicial transparency, manage ICT functions maintenance of new ICT systems confirmed efficiency and by comments received through feedback accountability mechanisms on clarity, structure, quality of information, and ease of navigation of public 27 websites on judicial decisions and activities I Component D. Project Management, Monitoring and Evaluation 0 Provides an overview a) Periodic reviews verify that: of project M&E i) project procurement is consistent with activities and project the Procurement Plan results and the IACC is contributing to project achievements Project Management, M & E ii) a) oversight 0 Enables monitoring of iii) external reports and evaluations project procurement (including stakeholder / user feedback Ensures effective surveys) are publicly available external participation in M&E 28 2 e ..a .rct a 5 r+ : P L 5 cU c i! ; I x e c1 L L 4 4 W m 5 3 P 2 m4 0 M 3 4 V m I m V L g .-VI I s a s2 s 010 2 e e e m rn 2 5 v1 s .-* s s s s s .-* 0 vi 0 a m0 Wvi 0N N w N s - s 2: 0vi I u V V bw 4 2 4 f! m VI 3 m VI M M 9. . . . Annex 4: Detailed Project Description RUSSIAN FEDERATION: Judicial Reform Support Project Component A. Institutionalizing Judicial Transparency and Accountability (US$7.15 million of which IBRD US$2.07 million) 1. The objective of this component is to institutionalize judicial transparency and accountability through different methods, such as surveys, research, actionable indicators. It will benefit all judicial entities involved in the project. 2. The component will finance: (i)the development and piloting ofcriteria and indicators to measure judicial transparency, efficiency and accessibility; (ii)periodic surveys of users of judicial services on access to, quality of and satisfaction with judicial services and enforcement ofjudicial decisions, and public dissemination of the survey results; (iii)research and analysis on other aspects of transparency, publication, openness and accessibility of judicial decisions, processes and practices, including obligatory publication of judicial decisions; research and analysis on introduction of modem information and communication technologies in judicial systems and on further integration ofthe RF judicial system; (iv) the development and piloting of criteria, indicators and a policy to assess and periodically report on the effectiveness of the judicial system, (v) analysis of human development needs to inform policy and strategy update(s); and (vi) development and implementation of a change management and communication strategy to promote judicial reform. 3. The research program will be developed on an annual basis on the basis of proposals of project beneficiaries, and approved by the IACC. Such activities could also, for example, include exercises such as the development of documentation for informatization of the judicial system, and a needs assessment for judicial training, development ofnew training curricular and training and methodological aids. Component B: Harnessing ICT for Judicial Transparency and Effectiveness (US$146.10 million of which IBRD US$42.36 million) 4. The RF judicial authorities believe that ICT is an essential tool to strengthen judicial transparency, efficiency and accountability. The 2007-201 1 FTP envisages the modernization and deployment ofinformation systems to strengthen judicial operations. 5. This component will contribute to achieving the project objectives by: i) Enhancing transparency: by increasing the amount of information made available for public access and improving the timeliness ofthe published information; ii) Improving the efficiency ofcourt functions: by strengthening the knowledge sharing and data retrieval necessary for court deliberations; reducing the time for document processing to deal with increasing case load; and facilitating access to justice in remote locations; and iii)Strengthening the accountability of court functions: by leaving auditable records ofcase flow and processing in the installed information systems. 34 6. This component comprises four sub-components to address the ICT needs of the RF judiciary. Each sub-component involves large-scale IT procurement. The basic approach for procuring IT goods and services is to: (a) minimize risk by packaging the most complex ICT procurements as “turn-key” solutions with a single-responsibility integration contract; and (b) ensure that only experienced bidders are qualified, using qualification filters evaluated by expert consultants who will support the preparation of system designhid technical specifications. A more detailed description and rationale of the ICT procurement approach for the project is at Annex 8. 7. ICT investments in the judicial systems are expected to have a lasting impact on how courts interact with the citizens they serve. ICT systems aim to facilitate, among others, publication of accurate and extensive information on court decisions and operations; creation of a common and searchable electronic knowledge base for judges to prepare their rulings; and protection ofthe integrity ofjudicial processes and records. While achieving these goals requires commitment and actions by the judiciary to change the internal processes and policies, the ICT investments will significantly simplify and ease the process by which this information is made available. The simple act ofpublishing judicial decisions will over the medium term establish a level of expectation and judicial transparency amongst citizens and civil society observers ofthe judiciary. Reformers hope that these expectations from outside the ‘‘system” will provide the necessary sustaining impetus against potential shifts in the political environment. Sub-Component B.1: Constitutional Court (US$5.85 million of which IBRD US$1.69 million) 8. Key Issues: The CC is committed to achieving the objectives of the ongoing and upcoming FTPs. President Putin’s message to the Sixth All-Russian Congress ofJudges includes a clear direction towards openness ofjustice for litigants, and for society as a whole. The CC is therefore keen to enhance its transparency and accountability by harnessing ICT. It also desires to improve its functional efficiency by modernizing its information systems. 9. Status: The CC has introduced automation in the past. However, currently available systems for document flow management, data retrieval, case management, online publication of court decisions, and administrative support are adequate to address the new requirements in a fully integrated manner. The information and communications network capability within its court complex needs to be strengthened to manage the anticipated volume ofinformation transfer. The CC intends to take a holistic approach to modernizing its information systems to address the anticipated needs. In this context, a concept note for information system investments has been drafted for final authorization by the court management. 10. Activities to befifinanced: To help the CC achieve its objectives, this sub-component will finance activities expected to: (a) improve efficiency by reducing the timeh-esources needed to access datdinformation for CC deliberations and court proceedings; and (b) enhance transparency by improving the timeliness and amount of information available for public access. The key activities to be financed include: 35 0 Implementation of an integrated system for document flow management and case management supporting electronic archives, electronic libraries and other business systems; 0 Implementation of an automated system for the online publication ofjudicial decisions and other relevant CC information from the electronic archives; Development and implementation of regulatory, and procedural frameworks for new business processes; and 0 Enhancement of the information and telecommunications network infrastructure for the CC to enable electronic data transfer. Sub-Component B.2: Supreme Court (US$26.10 million of which IBRD US$7.57 million) 11. Key Issues: The SC considers that effective use of knowledge and information would help improve the efficiency and enhance the quality ofjudicial deliberations. To achieve this goal, the creation of an electronic library of judicial decisions and relevant information is envisaged. The modernization of the case management and legal information systems becomes an important element to effectively feed in new information to the knowledge base. Currently, the cassation procedures for those detained in prisons require substantial time and resources. Sometimes, for those detained in remote locations, the process could take 3 to 6 months. To mitigate the costs and delays of felon transport and reduce processing time, the SC is exploiting video-conferencing capabilities in cassation procedures. With regard to enhancing its external transparency, the SC desires to broaden the channels for public access to SC information. 12. Status: The SC already has basic systems in place to deal with these needs including videoconference link with a few locations. However, to cope with increasing demand for efficiency and transparency, the SC would like to update the system and functionalities of its systems. 13. Activities to bepnanced: To help achieve the SC’s objectives, this sub-component will finance the modernization of its information system linked to an automated databank ofjudicial decisions, information reference systems, and an internet portal. The modernized system is expected to: (a) improve efficiency by reducing the timehesources needed to access datdinformation for SC deliberations and court proceedings; and (b) enhance transparency by improving the timeliness and amount ofinformation available for public access. 14. More specifically, this sub-component will finance SC efforts in the following areas: i) Strengthening the internal efficiency of the Supreme Court through (a) back-file conversion of paper files; (b) an electronic library; and (c) installation of information panels and information kiosks in public areas for visitors to the SC; ii) Modernizing SC case management and legal information systems, including through (a) enhancing and deploying an integrated case and document flow management system, an automated judicial decision databank, an information reference system and an internet portal; (b) legal, regulatory and procedural frameworks for new business processes including for electronic digital signatures; (c) computers and other hardware; iii)Improving Supreme Court access from remote locations by (a) improving SC communications capabilities for conducting remote judicial proceedings using 36 videoconference links; and (b) securing communications channels with adequate bandwidth. Sub-Component B.3: Courts of General Jurisdiction and Judicial Department (US$65.65 million of which IBRD US$19.04 million) 15. Key Issues: While the FTP considers computerization and automation to be key components for achieving transparency, the information systems currently available prevent court staff from benefiting from accessing past decisions, databases of legislation, and judicial practices. Moreover, to improve judicial transparency, systems for information publication and dissemination need to be developed. Enhanced transparency is expected to help strengthen public trust in the judicial system. 16. The vision of the CGJ and the JD for harnessing the full capability of ICT for judicial transparency and efficiency is embodied in an integrated suite of information systems and multimedia communications capabilities collectively called “GAS Pravosudiye” (State Automated System for Justice). The automation ofjudicial processes is sorely needed to address the growing case load. In 2005, district (rayon) courts processed 721,000 criminal cases, 1.9 million civil cases, and 1.8 million administrative cases. First instance criminal and civil cases processed by regional (oblast) courts totaled 5,000 and 9,600 respectively, while 285,000 criminal and 295,000 civil appeals were processed. 17. The creation ofan integrated database which can provide consistent and accurate records of conviction is an important issue to be addressed. For example, the Judicial Department was given the responsibility to develop and submit reliable data on review ofcriminal cases by courts of general jurisdiction3’. This will enable the relevant Federal authorities to (a) generate statistical data of any category available in primary records; (b) enhance opportunities for summarizing judicial best practices; (c) periodically reconcile the primary records with the data of the Main Information Center of the Ministry of the Interior to reflect any changes in the records due to, for example, reexamination ofthe cases, changes in the law, repeal of suspended convictions, and clearing of a criminal record; and (d) verify data reliability in case of doubt. 18. The reconciliation of databases is expected to avoid discrepancies and inaccuracies in the databases ofrelev’ant authorities, which could have serious consequences for citizens. 19. The JD is also exploring ways to reduce the case load associated with re-trials needed due to recent changes in the Criminal Code. Many detainees held in connection to such cases are in remote locations. The arrangements for escort and logistics for special transportation requirements result in extensive waiting periods for detainees. The JD intends to mitigate this problem by strengthening remote access and mobile capabilities. 20. Status: The initial concept for developing and implementing an integrated suite of automation dates to 2002. Work on the design and creation of the GAS Pravosudiye system was financed by the 2002-2006 FTP. The design of GAS-Pravosudiye focuses on integrated 39 See joint executive order “On the Unified Registration of Crimes” ofthe General Prosecution Office, the Ministry of Interior, Federal Security Service, Ministry of Justice, Ministry of Emergency Response, Ministry of Economic Development, and the Federal Drug Control Service (# 39/1070/1021/253/780/353/399 ofDecember 29, 2005). 37 information systems that support case flow management; court administration (including Financial Management and Human Resource Management), Court Rulings databanks and information interchange sub-systems, which communicate with other courts and related agencies in the RF. A video conferencing subsystem facilitating remote court appearances and court proceedings is also part ofthe technology suite to improve the delivery ofjustice. 21. The core functionality of the GAS Pravosudiye system has been piloted in a number of CGJs. Individual courts have also undertaken their own automation with varying degrees of success. Approximately 800 courts have reportedly implemented various types of case management systems. 22. Activities to befinanced To help the CGJs and the JD achieve these objectives, this sub- component will finance activities which will (a) improve efficiency and access to justice by reducing the average time for deciding cases, preparing statistics, and proceedings for incarcerated persons; and (b) enhance transparency by improving the timeliness and amount of information available for public and internal access. The roll out of the updated integrated system will also increase the accountability of CGJ activities by ensuring timely publication of judicial decisions and statistics. In addition, the JD intends to facilitate access to justice for those in remote locations by expanding mobile capability. 23. The automation facilities already installed in some CGJs some years ago, through the GAS Pravosudiye and other pilots, have had some local impact on the openness and publicity of judicial operations. The coverage of automation sites with communications infrastructure has also expanded across the country. The JD proposes to replicate the results of the initial pilots, ensuring a unified approach to the automation of the CGJ. Therefore, the JD’s approach is to propose, for implementation under the JRSP, the most efficient technical solutions for CGJ functional subsystems for the purposes of improving the openness of the judicial system and expanding access to justice in Russia. Expert technical assistance will be engaged to ensure a unified approach to CGJ automation through (a) the development of consistent technical specifications for installation and upgrade of necessary technology and (b) the deployment of GAS Pravosudiye subsystems supporting transparency, openness and accountability of the courts. 24. The JD has made progress in the introduction of IT in the CGJ. However, the task of providing adequate hardware for a network of over 3,000 courts nationwide continues to be an enormous challenge. Some courts have little to no IT capabilities. Additionally, some of the equipment currently in use is obsolete. The provision of minimal basic equipment such as desktops, printers and local area networks to these severely under-resourced courts will improve productivity and set the stage for the later deployment ofGAS Pravosudiye. 25. To maximize the impact from the integration ofinformation systems under the JRSP, the deployment of the updated system will be undertaken in selected regions. The pilot regions will be selected based on a balanced geographical representation and on the likely impact on addressing case load, access to justice, and demonstration effect. The tentative list of possible pilot regions comprises Samara Oblast (Volga); Tymen Oblast (Ural); St. Petersburg (North West); Evenkyisk AO, Taimyr AO, or Krasnoyarsk Krai (Siberia); Chukot AO, Koryak AO, or 38 Magadan (Far East) and perhaps one oblast from CentraVSouth Russia. The final selection of regions will be made incorporating recommendations from analytical work under the JRSP. 26. More specifically, this sub-component will assist CGJ efforts in the following areas: i) Increasing the efficiency of the CGJs and Judicial Department through (a) enhancing the integrated system for the Judicial Decision data Bank; (b) rolling out the system for automated publication ofcourt decisions in the courts in the selected regions; (c) creating a single system to enable remote monitoring and management of the communications infrastructure; (d) implementing a system to manage the technological systems to support court-room proceedings; and (e) provision of basic IT equipment to severely under- resourced courts; ii) Improving transparency and public access in CGJ functioning, including through (a) designing and implementing the CGJ Internet and intranet portal system to enable access to judicial decisions and the federal data bank on convictions; (b) developing and adopting regulations and guidelines to process information for public access; (c) completing the installation of ‘Sudimost’ (conviction history) software and initial data entry; (d) deploying the infrastructure environment in courts (hardware, network) to utilize the system; and (e) publishing, on a quarterly basis, statistics on enforcement of judicial decisions; and iii)Improving access to justice in remote areas, including through the deployment of hardware and software tools to support the conduct of trials and proceedings in remote areas beyond courthouse physical locations. Sub-Component B.4: Arbitration Courts and the Supreme Arbitration Court (US$48.50 million of which IBRD US$14.06 million) 27. Key Issues: The case load for the arbitration court system is growing as the economy expands. The case growth rate is 15 percent per annum. 6 more courts started hnctioning in 2006 to cope with this situation and another 10 are due to be created in 2007. To effectively manage the growing case load, the SAC wants to further integrate its case management system (Sudoprovizvodstvo) with the portal to enable the aggregation of information in different databases. 28. As in the other branches of the RF judicial system, the SAC is keen to enhance the availability of information about its activities to public. The SAC sees the Internet portal and online information delivery as presenting opportunities to make visible progress in this area. The integration with the case management system will contribute to this by increasing the amount and timeliness ofinformation publication. 29. Status: The SAC with its more recent history has been consistently implementing information systems and court automation to achieve these goals. For example, the pilot project for judicial openness is currently being implemented. It incorporates 34 courts in 4 judicial okrugs/districts (North-Western, Moscow, East-Siberian, and Northern Caucasus) and the RF Supreme Arbitration Court. The SAC still has two competing solutions for Case Flow Management developed at different times in the past. These competing solutions however have immediate tactical value, as they target individual arbitration courts at the lower and upper end of 39 the internal IT capacity scale. The SAC has, as an intermediate policy, decided to offer both these solutions as options to individual ACs. The SAC has established a common Data and Information standard and has enforced these standards across both solutions to ensure interoperability and information interchange. Further efforts are still needed to enable seamless transfer of information between the internal systems for document management and online publications of decisions and related information. The lessons learned during pilot implementation will be utilized to implement this enhancement. 30. Activities to be financed: To help the SAC achieve these objectives, this sub-component will finance activities to increase transparency and efficiency. The enhancement of SAC information publication capability linked with its case management and other internal systems is expected to: (a) improve transparency and accountability by increasing the amount and timeliness of information accessible to public; and (b) enhance efficiency by reducing the timeh-esources needed to access datdinformation for SAC deliberations and court proceedings. 3 1. This sub-component will finance the following activities: i) Strengthening the efficiency of 79 Arbitration Courts through a ‘Justice Openness’ initiative aimed at (a) extending the integration with the case management system to allow flexible text searching, full electronic documents and other improved functionalities; upgrading the existing software to enable verification ofstored electronic documents using electronic signature, aggregated integral search, and support for decision making; and address the gaps identified in implementing similar activities in 34 courts in 4 judicial ohgs/districts under the LRP; and (b) implementing and deploying hardware and software for remote monitoring and administration of the hardware and computing infrastructure; ii) Improving the public access and availability of Arbitration Court information through a ‘Justice Accessibility’ initiative aimed at: (a) developing regulations, procedures and mechanisms for publication of information; (b) establishing Internet-kiosks in all ACs to enable free access to online information; (c) further integration with the existing ‘Sudoproizvodstvo’ system; (d) development of a Web Portal capable of offering information for internal court access (intranet) and for public consumption (external site); (e) developing archives of electronic copies of judicial documents; and (f) supply and installation of advanced equipment for court rooms to enable recording ofcourt sessions as well as broadcasting outside the court rooms (public areas, press rooms, etc.). Component C. Strengthening Human Capital (US$lO.lO million of which IBRD US$2.93 million) 32. This component is designed to support the IT-related training needs, and knowledge sharing activities such as workshops, seminars, etc. for the courts and the Judicial Department. The need to urgently develop appropriate IT-related training curricula and materials for judges and court personnel, and to deliver IT-related training itself more effectively, has become urgent because the increasing automation of court functions and operations already requires much greater technological skills on the part ofcourt personnel and judges. This need will rise in line with the increasing court automation. 40 33. To address this issue, the following activities will be financed through this component: 0 Upgrading of IT skills of judges and key personnel of all courts (law assistants, courtroom secretaries, judicial counsels, court administrative assistants) and of the Judicial Department; Study of foreign experience by judges of the courts of general jurisdiction, and relevant court staff; 0 Training and exchange of judicial experience between judges and staff of the judicial system ofthe Constitutional Court ofthe Russian Federation; and 0 Increasingly wider application ofadvanced information and communication technologies, requiring training ofjudges and staff ofthe judicial system in running these new tools. Component D. Project Management and M&E (US$9.06 million of which IBRD US$2.63 million) 34. This component will support project oversight, project management, expert technical assistance, monitoring and evaluation. 35. Specialized technical expertise in ICT, systems integration, complex project management and bid document preparation will be critical to the courts to ensure successful implementation oftheir automation efforts under this project. Expert assistance will be needed: 0 In the preparation and implementation support ofa court-wide ICT systems development and integration framework for the CC and SC; To ensure a unified approach to CGJ automation through (a) the development of consistent technical specifications for the installation and upgrade of necessary technology and (b) expanded deployment of GAS Pravosudiye to support CGJ transparency, openness and accountability; and To help the SAC plan and implement the automation activities and mitigate the significant risks associated with system integration. 36. Activities to be financed include support for (i)the IACC, including facilitating overall project monitoring and evaluation through the implementation ofa project results framework and M&E indicators; (ii)the PIU, including for project audit and operating expenditures; and (iii) expert ICT technical support for the judiciary. 41 Annex 5: Project Costs RUSSIAN FEDERATION: Judicial Reform Support Project Project Cost By Component and Activity Govt. IBRD Total US$ million US$ million US$ million A. Institutionalizing Judicial Transparency 5.08 2.07 7.15 and Accountability B. Harnessing ICT for Judicial 103.74 42.36 146.10 Transparency and Effectiveness B. 1. Constitutional Court 4.16 1.69 5.85 B.2. Supreme Court 18.53 7.57 26.10 B.3. CGJ and Judicial Department 46.61 19.04 65.65 B.4. Supreme Arbitration Court 34.44 14.06 48.50 C. Strengthening Human Capital 7.17 2.93 10.10 C. 1 Workshops, knowledge sharing 1.42 0.58 2.00 C.2 IT-related training 5.75 2.35 8.10 D. Project Management, M&E 6.43 2.63 9.06 D.1 Equipment for PIU 0.26 0.1 1 0.37 D.2 IT Expertise for courts and Judicial 2.78 1.14 3.92 Department D.3 Annual Audit ofthe Project 0.23 0.09 0.32 D.4 Other Operational Costs 3.16 1.29 4.46 Total Baseline Cost 122.41 50.00 172.41 Physical Contingencies Price Contingencies Total Project Costs 122.41 50.00 172.41 Interest during construction ------Front-end Fee ------Total Financing Required 122.41 50.00 172.41 42 Annex 6: Implementation Arrangements RUSSIAN FEDERATION: Judicial Reform Support Project 1. Project implementation will be undertaken by the Ministry of Economic Development and Trade (MOEDT) as the main budget executor for the project. The MOEDT is also responsible for the implementation of the Federal Targeted Program (FTP) for the judiciary for 2002-06 and for the preparation and implementation ofthe new FTP for 2007- 1 1. 2. The project implementation arrangements envision an Inter-agency Coordination Council, working groups corresponding to beneficiary court systems, and a competitively selected Project Implementation Unit (PIU). Maintaining effective coordination between so many agencies straddling the judicial and executive branches throughout implementation will be a key challenge. 3. MOEDT Resolution No. 4 ofJanuary 18, 2005 established an Inter-agency Coordination Council (IACC) to supervise project preparation. The IACC comprises representatives from the Supreme Court (SC), Judicial Department under the SC of the RF, Supreme Arbitration Court (SAC)-the main beneficiaries under the project - and the MOEDT and the MOF. 4. The IACC is supported by the Bureau ofEconomic Analysis (BEA), an independent non- commercial legal entity, which served as the Project Preparation Unit. The BEA establishment in 1996 by the Academy of National Economy and State University - High School of Economics was initiated by the RF Ministry of Economy and approved by governmental decision. From the very beginning the BEA has been performing project implementation hnctions for several donor-financed projects. At the initial stage, the BEA was aimed at the implementation of the “Bureau of Economic Analysis” Project, financed from the IBRD Loan proceeds. This project was targeted to provide analytical and consultancy support for the RF Government and federal governmental institutions in the field of economic policy. The BEA is currently implementing two World Bank-financed projects (“Development of the State Statistical System I” and “Modernization and Technical Upgrade of the RosHydromet System”). It also provides analytical support to the MOEDT and several other federal ministries within the framework of state contracts on research and analytical issues. In 2005 the BEA was competitively selected from among existing PIUs in Russia to assist the MOEDT and other project stakeholders/beneficiaries in detailed project preparation. Its work is financed from the federal budget allocated by the MOF for JRSP preparation. 5. On July 5, 2006 by letter no. 04-02-62/6416 the MOF has confirmed its concurrence to MOEDT’s proposal no. D13-767 of June 22, 2006 to designate the BEA as the project implementation unit. 6. The BEA has adequate experience in managing World Bank-financed projects in Russia, including several with large information technology procurements, and has adequate knowledge ofWorld Bank procedures and requirements. The BEA has modified its Operating and Financial Manuals to adjust its administrative, operational, procurement and financial management procedures in line with project requirements. The BEA employs qualified administrative, procurement, financial management and disbursement specialists, and successfully cleared the World Bank’s capacity assessment review for other projects. However, the role of the BEA in 43 implementing the JRSP will be limited to providing project management, procurement, financial management and disbursement support to the various beneficiary agencies. Substantive decisions will be taken by the IACC and working groups corresponding to beneficiary court systems. The project management structure is schematically depicted below. 7. The MOEDT has written to the different elements of the judiciary to nominate representatives to serve as members of the implementation IACC. It has already received responses from most of them. Orders constituting the IACC will be issued before project effectiveness. 8. Each beneficiary agency will also form a Working Group which will be responsible for implementing its respective substantive project activities. For example, it will prepare the substantive elements of terms of reference, develop technical specifications, serve on bid evaluation committees and oversee its respective project activities. 9. It is true that the current trend in the Bank, and current policy in the ECA Region, is to avoid using stand-alone PIUs for project implementation, especially those not organically or structurally connected with beneficiary entities. The key reason is that such a practice militates against true ownership and accountability on the part of the beneficiary entities and limits long- term institutional capacity-building in the beneficiary entities for designing and implementing modernization plans. Implementation of recent Bank-financed judicial reform projects, for instance those in Azerbaijan, Romania and Ukraine, is being undertaken directly by the beneficiary entities through their organic structures, supplemented in the short term where necessary with specialist consultant skills in, for example, procurement and financial management. 10. In Russia, however, implementation of projects financed by the Bank has historically been managed by foundations such as the BEA, which - over more than a decade - have built up knowledge and expertise in Bank procedures and processes. In addition, there will be high demand under this project for coordinated, consistent and expert support to address the diverse needs of the participating judicial entities. The BEA, given its expertise, is expected to respond effectively to such demand through its designated role of facilitating day-to-day operational issues such as procurement, financial management, fiduciary compliance, and provision of logistical and secretarial support. On the other hand, strategic, substantive and quality assurance activities will be implemented and overseen directly by the participatingjudicial entities through their respective working groups. Thus, the proposed implementation arrangements are somewhat hybrid in nature, specific to the Russian institutional context, and therefore not likely to inhibit ownership, accountability for performance or mainstreaming ofcapacity development. 44 Project Management Structure The Russian Federation “The Borrower” Represented by the Ministry of Finance of the RF (MOF) The Ministry of Economic Development and Trade of the RF (MOEDT): Main budget executor a Inter-agency Coordination Council Chaired by the MOEDT Members include representatives from the MOF, Supreme Court, Judicial Department, the Supreme Arbitration Court, and the Constitutional Court Courts in the Courts in regional the regions branches 45 Annex 7: Financial Management and Disbursement Arrangements RUSSIAN FEDERATION: Judicial Reform Support Project Country Issues 1. The last Country Financial Accountability Assessment (CFAA) conducted in the Russian Federation was in 2001. Pending the graduation ofthe Government’s financial management and procurement capacity and infrastructure to a level of performance that would allow the World Bank to rely on those systems, the CFAA recommended that fiduciary hnctions (disbursement, procurement, accounting and reporting) continue to be outsourced to specialized agencies. Such agencies present the advantage ofusing skilled consultants and reliable, suitable, and stand-alone computerized information systems. 2. Based on the Bank’s current audit policy, the CFAA recommends maintaining current arrangements for the annual audit of Bank-assisted projects, which involve audit by private sector audit firms competitively appointed among those pre-selected by the Bank, in consultation with the MOF. Risk Analysis 3. The overall financial management risk for the project is moderate. Adequate mitigation measures are in place to ensure that the residual risk is acceptable. The Table below summarizes the financial management assessment and risk ratings ofthis project. FM Risk after Risk Risk Mitigation Measures risk mitigation Rating Inherent Risk Country level S To mitigate this risk, the CFAA recommended M using existing PIU and engaging private independent auditors. Accordingly, the BEA has been selected to act as the PIU. Appropriate mitigation measures on corruption risk are incorporated in this Annex. Entity level M The PIUhas experience in implementing M Bank-financed projects (including projects with a high share ofco-financing); its organizational structure is adequate. Project level M Budget funds will be provided through M MOEDT rather than the various courts, significantly simplifying the flow of funds. The corruption risk in this project is assessed as modest, as there will be limited cash payments from project funds; there are no grants or civil works. Goods and consultancy services have to be first accepted by the beneficiaries before any payment is made. Overall Inherent Risk M M 1. Budget M M 2. Accounting M M 46 3. Internal controls S Enhancing and documentation of control M procedures in the fmancial management sections of the Project Operation Manual is a condition of effectiveness. 4. Funds flow L L 5. Financial reporting M M 6. Auditing L L Overall Control Risk M M M 4. The 2005 BEEPS seems to confirm that corruption is a major issue for doing business in the country. According to the 2005 BEEPS, corruption appears to have taken an upward turn after a period of decline during 1999-2002, and is increasingly cited by businesses as a major problem. Ifthe number ofbusinesses in the World Bank-EBRD BEEPS survey citing corruption as an obstacle to their business declined notably between 1999 to 2002 (from 51 percent to 29 percent), this number increased again to 39 percent in 2005. However, adequate mitigation measures are foreseen for the project, and Bank staff will closely monitor performance during implementation. The mitigating actions can be summarized as follows: (a) the size of procurement thresholds and the frequency ofthe Bank's prior review will be determined in a way that allows an appropriate level of control after assessment ofthe procurement capacities and the risks of corruption and fraud in the country; (b) enhanced disclosure and transparency of project- related information; (c) appropriate complaints handling mechanism, with all complaints from bidders, observers or other parties being promptly forwarded to the borrower for consideration and follow-up action; (d) enhanced internal controls as there will be limited cash payments from project funds: there are no grants or civil works, and goods and consultancy services have to be first accepted by the beneficiaries before any payment is made; (e) some reliance on the regular audits of the project by the Accounting Chamber of the RF (the supreme audit institution) and internal audit units of the MOF; and (0 intensive Bank supervision, including annual visits by supervision missions to selected beneficiary entities. Implementing entity 5. The BEA has been selected as the project implementation unit with responsibility for the fiduciary arrangements. The BEA has been implementing several Bank-financed projects, including the Bureau of Economic Policy Project (closed in March 2005), the State Statistical System Project and the Hydromet Modernization Project (ongoing). Strengths 6. The significant strengths that provide a basis for reliance on the project financial management system include: (i)the experience of BEA and its financial management staff of implementing Bank-financed projects and satisfying Bank financial management requirements; (ii)the unqualified audit reports issued on BEA and projects' financial statements during the past three years; and (iii)sound internal control system within the BEA. Weaknesses and Action Plan 7. With the exception of the updating of the existing financial management manual, the weaknesses identified in the financial management arrangements of the project during the appraisal stage have been fully addressed by the BEA before Negotiations. It has been agreed 47 that the BEA will update its existing financial management manual, as part of the Project Operational Manual, to include details ofthe proposed project prior to effectiveness. Planning and Budgeting 8. Budgeting is done on the basis of the procurement plan by finance staff using Excel spreadsheets. The annual budget is approved by the BEA Council, the IACC, MOF, MOEDT and the Bank. Budget data is then entered in the project financial statements. Should the BEA desire to switch to the report-based disbursement after the initial stage ofproject implementation, the budgeting system should be incorporated into the accounting system. The planning and budgeting system is acceptable to the Bank. Accounting 9. Policies and procedures. The BEA has a clear formal set of appropriate accounting procedures and internal controls including authorization and segregation of duties in its existing financial manual. The BEA will update its existing FM manual, as part of the Project Operational Manual, to include details ofthe proposed project prior to effectiveness. 10. Key internal controls for the project will include: o Segregation of duties; o Proper authorization procedures; and o Restricted access to the accounting system 11. Svstem. The BEA maintains its accounting books and records as well as accounting books and records for the Bank-financed Projects using a computerized accounting system. It prepares 3 sets of financial statements: entity financial statements on accrual basis in accordance with FRS and Russian statutory reporting requirements, and on a cash basis (for Bank-financed projects). The accounting software to be used for the project is “lC”, a package widely used by many PIUs in Russia. The system meets the minimum requirements ofthe Bank. 12. Staffing. At present, key financial positions are occupied (all by staff with wide experience in Bank-financed projects). Financial specialists regularly undergo various accounting seminars and trainings (Bank-organized and external). All accounting staff have adequate knowledge and are considered acceptable. Internal Controls and Internal Auditing 13. The BEA has adequate internal controls for the project implementation, including adequate segregation of duties, defined internal control procedures (expenditure approval), reconciliation of disbursement summaries ofthe World Bank with project accounting records. The internal control procedures for the Project will be hrther explicitly defined in the FM sections of the Project Operational Manual, which will be reviewed by the Bank prior to effectiveness. 14. Under this project, there will be no grants or civil works. There will be limited cash payments in exceptional cases such as for training. Payments for goods and services will be made by the BEA only after it receives confirmation from the beneficiaries (respective courts) that the goods and services are acceptable. 48 15. There is no internal audit function in the PKJ, which is acceptable given its size and structure. However, the project activities and funds may also be audited periodically by the Accounting Chamber of the Russian Federation (SAI) during its audits of the MOEDT and also by internal audit units ofthe Ministry ofFinance. Funds Flow and Disbursement Arrangements 16. Funds flow arrangements for the project will be straightforward. A designated account will be opened in a commercial bank acceptable to the Bank. A project account in rubles will be opened, too. Co-financing will be provided through the MOEDT. 17. The traditional method of disbursement will be used at the initial stages of project implementation, with the opportunity to switch to report-based disbursements during implementation, provided financial management capacity remains adequate and the RF authorities would like to do so. 18. There will be two disbursement categories under the project: (a) operating costs and (b) all other eligible expenditures (including consultants, training, goods, etc.). All possible disbursement mechanisms (advances, direct payments, reimbursement and special commitments) will be used. 19. The ceiling for the Designated Account will be equivalent to US$2.0 million. Payments made from the Designated Account are to cover eligible expenditures under the Project. Applications for replenishment will be supported by the necessary documentation. The front-end fee will be paid by the Borrower from its own resources. Financial Reporting 20. The BEA will be responsible for producing all financial reports for the Bank. The BEA has demonstrated in other projects that it is able to report on project expenditures accurately and on time. 21. Project Interim unaudited Financial Reports (IFRs) will be used for project monitoring and supervision. They will be prepared on a cash basis. Entity financial statements will be prepared in accordance with IFRS. The BEA will produce a full set of IFRs every quarter throughout the life ofthe project. Draft formats ofthese IFRs have been prepared and discussed with the BEA. Auditing 22. There are no overdue audit reports or outstanding issues either for the BEA, or for projects it implements. 23. The audit of the Judicial Reform Support Project will be conducted by independent private auditors acceptable to the Bank, using International Standards on Auditing. The auditor will be engaged on standard terms ofreference acceptable to the Bank and procured by the BEA in accordance with the Bank procurement guidelines. The cost ofthe audit will be financed from the proceeds ofthe loan. 49 24. The first and final audits can cover up to 18 months. The contract for the audit awarded during the first year of project implementation may be thereafter extended from year-to-year with the same auditor, subject to satisfactory performance. 25. The following chart identifies the audit reports required to be submitted by the BEA together with the due date for submission. Audit Report Due Date Imdementing:Y Entity Within six months ofthe end ofeach fiscal year Project financial statements (PFS), I Within six months of the end of each reporting including SOEs and designated account. period; the first and the final audits can cover a The PFSs include sources and uses offunds period ofup to 18 months by category, by components and by financing source; SOE statements, Statement of designated account, notes to financial statements, and reconciliation statement Supervision Plan 26. As part ofits project supervision, the Bank will conduct risk-based financial management supervisions at appropriate intervals. During project implementation, the Bank will supervise the project’s financial management arrangements in the following main ways: a) A quarterly review of the financial part of the project IFRs as well as the annual project audited financial statements and auditor’s management letter; and b) A review, during the Bank’s on-site supervision missions, of: (i)project accounting and internal control systems; (ii)budgeting and financial planning arrangements; (iii) disbursement management and financial flows, including counterpart funds, as applicable; and (iv) any incidences of corrupt practices involving project resources. As required, a Bank-accredited Financial Management Specialist will assist in the supervision process. 50 Annex 8: Procurement Arrangements RUSSIAN FEDERATION: Judicial Reform Support Project A. General 1. Procurement for the proposed project would be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated May 2004; and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004, and the provisions stipulated in the Legal Agreement. The various items under different expenditure categories are described in general below. For each contract to be financed by the Loan, the different procurement methods or consultant selection methods, the need for pre- qualification, estimated costs, prior review requirements, and time frame are agreed between the Borrower and the IBRD in the Procurement Plan. The Procurement Plan will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. 2. Procurement of Goods: Goods procured under this project would include: Information Technology (IT) equipment (hardware and software), telecommunications equipment, audio- and video-equipment and related technical services. The procurement will be done using the Bank's SBD for all ICB and National SBD agreed with or satisfactory to the Bank. Current rules for the public procurement in Russia in general do not agree with the Bank's guidelines. Possible unacceptable features ofNCB may be invalidated by adding an Annex to Schedule 2 "Mandatory provisions for procurement under Bank-financed contracts subject to National Competitive Bidding" into the Loan Agreement to assure that NCB will be conducted under procedures acceptable to the Bank. Goods estimated to cost US$400,000 equivalent and more per contract, IT equipment estimated to cost US$l,000,000 equivalent and more per contract will be procured through ICB. Goods estimated to cost less than US$400,000 per contract, IT equipment estimated to cost less than US$l,OOO,OOO per contract may be procured through NCB and the additional provisions set forth in the Annex to Schedule 2 of the Loan Agreement. Procurement of IT and telecommunications equipment can be made through NCB also, when foreign firms will not be allowed to participate in tenders for security reasons, and estimated to the cost less than US$7,000,000 per contract. Goods estimated to cost less than US$lOO,OOO equivalent per contract may be procured through shopping. The DC method will be used for the procurement of goods which the IBRD agrees meet the requirements for Direct Contracting. Prior- and post- review contracts will be indicated in the procurement plan. 3. Procurement of non-consulting services: Technical services will be procured for the conversion of documents into electronic format for the Supreme Court. The procurement can be made through NCB and the additional provisions set forth in the Annex to Schedule 2 of the Loan Agreement, when foreign firms will not be allowed to participate in tenders for security reasons, and estimated to cost less than US$3,000,000 equivalent per contract. The procurement will be done using the IBRD's SBD or National SBD agreed with or satisfactory to the IBRD. Prior- and post-review contracts will be indicated in the procurement plan. 51 4. Training : Training activities which will include study tours, conducting seminars, workshops and participation in international conferences on subjects related to the project, will be procured through procedures agreed with or satisfactory to the IBRD (Agreed Procedures). When appropriate, a firm will be selected to provide services in respect of organization of training upon comparison of at least three responsive price quotations presented by suitably qualified local service providers under agreed procedures. Individual contract values will normally not exceed US$lOO,OOO equivalent. Contracts estimated to cost more than US$lOO,OOO equivalent, will be advertised nationally or internationally and bids for contracts will be invited. All contracts will be subject to prior review; this is indicated in the procurement plan. 5. Selection of Consultants: Consulting services will be utilized for (a) development of criteria and indicators ofefficiency of functioning ofjudicial system and pilot introduction ofthe system, (b) monitoring services, (c) preparation ofsurveys, (d) Project information and publicity, (e) provision of scientific research in the sphere ofjustice, (f) preparation of technical design, technical requirements and technical specifications, (g) preparation of training materials and delivery ofjudicial education and training, and (h) project financial audit, and other uses. Except as otherwise specified in the Procurement Plan consulting services under the project will be procured using the QCBS procedures and the standard RFP and contract formats. Contracts meeting the requisites of Paras 3.2-3.4 of the Consultants Guidelines may be procured using QBS procedures. Contracts meeting the requisites ofPara 3.6 ofthe Consultants Guidelines may be procured using LCS procedures. For small assignments meeting the requisites of Paras 3.7 and 3.8 ofthe Consultants Guidelines CQS may be used. Selection ofindividual consultants will be carried out as specified in Section V ofthe Consultants Guidelines, including Para 5.4 ofthis Section for selection of individual consultants on a sole-source basis. Prior- and post-review contracts will be indicated in the procurement plan. Short lists of consultants for services estimated to cost less than US$200,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. 6. Operating Costs: The operating costs of the PIU will be financed by loan proceeds. These costs will include consultant fees (where applicable), training courses for PIU staff, rent, communication expenses, travel expenses, utilities, security and office supplies. The operating costs will be disbursed on the basis ofannual budgets to be agreed with the lBRD. B. Assessment of The Agency’s Capacity to Implement Procurement 7. Procurement activities will be carried out by the Bureau of Economic Analysis Foundation (BEA), which has been selected as the PIU. The PIU procurement function is staffed by eight persons, namely the Head of the Procurement Department (Mr. Kirnos), the Deputy Head for Procurement of Consulting Services (Ms. Tikhmeneva), the Deputy Head for Procurement of Goods (Ms. Gavrilova), the Training Manager (Ms. Pavlenko), the Head of the IT Department (Mr. Stroganov ) and his Deputy Mr. Panfilov, the Deputy Director of the Department for Project Preparation and Planning (Ms. Zakharova) and the Manager of the Department for Project Preparation (Ms. Kriuchkova). Mr. Kirnos, Ms. Tikhmeneva, Ms. Gavrilova and Ms. Zakharova have sufficient qualification in international procurement issues, procurement ofgoods and consulting services under IBRD guidelines. Nevertheless, all PIU staff 52 responsible for procurement should be given intensive training in procurement of goods, including procurement ofInformation Systems, and procurement ofconsulting services under the IBRD Guidelines ofMay 2004. 8. An assessment has been carried out ofthe capacity ofthe PIU to implement procurement actions for the project. The assessment found that BEA has sufficient experience in procurement cycle management. BEA maintains up to date records according to the requirements of their regulations approved by the general director. All documents are available and are kept on the bookshelves in files with clear indication and in chronological order. 9. The BEA has already completed implementation of the Russian Bureau of Economic Analysis Project. Currently this PIU is implementing the Russian Development of State Statistical System (STASYS) Project (closing date December 3 1, 2006), and National Hydromet Modernization (NHM) Project (closing date September 30, 2010). 10. The key issues and risks concerning procurement for implementation of the project have been identified and include uncertain political, legal and financial environment. In view of the high volume ofICT-related procurement, the specific risks relating to ICT procurement, and the approach to ICT procurement, are outlined in the following section. 11. The general level of risk connected with procurement activity in Russia is considered to be high. Accordingly, the overall project risk for procurement is also rated as high. C. Procurement Strategy for Integrated Information Systems Implementation 12. Five large-scale integrated Information Systems implementations are proposed to be procured under the project: Supply and installation of an integrated system of document work-flow and automated system of publication of information in the internet portal of the Constitutional Court ($5.15M); Supply and installation of integrated system for case and document flow management, an automated data bank ofjudicial decisions, information reference system and internet portal for the Supreme Court ($4M); Supply and installation of Internet Portal System for the Courts of General Jurisdiction ($23.8M); Supply and installation for enhancement and deployment of the integrated system for Judicial Decision Bank, for the CGJ and JD ($24M); and Supply and installation of computer equipment and software for 79 arbitration courts (“Justice Openness”) ($9.5M). 13. The above packages will be procured using the Single Stage ICB process. The basic procurement strategy for these ICT packages has been to take a turn-key approach to minimize risk to the borrower. The key concern is the choice ofa single-responsibility integration contract as the basic procurement strategy for the three constituent elements of the judiciary, given its significant potential impact on project risk. 53 14. Key arguments in favor ofthis strategy are: (i) The efficiencies from concentrating project implementation responsibility on a single party, in particular the streamlined handling of coordination problems among s~bcontractors~~; (ii) The potential increased competition from increasing contract size, though such competition may be limited by the qualification criteria; (iii) The lesser project management capacity required of the purchaser (though this approach prevents building purchaser capacity from the outset); (iv) Potential simplification of Bank supervision (though it could be argued that this decreases the frequency ofBank interventions and not the importance ofproblems to be resolved). 15. Key arguments against the turn-key approach are: (i) The dangerous concentration ofimplementation risk on a single contractor; (ii) The difficulty to optimize contract design, procurement strategy and contract management for combined treatment of essentially different project components (technology supply on one side and system developmenthmplementation services on the other); (iii) Limited competition because ofhigh qualification and experience requirements; (iv) Potential lack ofeconomy for equipment in combined procurement. This is because in separate procurement of equipment, the contract will be signed and delivered later, and the price trend can allow for cost savings or for procuring more powerful equipment at the same price; (v) In a turnkey contract the intervention of the purchaser (if necessary) is usually too late to correct inappropriate software development - such interventions can occur only at the milestone acceptance phase for the system or module; (vi) Lack of ownership of the system by the purchaser and subsequent problems with using the system (e.g. if sufficient capacity does not exist now, a key issue is how and when such capacity can be developed - the most effective way to do so is to involve the users as soon as possible in the development ofthe system). 16. The risk of concentrating implementation risk on a single contractor is mitigated by the use ofcommercial and experience requirements in the bid process. This ensures that only bidders with the requisite capacity, experience and a good track record of successfully completing projects ofa similar nature and scale are eligible to bid. The qualification filters will be carefully evaluated by the expert consultants who will assist the counterparts to prepare the design of the systems and the bid technical specifications. 17. A key consideration in the assessment ofthe arguments for and against is the capacity of the Courts and the Judicial Department to take on the overall integration responsibility (and risk), and the appropriate sequencing and management of multiple procurement activities. The RF judiciary has yet to develop a sustained track record of managing large complex systems implementation projects, and the capacity to manage the scheduling and sequencing of complex 40 On the other hand, at the beginning of the contract, the purchaser is released from everyday coordination responsibilities. However, later on the purchaser has no direct influence on any of the sub-contractors and correction of any sub-task is very difficult to achieve; 54 procurement activities. However, the Bank has had a satisfactory procurement experience with several projects in Russia, for example the Customs Development Project and the Treasury Development Project where Russian counterparts are coordinating and managing complex contracts quite well. Given these country conditions, the risk minimization strategy adopted is to package the most complex ICT procurements as “turn-key” solutions with a single-responsibility integration contract. Additionally, ensuring that only experienced bidders are qualified will hrther minimize the judiciary’s risk exposure. 18. The World Bank’s procurement guidelines and guidance notes on large-scale systems integration procurements have been taken into consideration. The guidelines on bid evaluation and selection methods, conflict of interest, single or two-stage processing; ICB processing time standards, sole sourcing, etc have major implications for procurement packaging, qualification requirements, technical requirements specification, evaluation criteria and weights, processing timetable and other key aspects of project procurement. Additionally, the guidance from the “Study of Procurement of Information Technology in the Russian Federation” of August 2005 financed by the World Bank will be taken into consideration in developing qualification criteria and in the conduct ofthe procurement processes themselves. D. Procurement Plan 19. The Borrower, at appraisal, developed a procurement plan for project implementation which provides the basis for the procurement methods. This plan has been updated and agreed between the Borrower and the Project Team on November 27,2006 and is available at the BEA. Parts ofit will also be available in the project’s database and in the IBRD’s external website. The Procurement Plan will be updated in agreement with the Project Team annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. E. Frequency of Procurement Supervision 20. In addition to the prior review supervision to be carried out from Bank offices, the PIU will be visited on a regular basis no less than twice a year by the Project Procurement Accredited Staff based in the IBRD’s Moscow Country Office. 55 r 6 8 W 2 IL" h0 6 d h0 6 d I- 4 zB I- B n $ e Q I- ii; -4 c, a E 7 a93 h L 1 0 7 E! Va 0 c,v) 9 0 m0 Ha9 90 e E L .-? 2 a Y e a U D: 3a9 L J v) 0 g & U LI 0 v) r .I3 Q Y 6 13 d n zi Y 0 5 3sYE 3- =oY .m d .- -u 3 .2 x ?-$ 53 oB 5 c m x ?0 w z m 9 9 7m 7m 8 m g 2 2 z 8 2m 2z z m0 m0 J J 8 8 m m 8 x a a m 03 4 8 9 a a m 8- -4 7 73 0 0 0- 9 0 8 0- m : L L .-? .-? a a r v, ! 5 m m 0 0 r r (3 (3 0 a 4 v, ) i , ! ! I I i 1 i I i jz Iu) :0 !I j= h 0 il! I ;3 gio -2 0 m I- d I- d m I- 0 m I- n m I- e0 0 m I- D m I- 8 0- 0I. m Zs _m I v) W 8 3 i i 2 E- E3 ;;e8 p 3% o_ I a, 7s h e 0 U U 8 3 2 0 P do CI 010) .r( ++7-N 3 EE SS Lonu,Lr 3 cd 5 3 0 13 8 i! a 8 a J V V U0 n vcd Annex 9: Economic and Financial Analysis RUSSIAN FEDERATION: Judicial Reform Support Project 1. Benefits from improvements in judicial Performance are both economic and financial. The Project is expected to strengthen the capacity and incentives among the RF’s judges for greater transparency, accountability and competence, besides increasing the efficiency of the judicial system. It is difficult to quantify the economic benefits of anticipated improvements. However, a review ofthe current impact ofthe inefficient functioning ofthe system on the costs of doing business suggests that costs associated with a poorly functioning judiciary are significant. Project implementation is expected to improve the use of financial resources in the judicial sector and encourage better utilization ofIT and training systems. 2. Economic benefits. Greater transparency in judicial hnctioning, especially the publication ofdecisions, would facilitate greater predictability and thereby help lower the cost of doing business in the RF, and also reduce the time now required for case disposal. Courts serve businesses best when they are efficient and fair: in the absence of efficient courts and predictable judicial decisions, fewer investments and business transactions take place. 3. World Bank studies have identified a number of factors which improve the efficiency of courts and therefore contribute to improvements in the business climate: (i)functional judicial information systems; (ii)simplified judicial procedures and processes; and (iv) specialized commercial courts. Although it is hard to quantify the benefits resulting from improved court services, these studies demonstrate a direct link between improved court services and increase in economic development and growth. 4. Direct benefits include reduced costs of litigation, speedier case disposition, increased confidence in and access to the judicial system, as well as transparent conduct of judges and other personnel. More effective judicial decision-making in the RF will help balance commercial relationships and maintain a level playing field for all businesses. Speedier resolution of disputes and improved oversight ofjudicial decisions will help lower the cost of doing business and help reduce administrative corruption. 5. Indirect benefits include more predictable and uniform application of the rule of law, a more stable investment climate, and strengthened business confidence. Taken as a whole, these factors could help spur investment and promote economic growth. 6. Under Component B, strengthening the information base used to monitor performance of the judiciary will improve the efficiency with which budget resources are used. 7. Project benefits also include financial gains from greater judicial competence achieved through training. Under Component C, strengthening judicial human resources in the RF will improve efficiency in the functioning ofthe judicial system. 61 Annex 10: Safeguard Policy Issues RUSSIAN FEDERATION: Judicial Reform Support Project Environmental Assessment A. Assessment Summary 1. The JRSP envisages substantial ICT-related investments. To enable these investments to be most effective, the mission assessed whether the infrastructural facilities to support these investments could require renovation or upgrading, and the resulting implications - if any - for the environment category rating ofthe project for safeguards purposes. 2. The proposed JRSP activities are related to ICT systems implementation; logistical and secretarial support; education and training; and other activities related to the creation, implementation and dissemination of legal frameworks. Under the JRSP, existing buildings and main facilities will be used. Nonew constructions or other activities, which may have a direct or indirect impact on the environment, are proposed to be undertaken. According to RF legislation, activities which do not have any impact on the environment do not require an Environmental Impact Assessment (EIA) or any permission relating to environmental protection aspects. 3. According to the Federal Law on Ecological Expertise, activities which may have a direct or indirect impact on the environment are required to be subjected to State Ecological Expertise (SEE). The JRSP activities will not use land resources, or adversely impact the air, water, flora or fauna. None of the envisaged JRSP activities will need any special permission on environmental issues. Hence the JRSP will not be subject to the national EIA procedure or any permission relating to environmental protection aspects. B. Environmental Assessment: Objective and Scope 4. The aim of an environmental assessment is to assess and prevent/mitigate possible negative environmental impact as well as related social, economic, and other consequences of project implementation. 5. The EIA process should ensure that relevant information about the possible negative impacts of a proposed activity or project on the environment is gathered, analyzed and presented before the decision to go ahead is taken. The information is part ofthe basis for both the decision to grant or refuse permit, as well as possible conditions that should be met in order to mitigate or avoid the negative impacts. In other words, an EIA is a key project planning instrument. 6. World Bank Operational Policy 4.01 statement was revised in August 2004 to ensure consistency with the requirements ofOP/BP 8.60, issued in August 2004. The World Bank requires an environmental assessment (EA) for projects proposed for Bank financing to help ensure that they are environmentally sound and sustainable, and thus to improve decision- making. An EA is a process whose breadth, depth, and type of analysis depend on the nature, scale, and potential environmental impact of the proposed project. An EA evaluates a project’s potential environmental risks and impacts in its area of influence; examines project alternatives; identifies ways of improving project selection, siting, planning, design, and implementation by preventing, minimizing, mitigating or compensating for adverse environmental impacts and 62 enhancing positive impacts; and includes the process of mitigating and managing adverse environmental impacts throughout project implementation. 7. An EIA takes into account the natural environment (air, water, and land); human health and safety; social aspects (involuntary resettlement, indigenous peoples, and cultural property); and trans-boundary and global environmental aspects. An EA considers natural and social aspects in an integrated way. It also takes into account variations in project and country conditions; the findings of country environmental studies; national environmental action plans; the country’s overall policy framework, national legislation, and institutional capabilities related to the environment and social aspects; and obligations of the country, pertaining to project activities, under relevant international environmental treaties and agreements. The World Bank does not finance project activities that would contravene such country obligations, as identified during the EA. The EA is required to be initiated as early as possible in project processing and is integrated closely with the economic, financial, institutional, social, and technical analyses of a proposed project. C. Summary: RF EnvironmentalAssessment Requirements 8. The RF national EIA procedure is based on the Federal Law on Environmental Protection (2002), the Federal Law on Ecological Expertise (1995), the Regulations on the Assessment of Impacts ofplanned economic and other activities on the Environment in the Russian Federation (2000) and the legislation and normative acts adopted in pursuit of these laws and regulations. According to the Federal Law on Ecological Expertise (art. 14), all documents presented on ecological expertise in Russia must include an EIA. 9. The RF EIA procedure provides for two stages: an environmental impact assessment per se, with the meaning universally accepted in the world, and ecological expertise of the documentation providing justification for the planned activity. 10. At the first stage (i.e. the EIA) the activities to be undertaken in preparing justification documentation include 3 sub-stages: preliminary assessment and TOR preparation; conduct of EIA; discussion ofEIA report before its approval by the initiator ofthe activity. 11. The EIA materials should contain: A description of the characteristics of the planned activity and possible alternatives, including the version ofrefusal ofthe activity; The results of the analysis of the condition ofthe territory that the planned activity may influence (the state of the natural environment, the presence and the character of anthropogenous load); A description of the possible impacts of the planned activity on the environment, taking into account the possible alternatives; The results of assessments of probabilities of appearance (risks), the character, scale, zone of distribution of the possible environmental impacts and also a forecast of the ecological and linked social and economic consequences ofsuch impacts; Proposals on measures to reduce, mitigate or prevent the most significant negative impacts, assessment oftheir efficiency and ofthe possibility oftheir realization; The results of the assessment of the significance of residual impacts and their consequences; 63 . The results ofthe comparison of the expected ecological and linked social and economic consequences ofalternatives, including the version ofrefusal ofthe activity; . Proposals for a program of ecological monitoring and control at all stages of implementation ofthe planned activity, and post-project analysis. 12. The goal of the ecological expertise, as the final stage of the RF EIA procedure for the planned activity, is: . To prevent possible adverse environmental consequences in case of implementation of the project involving the object ofecological expertise and resulting social, economic and other implications. To this end, the EIA procedure seeks to ascertain that the object of ecological expertise is in conformity with environmental requirements and determine whether the implementation ofthe proposed project is environmentally acceptable. 13. The hndamental principle ofthe ecological expertise, as laid down in the RF legislation, is the presumption of potential environmental hazard of any planned activity. Therefore, all projects in Russia must undergo an EIA. The procedure for collecting and presenting information remains the same in all cases. Depending on the complexity and degree ofhazard of the planned activity, the EIA reports to be provided at different stages of design works will differ in depth and completeness ofinformation and will require different levels ofecological expertise. 14. RF legislation provides for two levels of ecological expertise: the federal level and the level of Subject of the RF. Also, two types of ecological expertise are distinguished: state ecological expertise (SEE) and public ecological expertise (PEE). Public ecological expertise should come before or during the SEE and its results taken into account by the SEE. 15. The materials to be submitted for SEE include the whole package of strategic, pre-plan, pre-design and design documents concerning the facilities and activities envisaged to be undertaken in the territory of the RF, irrespective of their estimated cost and affiliation. Ecological justifications of licenses will also have to be provided for the SEE. The state body exercising executive power and delegated with the authority for conducting SEE, based on the consideration of submitted materials, shall take a decision concerning the expediency of SEE in each specific case. The SEE has to be prepaid by the project proponent agency. D. Description of Environmental Characteristics of the Project/site(s) 16. JRSP activities relate to surveys and research; ICT systems implementation, logistical and secretarial support; and education and training. Project activities have been detailed in Annex 4 and in the major procurements outlined in Section F ofAnnex 8. E. Description and Assessment of the Project’s Potential Impact and Effects 17. All -the above activities will be implemented without any new building construction or reconstruction of existing ones; under the JRSP existing buildings and main facilities will be used. No other activities are proposed to be implemented which may have a direct or indirect impact on the environment. 64 18. According to the Federal Law on Ecological Expertise, any activities which may have a direct or indirect impact on the environment should be presented for State Ecological Expertise. The activities under the JRSP will not use the land resources, or adversely impact the air and water, flora and fauna. None of the envisaged JRSP activities will need any special permission on environmental issues. Hence the JRSP will not be subject to the national EIA procedure. F. Analysis of Possible Alternatives for the Project 19. No construction activity is proposed to be financed from the project. Before financing new building construction the requisite EL4 procedure will be implemented. G. Preliminary Mitigation Measures Plan - Environmental Management Plan (EMP) 20. The development ofan Environmental Management Plan is not needed. H. Recommended EIA-related Actions to be taken as Part of Further Project Preparation 21. RF law requires that the initiator of the project will have to organize and finance the investigation at the first stage of the RF EIA procedure. The results of the investigation are entered as a separate EIA material in the justification documentation, which has to be submitted for State Ecological Expertise (SEE) in stages, in line with the decision-making practice in the RF. The initiator shall assume the responsibility for the completeness and quality of EIA materials. 22. Decisions regarding project implementation shall be based both on the positive conclusion of the SEE and other issues and documents. Reports providing EL4 materials, together with design plans and specifications shall be submitted for SEE either by the body exercising state supervision ofan economic sector, or by a specific organization or enterprise. 23. The organization and conduct of the SEE is entrusted to duly authorized bodies of executive power. In the case ofthe federal level SEE, is the competent authority is a federal body exercising state executive power and with requisite authority in environmental protection: currently either the Federal Agency for Environmental, Technical and Atomic Supervision or the Federal Agency for Natural Resources Supervision. At the regional level (Subjects of the RF), the competent body a territorial subdivision of the specified federal body in the Subject of the RF. From January 1, 2007 the regional administration bodies will be given the exclusive right to conduct the SEE at the regional level. 24. The SEE for each project is carried out by a commission of independent experts, set up by the body exercising executive power and authorized to conduct the SEE. The experts should have scientific and (or) practical knowledge of the subject. The experts and the expert commission as a whole shall assure the objectivity and soundness of their conclusions with respect to the object ofecological expertise. 25. The PEE shall be organized and conducted by public organizations (associations) having the right to undertake such activity. Citizens, public organizations and self-government bodies can initiate public ecological expertise. The results of the PEE must be taken into account in the 65 SEE. Other mechanisms of public participation in the EIA process are involvement in EL4 material development (public consultations, meetings, hearings, etc.) and of members of the public in the SEE as observers. 26. A positive SEE report is a prerequisite for the financing and implementation of the project that is the subject of ecological expertise. Once such a report is in place, the decision regarding the start ofproj ect implementation lies with the investor. 27. The national EL4 procedure in the RF from the notification of intent to the positive conclusion of the SEE may take one year or even more. It will be necessary to take this into account if construction activity is planned. 66 Annex 11 : Project Preparation and Supervision RUSSIAN FEDERATION: Judicial Reform Support Project Planned Actual PCN review December 2 1, 2005 December 21,2005 Initial PID to PIC January 3,2006 January 3,2006 Initial ISDS to PIC January 3,2006 January 3,2006 Appraisal June 15, 2006 June 15,2006 Negotiations September 25,2006 November 27,2007 Board approval March 20, 2007 Planned date of effectiveness June 1,2007 Planned date ofmid-term review October 1, 2009 Planned closing date March 30,2012 Key institutions responsible for preparation ofthe project: Constitutional Court of the Russian Federation Supreme Court ofthe Russian Federation Supreme Arbitration Court of the Russian Federation Judicial Department at the Supreme Court ofthe Russian Federation Bureau of Economic Analysis Ministry of Economic Development and Trade of the Russian Federation Bank staff and consultants who worked on the project included: Name Title Unit Maria Amelina Senior Social Development Specialist ECSSD Alexander Balakov Procurement specialist ECSPS Gerhard Botha Senior Private Sector Specialist ECSPF Anita Correa Program Assistant ECSPE Sandra Craig Program Assistant ECSPE Joanne Marie Dickow Extended Term Consultant EXTUN Maria Gavrilova Team Assistant ECCUl Svetlana Golubeva Consultant ECSPE Theocharis Goncharidis Intern ECCUl Yoko Kagawa Consultant ECSPE Galina Kuznetsova Senior Financial Management Specialist ECSPS Kathy Lalazarian Senior Public Sector Management Specialist ECSPE Waleed Malik Lead Public Sector Specialist LCSPR Aziz Mamatov Extended Term Consultant ECSPS Amitabha Mukherjee Lead Public Sector Specialist ECSPE Craig Neal Senior Public Sector Specialist ECSPE Ljudmilla Poznanskaya Senior Operations Officer ECSPF Liberty Alexandra Reposar Program Assistant ECSPE Jesus Renzoli Procurement Specialist ECSPS Clelia Rontoyanni Young Professional ECSPE Ramesh Siva Lead Informatics Snecialist ISGEG 67 Olga Schwartz Consultant ECSPE Gerald Thacker Consultant ECSPE Siew Chai Ting Lead Financial Management Specialist ECSPS Jiro Tominaga Senior Information Officer ISGEG Imogen Wade Intern ECCUl Bank funds expended to date on project preparation: 1. Bank resources: US$548,200 2. Trust funds: US$45,600 3. Total: US$593,800 Estimated Approval and Supervision costs: I. Remaining costs to approval: US$20,000 2. Estimated annual supervision cost: US$165,000 68 Annex 12: Documents in the Project File RUSSIAN FEDERATION: Judicial Reform Support Project 1. Concept of the Draft Federal Law “On Amending and Supplementing Certain Legislative Acts of the Russian Federation Aiming at Improving the Legal Status ofthe Judiciary”, 17 p. and Explanatory Note to the Draft Concept of the Law , 20 p., 2006 2. Summary Report on the Project “Survey of the Current Legal and Regulatory Framework for Access to Court Decisions Including via Internet”, 2005,47 p. 3. Concept of the Federal Targeted Program “Development of the Judiciary System in Russia in 2002-2006”, 2001, 19 p. 4. Federal Targeted Program “DEVELOPMENT OF THE JUDICIARY SYSTEM IN RUSSIA IN 2002-2006” Approved by Resolution of the Government of the Russian Federation No. 805 of November 20,2001 and as updated by the RF GOR decree # 49 of February 6,2004), 25 p. 5. Federal Targeted Program “DEVELOPMENT OF THE JUDICIAL SYSTEM IN RUSSIA OVER 2007 - 2011”, Approved by Resolution of the Government of the Russian Federation no. 583 of September 21,2006,48 p. 6. Concept of Informatization of the Courts of General Jurisdiction and of Judicial Department; Approved by the Council ofJudges as of October 29, 1999,25 p. 7. Concept of Informatization of the Courts of General Jurisdiction and of Judicial Department --GAS Pravosuydiye System; Approved by the Council of Judges as of April 11, 2002,30 p. 8. Report On Completion of Survey of the Sites for Installation of Pravosudiye Government Automated System (based on the data provided by Judicial Department Offices, Oblast Courts, District Military Courts, and Pilot Courts) by SRI “Voskhod”, 184 p. 9. Report on the Results of Survey of Public Perception of the Judiciary. 10. Polling 2500 respondents in Russia to establish their perceptions of the judiciary by Center of Social Forecasting, 2005, 19 p. 11. Report “Review of the Existing Solutions on Information and Communications Technologies (ICT) in the Courts of General Jurisdiction and Development of the Unified ICT System in the Courts of General Jurisdiction”, 2005,38 p. 12. Report on the assessment of the needs of arbitration courts in computer equipment and software in order to place alljudicial decisions in the Internet, 2006, 65 p. 69 13. Judicial System of the RF: Issues Related to Judicial Transparency and Efficiency. Report by the BEA, 2005,227 p. 14. Report on the Academy of Justice and Recommendations on the Development of Training System for Judges and Specialists in the System of Courts of General Jurisdiction , 2006,37 p 15. JRSP mission Aide-Memoires, 2005-2006 16. Report on the RF Judicial System Part I.Looking to the Future: A Framework for Improving Institutional Effectiveness of the Judiciary, 14 pp. Part 11: Suggested Interventions to Address Constraints to Judicial Effectiveness, 23 pp. Working Paper for Discussion, Waleed H. Malik, World Bank 17. “Russian Federation: Enforcement of Judicial Decisions - Status, Challenges, Suggestions,” Informal Note for Discussion, World Bank, July 2006, 15 p. 18. Council of Europe Commission for the Efficiency of Justice (CEPEJ) Report on European Judicial Systems - edition 2006: Russian Federation Answer to the Revised Scheme for Evaluating Judicial Systems (2004 data), September 10,2006, 39 p. 70 Annex 13: Statement of Loans and Credits RUSSIAN FEDERATION: Judicial Reform Support Project Difference between expected and actual Original Amount in US$ Millions disbursements Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev’d PO78420 2006 CADASTRE DEVT 100.00 0.00 0.00 0.00 0.00 100.00 0.00 0.00 PO82239 2005 HYDROMETEO SYST MOD 80.00 0.00 0.00 0.00 0.00 80.00 1.47 0.00 PO82018 2005 KAZAN MUNICIPAL DEVT 125.00 0.00 0.00 0.00 0.00 75.00 -50.00 0.00 PO75387 2004 E-LRN SUPRT (APL #I) 100.00 0.00 0.00 0.00 0.00 69.43 -1.56 1.07 PO46497 2003 HEALTH REF IMP 30.00 0.00 0.00 0.00 0.00 26.86 13.45 6.32 PO72960 2003 CUSTOMS DEVT 140.00 0.00 0.00 0.00 0.00 117.50 45.73 36.11 PO69063 2003 ST. PETERSBURG ECON DEVT 161.10 0.00 0.00 0.00 0.00 154.42 96.58 0.00 PO66155 2003 TAX ADM 2 100.00 0.00 0.00 0.00 0.38 48.16 12.54 -2.13 PO64237 2003 TB/AIDS CONTROL 150.00 0.00 0.00 0.00 0.00 140.66 72.31 28.46 PO64508 2002 TREASURY DEVT 231.00 0.00 0.00 0.00 0.00 221.39 44.72 0.00 PO64238 2001 N RESTRUCT 80.00 0.00 0.00 0.00 0.00 56.05 56.05 -0.62 PO38551 2001 MUN HEATING 85.00 0.00 0.00 0.00 0.00 37.65 37.65 37.65 PO50474 2001 EDUC REFORM 50.00 0.00 0.00 0.00 3.00 16.85 18.89 2.49 PO46061 2001 MOSC URE3 TRANS 60.00 0.00 0.00 0.00 0.00 27.13 27.13 0.00 PO08832 2001 MUN WATER & WW 122.50 0.00 0.00 0.00 0.00 101.11 99.48 59.17 PO58587 2000 REG FISC TA 30.00 0.00 0.00 0.00 0.00 8.08 8.08 0.28 PO53830 2000 SUST FORESTRY PILOT 60.00 0.00 0.00 0.00 0.00 44.24 44.24 -0.41 PO50487 1999 STATE STATS SYST 30.00 0.00 0.00 0.00 0.00 3.26 3.26 1.34 PO50891 1997 ELEC SECTR REF 40.00 0.00 0.00 0.00 1.86 6.60 8.45 8.45 PO42622 1996 CAP MRKT DEV 89.00 0.00 0.00 0.00 34.09 13.56 47.65 13.90 PO08821 1995 ENV MGMT 110.00 0.00 0.00 0.00 0.00 31.78 31.78 5.17 Total: 1,973.60 0.00 0.00 0.00 39.33 1,379.73 617.90 197.25 RUSSIAN FEDERATION STATEMENT OF IFC’s Held and Disbursed Portfolio In Millions of US Dollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. 2005 ABOLmed 8.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2006 Absolut Bank 15.00 10.00 0.00 0.00 0.00 0.00 0.00 0.00 2002 AgroIndFinC 5.00 0.30 0.00 10.00 3.83 0.30 0.00 7.67 2003 BCEN Eurobank 75.00 0.00 0.00 0.00 75.00 0.00 0.00 0.00 2004 BSGV 25.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2004 BSGV Leasing 69.27 0.00 0.00 0.00 25.85 0.00 0.00 0.00 2001 BVF 0.00 3.31 0.00 0.00 0.00 0.00 0.00 0.00 2005 BVPEF I11 0.00 12.50 0.00 0.00 0.00 2.14 0.00 0.00 71 2004 Bauxite Timana 45.00 0.00 0.00 30.00 0.00 0.00 0.00 0.00 2005 Center-Invest 4.84 0.00 5.00 0.00 4.84 0.00 5.00 0.00 2006 Cinema Park 20.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2002 Delta Credit 16.47 0.00 0.00 0.00 16.47 0.00 0.00 0.00 2003 Delta Credit 30.00 0.00 0.00 0.00 30.00 0.00 0.00 0.00 2004 Delta Leasing 3.50 0.00 0.00 0.00 3.50 0.00 0.00 0.00 2002 Egar Technology 0.00 0.81 0.00 0.00 0.00 0.3 1 0.00 0.00 2005 Esanna 15.00 0.00 0.00 50.00 13.28 0.00 0.00 44.23 2005 Eurosibtrans 30.00 0.00 0.00 0.00 30.00 0.00 0.00 0.00 2002 IBS 0.00 0.00 8.00 0.00 0.00 0.00 8.00 0.00 2002 ICB 5.71 0.00 0.00 0.00 5.71 0.00 0.00 0.00 2004 MTH 0.00 3.50 7.00 0.00 0.00 0.00 7.00 0.00 2002 KMB Bank 4.86 0.00 0.00 0.00 4.86 0.00 0.00 0.00 2004 Krono Swiss 50.00 0.00 0.00 45.32 50.00 0.00 0.00 45.32 2005 Krono Swiss 45.00 0.00 0.00 0.00 45.00 0.00 0.00 0.00 2005 Kronospan Russia 81.98 0.00 0.00 0.00 51.53 0.00 0.00 0.00 2005 KuAz 15.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2004 Lebedyansky 35.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2005 Moscow Credit Bk 15.00 0.00 0.00 0.00 8.00 0.00 0.00 0.00 2003 Moscow Narodn... 57.14 0.00 0.00 0.00 57.14 0.00 0.00 0.00 I998 Mosenergo 8.99 0.00 0.00 0.00 8.99 0.00 0.00 0.00 2002 NBD 0.83 0.00 0.00 0.00 0.83 0.00 0.00 0.00 2003 NBD 4.17 0.00 2.00 0.00 4.17 0.00 2.00 0.00 2001 NMC 1.89 0.00 0.00 0.00 1.89 0.00 0.00 0.00 2004 NWSC 23.00 0.00 0.00 23.48 0.00 0.00 0.00 0.00 2005 Novatek 0.00 22.07 0.00 0.00 0.00 22.07 0.00 0.00 2005 Peter Hambro 0.00 15.00 0.00 0.00 0.00 14.99 0.00 0.00 2004 Pilkington Rus 49.77 0.00 0.00 0.00 49.77 0.00 0.00 0.00 2001 Probusiness Bank 0.00 0.00 5.00 0.00 0.00 0.00 5.00 0.00 Promek 83.79 0.00 0.00 0.00 19.79 0.00 0.00 0.00 2003 Quadriga Capital 0.00 17.70 0.00 0.00 0.00 6.86 0.00 0.00 2005 RWMN 0.99 0.00 0.00 0.00 0.99 0.00 0.00 0.00 2004 RZB Leasing Russ 20.00 0.00 0.00 0.00 9.50 0.00 0.00 0.00 RZB Russia 130.00 0.00 0.00 0.00 30.00 0.00 0.00 0.00 2003 RZB Russia 24.44 0.00 0.00 44.44 24.44 0.00 0.00 44.44 2004 RZB Russia 10.00 0.00 0.00 0.00 10.00 0.00 0.00 0.00 1998 Ramstore 8.50 0.00 0.00 0.00 8.50 0.00 0.00 0.00 2001 Ramstore 14.99 0.00 0.00 0.00 14.99 0.00 0.00 0.00 2002 Ramstore 23.57 0.00 10.00 18.75 23.57 0.00 10.00 18.75 2003 Ru-Net 0.00 3 .OO 3.00 0.00 0.00 3.00 2.00 0.00 2001 Ruscam 4.50 0.00 4.50 0.00 4.50 0.00 4.50 0.00 2003 Ruscam 9.00 0.00 0.00 0.00 9.00 0.00 0.00 0.00 2004 Ruscam 17.50 0.00 0.00 0.00 17.50 0.00 0.00 0.00 2002 Russ Stndard Bnk 0.00 10.00 0.00 0.00 0.00 10.00 0.00 0.00 2004 Russ Stndard Bnk 58.48 0.00 0.00 0.00 58.48 0.00 0.00 0.00 1995 Russ Tech Fnd 0.00 0.23 0.00 0.00 0.00 0.23 0.00 0.00 2005 RussiaPartnersII 0.00 10.00 0.00 0.00 0.00 0.80 0.00 0.00 Russkiy Mir 24.52 0.00 0.00 29.97 2.47 0.00 0.00 3.02 2004 Russkiy Mir 12.86 0.00 0.00 0.00 12.86 0.00 0.00 0.00 72 2005 Russkiy Mir 20.48 0.00 0.00 25.03 2.03 0.00 0.00 2.48 SCF Restructured 0.00 0.60 0.00 0.00 0.00 0.60 0.00 0.00 2004 Severstaltrans 23.21 0.00 13.93 0.00 23.21 0.00 13.93 0.00 2004 Sibakadembank 3.00 0.00 6.00 0.00 3.00 0.00 6.00 0.00 2002 Sonic Duo 0.00 0.00 6.00 0.00 0.00 0.00 6.00 0.00 2003 Stav. Broiler 14.25 0.00 0.00 0.00 11.75 0.00 0.00 0.00 2004 Sveza 40.50 0.00 0.00 0.00 28.10 0.00 0.00 0.00 2002 Swedwood Tichvin 5.07 0.00 0.00 0.00 5.07 0.00 0.00 0.00 2005 ToAz 30.00 0.00 0.00 45.00 0.00 0.00 0.00 0.00 2006 UralSib Bank 30.00 0.00 0.00 0.00 30.00 0.00 0.00 0.00 2003 UralTransBank 9.17 0.00 0.00 0.00 6.67 0.00 0.00 0.00 2004 Volga Shipping 25.18 0.00 0.00 17.25 15.05 0.00 0.00 0.00 2001 Volga-Dnepr 10.60 0.00 6.09 12.84 10.60 0.00 6.09 12.84 2002 ZAO Europlan 4.29 0.00 0.00 0.00 4.29 0.00 0.00 0.00 1998 ZAO Storaenso 0.60 0.00 0.00 0.00 0.60 0.00 0.00 0.00 2002 ZAO Storaenso 4.20 0.00 0.00 0.00 4.20 0.00 0.00 0.00 Total portfolio: 1,424.11 109.02 76.52 352.08 881.82 61.30 75.52 178.75 Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic. 1999 DLV 0.00 0.00 0.00 0.00 2002 RSB I1 0.00 0.00 0.00 0.00 2006 RSB N 0.00 0.00 0.03 0.00 2006 Forus Bank 0.01 0.00 0.00 0.00 2005 KMB Bank I1 0.03 0.00 0.01 0.00 2005 Novatek Gas 0.05 0.00 0.00 0.07 2005 Ramstore N 0.04 0.00 0.00 0.00 2006 CityMortgage 0.03 0.00 0.00 0.00 2003 Deltacredit Bank 0.03 0.00 0.00 0.00 Total pending commitment: 0.19 0.00 0.04 0.07 73 Annex 14: Country at a Glance RUSSIAN FEDERATION: Judicial Reform Support Project Russian Federation at a dance 8'22t05 Euw6 UPPW cbmrat mdde *Om incm Age distribution, 2005 Malt :ern& 473 599 24.238 30.135 04 04 64 72 3.945 3.358 4.113 5,325 9~742 10,924 BO 55 59 50 2 $6 Under-5 mortality rate (per t,WO) 6b 89 1 2a 23 5 7 I $7 99 95 A 32 105 109 102 106 92 $4 a5 84 1980 1990 2w 200s 1,313 Growth of GDP snd GDP per capito (9';) 715 93 71) no 06 02 2 11 3 874 6 2Qt3 12 3 1s 4 37 ? 19 3 _"a- 28 1 28.3 105 162 139.0 148 3 746 3 243.1 518,814 259709 7t33.72: I% of GDP) 1s E 64 56 4% 45 48 4 37 9 3.90 -7 1 61 17 6 17 9 35 D 556 56.4 -1 7 65 49 rj 4% 93 It3 0 -2 2 18 33 9 -39 1 92 35.3 Gd 95 21.5 -6 1 73 J 32.2 Russian Federation 2000 2005 I Governanu, indic~tor~,ZOO0 and 2004 1,275 3.tE7 &B,e.X 64.249 16.0 tT.0 27,970 1S2.240 E 4: 53 , a37 22.7 .. fE3 Technology and Infrastructure 2000 2004 75 13 19 35 24 1&.023 E2.2M 11,RZE- 59719- El E 2Sl 99 208 7,713 12479 150 528 I.? 1.9 Compcrsition of total external debt, 2005 200D 2005 - 33 - 5.0 - 52 16.2 24 4 15 a 71.8 22 75 Millennium Development Goals Russian Federation Goal 4: re&w under-6 mwtairty by two-rhirda 23 25 21 D 1 23 111 3 )I! E.0 132 16.3 2E 4 24.7 EducaUos indicators (Xi 1 76 Annex 15: Enforcement of Judicial Decisions - Issues and Challenges A. STATUS 1. The RF authorities have initiated substantive steps through the FTP to strengthen judicial transparency, efficiency and accountability. Rapid and effective enforcement of judicial decisions is critical to the credibility of the rule of law and judicial credibility. The enforcement ofjudicial decisions is also part ofthe fair trial process mandated by Article 6 ofthe European Convention on Human Rights and the related case law of the European Court of Human Rights (ECHR). In respect of decisions against the State, if final decisions against the State and its entities are not enforced at all or within a reasonable time, this could lead to a violation of the Convention. In addition, stronger enforcement of the decisions of commercial courts could also contribute significantly to improving the business climate in Russia. This Annex outlines key issues constraining the effective enforcement ofjudicial decisions in the RF, and sug ests some actions for the 2007-2011 FTP for the judiciary and the Federal Bailiffs Service4? . 2. Policy makers also recognize that non-enforcement of judicial decisions is an immense problem in Russia: at least half the decisions against the state are not executed. This affects the effectiveness and efficiency of the judiciary at all levels. In 2004, the RF authorities requested the European Commission for the Efficiency of Justice (CEPEJ) to analyze the issue of non-execution of court decisions against the State and/or its bodies in the RF, and formulate recommendations for improvement. It appears that at least 50 percent of court decisions against the State are not executed at all, or not executed within a reasonable time4*. 3. The number of enforceable judicial decisions43is increasing. Between 2003 and 2005 the number of enforceable decisions increased from 17 million (2003) to 20.7 million (2004, i.e. by 22 percent) to 23.3 million (2005, Le. by 12.5 percent). This number is likely to rise even faster, as the economy grows and more cases are filed. In the arbitration court system, for example, the number ofcases filed is currently growing at 15 percent per annum. The collection from enforcement rose from 2.9 billion rubles (2004) to 8.2 billion rubles (2005)44. The reason for this sharp increase is not clear from the data currently available. 4. The execution of judicial decisions in the RF is the responsibility of the Federal Bailiffs Service (FSB), and is governed by the relevant laws and regulations. There appears to have been substantial improvement in all aspects of judicial enf~rcement~~.It appears that violations of deadlines are decreasing (from 28.8 percent in 2003 to 27.1 percent in 2004 to 24.5 percent in 2005). However, there is a constant increase in the number ofenforceable cases at the 41 Comprising the courts, bailiffs, prosecutors, other investigative entities, probation services and possibly the penitentiary services. 42 See Heers Mireille et al. Examination of Problems related to the Execution of Decisions by National Civil Courts against the State and its Entities in the Russian Federation. European Commission for the Efficiency of Justice, Strasbourg, 2005. 43 In legal terms, decisions which do not exceed the defined procedural deadlines. 44 For the structure of its central apparatus, please check the appendix. Statistical information on the exact number of employees and its budget are not available. 45 See the webpage of the Federal Bailiffs Service at http:l/www.fssprus.ru/ under the heading “normative and bureaucratic acts”. 77 stage of execution. From the data available the reasons for this increase are unclear. It could be worthwhile to conduct an analysis of the reasons and examine the policy and administrative implications. Box. The Federal Bailiffs Service The Federal Bailiffs Service (FBS), a state agency under the Ministry ofJustice (MoJ), is tasked with the enforcement of decisions of all judicial and administrative entities. The establishment of the FBS was approved by the State Duma and the Federation Council in June and July 1997 respectively. However, it was only in 2000 that the FBS acquired its formal status under federal law.' The FBS central apparatus is located in Moscow. The FBS is territorially spread all over Russian regions (krais, oblasts and republics). It hires its employees either with public or private law contracts and its actions formally represent the sovereign will ofthe Russian government. B. CHALLENGES 5. There seem to be two core issues limiting the enforcement ofjudicial decisions against the state: (a) lack of appropriate procedures for timely and coordinated distribution offunds with which the state makes payment as ordered by the courts, and (b) lack of coordination between the judiciary and the FBS in executing judgments and reporting action taken. Most issues seem to relate to court decisions on actions brought either by individuals or by companies complaining of non-satisfaction of pecuniary claims, and are enforceable against the budget of the State and/or its entities in the Russian Federation. However, there are other categories of cases (such as those between the administration on the one side and individuals, organizations and firms on the other), where enforcement itself is also likely to be a significant issue. This section summarizes the key challenges grouped into four categories: (a) the legal framework, (b) judicial procedures and processes, (c) technological constraints, and (d) fiscal arrangements and budget processes. 6. Constraints arising from the legal framework comprise the following: a) Non-execution of some decisions seem to arise from frequent changes in legislation, unclear allocation of competences and responsibilities between the federal and sub- national tiers of government, and sometimes unanticipated or unpredictable public finance allocations. The recent diminution ofregions' regulatory authority also decreased their budgetary envelopes and flexibility, thus making it more probable for the local Judicial Department to refuse to pay the bailiffs. b) The principle forbidding two different courts to judge the same case is sometimes not followed. As a result, there may be contradictory decisions on the same case by different courts. c) Some delays in judicial enforcement also seem to be caused by state decisions not to legislate statutory provisions that would grant the plaintiff police or bailiff assistance for the execution ofthe court decision. d) Bailiffs are bound by a set of material incentives and legislative obligations to act fairly and efficiently. However, these may not be enough for several reasons: (i)their training and subsequent upgrading of their skills does not seem to be guaranteed; and (ii)other 78 factors such as uncertainty about real estate ownership and absence of up-to-date criminal records also appear to place serious constraints on enforcement. Hence, bailiffs may not have the incentive to execute their duties in the most effective way. 7. Constraints arising from judicial procedures and processes. Enforcement of decisions in the RF is constrained by the following characteristics of the prevailing judicial procedures and processes: Lack of coordination between the judiciary and the FBS in executing judgments and reporting action taken; Contradictory decisions can be delivered on the same issue by different courts. The result is that the public authority condemned to pay according to one judiciary system might be induced to wait for a more favorable decision to be given by another court system before executing the first decision; Supervision procedures, which review the legality of final judicial decisions (Nudzor), might create under certain circumstances uncertainties with regard to the nature of a final decision. Such uncertainty may therefore lead public authorities to wait for a possible extraordinary recourse with a possible more favorable result before executing the judicial decision, in particular in order to avoid the risk ofrestitution; In case ofnon-execution of a court decision, the applicant might address the court several times to obtain a decision on indexation of the amounts. This feeds a vicious circle of non-executed decisions. The lack oftraining qualifications ofsome judges might make it difficult for a decision to be properly enforced; The enforcement system is based on voluntary execution ofjudgments by the Federation (federal properties cannot be seized) and does not allow compulsory execution against the Federation. Technological constraints are another reason for delays in executing judicial decisions. It is reported that the information system used by the FBS is non-uniform and fragmented on a regional basis. As a result, the quality, architecture and functionality of the regional information systems vary widely. In addition, these information systems are not linked to judicial information systems. Besides, the judicial information systems are also currently under development. Registry systems key for enforcement such as those for civil, commercial and administrative cases have not yet been adequately moderni~ed~~. 9. Constraints arising from fiscal arrangements and the budget process may be summarized as follows: a) Appropriate procedures are still to be developed for timely and coordinated allocation and distribution offunds with which the state makes payment as ordered by the courts. b) Some social legislation adopted in the nineties apparently did not take into consideration the then-prevailing fiscal situation and budget realities. The result has been a lack of funds to pay the amounts due to creditors and a multiplication of non-executed cases. 46 See World Bank Staff, Initiatives in Legal and Judicial Reform, IBRD/World Bank, 2002, p. 49. 79 These delays do not seem to have been addressed yet. In addition, the relevant laws do not always seem to clearly specify the mechanism (entities, source and procedure) for payments, especially in the case ofsocial benefits. Despite the adoption of laws and policies regulating public expenditures, corresponding allocations do not always seem to be anticipated in the budget. According to existing procedures, sums to be paid by the state in compliance with judicial decisions are required to be anticipated and provided for in the next year’s budget. Current regulations do not permit payments to be made from the current year’s budget (since there are no reserves in the budget). This creates further delays in execution. Some ofthe recent reforms concern relations between the Federation, its Subjects and the municipal levels. Some competences and responsibilities are shared or have recently changed from one level to another. It may not always be clear which body or which level is responsible for executing the court decision. Without proper supervision, funds delegated from the federal to lower levels for the payment of due amounts to citizens, including for the execution ofcourt decisions, might be allocated by the lower levels for other purposes. Sometimes individual decisions are made at the administrative level which are legally binding towards third persons without taking into account the existence (or absence) of relevant budgetary provisions; In cases against the state, the budgetary flows for state liabilities become extremely slow, severely delaying or effectively nullifying a judgment against the State. Thus, administrative agencies may, sometimes even unintentionally, put significant obstacles in the smooth function ofthe FBS. The problem with the FBS is its two-fold nature. On the one hand, it is a state agency abiding by the law of Russia and under the hierarchical jurisdiction of the Minister of Justice. On the other hand, it is one of the strongholds of the rule oflaw in the country. Lack ofcoordination between the judiciary and the FBS in executing judgments and reporting action taken is a crucial impediment to judicial effectiveness and credibility in Russia. Appropriate procedures do not yet exist for the state to financially compensate a plaintiff, if the latter is in possession of a positive decision in his favor. Even if the court decides that the plaintiff should receive money from the federal, regional or municipal budget, it is reported that such payments are rarely made, and hardly ever on time. Access to legal information is necessary for creditors and debtors, so that they are able to defend their rights in the enforcement procedure. It is now difficult for people with limited economic means to access these legal documents or receive legal aid for their civil or commercial affairs47. C. A POSSIBLE WAY FORWARD 10. The Federal Targeted Program for 2007-201 1 offers an excellent opportunity for the RF 41 See USAID, Southeast Europe Online, Framework Document For Judicial Reform In South Eastern Europe, 9p. 80 authorities to significantly strengthen the enforcement of judicial decisions. The new FTP includes a specific allocation of 2.96 billion rubles (approx. $109.8 million) to the FBS for the purposes ofimproving court security; upgrading ofFSB premises; and the informatization ofthe FSB, including linkage between the FBS information system with those ofthe courts. The latter two components are linked to the FTP indicator of increasing the enforcement rate ofjudicial decisions from 52 to 80 percent. Section B ofthis Annex provides the rationale for raising the capacity ofthe FBS. 11. Illustrative activities which could be considered to improve enforcement rates include: a) Developing a set of actionable indicators and collecting baseline data to monitor the performance ofthe FBS (a) by region and (b) by bailiffs within regions; b) Enlisting the help of academic institutions, think-tanks, and regional governments to independently monitor the performance of the FBS at the regional level using the above indicators; awarding prizes to high-performing regional offices and individuals for excellent and transparent performance; c) Examining recent European and OECD initiatives to modernize the enforcement of judicial decisions and deriving lessons applicable to Russia. For instance, a review of comparative civil procedure could be helpful for procedural harmonization and judicial cooperation between different Russian regions as well as between the regions and the Federation. Despite the existence of uniform Russian legislation, different procedural and regulatory practices exist across regions. In terms ofcivil enforcement, as opposed to the EU, Russia is a unified legal system; this means that a harmonization of judicial practices rather than formal laws will be needed. The concept of mutual recognition of judicial decisions is deemed to be essential for interregional judicial cooperation and in cases involving creditors whose assets are located in regions different from that of their residence4*. d) Reviewing the enforcement rates across Russian regions and (a) identifying good practices from the most effective regions or (b) using the most successful bailiffs as resource persons andor trainers in regions with very low enforcement rates. e) Analyzing how procedural laws and regulations could be updated for: i) Efficient and transparent alternative dispute resolution processes (ADR) that could be used between public authorities and private parties to prevent judicial disputes; ii) Elimination of forum-shopping: parallel court proceedings and decisions on the same case could be avoided through appropriate instructions from the Supreme Court or the Supreme Arbitration iii)Avoidance of contradictory jurisprudence by creating a “Grand Panel” at the level of the last instance federal courts: this panel would be empowered to make appropriate decisions, in cases where two different higher-level federal courts issue conflicting decisions. 48 See Andenas Mads et al. Enforcement Agency Practice in Europe, British Institute of International and Comparative Law, London, 2005: 245pp. 49 BMZE, Legal and Judicial Reform in German Development Policy, Policy Report No. 405, Berlin: 2002, 6pp. 81 f) Analyzing how substantive laws and regulations could be modified for the following purposes: i) Harmonizing the FBS modernization and reforms to the recent amendments to the arbitration and civil procedure codes; ii) Clarification of Article 395 of the Russian Civil Code: this article seems to be virtually inapplicable with respect to the state’s debts and is almost exclusively applied in commercial relations between individuals. Nevertheless, there is nothing in the law preventing its applicability to state debts.50 The Plenum ofthe Supreme Court could possibly interpret this provision more broadly in administrative disputes; iii)Enhancing bailiffs’ authority and capacity to enforce judicial decisions against the Federation or its entities (e.g., attachment of goods, garnishment) according to the provisions ofthe law5’; iv) Empowering bailiffs to hold public auctions, allow garnishment against the state, which is provided by law, and apply coercive measures in case of non-execution of court decisions52. If deemed necessary, the threat and imposition of coercive fines either on the respective legal person or on the public official responsible for the delay could be mandated to occur repeatedly; v) Instituting a code of conduct including appropriate procedures for rapid and effective disciplinary procedures for bailiffs, when they violate their duties and do not act in accordance with the responsibilities oftheir profession. g) Modernizing FBS business processes and information technolonv, including through: i) A review of FBS business processes and information systems and identification of specific actions, costs and implementation timeline; ii) Development and implementation of standards and protocols for enabling exchange ofinformation between the FBS information systems and those ofthe courts, i.e. the GAS Pravosudiye system and the Supreme Arbitration Court’s information system. This would enable faster processing and real-time monitoring of enforcement, and - by closing the feedback loop between the FBS and the judiciary - provide faster information to the courts of the status of enforcement of their decisions. Such a component is envisaged to be financed by the 2007-1 1 FTP. h) Analyzing how budget processes and budget management at the national and sub- national levels could be further strengthened to facilitate more rapid and transparent enforcement ofjudicial decisions, e.g. through some or all ofthe following options: i) Adequate provisioning for contingent liabilities arising from enforcement of decisions; 50 Henderson Keith et al. Barriers to the Enforcement of Court Judgments and the Rule of Law. IFES, Spring 2003, 119pp. 51 Check the appendix for further documentation. 52 From a comparative standpoint, coercive civil fines are highly successful in Netherlands. See, for example, Henderson Keith et al. Barriers to the Enforcement of Court Judgments and the Rule of Law. IFES, Spring 2003, 191pp. 82 ii) Modification ofthe Budget Code for allocating in the drafi budget approximate sums to be paid in compliance with judicial decisions; iii)Classification ofjudicial payments as compulsory by law, so that they are securely remitted independently ofother budget constraints; iv) Creation of a special public fund for paying judicial debts imposed on the Federation or its entities. Procedural protection could be granted to the fund’s management, in case the Federation or the federal subjects do not cover their expenses toward the find. i) Analyzing the adequacy of incentives for effective enforcement from an individual and organizational perspective, including: i) whether privatization of the enforcement function could be an option for certain regions or categories of cases, and if so, under what circumstances and subject to what safeguards (so as to protect individuals’ rights and prevent harassment, intimidation, unlawhl coercion and other abuses in enforcement); an analysis of international best practices on this question is envisaged under the FTP 2007-1 1; ii) examining the need to increase financial and institutional incentives for enforcement for judges, court officers and other enforcement aged3; iii)examining the need for further raising the salary of bailiffs, and the fiscal cost of doing, while differentiating the total compensation on the basis ofthe cost ofliving in respective regions; iv) reviewing the adequacy of processes to limit or reduce corruption in the FBS and proposing effective improvements to integrity systems; v) training jurists and judges more effectively so that they correctly apply the law in force; vi) developing efficient procedures for compulsory execution against public authorities and the seizure ofstate property. j) Mediation, conciliation, arbitration and other modes of extra-judicial dispute resolution could play a significant role, over time, in reducing the workload of courts and ensuring the quick resolution of disputes at reasonable cost to both the state and litigants54. The possibility of bailiffs playing a role in such processes could be examined: this could improve bailiffs’ role as facilitators ofstability and social peace at the local level. 53 In France, the huissiers, who are professional bailiffs, are compensated for each enforcement procedure by a combination of a fixed salary and a proportional fee based on the amount collected. See, for example, Henderson Keith et al. Regional Best Practices: Enforcement of Court Judgments: Lessons Learned from Latin America, IFES, April 2004. 54 Henderson Keith et al. ibid., Barriers to the Enforcement of Court Judgments and the Rule of Law. IFES, Spring 2003. 83 Annex 16: Judicial Reform - Social Development, Gender & Inclusion Issues Overview 1. The Russian Federation has witnessed strong economic recovery and pro-poor growth, cutting poverty in half between 1999 and 2004. In order for the RF to achieve the goal offurther halving poverty by 2007, the 2005 CAS Progress Report noted the need for continued implementation of institutional and structural reforms, including an independent judiciary and the rule of law; protecting property rights; and improving social inclusion. The JRSP will contribute to these improvements. 2. The JRSP emphasizes the supply side ofjudicial modernization and reform. It would also be desirable to support, through demand-side initiatives, government efforts to strengthen the capacity and awareness of the private sector and the public as users ofjudicial institutions and services. Addressing both demand and supply sides could create synergies for sustainable judicial modernization, driven by actual needs and conforming to global standards ofexcellence. 3. For many countries in transition, political and financial constraints form significant obstacles to modernizing the judicial system. Customary rules of behavior and traditional mindsets ingrained in a society can constitute additional major challenges. In Russia, lack of public trust and confidence continues to be a challenge for the judiciary. Public perceptions could be changed over time through more effective access to judicial services, greater judicial transparency, and increased public knowledge and awareness. 4. The public’s familiarity with court procedures is increasing, as a result ofmedia exposure to civil and criminal trials, including broadcasts of actual trials on TV. The legal profession is becoming more prestigious and the number of established law firms is increasing. However, the potential of these factors directly or indirectly contributing to an enhancement of legal knowledge among the general public is still limited. Legal services are still costly. Many citizens are used to resolving their claims out of court without the assistance of legal counsel. Pro-bono legal services to socially and economically vulnerable groups are available at some law clinics. Nonetheless, these services are offered at limited locations with reputable law faculties. Further, the availability of such services tends not to be well-known among the general public, especially among the socially and economically marginalized. Issues 5. People in need often cannot afford the time and costs incurred for legal procedures. According to a survey conducted in three Russian cities, long court delays and high legal fees are major obstacles for citizens seeking redress in court. Though legal fees are waived for certain groups of citizens (e.g. the disabled, war veterans and plaintiffs), such exemptions are limited. 6. Regional disparities affect the judiciary. Some regions, especially the more isolated ones, cannot provide adequate judicial services. They lack qualified judges, courts, defense lawyers and sufficient judicial apparatus and support systems. In other regions, while judicial entities exist, they are often in a state ofneglect and suffer from low professionalism. 84 7. Geography affects the nature of demand for judicial .services. In urban areas, for example, low-income groups most often require resolution of issues related to property disputes; housing problems; displacement arising from land privatization; enforcement of contracts, etc. In rural areas, low-income groups face issues such as land disputes, internal immigration, and domestic violence. Small and medium businesses in rural and urban settings face contract enforcement problems and often need arbitration and dispute resolution services which are limited in availability. 8. Domestic violence remains a serious social problem in Russia. Violence against women, and particularly domestic violence, is a complex phenomenon. As in other countries, its true extent is difficult to measure. However, according to a March 2003 joint public statement by the Russian Association of Crisis Centers and Amnesty International, about 14,000 women were estimated to have been killed annually in domestic violence in recent years. In comparison, China, with nine times Russia’s population, reportedly had 15,000 such incidents. Women tend not to seek legal protection because ofthe low level of awareness about their rights and the tools available for legal protection. 9. An emerging problem for many courts is the absence of a juvenile justice framework and process. The enormous difficulty faced by poor unskilled youths in entering the labor market is considered a major factor behind the increase in juvenile crime in Russia. Widespread .illicit drug trafficking has been particularly associated with the expanding involvement of youth as both users and traffickers. An inadequate legal framework, absence of institutional support structures, and limited skills ofjudges, lawyers and social workers complicate this problem. 10. While access to judicial services is uneven, many communities seek to resolve their legal needs outside the judicial infrastructure, through the use of dispute resolution services, ombudsmen and non-state organizations or universities that provide pro bono services. For example, in St. Petersburg, the Faculty of Law at St. Petersburg University, working with a network of civil society organizations, has established a legal clinic. Each organization offers free legal consultations based upon its area of specialization (these include domestic violence, labor disputes and family conflicts). Regional and urbdrural disparities often determine the kinds ofalternative services available and sought. While there is an apparently wide and diverse range of legal support services (such as in the case of St. Petersburg), these services are rare. They are in fact small in scale, and ad hoc and pro bono work is often of low quality. Such parallel services are also difficult to access because of the lack of information about their availability. 85 Annex 17: Maps RUSSIAN FEDERATION: Judicial Reform Support Project 86 IBRD 33470R 60°N 60°N 50°N 50°N 40°N 40°N 30°N 30°N - y k i k s s k n - s i t l v o a a o n l h h h JAPAN JAPAN v c k z a t a u r i m p Yuzhno- Yuzhno- Y Yuzhno- Yuzhno- SakhalinskS Sakhalinsk y a a 130°E o d r r KamchatskiyK t t a S e n PetropavlovP Petropavlov sk- sk- g AnadyrA Anadyr a n e e e i n k g g g r a o k n n n l n t e s n n n i i i l l l a a a a s a A A A Japan - - v - Sea of of Sea B e e e t t PalanaP Palana t o R R R o o d o h h o h k k k i i i v r S S S a i a g d e e e g g g of Sea n n n a a a R R R r r r a a a b y y y a a m m m l l l o o o Okhotsk y y y l K K K a r a a a MagadanM Magadan VladivostokV Vladivostok h u d d d m KhabarovskK Khabarovsk OF OF Amur Amur A Amur n n n k REP. REP. s n A A A t a o KOREA KOREA h h UNITED STATES OF AMERICA AMERICA OF STATES UNITED z k d i OkhotskO Okhotsk OF OF b e e e g g g o n n n a a a R R R r r r r D.P.R. u u u h h h i z z z d d d g g g u u u BirobidzhanB Birobidzhan h h h KOREA z z z D D Kolyma D 120°E k e A s g n n e N a h k c ir a I g R Sea Sea i h n n d n s e e n y k e e H d d I i s d l l t l k v u o A A s A k CHINA CHINA CHINA CHINA C r g a e a l Yakutsk Yakutsk Y h Yakutsk East Siberian Siberian East BlagoveshchenskB Blagoveshchensk C e y a a 80°N a o n n n k e e e s L L L n i g a AginskoyeA Aginskoye t a i Islands n Le h ChitaC Chita 110°E New Siberia e d d d d n n n U a a a Lake Lake n l l l Baikal Baikal a l w w w Sea Sea A o o o UlanU Ude Ulan Ude L L L I n Laptev Laptev l u L a a a i n n n r O y a a a i e i i i r t k r r r s t e e e G k n e n s b b b y t i i i a u d b e S S S r a a a N k l r g g g a a a aa a IrkutskI Irkutsk i l l l O n n n r u u u a a a Central C Plateau P ' u t t t t s s s O TurT Tur Siberian S s a a a n n n a a a i i i h h h Ust'U Ordynskiy Ust' Ordynskiy 100°E r r r n n n K K K MONGOLIA M MONGOLIA a a a e e e P P P g g g 600 Kilometers n k r r r s l A y y y r y a z m m m y y y y y n o KyzylK Kyzyl a a a a n T T T k s a a r b Zemlya ey KrasnoyarskK s Krasnoyarsk i en AbakanA Abakan a YeniseyY k Severnaya n k i s d t 0 200 400 0 200 Miles 600 400 0 200 o e u v n DudinkaD Dudinka o z - r k u e s o a . k y k n m o n d ARCTIC OCEAN skssk r a v e t e y o l m o KemerovoK Kemerovo Pen. P Pen. n o Gorno-G Gorno- AltayskA Altaysk Gyda G Gyda NovokuznetskN Novokuznetsk TomT Tom 90°E a t l n i k . s b i l a s Land r n r ObO u e i Kara Sea Sea Kara m a e a e d b l a i Pen. P Pen. n r s r Yamal Yamal Y Yamal Yamal b a West West West West W Plain Plain P o a i h v a BarnaulB Barnaul k t Franz Josef o Siberian Siberian S e u k l k s NovosibirskN Novosibirsk - a r y y i SalekhardS Salekhard t o s n Vorkuta Vorkuta VVorkuta n a a h b Khanty-K Khanty- MansiyskM Mansiysk k Zemlya Ob O Ob r Ob s Novaya a m M OmskOOmsk n n a e . . . y N ' s s s g r menmmen S e a t t t n r u a a u A y M M M g b Nar'yanN Nar'yan Mar Mar TyuTTyu l l l r T n RUSSIAN i u a a a r k l r r B a r e n t s r KurganKKurgan S s e ol o ol t ol U U U FEDERATION n r b r a a o a k a H T Tob k Tob k e k m s v r Yekaterinburg Yekaterinburg Y Yekaterinburg ' m n K y u i t y m k b MurmanskMMurmansk d r . y k a a A u e l s n SyktyvkarS Syktyvkar y ' Perm'PPerm' l KudymkarK Kudymkar l o e e Z e Pen. Pen. 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R R. R. R. n y e r W O s Y SaratovSSaratov b a RyazanR PenzaP v g n MOSCOW M T h a SWEDEN SWEDEN SWEDEN SWEDEN S m o o k e A k S l a g s k a g l t l a s o Tambov Tambov T u ESTO ESTO E ESTONIA u e l r PskovP o t Tula Tula Tula T W m p a s a Volgograd Volgograd VVolgograd h i l SmolenskSSmolensk l KalugaK LipetskLLipetsk z R AstrakhanA Astrakhan a e a e r LATVIALATVIA k e n S a h t k O OrelOrelO k o c n S s s y s r i r a l a - l i y n n o u v p ElistaElistaE NORWAY NORWAY NORWA N h U o n o a s Voronezh Voronezh V n KurskK k o z p a t y D R a a LITH.LITH. k s d o r - o C i r r r o o BryanskB n h z MakhachkalaM Makhachkala FED. FED. v r A Rostov-RRostov- c on-Dono on-Don GroznyyG Groznyy a E ' a o l L t g NazranNazranN a RUSSIAN RUSSIAN StavropolSStavropol l E d N e Nal'chikN Nal'chik I a N BelgorodB Belgorod BELARUS BELARUS BELARUS BELARUS B r z k g D a A A s k n J s i A DENMARK DENMARK I v e R I N p s n r ) a RUSSIAN i k l o u A r k a K G r i k a m A e d B y d b h KaliningradKKaliningrad R L o OBLAST CENTERS CAPITAL NATIONAL RIVERS MAIN ROADS RAILROADS KRAI OR REPUBLIC BOUNDARIES OBLAST, OKRUG OR AUTONOMOUS OBLAST, REPUBLIC BOUNDARIES BOUNDARIES INTERNATIONAL Y ' UKRAINE UKRAINE U 3 a R a l l CherkesskC n 3 E s E O MaykopMaykopM . VladikavkazV Vladikavkaz N O a 6 E Z FEDERATION FEDERATION , a r H POLAND POLAND POLAND POLAND P r 5 KrasnodarK A T AZERBAIJAN AZERBAIJAN AZERBAIJAN AZERBAIJAN A GEORGIA GEORGIA G (5,633 m) ( (5,633 m) o E Gora El'brus G M NETH. NETH. N NETH. NETH. Sea Sea R Black Black This map was produced by the Map Design Unit of The World Bank. This map was produced by the Map Design Unit of The World The boundaries, colors, denominations and any other information Bank on the part of The World shown on this map do not imply, or any Group, any judgment on the legal status of territory, endorsement or acceptance of such boundaries. E GERMANY GERMANY G MAY 2006