ASIAN DEVELOPMENT BANK TAR:PHI 34081

PROPOSED TECHNICAL ASSISTANCE

(Financed from the Japan Special Fund and Cofinanced by the Government of Japan)

TO THE

REPUBLIC OF THE

TO

STRENGTHEN THE INDEPENDENCE OF THE JUDICIARY

July 2001 CURRENCY EQUIVALENTS (as of April 2001)

Currency Unit – Peso (P) $1.00 = P50.50

ABBREVIATIONS

ADB – Asian Development Bank APJR – Action Plan for Judicial Reform COA – Commission on Audit CSC – Civil Service Commission DBM – Department of Budget and Management FY – fiscal year IBP – Integrated Bar of the Philippines JBC – Judicial Bar Council NEDA – National Economic and Development Authority PhilJA – Philippine Judicial Academy PMES – Performance Monitoring and Evaluation System PMO – project management office TA – technical assistance US – United States

NOTE

In this report, "$" refers to US dollars. I. INTRODUCTION

1. A prerequisite for economic growth and social development is a stable society, and the cornerstone is a judiciary that dispenses, and is seen to dispense, fair and impartial justice, efficiently and effectively. The Supreme Court of the Philippines is aware of the challenges it faces and is actively responding to them. It has taken concrete steps to establish a strong foundation for the long-term development of the judiciary. With assistance from international funding agencies, the Supreme Court undertook several studies to assess the extent of change needed, and recommend reforms. The Supreme Court established a project management office (PMO), headed by a full-time director, to manage the studies and coordinate the reform proposals. An executive committee (the Executive Committee) headed by the chief justice was created to provide overall policy direction for the reforms. The result of these efforts, the Action Program for Judicial Reform (APJR), was adopted by the Supreme Court in November 2000. The APJR has received strong support from the executive branch.

2. Among the goals of the APJR are fiscal autonomy; independence from political interference; and fair, speedy justice. The Government of the Republic of the Philippines has requested the Asian Development Bank (ADB) to provide advisory technical assistance (TA) to advance APJR components in these areas. An ADB Fact-Finding Mission was fielded in October 2000 and reached an understanding with the Government on the objectives, scope, costs, and implementation arrangements for this TA. The logical framework is attached as Appendix 1. This TA is in line with the APJR and is included in the 2001 Philippine country assistance plan.1

II. BACKGROUND AND RATIONALE

3. The Philippine Constitution sets up a government with three separate, independent, but coequal branches. Congress writes the laws and appropriates the budget. The executive ensures compliance with the laws. The judiciary interprets the laws, resolves disputes, and defines the boundaries of government authority. As the judiciary has no instrument of power other than the power of its decisions, structures must be established to protect its independence and integrity. The Philippine Constitution takes the first step in this direction by recognizing that the judiciary must have fiscal autonomy.2

4. Jurisprudence defines fiscal autonomy as freedom from outside control in determining one’s needs, and full flexibility in allocating and using one’s resources. In practice the executive’s Department of Budget and Management reviews and revises the judiciary’s budget before submitting it to Congress. It also subjects the judiciary’s budget, obligation programming, and cash releases to the same terms and conditions applied to other agencies without fiscal autonomy. This has forced the judiciary to negotiate budget items with the executive on a transaction-by-transaction basis, and has compelled lower courts to accept subsidies from local governments. The judiciary’s level of fiscal autonomy fluctuates with changes in government leadership, thus undermining its impartiality and rendering it vulnerable to political change.

5. The judiciary’s resource constraints are aggravated by a lack of administrative autonomy. The evaluation and approval of salary grades; changes in staffing patterns; and creation, abolition, reclassification, and upgrade of positions are subject to the same review and approval procedures applied to executive agencies. This has resulted in work-task duplication, understaffing, inappropriate skills mix, and inefficiencies.

1 The TA first appeared in ADB Business Opportunities (Internet Edition) on 27 October 2000. 2 “The Judiciary shall enjoy fiscal autonomy. Appropriations for the Judiciary may not be reduced by the legislature below the amount appropriated for the previous year, and after approval, shall be automatically and regularly released.” (Sec. 3, Art. VIII) 2 6. Fiscal independence and accountability are vital to the development of the Philippine judiciary. However, to reap their benefits and ensure the long-term sustainability of the developments, the judicial appointments system must also be reformed. The Judicial and Bar Council was created to prepare an exclusive list of names from which the President can choose appointments or promotions to the Supreme Court and the lower courts. The current rules and procedures for screening and nominating judges and justices must be improved to ensure that they are transparent and respond to the need to nominate competent and impartial members of the bench. In the case of promotions, the rules and procedures also have to be linked to a transparent and systematic performance monitoring and evaluation system.

7. Further, it is also essential that the Supreme Court be able to detect inefficiencies and corruption in the courts, and effectively impose discipline. The Philippines currently has no institutionalized, systematic, performance monitoring and evaluation of such things as legal ability, case-flow management, comportment in and out of court, impartiality, appropriateness of the judge’s manner and initiatives, and reasonableness of opinions. The absence of such mechanisms contributes to the erosion of public confidence in the judicial system. This public support is imperative if the judiciary is to maintain its role as an independent and accountable, third-branch of government.

8. A parallel step toward judicial independence and impartiality is strengthening the bench. Unfortunately, the lower courts have many vacancies, equivalent to one third of the judicial posts.3 Therefore incentives and institutional support must be improved to encourage capable candidates to volunteer for judicial posts, and encourage desirable incumbents to remain in government service. The judiciary’s salary scale must be improved as it is far lower than that of comparable institutions; good performance needs to be recognized and rewarded; and individual efforts to maintain an appropriate level of expertise must be supported through continuous, deliberate, and properly managed judicial education. The Philippine Judicial Academy (PhilJA) was established to train judges, justices, court personnel, and aspirants to judicial posts. PhilJA has a critical role in upgrading the qualifications of incumbents on the bench. It has also started a prejudicature program for candidates to the bench. A comprehensive conceptual framework for judicial education will help assist PhilJA execute its mandate.

9. Providing support for judicial reform is consistent with ADB’s objective to improve governance. Independent, accountable, impartial, and competent judiciaries serve as a defense against corruption, reduce political interference in the dispensation of justice, enhance transparency, and help reduce waste of public funds. Judicial reform is central to predictability, one of four essential elements in ADB’s governance policy.4 Independent judicial institutions ensure (i) participation (by giving the public a hearing through public interest litigation), (ii) transparency (by upholding laws that require disclosure of information), and (iii) accountability (by granting citizens the right to challenge government actions before the judiciary). Additional information is available in Appendix 2.

III. THE PROPOSED TECHNICAL ASSISTANCE

A. Objectives

10. The goal of the TA is to contribute to the improvement of the Philippine judiciary by supporting its independence, accountability, impartiality, and competence. Under the TA, (i) a

3 Trial court judge to population ratio is about 1:35,200. As of 31 October 1999, 709 of 2,130 trial court were vacant. These include the first level trial courts, which administer justice in municipalities and cities, and the second-level trial courts, which handle civil and criminal cases, and cases on appeal from the first level trial courts. 4 R151-95: Governance: Sound Development Management, 17 August 1995. 3 framework for the judiciary’s fiscal and administrative autonomy will be designed, (ii) the appointment process and the accountability and incentive system under which the judges and justices function will be improved, and (iii) the capacity of PhilJA to deliver judicial training will be strengthened.

B. Scope

11. The TA will develop a framework to define the overall scope of judicial independence and accountability. A budget and revenue system will be designed to translate the framework into operational systems and guidelines for budget preparation, programming, and commitment, disbursement of funds, accounting procedures that meet Commission on Audit requirements, performance-based accomplishment reporting to Congress, and revenue generation actions. The judiciary’s administrative structure will be reengineered to achieve suitable skills-mix, staffing structures, and organizational and functional configurations for the courts; improve accountability and transparency; and ensure integration of functions and operating systems. The Supreme Court and the relevant executive agencies will be reviewed to identify impediments to judicial independence and accountability, and to develop fiscal systems for the judiciary that are consistent with the principles of judicial independence and prudent public expenditure practices. Appropriate amendments consistent with the Philippine Constitution will be recommended. On the basis of this work, assistance will be provided in the preparation of the judiciary’s 2003 budget.

12. The TA will conduct a detailed analysis of the legal and institutional framework for and actual implementation of the screening and nomination of judges and justices. On the basis of the review, the existing institutional arrangements, processes, and rules will be reformulated to enhance transparency and civil society’s participation in the screening and nomination of judges and justices. Performance standards will be established for, among other things, ethical conduct, judicial reasoning and writing, case-flow management, and court efficiency. A performance monitoring and evaluation system (PMES) will be developed to ensure that good performance is recognized, and deficiencies identified and disciplined. Data on case-flow management, currently being gathered by the Office of the Court Administrator, will be taken into account in setting the standards. The PMES will be linked to the screening, nomination, promotion, and discipline process. Proposals will be made for establishing a judicial tenure committee under the supervision of the Supreme Court to operate the PMES and assist the Judicial and Bar Council with the preliminary screening of candidates for appointment and promotion.

13. To improve the incentives system, a career program linked to the PMES and a competitive compensation-retirement plan will be designed for the bench. To support individual efforts to improve competence, a conceptual framework for judicial education will be developed to set educational goals and a value system, identify areas for education, and propose educational methods. Using the conceptual framework, PhilJA’s curricula will be refined, reoriented, and enriched. Distance training modules will be designed for regular courses identified by the Supreme Court, PhilJA, and ADB. Classroom -based and distance training modules will be designed to train the judiciary in the use of the new systems developed under the TA. With assistance from ADB, PhilJA will deliver classroom-based courses at its campus in Tagaytay, and deliver courses by distance training throughout the country.

14. The Ministry of Justice of the Government of Japan will offer a 3-4 week training course in Japan for about 10 court administrators, executive judges, and PhilJA trainers who will be selected based on criteria agreed between the Supreme Court, PhilJA, and ADB. The courses will be on performance evaluation, court administration, judicial career development, and judicial 4 education. The curriculum will be set upon consultation among the Ministry of Justice of the Government of Japan, PhilJA, and ADB.

15. A conference will be held at ADB to present the findings and reforms drafted under the TA. The Supreme Court, with assistance from TA consultants and ADB, will conduct nationwide workshops and dialogues to discuss the TA reforms with stakeholders including incumbent and retired members of the bench, court administrators and personnel, members of the bar, bar associations, law schools, members of Congress, and government officials. Feedback from these sessions will be considered in finalizing the TA reforms. Tools for implementing the reforms, including necessary legislative, regulatory, and administrative enactments, will be designed or formulated and the cost for reforms estimated.

C. Cost Estimates and Financing Plan

16. The TA is estimated to cost $1.878 million equivalent, of which $740,000 is the foreign- exchange cost and $1.138 million equivalent is the local currency cost. The Government has requested ADB to finance $1.200 million equivalent, covering $640,000 of the foreign exchange cost and $560,000 equivalent of the local currency cost. The Government of Japan, acting through the Ministry of Justice, will provide in-kind services for the overseas training program valued at the equivalent of about $100,000. The TA will be financed by ADB on a grant basis from the Japan Special Fund, funded by the Government of Japan. The Government will finance the remaining local-currency cost, equivalent to $578,000, covering administrative and support costs including salaries of counterpart staff, secretarial support, office supplies and equipment, office accommodation, local transportation, miscellaneous costs for dialogues and training courses, and per diems associated with attendance at such events. Details of the cost estimates are set out in Appendix 3.

D. Implementation Arrangements

17. The Supreme Court will be the Executing Agency; it will ensure that the PMO continues to be headed by a full-time director, is always adequately staffed, and has at least one full-time project officer reporting to the director to supervise day-to-day implementation of the TA. The director will ensure coordination among the Judicial and Bar Council, PhilJA, Office of the Clerk of Court, Office of the Court Administrator, the clerks of court of the Court of Appeals, Sandiganbayan, , TA consultants, and other stakeholders. The PMO will report monthly to the Executive Committee to update it on the TA reforms. The Executive Committee, and when necessary the Supreme Court, will regularly review the reforms and provide policy direction to ensure acceptability of the final proposals. To ensure proper synchronization and acceptability of judicial reforms outside the judiciary, the Supreme Court will coordinate and liaise with the Presidential Committee on Effective Governance, a committee composed of the Executive Secretary, the Secretary of the Department of Finance, the Secretary of the Department of Budget and Management, the Chairman of the Commission on Audit, and the Secretary of the National Economic and Development Authority. The TA will be implemented over a period of 18 months commencing in December 2001. Complete implementation is expected by May 2003.

18. Seventeen person-months of international consulting services will be required in the areas of constitutional and administrative law of comparable constitutional systems, judicial appointments and career development, performance evaluation, fiscal and administrative management of courts, and physical assets management. Reports will be required to outline the framework and processes of comparable constitutional systems, explain their theoretical and philosophical underpinnings, compare them with the Philippine system, and recommend a direction for fiscal and administrative independence and accountability, judicial nominations, and career development. The reports will be reviewed by the Supreme Court and ADB, and used as 5 a guide to formulate the reforms and strategies for advocating the reforms. Ninety person- months of domestic consultants’ services will be required in constitutional and administrative law, budget planning and management, financial planning and management, revenue generation, administration, corporate planning, asset management, procurement, auditing, staff reengineering, personnel management, career development, performance monitoring and evaluation, and training. The consultants will be engaged as a firm, under one contract, and will be headed by a domestic consultant team leader with expertise in project management, financial management, and administration. A resource person with expertise in the budgetary process of comparable court systems, and a resource person involved in performance evaluation of judges and justices, will be separately engaged to make presentations and provide inputs at the conference to be held at ADB.

19. The consultants will be recruited in accordance with ADB’s Guidelines on the Use of Consultants by Asian Development Bank and its Borrowers, and other arrangements satisfactory to ADB for the recruitment of domestic consultants. The outline terms of reference are attached as Appendix 4.

20. An inception meeting will be held within one month after engagement of the consultants. Five months thereafter, the Supreme Court and ADB will review the progress of the TA and the consultants will submit a preliminary report on the findings and reforms being developed. The conference at ADB will be held about two months after submission of the report, and promptly thereafter the consultants will submit to the Supreme Court and ADB a report on the results of the conference. The consultants will help organize workshops and dialogues. They will submit reports of the proceedings of such interactions promptly after they are held. A draft final report will be submitted to the Supreme Court and ADB within 10 months after inception, and a final report no later than a month after the draft final report is approved by the Supreme Court. The reports will include the reports of the international consultants, the reforms developed under the TA, and draft legislation if necessary. The PMO will prepare a project completion report within three months after completion of the TA to assess and evaluate the achievements of the TA.

21. Training courses developed under the TA will be subject to PhilJA’s approval. After the acceptance of the final report and approval of the training courses, PhilJA will deliver the courses, with assistance from the consultants. Trainers from the academe and the legal profession will be directly recruited as resource persons, in accordance with arrangements and criteria satisfactory to ADB, to help deliver most of the training courses. The consultants' team will help PhilJA prepare a report on the delivery of the training programs. The Supreme Court, in consultation with PhilJA and ADB, will select about 10 court administrators, executive judges, and PhilJA trainers to participate in the overseas training program. After completion of the overseas training course, the participants will be required to become regular resource persons for PhilJA.

22. Computers and other necessary information technology equipment will be procured by the consultants, in accordance with procedures acceptable to ADB, to assist them in their work. After completion of the TA, the equipment will be transferred to the Supreme Court.

V. THE PRESIDENT’S RECOMMENDATION

23. The President recommends that the Board approve the provision of technical assistance, on a grant basis, to the Government of the Republic of the Philippines in an amount not exceeding the equivalent of $1,200,000 to Strengthen the Independence of the Judiciary. 6 Appendix 1, page 1

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ADDITIONAL INFORMA TJON NOTES

A. Executive Review of the Judiciary's Budget

1. One of the systems with which the Philippine Government is constitutionally comparable is the United States (US) Federal Government. Both have three separate, independent but coequal branches of government. In both cases, the legislatures have the power of the "purse strings," the executives have the "power of sword," and the judiciaries have the least coercive of the three powers - the power of judicial review. Because both systems require that courts be able to review the acts of the President and Congress, and because of the passiveness of the instrument of judicial power (i.e., judicial decisions), the systems have had to actively protect the independence and integrity of their judiciaries.

2. The Philippines has specified in its constitution that the judiciary will be fiscally autonomous. The US has prohibited its President from changing the budget proposed by the judicial branch of government. In fact, to maintain full separation and independence of all three branches, the US President is also prohibited from changing the proposed legislative budget. Thus,

"(b) Estimated expenditures and proposed appropriations for the legislative branch and the judicial branch to be included in each budget under subsection (a)(5) of this section shall be submitted to the President before October 16 of each year and included in the budget by the President without change." (United States Code Annotated, Title 31, Chapter 11, Section 1105(b), emphasis supplied)

3. The basis of the Department of Budget and Management for reviewing and revising the judiciary's budget despite Section 3, Article VIII of the Philippine Constitution is another constitutional provision that requires the President to submit an annual budget to Congress. Section 22, Article VIII of the Philippine Constitution provides-

"The President shall submit to Congress within thirty days from the opening of the regular session, as the basis of the general appropriations bill, a budget of expenditures and sources of financing, including receipts from existing and proposed revenue measures."

Compare this provision with the following US statute that requires the US President to submit an annual budget and proposed appropriations to Congress, notwithstanding the prohibition against changing the budget of judiciary:

"xxx The President shall include in each budget the following: xxx (5) except as provided in subsection (b) of this section, estimated expenditures and proposed appropriations the President decides are

(Reference in text: page 2, para. 9) 12 Appendix 2, page 2

necessary to support the Government in the fiscal year for which the budget is submitted and the 4 fiscal years after that year;" (United States Code Annotated, Title 31, Chapter 11, Section 1105(a)(5))

4. As can be seen from the US model, an obligation on the part of the President to submit an annual budget is not necessarily inconsistent with a prohibition against changing the budgets submitted to the President by the judicial and legislative branches.

8. A Comparison of Salary Scales

5. A municipal trial court judge receives a basic salary of P19,500 a month and allowances of approximately P9,900 a month, for a total of about P29,400 a month. A judge receives gross compensation of about P35,OOOa month. First year associates in top law firms in Makati receive annualized salaries (14 - 18 months equivalent) of approximately P600,000 to P800,000; senior associates, with 4 - 5 years of work experience, receive annualized salaries of approximately P1,OOO,OOOto P1,200,OOO. c. The Judicial Bar and Council (JBC)

6. Structurally, the JBC is under the supervision of the Supreme Court. The chief justice is the ex-officio chairman. The other members are the secretary of justice (ex- officio), a professor of law, a retired justice of the Supreme Court, and one representative each from the legislature (ex-officio), the Integrated Bar of the Philippines (IBP), and the private sector. The professor, retired justice, and representatives of the IBP and the private sector are appointed by the President with the consent of the Commission of Appointments. However, the judges and justices appointed by the President from the list prepared by JBC need no confirmation from the Congressional Commission on Appointments. (Sections 8 and 9, Article VIII, Philippine Constitution). 13 Appendix 3

COST ESTIMATES AND FINANCING PLAN ($) Foreign Local Total Item Exchange Currency Cost

A. ADB Financing (JSF) 1. Consultants a. Remuneration and Per Diem i. International Consultants (17 person-months) 395,000 0 395,000 ii. Domestic Consultants (90 person-months) 0 370,000 370,000 iii. Resource Persons 4,000 0 4,000 b. International and Domestic Travel 25,000 2,000 27,000 2. Conference, Workshops, and Seminars 0 32,000 32,000 3. Training a. Overseas Travel and Per Diem 31,000 0 31,000 b. In-country Training (Trainers, Facilitators, Training Material) 0 100,000 100,000 c. Training Material and Equipment for Distance Learning 85,000 0 85,000 4. Editing and Printing of T A Reports 10,000 0 10,000 5. Equipment 25,000 0 25,000 6. Contingencies 65,000 56,000 121,000 Subtotal 640,000 560,000 1,200,000

B. Government of Japan (in-kind) 100,000 0 100,000

C. Government Financing 1. Office Accommodation,Facilities & Utilities 0 40,000 40,000 2. Transportation 0 35,000 35,000 3. Nationwide Workshops and Seminars 0 145,000 145,000 4. Counterpart Staff a. Remuneration and Benefits 0 55,000 55,000 b. Per Diem (for out of Manila workshops & seminars) 0 15,000 15,000 c. Travel 0 15,000 15,000 5. Training 0 215,000 215,000 6. Contingencies 0 58,000 58,000

Subtotal- . 0 578,000 578,000

Total 740,000 1,138,000 1,878,000

Source: Staff Estimates.

(Reference in text: page 4, para. 16.) 14 Appendix 4, page 1

OUTLINE OF TERMS OF REFERENCE

International Consultants

Review of Judicial Independence and Accountability (7 person-months

1. The consultant (i) will be based abroad for the first two months to prepare a review and recommend directions for independence and accountability, (ii) will be resident in the Philippines for five months after acceptance of the review and recommendations, and (iii) must have expertise and extensive experience in the fiscal and administrative operation of a constitutionally comparable judicial system.

2. The consultant will (i) review the court system of a constitutionally comparable judicial system (ii) detail the nature and scope of the judiciary's fiscal and administrative independence and accountability; (iii) discuss the political and historical context within which such independence and accountability evolved; (iv) explain the theoretical and philosophical underpinnings of judicial independence and accountability; (v) describe the fiscal, budgetary, revenue, and administrative processes and mechanisms set in place for the judiciary; (vi) discuss how fiscal discipline and accountability are maintained in and by the judiciary; (vii) describe the remuneration system for judges, explain its relation to the civil service salary scale, and explain the political and theoretical context for any difference or correlation between the two scales; (viii) (with the assistance of the legal experts on Philippine constitutional and . administrative law) compare the reviewed system and the Philippine system; and (ix) recommend for the approval of the Supreme Court the direction for fiscal and administrative independence and accountability.

3. After the report is accepted by the Supreme Court, the consultant will work closely with, supervise, and guide the other consultants to ensure that the reforms developed under the TA are in line with the approved direction for independence and accountability; develop a set of fiscal discipline guidelines (as part of the judicial budget process and budget formula) to ensure spending measures are responsible and within an approved expenditure program, as well as ensure that the budget is coherent with the state of the national economy, inflation, and the rate of growth of overall federal spending.

Appointments and Judicial Career (5 person-months)

4. The consultant (i) will be based abroad for the first two months to prepare a review, (ii) will be resident in the Philippines for three months after the review and recommendations are approved by the Supreme Court; (iii) must have extensive expertise in performance evaluation and discipline within the judiciary of a constitutionally comparable system; (iv) will review constitutionally comparable judicial systems, (v) outline the appointment, nomination, performance evaluation, discipline, and removal of judges and justices within those systems; (vi) describebasis for thethe variousjudicial mechanisms.career development system; and (vii) explain the political or theoretical'

5. On the basis of diagnostic studies already conducted of the appointment, nomination, discipline, and removal of judges and justices in the Philippines, and with the assistance of the legal experts on Philippine constitutional and administrative law, the consultants will prepare a report on judicial appointments and career development that (i) recommends reforms to improve the institutional framework and organizational arrangements for the appointment and nomination

(Reference in text: page 5, para.19.) 15 Appendix 4, page 2

of judges and justices; (ii) develops an overall framework for the appointment, nomination, monitoring, evaluation, discipline, and removal of judges and justices; and (iii) develops a framework for judicial career development and performance incentives.

6. The consultant will (i) formulate guidelines and mechanisms to (a) ensure transparency and accountability in the appointment and nomination process; and (b) ensure objectivity, predictability, and transparency in the discipline and removal process; (ii) establish performance standards for judges and justices; (iii) prepare recommendations and draft legal instruments for the establishment of a judicial tenure committee to monitor and evaluate judges, review their conduct, and help the Judicial Bar and Council with the preliminary screening of potential judicial appointees and candidates for promotion; (iv) determine resource requirements for implementation; (v) prepare instruments for implementation; and (vi) assist the legal experts prepare the administrative, regulatory, or statutory amendments needed to implement the system. 3. Physical Assets Management (5

7. The consultant will (i) develop a physical assets management system, typology of physical assets, methocology for physical assets inventory, and physical assets monitoring system; (ii) develop procurement policies and procedures, a physical assets accounting and valuation system, and a procurement, expenditure, maintenance, disposal, replacement tracking system; and (iii) develop training packages for relevant court personnel in the use of the new system.

B. Domestic Consultants

8. The domestic consultants will coordinate closely with the international consultants to ensure that all proposals are in line with the strategy for fiscal and administrative independence and accountability, and the framework for judicial appointments and career development. Each domestic consultant will have working knowledge of her or his aspect of court reform. A detailed understanding of the current state of operations and policies for the management of the Philippine judiciary is also necessary. All implementation instruments developed by the consultants under this TA must be electronically, as well as paper, based to ensure computer readiness of all reforms.

1. The Team Leader (18 person-months)

9. The team leader will have expertise in project management, financial management, and administration, and will (i) supervise and coordinate consultants' activities to ensure that all reforms and proposals are compatible and acceptable to the Supreme Court; (ii) ensure regular consultations with the Asian Development Bank (ADB) and the Project Management Office on all reforms and proposals developed under the TA; (iii) assist ADB and the Supreme Court with advocacy of the reforms; (iv) ensure that all reports, guidelines, and forms are user-friendly and submitted on time; (v) assist with organizing the conference, seminars, workshops, and training sessions, (vi) ensure that the necessary consultants are available to participate in those sessions; and (vii) keep stakeholders apprised of the developments in the TA.

2. Judicial Independence Strategy Formulation (4 person-months) 10. The consultant should have high level experience and expertise in public sector fiscal, financial, and administrative management, familiarity with handling issues on fiscal autonomy, 16 Appendix 4, page 3 and experience managing the technical, policy, and political aspects of public sector management in the Philippines.

11. In consultation with the international consultant on judicial independence and accountability and the domestic legal expert on constitutional and administrative law, the consultant will review all laws, legal issuances, systems, and procedures and their specific effects/hindrances on the fiscal, financial, and administrative independence of the judiciary, and formulate a judicial independence and accountability strategy, to include (i) the specific scope and nature of judicial independence and accountability in fiscal, financial, and administrative management; (ii) a strategy for acquiring such independence and accountability, which may include advocacy, agreements with the executive and legislative branches, legislation, and other strategies to sustain juJicial independence and accountability; and (iii) an action plan for strategy implementation and achievement of results.

3. Budget and Expenditure Planning (9 person-months)

12. The consultant will (i) define assumptions and plan-targets for formulating the six- year expenditure program, which should provide a budget for the Action Plan for Judicial Reform; formulate the six-year expenditure program and a three-year detailed budget program; (ii) prepare implementation instruments; (iii) develop an objective formula for the judicial budget level to be reflected in the annual National Expenditure Program and General Appropriations Act; (iv) formulate the budget preparation, execution, and accountability framework, and guidelines for the execution and accounting of the judiciary's budget; (v) design annual budget . preparation system, including estimation of the annual budget ceiling, prioritization methodology, allocation methodology, and preparation process within the fiscal discipline guidelines delineated by the international consultant; and (vi) assist in the preparation of the fiscal year (FY) 2003 judicial budget.

4. Revenue Generation and Management(6 person-months) 13. The consultant will (i) review and improve revenue audit and monitoring procedures, including the internal control mechanisms and reporting system to Congress, Commission on Audit (COA), and the public; (ii) inventory and assess existing revenue sources, local government unit resource infusions, rates, collection systems and procedures, institutional arrangements and resources, and accounting/monitoring procedures; (iii) identify new sources of revenues and formulate a program for the removal of local government resource infusions; (iv) implement the changes to the revenue management scheme and the necessary training program developed; (v) install the new system; (vi) define pricing assumptions to be used in pricing judicial services, improve pricing configuration of existing revenue sources, and formulate pricing configurations for new revenue sources; (vii) develop six- and three-year revenue-generation targets and plans; prepare instruments for implementation; (viii) estimate revenue requirements for the FY2003 budget; (ix) develop change management schemes, including system installation, training, operation, handholding, and maintenance; (x) assist legal experts to prepare the administrative, regulatory, or statutory amendments needed to implement the system; (xi) develop training packages for relevant court personnel in the use of the systems; and (xii) determine resources needed to implement the system.

5. Reengineering the Financial Management System (6 person-months)

14. The consultant will (i) formulate financial reporting framework, including the obligation and cash programming and management system and the budget accountability system; (ii) design a medium-term fiscal program development and management system; (iii) improve the financial accounting system while ensuring it conforms to the accounting and auditing

~ 17 Appendix 4, page 4 requirements of COA; (iv) work with physical assets consultant to improve the physical assets accounting system;(v) formulate a change management strategy and implementation schedule, including system installation, training, operation, hand holding and maintenance; (vi) design form documents (for financial monitoring and performance) to be submitted to Congress and published for the general public; (vii) determine resource requirements to implement the system; (viii) prepare instruments for implementation; and (ix) assist legal experts to prepare the administrative, regulatory, or statutory amendments needed to implement the system

6. Corporate Planning (4 person-months)

15. The Consultant will (i) formulate corporate planning philosophy, conceptual approach, and procedural templates; (ii) design a corporate planning process, scheduling methodology, outputs specification requirements, and links with the key operating systems; and (iii) formulate a six-year corporate plan for the Judiciary

7. Physical Assets Review (4 person-months)

16. The consultant will (i) assist the international consultant on physical assets management; (ii) review and report on the present physical assets management policies and processes, procurement policies, and physical assets accounting measures; and (iii) conduct a complete physical assets inventory for the Judiciary

8. Administrative Management and Staffing (9 person-months)

17. The consultant will (i) design institutional mechanisms to enhance the judiciary's administrative independence, and establish institutional, functional and capacity requirements to manage an administratively independent judiciary; (ii) formulate reporting systems to Congress, COA, and the public; (iii) review and redesign the formal administrative structure, removing duplication, proliferation, splitting and overlapping of oversight and housekeeping functions; (iv) redefine and delineate functions, authority, responsibility and accountability; (v) reengineer the formal administrative structure of the courts, reconfigure internal functions, and redefine the vertical relationship with central offices of the Supreme Court; (vi) assess existing staffing structures and levels, develop the staffing pattern of the judiciary including the philosophical basis and objectives therefor, the detailed skills mix definition and staffing structure, and conversion methodology; (vii) identify and define objectives and specific uses of a performance management system and its dimensions; (viii) review and reengineer performance indicators system for evaluation of staff performance; organizational performance; and program, project and activity performance; (ix) determine staffing, financial and physical resources needed to implement the judicial performance management system developed by the international consultant; (x) assist legal experts to prepare administrative, regulatory, or statutory amendments necessary for implementation; (xi) design performance data generation, internal/external reporting systems, and performance assessment methodologies to assess performances of individuals, unit heads, units, program, projects, activities organizations, and enterprises; design specific applications of performance assessment results in decision making, including definition of links to other systems.

9. Personnel Admin istration and Position Classification (6 person-months) 18. The consultant will (i) review existing position classifications, job descriptions and competency requirements; (ii) in line with the redesigned organization structure and staffing pattern, develop appropriate job descriptions and competency requirements for positions in the new staffing pattern, formulate appropriate recruitment policies and procedures, and formulate a conversion plan from the old to the new staffing structure in coordination with the administrative 18 Appendix 4, page 5

.; management and staffing consultant; and (iii) review, streamline, and modify personnel administration policies and implementation processes including employee deployment, maintenance of plantilla, attendance monitoring, leave administration, personnel records custodial and employee services, payroll administration, wage and salary administration, personnel expenditures planning and personnel budgeting, personnel discipline, personnel grievance relief facility, and incentives and rewards administration.

10. Judicial Remuneration (4 person-months)

19. The consultant will (i) review the existing remuneration system; (ii) based on the desk review, formulate a remuneration system for judges and justices, and develop application procedures; (iii) assist legal experts to prepare administrative, regulatory, or statutory amendments necessary to implement the reengineered remuneration system; (iv) estimate the budget impact; and (v) develop a judicial statistics system.

11. Judicial Appointments and Performance Evaluation (8 person-months)

20. The consultant will (i) develop/reengineer the system for appointment, nomination, monitoring, evaluation, discipline, and removal to improve transparency and accountability and predictability; (ii) define career development for judges and justices, formulate a judicial career development program, performance incentives, and rewards; (iii) formulate application methodology; (iv) deternline staffing, financial, and physical resources required to implement the systems; (v) prepare implementation instruments; and (vi) assist legal experts prepare appropriate implementing legislation, executive enactments, or administrative orders.

12. Reengineering Judicial Training Program (6 person-months)

21. The consultant will (i) analyze training needs of judges and justices; (ii) review international experience in judicial education and prepare proposals on how it may be applied; (iii) develop conceptual framework for judicial education; (iv) refine and improve the training curricula of Philippine Judicial Academy (PHILJA), formulate judicial training programs to support the reform process, design and formulate distance learning modules for courses specified by the Supreme Court including specific courses in the use of the new systems developed under the TA; (v) train personnel to implement the reforms developed under the TA; and (vi) identify training resource requirements in coordination with PhiIJA.

13. Legal Expert in Philippine Constitutional and Administrative Law (6 person-months) 22. The consultant will (i) advise all other consultants on current law and the legality of reform proposals; (ii) draft the administrative, regulatory, or statutory amendments or enactments necessary to implement or strengthen the reforms developed under the TA; (iii) work with the budget corsultants on the review of the legal purview of the Department of Budget . and Management (DBM) and the Civil Service Commission (CSC) over the funding of the Judiciary; (iv) review the existing laws concerning the purview of the DBM and Civil Service Commission (CSC) over the judicial budgeting process as well as the administrative organization of the judiciary; and (v) determine what limitations, if any these statutes place on the judiciary's autonomy and provide recommendations for dealing with these impediments.