Building Capacity by Rebuilding Community Assets: Learning from the Gazelle Restoration Authority (GRA) Experience

Background

Public Disclosure Authorized The purpose of this review is to bring a more locally-relevant perspective to the World Bank‟s understanding of dynamics of statebuilding, development, and governance in Papua New Guinea (PNG) by exploring the specific lessons from the experience of the post-disaster reconstruction program led by the Gazelle Restoration Authority (GRA) in East New Britain province, after a catastrophic dual volcanic eruption in 1994. Three audiences exist for this review: those interested in more effective approaches to public works and service delivery in PNG; specialists in post-disaster reconstruction; and World Bank staff seeking ways to contribute to institutional and state effectiveness through project implementation choices. Given these diverse audiences, specific lessons will be offered at the end, for each group.

The GRA is generally considered – both by PNG stakeholders and in the wider development community – as an effective institution that produced quality results, and its success is all the Public Disclosure Authorized more remarkable given the difficulties usually encountered in implementing major public work programs in PNG. Most observers emphasize the pre-existing strength and quality of the East New Britain Provincial Administration (ENBPA) – also widely viewed as an exceptionally capable and effective state institution – and elements of the Tolai culture, dominant in ENB, described as fostering a collaborative, pragmatic, and dedicated style of working across public and private sectors. While the Implementation Completion Report for the World Bank-financed project implemented by GRA acknowledges those two elements, it also highlights a range of other enabling factors that are less unique to the ENB context – and potentially more useful in considering these three questions:

1. What aspects of what GRA did, and how they did it, are potentially relevant to the

Public Disclosure Authorized design and implementation of other post-disaster reconstruction efforts? Are those elements equally useful for consideration in post-conflict reconstruction efforts?

2. What does the post-eruption reconstruction program, and GRA‟s role in it, suggest are the critical institutional and operational building blocks for effective state programs at the provincial or district level in PNG? What can be learned from GRA about the dynamics of nurturing public and private sector capacity?

3. What lessons should the World Bank learn from the GRA experience about how Bank processes and procedures can contribute to strengthening institutions in low-capacity environments?

Background: The 1994 Eruption, and the Gazelle Restoration Authority

Public Disclosure Authorized The twin volcanoes of Mt. Tavurvur and Mt. Vulcan erupted in September 1994 ejecting 250 million cubic metres of ash, pumice and material over the town of Rabaul and the surrounding Gazelle Peninsula in East New Britain province (ENBP). Almost all of the physical, social, and economic infrastructure and facilities in Rabaul town and surrounding areas were completely destroyed, severely damaged, or ended up being located within the hazardous areas after the eruption.

Although deaths and injuries were relatively low, there were significant social and economic disruptions and losses with about 30,000 residents losing their homes and about two-thirds of

Learning from the GRA Experience them seeking permanent resettlement away from hazardous areas. Estimates compiled soon after the eruption placed public asset damage and losses at about US$280 million, along with similar losses for private assets such as homes, businesses, inventory, etc.

Box 1: Key Facts about the Disaster and the Response

Following a severe tectonic earthquake in the early hours of 18 September 1994, the twin volcanoes of Mt Tavurvur and Mt Vulcan erupted early the next morning, displacing around 100,000 persons from Rabaul town and the neighbouring villages, and physically destroying most buildings and infrastructure. A damage and loss assessment calculated that total damage to both public and private assets was in excess of US$550 million, and 20,000-30,000 persons were permanently displaced. The Gazelle Restoration Authority (GRA) was established on 7 February 1995 to act as a Project Implementation Unit (PIU) to manage government and donor- funded restoration works. The Immediate Term Restoration Programme (ITRP) was undertaken from 1995 to 2000, with first priority given to initial emergency and humanitarian works, followed by a programme to restore key public and economic infrastructure. A significant component of these earlier works was the establishment of permanent resettlement areas, the establishment of Kokopo as the administrative capital of the province, and sufficient work in Rabaul to allow it to operate as a port. The structure of the ITRP was based upon a needs assessment report prepared by the then Australia Aid Agency AIDAB, covering six major sectors: aviation, education, health, lands, police, and roads. In agreement with both the National and Provincial Governments, the individual projects in the ITRP were divided between the major donors – AusAID, Japan, and the World Bank. AusAID and Japan largely managed their own programmes in coordination with the GRA, and the World Bank re-allocated portions of three existing loans to ITRP, thus allowing monies to flow from national government directly to GRA. Thirty percent of the ITRP’s total budget of K218.7 million was expended directly by GRA to complete close to 200 projects. The Medium Term Restoration Programme (MTRP) commenced in 2000 and ended in 2010. It was originally split into two phases, with significant financing from a World Bank loan that would be supplied in two tranches, with the second being dependent on the successful disbursement of the first. The primary goal of the MTRP was to consolidate the activities commenced under the ITRP, restoring in a sustainable and risk-averse manner the social and economic well-being of the population of the Gazelle Peninsula. The total financing profile for the MTRP (total of 237.8 million kina) was: budget allocations from national and provincial governments (K 85.3 million); donor grants (K 60.9 million); international concessional loans (K 78.0 million in the World Bank Second Gazelle Restoration Project, or SGRP); and PNGSDP Ltd (K 13.6 million). Of the 125 projects prioritized in the MTRP, all of which demanded a high level of technical, managerial and administrative skills including quality control and engineering oversight, 99 were completed by end-2009; 13 were under implementation or in tender process; and 13 still await funding, are under design, or have been deferred. The MTRP portfolio covered three categories: Land and Transport Infrastructure; Public Utilities and Essential Services; Social and Economic Services Infrastructure. In 2007 GRA joined GoPNG and the Bank in reviewing the SGRP; although effectiveness and development results were rated very highly, the national government political landscape had changed and GoPNG decided not to request the second tranche. The SGRP closed in 2008, with the Implementation Completion Report (ICR) done in 2009; the MTRP ended in 2010.

In 1995, the GoPNG commenced its Immediate Term Restoration Program (ITRP), supported by aid and donor agencies, including the World Bank, AusAID, JICA and ADB. Early investments were focused on two related but equally challenging objectives: improve the immediate socioeconomic conditions of the displaced population by restoring safe livelihood opportunities, and plan for longer term investment and development efforts.

In light of the extensive damage to the town of Rabaul and the continuing existence of hazardous conditions (ashfall, toxic gases, and tremors), the national and provincial authorities decided to resettle the affected population away from the existing town. They identified prospective areas for new permanent settlements throughout the northeast Gazelle Peninsula and developed plans to build a replacement town at Kokopo, a small village about 30km east of Rabaul. To carry out this transition, the government proposed a Medium Term Restoration Program (MTRP) that would be implemented by government with support from donors. The

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Bank‟s Second1 Gazelle Restoration Project was designed as an Adaptable Program Loan (APL) with two anticipated phases to support implementation of the MRTP by (a) helping complete the emergency restoration works started under the ITRP and (b) facilitating the return to more normalized development planning by the provincial government.

The Gazelle Restoration Authority (GRA) was established less than six months after the eruption to oversee government and donor-funded support and act as a Project Implementation Unit (PIU) to manage restoration works. The GRA was formed by mainly local experts, with support from selected and experienced expatriates; planning, engineering, environmental and social expertise as well as the administrative and financial support functions were sourced from East New Britain Provincial Administration (ENBPA) and national departments. In the main, GRA was able to achieve the objectives of improving the quality of life for displaced communities; consolidating Kokopo Town as the provincial capital of East New Britain; restoring those parts of Rabaul Town necessary to ensure its viability as the regional port for the New Guinea Islands Region and district headquarters for Rabaul District; rehabilitating and expanding utility infrastructure and social services for North East Gazelle Peninsula hinterland centres; and stimulating the economy while supporting institutional capacity for longer-term development and public works planning.

Investigating Conventional Wisdom: Enabling Factors

In February 2010 a World Bank team2 travelled to East New Britain and conducted small group meetings and key informant interviews with a diverse range of stakeholders with first-hand experience in the reconstruction program and the work of the GRA. Additional inputs from key informants residing outside of PNG were sought through email and telephone interviews.

The fieldwork was preceded by four weeks of desk review of key documents from the World Bank‟s own Second Gazelle Restoration Project (SGRP), including the project document, progress reports, supervision mission aide memoires, the final Implementation Completion Report (ICR), and the GRA-authored “Borrower‟s Contribution to ICR”. By the time the team began their fieldwork, the desk review had clearly identified seven themes that emerged in varying levels of detail as being explanatory variables, or enabling factors, that multiple informants believed were significant contributors to the success of the GRA program:

 political and institutional framework  planning and design of the reconstruction program  GRA systems  GRA staff  external players  communications and public relations  institutional and provincial culture

1 The “Second” Gazelle Restoration Project was so-named because the first intervention by the Bank in support of the Immediate Term Restoration Project was to restructure three existing sectoral loans with unexpended balances, available for use almost immediately. Although those resources were not packaged as a standalone Bank project, in the eyes of the provincial authorities they represented a valuable ‘first’ project from the Bank.

2 The team was led by World Bank Country Manager for PNG, Laura Bailey, and included Raymond Palangat, World Bank Public Information and Communications Assistant, and Lawrie Carlson, project engineer for the GRA (during the immediate post-disaster response period) and for the World Bank’s Second Gazelle Restoration Project, SGRP.

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In the following sections, each of these factors is discussed in greater detail with attention to the consensus views offered by the wide range of stakeholders interviewed during the review.

Political and Institutional Framework: The Role of Leadership

At the time of the eruption, Sinai Brown was the incumbent Premier of East New Britain and Ellison Kaivovo the Provincial Secretary. Both of them played a critical role in the establishment of GRA, with Ellison Kaivovo taking on the role of Project Manager for GRA‟s Project Implementation Unit. Beginning even as the eruption was still „live‟, these two key men mobilized support from others (including Michael Mayberry, a respected local business leader) to generate a momentum to support Leadership was an reconstruction efforts. Politicians and senior bureaucrats welcomed the absolutely critical provincial government‟s request for assistance; across the political factor ..... spectrum there appeared to be no objections ... and if there were, none were voiced. Sir Henry ToRobert, a respected corporate leader of the

Bank of Papua New Guinea, was approached by ENB Premier Brown to be the first Chairman of the GRA Board, and his selection added considerable credibility to the effort.

The Premier and Provincial Secretary made presentations to the national ... as was the ability government and donor aid agencies. Although Tavurvur was still to assemble an erupting and the threat of further eruptions was still unknown, the evidence-based national government accepted AusAID‟s offer to conduct a damage proposal and assessment; those empirical results provided a critical evidence base creatively mobilize which in turn created the donor confidence that resulted in JICA‟s offer to resources for support the construction of the Tokua Airport, and agreement from the immediate response. World Bank and GoPNG Treasury to reallocate an undisbursed and non- performing education loan to the immediate reconstruction works.

There appears to be little doubt that the prompt action by key players allowed national political leaders to respond without political, regional and cultural loyalties emerging in any divisive way3. Although there were East New Britainers key national government posts at the time of the Policy discussions eruption, there appears to have been little need to rely upon them as about difficult „friends and wantoks‟ to generate support. However, the restoration decisions relied on program design did require controversial policy choices – such as the existing good relationship between relocation of the institutional assets and provincial state functions from the provincial Rabaul to Kokopo, with the ensuing shift of businesses – and at that government and the point political criticism did emerge. However, the provincial government population ... had already been well into contingency planning for a possible move before the 1994 eruption, and they were transparent about their intent as they finalized the policy decision to enact the move; although opposition was mounted, much of the efforts under the Immediate Term Restoration

3 The cohesion across the Tolai ethnic group certainly contributed to a sense of common purpose which served the post-disaster response effort well. Historically, however, there was a certain amount of resentment regarding perceived exclusion of Baining, Pomio and Sulka cultures, and to some extent GRA tried to address this in the later years of the MTRP.

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Program (IRP) were well underway, and since those immediate works were undertaken under emergency procurement arrangements, the momentum of restoration was hard to stop.

By 1998, political criticism for the capital‟s relocation from Rabaul to Kokopo started to wane; however support for the entire program had also started to dim, as the emergency nature of the effort transitioned into a more medium-term program. After 1998, the center of gravity for sustaining support came from ex-Prime Minister and Kokopo‟s National Member of Parliament, Sir Rabbie Namaliu, sustained by the new Governor Sinai Brown (now a National MP under decentralized political

reforms). Political support was harder to find, as the national government faced a serious budget crisis and alliances fractured and divided around party, regional and constituent loyalties. At the GRA level, the GRA Board and key staff played an important role in rallying support amongst the Departments of National Planning and Treasury to deliver overdue ... while success in counterpart funding that had caused the program to „lull‟ in late 1997. implementation and in overcoming This re-invigorated support was essential for the planning of the Medium resourcing lulls Term Restoration Program (MTRP) and the World Bank‟s Second required effective Gazelle Restoration Project (SGRP) which was negotiated and launched lobbying at the in 1999. Efforts by the GRA to get political traction to hold national national government government to its legal commitments to fund the program required level. numerous representations from the GRA Board, key expatriate staff, provincial leaders, and the World Bank. Eventually, some counterpart funds were received but during the interim period the Bank restructured the levels of disbursements for civil works to cover the shortfall. Also GRA generated high levels of interest (up to 18%) on its deposits,

providing a good income stream to supplements its counterpart funds. These initiatives, together with counterpart funds finally made available, brought total available funds just barely up to the amount required.

During the period of both the immediate and medium-term programs, there was remarkably little overt political intervention in the works program design and implementation; this was possible partly because of Continuous the degree of confidence that the population and private sector felt in the engagement and Provincial Administration, but also was a testament to GRA‟s communications management of its own role as focused on reconstruction between the provincial implementation. Importantly, the high level of stakeholder consultation government, the and support done by both GRA and ENBPA appears to have provided a private sector, and generally positive local political environment, so there was little need to the affected tinker with the program to gain support of key individuals or industries. communities helped Taking a step back, it is interesting to note that ENBPA had a number of reduce the risk of options available to consider for institutional arrangements to implement political interference. the reconstruction program, and that those discussions took place in a larger context of mixed experience across PNG with „special purpose authorities‟, entities often created in hopes that they would be effective where „normal‟ government departments were ineffective (despite inconsistent historical results with SPAs). If required, the ENBPA might

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have considered working with the National Disaster and Emergency Services (NDES), but that institution‟s weak implementation capacity – and lack of clarity around mandate for disaster planning vs. response – made it a problematic choice. ENBPA was able to execute its preferred model, which was to create the GRA with its own enabling Act and an independent Board, and to structure the relationship between the two institutions with careful attention to transparency, clarity of role, and a commitment to high quality standards, all meant to enhance the effectiveness of provincial institutions, not compete with them.

Box 2: East New Britain Provincial Premier Recalls the Catalytic Role of Leadership in Aligning National and Provincial Action (from an interview with Sir Rabbie Namaliu)

The Prime Minister in 1994 was Sir Julius Chan, a representative of Namatanai in New Ireland with first-hand understanding of the economic and social networks that linked New Britain to surrounding islands. On the first day of the eruption, the PM invited me – I was the Premier of East New Britain and Speaker of the National Parliament at that time – to take a senior official from Air Niugini, Jack Pidik, and travel to Rabaul from Port Moresby to gain first hand information on the destruction and the evacuation plan to get people out of danger. On arrival in Rabaul, Islands Aviation made a helicopter available for us to do a quick reconaissance of Rabaul town and surrounding villages as far as the North Coast and Kerevat. On landing back at Tokua, Mr. Pidik and I drove by road to Rabaul and to villages on the North Coast, then inland to Kerevat before arriving back in Kokopo. In the evening, we spent time welcoming the ships from Rabaul Shipping, unloading people from Matupit and Talwat, Baai, the Nordup villages; we greeted people before they were taken to the Kokopo Show Grounds, where evacuation centers were set up. We spent the next day speaking to the authorities and visiting villagers setting up their temporary shelters, and reported back to the Prime Minister on return to Port Moresby. In addition to formal communication from the ENBPG and the Office of the National Disaster and Emergency, it was through these kinds of indirect and informal channels that national government was able to anticipate what was required for the immediate needs of the emergency situation and subsequently the need to establish a special authority to spearhead the restoration program in the Gazelle Restoration Authority. Clear signals being sent by the PM showed that the national government was aligned with the provincial authorities in considering this a national emergency; this was especially useful in relation to donor negotiations and funding. For instance, negotiations with the Japanese Government for the design, funding and construction of Tokua Airport was done in Port Moresby with the Ministers for Treasury and Planning, and Civil Aviation taking the lead, supported by the Prime Minister and the Foreign Affairs Minister in regular contact with the Japanese Ambassador. Similarly, for the Rabaul-to-Kokopo Road, the national government worked through the ministries for Treasury and Planning, and Works, to gain support from AusAID for that major effort, so critical to restoring essential services to the province. And in the same vein, Sir John Kaputin, then Member for Rabaul, was empowered to negotiated directly with the German government to provide a temporary mobile control tower for Tokua Airport until a proper control tower was constructed as part of the Tokua airport redevelopment (funded by Japan). Sir John Kaputin was then a member of the Joint African Carribbean Pacific Group (ACP) EU Parliamentary Assembly representing the PNG National Parliament, and this allowed for close consultations with the European Union, another major donor for the overall program. The PM appointed the Deputy Prime Minister and Minister for Finance and Planning, the Hon. Chris Haiveta to be responsible for GRA, with the assistance and advice from the national MPs including the Member for Gazelle, Mr. Nakikus Konga (then Minister for Commerce and Industry), the Member for Rabaul, Sir John Kaputin, myself, and senior leaders from both the public and private sectors living in Port Moresby. This allowed a coordinated effort to steer major proposals including the ITRP through the National Executive Council (Cabinet) against competing interests from other provinces, during a time when Papua New Guinea was suffering a budgetary and fiscal crisis with severe political consequences. The proposal to set up a special authority was canvassed by me with parliamentary colleagues and senior leaders in Port Moresby including most notably Sir Alkan Tololo, Sir Henry ToRobert and Don Manoa (who were all on a major fundraising committee), and it was from this united political base that the Prime Minister proposed to create the GRA by Act of Parliament. Without this aligned and proactive support, the inclination was to do things through normal channels, which would have slowed us down and possibly let our efforts fall prey to the fiscal crisis, or result in the kind of delays that post-disaster programs in Manam and Oro have experienced.

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Learning from the GRA Experience

The provincial administration determined policy and led planning; GRA implemented the program determined by those decisions. GRA‟s Project Implementation Unit (PIU) used people from ENBPA, including all but one of the Project Managers, and regular meetings that included both Early decisions on GRA and ENBPA senior executives provided almost seamless operation. institutional Interestingly, GRA refers to itself as „semi-autonomous‟, which seems to structure were pragmatic, and roles articulate the operational reality that although the GRA‟s enabling and mandates were legislation gave it true “independence”, the GRA mandate was seen clearly defined. implementing choices made by the elected leaders and provincial civil servants. Key informants from both ENBPA and GRA emphasize that they cannot remember a time where there were conflicting interests or serious disputes; this clarity in coordinating mandates was certainly a

hallmark of the effectiveness of these two state institutions.

Planning and Design of Reconstruction Program

The ENBPA was clearly both strategic and opportunistic in their program

planning and design. When formulating the immediate response, the ITRP, ENBPA appears to have had an implicit understanding of the program needs; the speedy damage assessment funded by AusAID played an essential part in providing the neutral evidence base required to articulate that implicit understanding in enough detail to reassure

political supporters and ensure technical coherence. In those early days, there were actively conflicting interests emerging, such as the decision to restore Rabaul or develop Kokopo. However seriously the ENBPA may Reconstruction have been contemplating a move of the provincial state functions away planning, and design from Rabaul before 1994, the formal decision was delayed until the of both the immediate post-disaster program was completed; importantly, the ITRP immediate and included critical analytical efforts that strengthened the evidence base medium-term from which ENBPA would later make policy decisions: programs, was of necessity both  assessment of hazards and risks and mitigation measures for a strategic and volcanic eruption of a similar size to the 1994 eruption; opportunistic.  assessment of the infrastructure damage to the town and its environs and scenarios for the restoration of the town; and  development of a town plan in line with the hazard, risk and infrastructure assessments.

The Rabaul Town Plan4, which was generated by these empirical studies, received considerable criticism from Rabaul business houses, their Chamber of Commerce, and a prominent local politician, Sir John Kaputin. The decision to implement this plan as a foundation element of the larger Gazelle Peninsula Medium-Term Restoration Program

4 The completed plan envisioned the abandonment of the town south of Namanula Hill Road, including the major residential area of Malay Town, Rabaul Airport and institutional assets. North of this line, up to the boundary where buildings had been relatively unaffected by the eruption, only businesses such as operational hotels were allowed to remain. The unaffected areas to the north-eastern extremity of the town including the regional seaport were to remain and be protected, with some consolidation of critical urban public infrastructure (such as the relocated Rabaul Market).

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(MTRP), reinforced by continued eruptions which re-damaged areas of

Rabaul that local businesspeople had argued to rebuild, ultimately saw the demise of Rabaul as ENB‟s business, economic and institutional center and the emergence of Kokopo as its replacement5. If ENBPA had succumbed to mounting political and business pressure to delay or equivocate in the decision to move the provincial state assets, then

efforts to secure wider financial support for the medium-term program Success partially from donor aid agencies and probably from the National Government depended on the would have failed. ENBPA made the hard decisions and staved off Provincial opposition to their intended program. Government’s ability to seek, and absorb A hallmark of the success of the program was the ability of the ENBPA to advice, and then to seek, consider and generally accept advice provided to it. It is through make hard decisions this process, actively supported by GRA, that ENBPA was able to feel and stick to them confident it had a clear understanding of the needs and trade-offs for the ITRP and then develop the draft program for the medium term. The Bank‟s project was based on the draft MTRP and the analytical work undertaken by GRA and ENBPA provided the Government‟s contribution

to the Bank project‟s identification and project preparation stages.

GRA Systems

In the course of implementing both the 4-year immediate restoration program and the 9-year medium-term program, GRA developed their own systems for all aspects of the works program they managed, An early emphasis „growing them‟ in line with what they identified as „best practice‟ but on practical basing them as much on their own internally-driven initiative as on systems shaped standards imposed by external agencies such as the World Bank. both an institutional culture It is noteworthy that ENBPA had pre-existing systems that were of quality and transferred to the GRA, such as procurement arrangements, and that at integrity , and the time of the disaster ENBPA was one of the few provincial authorities public expectations to have already begun developing provincial works contracting capacity. of transparency and Their early systems provided a good basis in shaping both an institutional fairness. mentality of quality and integrity6, and public expectations of transparency and fairness.

5 As emotionally painful and politically difficult as the decision to not rebuild Rabaul was, the 16 years since the eruption have proven it absolutely the correct decision from a public safety and economic efficiency perspective. In spite of considerable investment in maintaining a minimum set of public infrastructure and in particular preserving the functionality of Rabaul port, ENB’s only safe harbor, frequent eruptions continue to damage the roads, homes, and businesses in Rabaul. One the last day of the field team’s visit, seasonal rains combined with heavy silt and ash loads from the recent 5-month-long eruption culminated in a huge section of the main coastal Rabaul-Kokopo road being entirely washed away, making it impossible for goods or fuel to be transported by road from the port in Rabaul to consumers and businesses. Thirty days on, that road is still unusable.

6 By the early 1990’s East New Britain was already seeking increased autonomy from the national government, and in support of that effort they were actively developing provincial and district capacity and competence. They were quite successful in doing so, and had proven themselves able to balance provincial revenue collection and resource allocation even without the windfall profits available to provinces with mines. Thus, at the time of the 8

Learning from the GRA Experience

Systems – procurement protocols, quality control manuals, administrative records – are tools or vehicles that need to be driven by someone; otherwise they simply gather dust on the shelf. NO matter how simple or how detailed and comprehensive, systems need to be implemented with strict attention to both integrity compliance: the state oversight authority, Across GRA staff, and the private sector contractor, both need to believe that all the rules of contractors, and the game are being followed and applied impartially, consistently, and communities, the with a base in common sense. It is clear from interviewing all robustness of GRA stakeholders that GRA‟s systems were in fact implemented in such a systems were seen way, and even when bemoaning the “strictness” of a tenders system not as acquiescence which would not allow a bid to be slid into the box even one minute past to donor rules related to risk the publically stated deadline, the private sector stakeholders were management, but as adamant that these systems were a hallmark of GRA‟s success. a commitment to The GRA team explained that their systems were developed through quality and integrity. teamwork, taking draft building blocks from systems they viewed as „best practice‟ and then customizing them for the local context. However, they were clear that consistent application of those systems, and refusal to abandon them under pressure to “just be a bit flexible, it‟s an emergency” required constant support and leadership by the management team. In

this regards, the Project Manager, Principal Engineer and the Accountant must take the credit for the maintenance of such systems, and for the tactical use of external donor agencies‟ own fiduciary standards to support their own internally driven insistence on quality.

Senior GRA staff from across the 13 years of the institution highlight an important nuance: it is a mistake to interpret the robustness of GRAs

commitment to systems, processes, and manuals as acquiescence to a donor requirement related only to risk management, because it‟s more about building a joint commitment to quality. GRA felt that for their own High standards in reputation‟s sake, they could not compromise their rigorous systems and procurement did not scrupulous attention to quality and detail: the stakes were high and result in delays, but compromise was not an option, as a critical public and media were did require skilled watching and “we‟ll only get this one chance; if we are seen to misuse staff and money or compromise on quality, the funding will be cut off and the entire management reconstruction program will fail”. Contractors were also watching, and supporting them. actively voice concerns if they arose; the fact that the relationship between contractors and GRA was generally without rancor may be attributed both to the pre-existing trust built up between contractors and ENBPA, and to the clarity of GRA‟s motive: compromise would lead to misappropriation and subversion of the program.

In the area of procurement, GRA maintained an impeccable reputation acknowledged by all; this required the strictest compliance to the bidding and selection process and implementation of contracts. There appears to be a close relationship between compliance of such systems and the

disaster, ENB-PA was “pre-adapted” to respond effectively, and this was a visible contrast to the national government which has not consistently been capable of effective and efficient response to disasters..

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confidence of GRA staff to take action when problems did arise. Likewise, GRA‟s even-handed and predictable demands for compliance with transparent systems increased the contractor‟s trust in GRA; both contractors and the Chamber of Commerce expressed a high level of trust in GRA‟s ability to provide fair and transparent processes and high quality outcomes. Interestingly, there is no evidence that high standards for procurement resulted in delays, only that communicating and maintaining those standards required skilled and patient GRA staff and a long-enough medium-term program that contractors and citizens would wee the benefits of high procurement standards translate into high quality physical assets.

In the dynamic process of developing, using, and improving their systems, GRA found that relying on the World Bank procurement rules as a foundation provided not only technical support but also “a useful defense”, as GRA was able to deflect some criticism, referring to the need to comply with donor standards. As an example, there was a marked difference between the contract and quality control measures applied in by GRA compared to other departments, projects and programs; at the outset GRA resisted some of these new measures, but they quickly embraced them and improved them over time. A Contract Administration Manual and Quality Control Manual were developed with all of the practices and procedures required under the contract; although the contractors initially challenged GRA‟s junior engineering and supervisory staff, the manuals provided comprehensive checklists which gave staff the confidence to direct the contractor to take appropriate and corrective action. Contractors soon became aware of the need to comply with contract conditions and conform to the specifications and drawings, and several reported that the GRA quality standards caused them to „raise their game‟ consistently across all contracts. By the time World Bank-financed SGRP closed, the GRA‟s contract and quality systems and manuals were being exported to and used by other national and provincial bodies including the National Department of Works and the Central Supply and Tenders Board. An important note: the effectiveness of those tools, and the individuals who use them, is limited by the environment in which they are deployed; a former GRA engineer who worked in Northern (Oro) province after the 2007 cyclone brought the manuals with him, but found a much less enabling environment without the political will and technical support needed to generate progress.

GRA Staff

The Project Implementation Unit was staffed by local and expatriate staff, either hand-picked, seconded from other government agencies, or engaged through a competitive selection process. For the initial works program under the ITRP, the ENBPA had the opportunity to choose some of the GRA staff: Ellison Kaivovo (Project Manager), Robert Cohen (Project Accountant and later Operations Manager), John Eddison (Principal Engineer) and Joe Enman (Senior Engineer), were all well- known to the ENBPA and respected in both public and private sectors. 10

Learning from the GRA Experience

GRA‟s staffing was purposefully lean, initially under the misconception that a staff of less than 10 would avoid mandatory superannuation entitlements. However, later GRA maintained their minimalistic staffing, seeking to cultivate a „lean team of respected and motivated people‟. It is unclear how the organisation structure of GRA grew into its current form; some staff and observers feel it grew out of necessity, in an natural sort of way, while others feel that it was shaped at least partially by the key expatriate advisors, who based their approach on criteria of technical effectiveness rather than on an ideological position about „the right way‟ ‘Common sense’ to structure the group. Certainly, early in the SGRP the World Bank team good management undertook a comprehensive human resource analysis of GRA technical practices prevailed at staff and some informants report that this analysis‟ identification of a lack GRA, empowering a of technical staff provided an evidence base for the Operations Manager team of skilled, and GRA Board to agree to the staffing structure that was maintained collaborative and from 2001 through 2008. effective people. Perhaps most critical was that GRA maintained the quality of their staff by making great efforts to hire the best and, even more importantly, readily firing people who did not perform. In spite of a demonstrated

willingness to let people go who were not performing up to their energetic standards, GRA maintained a high level of staff retention: many informants acknowledged that GRA was able to attract and maintain an excellent team dominated by national staff who were complemented by – but not dominated by – a small number of select expatriates. Under its Act, there is no doubt that GRA had greater flexibility to hire and fire than the average public sector entity, avoiding a sometimes complex government personnel management system, but the most important Rewards for good element of this flexibility is that they used it: people who either under- performance, performed or misbehaved were quickly dismissed. Other government sanctions for poor agencies have struggled to maintain quality staff and dismiss those performance, and proven unfit. open collaborative decision-making, Most Project Managers were seconded from ENBPA, with the exception were the base rules of John Painap who was a senior national public servant and a previous at GRA. departmental Secretary. All of GRA‟s Project Managers performed well, having a clear understanding of the project objectives and requirements and demonstrating an ability to effectively maintain linkages with the ENBPA and key stakeholders. They generally made hard decisions and worked well with donor aid agencies, although it was interesting to hear that a considerable burden was delegated to key expatriates. This burden was mostly in the form of workload, rather than decision power (which was more broadly held across the group), and it was reportedly an explicitly agreed arrangement that both national and international staff felt was „fair,‟ in that it would shield national staff from outside pressure. 7

7 There is ample documentary evidence that the Project Managers heavily relied on the Operations Manager (Robert Cohen) during the ITRP and Principal Engineer (John Eddison) during the MTRP to handle often burdensome discussions and correspondence with the donor agencies.

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Learning from the GRA Experience

Most key informants from ENBPA and GRA believe there was no differentiation between the selection of either nationals or expatriates for a particular position, but other observers felt that the selection of expatriates for the position of Accountant and Principal Engineer was purposeful, perhaps a strategic choice to provide national staff with both technical depth and political „cover‟ for decisions that were sometimes

difficult and challenging. Importantly, the expatriates in general are remembered as working well both with their national counterparts and team members, and with provincial and Board superiors.8

Perhaps most striking about the way in which GRA managed and used Selection, use, and its expatriate staff as institutional assets is the apparently sophisticated retention of calibration of their roles. Many development projects which position expatriate technical expatriate advisors in roles that require both technical inputs and advisors was careful, capacity building of local staff fail in those dual efforts, with the drive for and mindful of results overpowering the more nuanced and less linear needs of building cultural issues. local staff skills and confidence. Additionally, the higher compensation received by expatriates staff can often drive key counterparts to make an efficiency argument and demand that delivery of technical results, along with transaction costs involved with donor agencies, be the primary job of the expatriate, in order to justify their compensation. Interestingly, GRA seems to have been able to largely balance the competing objectives of technical inputs and capacity building, and moreover created a genuinely level „team playing field‟ where advisors were respected and used for their expertise and breadth of knowledge but were not „deferred to‟.

John Eddison in his role as Principal Engineer warrants special mention, as his ability to maintain quality systems over a long period of time, with

meticulous detail and dedication to GRA and its program, helped shape the GRA. John was able to train national staff, cultivate their technical skills and their commitment to quality, and engage them in creating a „culture of quality” that ensured everyone used the systems the team had created. His influence on the program became more apparent after the role of Operations Manager was eliminated; in other projects and government agencies starting with excellent systems, they often are allowed to slowly deteriorate when the original „quality champion‟ is gone. However, in the case of GRA, procurement, tendering, contract administration and quality systems have matured and improved over time.

GRA‟s ability to appropriately staff key positions was not limited to their selection of a few expatriates; care in selecting national staff was also

8 The only reported exception to this uniform positive judgement is the period of time when Robert Cohen held a dual appointment as both the Accountant and the Operations Manager. Some key observers worried there was an inherent conflict in one person playing both the role of Accountant, which needed to report to the Project Manager and be concerned with the consistent delivery of fiduciary outputs, and the role of Operations Manager, created by the Board Chairman as a more strategic function to work with national politicians and donor agencies in sensitive areas, including successfully challenging the political push to re-build Rabaul and shoring up the political support needed for securing counterpart funding during the “lull’.

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Learning from the GRA Experience

clearly evident. The Community Development Officer position proved to be a particularly influential role, and during the entire 13 years of GRAs operations, there were only two CDOs: Ms. Beddie Jubilee and Mr. Ezekiel ToLulu. As ENB has a matrilineal system and with the relocation of people from their traditional land to refugee camps and then to

resettlement sites, the choice of a female CDO during the ITRP appeared to be ideal; Ms. Jubilee is remembered as a confident effective communicator who had a good understanding of the problems and Unusually for an sensitivities at hand. Mr. ToLulu was equally capable, and was integral organization to the roll-out of MTRP, which required a delicate balancing act between dominated by staff explaining the public infrastructure projects whose location and with engineering skill prioritization were a technical decision taken by ENBPA and facilitating sets, the value of genuine community input into village-level projects (how many schools, ‘softer’ competences and where they would be built, was not a matter for bottom-up planning, like communication but selection of a community hall or a water supply could be). and team-building were not neglected. Whilst members of both host and resettled communities expressed frustration with some aspects in retrospect, communications and public

relations were generally viewed as good by the „beneficiaries‟. Interviews with a broad cross-section of stakeholders confirms that communications and consultation improved over time, particularly with the “host” communities: there was an initial period when the main communication was with the groups that had to be relocated because their homes near

the volcanoes had been destroyed, and there was a feeling among those to whose land they were being relocated that they (the hosts) were not being given as much attention as they should have been. Some of the host communities comprised ethnic Pomio, Baining, or Sulka people (non-Tolais), and some of them interpreted the resettlement dialogue as being dominated by a Tolai-centric bias in the restoration programme.

GRA technical staff members were generally selected through advertisements: some were just out of university and had no experience while others had some level of on-the-job experience and proven skills. This required the staff to be rapidly trained in GRAs systems and to form a cohesive team that worked well together. Technical staff report that they felt they had considerable support from their superiors, who would support them to either make difficult decisions or confront a contractor. A small number of technical staff was seconded temporarily from ENBPA and one DoW supervisor provided valuable service and remained with GRA for 12 years.

Special mention must be made of the lessons GRA itself has drawn from their experience in using consultants; they strongly counsel against using a multitude of consultants without pre-existing local knowledge: “don‟t hire outsiders to repackage what we know already.” Analysis of the portfolio hints that the best results were obtained by consultants who worked repeatedly with the program and developed a critical mass of institutional and contextual knowledge.

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Learning from the GRA Experience

National staff were well compensated and salaries in GRA were increased by two pay levels (30-40%) to their normal salaries, to reflect the added workload and conditions. However in comparison, expatriates salaries were individually negotiated. All of the staff worked extremely hard, with staff commonly working unpaid overtime and on weekends; it

was not unusual to find GRA staff working at 7pm during the week and on Saturdays and Sundays. This signalled a high level of dedication and commitment to the program and personal sacrifice not routinely seen in GRA systems and other state agencies. staffing choices created: Team building and discipline amongst the GRA staff is a hallmark, with  the discipline to the management team leading by example; the weekly management hold regular meetings were a transparent model of each department reporting upon meetings, their actions and taking accountability for any problems encountered.  the frankness with Staff kept themselves accountable to each other, and this mutual which problems commitments was reinforced by senior management who set the and issues were benchmark. Staff felt that they had suitable levels of delegation; they analysed, were encouraged to take action on issues straight away. The engineering  an ethic of equality staff had routine meetings in which each engineer described the current with respect for status of their projects and flagged problems seen; this allowed for group the right to voice brainstorming, assured that the entire team was aware of any delays, and concerns and reinforced a sense of mutual accountability by bringing the results of opinions normal works supervision into the management dialogue.

Staff that did not perform were identified and dealt with; emerging problems were often addressed first through peer counselling. Discipline was calibrated to the concern raised, and could involve being informally counselled or formally warned; in some cases staff were dismissed immediately for the worst transgressions. In one case, a staff member was found to be soliciting beer from a contractor: the staff member was These organizational sacked immediately, since even the appearance of exploitation of the practices contributed relationship between contractor and contracting agency was seen as to a collective habit: endangering the reputation of the GRA itself. delivering a high- quality performance. GRA exhibited the attributes of a highly organised, disciplined and motivated team characteristic of a successful agency in either public or

private sector of a developed country. Staff held quarterly roundtable discussions where the chairmanship was rotated and junior staff encouraged to contribute to the discussions; individual departments had sub-meetings beforehand to discuss matters pertinent to them and agree on how to raise them in the larger meeting. All staff members including

senior management were treated as equals, to facilitate open discussion.

Similarly, implementers meetings were convened monthly for those people and agencies leading components and contracts. These meetings were considered critical to a sense of ownership of the projects and accountability for decisions. It also allowed the full range of public and private sector stakeholders to contribute to the decision-making process and make them jointly and mutually accountable for the success of the program.

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Learning from the GRA Experience

Taken together, the combination of GRA systems and staffing choices created a critical mass: the discipline to hold regular meetings, the frankness with which problems and issues were analysed, the inculcation of an ethic of equality with respect for the right to voice concerns and opinions; this all led to the development of habits of performance. All concerned knew 1) that their performance and the performance of tasks on which they were involved would be closely monitored and 2) they would have access to all the expertise of GRA in correcting problems and issues as they arose. This effectively removed the fear of failure because individuals knew that it was wiser to admit to problems and seek help than to try to hide them until they became more serious – and frankly, it was difficult to hide problems in any event.

External Players

The key external players considered in discussions with GRA were the

donor aid agencies and the private sector contractors. GRA considered the World Bank a good model of technical competence to emulate, and relied heavily on their practices and procedures. The GRA generally found the Bank to be flexible and consistent, although demanding at times and especially so during supervision missions. AusAID did not

provide any direct contribution to the institutional development of GRA, although junior technical staff were seconded to the managing consultant‟s team for work experience. JICA essentially worked Continuous independently, funding the new Tokua Airport. Although their funding engagement by the was welcomed, the European Union assistance was challenging for World Bank project GRA, as their funding was delayed and their procurement arrangements team, far more difficult to understand. intensive than twice- yearly supervision It appears the levels of Bank involvement and intervention on the ITRP missions, allowed and MRTP were more comprehensive than other donor-funded projects collaborative habits and programs, with regular missions and detailed followed up action lists, to develop that fortnightly telephone conferences for a period of time and detailed supported GRA in monthly reporting against listed actions. Early in the collaboration with sustaining high GRA, the World Bank asked GRA to develop a comprehensive works quality results. program and human resource analysis. These tools, which were considered essential steps in a planning a large works program, proved to be useful „learning by doing‟ tools for GRA to understand the critical path of the works program and its individual projects, the inter- dependencies that could constrain it, and the human resources required to roll it out. The World Bank required GRA to develop a contract administration manual and complementary quality control manual, and while GRA initially resisted the development of these manuals, these procedures and checklists enabled the systematic, technically strong, and reliable approach that is now seen as the hallmark of GRA (and a source of pride for GRA staff). Later in the program, as the MTRP started to experience delays and cost over-runs, the collaborative nature of the Bank‟s engagement with GRA management team really became clear: the GRA team invited the World Bank to intervene in support of cost cutting measures, devising a risk management system to identify 15

Learning from the GRA Experience

risks and manage them, and jointly conducting a market analysis to target and attract more competition amongst contractors. GRA staff report that they were generally receptive to advice and inputs from the Bank because it provided a good sounding board for ideas and an opportunity for them to learn “on-the-job”.

World Bank actively assisted with delivering a strong message to government that counterpart funds were essential and a condition of the loan agreement; it is understood that these messages proved to be useful in getting money finally released from national government. The Bank also showed considerable flexibility within its own sphere of control, adjusting the percentage of disbursement for civil works from 78% to 90% to cover the shortfall in continued lack of counterpart funds. The World Bank also assisted GRA in lobbying AusAID to fund the Kokopo- Rabaul Road, thus freeing up needed funds to complete the remainder of the works program.

Contractors and the Chamber of Commerce, representing the business community, expressed a high level of satisfaction with GRA. This reputation and confidence appears to have built upon the good relationship they had with the ENBPA and they clearly saw the two institutions as related state institutions with clearly important state functions. They reported that GRA was well organized, firm but fair, Building on a pre- transparent in its dealings and decisions, possibly too strict on occasions existing positive and yet flexible enough to counsel contractors and discuss options to relationship between rectify a problems. In retrospect both sides agree this marked a healthy the State and the relationship that resulted in better value-for-money outcomes. private sector, GRA helped nurture local Interestingly, almost all contractors were initially challenged by GRA‟s contracting capacity strict policy of following the contract, specifications and drawings. This both in volume and initially caused strife, with claims that GRA was being “unfair” and “too quality terms. strict”; however, over time, this criticism subsided, replaced with admiration and respect. Local contractors benefitted considerably under the program; competition was originally high, with a number of inexperienced contractors bidding, but this evolved into more experienced contractors winning repeatedly over time. Contractors felt that they matured throughout the program and in at least two cases contractors greatly expanded the scope of their operations and branched out elsewhere in PNG. One contractor reported a number of examples where the very same GRA engineers who would were uncompromising in their insistence on compliance with technical quality standards would also invest long hours in brainstorming with the contractor team to solve unexpected supply bottlenecks through replacement inputs or mutually agreed design modifications. New contractors developed depth and a history of performance; experienced contractors grew larger and expanded to serve other parts of the country.

Contractors believed that GRA was generally impartial, looking after the interests of both parties, under the contract (that is, the State and Contractor). This form of contract management is similar to current best

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Learning from the GRA Experience

practices in developed countries, whereby the Engineer is a neutral technically-grounded mediator, rather than the Government‟s (or Client‟s) gatekeeper. It appears this even-handed approach was critical to both maintaining good relationships and encouraging good outcomes.

Some of the other defining positive attributes of GRA, expressed by contractors and the Chamber of Commerce are:

 Public tenders – everyone knew what is happening.  GRA encouraged competition and resisted cronyism. There were no „favors‟ given or solicited, at any time.

 During tender evaluation, there was a high level of trust that fair outcomes will be achieved.  The Principal Engineer was seen to provide credible and reliable

leadership of the engineering/procurement team. A reputation as  The technical staff were strict; “and sometimes too strict”, being ‘firm but fair’, although the commentator willingly acknowledged, GRA probably and a willingness to needed to be “too strict” in order to cultivate credibility in the be flexible enough to generally unrespected and low-credibility world of public works help troubleshoot contracting in PNG. technical challenges  GRA was seen as “in control of” the contractors, as opposed to with the contractors, other agencies whose technical skills and management capacity won GRA the respect were so weak as to depend on the contractor to “do the right of the private sector. thing” by their own initiative.  Contractors felt that the use of donor-compliant funds and

oversight systems provided confidence in the program.  GRA paid within days, instilling confidence in the program.

One contractor suggested that GRA‟s strict application of contract terms may have resulted in 3-5% increase in tender price. While small, that surcharge is not trivial for a large public works program, and so further discussions focused on whether the higher level of quality control generated higher quality and thus value-for-money. The consensus of those discussions is that, based on quality differential between GRA and other PNG works projects, the additional value of final product may well have exceeded the hypothesized 3-5% surcharge in bids.

Communications and Public Relations

Under ITRP there was a modest program of stakeholder consultation, commensurate with the emergency nature of the works; Beddie Jubilee (GRA‟s first CDO) did organize some discussions with host and resettled communities to hear their views. In retrospect, more consultation could have been warranted, for both key target groups (host communities and resettled groups). Some resettled communities feel they were relocated to unsuitable areas that did not provide adequate scale and type of land to sustain family livelihoods (although ENBPA has endeavoured to rectify these deficiencies). For host communities, the situation was more complex. Firstly, there was a failure early on to hold adequate consultations with host communities; as the ITRP continued into the late 90s the consultation process was deepened and the host communities in 17

Learning from the GRA Experience

particular were more effectively engaged. Secondly, the more complex dynamics underlying the perceived „stability‟ of Tolai-dominated ENB needed to be accommodated: the consultations could have involved groups who were not in the immediately affected area but who were feeling that they were being left out of the development process,

particularly once the process moved from immediate to medium term rehabilitation ... the Pomio, Baining and Sulka populations.

Notably, communication under the MTRP was much more comprehensive. Communications happened at two levels: dissemination and explanation, for large scale public asset projects such as roads, schools and health centers, and iterative consultation for local level

projects such as water supplies and community halls. Communications Communications was was also tiered and structured, from the start of planning to post- a critical element of construction. Communications focussed on „ownership‟ to help both the immediate stakeholders feel that they were integral to the planning and design reconstruction effort process, which would in turn ensure that the completed works would be and the medium- handed over to those well-informed stakeholders as custodians. term program .... The consultation associated with the larger scale projects was thorough, relying upon a cascade model where GRA reached out to key public and private sector leaders at multiple levels, but it also seems that some

communities were not as well informed as they should have been of the ... and was rationale and selection of the large new infrastructure, nor of the trade- considered an offs inherent in the program which needed to serve multiple purposes: instrumental feature resettle eruption-affected communities, provide „thank you‟ assets for for program host communities, and build critical state assets for the resettled implementation, not population and the new provincial capital. a remedial action for solving problems. For the community level projects, there was also a cascade model used, although there was more explicit instruction to district and LLG officials about the expected process they were to use. There is some evidence that not all District Administrators and councillors fully informed their

constituents of planning and implementation arrangements for the community projects, nor did they all use the bottom-up planning and community prioritization approaches that GRA depending on them using.

Communications between key stakeholders on large projects occurred through the design consultants who undertook joint meetings with GRA and stakeholders. For community-level projects, communications were channelled through GRA to District Administrators, local level Councillors and Ward Development Committees to deliver messages to their people and provide direction on selected options. GRA‟s Community Development Officer (CDO) sometime required Engineering staff and Environmental Officer from GRA to attend selected visits and provided follow-up.

Recognizing in retrospect that there were blockages in the „cascade‟ transfer of information to communities, the GRA‟s CDO could have also involved provincial CDOs and information officers in a structured and proactive way as an additional channel for information. 18

Learning from the GRA Experience

There were up to 20 meetings for each community project, from pre- concept stage to handover. Dialogue was generally a two-way process between GRA and the relevant stakeholders; there was no report of political involvement at the project level and it appears this was not encouraged. GRA tried to not to inflate stakeholders expectations by not talking „big‟, but because of the iterative process of consultation, expectations did rise which were not necessarily tempered by clear communication about GRA‟s budget constraints and the need for trade- offs (“... if you want a more sophisticated water supply system we will have to reduce the size, and will serve fewer people”). Stakeholders were told about timelines (design through to implementation) and generally people expected projects to take a long time; uniformly, communities were both surprisingly patient and pleased with the completed works.

Box 3: How Community Involvement Shaped Results in Three Water Projects

The field team visited with three communities who hosted displaced groups from the eruption-ravaged Rabaul area, and whose generosity was recognize through GRA‟s Village Development Fund projects. Of the 20+ VDF projects nine were water supply, and the team saw three of them:

 In Bitapaka, communications were not effective: the LLG and DA did not coordinate the handover of the asset nor did they facilitate the establishment of the necessary Water Committee and creation of its maintenance fund bank account. A power struggle over ownership of the asset and the water ensued, and the impressive two-tank installation is now non-functioning. Repeated pump problems were left unattended without resources or accountability for repair.  In Vunamami, the communications cycle was fully realized and asset handover and accountability are functioning as designed; the water supply is well maintained and extensively used, and generates significant revenues. The water committee is proactive in allocating revenues to other community projects, possibly to the extent that the balance they hold in the account for repair may be insufficient should they run into serious trouble.  In Bitavavar, similarly effective communications nurtured similarly strong collective ownership and accountability, but an early experience with lightening strike that blew out a pump motor has inspired them to be both more conservative and creative in their asset management. Although they had almost enough money to pay for the entire replacement pump, they successfully negotiated with their LLG to cost-share, and instead of drawing down their trust account too low, they took out a loan for their portion of the new pump, and are paying it back through cash flow generated by the well-functioning repaired installation.

Weekly live radio broadcasts by the CDO allowed GRA to present messages not only to communities listening for news of „their project‟, but also to the wider public. News items included project updates, discussions of recent problems encountered with the program and concerns such as vandalism of completed works. These broadcasts appear to have been effective in nurturing a sense of common endeavour; even years later interviewees commonly referred to hearing them. Implementers‟ meetings were another part of the communications process, as they were used a channel for two-way discussion. During the ITRP and part way through the MRTP, the Advisor for Lands was influential in dealing with the complex and potentially volatile lands issues. John Brown was a long time expatriate resident with intimate knowledge of lands issues, and he commanded respect from the community at large as a well-informed but neutral advisor; he was commonly used by GRA and ENBPA to deal with lands issues and

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Learning from the GRA Experience

mediate solutions. Churches were also helpful to share information and sometimes used as mediators to resolve problems.

Institutional and Provincial Culture

There are two aspects of culture that were referred to by informants; the internal culture of GRA and the Tolai culture that derives from the dominant clan grouping in the Gazelle population.

GRA clearly cultivated its own corporate culture, consisting of loyalty to the program and to each other, strong work ethic and uncompromising standards. Confidence and trust appeared to be a hallmark of the GRA, both internally and externally: stakeholder and long-time observers continually used these terms to describe GRA and the people working in it. However, this confidence and trust was continually earned and re- earned, and it appears that the high level of dedication that GRA staff had to their job and „their systems‟ was instrumental in this. “GRA is a good place to work, and GRA staff do good work.”

The Tolai culture has always been regarded as well organised, highly educated and astute, and GRA consisted of mainly Tolai people. This largely homogeneous group appears to have allowed GRA to be seen as being loyal to East New Britain and the reconstruction efforts, and even the expatriates at GRA understood the culture extremely well. GRA staff emphasize that they did not act to exclude the smaller Baining or Pomio clans, but there were nonetheless reports that in the more remote areas that were not benefitting from the large sums and projects under MTRP the perception was that the Tolais were monopolizing benefits by „keeping everything in Kokopo‟.

The evolution that GRA staff and observers described as having happened over time, and the vocabulary they used to do so, reinforces the view of key outside observers that GRA established its own cultural identity, its own clan, a form of wantok.9 This appears to have occurred through building a joint commitment to common rules and practices that were systematically observed without differentiation over a period of time, possibly without any conscious intent to do so. There seems to have been a gradual melding of local norms applied to westernized systems such as procurement, administration and finance and quality control, in which the cultural traits often disparaged as being “undesirable PNG wantok behaviors” were in fact the very strengths which allowed the GRA to build its reputation.

9 This same dynamic was observed by a joint World Bank-AusAID-UNDP review of post-conflict capacity building in the Solomon Islands, where in the wake of violent and socially devastating ethnic clashes between clan groups the Office of the Auditor General has been rebuilt through a combination of collaborative expatriate technical assistance inputs and a dynamic national leader (Floyd Fatai, the late Auditor General) who explicitly motivated his staff by saying “We are the OAG wantok – we’re a national team, not Guale, not Malaitan, just national servants.”

20

Learning from the GRA Experience

These traditional cultural elements – uncompromising loyalty and support for each other, strong work ethic for the common good, forms of communal discussions and problem-solving, and shunning of those who had transgressed the group norms – were used in the GRA to inform and shape the thoroughly modern and technical systems and processes that allowed GRA to deliver their much-applauded quality of public works with an equally admired element of fairness and integrity.

What could have been improved?

Through field interviews and the desk review of implementation documents, suggestions have emerged that point to actions that could have increased GRA‟s effectiveness in delivering its program, and thus might be relevant for other efforts: 1. Constantly renew and cultivate relationship with National Departments, through politicians and community leaders, to prevent or resolve problems like the lack of counterpart funding at key points. GRA expressed that if they had been more successful at this, disruptions would have been fewer even during the period of fiscal crisis in the late 1990s. 2. GRA believes – and the World Bank agrees – that intensive upfront training by donor aid agencies in their procedures and practices would have made the project run more smoothly, reducing delays, costs, and frustration levels. The Bank further believes that undertaking a collective effort across donors to at least cross-train each other on required systems – or better, to harmonize systems through a multi-donor trust fund – would have improved both efficiency and the quality of results. 3. GRA now feels they should have engaged more technical staff earlier in the program. 4. Communications with the full range of stakeholders needed to be better managed to ensure that the information being „given‟ to people was „heard‟, and understood, in context. The program sought to achieve three goals, each of which affected a specific population with their own sense of entitlement and loss: resettle and restore livelihoods to affected communities, move provincial capital to Kokopo and provide associated public infrastructure, and restore and preserve the functionality of Rabaul port. A more proactive and nuanced communication effort would explicitly recognize that each group would instinctively „see‟ only „their part‟ of the effort, and thus would communicate the multiple goals of the reconstruction program to all of the multiple audiences with an emphasis on understanding ‘others’ needs. 5. Explicit attention should have been given to the risk that even groups not directly affected – either as relocated populations or host populations – would feel either invested in or disadvantaged by the MTRP. The Pomio, Baining and Sulka people in more remote areas watched as large sums were expended on populations that, in their minds, had traditionally been advantaged already. In retrospect, it would have been useful to develop political support early in the MTRP to use the GRA „success‟ as a platform to extend effective and inclusive development to areas not directly affected by the disaster. This occurred to some extent later on, but it could have been addressed earlier and might have thus been a critical element in allowing GRA to evolve past 2010. 6. Timeframes needed to be realistic. It was apparent that the MTRP was too ambitious for a 3-4 year timeframe, thus placing pressure on the GRA and other stakeholders to deliver a timeline that could never be achieved. Recognizing that part of that dynamic was generated by the Bank‟s own thinking (now modified) that emergency programs be short10, donor requirements should be explicitly balanced with reality on the ground.

10 Under OP 8.50 emergency recovery loans (ERLs) were to be no more than 3 years in duration; this seems to have influenced the thinking of the Bank’s design team even though an APL was used for the SGRP.

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Learning from the GRA Experience

7. As an example of transition from reconstruction to development, the GRA transition from the ITRP to the MTRP illustrates the importance of common principles and pillars that are widely communicated (and even publicly debated, as in the move of ENBPA from Rabaul to Kokopo) even though administrative arrangements and implementation modalities may change as the transition is made. 8. GRA experienced considerable problems with No Objection Letters not being issued expediently by the World Bank (until a negotiated 7-day turnaround was agreed in 2004); given the heroic levels at which GRA staff were working, this was more than just a delay or a nuisance. Explicit agreement on both formal and informal „standard operating procedures‟ in the emergency context are important so that the broader team – implementing partner agency and donor agency – are not working at cross purposes. 9. The short notice, intensive meeting schedules, and large volume of documents required for World Bank supervision missions were a significant burden, even as the GRA valued the technical support and mentoring that mission teams provided. GRA indicated that more timely notice was required, along with more clarity on what was to be reviewed. Selective Transplantation, not ‘Replication’

GRA staff are united in their belief that the success of their institution is a unique product of unique people operating in a unique circumstance, which therefore cannot be replicated. However, the review team believes that there are key elements and choices exhibited by the GRA that can be explicitly selected for and nurtured in other contexts, and important lessons for the World Bank in how our support for project implementation can help in itself contribute to nurturing effective state institutions. What aspects of GRA are relevant to other post-disaster reconstruction efforts?  When considering the utility of and structure for a special-purpose authority, allocate policymaking and strategic choices to the permanent mechanisms of state whenever possible, and develop a clear distinction between those functions and the overwhelmingly large but temporary of implementing and supervising reconstruction.  Undertake a candid analysis of the strengths and weaknesses of the „parent‟ institutions; rely on the strengths and build mechanisms into the program (or the special purpose authority) to compensate for the weaknesses.  Don‟t confuse the need for rapid action and visible results with a need to obscure quality standards or use non-transparent processes. o Triage the reconstruction program so that a sequenced approach can launch most urgent works, based on practical simple designs, with a high degree of transparency demonstrated in a straightforward but uncompromising procurement process. o Consider procurement processes inextricably linked to quality control and supervision processes; procurement doesn‟t end at bid award.. o Build on the trust engendered by those early simple high-integrity works to continue with an equally transparent and rigorous procurement and works supervision process for the more complex and larger medium-term works.  Treat communication as instrumental, not remedial; invest in and staff it well, carry it through the entire project cycle, and „close the loop‟ by bringing back reports of actions taken based on community and stakeholder inputs. o Anticipate a need to communicate across stakeholder groups to build their understanding of and compassion for others‟ needs. o Explicitly facilitate exchanges about the trade-offs required so stakeholders know why certain choices are made. 22

Learning from the GRA Experience

o Recognize and be sensitive to the likelihood that groups in the vicinity of the disaster who are not directly affected but feel consistently disadvantaged will feel they deserve their needs to also be met as part of a longer term development program.  Where a pre-existing relationship of community confidence in state service delivery exists, explicitly use the institutions and individuals associated with that state effectiveness to champion the reconstruction program.  Identify compelling goals that can mobilize leadership at the provincial, local and national levels to align with common objectives, creating a platform of political support.  Where that relationship is damaged, and where the state is viewed as fragile or ineffective, the political champions and the reconstruction program donors must identify „early wins‟ that can rebuild some minor degree of confidence; a well-communicated emphasis on simple processes with clear standards and high integrity, for a few modest early works, is a good start.  In designing terms of reference and reporting relationships, and in selecting advisors and project staff, explicitly seek expatriates who have long experience in the local context and be mindful of the utility of using them to help deal with outside pressure and interference.  No matter how strong or fragile the local contracting capacity is, develop clear and straightforward systems and communicate the rules; avoid over-engineering but do not compromise on standards and requirements of tenders, and then build collaborative problem-solving into the quality control and supervision processes so that troubles become learning opportunities. For consideration in post-conflict reconstruction efforts?  Communication becomes even more central in all dimensions identified above: o comprehensive, structural and proactive rather than reactive; o designed to exploit existing social capital and build new capital, across and between communities and between them, businesses, and the state; and o sensitive to and healing towards gaps or mistrust between groups.  If the conflict was protracted, much of the domestic contracting and works capacity may have disappeared; however, mechanisms for joint venturing and local subcontracting should be emphasized so that the early works program can contribute to rebuilding that capacity, however rudimentary, especially in ways that mobilize community labor.  Given the much more severe deterioration in state institutions that usually characterizes post-conflict settings – and the damaged trust between population and state that accompanies it – the choice of institution(s) for implementation must take into account the need to re-build confidence by demonstrating competence. o This does not necessarily mean that one state institution should „do it all‟, since clarity about mandate and realism in setting (and delivering upon) expectations are critical elements in rebuilding state effectiveness. o Nor should it prevent other stakeholders from bearing some of the implementation burden as long as the state function of policy decisions and strategic choices is exercised with stakeholder consultation.

What are the critical institutional and operational building blocks for effective state programs at the provincial or district level? 23

Learning from the GRA Experience

 The building blocks are similar no matter how large the works program: mobilization of political will and funding; policy-making and strategic decision-making; program planning and implementation; financial management and audit; procurement all the way through to quality control and supervision; communication across stakeholder groups throughout the project cycle.  If capacity does not already exist in these areas, a willingness to build it must be evident, as well as a willingness to share responsibility with other levels of government or supportive donor agencies during program implementation.  Resources are important but not paramount; financing that overwhelms capacity may risk producing unrealistic expectations but little in sustainable benefits.  Candor is critical in assessing state capacity and calibrating program accordingly: align the sophistication of systems and the burden of technical supervision to the level of capacity already available, not to aspirational levels. Build in continuous learning and joint problem-solving so that early wins rebound to the benefit of the growing reputation (of strong government entities) and the increasing legitimacy (of weaker units).

How can Bank processes and procedures contribute to strengthening institutions and delivering investment programs in low-capacity environments?  The Bank task team can support a vision of effective state institutions with transparency and respect for agreed processes, collaborative problem-solving, and full-circle communication, by modelling those in its own interactions with the Borrower team. In fact, the absence of any of those characteristics in how the Bank deals with the Borrower risks imposing a sense of double-standards that could undermine the purported rationale of the fiduciary systems themselves.  From the outset, build agreement that a robust commitment to systems should not be chosen in acquiescence to a donor requirement related to risk management; procurement, financial management, and M&E are important not only as fiduciary safeguards but also as mechanisms for building a joint commitment to quality between financier and Borrower. o Creating and agreeing upon manuals and systems during the project preparation period isn‟t just a necessary step for effectiveness and project launch; it also builds ownership and enhances the credibility of the Borrower. Invest in training early, respect the value of ideas brought to the table by the Borrower team, and encourage (even require) frequent updates of the Project Implementation Manual and associated manuals based on the evolving experience. o Work with the Borrower and implementers to not attribute fiduciary controls narrowly as “a Bank requirement”, but to instead communicate clearly with stakeholders inside and outside Government the reasons why these processes are used, and transparently explain decisions taken when problems arise: this builds the legitimacy of state institutions rather than presenting them as subservient to a donor agency.  Recognize that while the Bank‟s primary counterpart is the Government, opportunities exist for Bank task teams to tailor their project preparation and design work – and the procurement processes used in the works programs – in such a way as to support increased capacity in the private sector.

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Conclusion

The reputation of GRA as an effective institution, and the legacy of the post-disaster reconstruction as a well-communicated consultative public works program that delivered high quality through a largely nationally staffed team with a reputation for integrity and transparency, are both clearly demonstrated. This review has helped to „dig beneath the surface‟ of the „uniqueness‟ claims about East New Britain and the GRA, in order to learn lessons for – among others – the government leaders and development partners interested in improving our results in development efforts across Papua New Guinea.

As the Medium Term Restoration Program wound down in 2007-2008, provincial government leaders and local stakeholders began discussing GRA‟s „life after MTRP‟. Hopes were held out for a united approach through which the Provincial Government and National Ministers could develop a sensible plan in which the GRA was retained as an institution, with an amendment to its mandate to cover the whole province rather than just the Gazelle Peninsula, possibly including provision for it to „contract out‟ to other provinces for support to their own efforts to implement public works and build their own capacity. Some stakeholders felt strongly that this would have been the best mechanism for the province to spearhead the development of the less developed areas of the province (namely Pomio, Baining and Open Bay in the Gazelle District), and certainly development partners including the World Bank encouraged approaches that would sustain the important institutional capacity and learning that had been so carefully built. This approach was broached by provincial and national actors in 2008-09, and was initially widely supported, and efforts were begun to draft the necessary amendments for consideration by Parliament.

However, the consensus needed between national leaders of ENB origin and provincial leaders proved elusive, and strong differences of opinion regarding the appropriate course of action resulted in a political stalemate. The 2010 national budget provided no funding for the routine operations of GRA, and as early as March 2010 staff were being made redundant, even as other provinces and private sector entities began to circle around GRA in hopes of luring away key expertise. The capacity of those individuals will hopefully contribute to their new institutions, and produce strong results for them, but the institutional impact of the GRA – and its potential to serve broader provincial and national goals – may have been lost.

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Learning from the GRA Experience

Annex 1: Acknowledgements and List of Persons Interviewed

Eminent Persons

Sinai Brown, OBE, MP former Minister responsible for Gazelle Restoration Authority

Leo Dion, CMG, QPM, MP Governor, East New Britain province

Gazelle Restoration Authority Peter Buak Project Manager Gary Thomas Project Accountant Noel Kelly Assistant Principal Engineer / acting Principal Engineer Joe Enman Contract Administration Engineer Kiramin Karani Office Manager Kesia Willimon Finance Manager Peter Buak Project Manager

Former GRA staff Ezekiel ToLulu Former Community Development Officer

East New Britain Provincial Administration Akuila Tubal Provincial Administrator Bernard Lukara Deputy Provincial Administrator, Policy, Planning and Evaluation Allan ToVue Adviser, Technical Services

Chamber of Commerce Nick Lyons East New Britain Chamber of Brian Martin Commerce Ex-Chamber of Commerce (owner of Rapopo Plantation Resort) General Community

Bitipaka and Kokopo/Vunamami Community cross-section of leaders from Host and Sikut and GelaGela Community Resettled Communities

Tour of market in Rabaul and discussion with random selection of market vendors

Contractor Dave Stein General Manager – Nivani Rudy Terracciani Principal – Southern Enterprises Mr Li Manager China Jiangsu International

The GRA Review Team gratefully acknowledges the support and investment of time and wisdom that our many informants gave to us. We are particularly grateful to the Gazelle Restoration Authority team in Kokopo, the East New Britain Provincial Administration, We extend a special ‘thank you’ to our Peer Reviewers: Sir Rabbie Namaliu and Dr. Bruce Harris, in Papua New Guinea, and Markus Kostner and Wolfgang Fengler, from the World Bank’s global expert team on post-disaster reconstruction. The Review Team included World Bank Country Manager for PNG, Laura Bailey; Raymond Palangat, Public Information and Communications Assistant; and Lawrie Carlson, consulting engineer. For more information on the Second Gazelle Restoration Project, please visit the World Bank website: http://web.worldbank.org/external/projects/main?pagePK=64283627&piPK=73230&theSitePK=40941&menuPK=228424&Projectid=P054238

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Learning from the GRA Experience

Annex 2: Overview of GRA and the Restoration Programmes

Following a severe tectonic earthquake in the early hours of 18 September 1994, the twin volcanoes of Mt Tavurvur and Mt Vulcan erupted early on the morning of Monday 19 September 1994, displacing around 100,000 persons from Rabaul town and the neighbouring villages, and physically destroying most buildings and infrastructure. A damage and loss assessment calculated that total damage to both public and private assets was in excess of US$550 million, and 20,000-30,000 people were permanently displaced; most were subsequently resettled as part of the restoration programs. The Gazelle Restoration Authority was established on 7 February 1995 by the national government through the passing of the Gazelle Restoration Act 1995.

The Immediate Term Restoration Programme (ITRP) was undertaken from 1995 to 2000, with first priority given to initial emergency and humanitarian works, followed by a programme to restore key public and economic infrastructure. A significant component of these earlier works was the establishment of permanent resettlement areas, the establishment of Kokopo as the administrative capital of the province, and sufficient work in Rabaul to allow it to operate as a port.

The structure of the ITRP was based upon a needs assessment report prepared by the Australian aid agency (then called AIDAB), covering six major sectors: aviation, education, health, lands, police, and roads. In agreement with both the National and Provincial Governments, the individual projects in the ITRP were divided between the major donors11 – AusAID, Japan, and the World Bank. AusAID and Japan provided significant funds, and largely managed their own programmes in coordination with the GRA, and the World Bank re-allocated portions of three existing loans to ITRP projects, thus allowing monies to flow from national government directly to GRA:

Budget Support National and Provincial Governments K 21.9 million International Grants AusAid K 66.5 million Japan K 84.7 million European Union Development Funds K 7.9 million International Soft Loans The World Bank K 33.3 million Germany K 2.4 million Asian Development Bank K 2.0 million Total ITRP Budget K 218.7 million

Approximately 30 percent of the total K218.7 million was disbursed directly through the GRA PIU: K62.5 million was utilised by the GRA to complete almost 200 projects with well over 300 subprojects.

The Medium Term Restoration Programme (MTRP) commenced in the 2000 financial year and was originally split into two phases, to be mostly financed by a World Bank loan that would be supplied in two tranches, with the second being dependent on the successful disbursement of the first. These would have been: Phase 1 (2000-2007) and Phase 2 (2007-2010).

The primary goal of the MTRP was to consolidate the restoration activities commenced under the ITRP, restoring in a sustainable and risk-averse manner the social and economic well-being of the population of the North East Gazelle Peninsula. The key objectives were to: 1. improve the quality of life for displaced communities; 2. consolidate Kokopo Town as the provincial capital of East New Britain;

11 Relative contributions at the rates of exchange on 29 December 2000. 27

Learning from the GRA Experience

3. restore those parts of Rabaul Town necessary to ensure its viability as the regional port for the New Guinea Islands Region and district headquarters for the Rabaul District; 4. rehabilitate and expand utility infrastructure and social services for North East Gazelle Peninsula hinterland centres; and 5. stimulate economic diversification and undertake institution building for longer-term development planning.

During the formulation and development of the MTRP, these objectives were used to screen projects proposed by the LLG‟s, the Provincial Administration, and the national line agencies. Those projects that responded to one or more of the objectives were subsequently prioritised in a series of stakeholder workshops to produce the final public works program approved by the Provincial and National Executive Councils. The financing requirements of the MTRP were provided from the following funding sources: · World Bank Loan Number IBRD 4525 PNG · European Development Fund Grants · AusAID finance for the major part of the Rabaul-to-Kokopo road upgrade · AusAID participation and support in a range of longer term planning activities · PNG Sustainable Development Ltd Financing Agreement · GoPNG counterpart funding The total financing profile for the MTRP was as follows: Budget Support National and Provincial Governments K 79.1 million Department of Health K 6.2 million International Grants AusAid K 37.3 million European Union Development Funds K 23.6 million International Soft Loans The World Bank K 78.0 million Other PNG Sustainable Development Ltd K 13.6 million Total MTRP Budget K 237.8 million

Of the 125 projects prioritized in the MTRP, all of which demanded a high level of technical, managerial and administrative skills to implement in an efficient and timely manner, 99 were completed by end-2009; 13 were under implementation or in tender process; and 13 still await funding, are under design, or have been deferred. The MTRP portfolio covers three major categories:  Land and Transport Infrastructure (including Rabaul port structures and roads, resettlement estates, roads and highways, and clearing and seeding of devastated areas in Rabaul);  Public Utilities and Essential Services Infrastructure (including electricity supplies and water supplies); and  Social and Economic Services Infrastructure (education facilities, market facilities, incinerator for national quarantine services, district offices, health facilities, police post, community hall, and livelihoods assets including cocoa seedlings and a rice milling machine).

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