Morocco - Environmental Management Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No: 20590 IMPLEMENTATION COMPLETION REPORT (CPL-36470; SCL-3647A; SCPM-3647S) ON A LOAN IN THE AMOUNT OF US$6.0 MILLION TO THE KINGDOM OF MOROCCO FOR AN ENVIRONMENTAL MANAGEMENT PROJECT JUNE 22, 2000 Rural Development, Water and Environment Department Middle East and North Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (Exchange Rate Effective March 2000) Currency Unit = Moroccan Dirham (MAD) 0.098 MAD = US$ I US$ 1 = 10.21 MAD FISCAL YEAR Since 1996: July 1 - June 30 ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy CDF Country Development Framework CED Comptroller of Expenditure Commitmnents EA Environmental Assessment EMP Environmental Management Project EMS Environmental Management Systems EU European Union FY Fiscal Year GOM Government of Morocco lCB International Competitive Bidding ICR Implementation Completion Report MATEH Ministry of Land Development, Environment, Urbanism and Habitat MNA Middle East and North Africa MOA Ministry of Agriculture MOI Ministry of the Interior CNE National Environment Council (Conseil National de l'Environnement) NEAP National Environmental Action Plan NGO Non-Governmental Organization OED Operations Evaluation Department PDES Economic and Social Development Plan (Plan de Developpement E~conomique et Social) PR President Report SGG Government General Secretariat (Secretariat General du Gouvernement) SEE State Secretariat for the Environment (Secretariat d'Etat de I 'Environnement) SSE Under-Secretariat for the Environmnent (Sous-Secretariat d'Etat de I'Environnement) (SEE's predecessor) Vice President: Jean-Louis Sarbib Country Manager/Director: Christian Delvoie Sector Manager/Director: Salah Darghouth Task Team Leader/Task Manager: Nicole Glineur  FOR OFFICIAL USE ONLY CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 1 4. Achievement of Objective and Outputs 6 5. Major Factors Affecting Implementation and Outcome 10 6. Sustainability 12 7. Bank and Borrower Performance 13 8. Lessons Learned 16 9. Partner Comments 17 10. Additional Information 26 Annex 1. Key Performance Indicators/Log Frame Matrix 27 Annex 2. Project Costs and Financing 28 Annex 3. Economic Costs and Benefits 30 Annex 4. Bank Inputs 31 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 33 Annex 6. Ratings of Bank and Borrower Performance 34 Annex 7. List of Supporting Documents 35 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization.   Project ID: P005504 Project Name: ENVIRONMENTAL MANAGEMENT Team Leader: Nicole Glineur TL Unit: MNSRE ICR Type: Core ICR Report Date: June 22, 2000 1. Project Data Name: ENVIRONMENTAL MANAGEMENT L/C/TF Number: CPL-36470; SCL-3647A; SCPM-3647S Country/Department: MOROCCO Region: Middle East and North Africa Region Sector/subsector: VI - Enviromnental Institutions KEY DATES Original Revised/Actual PCD: 12/05/91 Effective: 10/06/94 Appraisal: 04/20/93 MTR: 06/06/97 Approval: 09/14/93 Closing: 12/31/98 12/31/99 Borrower/lImplementing Agency: KINGDOM OF MOROCCO/UNKNOWN Other Partners: STAFF Current At Appraisal Vice President: Jean-Louis Sarbib Caio Koch-Weser Country Manager: Christian Delvoie Harinder Kohli Sector Manager: Salah Darghouth Anand Seth Team Leader at ICR: Nicole Glineur Sherif Arif ICR Primary Author: Harald Stier 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactoxy, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: U Sustainability: L Institutional Development Impact: M Bank Performance: U Borrower Performance: U QAG (if available) ICR Quality at Entry: U Project at Risk at Any Time: Yes 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: An outline of a new Government policy on the enviromnent was presented in the National Report submitted to the 1992 UNCED Conference and reflected a strong, yet new, commitment to protecting the enviromnent  with appropriate natural resource management and a minimization of pollution. At that time, in Morocco, there was a real vacuum in the legal and institutional framework in the environmental field and environmental questions had been handled by the Directorate of Environment and Urban Planning in the Ministry of Interior (MOI). With this new emphasis, a separate Under-Secretariat for the Environment (SSE) reporting directly to the MOI minister was created. To implement the Government policy, SSE required to build up its technical capacity and operational procedures needed to be developed while at the same time the overall institutional (both at central and local level) and legal framework for environmental protection had to be strengthened. At the Government's request, the Bank had the opportunity to assist Morocco in developing the regulatory and institutional framnework, formulating an environmental policy and developing appropriate economic and financial instruments to ensure the integration of effective environmental management into Morocco's micro and macro economic policies. Hence, a technical assistance project was prepared with the following objective: "to assist the Government in strengthening its institutional and regulatory framework for managing environmental protection. It is expected that the establishment of the needed environmental institutions and full development of the necessary environmental laws would require a concerted and long term effort spanning many years. The project, representing the first step of such efforts, will define the elements for and initiate the process of strengthening the Government's environmental capacities." The objective was in line with the 1993 Morocco Country Assistance Strategy. The project also complemented other Bank-financed projects which relied on the enhanced capability of environmental management. The project was viewed as providing an impetus to shift the region's conceptual framework towards designing sustainable investment projects. 3.2 Revised Objective: N/A 3.3 Original Components: The main project components as stated in the President's Report (PR) were: (i) Strengthen the technical and administrative capacity of the Under-Secretariat of State for Environment (SSE) as the central environmental authority, the Ministries of Agriculture and Public Works, representing the sector ministries and the Wilaya (Province) of Fez representing the local government in order to apply on a pilot basis the decentralized environmental management process. (ii) Reactivate the National Council of the Environment (CNE) to oversee the environmental activities of the ministries. (iii) Reinforce the legal and regulatory framework by reviewing and updating existing regulations, introducing the environmental impact assessment (EIA) as mandatory for new investment projects which may have potential adverse environmental impact and assisting in the preparation of two new laws: the permit law for integrated pollution control and the chemicals and toxic wastes control law. (iv) Design an enforcement and compliance mechanism for environmental protection through adoption of the "command and control" approach based on norms and standards which were being developed with the assistance of the German Agency for Technical Cooperation (GTZ), for chemical uses and the "roll back" approach for point sources pollution. This component which was listed in the PR was financed with - 2-  concessional aid and was not included in the legal agreement for the project. (v) Finance a series of studies on economic and financial incentives and measures for environmental protection and for enabling Morocco to adopt European Standards in preparation for a free trade agreement with EEC. (vi) Promote an environmental education and awareness programn outside the fornal education system on the basis of a strategy which was developed with the assistance of the GTZ. (vii) Establish a National Environment Information Network (NEIN) on a pilot scale in the form of a central information node at the SSE and two service nodes at the ministries of Public Works and Agriculture and the Wilaya of Fez. The project would provide (a) provide technical assistance for six policy, economic, financial and legal studies (272 months of international and local consultants); (b) organize 33 technical and specialized workshops for 600-800 professionals from the sector ministries, local government, NGOs and private and public sector consulting and industrial firms; (c) provide training abroad for 26 professionals; and (d) furnish computers, vehicles, office equipment and audio-visual aids. 3.4 Revised Components: During project implementation it was found necessary to regroup the project components into four "lots", in order to obtain suitable packages for consultant contracts, putting together activities with matching skill requirements for technical assistance needs. This was also necessary to better reflect the GOM budget structure (budget lines) and thereby avoiding drawing from different budget lines to pay one consultant or pay several consultants from the same line; which would have rendered execution more difficult. The components were therefore regrouped into four lots without making any substantive change to the overall project concept. This modification appears to have been made, defacto, early on by the GOM, before the procurement process was launched, but it only appeared in Bank form 590s in June 1997, after the mid-term review. The revised components were: Lot 1: Legal and Institutional Component [containing components (i)-(iii) above] Lot 2: Economic and Financial Instruments Component [component (v) above] Lot 3: Environmental Information System (SIDE)[component (vii) above] Lot 4: Environmental Education and Dissemination [component (vi)] Because of the initial delay in project startup, compounded by additional delays due to the complexity of the procurement/financial setup involving three agencies and the Wilaya of Fes, and the inexperience of the implementing agency, the project could not be completed according to the original timetable. The Government requested in February 1998 to: extend the closing date by 18 months, eliminate the Wilaya of Fes pilot component, and hence reduce the loan amount by US$1 million (see below). Five reasons were given for such changes: * Belief that the legal and institutional analysis carried out under the project would only prove useful if Morocco could achieve concrete results in the areas of environmental legislation, institutional coordination mechanisms, environmental planning and financial and economic instruments. * The catalytic role of the EMP in training, intemships, dialogue and inter-ministerial coordination and with field staff needed to be maintained and strengthened. - 3 -  * The expected impact of the project with regard to sensitizing decision makers and the general population to environmental issues. * The catalytic role of EMP in mobilizing financial resources and the support of donors could be compromised if the project were to be closed without having obtained its objectives. * The project only became effective more than a year following Board approval and implementation effectively only started in 1996. Following a formal request from the Government of May 15, 1998, activities in the Wilaya of Fez were cancelled, in conjunction with US$1 M of the loan amount, in October 1998 (reducing the loan to US$5 M). Activities in Fez had made no progress due to lack of counterpart funding, the Wilaya being unable to budget the necessary resources. The local communities are administered under the Ministry of Interior. At project preparation, with the SSE being part of the this ministry, there was a budgetary link and the preparation team trusted that the Fez component would be budgeted. With this link broken as the SSE was separated from the MOI (see section 4.1) other investment priorities were given preference. The elimination of the "Wilaya of Fes" component was justified because of two key reasons: (i) important institutional changes which occurred since the project was designed, had led to the creation of a Department of Environment independent of the Ministry of Interior in charge of local governments; and (ii) the budget process, as confirmed by the Ministry of Finance, did not allow government transfers from Environment to local governments. The GOM request for an 18 months extension of the loan closing date, from December 31, 1998 to June 30 2000 was considered by the November 1998 supervision mission during which it was decided to restructure the project. The criteria which guided the restructuring of the project included: (a) direct contribution of remaining activities to the development objectives of the project, (b) the elimination of the sub-components and components which became obsolete either due to the evolving SEE organizational and administrative framework or to the intervention of other donors, (c) the integration of the project within the Government's new Social and Economic Development Plan (PDES); and (d) the establishment of a scheduled action plan to enable project's completion within the extension period. As a result, the following changes were undertaken: (i) cancellation of the training component of lot I (funded outside the project); (ii) cancellation of the lot 2 phase 2 study on Economic Instruments (the introduction of these instruments was judged as prertature, by GOM, within the country's socio-economic context); (iii) cancellation of the Education and Awareness component (funded outside the project); and (iv) The SIDE component was refocused to be fully in line with the PDES and to operationalize the products in order to enable decision makers to determine their priority activities on the basis of reliable information as well as to disseminate information to all concerned parties. On the basis of this restructuring, which led to the cancellation of another US$1.5 M (reducing the loan to US$3.5 M) the Bank approved a one year extension of the project to December 31 1999. At the request of the Government, an additional FF5.0 million was cancelled during the April 2000 supervision mission. The amount corresponded to the equipment to run the SIDE which was to be procured with other funding. The first bid for the procurement of the equipment was launched in early 1999, a second bid was launched in the summer of 1999. To date the bidding has not materialized and a new bid is expected to be launched. -4 -  3.5 Quality at Entry: ICR rating unsatisfactory. The project's objectives were largely in line with the CAS and consistent with government priorities at the time. At the design phase several major risks to project implementation were identified, which did indeed materialize, seriously impacting the quality of project implementation: * Environmental protection was new to the Government's political agenda, and its political commitment uncertain; * The State Secretariat of the Environment, then Under Secretariat, (SSE) might experience resistance from the sector ministries in cooperation; * The project was institutionally complex; and * Enactment of the two laws to be prepared under the project could occur after the end of project implementation. With hindsight, the scope of project activities exceeded the capacity of a new and inexperienced government agency (SSE). The SSE carried insufficient weight in its efforts to coordinate between well established ministries such as Agriculture, Public Works (now Equipment), Finance, as well as later on with the Ministry of Interior. A less complex institutional involvement with a less ambitious set of project activities might have had a greater chance of being fully implemented. Although detailed project preparation was made with the help of consultants, it does not seem to have fully taken into account the budgetary procedures, which proved fatal for project implementation. Need for the finalization of TORs and preparation of bid documents were given as reasons by the Ministry of Finance for delaying signing of the Loan Agreement until May 1994, eight months after Board approval. The preparation team had correctly foreseen this problem and made the submission of bidding documents for the first year of project implementation a conditionality but this was dropped by the FEPS review meeting. Failure to clearly understand GOM budget procedures and to analyze the flow of funds for the project were the major factors in causing an additional delay in the signing of the first two consultants contracts (Lots 1&2) until early 1996. An inter-ministerial steering committee had been set up (condition of effectiveness) to provide overall policy guidance, review work programs and resolve any inter-ministerial implementation issues. However failure to ensure that its members were the decision makers rendered it dysfunctional and inter-ministerial disagreements seriously hampered project implementation. Also lack of sufficient attention to the division of responsibilities for project implementation within the SSE, among its services, had led to tensions, lack of commitment and lackluster performance. Yet a power struggle as a result of the reorganization of the Directorate of Environment and Urban Planning and the creation of a separate Under-Secretariat for the Environment with four Directorates was clearly seen and reported on by the preparation team. No regular project progress reports have been prepared by the project executing agency and since this was not a requirement in the loan agreement with GOM, it could not be enforced. The lack of records has made it hard for Bank task teams to supervise the project and for the ICR mission to evaluate the irnplementation performance. Overall, the preparation team had correctly identified major project risks, but had not effectively been able to mitigate these risks since they all seriously hampered project implementation. - 5 -  4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: The project outcome is unsatisfactory. The projects objective to strengthen Morocco's institutional and regulatory framework for managing environmental protection is not a precise measurable goal and the preparation team underlined in the PR, that the project represented a first step in such efforts and would define elements for, and initiate the process of, strengthening GOM's environmental capacities. Hence, the outcome of the project objective are evaluated according to what the components were set out to achieve: * Institutional Strengthening. The institutional analysis of three main ministries and of research and operational agencies under these ministries' jurisdiction was completed. Based on this analysis, two scenarios for restructuring the Ministry of Environment were proposed. Operational directives and procedures for the cooperation between the Ministry of Environment and other governmental departments and NGOs are being formulated after an analysis of relationship between the National Council for the Environment (CNE) and the National Supreme Council for Water and Climate. According to the January 1995 Decree (2-93-1011), CNE was restructured to broaden governmental and non-governmental participation in the enviromnental policy formulation process. Its large constitution of more than 400 members renders it inoperational. During project implementation, the SSE was exposed to several institutional changes unreiated to the project, which contributed to implementation difficulties. From having been an under-secretariat in the Ministry of Interior, it became a separate ministry, then it became part of the Ministry of Agriculture and is now State Secretariat for the Environment (SSE) within the Ministry of Land Development, Environment, Urbanism and Habitat. The project contributed to elevate the environmental agenda of the government and initiated communication between environmental units of many ministries. At the time of the ICR mission, the SSE was working on a submission for Morocco to host the seventh world Conference of Parties on Climate Change (COP 7). SSE also was able to place a representative to mainstream the environment in each of the 31 commissions for the PDES. The National Council of the Environment has been reactivated under the project but has failed in steering concerted government action for reasons explained above. Because of lack of local budget, the creation of environmental monitoring unit in the Wilaya of Fes has been canceled. The specific issue concerning decentralization of environmental management is being dealt within the broader context of the administrative reform in PDES. * Enhancement of the Legal Framework. The following legal instruments were prepared: draft environmental framework law; legislation on Environmental Impact Assessment (EIA), hazardous wastes, toxic chemicals and integrated pollution control. These legal instruments are still at an early stage of the approval process. This is not inconsistent with the situation in other MNA countries where often it takes a decade to enact laws. This would appear to be an indication of lack of sufficiently strong government commitment and leadership to arrive at a consensus among concerned ministries. Despite the fact that EIAs are yet to be legally required, the project has succeeded in making the EIAs a practice for major projects within key ministries and the private sector. * Financial and Economic Incentives. Based on the industrial audits carried out in the Sebou River Basin, financial and fiscal instruments are proposed for pollution reductions, e.g., ecotax for sugar, pollution charges and environmental covenants "Contrat de branche" for tanneries and olive-oil producers. * Environmental Information System. While the system is completed, the National Environment Information System (SIDE) is not yet operational due to lack of equipment. - 6 -  * Environmental Education and Dissemination. A broader strategic dissemination plan for public education is established annually by the SEE (Department for Public Dissemination and Education) and the original proposed component became obsolete and was cancelled. 4.2 Outputs by components. The lack of project progress reports and systematic monitoring data on project implementation, renders difficult any effort of a systematic account for project outputs in relation to PR projections. Available infornation shows the following results: Institutional Strengthening and Legal framework (Lot 1). Institutional Strengthening. Under this heading the following main outputs were produced: (i) A report on the institutional analysis, first submitted by the consultants in April 1997; (ii) A proposed institutional framework for the strengthening of the SEE was made in February 1998; (iii) A study to redefine the role of the National Council on the Environment, March 1999. (iv) A training program was first prepared by the consultants in 1996 and approved by the participating ministries in 1997. Although delayed, all the TA work to enhance the institutional capacity in the field of environment under the project was carried out as planned. Based on the institutional analysis of the three main ministries and the research and operational agencies under these ministries' jurisdiction, two scenarios for restructuring the SSE were proposed and provided a basis for its reorganization. Little evidence has been found of the impact of the EMP in strengthening environmental functions in the participating ministries and the environmental unit established in Fez remained inactive. The separation of SSE from the MOI and creation of a separate ministry of environment, in March 1995, broke the institutional ties with the Wilaya and caused a void in terms of budget funding. This finally led to the cancellation of the Fez sub-component in October 1998, as referred to earlier. Training under the project would have been beneficial at the outset but later is was considered that sufficient training was provided under other programs and the sub-component was finally cancelled in November 1998. Operational directives and procedures for the cooperation between the SEE and other governmental departments and NGOs were being formulated. CNE was restructured to broaden governmental and non-govemmental participation in the environmental policy formulation process but failed to function (section 4.1). While the outcome of this component is unsatisfactory, the outputs, as defined in the PR, were satisfactory. Legal Framework. The following main outputs were obtained: (i) A review of legislation regarding the environment was carried out in 1996 and provided a basis for the consultants work on the legal texts; (ii) a draft law and decrees on environmental impact assessment, April 1997; (iii) a draft law and decree on integrated pollution control in April 1997: - 7 -  (iv) a draft law on toxic chemicals and hazardous wastes in March 1998, (v) a draft law and decrees on atmospheric pollution, March 1998. (vi) A draft environment code was submitted in June 1998. (vii) an inter-ministerial legal audit was carried under the project and finalized February 1998; (viii) a study on "branch contracts", December 1998; The TA work for this component resulted in the expected output and essentially all the work envisaged at appraisal was carried out. However except for the fact that EIAs are being carried out for major governmental and private sector projects (see section 4.1) the impact of this component, at the time of project closure, is limited since the legal texts have yet to be endorsed. The laws on toxic and hazardous wastes, atmospheric pollution, environmental impact assessment and the environment framework are still in the preliminary govemment legal review committee (SGG) and have not yet been submitted to the Government Council for decision, this represents a 3 to 5 year gap (depending on the law) from the project target. The inter-ministerial review committee never reached agreement on the integrated pollution control law, which was never even submitted to SGG. The study on branch contracts never led to any such contracts. Although this sub-component has had no impact yet, since all the legal text work was carried out and the results may still be forthcoming, output under this component is rated satisfactory. Economic and Financial Instruments (Lot 2) The outputs under this component were: Phase 1: (i) Five sector studies (leather, vegetable oil, textiles, sugar, and chemicals) with an evaluation of polluting discharges were carried out and a report a was submitted in October 1996; (ii) Environmental audits were carried out on 11 companies; (iii) A study (phase 1) was made on economic incentives and instruments for pollution control were prepared and a report was issued in January 1997; (iv) A report was prepared on socio-economic and sanitary impact, March 1997 Phase 2 (no output. cancelled November 1998): (i) Application of economic incentives and instruments for pollution control (cancelled); (ii) Application of "branch contracts" (cancelled) As GOM did not indicate readiness to application of these ambitious tools in the socio-economic context of the country, phase 2 of this component was cancelled. - 8 -  Environmental Information System (Lot 3) The outputs under this component were: (i) Inventory of environmental inforrmation in Morocco, May 1999 (ii) Concept study on the Information System (SIDE), November 1999 (iii) SIDE operational manual, October 1999 (iv) Training plan, November 1999 (v) Training of operators, except for the overseas training, has been done. (vi) A concept study for Network of Partner Actors in Environment (RAPIDE) has been prepared. (v) A Report on the State of Environment in Morocco (REEM) has been prepared. After the late recruitment of the consultants, the SIDE was revised within the framework of the PDES. The conceptual framework, the Partnership Network (RAPIDE), the Report on the State of the Environment in Morocco (REEM) are completed. However, the equipment, which is procured outside of project funds, is not yet in place. Hence the consultants have been unable to set up the network. Environmental Education and Dissemination (Lot 4) This project component was cancelled in the November 1998 since it was funded outside the project. 4.3 Net Present ValueiEconomic rate of return: N/A 4.4 Financial rate of return: N/A 4.5 Institutional development impact: While the project strengthened the technical capacity of the SSE, it did not strengthen its administrative capacity. Project studies and the implementation difficulties encountered through the project clarified the role of SSE and the project has contributed to the reorganization of SSE with a view of mainstreaming environment in the sector ministries as well as with the private sector and civil society. SSE is moving away from attempting to manage all environmental issues to being a catalyst in ensuring that environmental issues are managed by relevant institutions and the private sector, in compliance with prepared legislation. SSE now stands ready to host the seventh Conference of Parties on Climate Change (COP 7). Never-the-less, the legislation and incentives for an effective monitoring of the effects of economic activities on environment still needs to be legally endorsed. The project has contributed to elevate the environmental agenda of the government and initiated communication between environmental units of many ministries. -9-  5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control of government or implementing agency: * Frequent changes of Bank task team leaders lead to substantial discontinuity of dialogue and uncertainty of purpose; and * Lack of timely training on procurement and disbursement procedures to executing agency personnel contributed to delays. 5.2 Factors generally subject to government control: Government commitment to the project is questioned by (a) the CNE lack of effectiveness; (b) insufficient coordination between participating government agencies; (c) the lack of strong support for the endorsement of environmental legislation and; (c) the reluctance of Government to use Bank loans for TA. Governmental budget allocations were insufficient at various stages of project implementation Governments rigid budget system did not easily accommodate the use of counterpart funds for the project. Procedural bottlenecks impeded the timely availability of budget allocations to the ministries and limited their capacity to execute projects efficiently and pay services within reasonable delays. These bottlenecks led to a delay of some 18 months in project execution. In addition the Government's a priori system of approving expenditures required excessive time. The structure of the department responsible for coordination of environment questions within the Government changed constantly over the course or the project. The Under-secretariat of State within the Ministry of Interior, at the onset of project implementation, became a full fledged Ministry of Environment in 1995, a Secretariat of State for Environment within the Ministry of Agriculture Equipment and Environment in 1997 and finally a Secretariat of State for Environment within the Ministry for Land Development, Environment, Urbanism and Habitat in 1998 until the present. At each change the new management reevaluated project activities which took time and caused changes and disruptions in project implementation. 5.3 Factors generally subject to implementing agency control: Contrary to agreements during negotiations, staff in the project implementation unit were not allowed to devote their full time and attention to the project. In addition staff recruited for project implementation (about 30) were reported to be new to the task and ill prepared, were not supervised by more experienced staff and received insufficient training (including in governmental and Bank procedures). These factors contributed to the delay in the recruitment of the consultants, in the preparation of TORs and bidding documents, and in the evaluation of the first proposals, which were reported to be ready in January 1995 whereas contracts were signed only in early 1996 (the rigid budget system also contributed). The incapability of project staff to cope is also evidenced by the Bank suggesting the recruitment of a consultant to assist with the procurement of Lots 3&4. Failure of the project implementation unit to involve other concerned departments of SSE in the planning and execution of project activities resulted in a lukewarm interest at best and an uninspired contribution when called upon. This no doubt affects the ownership of project output resulting in poor support for its dissemination and application. - 10 -  No systematic records were kept on the project. Bank missions repeatedly reported that financial and physical reporting was inadequate and no progress reports were prepared. As a result it was hard for the Bank to monitor project progress and take remedial action, and for the ICR mission to collect coherent data for the evaluation. 5.4 Costs andfinancing: Total project costs were estimated at US$10.8 M (DH94.2M), financed through a Bank loan of US$6 M. Following a confirmation of the cancellation request, sent by the Government on October 1, 1998, the Fez component was cancelled and the loan amount reduced to $5 million. In addition, as a result of the November 1998 restructuring mission, the training component of lot 1, the lot 2 phase 2 study on Economic Instruments, and the Education and Awareness component were cancelled, reducing thereby the loan amount to $3.5 million. Finally, at the request of the Government, an additional FF5.0 million (US$0.7M) was cancelled over the course of the April 2000 supervision mission. A total of US$2.02 M had been disbursed at loan closing whereas compared to project expenditures as recorded by SSE of DH3 1 M should have resulted in disbursements of somewhat over US$2.5 M (depending on the exchange rate). However the last scheduled disbursement of project funds did not occur. Late withdrawal requests for expenditures of about US$ 0.5 M for SIDE consultants services did not reach the Bank before the closing of the accounts on April 30, 2000. DISBURSEMENTS (cumulative) (US$ million equivalent) FY95 FY96 FY97 FY98 FY99 FY00 Appraisal Estimate 0.18 1.74 3.80 5.04 6.00 Estimate after Restructuring 0 0.60 1.14 1.90 3.46 3.46 Actual 0 0.60 1.14 1.90 1.96 2.02 Actual as % of Estimate 0 34% 30% 38% 57% 58% Date offinal disbursement April 30, 2000  6. Sustainability 6.1 Rationale for sustainability r ating: The limited results achieved are rated as likely sustainable. The project is rated as unsatisfactory because the delivered outputs did not meet expectations. Never-the-less some achievements are likely to be sustainable. At project completion, there are good prospects that the achievements of the development objectives will be maintained. Dialogue continues between the World Bank and the Government to further strengthen institutional capacity of government agencies for environmental management. The achievements of the project are not only likely to be sustained, but form the cornerstones for mainstreaming environment in the sectoral ministries, private sector and civil society. Institution Building. The achievements under this component include a strengthening of the SSE and of elevating the environmental agenda of the Government and this is highly likely to be sustainable, particularly in the view of what is expected from Morocco's partners e.g. for an association with the EU. The reorganization of the CNE did not seem to have the full Government support and the reform has not been sustainable. Legal Strengthening. The achievements in this area include draft laws prepared under the project, none of which has yet passed the SGG. The various stakeholders who constitute the Government have different interests to defend and have not (yet) been able to agree on suitable texts. On the one hand, one might argue that this legislation is premature and will not be passed in a foreseeable future. A more optimistic view stems from the experience from other countries in the region which indicates that, on average, it takes 10 years to endorse environmental legislation. The ICR mission adopts this more optimistic conclusion and rates the achievements under this heading as likely to be sustainable. Information System. This component was not completed at project closing due to lack of equipment, but the SEE is continuing work for the equipment set up of the SIDE and funds have been budgeted to that effect. These expected achievements are likely to be sustainable for reasons similar to the ones identified under the Institution Building component. Overall the project has helped Morocco to launch an environmental agenda and start mainstreaming environmental issues, which momentum can no more stop given its importance and the expectations of Morocco's economic partners in this respect. Sustainability is therefore likely. 6.2 Transition arrangement to regular operations: The project once completed is not a separate entity but an integral part of Morocco's overall institutional structure and operated accordingly. Staff recruited under the project are funded from the regular Government recurrent budget and under the same conditions as other civil servants. Activities, such as the SIDE, has government funding for its completion. Performance indicators for the final achievement of project objectives would include: - 12 -  (a) Passing of legislation: (i) on environmental impact assessment; (b) Progress towards the endorsement of the following legislation: (i) on solid waste and toxic chemicals and hazardous wastes; (ii) on atmospheric pollution; (c) Environment Information System (SIDE) operational (d) Application of economic and financial incentives for pollution control The passing of the legislation (a), progress towards legislation endorsement (b) and rendering SIDE operational (c) are indications of a clear SEE's direction and efforts toward improving the environment in Morocco. The Bank should continue to support the main objectives of the project and the achievements of project outputs. It was voiced among the ICR mission's bilateral interlocutors that the Bank was best placed to push legislative reforms and proponents for environmental reforms in Morocco look to the Bank for support and leadership in breaking the resistance of special interests. This could be done in the context of the overall Bank program discussions (Comprehensive Development Framework [CDF]) as well as in the context of specific projects. The Bank has environmental requirements in all its relations with Borrowers and follow-up on the EMP should be part of its dialogue with Morocco. Failure to do so would show lack of the clear direction and purpose expected in Bank assistance. If an impact evaluation of the project is planned by OED, 2005 would appear to give sufficient time to pass the legislative EIA and solid waste package and start to see its impact on economic activities in Morocco. 7. Bank and Borrower Performance Bank 7. 1 Lending. Bank performance at project identification was satisfactory and took into account the Govemment's new emphasis on protecting the environment although the necessary institutions, legislation and know-how to launch a program were lacking. Also environmental and water resource management was one of the key pillars in the Bank's assistance strategy for Morocco (CAS). Bank performance in project preparation and appraisal was unsatisfactory contributing to making the project unsatisfactory at entry (section 3.5) and leading to delays and other difficulties during execution, explained above. While the staff mix and continuity at preparation and appraisal were adequate, design issues and the materialization of risks hampered project implementation. The content of the project was too ambitious and complex, a problem which had already been raised at the IEPS Meeting and at the Yellow Cover Review Meeting where the team was asked to be realistic in setting project indicators and targets. At the same time, safeguards proposed by the preparation teamn (such as early preparation of bidding documents) were removed by formal review meetings. Components had to be redefined during implementation in order to obtain suitable and sequential consultant packages, and finally large parts were cancelled. Not enough account was taken of the executing agency's capacity to implement the project, including its unfamiliarity with governmental and Bank procedures and inexperience in the financial management of projects. Moroccan partners - 13 -  commented that not sufficient attention had been given to take the socio-economic Moroccan situation into account, demonstrated by stalled legislation. Similarly, a Bank staff expressed that the design of the project did not account for the institutional situation of Morocco, and proposed too many studies with several ministries without specifying the operational outputs and coordination mechanism. 7.2 Supervision: Overall supervision was unsatisfactory although there was improvement in 1998 when the project was finally restructured. Frequent changes of task managers (there were five) led to lack of continuity in approach and in the dialogue with the Moroccan partners, reducing the effectiveness of Bank interventions. Issues raised as requiring the attention of the following supervision were often not mentioned in the next report. Project reporting would have benefited from a more consistent structure and continuity. A Moroccan project staff expressed that Bank supervisions were more of the "inspector" type, often hasty, of an administrative nature and did not contribute technically to good implementation of the project. For example, assistance by supervision missions in finalizing bid documents would have helped. Training in Bank procurement procedures was discussed, but there is no record of its implementation. Only at the end was there an improvement and the project was restructured as a consequence. Yet it is the technical assistance part of Bank cooperation that is mostly appreciated by the implementing agencies, rather than the Bank's financial contribution. 7.3 Overall Bank performance: Overall performance by the Bank was unsatisfactory, during both preparation and implementation. Borrower 7.4 Preparation: Borrower performance at identification, preparation, and appraisal of the project was unsatisfactory. While the Borrower took on an active role in the identification, preparation and appraisal of the project, although new to such project the borrower shares the responsibility for the unsatisfactory project at entry. 7.5 Government implementationperformance: Borrower implementation perfornance was unsatisfactory. The Borrower shares responsibility for the projects poor implementation performance. Failure to resolve the problem of project funding with multiple project agencies caused serious delays in implementation and contributed to the failure to complete the project. Although the Government reformed the CNE it resulted in its ineffective functioning. The inter-agency steering committee's failure to resolve project problems in a timely manner added to project delays. Legislation prepared under the project has not yet been passed, this postpones the impact of the project on environment. Lack of ministerial consensus in implementing EMP project, and reluctance to borrow for technical assistance are some of the reasons for the limited success of EMP. 7.6 Implementing Agency: The performance of the implementing agency is unsatisfactory. Staff in the project implementation unit were, contrary to agreements, given other tasks thereby contributing to delays in project implementation. Financial and quality monitoring of the project was poor. No progress reports were sent to the Bank over the course of the project. Because all concerned departments in SSE were not sufficiently involved in the planning of project activities, the project suffered from their lack of interest. Although there was substantial progress in the implementation of project tasks in the last year of the project, administrative problems - 14 -  identified earlier continued to persist until project completion. This negatively affected project completion and disbursements. 7.7 Overall Borrower performance: Overall performance the borrower was unsatisfactory for reasons explained above. - 15-  8. Lessons Learned (i) The Bank does not have a high comparative advantage in funding technical assistance projects which are not seen as competitive or bankable. In addition, environmental capacity building in particular, and institutional projects in general, are better carried out by aid agencies with staff in the field and grants available for environmental pilot activities. Where institutional development projects for new agencies are undertaken by the Bank, close supervision is necessary, preferably by resident staff where possible. The Bank advisory role in institutional type projects is seen as more important than the loan itself. Political will is essential for project success, as is coordination of donors and government agencies for instance through the CDF. (ii) A project monitoring system and reports (financial and technical) should be agreed during project preparation and reflected in the legal documents permitting their enforcement. (iii) The planning and verification of the flow of funds from the budget to final payments is critical at project preparation. (iv) Design for environmental management projects should take more into account the socio-economic context of the country and should focus on attainable activities. Alternatively top management should ensure that set environmental goals are met at the highest level. (v) At the project implementation stage, opportunity should be taken at the onset during supervisions to redirect course of action in order to reflect evolution of events and other donor interventions. (vi) The legislation prepared under projects is seldom enacted during the typical five year implementation period. Following the project closure, the Bank should continue manifesting the importance it attaches to reaching the final targets on which the impact of the project depends. The Bank should find means to continue support for the adoption of such legislation. (vii) As it has proved particularly difficult when the counterpart is a new inexperienced agency, with limited capacity and technical know-how, to fully implicate the borrower, means must be found to ensure better ownership of the project in such cases. (viii) Although participation of cross-sectoral institutions in the project is essential for its success, it is not sufficient. Ownership must be ensured from all participating institutions. The borrower should propose cross-sectoral coordination mechanisms during project preparation, which could be tested at the onset of implementation. (ix) Within the Bank side, the project was managed by five task team leaders. The implementing agency was headed by four different ministries during the course of the project. Such frequent changes within the Bank and the implementing agency lead to lack of continuity and purpose in the dialogue and cause disruption and delays in project execution. The Bank should encourage more continuity in its project teams. - 16 -  9. Partner Comments (a) Borrower/implementing agency: Le present rapport elabore par le Secretariat d'Etat charge de 1'environnement est un rapport de fin de projet. II fait suite a une serie de 9 missions de concertation et de suivi de la Banque mondiale, et d'un rapport d'evaluation a mi-parcours. Le contenu du rapport sera axe sur une analyse qualitative, plut6t que quantitative suivant le modele propose par la Banque mondiale. Ce rapport sera egalement annexe au rapport d'evaluation de la Banque mondiale en son examen par le Conseil d'Administration de cette demiere. - Objectif du projet Le projet de Gestion de l'Environnement (PGE) est un projet financ6 par un pr8t initial de la Banque mondiale de 6 millions de dollars, ayant pour objectif d'assister l'autorite nationale chargee de la protection de l'environnement en matiere de renforcement de ses capacites institutionnelles, juridiques, techniques et communicationnels. - Duree du projet Approuv6 par le Conseil de la Banque mondiale en septembre 1994, I'accord de pret du projet a e signe en mai 1994 et le demarrage effectif des ses activites en f6vrier 1996. La date de cl6ture initialement prevue pour le 31 decembre 1998 a et reportee au 31 decembre 2000. - Conception du projet (formulation et preparation) En tant que projet integre, le PGE etait concu selon: Une structuration sectorielle impliquant dans la gestion et le suivi des activites un noyau dur, form6 en plus du departement charge de l'environnement, de deux autres departements ministeriels a savoir, le departement charge de l'equipement et celui charge de l'Agriculture, du Developpement Rural et des Peches Maritimes. Une structuration thematique traitant respectivement des aspects institutionnels et juridiques (lot I d' une duree de 24 mois), des aspects technico-financiers, en relation avec les instruments economiques et financiers (lot 2 d'une duree de 18 mois), des aspects communicationnels en relation avec le developpement d'un reseau d'echange d'information et de donnees environnementales (lot 3 d'une dur6e de 15) et egalement des aspects lies i la promotion et i la diffusion de l'information, en rapport avec la sensibilisation (lot 4 d'une dur6e estimee de 6 i 8 mois). Cette structuration thematique suivait une logique de realisation qui faisait que le lot I et le lot 2 devaient permettre des echanges mutuelles de produits et necessitaient une parfaite synchronisation et coordination des activites (plan d'action des audits industrielles a finaliser sous forme de contrat de branche a titre d'exemple). Une fois l'assise institutionnelle, juridique et technico-financiere elaboree, la circulation et le partage de l'information devaient etre facilites via la constitution d'un Reseau d'Acteur Partenaires en Information et Donnees sur l'Environnement (lot 3). Par la suite viendrait la phase de dissemination de l'information et de sensibilisation en vue de capitaliser les resultats auquel le projet - 17 -  aurait abouti, objet du demier lot, le lot 4 du PGE. Egalement, afin d'orienter le projet vers la realisation d'actions concretes sur le terrain, le bassin du Sebou, bassin le plus pollue au niveau national a ete choisi comme zone pilote. Par ailleurs, la wilaya de Fes a e identifiee en tant que cible de decentralisation des activites du projet, sachant que le departement de l'environnement, lors du demarrage du projet etait Sous-Secretariat d'Etat charge de I' Environnement aupres du Ministere de l'Interieur. Resultats attendus Les principaux resultats attendus du projet peuvent etre r6sumes comme suit: Renforcement des capacites techniques, administratives et de coordination en matiere de gestion de F' environnement du Departement de l'environnement et des ministeres de l'Agriculture, de l'Equipement et de la Wilaya de Fes; Renforcement du cadre legislatif et reglementaire du departement de l'environnement dans le domaine de l'Etude d'Impact sur l'Environnement (EIE), la gestion des dechets dangereux, le projet de loi sur la gestion integr6e de la pollution, l'elaboration et le test de deux contrats de branche A titre demonstratif; Mise en place d'un Systeme d'Information et de Donnees sur l'Environnement (SIDE) au niveau central et sa decentralisation au niveau de la Wilaya de Fes; et Elaboration d'un programme de sensibilisation. Execution du projet L'execution du projet a ete assuree par le departement de l'environnement en tant qu'agence d' execution, associ6e aux departements de l'Agriculture et de l'Equipement. Un comit6 interninisteriel de suivi et egalement charge du suivi des activites du projet. L'accord de pret a et signe le 20 mai 1994. Les activites du projet ont effectivement demarre en fevrier 1996. Le projet a ete cloture le 31 decembre 2000. Le lotl relatif aux etudes et A l'assistance technique pour le renforcement du cadre juridique et institutionnel en matiere de protection de l'environnement a demarre, en f6vrier 1996 et s'est acheve en mai 1999. La sous composante formation, avenant du lot 1, d'une duree de 10 mois n'a pu 8tre realisee. Ce lot a ete realise par le Bureau d'etudes suisse Urbaplan. Le lot 2 relatif aux etudes et A l'assistance technique pour la mise en place des instruments economiques et financiers pour le contr6le et la reduction de la pollution a demarre en fevrier 1996 et s'est acheve en avril 1997. La sous composante 2eme phase du lot 2, avenant d'une duree de 8 mois n'a pu etre realisee. Ce lot a ete execute par le Bureau d'etudes fran,ais BCEOM en tant que bureau chef de file, en collaboration avec les bureaux d'etudes, hollandais DNV et marocains CID et EAU Globe. Le lot 3 du PGE relatif a la mise en place d'un Systeme d'Information et Donnees sur l'Environnement (SIDE) a d6marre en mai 1998 et achev6 en Decembre 1999. Le Bureau d'etudes americain Ecology and Environment a ete charg6 de la realisation du projet. -18 -  Le lot 4 relatif A la sensibilisation et A l'education en matiere d'environnement, d'une duree estimee A 8 mois, a ete annulee. - Restructuration du projet: En rapport avec les objectifs initiaux du projet, nous rappelons que le projet a connu deux restructurations. La premiere restructuration a fait suite A la 7eme mission de la Banque mondiale (I au 7 fevrier 1998 ). En effet, considerant d'une part la surevaluation des previsions initiales des aleas financiers et physiques ($US 831 300) et les prix des dquipements infornatiques en perpetuel decroissance et d'autre part les delais restants pour 1'execution du projet (date de cl6ture officielle du projet en decembre 1998), la partie marocaine, en accord avec la mission de la Banque mondiale, a demande la restructuration du projet par: - I'annulation de I million de dollars US; - I'elimination de la composante wilaya de Fs ; et - le report de la date de cloture du pret au 31 decembre 1999 soit une prorogation de 12 mois. La seconde restructuration du projet a fait suite A la 8eme mission de la Banque mondiale (8 au 20 novembre 1998) en prenant en consideration l'evolution de la situation connu par le projet et en particulier le re-ciblage de ses objectifs dans le cadre du Plan de Developpement Economique et Social du Pays (PDES). Cette restructuration a permis l'annulation de 1,5 millions de dollars US soit P' annulation des composantes non encore engagees a savoir les avenants cites plus haut du lot I et lot2 ainsi que la composante lot 4 du projet. Le montant du pret est alors de 3,5 millions de dollars US. - Evaluation de la perfornance de l'emprunteur durant l'evolution et l'execution du projet Contexte: Avant d'evaluer la performance de l'agence d'execution durant 1'6volution du projet, il est important de situer le contexte dans lequel le projet a evolue. Genese du projet: I'idee de projet a debute, selon notre information en 1992, dans un contexte ou les projets en rapport avec la protection de l'environnement etaient rares. Nature du projet: le projet de gestion de l'environnement etait concu, comme signale plus haut, en tant que projet integre impliquant au moins trois secteurs d'activites (trois departements) et intervenant sur plusieurs themes (du lot I au lot 4). Contexte institutionnel : Ce demier a connu une evolution institutionnelle qui a fait que la gestion du projet a et assuree respectivement par le Sous-Secretariat d'Etat charge de rEnvironnement aupres du Ministere de l'Interieur (de 199 3 a 1995), par le Ministere de l'Environnement (de 1995 a 1997), par le Secretariat d'Etat charge de l'Environnement aupres du Ministere de rAgricuture, de l'Equipement et de I'Environnement (de 1997 a 1998) et finalement par le Secretariat d'Etat charge de I'Environnement aupres du Ministere de l'Amenagement du Territoire de l'Environnement, de l'Habitat et de l'Urbanisme de 1998 a cejour). Le suivi du projet a ete assure au sein du departement par un Directeur de projet assiste par une cellule d'execution. Au niveau exteme un comite interministeriel assurait le suivi du projet. - 19 -  - Evaluation de la performance: Tableau N