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World Bank Document Document of The World Bank Public Disclosure Authorized FOR OFFICIAL USE ONLY Report No: 56576-PE PROJECT APPRAISAL DOCUMENT Public Disclosure Authorized ON A PROPOSED TECHNICAL ASSISTANCE LOAN IN THE AMOUNT OF US$20 MILLION TO THE REPUBLIC OF PERU FOR A Public Disclosure Authorized JUSTICE SERVICES IMPROVEMENT PROJECT II October 20, 2010 This document has a restricted distribution and may be used by recipients only in the Public Disclosure Authorized performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective September 13, 2010) Currency Unit = US Dollar 2.8 Peruvian Soles Nuevos = US$1 1.52 US$ = SDR 1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS ADR Alternative Dispute Resolution AGO Attorney General’s Office (Ministerio Público or Fiscalía) ALEGRAs Legal aid centers administered by the Ministry of Justice in conjunction with municipalities (Asistencia Legal Gratuita) AMAG Judicial Academy (Academia de la Magistratura) CEJA Justice Studies Center of the Americas (Centro de Estudios de Justicia de las Américas) CNM National Judicial Council (Consejo Nacional de la Magistratura) CSO Civil Society Organization CPC Criminal Procedure Code (Código Procesal Penal) CPS Country Partnership Strategy GAC Governance and Anti-Corruption Strategy of the World Bank GDP Gross Domestic Product GoP Government of Peru IBRD International Bank for Reconstruction and Development IDB Inter-American Development Bank IDL Legal Defense Institute (Instituto de Defensa Legal) INPE National Penitentiary Institute (Instituto Nacional Penitenciario) JSCA Justice Studies Center of the Americas (Centro de Estudios de Justicia de las Americas) MEF Peru’s Ministry of Finance and Economy MINJUS Peru’s Ministry of Justice OCMA Anti-corruption Office of the Judiciary (Oficina de Control de la Magistratura) ODECMA Decentralized offices of the OCMA PAD Project Appraisal Document PCU Project Coordination Unit Vice President: Pamela Cox Country Director: Carlos Felipe Jaramillo Sector Director Marcelo Giugale Sector Manager: Veronica E. Zavala Lombardi Task Team Leader: Lisa L. Bhansali PERU Justice Services Improvement Project II CONTENTS Page I. STRATEGIC CONTEXT AND RATIONALE ................................................................. 1 A. Country and sector issues.................................................................................................... 1 B. Rationale for Bank involvement ......................................................................................... 4 C. Higher level objectives to which the project contributes .................................................... 5 II. PROJECT DESCRIPTION ................................................................................................. 5 A. Lending instrument ............................................................................................................. 5 B. Project development objective and key indicators .............................................................. 5 C. Project Components ............................................................................................................ 5 D. Lessons learned from the 1st project and reflected in the project design ............................ 8 E. Alternatives considered and reasons for rejection ............................................................ 11 III. IMPLEMENTATION .................................................................................................... 12 A. Partnership arrangements (if applicable) .......................................................................... 12 B. Institutional and implementation arrangements ................................................................ 12 C. Monitoring and evaluation of outcomes/results ................................................................ 12 D. Sustainability..................................................................................................................... 13 E. Critical risks and possible controversial aspects ............................................................... 13 F. Loan/credit conditions and covenants ............................................................................... 15 IV. APPRAISAL SUMMARY ............................................................................................. 16 A. Economic and financial analyses ...................................................................................... 16 B. Technical ........................................................................................................................... 17 C. Fiduciary ........................................................................................................................... 17 D. Social................................................................................................................................. 18 E. Environment ...................................................................................................................... 21 F. Safeguard policies ............................................................................................................. 21 G. Policy Exceptions and Readiness...................................................................................... 21 Annex 1: Country and Sector or Program Background ......................................................... 22 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ................. 29 Annex 3: Results Framework and Monitoring ........................................................................ 32 Annex 4: Detailed Project Description ...................................................................................... 36 Annex 5: Project Costs ............................................................................................................... 43 Annex 6: Implementation Arrangements ................................................................................. 44 Annex 7: Financial Management and Disbursement Arrangements ..................................... 46 Annex 8: Procurement Arrangements ...................................................................................... 57 Annex 9: Economic and Financial Analysis ............................................................................. 63 Annex 10: Safeguard Policy Issues ........................................................................................... 64 Annex 11: Project Preparation and Supervision .................................................................... 66 Annex 12: Documents in the Project File ................................................................................. 68 Annex 13: Statement of Loans and Credits .............................................................................. 71 Annex 14: Country at a Glance ................................................................................................. 73 Annex 15: Map IBRD 33465R ................................................................................................... 75 PERU JUSTICE SERVICES IMPROVEMENT PROJECT II PROJECT APPRAISAL DOCUMENT LATIN AMERICA AND CARIBBEAN LCSPS Date: October 20, 2010 Team Leader: Lisa L. Bhansali Country Director: Carlos Felipe Jaramillo Sectors: Law and justice (100%) Sector Manager: Veronica E. Zavala Themes: Access to law and justice (40%); Lombardi Judicial and other dispute resolution mechanisms (40%); Legal institutions for a market economy (20%) Project ID: P110752 Environmental category: C Lending Instrument: Technical Assistance Joint IFC: N/A Loan Joint Level: N/A Project Financing Data [X] Loan [ ] Credit [ ] Grant [ ] Guarantee [ ] Other: For Loans/Credits/Others: Total Bank financing (US$m.): 20.00 Proposed terms: Variable-Spread Loan (VSL) with a repayment schedule linked to commitments and with all options. Payable in 13 years, including a 10.5 year grace period with a custom repayment schedule with repayments on each May 15 and November 15. Front-End Fee equal to one quarter of one percent (.25%) of the loan amount payable from the Borrower’s proceeds within 60 days of effectiveness. Financing Plan (US$m) Source Local Foreign Total Borrower 10.00 0.00 10.00 International Bank for Reconstruction and 20.00 0.00 20.00 Development Total: 30.00 0.00 30.00 Borrower: Republic of Peru Represented by the Ministry of Economy and Finance Jr. Junín 319, Cercado de Lima, Lima, Perú Tel: (51-1) 311-5930 Responsible Agency: Judiciary of Peru Av. Paseo de la República s/n, Palacio N 4to Piso, Oficina 444 Lima, Perú Tel: (51-1) 719-6300 Fax: (51-1) 427-0292 [email protected] Estimated disbursements (Bank FY/US$m) FY 2011 2012 2013 2014 2015 2016 Annual 0 5 6 6 2.5 0.5 Cumulative 0 5 11 17 19.5 20 Project implementation period: 4 years Expected effectiveness date: April 1, 2011 Expected closing date: September 30, 2015 Does the project depart from the CAS in content or other significant respects? [ ]Yes [X] No Ref. PAD I.C. Does the project require any exceptions from Bank policies? Ref. PAD IV.G. [ ]Yes [X] No Have these been approved by Bank management? [ ]Yes [ X ] No Is approval for any policy exception sought from the Board? [ ]Yes [X] No Does the project include any critical risks rated “substantial” or “high”? [ ]Yes [X] No Ref. PAD III.E. Does the project meet the Regional criteria for readiness for implementation? [X]Yes [ ] No Ref. PAD IV.G. Project development objective
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