Colombia - Judicial Conflict Resolution Improvement Project

Document of The World Bank Report No: 23184-CO PROJECT APPRAISAL DOCUMENT ONA PROPOSED LEARNING AND INNOVATION LOAN IN THE AMOUNT OF US$5 MILLION TO THE REPUBLIC OF COLOMBIA FOR A JUDICIAL CONFLICT RESOLUTION IMPROVEMENT PROJECT November 8, 2001 Latin America and Caribbean Region Colombia, Mexico and Venezuela Country Management Unit Latin America and the Caribbean Regional Office  CURRENCY EQUIVALENTS (Exchange Rate Effective November 1, 2001) Currency Unit = Peso Colombiano Col$ 1.00 = US$0.000433 US$1.00 = Co1$ 2309.12 FISCAL YEAR January 1 -- December 31 ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy DNP National Planning Department GDP Gross Domestic Product GOC Government of Colombia IDB Interamerican Development Bank JCT Groups for Judicial Change JSRLB Rodrigo Lara Bonimla Judicial School LIL Learning & Innovation Loan NGO Non Governmental Organization PCUJ Project Coordination Unit PHRD Policy and Human Resources Development Fund SCJ Superior Council of the Judicature SIIF System of Integrated Financial Information of the Ministry of Finance USAID United States Agency for the International Development Vice President: David de Ferranti Country Manager/Director: Olivier Lafourcade Sector Manager/Director: Emesto May Task Team Leader/Task Manager: Felipe Saez  COLOMBIA JUDICIAL CONFLICT RESOLUTION IMPROVEMENT PROJECT CONTENTS A. Project Development Objective Page 1. Project development objective 2 2. Key performance indicators 2 B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 3 2. Main sector issues and Government strategy 3 3. Learning and development issues to be addressed by the project 10 4. Learning and innovation expectations 11 C. Project Description Summary 1. Project components 11 2. Institutional and implementation arrangements 16 3. Monitoring and evaluation arrangements 19 D. Project Rationale (This section is not to be completed in a LIL PAD) E. Summary Project Analysis 1. Economic 19 2. Financial 19 3. Technical 20 4. Institutional 20 5. Environmental 21 6. Social 22 7. Safeguard Policies 23  F. Sustainability and Risks 1. Sustainability 24 2. Critical risks 24 3. Possible controversial aspects 25 G. Main Loan Conditions 1. Effectiveness Condition 25 2. Other 25 H. Readiness for Implementation 26 I. Compliance with Bank Policies 26 Annexes Annex 1: Project Design Summary 27 Annex 2: Detailed Project Description 32 Annex 3: Estimated Project Costs 38 Annex 4: Cost Benefit Analysis Summary, or Cost-Effectiveness Analysis Summary 39 Annex 5: Financial Summary for Revenue-Earning Project Entities, or Financial Summary 40 Annex 6: Procurement and Disbursement Arrangements 41 Annex 7: Project Processing Schedule 51 Annex 8: Documents in the Project File 52 Annex 9: Statement of Loans and Credits 53 Annex 10: Country at a Glance 55 MAP(S)  COLOMBIA JUDICIAL CONFLICT RESOLUTION IMPROVEMENT PROJECT Project Appraisal Document Latin America and Caribbean Region Colombia, Mexico and Bolivarian Republic of Venezuela Country Management Unit LCC1C Date: October 26, 2001 Team Leader: Felipe Saez Country Manager/Director: Olivier Lafourcade Sector Manager/Director: Ernesto May Project ID: P057369 Sector(s): BY - Other Public Sector Management Lending Instrument: Learning and Innovation Loan (LIL) Theme(s): Poverty Targeted Intervention: N Program Financing Data [X] Loan [ ] Credit [ Grant [ ] Guarantee [] Other: For Loans/Credits/Others: Amount (US$m): US$5 million Proposed Terms (IBRD): Fixed-Spread Loan (FSL) Commitment fee: 0.85% during the first four years; and Front end fee on Bank loan: 1.00% 0.75% thereafter Financing Plan (US$m): Source Local Foreign Total BORROWER 0.67 1.00 1.67 IBRD 4.10 0.90 5.00 Total: 4.77 1.90 6.67 Borrower: REPUBLIC OF COLOMBIA Responsible agency: SUPERIOR COUNCIL OF THE JUDICATURE Address: Palacio de los Tribunales, Bogota, Colombia Contact Person: Carlos Enrique Marin Velez. President, Administrative Board. Tel: 57-1-562-9097 Fax: 57-1-565-8987 Email: Estimated disbursements ( Bank FYIUS$m): FY 2002 2003 2004 | Annual 1.40 1.80 1.80 _ Cumulative 1.40 3.20 5.00 Project implementation period: January 1, 2002 - December 31, 2004 Expected effectiveness date: 02/15/2002 Expected closing date: 06/30/2005 OCS PAD F-n F M,d.. 2000  A. Project Development Objective 1. P'roject development objective: (see Annex 1) The proposed Project constitutes the learning phase of a long term initiative undertaken by the Governument of Colombia, under the leadership of the SCJ, aimed at improving the rendering by the Judiciary of judicial conflict resolution services. It is expected that the proposed Project will allow the testing of a participatory and comprehensive organizational change strategy to bring about change in the courts' operations which ensure people swifter, fairer and more transparent conflict resolution services. If the Project is deemed successful it would be extended to the totality of civil, labor and family law jurisdictions in Colombia generating a substantial improvement in the overall justice environment in the country and, particularly, in three key areas. In the first place, it would contribute to improve the judiciary's social legitimacy and ability to respond effectively to the society's justice needs. In the second place, it would create increased incentives for the resolution of labor, family and civil conflicts through peaceful means, thus, improving the prevalence of the rule of law and peaceful coexistence among Colombians. In the third place, it would enable a more effective and lower cost enforcement of contracts, thus, enhancing a critical condition for private sector development. 2. Key performance indicators: (see Annex 1) A first set of indicators will establish the progress made in project implementation, particularly, advancement in carrying out the change strategy for each of the Judicial Change Teams (JCTs) envisaged under the Project. The Implementation Indicators for the various components will be derived from the targets set forth in the performance plan agreed by each JCT with the SJC on an annual basis as described below. The ultimate success of the Project is not derived, however, from the implementation of the various components of the comprehensive organizational change strategy. It is crucial that the implementation of the change strategy generates substantial improvements in the output of the justice services provided by the courts. The Output Indicators would be measured through: (i) a significant reduction in processing time for case disposition in participating courts over a two-year period (compared to baseline). The specific level of delay reduction will be agreed with each of the JCTs and will be a function of the existing case load, the "ideal duration" of the various types of procedures in accordance with the existing legal framework and the consensus reached between the respective JCT and the SCJ as to the degree of increased efficiency in case management that can be obtained by the courts derived from the Project. The SCJ leadership has indicated that a delay reduction target of about 30% over a two year period is a reasonable target; (ii) increased number of cases disposed per judge per year (above baseline). The specific level of productivity improvement will be agreed with each of the JCTs. This will be a function of the prevailing level of case congestion and the consensus reached by each JCT and the SCJ on the degree of increased productivity in handling the courts' workload. As in the case of delay reduction, the SCJ leadership has indicated that a 30% improvement in productivity over a two year period is a reasonable target; (iii) increased satisfaction of users of participating courts (e.g., - 2-  lawyers & parties). This indicator will be measured through annual user surveys in a sample of the participating courts. Performance with respect to the Impact Indicators will be measured through: (i) evidence that participating civil circuit courts are increasingly recognized by their peers as the best practice model for civil, labor and family courts in the areas of: (1) swiftness and quality in the provision of conflict resolution services; and (2) high productivity in the use of judicial resources (# of cases disposed by judge per year); (ii) increased demand by court users, judicial leadership and public for a switch of all civil, labor and family courts to the new service standard supported by the LIL; and (iii) evidence of judges and judicial personnel which are not participating in the Project increasingly adhering to the policy objectives and organizational changes adopted under the LIL. B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: 17107 CO Date of latest CAS discussion: 11/18/99 The project is addressed in the CAS Report (Report # 17107 CO) of October 15, 1997 and the CAS Progress Report (Report # 19805) of November 18, 1999. This project will contribute to the overall development objectives of the CAS. Specifically, it supports activities whose goals include: (i) deal with some of the institutional deterninants of violence in Colombia by ensuring the primacy of the rule of law via improving the judiciary's social legitimacy and ability to respond effectively to the society's judicial conflict resolution needs; (ii) contribute to poverty alleviation since an improved rule of law should specially protect and benefit the poor which are most affected by violence; (iii) improve governance in Colombian society by increasing the social legitimacy and effectiveness of the judiciary; and (iv) contribute to private sector development by improving the quality and swiftness of judicial conflict resolution mechanisms. The project is included as part of the Government's priorities contained in the GOC's National Development Plan 1998-2002. 2. Main sector issues and Government strategy: During the recent decades, the Judiciary in Colombia -as is the case in most countries in the Region- has been subjected to mounting pressures for reform. These pressures are derived, in part, from a deterioration of the judiciary's social standing as a bulwark for the protection of human and social rights, as a forun for the fair and effective resolution of disputes and the penalization of criminal behavior and the inability of judiciaries to meet a demand which is growing in number, complexity and diversity. The inability of judiciaries in the Region to cope with mounting judicial demand has taken a dramatic turn in Colombia. The increased fragility of the rule of law that judiciaries are called upon to uphold and promote can be considered as an important contributor to the high level of prevalent violence, including the perverse and increased tendency towards different forms of private justice. The principal efforts undertaken by Colombia in improving judicial performance have focused on the organizational and governance set up of the judiciary and the criminal justice system. As part of a comprehensive Constitutional Reformn approved in 1991, Colombians established a number of - 3 -  new judicial institutions: a) a specialized constitutional jurisdiction to carry out substantive constitutional control of the state institutions and an effective enforcement of the individual and social rights; b) a specialized judicial administrative body -the Superior Council of the Judicature- entrusted with promoting the more efficient use of judicial resources and operations; including the handling of the judiciary's planning, human resource and administrative functions, and c) a wholesale restructuring of its criminal justice system via the establishment of an autonomous Attorney General's Office and the revamping of the inquisitorial process and its replacement with a system which has entrusted the Attorney General's Office with enhanced authority and means to promote greater expediency and effectiveness in pursuing criminal responsibility. These efforts were accompanied with a build-up in justice expenditures. Public expenditures on justice increased from 0.65% of GDP in 1990 to 1.14 of GDP in 1996, reflecting an average real annual increase in justice expenditures of 17% during those years. This increment does not imply a proportionate increase in resources available to the judiciary since they were aimed mostly at meeting increased costs linked to the establishment of the Attorney General's Office and other institutions established under the 1991 Constitution. Investment expenditures represent aboul 10%No of the total sector budget which is heavily concentrated in physical infrastructure. Thus, there has been little room left for investments promoting institutional and organizational change. The build-up in justice expenditures has been backtracked partially during the second half of the decade as a result of growing fiscal constraints. The corollary of the efforts to improve justice administration in Colombia is that there has been no appreciable improvement in the contribution of the justice sector to uphold the rule of law as a crucial bearing for peaceful social coexistence: * There has been limited progress in reducing the rampant impunity problem that plagues Colombia. Recent studies indicate that two out of three homicides are not subject to judicial criminal investigation in Colombia and that 95% of violent deaths are abandoned without reaching the stage of identifying offenders and potential responsibilities. These poor resu]ts are certainly not the exclusive responsibility of the Judiciary. It is in part the result of the growing conflict with the guerrilla and paramilitary groups with its outcome of death and destruction overwhelming the state's penal authority. It is also the result of bottlenecks in other components of the criminal system, particularly the police's investigative capacity and the poor utilization of the state attorney's office prosecuting capacity. * There have been limited efforts to improve the quality and expediency of other areas of justice administration such as civil and commercial law, family and labor law. The lack of priority assigned to these areas would seem unwarranted since a strong majority of the justice demands is directed, precisely, towards these sectors. The main source of judicial congestion is concentrated in Colombia's Civil Justice System. This issue is further discussed in relation to the congestion issue. * Little progress has been made in order to improve access to justice by the poor, notwithstanding their growing demands and needs. The constitutional mandate to establish community based tribunals headed by lay judges selected via popular elections and deciding on - 4 -  equity grounds was only acted upon by Congress through the approval of the Law of Judges for Peace in December 1998. Efforts for actual implementation of this law are still pending. * There have been some relevant efforts to improve the efficiency in resource use within the Judiciary, i.e., the issuance of a new judicial map aimed at balancing judicial resources with demand and the implementation of a performance evaluation system. The results of these measures have generated some improvements in judicial productivity but there is still some significant room for improvement. * The new governance structure created by the Constitution of 1991 has generated some mixed results. On the one hand, it has generated an increase in judicial activism with the Judiciary increasingly in the protection of basic human rights and key constitutional rights. On the other hand, it has generated coordination challenges and potential for conflict and overlap in jurisdictions. This was particularly so in the mid nineties. Recent developments reflect a smoother coordination among the various governing judicial bodies. The Access to Justice Issue. Access to justice constitutes a major issue in Colombia as reflected in a recent household survey undertaken by the SCJ in the main urban centers. This survey showed that only about 9% of the conflict resolution demand arising from households is met by the formal judicial system and about 11.5% of criminal demand by the Attorney General's Office. Over 43% of conflicts were resolved by the population without resort to official or officially promoted conflict resolution mechanisms and institutions. The restricted access to official institutional arrangements for dealing with interpersonal and social conflict severely limits the ability of people to enforce their rights effectively, perpetuates prevailing power structures and portrays and promotes the use of force/power as an effective means of resolving conflicts. The high incidence of personal injury among minor criminal offenses (over 43% of total reported criminal offenses) constitutes a strong indication of the prevailing trend to resolve disputes via personal injury. Thus, increasing justice coverage should constitute a high priority of the authorities in their quest for reducing interpersonal and social conflict. Issues of fiscal sustainability and the cultural barriers constitute critical constraints in improving access of the poor to judicial services. Pursuant to the household survey, over 40% of the population that could have sought judicial relief did not do so mostly due to negative cultural preconceptions, i.e., lack of trust in the effectiveness and credibility of the judiciary. Cultural constraints limit the options for expanding judicial coverage to non-judicial programs such as the proposed Justices of Peace initiative and the expansion of the Houses of Justice Program. Despite the approval in 1998 of the Law establishing the Justices of Peace Jurisdiction, there has been limited progress in the implementation of the Law. The Houses of Justice Program is being actively supported both by IDB and USAID. The Bank will not be dealing directly with issues of access to justice. It is expected, however, that over the medium term an improvement in the delivery of conflict resolution services by the judiciary, both in terms of quality and productivity, will generate incentives for some of those groups with restricted access to seek redress for their grievances in the Judiciary. -5 -  The judicial congestion and delay issue. A key factor contributing to the poor image of the courts in Colombia is the deficiency in the provision of judicial conflict resolution services. There are two indicators that are broadly utilized to describe the feebleness of the Colombian Judiciary: its high degree of congestion and process delay. Congestion, defined as the stock of unresolved disputes introduced to the judicial system that are not dealt in an annual judicial exercise, has become chronic. By the mid nineties, absorving the backlog of civil cases (representing 32% of total judicial demand) would require 6.2 years of current court capacity. The figures on congestion two years later reflect a substantial, while yet insufficient, improvement in congestion levels. By end 1999 the backlog had been reduced almost by one third reducing the absorption period to 4.6 years. There is no definitive explanation for this improvement in judicial congestion (other than improvement in statistical data). During Project implementation an in-depth assessments of the causes of reduction of congestion among the participating courts will be undertaken. Process delay is one of the factors contributing to this high congestion level. When compared with the duration of procedures envisaged in the various procedural codes, reality seems to substantially surpass the most pessimistic estimates. Executive proceedings last in reality 336'l K more time (1.301 vs. 298 days) than envisaged in the Civil Procedure Code. Regular civil proceedings last 432% more (2.048 vs. 469 days) than the prescribed legal procedure. Indicators of congestion and judicial delay are, however, output indicators. They reflect deficiencies in judicial performance but do not denote its cause. A sample of 100 executive procedures were exhaustively studied and discussed in interdisciplinary workshops that included judges, practitioners, academicians, etc. The conclusions of those workshops enabled a different view of the incentives and constraints driving judicial proceedings. The workshop on executive proceedings identified some deficiencies in the structure of the executive procedure derived from the provisions of the Civil Procedure Code, namely, a relatively long process averaging 300 day7s, a high level of dispersion in the various procedural stages and the mixing of jurisdictional and adnministrative tasks, all of them assigned to the judge. Reality indicated, however, that problems were more severe than those derived from a review of the legislative framework: * Judges adopted a very low profile in the conduct of proceedings, enabling the parties and court officers to unduly delay the handling of the cases; * High levels of inefficiency in the management of the administrative aspects of proceedings which absorb over 50% of actual process duration.. A main culprit of this situation is again the assignment of these functions to judges who have very limited skills and advantages in this field. The conclusions derived from the review of the executive process have been confirmed in later analysis of the ordinary civil and labor processes. The most intriguing paradox is derived from the experience in the handling of labor proceedings. The legislator had established a streamlined procedure consisting in not more than four hearings and the virtual eradication of any form of written proceedings. Despite the explicit legislative mandate the traditional practices continue tO prevail with labor cases averaging 1647 days against a normative maximum of 260 days, a delay overrun of 633%. -6 -  The judicial quality issue. Improvement in judicial performance is not tantamount to reductions in judicial delay or congestion or access betterment. It relates mainly to the perceived soundness and fairness of judicial decisions by the public. In itself, judicial quality constitutes a critical dimension in any attempt to improve overall judicial performance. There would be no increase in social welfare derived from a judicial machine that issues swift judgements which are perceived as unfair or unsubstantiated. There are three basic dimensions of judicial quality that seem particularly relevant for purposes of the Colombian Judiciary. The first dimension deals with the introduction of immediacy in case management, thus, the transformation of the judges' role as a remote agent communicating with the parties mostly in writing into an active and direct participant in the resolution of the judicial controversy. Immediacy requires that the judge adopts decisions based on first hand knowledge of the process and derived from his active participation in, inter alia, hearings, witness examination and direct interaction with the parties. The second quality dimension is the introduction of pro-activity in case management, a crucial component of any delay reduction strategy. Judges must change their present subordination to the pace and agenda of the parties and pursue, as a priority public interest, swiftness in conflict resolution. As part of the swiftness elements, judges must ensure strict adherence of litigants to principles of good faith and equality of opportunity among litigants and address squarely and expediently issues arising from conflicting juridical or social values. A third dimension of quality refers to the fairness and soundness of the judicial reasoning judges should exercise in resolving disputes. The prevailing rule-oriented and formalistic judicial reasoning should gradually leave room to enable a more inductive and principled based judicial reasoning process to take hold. This would ensure a closer identity between judicial decision making and the juridical principles and social values prevailing in a society, thus, enhancing the norm creation function of modern judiciaries. Judicial decisions should also base the non-legal aspects of the controversy on sound scientific and technical information and judgements. Current mechanisms and criteria for the appointment of court experts prevent in most cases acquiring high caliber scientific and technical knowledge to underpin judicial decisions. The issue of corruption in the judiciary. The Judiciary's standing before public opinion in Colombia is y affected by issues of effectiveness in the provision of judicial services, the degree of independence of the judicial branch and from a widespread perception that the system lacks integrity. Judicial delay -the main challenge identified under this project- seems to be at the forefront among the problems affecting the dispense of justice. The proposed project is also expected to contribute to improve the Judiciary's integrity by developing an environment that precludes or mitigates the incidence of corrupt practices. As referred above, the introduction of immediacy in the conduct of proceedings, the need for judges to decide issues in hearings under the scrutiny of the public and the need to back those decisions on socially relevant values, are all elements that will contribute to improve the credibility of the Judiciary as an instrument to solve social and inter-personal conflict. By the same token, these measures will substantially increase transparency in judicial operations and constitute an effective deterrent for corrupt practices. The SCJ is expected to be closely involved in other activities being undertaken by the Bank in the fight - 7 -  against corruption. The Bank is working with the National Program for the Fight Against Corruption headed by the Vice President of the Republic with the aim of defining a comprehensive program for the fight against corruption that will enlist the participation of all relevant social actors involved in anti-corruption activities. Proposed Project Change Strategy. The complexity of the judicial organizational structures points towards the need for a multifaceted reform strategy. This strategy should include initiatives in the cultural, normative, organizational, technological and logistic aspects of judicial conflict resolution. As with any other type of organization, to introduce change in a judicial organization some basic preconditions must concur, namely, there should be a sense of crisis and dissatisfaction with the status quo, high level of support for the introduction of reforms within the organization, and the leadership should be committed to, and have clarity on the direction of, the proposed change. Thereafter, the organization should define a clear, straightforward path of change which the leadership feels amply excited and empowered to push forward. Unfortunately, some of these prerequisites are only partially in place in the case of the Colombian judiciary. The Colombian judiciary has a clear sense of the need to improve the rendering of judicial services to the population and is intensely aware of the level of dissatisfaction with judicial performance in broad sectors of society. Because of various circumstances -i.e., too much reliance on legislation as a means to bring about change and limited organizational capacity to plan and implement reform strategies- there has been limited progress in improving judicial performance. In view of the limited experience with change initiatives, the possibilities of effecting rapidly implemented, massive change in this type of organizations are low. This constitutes a clear lesson from regional experiences in promoting other initiatives of judicial reform. On the upside, the Colombian Judiciary presents some promising opportunities: (i) members of the leadership are fully aware of the need for change and are strongly committed to bring about reforms; (ii) there is growing awareness in the judicial rank and file for the need to change and there are increasing numbers of isolated pilots attempted in various cities to improve the handling of disputes The most promising of those initiatives has been the process of change initiated by a group of judges in the Municipality of Itagui in the Department of Antioquia. This initiative has been able to introduce significant improvements in the standard of service afforded to the public by pooling the secretarial and administrative services provided by the various courts in one central administrative unit. This initiative, however, has not dealt with the need to improve delay and congestion and presents poor results in those areas. The Project preparation team has worked intensively with the judges of Itagui to reflect the lessons of their experience in this project. T he changes in the formal organizational structure proposed under the LIL are substantially derived from the Itagui experience, and (iii) there is growing consensus in terms of the general direction of the proposed change and the need to develop significant change experiences. The proposed operation would attempt to help build the pro-change constituency and momentum and develop a best practice experience which would provide the basis for a stronger and broader change initiative. -8 -  The project will attempt a hybrid change management approach that will assume a commanding role from the SCJ leadership while leaving the impetus and motivation for reform at lower levels of the judicial echelon, where the change in judicial performance has to actually take place. This approach will also ensure a significant role for extra-judicial players operating in an advisory and monitoring capacity. Under this approach, the judicial leadership would provide the vision, the key corporate targets and a menu of strategies and the qualitative and quantitative indicators. The Judicial Change Teams (JCTs) will agree with the SCJ on the pace, specific contents and sequencing for implementing change in each of the participating cities. The JCT Advisory Boards will make proposals for the formulation of specific performance agreements by each JCT and the SCJ, agree with them on their respective roles and responsibilities in the implementation of a JCT change strategy and participate in the evaluation and monitoring of the respective performance agreements. The JCTs will be composed of the members of each of the participating civil circuit courts and undertake to meet specific performance indicators consistent with the proposed change strategy. Within this hybrid approach, the leadership would provide in a top down manner the hardware items of the reform strategy (including the institutional legitimacy) and enable the JCTs to develop a participatory dynamic that focuses on the software, mostly cultural/competencies elements of the strategy. As part of the LIL exercise 5 JCTs would be established, one for each of the cities of Bogota, Cali, Medellin, Barranquilla and Bucaramanga, with a composition of 5-10 circuit judges (from 30 to 50% of the current circuit judges in each city) and the professional and administrative staff of each of the courts. In view of the pilot nature of the operation, the legal agreements will envisage the possibility for the SCJ and the Bank to agree to changes in the cities and type of courts in which the JCTs will be established without requiring a formal amendment of the agreements. The activities initiated with the JCT of the city of Bogota, comprising 17 judges and the respective court personnel, has shown the extraordinary potential of this approach as it is already generating positive change in their respective courts and developing a team spirit that had been lacking in the past. JCT Advisory Boards will consist of representatives of: (i) non-governmental organizations and academic institutions involved in legal and judicial reforrn issues; (ii) bar associations; (iii) justice services users; and (iv) mass media. To enable the participatory dynamic to take hold three key measures will be undertaken. One, the judicial leadership will strongly endorse the change initiative and put in place an incentive framework that will induce the JCTs to undertake proactive and innovative change. Up to know, participatory change initiatives emerging from enthusiastic rank and file members have not been actively recognized by the judicial leadership. Two, the whole change process in each JCT will be facilitated by a project coordination unit reporting to the SCJ. This unit will ensure that all inputs required by the JCTs in terms of software (change management advisory, training, etc.) or hardware (improved filing systems, computerized information systems, etc.) to bring about change are provided in a timely and adequate manner. Third, both the SCJ and the JCT leadership will allow an active role for the JCT Advisory Boards in the various phases of implementation of the -9-  change strategies. The hybrid strategy, with the involvement of the actors referred above, will be ultimately reflected in a performance agreement between each of the JCTs and the SCJ which will lay out the various co3nponents of the reform strategy, the pace of change proposed, the sequencing and articulation of the various components and the specific performance targets to which each JCT will be accountable. 3. Learning and Development issues to be addressed by the project: The proposed operation fits squarely with the features of the Learning and Innovation Loan instrument. The Project is modest in size, as it has been designed as a pilot operation involving so]ne 37 civil circuit courts. The focus of the Project is the testing of a participatory and comprehensive organizational change strategy which attempts to tackle concurrently the key lex ers of the courts' organizational structure, including its culture, human resource capabilities and competencies and work processes. Each of the specific project components is seen as part and1 parcel of the strategy contributing to deal with specific elements of the prevalent court organizational structure. This strategy, as a means to bring about judicial change, contains two innrovative features which, if proved valid, would make a significant contribution towards improving judicial conflict resolutions services in Colombia and probably in many other judiciaries in. the developing world. The first innovation attempts to deal with the very limited experience with change that has prevailed within the judicial systems in the Region and which has prevented bringing about significant improvements in judicial services. The Project is introducing as an original feature, and will attempt to test, a hybrid change strategy (discussed above) which is aimed at gradually building up a pro change constituency within the judiciary by providing judges and judicial staff an active role in the change process. Thus, project implementation will enable us to determine whether the proposed change strategy will generate a significant change dynamic within the various groups of participating judges and contribute to breed a virtuous demonstration effect within the judiciary. The second innovation deals with the traditional custom of attempting judicial change mainly through the introduction of legislative changes or reforms in the formal organizational structure of courts. These attempts have had limited incidence in improving the courts day to day conflict resolution functions. The proposed operation seeks to sidestep these traditional approaches to generate judicial change and focuses instead on a comprehensive organizational change strategy ainied at tackling concurrently critical institutional and organizational factors affecting the way courts deliver judicial conflict resolution services. The strategy will specifically privilege corporate culture and improved competencies as the driving forces that may generate improved court performance. These elements will be complemented with hard components (formal organization structure, information systems and facility rehabilitation) which are intended to contribute to increase court productivity. It is expected, therefore, that project implementation will enable us to ascertain whether the focus on corporate culture and improved competencies as the driving forces of change, and the strategic orientation and content of those components, are the appropriate levers in improving court performance. - 10-  4. Learning and innovation expectations: O Economic X Technical C Social Z Participation Zl Financial 1 Institutional El Environmental 3 Other The proposed LIL will be deemed successful if both basic innovations are duly implemented (i) that the Project through its participatory method is able to generate a strong pro-change alliance within the Judiciary; and (ii) that the various project components are able to change the courts towards team-based, result-oriented organizations that genertate the outputs described above as Output Indicators. In order to assess the progress and results derived from the learning experience, annual independent assessments of performance by the various JCTs will be undertaken. If the Project is deemed successful, the expected outcome is that the innovative elements tested in this operation would be mainstreamed as the best practice for all conflict resolution services provided by the judiciary in the civil, labor and family courts. The specific strategy for replicating this experience on a nation-wide basis and the potential Bank involvement would be discussed with the Government and the SJC in due course. The Project's success would significantly minimize the current risk of attempting judicial change since the LIL would have helped developed a solid pro change constituency, proven the proposed strategy as valid and effective one and generated a virtuous demonstration effect for the rest of the court system. C. Project Description Summary 1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown): The proposed project will consist of three distinct but highly interrelated parts. PART A: COMPREHENSIVE CHANGE STRATEGIES FOR PARTICIPATING JCTs The proposed project will support a comprehensive organizational change process in 37 participating civil circuit courts in the main urban centers of Colombia aimed at generating notable improvements in the expediency and quality in the provision of conflict resolution services and in the productivity of judicial resource use. The comprehensive nature of the change strategy derives from the attempt to tackle concurrently the key levers of the courts' organizational structure, including its culture, human resource capabilities and competencies and work processes. The comprehensive change strategy to be adopted by each of the JCTs will consist in a combination of the various components described below with the objective of attaining some specific performance targets. Following you will find a brief description of each of the components that the JCTs may select in order to construct their respective change management strategy. - 11 -  Cultural Change Component. The project will establish a discrete line of activities aimed at changing the prevailing cultural traits prevailing among the various JCTs and the staff of the vaIious participating courts. The project will support a change management process with each of the JCTs, including the definition of the proposed change strategies and corresponding adjustmnents in the prevailing judicial culture. The cultural module will involve pilot courts carrying out diagnosis of their prevailing cultural traits, their congruence with the intended changes and the promotion of pro-change values such as leadership, innovation, team work and client responsiveness. The obJlective is to generate team norms and values that will be congruent with the changes in case management and work processes promoted under the Project. For this purpose, the project wLll finance expert assistance to work with the JCTs and other critical actors in designing and putting in place a change management strategy that underpins the reforms aimed at improving justice delivery. This phase of the cultural change process culminates with a definition by each of the JCTs of their vision and mission as a team, the strategies to bring about their new vision and mission and the corresponding performance indicators. Human resource competencies and capabilities component. Improvements in the competencies an(I capabilities of the participating civil circuit courts, particularly of the judges who are expected to assume a leadership role in the change process, constitutes a critical element of the proposed change strategy. The training program will seek to introduce the modem party disposition paradigm and its practical consequences by discussing with the participating judges in a highly interactive mode the implications of the change proposed at three levels of knowledge: (i) jurisprudence elements supporting the proposed case management changes; (ii) the legislative/precedent framework enabling the introduction of the proposed changes in case management; and (iii) the skills and technical abilities that would improve effectiveness in implementing the proposed changes, i.e., the effective management of hearings, negotiations and alternative dispute settlement techniques. The training process will cover a six month period that will be divided in two distinctive phases: (i) a series of intensive workshops for a total of about 15 days covering both theoretical and case discussions; and (ii) four to five months of tutoring in the interim periods between the various workshops aimed at applying the new case management policies in the day to day judicial practice. The terms of reference for the proposed training program, including the change in the jurisprudence paradigm attempted through this training is available in the project file. This terms of reference have been discussed with the leadership of the SCJ, of the JSRLB and the judges of the JCT of Bogota. The core of the training effort will be focused on the judges presiding each of the participating couirts and some of their key professional assistants. The project will also support training (i) for participating court staff on the overall change effort and the technological and organizational changes that will be implemented as part of the project; and (ii) for relevant judicial actors -lawyers, court experts, etc.- on their new role and functions derived from the proposed changes in conflict resolution services. The training will also be extended -although in a less intensive manner- to other teams within and outside the judiciary to ensure that the change process starts to permeate beyond the pilot courts. - 12-  Organizational structure change. The Project will support technical assistance to introduce critical changes in the circuit courts' organizational structure. These changes are congruent with the proposed case management reform and contribute to improved court productivity. Although the project would provide flexibility to finance different initiatives in this field the following matters have already been identified: * Unbundling of judicial and administrative activities. A major focus of organizational change will consist of removing judges from handling administrative matters and ensuring that the jurisdictional functions -undertaken proactively and with immediacy- are assigned to a strong and qualified team within the court under the judge's direct leadership. Administrative functions currently performed by courts (in the case of the executive process, well over 50% of total process duration) would be eventually removed from the judges' managerial responsibility. This component will require the financing of expert assistance in both administrative and organizational management for purposes of designing the various reform alternatives and implementing reform initiatives in the pilot courts. The SCJ, with the assistance of the PHRD Grant, has hired a firm that has carried out a diagnosis and proposed some alternative court organizational structures.Based on those alternatives, the SCJ has approved some new forms of judicial organizations which will be tried under the proposed project. As part of the LIL experience, the organizational experts will work together with the JCTs in implementing and evaluating the impact of the alternative organizational models proposed. It will be left to the JCTs to decide the pace and sequencing of the organizational changes. The organizational experts will assist the JCT in implementing the changes and training staff in their new roles and functions. - Improving the provision of expert advise services to the courts. A study to improve the utilization by courts of experts on specialized technical and scientific matters is currently underway. The proposed project will finance the technical assistance necessary to implement the changes that are adopted by the judicial authorities in this field. * Introducing changes in the courts' work processes to enable the changes in case management and improve user service. At this stage two main areas of work process changes have been identified, namely, simplification of a number of administrative processes dealing with judicial notices, judicial deposits, etc., and strengthening the use of hearings as a key tool to ensure immediacy and expedite the resolution of judicial controversies. It is expected that other process initiatives that emerge from the change process could also be supported under the loan. The proposed project will finance the provision of technical assistance and investments in information systems, equipment and other elements required to introduce the proposed process changes in the courts' operations. Information systems. The Project will support the installation and initial operation of a computerized case management system among the participating civil circuit courts and, eventually, other courts whose experience in this field is deemed relevant for the change initiative. - 13-  The new case management software was commissioned by the SCJ which has also initiated the acquisition of hardware for the installation of the system. The software has been tailored in accordance with the Colombian procedural regulations and has built-in a high level of versatili y that matches the proposed organizational and institutional reform initiatives. This component will provide for: * The acquisition of additional software and hardware to install the computerized court management system, including the financing of ancillary civil works, materials and equipment; * The provision of technical assistance and training to make the system operational; and * The provision of supplementary services to convert the existing court manual files into electronic files. The LIL will finance primarily the two latter elements. The Judiciary will contribute the counterpart funding for this project by primarily financing the software and hardware iterris of the information system. Courlfacilities. The project will support improvements in court facilities to enable the adjustment of the existing court infrastructure to the requirements of the new case management systems and to ensure improvements in productivity. Two key areas of facility improvements have been identified: * Introduction of modem court filing systems to improve the handling and organization of case records and make it compatible with the introduction of hearing-based procedures. The present filing and documentation system lack systematic classification and organization and has serious shortcomings in terms of safety, handling and classification of information and conservation techniques. * Physical infrastructure improvements mostly related to the modification of the courts' plant layout to allow for hearing rooms, computerized case management, court administrative service centers and modem filing systems. The infrastructure improvements will be complementary to SCJ's infrastructure investment priorities. The project will finance the materials, equipment, fumishings and civil works related to these various facility improvements. - 14 -  PART B: DEVELOPMENT OFANAPPROPRIATE POLICYAND SUPPORT ENVIRONMENT FOR THE PROPOSED CHANGE STRA TEGY Communication andparticipation initiatives. The Project will support a broad communication and participatory strategy by the SCJ aimed at ensuring the support from the public and the involvement of relevant actors in the proposed judicial change initiative. The communication strategy will consists of events, publications, and other means deemed necessary to promote the proposed change effort among judicial staff, media, relevant judicial actors and public opinion at large. The participatory efforts will consists in events, technical assistance and other activities aimed at ensuring the involvement of a wide range of actors in the proposed change initiative. Performance evaluation and rewards. The Project will support two initiatives to introduce changes in the present scheme of performance evaluation: * It will provide technical assistance to assess the objectives, performance and impact of the current performance evaluation system and to implement a revised system which is congruent with the proposed organizational change strategy that would be applicable at least initially to the JCTs. The latter could also include the necessary information systems, equipment and training. * It will institute a pilot program of individual and team incentives, initially focused in the participating civil circuit courts, to reward attainment of the performance indicators by the various JCTs and to promote activities within the judiciary related to the proposed organizational change initiative. PART C: PROJECTMANAGEMENT. MONITORINGANDEVALUATION. The project will finance the costs related to the management, monitoring and evaluation of the proposed organizational change strategy. It is envisaged that a project coordinating unit will be established within the SCJ which will undertake the responsibility for ensuring that the demands arising from the JCTs for implementing the respective change initiatives are properly met. The coordinating unit will liaise with the corresponding technical units within the SCJ to ensure appropriate use of the existing institutional capacity. The project will finance the staffing, equipment, travel and operational costs related to the operation of the coordinating unit and the technical assistance requirements arising from project management. - 15-  0Indicative Bank- 0 : 1;of Component sector costs %/ of financing Bank- (US$M) Total (US$M) financing PART A. Comprehensive Change 5.43 81.5 3.91 78.2 Strategies. PART B. Development of Appropriate 0.46 6.9 0.39 7.8 Policy and Support Environment. PART C. Project Management, 0.77 11.6 0.70 14.0 Monitoring and Evaluation. _ Total Project Costs 6.66 100.0 5.00 100.0 Front-end fee 0.00 0.0 0.00 0.0 Total Financing Required 6.66 100.0 5.00 100.0 2. Institutional and implementation arrangements: Institutional arrangements. The SCJ would assume the main responsibility for program implementation. For this purpose the SCJ will enter into a Project Agreement with the Bank. The SCJ is governed by an Administrative and a Disciplinary Board composed of six and seven magistrates, respectively. The Administrative Board has assumed direct responsibility for directing the project. The SCJ's administrative structure is designed along functional and territorial lines. The functional responsibilities are assigned to 6 units: planning, training, career development, knowledge and documentation management, physical development and auditing. Territorial functions are carried out by 22 departmental units, largely corresponding to the main political subdivisions in Colombia. In the case of the Project, it will have direct relationship with the five departmental units where the five main urban centers are located. A Project Coordination Unit has been established to advance project preparation activities. In that capacity, the PCU has been responsible for the preparation and pilot advancement of some of the activities envisaged under this LIL. The PCU will report to the Administrative Board. In the discharge of its duties the PCU will: (i) respond to the demands and initiatives arising from the JCTs in carrying out the various project components; (ii) ensure an effective liaison between the JCTs and the SCJ and, particularly, promote an adequate utilization of the SCJ's installed institutional capacity; and (iii) ensure compliance with the Bank's requirements in the areas of procurement, disbursements and financial management. The SCJ agreed during negotiations to maintain the PCU during the whole implementation of the LIL adequately staffed and provide the PCU sufficient administrative and operational autonomy to enable an eff icient implementation of the project. During the course of project preparation the PCU has been brought up to an adequate operational level. However, a phase-in process will be required to insert the PCU within the SCJ's administrative structure. As a condition of loan effectiveness, the SCJ would have taken actions to establish the PCU and hire the core professional staff, During negotiations it was agreed that the core professional staff would consists of the Project Coordinator and the professionals responsible for cultural change and training and for the management offinancial and administrative affairs. The proposed JCTs and each of the courts comprising the JCTs will constitute the key organizational units for the Project. This will be the - 16-  point at which the change, and the various activities in which it will reflected, will be initiated, agreed and implemented. In this respect, the formal structure of the SCJ (including the PCU) under the present design, is expected to respond and help implement the change initiatives emerging from each of the JCTs. Implementation arrangements. The project will be implemented in a period of three years ending on December 31, 2004. The Closing Date for the project would be June 30, 2005. In view of its inherent experimental nature, the proposed LIL will not have from the outset a detailed implementation plan. The specific implementation plans will be agreed between the SCJ and each of the JCT pilots through performance agreements that will include the proposed change management plan proposed for the respective JCT during the following calendar year and the related performance targets for the respective JCT. It is expected that the project will have a gradual build-up of implementation experience by incorporating annually one or two JCTs. In this way, the SCJ and the PCU will be able to plan and ensure a steady growth in their operational capacity and benefit from the lessons and experiences obtained under each of the prior JCT pilots. As part of the preparation effort some pilot activities have been initiated with a group of 17 civil circuit court judges in Bogota. The Bogota JCT will be the first JCT expected to undergo the process of formulation and negotiation of a performance agreement with the SCJ. During negotiations it was agreed that SCJ will submit to the Bank the Bogotd JCT performance agreement not later than November 30, 2001. It is expected that the Bogota JCT performance agreement, as well as all the other performance agreements envisaged under the Project will follow the following process: after having undergone a preliminary phase of familiarization with change processes, the JCT will define its change strategy for the following twelve-month period within the policy framework and broad objectives established by the SCJ. The PCU will discuss, on behalf of the SCJ, with the JCT the consistency and degree of effort implied by the proposal, ensure that the agreed output indicators are fully consistent with the project's overall objectives and that there is congruence with the expected content and degree of change effort. Once the PCU feels it has reached a meaningful agreement, it will submit the agreement for approval to the SCJ. The agreed performance agreement, including the output indicators, will constitute the main guide for project implementation in each of the JCTs and provide the basis for evaluating each JCTs performnance. During negotiations it was agreed that, except for the timing of the Bogota JCT case referred above, the SCJ will submit to the Bank not later than October 31 in each year (starting with the year in which a JCT initiated its participation in the project), a performance agreements for the participating JCT congruent with some basic criteria agreed between the Bank and SCJ, namely, target performance indicators in terms of delay reductions and improvements in productivity based in reliable base lines and seeking improvements amounting to about 30% in a period of two years. SCJ also agreed to carry out an independent assessment ofperformance by each JCTfor the previous calendaryear, not later than June 30 in each year; exchange views with the Bank and DNP on such report by September 30 of the respective year and discuss the results of the assessment and consultations with the Bank and DNP with each JCT and their respective advisory board of extra-judicial actors not later than October 31 in each year. - 17-  Current implementation plans for the Project call for initiating the implementation of a performance plan with the JCT of Bogota and initiate the preparatory work for the performance plan for the JCT of Medellin in calendar year 2002. During the second year of implementationi the project would expand its activities to the cities of Cali and Barranquilla. In its third year of implementation the project intends to initiate activities in the city of Bucaramanga. The proposed implementation plan is tentative and may be modified during Project implementation by agreement between the SCJ and the Bank to respond to changing priorities or lessons from experience. In the initial stages of project implementation, the SCJ will plan and undertake three types of activities: (i) pre-investment activities (consisting mainly of cultural change and training events i aimed at establishing the ground work for the setting up of a JCT in those cities where a performance agreement has not been finalized; (ii) the investment and other activities comprised in a performance agreement agreed with a JCTs; and (iii) support activities to improve the project policy environment. Once the Project has extended to all the participating JCTs, the investment plan will consist mostly of the aggregate performance plans agreed with the participating JCTs. During negotiations, SCJ agreed to submit to the Bank not later than December 15 in each year, an annual implementation plan for the Project that will contain the overall investment program for the Project for the coming calendar year, including the specific investments envisaged under the change management strategies for each JCT, the pre-investment activities for JCT in formation proposedfor the following year and the overall support activities for the Project. The Bank will review and approve the said annual implementation plan once it is satisfied it is congruent with the proposed Project objectives. A Project Manual has been prepared that describes the detailed arrangements agreed for purposes of project implementation. As a condition of Loan effectiveness, the SCJ would have furnished to the Bank an officially sanctioned Project Manual in terms satisfactory to the Bank. During negotiations, SCJ also agreed that changes in the Project Manual would be made only after obtaining agreement from the Bank. The administrative arrangements section contains the detailed project organization, functions and responsibilities of the various actors and the administrative policies in project implementation. Procurement arrangements provided in detail in the Manual are described in Annex 6 to this Report. The financial arrangements section includes, inter alia, the revenue and disbursement flows, the opening of a special account in the Banco de la Repuiblica under terms and conditions described therein and the maintenance of separate accounts for the project within SCJ's accounting system. During Project preparation SCJ has made significant progress towards defining and implementing a satisfactory financial management system. The system, however, will be highly dependant on the hiring of an agent that will provide key project management assistance. As a condition of Loan effectiveness, it has been agreed that SCJ would have hired a procurement and financial agent under terms of reference, and with qualifications and experience, acceptable to the Bank. - 18-  3. Monitoring and evaluation arrangements: Monitoring and evaluation. The project currently provides for implementation, output and impact indicators to assess progress in meeting the project implementation targets and objectives. It is expected that the specific implementation indicators for each of the JCT will be agreed upon by the SCJ and each of the JCT as part of the change management process and will consist mainly in reduction in process time for case disposition and the number of cases disposed per judge per year. A number of qualitative output indicators described in the performance indicators section of this report will be assessed on an annual basis by independent experts hired by the SCJ. It is expected these consultants will undertake surveys of judges, staff, users and other key actors to assess progress in the proposed change strategy. The project will finance the consulting services (including surveys) and required equipment and software linked to monitoring and evaluation. During negotiations, the SCJ agreed to introduce, not later than December 31, 2002, adjustments to its current performance evaluation system to ensure that it does provide clear incentivesfor judges and staffparticipating in JCTs to perform in accordance with the standards and objectives supported by this operation. D. Project Rationale [This section is not to be completed in a LIL PAD. Rationale should be implicit in paragraph B: 3.] E. Summary Project Analysis (Detailed assessments are in the project file, see Annex 8) 1. Economic (see Annex 4): [For LIL, to the extent applicable] O Cost benefit NPV=US$ million; ERR = % (see Annex 4) O Cost effectiveness * Other (specify) N.A. 2. Financial (see Annex 4 and Annex 5): NPV=US$ million; FRR = % (see Annex 4) [For LIL, to the extent applicable] Fiscal Impact: Because of its pilot nature, the project is not expected to generate significant additional fiscal responsibilities. The project is, however, intended to derive some lessons regarding the expected fiscal requirements arising from a judiciary that provides quality conflict resolution services. Improvements in judicial performance quality present a special challenge for policy makers. The poor performance of the current judicial system generates a double effect in terms of minimizing fiscal costs: (i) it dissuades citizens from seeking judicial relief and opt for other forms of conflict resolution; and (ii) can automatically adjust any mismatch between demand and supply ofjudicial services by increasing judicial delays, i.e., it transfers to the litigants the cost of the supply shortfall by extending the time period in which a case will be resolved. Under the fiscal perspective, the maintenance of the present system would seem attractive since it transfers the - 19-  hidden costs to litigants and to society at large -the latter in terms of weakening the rule of law environment. On the contrary, the introduction of immediacy and other judicial quality improvements may imply an increase in justice expenditure as a result of two combined effects, namely, an increase demand by citizens for improved judicial services and the need for a lower case/judge ratio as judges will invest a higher amount of their time per case through their direct and active involvement in case management. The basic working hypothesis for this operation is that increased judicial inputs derived from improvements in judicial performance quality can be compensated by substantially improving court productivity. Thus, the project would attempt to be fiscally neutral despite an expected increase in judicial demand as a result of improvements in court performance and an increased dernand of the judges' time per case. The main sources of productivity improvements would be the following: (i) focusing judges in juridical matters and removing them from their current involvement in purely administrative/operational matters; (ii) reducing process delay through an active and decisive role of the judge in case management; (iii) introducing computerized case management systems; (iv) developing court teams that would enable the judges to utilize specialized assistance in case management; and (v) rationalizing the courts organizational structure. The pilot nature of this operation will enable the authorities to test the potential of increasing judicial quality while maintaining fiscal costs without generating extraordinary claims on the fiscal b'udget. However, if this experience would show that there can be no increase in judicial quality without some increase in judicial expenditures it would be up to the judicial and fiscal authorities to agree on the type of judicial quality society can afford. In this case, the project would provide a reliable indication of the cost of quality justice provision in an efficient environment. 3. Technical: [For LIL, enter data if applicable or 'Not Applicable'] A key technical issue dealt during the process of project preparation was the room provided by the existing legislative framework to undertake the proposed changes in case management. After thorough analysis it was concluded that the current legislative framework has been systematically misapplied by judges that rather than active directors of proceedings have chosen to assume a wait and see attitude until the stage of deciding the case. Thus, the pace and direction of the process has been typically left for the parties to decide. Reversing the prevailing practice will not be simple since there are vested interests to maintain the status quo. In fact, it is expected that parties unsatisfied with the new state of affairs may bring disciplinary claims against innovative judges that attempt, themselves, to put order and speed-up the resolution of disputes. Despite these potential challenges, the legal foundations in which the project is based are strong and clear. In fact, the project can be protrayed as an attempt to set right the use of the law. 4. Institutional: 4.1 Executing agencies: The SCJ is the project executing entity. The SCJ is a corporation established by the 1991 Constitution responsible for the planning, human resource management and overall management - 20 -  function of the Judicial Branch. In the discharge of its duties the SCJ is autonomous from the various court systems -the constitutional, criminal, administrative and civil and social jurisdictions. The SCJ is governed by an Administrative and a Disciplinary Board composed of six and seven magistrates, respectively. The Administrative Board has assumed direct responsibility for directing the project. 4.2 Project management: A Project Coordination Unit has been established to advance project preparation activities. The PCU will comprise a limited administrative structure (initially three professionals) and headed by a unit director whose qualifications and experience are satisfactory to the Bank. 4.3 Procurement issues: The demand driven nature of the operation -that leaves to each of the GJCs the decision regarding the timing and sequencing of the various project components- does not warrant the preparation of detailed procurement plans. Procurement activities related to the project are expected to be relatively straightforward. An indicative Procurement Plan for the first year with the most likely implementation scenario has been prepared and discussed in negotiations. All contracts related to the soft/cultural/capacity building activities of the project will be of a national scope and there is a high probability that the firms that are initially selected for the city of Bogota would continue to perform the same role in the other participating cities, subject to continued satisfactory performance. It may be in the interest of SCJ and the Project to have the contract extended under similar terms and conditions for the reasons referred above. This would imply a new contract that would be put out by the SCJ and financed under the Loan. A similar situation may happen in the case of the communications, organizational change and training components, if the firms perform in a satisfactory manner and it is in the SCJ's interest to continue the assistance of such firms. 4.4 Financial management issues: All financial management matters of the project will be under the direct responsibility of the PCU. It will rely heavily, however, on the infrastructure and systems operated by the Accounting Department of the SCJ. The accounting systems of SCJ and the staff responsible for their management were assessed and found satisfactory as part of the Financial Management Assessment undertaken during project preparation. Some minor adjustments will need to be made to the current accounting system in order to enable it to conform to Bank requirements, particularly in the record of transactions in currencies other than the Colombian peso. The Financial Management Assessment provided as a key recommendation the need to strengthen the PCU with a professional with substantial experience in the management of Bank financed projects. 5. Environmental: Environmental Category: C (Not Required) 5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (including consultation and disclosure) and the significant issues and their treatment emerging from this analysis. N.A. 5.2 What are the main features of the EMP and are they adequate? N.A. - 21 -  5.3 For Category A and B projects, timeline and status of EA: Date of receipt of final draft: N.A. 5.4 How have stakeholders been consulted at the stage of (a) environmental screening and (b) draft EA. report on the environmnental impacts and proposed environment management plan'? Describe mechanisms of consultation that were used and which groups were consulted? N.A. 5.5 What mechanisms have been established to monitor and evaluate the impact of the project on the environment? Do the indicators reflect the objectives and results of the EMP'? N.A. 6. Social: 6. I Summarize key social issues relevant to the project objectives, and specif,y the project's social dev-lopment outcomes. N.A. 6.2 Participatory Approach: How are key stakeholders participating in the project? The proposed project has from the outset identified participation as the crucial tool to bring albout effective judicial change. The only possibility for an organization to bring about significant change in the delivery of conflict resolution services is through increasing the internal and external dissatisfaction with the status quo and putting together coalitions of change agents within and outside the organization that would have sufficient weight as to attempt innovation. To generate momentum for change a deliberate effort has been made to hiave as many stakeholders possible involved not only in consultations regarding the policy options available but also in terms of sharing in the decision making process among the strategic options available and to privilege consultation and collaboration with the rank and file judges that have been identified as those more open to change and innovation. Thus, although the overall project design has been agreed witlh the judicial leadership, a significant number of members of the organization at various levels have made significant contributions in identifying and prioritizing the various elements of the design. Participation is also considered crucial in the implementation of the project which is basically a participatory change strategy aiming mostly at a change in culture as a crucial factor in bringinlg about improvements in quality and efficiency of courts. The possibility of making a dent in the up to now impenetrable judicial culture of passive, individualistic and formalistic judges and courts' staff will depend mostly in the ability of the proposed JCT to develop a new form of team culture. The JCT is, however, not an artificial invention but a form of innovation that is already taking place in some isolated regions in Colombia as a result of the initiative and will to change of spontaneous groups of judges. The most lucid example of it is the experience in the city of Ita,ui. The proposed project would differ from those spontaneous initiatives in that it would seek to generate strong leadership support for the JCTs which would be valued as the best practice and innovators within the organization. Thus, participation in the rank and file is the crux of the change strategy that is proposed in the project. 6.3 How does the project involve consultations or collaboration with NGOs or other civil society organizations? - 22 -  The key strategies to be pursued in improving conflict resolution mechanisms in Colombia were identified in a two-day workshop convened in April 1998 with participation of the leaders and key representatives of the Judicial Branch -including the Presidents of the Supreme Court and of the Council of the Judicature- of the Executive Branch -including the Minister of Justice and senior officials of the Planning Department- and representatives of the academia and NGOs dealing with justice matters. The group carried out a detailed diagnosis of the main issues confronting the justice system including the demand by the public for effective conflict resolution and the responsiveness of the judiciary in meeting the conflict resolution demand. 6.4 What institutional arrangements have been provided to ensure the project achieves its social development outcomes? The establishment of the JCT Advisory Boards which have been discussed above. 6.5 How will the project monitor performance in terms of social development outcomes? Through the involvement of the JCT AdvisoryBoards in monitoring and evaluation. 7. Safeguard Policies: 7.1 Do any of the following safeguard policies apply to the project? Policy Applicability Environmental Assessment (OP 4.01, BP 4.01, GP 4.01) 0 Yes * No Natural Habitats (OP 4.04, BP 4.04, GP 4.04) 0 Yes 0 No Forestry (OP 4.36, GP 4.36) Q Yes * No Pest Management (OP 4.09) 0 Yes * No Cultural Property (OPN 11.03) 0 Yes 0 No Indigenous Peoples (OD 4.20) O Yes * No Involuntary Resettlement (OD 4.30) 0 Yes * No Safety of Dams (OP 4.37, BP 4.37) 0 Yes * No Projects in International Waters (OP 7.50, BP 7.50, GP 7.50) 0 Yes 0 No Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60)* 0 Yes 0 No 7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies. N.A. - 23 -  F. Sustainability and Risks 1. Sustainability: This section is not to be completed in LIL PAD. 2. Critical Risks (reflecting the failure of critical assumptions found in the fourth column of Annex -.1 Risk Risk Rating Risk Mitigation Measure From Outputs to Objective I) issatisfaction of key constituencies M Develop a communications strategy that will -judicial leadership, lawyers, clients of the make available to all groups concerned the judicial system, judicial employees and improved results of the participating civil court. public opinion- with the LIL supported changes on judicial case management. Failure to obtain support from the M Develop detailed proposals on the legi.slative political establishment in introducing changes needed to introduce full hearing-based legislative reforms to support the court procedures and promote their advantages among organizational changes on a system-wide all relevant groups, particularly members of the basis. judiciary, the political establishment and public opinion. F ailure to reach consensus among judicial M Develop substantial evidence on the significant leadership and economic authorities on social welfare returns derived from improved the level of fiscal resources necessary to judicial conflict resolution services and the implant reforms on a system-wide basis. hidden trade-offs derived from stringent judicial expenditure policies. Judges sense that new Human Resources M Introduce condition requiring clear congruence sy stem does not reward the introduction of between incentive system and the introduction of improved judicial processes. improved judicial services. From Components to Outputs Leadership of judiciary fails to generate M The initiation of some of the activities to ensure an environment conducive to change that significant buy-in in the leadership of the motivates the JCTs to act boldly in pursuit change management strategy and refcorm of the proposed change objectives. objectives. Leadership of judiciary does not strongly M Same as above. and consistently back the institutional arrangements proposed for project implementation. Leadership of Judiciary does not approve M Introducing condition requiring clear congruence cir effectively enforce changes on the between incentive system and the improved performance evaluation and incentives judicial services. system congruent with proposed organizational changes. Participant judges do not reflect the M Ensure that the process of selection of the expected high levels of professional participating judges is conducted in accordance excellence and personal integrity. with adequate criteria of leadership, integrity and professionalism. - 24 -  Insufficient availability of counterpart M Ensure that most counterpart contributions are funds. provided up front to reduce the risk of budget cuts. Overall Risk Rating M Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk) 3. Possible Controversial Aspects: N.A. G. Main LoanConditions 1. Effectiveness Condition The following are effectiveness conditions for this Loan: (a) The SCJ would have taken actions satisfactory to the Bank to establish and staff appropriately the PCU. The specific staffing requirements to ensure adequate loan implementation was agreed upon during negotiations; (b) That the Subsidiary Agreement between the Republic of Colombia and the SCJ would have been entered in terms satisfactory to the Bank; (c) The SCJ would have hired a procurement and financial agent under terms of reference, and with qualifications and experience, acceptable to the Bank; and (d) The SCJ will have issued the Project Operational Manual in terms satisfactory to the Bank. 2. Other [classify according to covenant types used in the Legal Agreements.] In addition to the standard conditions regarding the management of the Project and of the proceeds of the Loan, the following are special conditions to be agreed during negotiations: (a) The SCJ will maintain the PCU during the whole implementation of the LIL adequately staffed and provide the PCU sufficient administrative and operational autonomy to enable an efficient implementation of the project; (b) The SCJ will agree to conclude with each of the JCTs on an annual basis and in any case not later than October 31 in each year (starting with the year in which each respective JCT initiated its participation in the Project), performance agreements that set forth the JCTs change management strategy and targets for improved performance during the corresponding calendar year; (c) The SCJ will also agree to carry out an independent assessment of performance by each JCT not later than June 30 of the immediately following calendar year and finish the report of such assessment to the Bank for comments. For such purposes, the SCJ will hire consultants whose qualifications and experience are satisfactory to the Bank; (d) The SCJ shall agree to introduce changes in the Project Manual only after obtaining agreement from the Bank. (e) The SCJ shall agree to carry out the procurement of goods, services and works required for purposes of the Project in accordance with the arrangements set forth in Annex 6; (f) The SCJ will agree to introduce, not later than December 31, 2002, adjustments to its current performance evaluation system to ensure that it does provide clear incentives for - 25 -  judges and staff of the JCTs to perform in accordance with the standards and objectives supported by this operation; and (g) the SCJ will agree to have the project accounts for the calendar year 2002 and thereafter, audited by a private external auditor to be hired by March 31, 2002. H. Readiness for Implementation C] 1. a) The engineering design documents for the first year's activities are complete and ready for the start of project implementation. LI 1. b) Not applicable. El 2. The procurement documents for the first six months' activities are complete and ready for the start of project implementation; and a framework has been established for agreement on standard bidding documents that will be used for ongoing procurement throughout the life of LIL iZ 3. The LIL's Implementation Plan has been appraised and found to be realistic and of satisfactory quality. LI 4. The following items are lacking and are discussed under loan conditions (Section G): The Projects stands ready for implementation. Some of the processes and activities envisaged as part of the organizational change proposal have already been initiated in an experimental basis with the JCT of the city of Bogota. The LIL's implementation plan has been thoroughly d-iscussed and appraised and found to be realistic and of satisfactory quality. I. Compliance with Bank Policies NX 1. This project complies with all applicable Bank policies. El 2. The following exceptions to Bank policies are recommended for approval. The project complies wvith all other applicable Bank policies. Felipe Saez Emesto May Olivier Lafourcade Team Leader Sector Manager/Director Country Manager/Director - 26 -  Annex 1: Project Design Summary COLOMBIA: JUDICIAL CONFLICT RESOLUTION IMPROVEMENT PROJECT Key Performnance Data Collection Strategy Hierarchy of Objectives Indicators Critical Assumptions Sector-related CAS Goal: Sector Indicators: Sectorl country reports: (from Goal to Bank Mission) To improve the judiciary's Gradually improving public * ESW reports *: The improved rule of law social legitimacy and ability opinion regarding the (occasional); will specially protect and to respond effectively to the acceptability and effectiveness * Government reports on benefit the poor since society's justice needs as a key of the courts for conflict judicial indicators and they are most affected by input to ensure the prevalence resolution purposes. improvements in civil violence. of the rule of law and Gradually improving the coexistence (occasional) * Improving legitimacy encourage peaceful access of the poor to conflict and effectiveness of coexistence among resolution services judiciary contributes to Colombians. improvements in governance in Colombian society. *: Improving quality and swiftness of conflict resolution mechanisms contributes to private sector development. Follow-on Development Objective: Colombia's civil, family & labor court systems utilize more efficient and effective conflict resolution methods. Project Development Outcome I Impact Project reports: (from Objective to Goal) Objective: Indicators: To test a participatory and Outcome / Impact Indicators: *: Supervision mission * LIL successes replicated comprehensive change *: Participating civil circuit reports (periodic); in follow-on large scale strategy aimed at tackling the courts are increasingly * Evaluation mission operations; key levers of the courts' recognized as the best reports (mid-term & *: New judicial conflict organizational structure, practice model for civil, ICR); resolution methods based leading to improvements in labor and family courts in * User and judicial on a proactive judge and the judiciary's timeliness, the areas of: (i) a personnel survey reports hearings -backed by a quality and productivity in significant reduction in (mid-term & final); new legislative discharging its conflict processing time for case * Project coordination unit framework- constitute the resolution function. disposition in report on judicial standard for all of participating courts over indicators (annual); Colombia's courts; a two-year period; (ii) *: Increased consensus increased productivity in among governmental the use of judicial authorities on the need to resources (# of cases make increases in judicial disposed by judge per expenditures to meet year); and (iii) increased increased justice demand. satisfaction of users of *: Improved perception by - 27 -  participating courts (e.g., the public on improved lawyers & parties). performance of courts *: Evidence that leads to an increase in the participating civil circuit judiciary's social courts are increasingly legitimacy and standing recognized by their peers among the branches of as the best practice model government. for civil, labor and family courts *3 Increased demand by court users, judicial leadership and public for a switch of all civil, labor and family courts to the new service standard supported by the LIL. +* Evidence of non- participating judges and judicial personnel increasingly adhering to the policy objectives and organizational changes adopted under the LIL - 28 -  1 Key Performance Data Collection Strategy Hierarchy of Objectives Indicators I Critical Assumptions Output from each Output Indicators: Project reports: (from Outputs to Objective) Component: 1. Notable changes in the *. 30 % reduction in * Supervision mission *. Increased dissatisfaction values and norms that processing time for case reports (periodic); of key constituencies prevail among the GJCs disposition in * Evaluation mission -judicial leadership, in terms of client participating courts reports (mid-term & lawyers, clients of the orientation, team work, (compared to baseline); ICR); judicial system, judicial openness to innovation, * Increased nurnber of 4 Project progress reports employees and public clarity in the direction of cases disposed per judge (quarterly); opinion- with the change and per year (above baseline); * Project coordination unit traditional judicial empowerment to * Increased satisfaction of reports on judicial conflict resolution undertake it. users of participating indicators (annual); services and increased 2. Notable improvements in courts (e.g., lawyers & *. Judicial Council report consensus with expediency and quality in parties). on HR reform; introduction of the LIL providing conflict * Improved performance *: Independent assessment supported changes on a resolution services in 37 evaluation and incentive report of LIL successes system-wide basis. participating civil circuit system for JCTs and failures. * Increased consensus courts. developed and among judicial leadership 3. Notable improvements in operational. and political productivity in the use of establishment in judicial resources in 37 introducing legislative participating civil circuit reforns to support the courts; introduction of the court 4. Priority physical organizational changes improvements made in on a system-wide basis; participating courts to * Consensus among judicial facilitate process leadership and economic changes; authorities in providing 5. Colombian judiciary the fiscal resources arrive at an improved HR necessary to implant incentive system for JCTs reforms on a system-wide congruent with proposed basis. change strategy; * Judges sense that new HR 6. Assessment completed of system rewards the LIL successes and introduction of improved failures. judicial processes. -29 -  1 7 7 Key Performance Data Collection Strategy 1 Hierarchy of Objectives Indicators J Critical Assumptions Project Components I Inputs: (budget for each Project reports: (from Components to Sub-components: component) Outputs) PART A: Comprehensive Periodic reports (pursuant to *> Leadership of. udiciary change strategies for contract) by consultants effectively establishes an participating JCTs. assisting in the environment co iducive to To generate notable organizational change change to enable the GJCs irrprovements in quality and process on progress by GJCs and the 37 participating civil expediency in conflict and individual participating circuit courts tc, act boldly in re ;olution services and courts in implementing the pursuit of the proposed pr:ductivity of judicial change initiative. change objectiv;es, resource use. 1. Cultural change. $270,000 *> Project progress reports * Leadership of iiudiciary TA to assist GJCs and (quarterly). consistently basks the hybrid ju licial authorities in the institutional alTangements organizational change proposed for Fraject pracess. execution. 2. Hurnan Resource $700,000 ** Disbursement reports * Leadership of. udiciary has competencies and (quarterly). approved and z rfectively capabilities. enforce changc; on the Training program for performance ce.aluation and participating judges on incentives sys:em congruent ccnflict resolution with proposed improvement. organizational changes. rTraining program for key court staff on technologi- cal and organizational ch anges. Training program for relevant actors (lawyers, cturt experts) on conflict resolution improvement. 3. Organizational structure $170,000 * Audit reports (annual). * Participant ju.l,3es reflect change. high levels of professional * T r X to implement changes in excellence an i personal courts' organizational integrity and demonstrate structure: unbundling of openness to innovation and judicial and administrative willingness tc lead the ,unctions. process of org:aLnizational > T X to improve provision of change. expert advice services to .ourts. * 'f 4 to implement changes on courts' work and administrative process. 4. Information systems. S1,200,000 * Timely availatility of * Software and hardware to counterpart fiunds. ariplement computerized case management system. * r X to make operational case management system. and convert court manual files to electronic files. 5. Court Facilities SI,888,000 *M \dodern court filing systems. phiysical infrastructure - 30 -  improvements to modify the courts' plant layout for hearing rooms, compu- terized case management, court service centers and modem filing systems. PART B: Development of an $360,000 appropriate policy and su- pport environment for the proposed change strategy 1. Communication and participation initiatives. A broad communication and participatory strategy to ensure public support and involvement of relevant actors. 2. Performance evaluation and rewards. * TA on implementation of judicial performance evaluation and incentives. * Introduction of individual and team incentives. PART C: Project management, evaluation and monitoring. 1. Monitoring and evaluation. $150,000 2. Project Management. $450.000 Operation of Project Coordination Unit. - 31 -  Annex 2: Detailed Project Description COLOMBIA: JUDICIAL CONFLICT RESOLUTION IMPROVEMENT PROJECT By Component: Project Component I - US$0.27 million Cultural Change Component. The project will establish a discrete line of activities aimed at changing the prevailing cultural traits prevailing among the various JCTs and the staff of the various participating courts. Discussions with various teams of judges and judicial actors have led us to identify some key cultural traits as significant obstacles to judicial change. Among those traits, three seem particularly relevant in restraining change: (i) the introspective mentality prevalent in judicial organizations leading to the repetition of their traditional tasks and work processes regardless of changes in societies' needs. This mentality has made judiciaries insensitive to increasing demands for improved access and quality of judicial services and defensive in responding to exogenous demands for change; (ii) a low level of result orientation in the discharge of their duties reflected in the impracticality of measuring performance by judicial operators under the existing court information systems. Changing the current non-accountable culture into a results-oriented environment will constitute a major objective of the change management component; and (iii) a hierarchical, top-down governance structure generating fear to innovate and individualism within the organization. Development of a team-based culture that shares values and objectives and works together with the authorities of the SCJ in developing a change initiative would constitute a significant cultural innovation. The Project has identified change in the organizational culture as a critical component of the overall change initiative due to the incongruity between the objective of introducing improved timeliness, quality and productivity in case management and the cited cultural traits. To introduce changes in the cultural set up of the participating courts, the project will support a change management process with each of the JCTs, including the definition of the proposed change strategies and corresponding adjustments in the prevailing judicial culture. The cultural module will involve the staff of the pilot courts in carrying out diagnosis of the prevailing cultural traits, their congruence with the intended changes and the promotion of pro-change values such as leadership, innovation, team work and client responsiveness. The objective is to generate team norms and values that will be congruent with the changes in case management and work processes promoted under the Project. For this purpose, the project will finance change management assistance to work with the JCTs and other critical actors in designing and putting in place a change management strategy that would underpin the reforms aimed at improving justice delivery. This phase of the cultural change process culminates with a definition by each of the JCTs of their vision and mission as a team, the strategies by which they will attempt to bring about their new vision and mission and the performance indicators by which they expect to be evaluated over time. The project design will ensure close coordination and interaction among the consultants assisting in the change strategy effort, those assisting in the field of competencies and capabilities development and those dealing with organizational change. - 32 -  Project Component 2 - US$0.70 million Human resource competencies and capabilities component. Improvements in the competencies and capabilities of the participating civil circuit courts, particularly of the judges who are expected to assume a leadership role in the change process, constitutes a critical element of the proposed change strategy. The training will also be extended -although in a less intensive manner- to other teams within and outside the judiciary to ensure that the change process starts to permeate beyond the pilot courts. The training has been designed as a direct means to promote and underpin a change in the public policy paradigm that has prevailed in the judiciary regarding the role of judges in case management. The prevailing paradigm, designated as the Parties Disposition Principle, has emphasized the prevalence of the private interests of the parties as the driving force in managing civil procedures. Consequently, it has assigned judges a diminished and passive role in the conduct of the proceedings, particularly in the stages of discussion and production of evidence, and concentrated the judges' authority in the stage of final judgement of the case. The practical consequences of this approach -i.e. the failure by judges to assume the protection of public goods such as expediency and an effective pursuit of truth- generated a reaction among continental scholars in the XIX Century aimed at mitigating such adverse effects. The modem disposition paradigm -which prevails in continental Europe- recognizes an enhanced role for judges in civil proceedings. This involvement consists in the judges playing a key leadership role in the management of proceeding aimed at seeking swiftness, economy and quality in the discussions, while guaranteeing due process for the parties. Unfortunately, this modem school of thought has not permeated the judicial and policy environment in the Region. What is being proposed in the training program is to modernize the policy paradigm that has prevailed in the education of judges in Colombia. The training program will seek to introduce the modem party disposition paradigm and its practical consequences by discussing with the participating judges in a highly interactive mode the implications of the change proposed at three levels of knowledge: (i) jurisprudence elements supporting the proposed case management changes; (ii) the legislative/precedent framework enabling the introduction of the proposed changes in case management; and (iii) the skills and technical abilities that would improve effectiveness in implementing the proposed changes, i.e., the effective management of hearings, negotiations and alternative dispute settlement techniques. The training process will cover a six month period that will be divided in two distinctive phases: (i) a series of intensive workshops for a total of about 15 days covering both theoretical and case discussions; and (ii) four to five months of tutoring in the interim periods between the various workshops aimed at applying the new case management policies in the day to day judicial practice. The termns of reference for the proposed training program, including the change in the jurisprudence paradigm attempted through this training is available in the project file. This terms of reference have been discussed with the leadership of the SCJ, of the JSRLB and the judges of the JCT of Bogota. The core of the training effort will be focused on the judges presiding each of the participating - 33 -  courts and some of their key professional assistants. The project will also support training (i) for participating court staff on the overall change effort and the technological and organizational changes that will be implemented as part of the project; and (ii) for relevant judicial actors -lawyers, court experts, etc.- on their new role and functions derived from the proposed changes in conflict resolution services. The training activities will be sub-contracted with universities and specialized firms. The domestic market has an adequate offer for the provision of quality judicial training. The project will closely coordinate these activities with the JSRLB. In order to ensure such coordination, members of the JSRLB will be participants in the programs with the JCTs. The latter have been invited to cornment on the terms of reference and participate in the committees evaluating the proposals. It is also expected that the JSRLB will derive from this experience teaching materials and programs which may be utilized for the training of judges at large. This experience should strengthen the institutional capacity of the JSRLB in defining and supervising courses offered to the judicial staff. In particular, ensure a more strategic focus of the products supplied by the academic/private market in terms of content and methodology and in terms of congruence with the proposed change objectives. Project Component 3 - US$ 0.17 million Organizational structure change. The Project will support technical assistance to introduce critical changes in the circuit courts' organizational structure. These changes are congruent with the proposed case management reform and contribute to improved court productivity. Although the project would provide flexibility to finance different initiatives in this field the following matters have already been identified: * Unbundling of judicial and administrative activities. A major focus of organizational change will consist of removing judges from handling administrative matters and ensuring that the jurisdictional functions -undertaken proactively and with immediacy- are assigned to a strong and qualified team within the court under the judge's direct leadership. Administrative functions currently performed by courts (in the case of the executive process, well over 50% of total process duration) would be eventually removed from the judges' managerial responsibility.The possibility of pooling those activities and assigning them to specialized units that will perform them utilizing modem operational methods that maximize productivity is a key objective of this component. The expectation is that the process by which judges will devolve administrative responsibilities will be gradual to ensure a smooth adjustment process that will not disrupt the day to day operation of courts. In an initial stage, it would be expected that the participating courts will pool resources to manage the provision of information to the public. This would be a logical follow up to the introduction of computerized case management systems and the removal of a heavy administrative burden to the courts day to day operations. In later stages, the courts would seek to pool the receipt of briefs, the handling of deposits and other financial matters. This process is envisaged to be culminated with the pooling of all administrative activities. This component will require the financing of expert assistance in both administrative and organizational management for purposes of designing the various reform alternatives and implementing reform initiatives in the pilot courts. The SCJ, with the assistance of the PHIRD - 34 -  Grant, has hired a firm that has carried out a diagnosis and proposed some alternative court organizational structures.Based on those alternatives, the SCJ has approved some new forms of judicial organizations which will be tried under the proposed project. As part of the LIL experience, the organizational experts will work together with the JCTs in implementing and evaluating the impact of the alternative organizational models proposed. It will be left to the JCTs to decide the pace and sequencing of the organizational changes. The organizational experts will assist the JCT in implementing the changes and training staff in their new roles and functions. * Improving the provision of expert advise services to the courts. A study to improve the utilization by courts of experts on specialized technical and scientific matters is currently underway. The proposed project will finance the technical assistance necessary to implement the changes that are adopted by the judicial authorities in this field. * Introducing changes in the courts' work processes to enable the changes in case management and improve user service. At this stage two main areas of work process changes have been identified, namely, simplification of a number of administrative processes dealing with judicial notices, judicial deposits, etc., and strengthening the use of hearings as a key tool to ensure immediacy and expedite the resolution of judicial controversies. It is expected that other process initiatives that emerge from the change process could also be supported under the loan. The proposed project will finance the provision of technical assistance and investments in information systems, equipment and other elements required to introduce the proposed process changes in the courts' operations. Project Component 4 - US$1.20 million Information systems. The Project will support the installation and initial operation of a computerized case management system among the participating civil circuit courts and, eventually, other courts whose experience in this field is deemed relevant for the change initiative. The new case management software was commissioned by the SCJ which has also initiated the acquisition of hardware for the installation of the system. The software has been tailored in accordance with the Colombian procedural regulations and has built-in a high level of versatility that matches the proposed organizational and institutional reform initiatives. This component will provide for: * The acquisition of additional software and hardware to install the computerized court management system, including the financing of ancillary civil works, materials and equipment; * The provision of technical assistance and training to make the system operational; and * The provision of supplementary services to convert the existing court manual files into electronic files. The LIL will finance primarily the two latter elements. The Judiciary will contribute the counterpart funding for this project by primarily financing the software and hardware items of the information system. - 35 -  Project Component 5 - US$1.90 million Court facilities. The project will support improvements in court facilities to enable the adjustment of the existing court infrastructure to the requirements of the new case management systems and to ensure improvements in productivity. Two key areas of facility improvements have been identified: * Introduction of modem court filing systems to improve the handling and organization of case records and make it compatible with the introduction of hearing-based procedures. The present filing and documentation system which lack systematic classification and organization and has serious shortcomings in terms of safety, handling and classification of information and conservation techniques. * Physical infrastructure improvements mostly related to the modification of the courts' plant layout to allow for hearing rooms, computerized case management, court administrative service centers and modem filing systems. The infrastructure improvements will be complementary to SCJ's infrastructure investment priorities. The project will finance the materials, equipment, furnishings and civil works related to these various facility improvements. Project Component 6 - US$0.12 million Communication and participation initiatives. The Project will support a broad communication and participatory strategy by the SCJ aimed at ensuring the support from the public and the involvement of relevant actors in the proposed judicial change initiative. The communication strategy will consists of events, publicationsand other means deemed necessary to promote the proposed change effort among judicial staff, media, relevant judicial actors and public opinion at large. The participatory efforts will consists in events, technical assistance and other activities aimed at ensuring the involvement of a wide range of actors in the proposed change initiative. Project Component 7 - US$0.24 million Performance evaluation and rewards. The Project will support two initiatives to introduce changes in the present scheme of performance evaluation: * It will provide technical assistance to assess the objectives, performance and impact of the current performance evaluation system and to implement a revised system which is congruent with the proposed organizational change strategy that would be applicable at least initially to the JCTs. The latter could also include the necessary information systems, equipment and training. * It will institute a pilot program of individual and team incentives, initially focused in the participating civil circuit courts, to reward attainment of the performance indicators by the various JCTs and to promote activities within the judiciary related to the proposed organizational change initiative. - 36 -  Project Component 8 - US$0.60 million Project Managament, Monitoring and Evaluation. The project will finance the costs related to the management, monitoring and evaluation of the proposed organizational change strategy. It is envisaged that a project coordinating unit will be established within the SCJ which will undertake the responsibility for ensuring that the demands arising from the JCTs for implementing the respective change initiatives are properly met. The coordinating unit will liaise with the corresponding technical units within the SCJ to ensure appropriate use of the existing institutional capacity. The project will finance the staffing, equipment, travel and operational costs related to the operation of the coordinating unit and the technical assistance requirements arising from project management. - 37 -  Annex 3: Estimated Project Costs COLOMBIA: JUDICIAL CONFLICT RESOLUTION IMPROVEMENT PROJECT Indicative % of Bank % of Bank Component Costs Total Financing Financing W(S$M) (US$) _ PARTA. COMPREHENSIVE CHANGE STRATEGIES. 1. Cultural change 270,000 5.2 270,000 100 2 Human resource competencies and 700,000 13.5 700,000 100 capabilities 3. Organizational structure change 170,000 3.2 170,000 100 4. Information systems 1,200,000 23.1 730,000 60.1 5. Court facilities. 1,888,000 36.4 1,750,000 92.7 PART B. Development of appropriate policy and support environment Communication Strategy and 360,000 6.9 360,000 100 Performance evaluation and reward. PART C. PROJECT MA. NA GEMENT, MONITORING AND EVALUATION. 7. Monitoring and evaluation 150,000 2.9 150,000 100 8. Project management 450,000 8.7 450,000 100 Total Baseline Costs 5,188,000 100 4,580,000 83 Physical and price contingencies 420,000 6.3 420,000 Taxes 1,058,000 16 0 0 Total Project Costs 6,666,000 100 5,000,000 75 Total Financing Required 6,666,000 100 5,000,000 75 - 38 -  Annex 4 Cost Benefit Analysis Summary or Cost Effectiveness Analysis Summary COLOMBIA: JUDICIAL CONFLICT RESOLUTION IMPROVEMENT PROJECT N.A. - 39 -  Annex 5: Financial Summary COLOMBIA: JUDICIAL CONFLICT RESOLUTION IMPROVEMENT PROJECT Required Project costs Inv/estment costs 2.4 2.17 2.10 Recurrent costs C0 0 Total Project costs 2.4 2.17 2.10 Total financing 2.4 2.17 2.10 Financing 1.4 1.8 1.8 IB RD/IDA Government 1.0 .37 .30 Central - 40 -  Annex 6: Procurement and Disbursement Arrangements COLOMBIA: JUDICIAL CONFLICT RESOLUTION IMPROVEMENT PROJECT Procurement General Goods and works shall be procured in accordance with the provisions of the "Guidelines for Procurement under IBRD Loans and IDA Credits ", published by the Bank in January 1995 and revised in January and August 1996, September 1997 and January 1999 and "Guidelines Selection and Employment of Consultants by World Bank Group", published in January 1997 and revised in September 1997 and January 1999. Procurement Methods The main items for financing under the Loan will be consulting services (about 55% of the loan amount and 45% of total project costs), civil works (about 40% of the Loan and 32% of total project costs) and equipment (about 4% of the loan amount and 16% of total project costs. Procurement of goods, works and services will be carried out in accordance with Bank Guidelines. The demand driven and gradual implementation strategy proposed for the operation will require a significant level of desegregation of the contracts for goods, consulting services and works envisaged under the project. In view of the size of the contracts for goods and works expected, no international competitive bidding procedures will be carried out during project implementation. Consulting services Consulting services are expected to be contracted under three different modalities: Quality-and Cost-Based Selection would be the general rule for most of the consultant services envisaged under the Loan. The only area where Quality-Based Selection is expected is in the field of judicial training in view of the high level of specialization of the task and the expectation that proponents will embark on a high level of innovation and explore beyond the traditional boundaries in this field. Single-source selection may be warranted in the case of the consultant firms that has been hired under the PHRD Grant to assist in the cultural and organizational change components. In both cases the new tasks would represent a natural continuation of the experimental activities that have been initiated in the city of Bogota and would be in the best interest of the SCJ to retain firms that have had a satisfactory performance, have accumulated significant know-how regarding the peculiarities of the judicial change process and developed trust and recognition among the SCJ leadership and members of the GCJs. In both cases, the initial selection was undertaken under QBCS and the terms of reference outlined the prospect for potential continuation of the program with other GJCs. - 41 -  Goods Contract for goods will be limited to the financing of furniture and office equipment linked to the refurbishing of existing court facilities and the set up of judicial administrative centers and some software which may be needed to complement the substantial investment that SCJ has undertaken in this field. There is only one contract for goods expected to exceed $200,000 equivalent, thus, it i; proposed that only that contract be subjected to prior review and procured in accordance with national competitive bidding procedures which are deemed satisfactory to the Bank. Contracts below the threshold of $150,000 and over $50,000 would not be subjected to prior rex lew but continue to be procured under national competitive bidding procedures. Contracts below $50,000 will be procured under national shopping procedures. It is expected that an aggregate amount of about $80,000 would be procured under that method. Civil Works Contracts for civil works will consist in the refurbishing of existing court facilities and the set up of judicial administrative centers. Contracts will be aggregated for each of the cities of project intervention to ensure economies of scale and synchronization of infrastructure renewal with the softer change components envisaged under the project. Three contracts for civil works exceeding the equivalent of $200,000 will be expected. These will be tendered in accordance with national comnpetitive bidding procedures. Contracts below that threshold will be subjected to national competitive shopping procedures acceptable to the Bank. Summary Tables The procurement methods to be used and the estimated amounts for each method are sit nmarized in Table A. The threshold contract values for the use of each method are fixed in Table B. Procurement Process Responsibilities SCJ, the project's executing entity, will be responsible for the overall procurement activities, including compliance with the procurement conditions agreed with the Bank. SCJ has not had hands-on experience in managing internationally funded investment projects and therefore has been developing, in the process of project preparation, their own institutional capacity, basing rmost of the effort in the PCU. In order to ensure an adequate focus in this new dimension of SC J's activities they have decided to maintain the staff that has coordinated project preparation activities and conferred the PCU substantial responsibility for coordinating all project related efforts, including managing the procurement functions. Continuing the practice during the Bank executed PHRD Grant and in order to ensure ownership and commitment from the various levels involved in the project, significant contracts -due to their amount (over $200,000) or their stritegic relevance for project objectives- will be tendered after approval of the terms of reference oil bidding documents by an ad-hoc committee composed of a Magistrate of the SCJ, a senior SCJ offilcial and the PCU staff. This has proven to be an excellent vehicle to ensure that there is an adequate integration of the SCJ in project activities and that the views of all levels in the institutions are considered in the definition and evaluation of main project contracts. SC'J's procurement experience has been mainly related to the bulk purchase of electronic equipment and the construction of new buildings both under national procurement laws. It has - 42 -  developed a reasonable experience in hiring local consultants to undertake a myriad of studies related to the operation of the judicial branch. In the area of training, through the Judicial School, they have developed capacity to contract and manage the logistics related to training activities, however, they have lacked the capacity to provide a strategic focus on their deals with training contractors (mostly universities) and to ensure an adequate monitoring and evaluation of the contracted training activities. Three basic challenges need to be dealt with in the case of this project to ensure an effective development of the procurement function: (i) trying to respond in a timely manner to the demands arising from the various GJCs for goods, works and services, most of them of a moderate size and low complexity; (ii) ensure that the contracting -particularly in the areas of organizational culture and training- follows the priorities and contents that are being promoted by the project and (iii) ensure that there is consistency among the procurement practices and rules applied for project activities in the various participating cities. To deal with these challenges the SCJ has decided that all technical matters related to procurement for the project will be the PCU's responsibility. Actual bid evaluation will be shared with representatives from relevant SCJ units and contract execution will be undertaken by the entity's administrator. It is expected that there will be substantial continuity between the members of the PCU and those that have participated in the coordination of the PHRD Grant. It has also been decided that in order to ensure consistency in the norms and orientation of the procurement effort, all contracting for the project will be carried out by the PCU in a centralized manner. Procurement Qualifications and Experience The appointed head of the PCU has had relevant experience in managing Bank financed contracts and will be able to effectively supervise the work of the unit in this area. She is familiar with Bank operations, has developed strong links with Bank staff dealing both with technical and operational aspects of the project and should therefore constitute a critical asset in ensuring a smooth and effective project start-up. Moreover, she has demonstrated strong ethical standards and a high degree of professional integrity and commitment. This will certainly have a positive impact in developing the right culture and commitment in the rest of the PCU members. Since most of the project activities have already been initiated under the PHRD, it is expected that the transition from the Grant to the loan will be practically seamless, thus, significantly minimizing the risks of having a project start-up from scratch. A specialized procurement professional will be responsible for day to day procurement operations for the project. To strtengthen the PCU's capacity, SCJ will hire an experienced international procurement and financial agent that will assist the PCU in these matters. Specific qualifications of the consultant will include not less than 5 years general experience on procurement. Preference would be given to candidates with experience on Bank procurement. The main responsibilities of the consultant will include the review and up dating of the PCU's procurement policies and drafting of the relevant section of the project's OM; developing of standard documentation for shopping and individual consulting services; and handling of NCB procurement. The PCU will have the critical mass of technical capability in the various areas of the project (culture/training; electronic equipment/facility rehabilitation) that will work hand in -43 -  hand with the procurement specialist in developing the terms of reference and bidding documents required for project execution. It is expected that the recruitment of the PCU professional team will be undertaken prior to the effectiveness of the project. It is our expectation that the teaming-up of the theme specialist with the procurement specialist and the ultimate reliance on the technical capacity in store in the various SCJ Departments, will provide us the adequate professional basis to carry out effectively the procurement under the project. There are sufficient experts in Bank financed procurement available in the local job market that may enable us to choose a qualified professional. If work demand would indicate the need to expand the procurement team this will be done in due course. The Project Manual has developed a special section regarding the procurement rules to be followed for the acquisition of goods and services under the Project. The rules reflected in the Project manual are fully consistent with those included in the Loan Agreement. We will endeavor to have project launching workshops for each of the cities in which the basic arrangements for operation of the project will be explained to the GCJs members. Procurement plans The demand driven nature of the operation -that leaves to each of the GJCs the decision regarding the timing and sequencing of the various project components- would not warrant the preparation of detailed procurement plans. Procurement activities related to the project are expected to be relatively straightforward. However, an indicative Procurement Plan for the first year taking into account the most likely implementation scenario will be prepared and discussed in negotiations. Alt contracts related to the soft/cultural/capacity building activities of the project will be of a national scope and there is a high probability that the firms that are initially selected for the city of Bogota would continue to perform the same role in the other participating cities, subject to continued satisfactory performance. As discussed above, the initial technical assistance for the cultural change component has been contracted through a competitive process financed under a Bank executed PHRD Grant. Although the initial contract had been expected to cover the total cultural change process, it was later restricted to activities in the city of Bogota and the contract price reduced to an equivalent of $70,000. It may be in the interest of SCJ and the Project to have the contract extended under similar terms and conditions for the reasons referred above. This would imply a new contract that would be put out by the SCJ and financed under the Loan. A similar situation may happen in the case of the communications, organizational change and training components, if the firms perform in a satisfactory manner and it is in the SCJ's interest to continue the assistance of such firms. Training will be tendered in one national contract on a QBS basis for the reasons referred above. This contract has initially been tendered for partial financing under the PHRD Grant. As part of project preparation a preliminary assessment of the capacity of universities for providing judicial training has been undertaken. The short list of qualified universities included private and public universities that operate at the national level given that both have very high academic standards and experience in the field ofjudicial training. The possibility of developing consortiums between the selected university and regional universities located in the various cities included in the project - 44 -  will be encouraged to ensure the development of improved judicial training capacity in the regions. Contracts for equipment and furniture as well as for civil works will be tendered for each of the participating cities to ensure responsiveness to their timing and logistical demands. There should be only one, maximum, two civil works contracts for each participating city and probably one contract for furmiture and equipment. Procurement planning will be undertaken in conjunction with the other organizational change activities planned for each of the cities. The PCU will establish a record keeping system to ensure that all procurement related activities and documentation are adequately kept and stored. Initial Bank supervision missions should give a high priority to the establishment of adequate record system, which together with the proposed information system for purposes of recording financial transactions should guarantee adequate accountability on all project related decisions. Procurement records Detailed procurement records for contracting the goods, works and consulting services required for the Project will be maintained by the PCU. These records shall contain full documentation of each of the phases required to contract a specific good, work or consulting service including bid evaluation reports, signed contracts with related addenda and other useful information related to the life of each contract. These records shall be maintained at least for a period of two years after the project's closing date. The PCU shall be responsible for maintaining such records and ensure they are kept in safe and adequate environment. Frequency ofprocurement supervision In addition to the prior review of contracts, the capacity assessment of the PCU indicates the need for two full supervision missions to carry out post-review of procurement actions during the life of the project. Procurement audits The PCU will provide to the Bank by March 2003 (Midterm review), a report by independent procurement experts on the adequacy of the policies and procedures applied, and decisions made, by the PCU in the conduct of procurement activities for the project. For such purpose, the expert shall follow the policies and procedures that have been agreed between the Bank and the SCJ for purposes of the Project. Overall Risk Assessment The overall risk assessment for the appropriate conduct of procurement business under the project is considered average. This is based in two considerations: (i) the project is utilizing the experience gained during the execution of the PHRD Grant and it is expected that there will be continuity in the staffing of the PCU, thus, ensuring an adequate knowledge of Bank policies and practices and a culture of professional and ethical integrity; and (ii) the SCJ is fully committed to enable the PCU to follow Bank policies and practices and grant the PCU sufficient autonomy to ensure its staffing with suitable professionals and in decision making. - 45 -  A detailed Procurement Assessment was conducted by a Procurement Specialist. The Action Plan derived from such assessment is summarized below: * Completion of a Project's Operation Manual * Preparation of an indicative procurement plan for the first year of the Project * Agreement on Standard Bidding Documents for procurement of goods, works and selection of consultants to be awarded under NCB, local shopping, and selection of consultants (QC'BS, QBS, SS) * Hiring of an expert in procurement and contract management * Formalization of arrangements on delegation of authonrty for expenditures decisions to the SCJ Executive Director * Preparation of procurement audits report * Contracting a specialized consultant for design and development filing system and development of the system * Completion of PCU's team Procurement methods (Table A) Table A: Project Costs by Procurement Arrangements (US$ million equivalent) Procurement Method Expenditure Category ICB NCB Other N.B.F. Total Cost 1. Works 0.00 0.90 1.26 0.00 2.16 ________________________ (0.00) (0.70) (1.05) (0.00) (1.75) 2. Goods 0.00 0.84 0.46 0.00 1.30 _________________________ (0.00) (0.35) (0.08) (0.00) (0.43) 3. Services 0.00 0.00 2.04 0.00 2.04 Consultants (0.00) (0.0() (1.76) (0.00) (1.76) Other Consultants Services 4. Unallocated 0.00 0.00 0.37 0.00 0.37 (0.00) (0.00) (0.37) (0.00) (0.37) 5. Front-end fee 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 4. Front-end-Fee 0.00 0.00 0.05 0.00 0.05 (0.00) (0.00) (0.05) (0.00) (0.05) Total 0.00 1.74 4.18 0.00 5.92 _________________________ (0.00) (1.05) (3.31) (0.00) (4.36) 'Figures in parenthesis are the amounts to be financed by the Bank Loan. All costs include contingencies. 2' Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units. - 46 -  Table Al: Consultant Selection Arrangements (optional) (US$ million equivalent) Selection Method Consultant Services Expenditure Category QCBS QBS SFB LCS CQ Other N.B.F. Total Cost A. Firms 1.51 0.00 0.00 0.00 0.00 0.00 0.00 1.51 (0.30) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.30) B. Individuals 0.30 0.00 0.00 0.00 0.00 0.23 0.00 0.53 (0.26) (0.00) (0.00) (0.00) (0.00) (0.20) (0.00) (0.46) Total 1.81 0.00 0.00 0.00 0.00 0.23 0.00 2.04 (0.56) (0.00) (0.00) (0.00) (0.00) (0.20) (0.00) (0.76) 1\ Including contingencies Note: QCBS = Quality- and Cost-Based Selection QBS Quality-based Selection SFB = Selection under a Fixed Budget LCS Least-Cost Selection CQ = Selection Based on Consultants' Qualifications Other = Selection of individual consultants (per Section V of Consultants Guidelines), Commercial Practices, etc. N.B.F. = Not Bank-financed Figures in parenthesis are the amounts to be financed by the Bank Loan. - 47 -  Prior review thresholds (Table B) Table B: Thresholds for Procurement Methods and Prior Review' Contract Value Contracts Subject to Threshold Procurement Prior Review Expenditure Category (US$ thousands) Method (US$ millions) 1. Works >200 NCB First two <200 National shopping Expost 2. Goods >150 NCB All <150 NCB Expost <50 National shopping Expost 3. Services -Firms >75 QCBS, QBS, SS All <75 QCBS, QBS, SS Review of TORs -Individuals >30 QCBS, QBS, SS All- <30 QCBS, QBS, SS Review of TORs Total value of contracts subject to prior review: Overall Procurement Risk Assessment Average Frequency of procurement supervision missions proposed: One every 18 months (includes special procurement supervision for post-review/audits) Thresholds generally differ by country and project. Consult OD 11.04 "Review of Procurement Documentation" and contact the Regional Procurement Adviser for guidance. - 48 -  Disbursement Allocation of loan proceeds (Table C) Table C: Allocation of Loan Proceeds Expenditure Category Amount in US$million Financing Percentage Works 1750000.00 80% Goods 430000.00 100% of foreign expenditures and 84% of local expenditures Services 2400000.00 84% Unallocated 420000.00 Total Project Costs 5000000.00 Front-end fee 0.00 Total 5000000.00 Financial Management All financial management issues of the project will be under the direct responsibility of the PCU. It will rely heavily, however, on the infrastructure and systems operated by the Accounting Department of the SCJ. The accounting systems of SCJ and the staff responsible for their management were assessed and found satisfactory as part of the Financial Management Assessment undertaken during project preparation. Some minor adjustments will need to be made to the current accounting system in order to enable it to conform to Bank requirements, particularly in the record of transactions in currencies other than the Colombian peso. The Financial Management Assessment provided as a key recommendation the need to strengthen the PCU with a professional with substantial experience in the management of Bank financed projects. The Bank's will seek during negotiations the hiring of an external auditor with adequate qualifications and experience. While the Bank would have a strong preference for the hiring of a private external auditor from the start of project operations, it would accept the opinion of the Comptroller General for the accounts during calendar year 2001. It would, however, expect that the hiring of the private external auditor to carry out the audit of the calendar year 2002 be hired by March 31, 2002, to ensure a smooth transition. Auditors will audit the Special Account and the other project financial statements annually. The audit report will be submitted to the World Bank no more than 4 months after the end of each fiscal year. Detailed terms of reference for the auditors will be prepared following guidelines included in the World Bank's Financial Accounting, Reporting and Auditing Handbook. Although disbursement would be initially based in part in SOEs, the SCJ and the Bank will exchange views during the second quarter of 2002 on the possibility of moving from the use of SOEs to PMR's at the start of calendar year 2003. This matter will be evaluated based on progress in the consolidation of the project's accounting and financial management systems. - 49 -  Detailed supporting documentation, including certification, for expenditures will be kept by the PCU for at least one fiscal year after the year in which the last disbursement takes place. For all contracts requiring the Bank's prior review, full documentation will accompany disbursement request until disbursement is uased on PMR's. Detailed documentation will be retained by the PCU for inspection during supervision missions andi for audit by external auditors acceptable to the World Bank. Disbursements Allocation of Loan proceeds (Table C): The total loan of US$5.0 million would be disbursed over a three-year period in accordance with Table C. All project activities are expected to be completed by December 31, 2004, and the Loan would close on June 30, 2005. Allocation cf Loan proceeds by disbursement categories and percentages financed by the loan are presentecd in Table C. Use of statements of expenditures (SOEs) Full documentation for expenditures under contracts requiring the World Bank's prior review will be submitted with the corresponding application. Disbursements under contracts for goods valued below US$150,000, all contracts for works below US$ 200,000, and for services below U$50,000 for consulting firms and US$20,000 for individual consultants would be made on the basis of Statements of Expenditures (SOEs). Documentation to support these expenditures would be maintained by the PCU and made available for review by the World Bank supervision missions and project auditors. Documentation relating to SOEs and other project expenditures would be retained for one year after the fiscal year in which the final withdrawal from the Loan will take place. These arrangements for disbursements under SOEs will be phased out when the project is converted to PMR-based disbursement. Flow offunds arrangements and Special Account The Loan will be made directly to the Republic of Colombia. A Special Account in US dollars will be established in a special foreign-exchange account at Banco de la Repablica. Until aggregated disbursement amount to US$1,000,000, the Special Account will have an initial advance of US$200,000. After such threshold is met, the authorized allocation will be US$ 500,000. The special account will be replenished monthly and will be used for all transactions with a value less than 20% of the amount advanced to the special account. Traditional documentation requirements apply for direct payments, special commitments and reimbursements not submitted on the basis of statements of expenditures. If the project is converted to the PMR-based disbursement, the authorized allocation will be increased to US$1 million and the special account will be replenished based on the PMRs submitted by the PCU. The flow of funds arrangements will be those provided under the SIIF whose establishment has been supported under a separate Bank loan. The SCJ, as the executing agency for the project, is one of the entities that carries out its budgetary and treasury operations through the SIIF. While the SIIF has currently some restrictions in its use by public entities, particularly in terms of making direct payments to third parties, the project will follow the arrangements agreed between the Government and the Bank regarding flow of funds. The draft Project Manual provides a detailed description of flow of funds arrangements under the SIIF. - 50 -  Annex 7: Project Processing Schedule COLOMBIA: JUDICIAL CONFLICT RESOLUTION IMPROVEMENT PROJECT Project Schedule Planned Actual Time taken to prepare the project (months) 6 23 First Bank mission (identification) 09/15/1999 09/15/1999 Appraisal mission departure 06/15/2000 06/20/2000 Negotiations 08/05/2001 08/05/2001 Planned Date of Effectiveness 09/15/2001 12/15/2001 Prepared by: Consejo Superior de la Judicatura and World Bank team, with support from the National Planning Department. Preparation assistance: Bank staff who worked on the project included: Name Speciality Felipe Saez Team Leader David Varela Legal Counsel, Peer Reviewer Mauricio Cuellar Procurement Luiz Gazoni Procurement Jairo Arboleda Participatory Strategy Issam Abousleiman Disbursement Officer Luis M. Schwarz Financial Management Specialist Waleed Malik Peer Reviewer Richard Messick Peer Reviewer Pilar Mengod Team Assistant Jose Augusto Carvalho Legal Counsel Mirtyla Lane Team Assistant - 51 -  Annex 8: Documents in the Project File* COLOMBIA: JUDICIAL CONFLICT RESOLUTION IMPROVEMENT PROJECT A. Project Implementation Plan Training Component Terms of Reference composed of Two documents: The Training Plan (Plan de Capacitaci6n) and the Contents and orientations for the Training Plan (Contenidos y orientaciones del Programa de Capacitaci6n) Change Strategy B. Bank Staff Assessments N.A. C. Other *rIcluding electronic files - 52 -  Annex 9: Statement of Loans and Credits COLOMBIA: JUDICIAL CONFLICT RESOLUTION IMPROVEMENT PROJECT 23-Oct-2001 Difference between expected and actual Original Amount in US$ Millions disbursements' Project ID FY Purpose IBRD IDA GEF Cancel. Undisb. Orig Frm Rev'd P057692 2002 2nd Magdalena Medio Project 35.47 0.00 0.00 0.00 35.47 0.00 0.00 P040109 2001 CO PUBLIC FINANC. MANAGEMENT PROJECT II 0.00 0.00 15.00 0.00 14.87 1.07 0.00 P063317 2001 COLOMBIA HIGH ANDES 160 00 0.00 0.00 0.00 150.00 0.00 0.00 P069964 2001 CO- Human Capital Prot.- Cash Transfers 85.00 0.00 0 00 0.00 75.75 26.47 0.00 P068762 2000 CO- COMMUNITY WORKS (MANOS A LA OBRA) 20.00 0.00 0.00 0.00 18.78 3.32 0.00 P065263 2000 EARTHQUAKE RECOVERY 5.00 0.00 0.00 0.00 4.41 -0.59 0.00 P057326 2000 SIERRA NEVADA SUSTAINABLE DEVELOPMENT 100.00 0.00 0.00 0.00 96.00 22.00 0.00 P050578 2000 CO- RURAL EDUCATION 225.00 0.00 0.00 0.00 103.86 47.19 0.00 P044140 2000 CARTAGENA WATER SUPPLY & SEWERAGE 5.00 0.00 0.00 0.00 3.03 3.03 0.00 P050576 1999 ENVIRO 40.00 0.00 0.00 0.00 28.57 17.79 1.75 P006891 1998 CO- YOUTH DEVELOPMENT 5.00 0.00 0.00 0.00 2.80 2.14 0.00 P006861 1998 CO- ANTIOQUIA EDUCATION 7.20 0.00 0.00 0.00 3.57 2.74 -0.03 P053243 1998 CO URBAN INFRASTRUCTURE 75.00 0 00 0.00 0.00 57.32 26.16 0.00 P046112 1998 PEASANT ENTERPRISE Z 15.00 0.00 0.00 0.00 9.01 9.01 0.00 P006884 1997 CO- PASTO EDUCATION 12.50 0.00 0.00 0 00 5.31 4.90 0.00 P040102 1997 FINANCIAL MARKETS DEVELOPMENT 249.30 0.00 0.00 0.00 4.39 4.39 4.39 P006887 1996 REG REF.TA 20.00 0.00 0.00 0.00 2.00 2.00 -0.78 P039291 1996 POWER MARKET DEVELOPMENT & ENERGY (TA) 145.00 0.00 0.00 0 00 44.87 4386 0.00 P006894 1996 URBAN ENVIRONMENT TA 36.00 0.00 0.00 0.00 12.66 12.66 -5.44 P006893 1995 SANTAFE I (Water/Supply) 11.00 0.00 0.00 0.00 0.47 047 0.00 P006880 1995 ENERGY TECHNICAL ASSISTANCE 90.00 0.00 0.00 0.12 0.12 0.24 0.24 AGRICULTURE TECHNOLO Total: 1331.47 0.00 15.00 0.12 673.25 228.92 0.13 - 53 -  COLOMBIA STATEMENT OF IFC's Held and Disbursed Portfolio lMAY-XO0 1 - In Millions US Dollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic 1969/85/88/93/95 CF del Valle 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2001 CHMC 4.05 10.00 0.00 12.95 0.00 0.00 0.00 0.00 1974/01 Cementos Caribe 6.02 0.00 0.00 0.00 6.02 0.00 0.00 0.00 1963/90 Coltejer 25.00 0.00 25.00 0.00 0.00 0.00 25.00 0.00 1995/99 Corfinsura 30.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1987 PRODESAL 0.00 0.59 0.00 0.00 0.00 0.59 0.00 0.00 1977/89/92/94/96 Promigas 6.88 0.00 0.00 14.58 6.88 0.00 0.00 14.58 1994/95 Promisan 0.00 0.23 0.00 0.00 0.00 0.23 0.00 0.00 1996 Proyectos 0.00 5.00 0.00 0.00 0.00 5.00 0.00 0.00 1997 Suleasing 24.82 0.00 0.00 0.00 2.25 0.00 0.00 0.00 1999 Surenting 0.00 5.10 0.00 0.00 0.00 2.50 0.00 0.00 2001 Tolcemento 3.33 0.00 0.00 10.67 0.00 0.00 0.00 0.00 Total Portfolio: 100.10 20.92 25.00 38.20 15.15 8.32 25.00 14.58 Approvals Pending Commitrnent FY Approval Company Loan Equity Quasi Partic 2001 CHMC 0.00 10.00 30.00 0.00 Total Pending Commitment: 0.00 10.00 30.00 0.00 - 54 -  Annex 10: Country at a Glance COLOMBIA: JUDICIAL CONFLICT RESOLUTION IMPROVEMENT PROJECT Latin Lower- POVERTY and SOCIAL America middle- Colombia & Carib. Income Development diamond* 2000 Population, mid-year (millions) 42.3 516 2,046 Life expectancy GNi per capita (Atlas method, US$) 2,020 3,680 1,140 GNI (Atlas method, USS billions) 85.3 1 895 2,327 Average annual growth, 1994-00 Population (I%) 1.9 1.6 1.0 Labor force t%) 2.7 2.3 1.3 GNI Gross per .,primary Most recent estimate (latest year available, 1994-00) capita enrollment Poverty (% of population below national povertv line) 55 . .ta Urban population (% of total population) 74 75 42 Life expectancy at birth (years) 70 70 69 Infant mortality (per f/000 live births) 23 30 32 Child malnutrition (% of children under 5) 8 9 11 Access to improved water source Access to an improved water source (% of population) 91 85 80 Illiteracy (% of population ape 15+) 8 12 15 Gross primary enrollment (% ofschool-aae poPulation) 113 113 114 -Colombia Male 113 .. 116 Lower-middle-income group Female 112 .. 114 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1980 1990 1999 2000 Economic ratios' GDP (US$ billions) 33.4 40.3 84.8 81.3 Gross domestic investment/GDP 19.1 18.5 12.5 12.2 Exports of qoods and services/GDP 16.2 20.6 18.6 21.9 Trade Gross domestic savings/GDP 19.7 24.2 12.5 13.7 Gross national savinqslGDP 19.6 21.6 10.5 11.9 Current account balancelGDP 0.3 1.3 -0.2 -0.2 Domestic ____ t Interest pavments/GDP 0.9 3.9 2.8 2.5 s Investment Total debt/GDP 20.8 42.8 40.7 44.3 savings Total debt service/exports 15.1 40.9 43.5 47.9 Present value of debt/GDP .. .. 39.7 Present value of debtlexports 221.8 Indebtedness 198D-90 1990-00 1999 2000 2000-04 (average annual qrowth) GDP 3.6 3.0 -4.1 2.8 4.7 - Colombia GDP per capita 1.5 1.1 -5.7 1.0 2.9 Lower-middle-income group Exports of goods and services 7.5 5.3 4.7 5.3 4.4 STRUCTURE of the ECONOMY 1980 1990 1999 2000 Growth of Investment and GDP(%) (% of GOP) 40 Agriculture 19 9 16.7 13.8 13.8 40 Industrv 32.5 37.9 28.1 30.5 Manufacturing 23.9 20.6 13.7 13.8 Services 47.6 45.4 58.1 55.7 20o 0 -40 Private consumption 70.2 66.4 64.4 68.1 -60 General qovernment consumption 10.1 9.4 23.1 18.2 GO[ - DOP Imports of goods and services 15.6 14.8 18.6 20.4 1980-90 1990-00 1999 2000 Growth of exports and imports (%) (average annual growth) AQriculture 2.9 -2.2 0.2 5.2 30- Industrv 5.0 1.7 -9.0 3.8 1> Manufacturina 3.5 -2.3 -10.2 9.3 o __ _ Services 3 1 4.3 -1.1 1.9 0. Private consumption 2.6 2.6 -4.5 6.5 -15 General qovernment consumption 4.2 9.5 3.9 -14.5 -30 Gross domestic investment 1.4 2.1 -38.3 15.2 -Exports Imports Imports of goods and services 0.4 94 -22.3 5.8 Note 2000 data are preliminary estimates The diamonds show four kev indicators in the countrv (in bold) compared with its income-qroup averaqe. If data are missinq, the diamond will be incomplete - 55 -  Colombia PRICES and GOVERNMENT FINANCE 1980 1990 1999 2000 Inflation (%) Domestic prices I% chanqe) so Consumer prices 26.4 32.4 9.2 8.8 40 Implicit GDP deflator 27.6 28.6 10.2 10.7 3r Government finance 1C % of GDP, includes current grants) o C(urrent revenue .. 15.8 12.7 12.1 95 96 97 98 99 Current budget balance .. 6.8 -4.9 -5.3 - GDP deflator - e CPI Overall surplus/deficit .. 3.9 -7.5 -6.1 TRADE (US$ millions) 1980 1990 1999 2000 Export and import levels (US$ mill.) Total exports (fob) 4,255 7,139 11,569 13,115 20,000 Coffee 2,361 1,415 1,324 1,069 Petroleum 101 1,951 3,757 4,569 15,000 . Manufactures 973 1.759 3,947 5,190 Total imports (cif) 4,663 5,589 10,659 11,538 10,0 Food 296 245 1,426 1,428 s Fuel and energy 564 330 252 234 Capital qoods 1,616 2,034 3,651 3,414 o - 94 95 96 97 98 99 21) Export price index (1995=100) 7 61 194 243 Import price index (1995=100) 5 56 161 201 3 Exports U Imports Tarms of trade (1995=100) 126 110 121 121 BALANCE of PAYMENTS 1980 1990 1999 2000 Current account balance to GDP (%) (UIS$ millions) E<ports of goods and services 5,747 8,687 13,866 15,608 0- _ Irmports of goods and services 5,597 7,089 13,408 14,301 A 99 03 Resource balance 150 1,597 457 1,307 N et income -211 -2,080 -1,422 -2,429 Natcurrenttransfers 166 1,026 785 990 -3- I C irrent account balance 105 544 -180 -132 -4 - -inancing items (net) -430 53 502 -737 -s ,-anqes in net reserves 325 -597 -322 869 -6 Memo: Reserves including qold (USS millions) . . 8,103 9,006 Conversion rate (DEC. locallUSS) 47.3 602.3 1,756.6 2,087.6 EXTERNAL DEBT and RESOURCE FLOWS 1980 1990 1999 2000 I, S$ millions) Composition of 1999 debt (USS mill.) Trctal debt outstanding and disbursed 6,940 17,222 34,538 35,968 IBRD 991 3,859 1,960 1,920 G: 3,965 A: 1,960 IDA 21 15 8 7 I 8 Tctal debt service 951 3,889 6,611 7,888 D: 4,252 IBRD 144 751 390 370 ~DA 0 1 1 1 E ,7 C.cmposition of net resource flows 9fficial grants 8 35 103 9fficial creditors 280 -40 970 275 'rivate creditors 531 -155 2,502 -415 moreign direct investment 157 500 1,109 2,247 *'ortfolio equity 0 0 25 1 7 F: 22,883 World Bank pngoram Commitments 351 536 591 350 A - IBRD E - Bilateral Disbursements 218 213 511 265 B - IDA D - Other multilateral F - Private P'rincipal repayments 66 435 271 244 C - IMF G - Short-term Net flows 152 -221 241 21 Interest payments 79 318 121 127 Net transfers 73 -539 120 -105 Development Economics 917/01 - 56 -    IBRD 31251 ; 5 ; >t -; 9 -; : - 6 - Roch V X ) X~~COLOMBIA s.> .~ ~~~~~~~S Ricchoc-. -- aaa ho,f e oa X :.At Sr f S + :;- +: < w A R . t X 7 s BOlMA f~~~~~~~~~~~~~~~~~~~~~~~~~~~ - < >< <X\Monfleria ( lil X 05i f4ORTE fi 1EC 8 - . g . '> hCORD< 7a tt J C;cuta 5 a F - - - * X \ / tS w g )~~~~~~~~~~~~~~~~~~~~~ RA I i ~etrreLnefshbndr -2 2 M E T A (F_= \ DE 70 w; >~~~~~~~~~~~RO sh fth ds Ppn *'pl _ @ - (d Bankaee,,</ ,;f~~~~~~O Cot j s ~7\G oU AVIARE p, .jugot,~ Ar N. T 4 I U I A ANTA E ARAUCAX | f ,K ,~~~~~~~~~Ro Casan \ * Departrnentcopihis tuni A M A ZON A RS @~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Ia0c CaF H A; ci~~~~~~~~~~~~~ ~~ ~ Riir micencio -*- Internobonol ~ ~ ~ L Manure E T A Guo G o U I A A 50 I0 N50 M I LESrenci "'oo 7~~~~~~~~~~~~A A Ivi 7M o* | | Jo DECEMEER 200AUPE