China - Labor Market Development Project : Loan 3967 - Project Agreement - Conformed

CREDIT NUMBER 2800 CHA LOAN NUMBER 3967 CHA Project Agreement (Labor Market Development Project) among INTERNATIONAL DEVELOPMENT ASSOCIATION INTERAATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and DEIANG MUNICIPALITY GUANGZHOU MUNICIPALITY SHAOXING MUNICIPALITY WEIFANG MUNICIPALITY WUHAN MUNICIPALITY and ZBEJIANG PROVINCE Dated L 1996 CREDIT NUMBER 2800 CHA LOAN NUMBER 3967CWA PROJECT AGREfMENT AGREEMENT dated 0tLA11C-4r"A ,1996 among INTERNATIONAL DEVELOPMENT ASSOCIATION (the Ass ciation), INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank) and DEYANG MUNICIPALITY (Deyang), GUANGZHOU MUNICIPALITY (Guangzhou), SHAOXING MUNICIPALITY (Shaoxing), WEIFANG MUNICIPALITY (Weifang), WUHAN MUNICIPALITY (Wuhan) (Deyang, Guangzhou, Shaoxing, Weifang and Wuhan hereinafter referred to collectively as the Project Municipalities, and individually as a Project Municipality) and ZHEJIANG PROVINCE (Zhejiang) (the Project Municipalities and Zhejiang hereinafter referred to collectively as the Project Entities and individually as a Project Entity). WHEREAS (A) by the Development Credit Agreement of even date herewith between People's Republic of China (the Borrower) and the Association, the Association has agreed to make available to the Borrower an amount in various currencies equivalent to thirteen million four hundred thousand Special Drawing Rights (SDR 13,400,000) on the terms and conditions set forth in the Development Credit Agreement, but only on condition that the Project Entities agree to undertake such obligations toward the Association as are set forth in this Agreement; (B) by the Loan Agreement of even date herewith between the Borrower and the Bank, the Bank has agreed to make available to the Borrower an amount in various currencies equivalent to ten million dollars ($10,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that the Project Entities agree to undertake such obligations toward the Bank as are set forth in this Agreement; and WHEREAS the Project Entities, in consideration of the Association's entering into the Development Credit Agreement with the Borrower, and the Bank's entering into the Loan Agreement with the Borrower, have agreed to undertake the obligations set forth.in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: -2- ARTICLE I Definitions Section 1. 01. Unless the context otherwise requires, the several terms defined in the Development Credit Agreement, the Loan Agreement and in the General Conditions (as so defined in the Development Credit Agreement and the Loan Agreement, respectively) have the respective meanings therein set forth, and, wherever used in this Agreement (except in Section 5.04 hereof), reference to the Association, the Credit and the Credit Account shall also be deemed as a reference to the Bank, the Loan and the Loan Account, respectively. ARTICLE II Execution of the Project Section 2.01. (a) Each Project Entity declares its commitment to the objectives of the Project as set forth in Schedule 2 to the Development Credit Agreement, and, to this end, shall carry out its Respective Part of the Project with due diligence and efficiency and in conformity with appropriate administrative, economic, financial and labor market practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) Without limitation upon the provisions of paragraph (a) of this Section and except as the Association and the Project Entity concerned shall otherwise agree, each Project Entity shall carry out its Respective Part of the Project in accordance with the Implementation Program set forth in Schedule 1 to this Agreement. Section 2.02. Except as the Association shall otherwise agree, procurement of the goods and consultants' services required for the Project and to be financed out of the proceeds of the Credit -.hall be governed by the provisions of Schedule 3 to the Development Credit Agreement. Section 2.03. (a) Each Project Entity shall carry out the obligations set forth in Sections 9.03, 9.04, 9.05, 9.06, 9.07 and 9.08 of the General Conditions referred to in Section 1.01 of the Development Credit Agreement and in Sections 9.04, 9.05, 9.06, 9.07, 9.08 and 9.09 of the General Conditions referred to in Section 1.01 of the Loan Agreement (relating to insurance, use of goods and -3- services, plans and schedules, records and reports, maintenance and land acquisition, respectively) in respect of its Respective Part of the Project. (b) For the purposes of Section 9.07 of the General Conditions referred to in Section 1.01 of the Development Credit Agreement and Section 9.08 of the General Conditions referred to in Section 1.01 of the Loan Agreement, and without limitation thereto, each Project Entity shall: (i) prepare, on the basis of guidelines acceptable to the Association, and furnish to the Association not later than six (6) months after the Closing Date or such later date as may be agreed for this purpose between the Borrower and the Association, a plan for the future operation of said Project Entity's Respective Part of the Project; and (ii) afford the Association a reasonable opportunity to exchange views with said Project Entity on said plan. Section 2.04. (a) Each Project Entity shall, at the request of the Association, exchange views with the Association with regard to the progress of its Respective Part of the Project, the performance *of its respective obligations under this Agreement, and other matters relating to the purposes of the Credit. (b) Each Project Entity shall promptly inform the Association of any condition which interferes or threatens to interfere with the progress of its Respective Part of the Project, the accomplishment of the purposes of the Credit, or the performance by it of its respective obligations under this Agreement. ARTICLE III Financial Covenants Section 3.01. (a) Each Project Entity shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of its Respective Part of the Project of the departments or agencies of said Project Entity responsible for carrying out said Part of the Project. -4- (b) Each Project Entity shall: (i) have the records and accounts referred to in paragraph (a) of this Section for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association as soon as available, but in any case not later than six (6) months after the end of each such year, the report of such audit by said auditors, of such scope and in such detail as the Association shall have reasonably requested; and (iii) furnish to the Association such other information concerning said records and accounts and the audit thereof as the Association shall from time to time reasonably request. ARTICLE IV Effective Date; Termination; Cancellation and Suspension Section 4.01. This Agreement shall come into force and effect on the date upon which both the Development Credit Agreement and the Loan Agreement become effective. Section 4.02. (a) This Agreement and all obligations of the Association and each Project Entity thereunder shall terminate on the earlier of the following two dates: (i) the date on which both the Development Credit Agreement and the Loan Agreement shall terminate in accordance with their terms; or (ii) the date twenty (20) years after the date of this Agreement. (b) If the Development Credit Agreement or the Loan Agreement terminates in accordance with its terms before the date specified in paragraph (a) (ii) of this Section, the Association shall promptly notify each Project Entity of this event. Section 4.03. All the provisions of this Agreement shall continue in full force and effect notwithstanding any cancellation or suspension under the General Conditions referred to in Section 1.01 of the Development Credit Agreement or under the General Conditions referred to in Section 1.01 of the Loan Agreement. ARTICLE V Miscellaneous Provisions Section 5.01. Any notice or request required or permitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agreement shall be in writing. Such notice or request shall be deemed to have been duly given or made when it shall be delivered by hand or by mail, telegram, cable, telex or radiogram to the party to which it is required or permitted to be given or made at such party' s address hereinafter specified or at such other address as such party shall have designated by notice to the party giving such notice or making such request. The addresses so specified are: For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 82987 (MCI) or Washington, D.C. 64145 (MCI) For the Bank: International Bank for Reconstruction and Development 1818 H. Street, N.W. Washington, D.C. 20433 United States of America -6- Cable address: Telex: INTBAFRAD 82987 (MCI) or Washington, D.C. 64145 (MCI) For Deyang: Deyang Municipal Labor Bureau No. 23 Changjiangxi Road Deyang 618000 People's Republic of China Cable address: Telex: FINANMIN 22486 MFPRC CN Beijing For Guangzhou: Guangzhou Municipal Labor Bureau No. 139 Wanfu Road Guangzhou 510030 People's Republic of China Cable address: Telex: FINANMIN 22486 MFPRC CN Beijing For Shaoxing: Shaoxing Municipal Labor Bureau Liyu Bridge Shengli Road Shaoxing City 312000 People's Republic of China Cable address: Telex: FINANMIN 22486 MFPRC CN Beijing -7- For Weifang: Weifang Municipal Labor Bureau No. 101 Shengli Dajie Road Weifang 261041 People's Republic of China Cable address: Telex: FINANMIN 22486 MFPRC CN Beijing For Wuhan: Wuhan Municipal Labor Bureau No. 8 Mingxin Road Wuhan 430020 People's Republic of China Cable address: Telex: FINANMIN 22486 MFPRC CN Beijing For Zhejiang: Employment Bureau Zhejiang Provincial Department of Labor No. 42 Shihu Road Hangzhou 310006 People's Republic of China Cable address: Telex: FINANMIN 22486 MFPRC CN Beijing Section 5.02. Any action required or permitted to be taken, and any document required or permitted to be executed, under this Agreement on behalf of: (a) a Project Municipality, may be taken or executed by the Mayor of such Project Municipality or such other person or persons as said Mayor shall designate in writing, and such Project Municipality shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature -8- of each such person; and (b) Zhejiang, may be taken or executed by any Vice Governor of Zhejiang or such other person or persons as said Vice Governor shall designate in writing, and Zhejiang shall furnish to the Association sufficient evidence of the authority and the authenticated specimen signature of each such person. Section 5.03. This Agreement may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument. Section 5. 0. As long as the Bank has not given notice to the contrary to a Project Entity and so long as the Development Credit Agreement shall not have terminated prior to the termination of the Loan Agreement: (a) the obligations of said Project Entity to consult with, and to furnish information, documents, plans, reports, records and statements to, the Bank shall be satisfied to the extent performance in respect of such obligations is rendered to the Association; (b) the obligations of the Bank to consult with, and to furnish information to, said Project Entity shall be satisfied to the extent such obligations are fulfilled by the Association; and (c) all actions taken (including the giving of approvals or granting of waivers) by the Association pursuant to the Development Credit Agreement shall be deemed to be taken pursuant to both the Development Credit Agreement and the Loan Agreement, and in the name and on behalf of both the Association and the Bank. -9- IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. INTERNATTONAL DEVEL.OPMENT ASSOCIATION INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Regional Vice President East Asia and Pacific DEYANG MUNICIPALITY GUANGZHOU MUNICIPALITY SHAOXING MUNICIPALITY WEIFANG MUNICIPALITY WUHAN MUNICIPALITY ZHEJIANG PROVINCE By Authorized Representative - 10 - SCEUULE 1 Implementation Program The provisions of this Schedule shall apply for the purposes of Section 2.01(b) of this Agreement. A. Project Management In order to ensure the proper carrying out of its Respective Part of the Project, each Project Entity shall continue to maintain a project implementation unit, with terms of reference, staffing and other resources satisfactory to the Association, to be responsible for the coordination and supervision of said Project Entity's Respective Part of the Project, including procurement of goods and services under said Part of the Project, monitoring and evaluation of the progress of said Part of the Project and liaison between said Project Entity, the Borrower and the Association. B. Parts B(1) and B(4) of the Project 1. Each Project Municipality shall carry out its respective Social Insurance Reform Program in accordance with a time-bound action plan acceptable to the Association. 2. Each Project Entity shall carry out the training under Part B(4) of the Project in accordance with a training program acceptable to the Association. C. Part B(3) of the Project: Vocational Training Funds 1. In order to ensure the proper coordination of the provision of grants, including Vocational Training Grants, under part B(3) of the Project, each Project Municipality shall: (a) at all times maintain its respective vocational training coordination committee referred to in Part B(3) (b) of the Project, with membership, terms of reference and resources satisfactory to the Association; (b) not later than April 30, 1996: (i) establish, under arrangements satisfactory to the Association, its respective vocational training grant facility referred to in Part B(3) (c) of the Project; and - 11 - (ii) develop, on the basis of guidelines satisfactory to the Association, and adopt an operating manual for its respective Vocational Training Coordination Committee; and (c) at all times ensure that its respective Vocational Training Fund shall be managed by its respective Vocational Training Coordination Committee in accordance with the operating manual adopted pursuant to Part C.1(b) of this Schedule. 2. Each Project Municipality shall: (a) through its Vocational Training Coordination Committee, make Vocational Training Grants in accordance with the operating manual referred to in Part C.1(c) of this Schedule, and in accordance with such additional procedures and on such conditions as are set forth or referred to in the Annex to this Schedule; and (b) supervise, monitor and report on the carrying out by Vocational Training Providers of Vocational Training Subprojects, in accordance with procedures acceptable to the Association. 3. Each Project Municipality shall: (a) exercise its rights in relation to each Vocational Training Subproject for which it shall have made a Vocational Training Grant, in such manner as to protect the interests of the Borrower, the Association and said Project Municipality, comply with its obligations under this Agreement and achieve the purposes of the Project; and (b) not assign, amend, abrogate or waive any of its agreements providing for Vocational Training Grants, or any provision thereof, without the prior approval of the Association. D. Monitoring and Reporting 1. Each Project Entity shall maintain policies and procedures adequate to enable it to monitor and evaluate, in accordance with the indicators referred to in Part C.1(d) of Schedule 4 to the Development Credit Agreement, the carrying out of its Respective Part of the Project, including the programs referred to in Part B of this Schedule. 2. Each Project Entity shall prepare, under terms of reference acceptable to the Association, and furnish to the Borrower, semi- annual reports, not later than January 31 and July 31 in each year, for forwarding to the Association pursuant to Part C of Schedule 4 to the Development Credit Agreement, integrating the results of the monitoring and evaluation activities performed by said Project Entity pursuant to Part D.1 of this Schedule, on the progress - 12 - achieved in the carrying out of its Respective Part of the Project during the preceding calendar semester and setting out the measures recommended to ensure the efficient carrying out of its Respective Part of the Project and the achievement of the objectives thereof during the then current calendar semester. 3. Each Project Entity shall, after furnishing each report referred to in Part D.2 of this Schedule prepared by it, review said report with the Borrower and, if so requested, by the Association, and promptly take all measures required to ensure the continued efficient implementation of its Respective Part of the Project and the achievement of the objectives thereof, based on the conclusions and recommendations of said report and the Borrower's and the Association's views thereon. - 13 - ANNEK TO SCHEDULE 1 Vocational Training Grants The principal procedures and conditions set forth or referred to in this Annex shall apply for the purposes of Part C.2 of Schedule 1 to this Agreement. A. Eligibility of Vocational Training Providers Each Vocational Training Grant shall be made by a Project Municipality only to a Vocational Training Provider which: 1. is a legal entity duly established and operating under the laws of the Borrower; and 2. shall have established to the satisfaction of said Project Municipality on the basis of guidelines satisfactory to the Association, that: (a) it has the organization, management, staff and other resources required for the efficient carrying out of its operations, including the Vocational Training Sub-project which it proposes to carry out; (b) it has developed a modular, competency-based curriculum appropriate for the implementation of the Vocational Training Sub- project which it proposes to carry out; and (c) it has adopted sound financial accounting policies and practices. B. Eligibility of Vocational Training Sub-projects 1. Each Vocational Training Grant shall be made by a Project Municipality only for a Vocational Training Sub-project which is determined to be technically feasible and financially and economically viable, and for which there is adequate market demand, all as shall be determined on the basis of an appraisal carried out in accordance with guidelines satisfactory to the Association. 2. No expenditures for goods or services required for a Vocational Training Sub-project shall be eligible for financing out of the proceeds of the Credit unless: - 14 - (a) the Vocational Training Grant shall have been approved by the Association; or (b) the Vocational Training Grant shall have been a free-limit Grant. For the purposes of this Agreement, a free-limit Grant shall be a Vocational Training Grant made by a Vocational Training Fund for a Vocational Training Sub-project (other than the first three (3) Vocational Training Grants made by said Vocational Training Fund), in an amount to be financed out of the proceeds of the Credit which shall not exceed the sum of $50,000 equivalent, the foregoing amount being subject to change from time to time as determined by the Association. C. Vocational Training Grants Each Vocational Training Grant for a Vocational Training Sub- project shall be made on conditions whereby the Project Municipality making such Vocational Training Grant shall obtain, by written contract with the Vocational Training Provider carrying out such. Vocational Training Sub-project, or by other appropriate legal means, rights adequate to protect the interests of the Association and said Project Municipality, including the following: 1. Said Vocational Training Provider shall undertake to: (a) carry out and operate said Vocational Training Sub- project with due diligence and efficiency and in accordance with sound technical, financial, managerial and vocational training standards; (b) maintain adequate records and provide, promptly as needed, the funds, facilities and other resources required for the purpose; (c) procure the goods and services required for said Vocational Training Sub-project and to be financed out of the proceeds of the Credit in accordance with the provisions of Schedule 3 to the Development Credit Agreement, and utilize such goods and services exclusively in the carrying out of its Vocational Training Sub-project; (d) enable the Association and said Project Municipality to inspect such goods and the sites and works included in said Vocational Training Sub-project, the operation thereof, and any relevant records and documents; (e) take out and maintain with responsible insurers such insurance, against such risks and in such amounts, as shall be consistent with sound business practice, including, without limitation, such insurance to cover hazards incident to the acquisition, transportation and delivery of goods required for said Vocational Training Sub-project to the place of use or installation, any indemnity thereunder to be made payable in a currency freely usable by said Vocational Training Provider to replace or repair such goods; and (f) prepare and furnish to said Project Municipality for forwarding to the Association, if either of them so requests, all such information as the Association or said Project Municipality shall reasonably request relating to the administration, operations and financial condition of said Vocational Training Provider and to the benefits to be derived from said Vocational Training Subproject; and 2. Said Project Municipality shall have the right to suspend or terminate the right of the Vocational Training Provider to the use of the proceeds of the Credit upon failure by said Vocational Training Provider to perform its obligations under its contract providing for said Vocational Training Grant. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the International Bank for Reconstruction and Development and the International Development Association. FOR SECRETARY