13 March 2006
[Federal Register: March 13, 2006 (Volume 71, Number 48)]
[Notices]
[Page 12933-12986]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13mr06-111]
[[Page 12933]]
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Part III
Millennium Challenge Corporation
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Notice of Entering Into a Compact With the Government of the Republic
of Benin; Notice
[[Page 12934]]
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MILLENNIUM CHALLENGE CORPORATION
[MCC FR 06-05]
Notice of Entering Into a Compact With the Government of the
Republic of Benin
AGENCY: Millennium Challenge Corporation.
ACTION: Notice.
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SUMMARY: In accordance with Section 610(b)(2) of the Millennium
Challenge Act of 2003 (Pub. L. 108-199, Division D), the Millennium
Challenge Corporation (MCC) is publishing a summary and the complete
text of the Millennium Challenge Compact between the United States of
America, acting through the Millennium Challenge Corporation, and the
Government of the Republic of Benin. Representatives of the United
States Government and the Government of the Republic of Benin executed
the Compact documents on February 22, 2006.
Dated: March 6, 2006.
Jon A. Dyck,
Vice President & General Counsel, Millennium Challenge Corporation.
Summary of Millennium Challenge Compact With the Government of the
Republic of Benin
I. Introduction
Situated in West Africa, between Nigeria and Togo in the Gulf of
Guinea, Benin is a very poor country with a population of nearly seven
million, a third of which live in poverty. Progress in development is
attributed to reforms initiated in the early 1990s as Benin
transitioned from a Marxist-Leninist state towards a pluralistic
democracy and market economy.
Despite growth rates averaging 5 percent per year in the past
decade, rapid population growth has offset much of these gains and
poverty remains widespread. Per capita income in Benin remains below
the sub-Sahara African average and rural poverty has increased in
recent years. Benin's economy is narrowly dependent on cotton
production, subsistence agriculture and regional trade through the Port
of Cotonou. Key impediments to sustainable economic growth and poverty
reduction are a poor investment climate and a lack of dynamic private
sector activity. These are hindered by land insecurity, lack of access
to capital, an inefficient judicial system, and an increasingly
uncompetitive Port of Cotonou.
The five year, approximately $307 million Millennium Challenge
Compact with the Government of Benin (GOB) aims to increase investment
and private sector activity in Benin. The program to be funded under
the Compact (Program) seeks to remove key constraints to growth and
supports improvements in physical and institutional infrastructures.
The projects included in the Program reinforce each other and MCC
estimates they will together contribute to an economic rate of return
(ERR) of 24 percent.
II. Program Overview and Budget
Benin's MCA Program is a series of strategic investments designed
to improve core physical and institutional infrastructure and increase
investment and private sector activity. The Program comprises four
Projects: ``Access to Land,'' ``Access to Financial Services,''
``Access to Justice,'' and ``Access to Markets.''
1. Access to Land (``Land Project'') (approximately $36 million):
Investment climate studies list land access among the top constraints
to business development in Benin. This Project aims to create secure
land tenure for the poor and non-poor alike and to create effective,
transparent governance of land and property issues. MCC anticipates
this Project will reduce the time and cost to obtain a title, reduce
the number of land disputes, and increase the perception of land
security.
2. Access to Financial Services (``Financial Services Project'')
(approximately $20 million): Due to the high cost or unavailability of
credit and other financial services, small businesses in Benin are
unable to expand production and employment. This Project aims to
improve the ability of micro, small and medium-sized enterprises
(MSMEs) to respond to opportunities by expanding access to financial
services. The Project is designed to expand the financial services
provided to MSMEs, improve supervision of microfinance institutions
(MFIs), increase MFI operational self-sufficiency, decrease MFI
portfolio at risk, and increase the number of loans guaranteed with
land titles.
3. Access to Justice (``Justice Project'') (approximately $34
million): A major obstacle to investment and economic growth in Benin
is the inefficiency of the judicial system. Only 8 percent of
commercial cases filed are resolved within a year. Benin was recently
rated by the World Bank as among the most difficult places in the world
to enforce a contract. This Project aims to strengthen the
institutional environment for business and investment in Benin by
improving the ability of the judicial system to resolve claims. The
Project is expected to increase the number of cases resolved per year
by the Courts of First Instance, increase the number of cases handled
by the Arbitration Center, and increase the number of registered
enterprises.
4. Access to Markets (``Markets Project'') (approximately $169
million): The importance of the Port of Cotonou to Benin's economy has
been increasing, while its competitiveness has been steadily
decreasing. This Project is designed to promote access to markets by
improving Port operations and infrastructure. Specifically, it aims to
improve Port performance and security, expand capacity, and reduce
costs. MCC anticipates the Project will reduce delays at the Port and
increase the volume of imports and exports.
The following table outlines the estimated MCC contribution to the
Program by year and category for term of the Compact.
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Timeline
----------------------------------------------------------------------------------------------- Total
Description Compact YI Compact YI Compact Y2 Compact Y3 Compact Y4 Compact Y5 ($US
($US mil) ($US mil) ($US mil) ($US mil) ($US mil) ($US mil) mil)
--------------------------------------------------------------------------------------------------------------------------------------------------- -------
Access to Land..................................... 4.56 10.43 8.55 7.37 5.11 36.02
Access to Financial Services....................... 3.15 5.42 5.41 4.71 0.96 19.65
Access to Justice.................................. 3.83 7.85 9.06 6.97 6.56 34.27
Access to Markets.................................. 9.45 30.13 66.29 62.36 1.22 169.45
Program Administration & Audits.................... 8.21 7.61 7.75 7.73 7.83 39.13
Monitoring & Evaluation............................ 3.19 1.69 1.24 1.24 1.42 8.78
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Estimated Total................................ 32.39 63.13 98.30 90.38 23.10 307.30
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[[Page 12935]]
III. Impact
The Program is expected to impact up to five million beneficiaries
and lift an estimated 250,000 Beninese out of poverty by the year 2015.
Specifically, the Land Project is expected to assist an estimated
115,000 rural and urban households with more secure and useful tenure;
contribute to a 50 percent reduction in court cases related to land
disputes; and result in a 10 percent increase in investment in rural
land and a 20 percent increase in investment in urban property. The
Financial Services Project is expected to expand financial services to
MSMEs by nearly $60 million (a multiple of three times the Project's
funding), thereby increasing MSME value added and incomes of the poor
that own, are employed by, or do business with those enterprises. The
Justice Project is anticipated to benefit approximately 2.38 million
Beninese by bringing courts closer to rural populations and making them
more responsive and effective. Finally, a more efficient Port will
contribute to importer and exporter value-added by reducing
transportation costs and increasing the level of Port operations. It is
likely that the anticipated reduction in shipping costs will be passed
on to wholesalers and traders, and ultimately be reflected in lower
consumer prices. Additional added value in jobs from fish processing
and Port operations are expected from improvements in several
infrastructure components.
IV. Program Management
GOB will create a legal entity (MCA-Benin) to manage and oversee
the implementation of the Program. This entity will be comprised of an
eleven-member Board of Directors and a management team. The Board of
Directors will make certain strategic decisions and recommendations,
provide oversight of the Program implementation and ensure the success
of the Program. MCA-Benin's management will be responsible for the
implementation of the Program, including contracting, program
management, certain financial management functions, and coordination of
monitoring and evaluation. In addition, an eight-member Advisory
Council will be established to provide recommendations and feedback to
the MCA-Benin Board of Directors.
Independent fiscal and procurement agents, selected through
international competitive search processes, will be engaged to provide
fiscal management and procurement services respectively.
Other Highlights
A. Consultative Process: This Program has undergone one of the most
robust consultative processes to date in an MCA-eligible country.
Benin's proposal is the product of a genuine, meaningful and
participatory consultative process. Guided by the Poverty Reduction
Strategy Paper (PRSP), GOB's consultative process included a wide
cross-section of private sector and civil society groups in the
formulation of Benin's MCA priorities. Benin held several consultative
meetings with representatives from various stakeholder groups as well
as radio and television events to broadly present the outlines of the
proposal and garner feedback from intended beneficiaries. The
consultative process was guided by the Benin National Committee (BNC),
whose members were elected or delegated by their respective
constituencies. Representation on the BNC includes six representatives
of GOB, three representatives of civil society, three representatives
of the Chamber of Commerce, three representatives of national labor
unions, two representatives of the Agricultural Chamber, and one
representative of artisan associations.
B. Government Commitment and Effectiveness: The Program has
received considerable attention during the Compact development process.
GOB allocated $680,000 for the preparation of the proposal and has
committed as part of the Compact to contribute an additional 5 billion
CFA ($9.2 million) to the Program during the Compact Term. One fourth
of this contribution has already been included in the national budget
for 2006 and will be available immediately following Compact signing.
GOB has also expressed its commitment to the Program by its willingness
to condition key activities upon requirements for institutional change
and policy reform.
C. Sustainability: Sustainability will be ensured through training,
capacity building, policy reforms and institutional changes. The Land
and Justice Projects contain core training, information and education
campaigns that will build public knowledge on land and justice issues,
respectively. A key objective of the Financial Services Project is to
enhance the sustainability of existing commercial actors that service
MSMEs. Beneficiaries of the Challenge Facility can be expected to
continue to implement improvements in financial technologies and
institutional capacities after Program support ends. The Markets
Project includes greater private management of operations, more
efficient land usage, and streamlining of customs processing.
D. Environment and Social Impacts: The Land and Financial Services
Projects are expected to have few or no adverse environmental and
social impacts. They have been placed in screening category ``C'' under
the MCC Environmental Guidelines. The Land Project is anticipated to
have positive social effects as well as to foster land stewardship. The
Financial Services Project will incorporate training, technical
assistance, and services, where appropriate, on strategies to avoid
environmental and social risks and enhance the sustained impact of
access to financial services. Both of these projects have specific
commitments to take into account gender concerns.
The Justice Project has the potential for modest, adverse
environmental and social impacts because of construction of a legal
information center and courthouses. The Justice Project has been placed
in screening category ``B'' under the MCC Environmental Guidelines. A
framework environmental and social assessment will be required to
screen sites once they are proposed and provide guidance for site-
specific Environmental Management Plans (EMPs) and Resettlement Action
Plans (RAPs) consistent with international best practices. To enhance
the social impacts of this project, outreach will be designed to
incorporate gender considerations as well as access by vulnerable
segments of society.
The Markets Project has been placed in screening category ``A''
under the MCC Environmental Guidelines and will require a comprehensive
Environmental and Social Impact Assessment (ESIA), conducted in phases.
As a critical first step, technical, environmental, engineering and
economic studies are required to evaluate alternatives and select the
preferred design to reduce sedimentation of the harbor access and not
adversely impact coastal erosion east of the Port; studies must also
analyze disposal of potentially contaminated dredged material, for the
selected alternative and new wharf construction. Based on these
studies, an ESIA and EMP will be required to address impacts of
increased Port activity and new infrastructure and compliance with
international marine conventions. An ESIA (combined or separate,
according to schedule needs) will be required for landside
improvements, including an environmental audit of the existing
operations, an Environmental Management Plan/System, and an
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overall EMP. Verification is required to determine if economic or
physical displacement will occur and a RAP is needed.
E. Donor Coordination: MCC's investment would position the United
States Government as the largest bi-lateral donor to the country. Other
major donors to Benin are the Netherlands, Denmark, France, Belgium and
Germany.
GOB and MCC have convened various discussions and meetings with
donor partners to ensure complementarity. The German development
agency, Deutsche Gesellschaft fur Technische Zusammenarbeit (GTZ),
financed a pilot phase of the Rural Land Plans upon which sections of
GOB's proposal are based. A recent International Finance Corporation
Foreign Investment Advisory Service (FIAS) investigation of the
investment climate in Benin will recommend a reform agenda very similar
to what is proposed for MCC funding. A number of multilateral and
bilateral donors, including the World Bank, France, Denmark, and the
Netherlands, have been involved in activities and studies aimed at
improving the performance of the Port of Cotonou.
Millennium Challenge Compact Between the United States of America
Acting Through the Millennium Challenge Corporation and the Government
of the Republic of Benin
Table of Contents
Article I. Purpose and Term
Section 1.1 Objectives
Section 1.2 Projects
Section 1.3 Entry into Force; Compact Term
Article II. Funding and Resources
Section 2.1 MCC Funding
Section 2.2 Government Resources
Section 2.3 Limitation on the Use or Treatment of MCC Funding
Section 2.4 Incorporation; Notice; Clarification
Section 2.5 Refunds: Violation
Section 2.6 Bilateral Agreement
Article III. Implementation
Section 3.1 Implementation Framework
Section 3.2 Government Responsibilities
Section 3.3 Government Deliveries
Section 3.4 Government Assurances
Section 3.5 Implementation Letters; Supplemental Agreements
Section 3.6 Procurement; Awards of Assistance
Section 3.7 Policy Performance; Policy Reforms
Section 3.8 Records and Information; Access; Audits; Reviews
Section 3.9 Insurance; Performance Guarantees
Section 3.10 Domestic Requirements
Section 3.11 No Conflict
Section 3.12 Reports
Article IV. Conditions Precedent; Deliveries
Section 4.1 Conditions Prior to the Entry into Force and
Deliveries
Section 4.2 Conditions Precedent to MCC Disbursements or Re-
Disbursements
Article V. Final Clauses
Section 5.1 Communications
Section 5.2 Representatives
Section 5.3 Amendments
Section 5.4 Termination; Suspension
Section 5.5 Privileges and Immunities
Section 5.6 Attachments
Section 5.7 Inconsistencies
Section 5.8 Indemnification
Section 5.9 Headings
Section 5.10 Interpretation; Definitions
Section 5.11 Signatures
Section 5.12 Designation
Section 5.13 Survival
Section 5.14 Consultation
Section 5.15 MCC Status
Section 5.16 Language
Section 5.17 Publicity; Information and Marking
Exhibit A: Definitions
Exhibit B: List of Certain Supplemental Agreements
Schedule 2.1(a)(iii): Description of Compact Implementation Funding
Annex I: Program Description
Schedule 1: Land Project
Schedule 2: Financial Services Project
Schedule 3: Justice Project
Schedule 4: Markets Project
Annex II: Summary of Multi-Year Financial Plan
Annex III: Description of the M&E Plan
Millennium Challenge Compact
This Millennium Challenge Compact (the ``Compact'') is made between
the United States of America, acting through the Millennium Challenge
Corporation, a United States Government corporation (``MCC''), and the
Government of the Republic of Benin (the ``Government'') (referred to
herein individually as a ``Party'' and collectively, the ``Parties'').
A compendium of capitalized terms defined herein is included, for
convenience only, in Exhibit A attached hereto.
Recitals
Whereas, MCC, acting through its Board of Directors, has selected
the Republic of Benin as eligible to present to MCC a proposal for the
use of Millennium Challenge Account (``MCA'') assistance to help
facilitate the advance of economic growth and poverty reduction in
Benin;
Whereas, the Government has carried out a consultative process with
the country's private sector and civil society to outline the country's
priorities for the use of MCA assistance and developed a proposal,
which final proposal was submitted to MCC on September 5, 2005 (the
``Proposal'');
Whereas, the Proposal focused on, among other things, improving
core physical and institutional infrastructure to increase investment
and private sector activity;
Whereas, MCC has evaluated the Proposal and related documents to
determine whether the Proposal is consistent with core MCA principles
and includes proposed activities and projects that will advance the
progress of Benin towards achieving economic growth and poverty
reduction; and
Whereas, based on MCC's evaluation of the Proposal and related
documents and subsequent discussions and negotiations between the
Parties, the Government and MCC determined to enter into this Compact
to implement a program using MCC Funding to advance Benin's progress
towards economic growth and poverty reduction (the ``Program'');
Now, Therefore, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, the Parties hereby agree as
follows:
Article I. Purpose and Term
Section 1.1 Objectives. The overall objective of this Compact is to
increase investment and private sector activity in Benin (``Program
Objective''), which is key to advancing the goal of economic growth and
poverty reduction in Benin (the ``Compact Goal''). The Parties have
identified the following project-level objectives (each, a ``Project
Objective'' and together, the ``Project Objectives'') of this Compact
to advance the Program Objective and Compact Goal, each of which is
described in more detail in the Annexes attached hereto:
(a) Strengthen property rights and investment (the ``Land
Objective'');
(b) Expand access to financial services (the ``Financial Services
Objective'');
(c) Improve ability of the justice system to enforce contracts and
reconcile claims (the ``Justice Objective''); and
(d) Improve access to markets through improvements to the Port of
Cotonou (``Markets Objective'').
The Government expects to achieve, and shall use its best efforts
to ensure the achievement of, the Compact Goal, Program Objective and
Project Objectives during the Compact Term. The Program Objective and
the individual Project Objectives collectively referred to herein as
``Objectives'' and each individually as an ``Objective.''
Section 1.2 Projects. The Annexes attached hereto describe the
specific projects and the policy reforms and other activities related
thereto (each, a ``Project'') that the Government will carry out, or
cause to be carried out, in
[[Page 12937]]
furtherance of this Compact to achieve the Objectives and the Compact
Goal.
Section 1.3 Entry into Force; Compact Term. This Compact shall
enter into force on the date of the last letter in an exchange of
letters between the Principal Representatives of each Party confirming
that each Party has completed its domestic requirements for entry into
force of this Compact (including as set forth in Section 3.10) and that
all conditions set forth in Section 4.1 have been satisfied by the
Government and MCC (the ``Entry into Force''). This Compact shall
remain in force for five (5) years from the Entry into Force, unless
earlier terminated in accordance with Section 5.4 (the ``Compact
Term'').
Article II. Funding and Resources
Section 2.1 MCC Funding.
(a) MCC's Contribution. MCC hereby grants to the Government,
subject to the terms and conditions of this Compact, an amount not to
exceed Three Hundred Seven Million Two Hundred and Ninety Eight
Thousand and Forty United States Dollars (USD $307,298,040) (``MCC
Funding'') during the Compact Term to enable the Government to
implement the Program and achieve the Objectives.
(i) Subject to Sections 2.1(a)(ii), 2.2(b) and 5.4(b), the
allocation of the MCC Funding within the Program and among and within
the Projects shall be as generally described in Annex II or as
otherwise agreed upon by the Parties from time to time.
(ii) If at any time MCC determines that a condition precedent to an
MCC Disbursement has not been satisfied, MCC may, upon written notice
to the Government, reduce the total amount of MCC Funding by an amount
equal to the amount estimated in the applicable Detailed Financial Plan
for the Program, Project or Project Activity or sub-activity for which
such condition precedent has not been met. Upon the expiration or
termination of this Compact, (A) any amounts of MCC Funding not
disbursed by MCC to the Government shall be automatically released from
any obligation in connection with this Compact and (B) any amounts of
MCC Funding disbursed by MCC to the Government as provided in Section
2.1(b)(i), but not re-disbursed as provided in Section 2.1(b)(ii) or
otherwise incurred as permitted pursuant to Section 5.4(e) prior to the
expiration or termination of this Compact, shall be returned to MCC in
accordance with Section 2.5(a)(ii).
(iii) Notwithstanding any other provision of this Compact and
pursuant to the authority of Section 609(g) of the Millennium Challenge
Act of 2003, as amended (the ``Act''), upon the conclusion of this
Compact (and without regard to the satisfaction of all of the
conditions for Entry into Force required under Section 1.3), MCC shall
make available One Million Five Hundred Thirty Six Thousand Four
Hundred and Ninety United States Dollars (USD $1,536,490) (``Compact
Implementation Funding'') to facilitate certain aspects of Compact
implementation as described in Schedule 2.1(a)(iii) attached hereto;
provided, such Compact Implementation Funding shall be subject to (A)
the limitations on the use or treatment of MCC Funding set forth in
Section 2.3, as if such provision were in full force and effect, and
(B) any other requirements for, and limitations on the use of, such
Compact Implementation Funding as may be required by MCC in writing;
provided, further, that any Compact Implementation Funding granted in
accordance with this Section 2.1(a)(iii) shall be included in, and not
additional to, the total amount of MCC Funding; and provided further,
any obligation to provide such Compact Implementation Funding shall
expire upon the expiration or termination of this Compact or five (5)
years from the conclusion of this Compact, whichever occurs sooner.
Notwithstanding anything to the contrary in this Compact, this Section
2.1(a)(iii) shall provisionally apply prior to Entry into Force.
(b) Disbursements.
(i) Disbursements of MCC Funding. MCC shall from time to time make
disbursements of MCC Funding (each such disbursement, an ``MCC
Disbursement'') to a Permitted Account or through such other mechanism
agreed by the Parties under and in accordance with the procedures and
requirements set forth in Annex I, the Disbursement Agreement or as
otherwise provided in any other relevant Supplemental Agreement.
(ii) Re-Disbursements of MCC Funding. The release of MCC Funding
from a Permitted Account (each such release, a ``Re-Disbursement''),
shall be made in accordance with the procedures and requirements set
forth in Annex I, the Disbursement Agreement or as otherwise provided
in any other relevant Supplemental Agreement.
(c) Interest. Unless the Parties agree otherwise in writing, any
interest or other earnings on MCC Funding that accrue (collectively,
``Accrued Interest'') shall be held in a Permitted Account and accrue
in accordance with the requirements for the accrual and treatment of
Accrued Interest as specified in Annex I or any relevant Supplemental
Agreement. On a quarterly basis and upon the termination or expiration
of this Compact, the Government shall return, or ensure the return of,
all Accrued Interest to any United States Government account designated
by MCC.
(d) Conversion; Exchange Rate. The Government shall ensure that all
MCC Funding that is held in the Permitted Account(s) shall be
denominated in the currency of the United States of America (``United
States Dollars'') prior to Re-Disbursement; provided, that a certain
portion of MCC Funding may be transferred to a Local Account and may be
held in such Local Account in the currency of the Republic of Benin
prior to Re-Disbursement in accordance with the requirements of Annex I
and any relevant Supplemental Agreement. To the extent that any amount
of MCC Funding held in United States Dollars must be converted into the
currency of the Republic of Benin for any purpose, including for any
Re-Disbursement or any transfer of MCC Funding into a Local Account,
the Government shall ensure that such amount is converted consistent
with Annex I, including the rate and manner set forth in Annex I, and
the requirements of the Disbursement Agreement or any other
Supplemental Agreement between the Parties.
(e) Guidance. From time to time, MCC may provide guidance to the
Government through Implementation Letters on the frequency, form and
content of requests for MCC Disbursements and Re-Disbursements or any
other matter relating to MCC Funding. The Government shall apply such
guidance in implementing this Compact.
Section 2.2 Government Resources.
(a) The Government shall provide or cause to be provided such
Government funds and other resources, including any Government
contributions set out forth on Annex II attached hereto, and shall take
or cause to be taken such actions, including obtaining all necessary
approvals and consents, as are specified in this Compact or in any
Supplemental Agreement to which the Government is a party or as are
otherwise necessary and appropriate to effectively carry out the
Government Responsibilities or other responsibilities or obligations of
the Government under or in furtherance of this Compact during the
Compact Term and through the completion of any post-Compact Term
activities, audits or other responsibilities. The Government shall
submit to the Parliament on an annual basis the amount of the upcoming
year's
[[Page 12938]]
Government contribution for inclusion in the applicable finance law of
Benin and such amount shall be committed in the national budget for
that year for purposes of the Program, such contribution to be
allocated within and in furtherance of the Program as agreed by the
Parties. The Government shall disburse funds on a quarterly basis from
this committed amount into an account, held at a bank acceptable to
MCC, designated solely for this purpose.
(b) If at any time during the Compact Term, the Government
materially reallocates or reduces the allocation in its national budget
or any other Beninese governmental authority at a departmental,
municipal, regional or other jurisdictional level materially
reallocates or reduces the allocation of its respective budget of the
normal and expected resources that the Government or such other
governmental authority, as applicable, would have otherwise received or
budgeted, from external or domestic sources, for the activities
contemplated herein, the Government shall notify MCC in writing within
fifteen (15) days of such reallocation or reduction, such notification
to contain information regarding the amount of the reallocation or
reduction, the affected activities, and an explanation for the
reallocation or reduction. In the event that MCC independently
determines, upon review of the executed national annual budget that
such a material reallocation or reduction of resources has occurred,
MCC shall notify the Government and, following such notification, the
Government shall provide a written explanation for such reallocation or
reduction and MCC may (i) reduce, in its sole discretion, the total
amount of MCC Funding or any MCC Disbursement by an amount equal to the
amount estimated in the applicable Detailed Financial Plan for the
activity for which funds were reduced or reallocated or (ii) otherwise
suspend or terminate MCC Funding in accordance with Section 5.4(b).
(c) The Government shall use its best efforts to ensure that all
MCC Funding is fully reflected and accounted for in the annual budget
of the Republic of Benin on a multi-year basis.
Section 2.3 Limitations on the Use or Treatment of MCC Funding.
(a) Abortions and Involuntary Sterilizations. The Government shall
ensure that MCC Funding shall not be used to undertake, fund or
otherwise support any activity that is subject to prohibitions on use
of funds contained in (i) paragraphs (1) through (3) of section 104(f)
of the Foreign Assistance Act of 1961 (22 U.S.C. 2151b(f)(1)-(3), a
United States statute, which prohibitions shall apply to the same
extent and in the same manner as such prohibitions apply to funds made
available to carry out Part I of such Act; or (ii) any provision of law
comparable to the eleventh and fourteenth provisos under the heading
``Child Survival and Health Programs Fund'' of division E of Public Law
108-7 (117 Stat. 162), a United States statute.
(b) United States Job Loss or Displacement of Production. The
Government shall ensure that MCC Funding shall not be used to
undertake, fund or otherwise support any activity that is likely to
cause a substantial loss of United States jobs or a substantial
displacement of United States production, including:
(i) Providing financial incentives to relocate a substantial number
of United States jobs or cause a substantial displacement of production
outside the United States;
(ii) Supporting investment promotion missions or other travel to
the United States with the intention of inducing United States firms to
relocate a substantial number of United States jobs or a substantial
amount of production outside the United States;
(iii) Conducting feasibility studies, research services, studies,
travel to or from the United States, or providing insurance or
technical and management assistance, with the intention of inducing
United States firms to relocate a substantial number of United States
jobs or cause a substantial displacement of production outside the
United States;
(iv) Advertising in the United States to encourage United States
firms to relocate a substantial number of United States jobs or cause a
substantial displacement of production outside the United States;
(v) Training workers for firms that intend to relocate a
substantial number of United States jobs or cause a substantial
displacement of production outside the United States;
(vi) Supporting a United States office of an organization that
offers incentives for United States firms to relocate a substantial
number of United States jobs or cause a substantial displacement of
production outside the United States; or
(vii) Providing general budget support for an organization that
engages in any activity prohibited above.
(c) Military Assistance and Training. The Government shall ensure
that MCC Funding shall not be used to undertake, fund or otherwise
support the purchase or use of goods or services for military purposes,
including military training, or to provide any assistance to the
military, police, militia, national guard or other quasi-military
organization or unit.
(d) Prohibition of Assistance Relating to Environmental, Health or
Safety Hazards. The Government shall ensure that MCC Funding shall not
be used to undertake, fund or otherwise support any activity that is
likely to cause a significant environmental, health, or safety hazard.
Unless MCC and the Government agree otherwise in writing, the
Government shall ensure that activities undertaken, funded or otherwise
supported in whole or in part (directly or indirectly) by MCC Funding
comply with environmental guidelines delivered by MCC to the Government
or posted by MCC on its Web site or otherwise publicly made available,
as such guidelines may be amended from time to time (the
``Environmental Guidelines''), including any definition of ``likely to
cause a significant environmental, health, or safety hazard'' as may be
set forth in such Environmental Guidelines.
(e) Taxation.
(i) Taxes. The Government shall ensure that the Program, any
Program Assets, MCC Funding and Accrued Interest shall be free from any
taxes imposed under the laws currently or hereafter in effect in the
Republic of Benin during the Compact Term. This exemption shall apply
to any use of any Program Asset, MCC Funding and Accrued Interest,
including any Exempt Uses, and to any work performed under or
activities undertaken in furtherance of this Compact by any person or
entity (including contractors and grantees) funded by MCC Funding, and
shall apply to all taxes, tariffs, duties, and other levies (each a
``Tax'' and collectively, ``Taxes''), including:
(1) To the extent attributable to MCC Funding, income taxes and
other taxes on profit or businesses imposed on organizations or
entities, other than nationals of the Republic of Benin, receiving MCC
Funding, including taxes on the acquisition, ownership, rental,
disposition or other use of real or personal property, taxes on
investment or deposit requirements and currency controls in the
Republic of Benin, or any other tax, duty, charge or fee of whatever
nature, except fees for specific services rendered; for purposes of
this Section 2.3(e), the term ``national'' refers to organizations
established under the laws currently or hereafter in effect in the
Republic of Benin, other than MCA-Benin or any other entity established
solely for purposes of managing or overseeing the implementation of the
Program or any wholly-owned subsidiaries, divisions, or Affiliates of
entities not registered or established under the laws currently or
hereafter in effect in the Republic of Benin;
[[Page 12939]]
(2) Customs duties, tariffs, import and export taxes, or other
levies on the importation, use and re-exportation of goods, services,
or the personal belongings and effects, including personally-owned
automobiles, for Program use or the personal use of individuals who are
neither citizens nor permanent residents of the Republic of Benin and
who are present in the Republic of Benin for purposes of carrying out
the Program or their family members, including all charges based on the
value of such imported goods;
(3) Taxes on the income or personal property of all individuals who
are neither citizens nor permanent residents of the Republic of Benin,
including income and social security taxes of all types and all taxes
on the personal property owned by such individuals, to the extent such
income or property are attributable to MCC Funding; and
(4) Taxes or duties levied on the last transaction for the purchase
of goods or services funded by MCC Funding, including sales taxes,
tourism taxes, value-added taxes (VAT), or other similar charges. The
term ``last transaction'' refers to the last transaction by which the
goods or services were purchased for use in the activities funded by
MCC Funding.
(ii) This Section 2.3(e) shall apply, but is not limited to (A) any
transaction, service, activity, contract, grant or other implementing
agreement funded in whole or in part by MCC Funding; (B) any supplies,
equipment, materials, property or other goods (referred to herein
collectively as ``goods'') or funds introduced into, acquired in, used
or disposed of in, or imported into or exported from, the Republic of
Benin by MCC, or by any person or entity (including contractors and
grantees) as part of, or in conjunction with, MCC Funding or the
Program; (C) any contractor, grantee, or other organization carrying
out activities funded in whole or in part by MCC Funding; and (D) any
employee of such organizations (the uses set forth in clauses (A)
through (D) are collectively referred to herein as ``Exempt Uses'').
(iii) If a Tax has been levied and paid contrary to the
requirements of this Section 2.3(e), whether inadvertently, due to the
impracticality of implementation of this provision with respect to
certain types or amounts of taxes, or otherwise, the Government shall
refund promptly to MCC to an account designated by MCC the amount of
such Tax in the currency of the Republic of Benin, within thirty (30)
days (or such other period as may be agreed in writing by the Parties)
after the Government is notified in writing of such levy and tax
payment, in accordance with procedures agreed by the Parties, whether
by MCC or otherwise; provided, however, the Government shall apply
national funds to satisfy its obligations under this paragraph and no
MCC Funding, Accrued Interest, or any assets, goods, or property (real,
tangible, or intangible) purchased or financed in whole or in part
(directly or indirectly) by MCC Funding (``Program Assets'') may be
applied by the Government in satisfaction of its obligations under this
paragraph.
(iv) The Parties shall memorialize in a mutually acceptable
Supplemental Agreement or Implementation Letter or other suitable
document the mechanisms for implementing this Section 2.3(e), including
(A) a formula for determining refunds for Taxes paid, the amount of
which is not susceptible to precise determination, (B) a mechanism for
ensuring the tax-free importation, use, and re-exportation of goods,
services, or the personal belongings of individuals (including all
Providers) described in paragraph (i)(2) of this Section 2.3(e), (C) a
requirement for the provision by the Government of a tax-exemption
certificate which expressly includes, inter alia, the thirty (30) day
refund requirement of Section 2.3(e)(iii), and (D) any other
appropriate Government action to facilitate the administration of this
Section 2.3(e).
(f) Alteration. The Government shall ensure that no MCC Funding,
Accrued Interest nor Program Assets shall be subject to any
impoundment, rescission, sequestration or any provision of law now or
hereafter in effect in the Republic of Benin that would have the effect
of requiring or allowing any impoundment, rescission or sequestration
of any MCC Funding, Accrued Interest or Program Asset.
(g) Liens or Encumbrances. The Government shall ensure that no MCC
Funding, Accrued Interest, or Program Assets shall be subject to any
lien, attachment, enforcement of judgment, pledge, or encumbrance of
any kind (each a ``Lien''), except with the prior approval of MCC in
accordance with Section 3(c) of Annex I, and in the event of the
imposition of any Lien not so approved, the Government shall promptly
seek the release of such Lien and if required by final non-appealable
order, shall pay any amounts owed to obtain such release; provided,
however, the Government shall apply national funds to satisfy its
obligations under this Section 2.3(g) and no MCC Funding, Accrued
Interest, or Program Assets may be applied by the Government in
satisfaction of its obligations under this Section 2.3(g).
(h) Other Limitations. The Government shall ensure that the use or
treatment of MCC Funding, Accrued Interest, and Program Assets shall be
subject to and in conformity with such other limitations (i) as
required by the applicable law of the United States of America now or
hereafter in effect during the Compact Term, (ii) as advisable under or
required by applicable United States Government policies now or
hereafter in effect during the Compact Term, or (iii) to which the
Parties may otherwise agree in writing.
(i) Utilization of Goods, Services and Works. The Government shall
ensure that any Program Assets, services, facilities or works funded in
whole or in part (directly or indirectly) by MCC Funding, unless
otherwise agreed by the Parties in writing, shall be used solely in
furtherance of this Compact.
(j) Notification of Applicable Laws and Policies. MCC shall notify
the Government of any applicable United States law or policy affecting
the use or treatment of MCC Funding, whether or not specifically
identified in this Section 2.3, and shall provide to the Government a
copy of the text of any such applicable law and a written explanation
of any such applicable policy.
Section 2.4 Incorporation; Notice; Clarification.
(a) The Government shall include, or ensure the inclusion of, all
of the requirements set forth in Section 2.3 in all Supplemental
Agreements to which MCC is not a party and shall use its best efforts
to ensure that no such Supplemental Agreement is implemented in
violation of the prohibitions set forth in Section 2.3.
(b) The Government shall ensure notification of all of the
requirements set forth in Section 2.3 to any Provider and all relevant
officers, directors, employees, agents, representatives, Affiliates,
contractors, sub-contractors, grantees and sub-grantees of any
Provider. The term ``Provider'' shall mean (i) MCA-Benin and any
Government Affiliate or Permitted Designee involved in any activities
in furtherance of this Compact or (ii) any third party who receives at
least USD $50,000 in the aggregate of MCC Funding (other than employees
of MCA-Benin) during the Compact Term or such other amount as the
Parties may agree in writing, whether directly from MCC, indirectly
through Re-Disbursements, or otherwise.
(c) In the event the Government or any Provider requires
clarification from
[[Page 12940]]
MCC as to whether an activity contemplated to be undertaken in
furtherance of this Compact violates or may violate any provision of
Section 2.3, the Government shall notify, or ensure that such Provider
notifies, MCC in writing and provide in such notification a detailed
description of the activity in question. In such event, the Government
shall not proceed, and shall use its best efforts to ensure that no
relevant Provider proceeds, with such activity, and the Government
shall ensure that no Re-Disbursements shall be made for such activity,
until MCC advises the Government or such Provider in writing that the
activity is permissible.
Section 2.5 Refunds; Violation.
(a) Notwithstanding the availability to MCC, or exercise by MCC of,
any other remedies, including under international law, this Compact, or
any Supplemental Agreement:
(i) If any amount of MCC Funding or Accrued Interest, or any
Program Asset, is used for any purpose prohibited under this Article II
or otherwise in violation of any of the terms and conditions of this
Compact, any guidance in any Implementation Letter, or any Supplemental
Agreement between the Parties, MCC may, upon written notice, require
the Government to repay promptly to MCC to an account designated by MCC
or to others as MCC may direct the amount of such misused MCC Funding
or Accrued Interest, or the cash equivalent of the value of any misused
Program Asset, in United States Dollars, plus any interest that accrued
or would have accrued thereon, within thirty (30) days after the
Government is notified, whether by MCC or other duly authorized
representative of the United States Government, of such prohibited use;
provided, however, the Government shall apply national funds to satisfy
its obligations under this Section 2.5(a)(i) and no MCC Funding,
Accrued Interest, nor Program Assets may be applied by the Government
in satisfaction of its obligations under this Section 2.5(a)(i); and
(ii) If all or any portion of this Compact is terminated or
suspended and upon the expiration of this Compact, the Government
shall, subject to the requirements of Sections 5.4(e) and 5.4(f),
refund, or ensure the refund, to MCC to such account(s) designated by
MCC the amount of any MCC Funding, plus any Accrued Interest, promptly,
but in no event later than thirty (30) days after the Government
receives MCC's request for such refund; provided, that if this Compact
is terminated or suspended in part, MCC may request a refund for only
the amount of MCC Funding, plus any Accrued Interest, then allocated to
the terminated or suspended portion; provided, further, that any refund
of MCC Funding or Accrued Interest shall be to such account(s) as
designated by MCC.
(b) Notwithstanding any other provision in this Compact or any
other agreement to the contrary, MCC's right under this Section 2.5 for
a refund shall continue during the Compact Term and for a period of (i)
five (5) years thereafter or (ii) one (1) year after MCC receives
actual knowledge of such violation, whichever is later.
(c) If MCC determines that any activity or failure to act violates,
or may violate, any Section in this Article II, MCC may refuse any
further MCC Disbursements for or conditioned upon such activity, and
may take any action to prevent any Re-Disbursement related to such
activity.
Section 2.6 Bilateral Agreement. All MCC Funding shall be
considered United States assistance under the Economic, Technical and
Related Assistance Agreement by and between the Government of the
United States of America and the Government of the Republic of Benin,
dated May 27, 1961, as amended from time to time (the ``Bilateral
Agreement''). If there are conflicts or inconsistencies between any
parts of this Compact and the Bilateral Agreement, as either may be
amended from time to time, the provisions of this Compact shall prevail
over those of the Bilateral Agreement.
Article III. Implementation
Section 3.1 Implementation Framework. This Compact shall be
implemented by the Parties in accordance with this Article III and as
further specified in the Annexes and in relevant Supplemental
Agreements.
Section 3.2 Government Responsibilities.
(a) The Government shall have principal responsibility for
oversight and management of the implementation of the Program (i) in
accordance with the terms and conditions specified in this Compact and
relevant Supplemental Agreements, (ii) in accordance with all
applicable laws then in effect in Benin, and (iii) in a timely and
cost-effective manner and in conformity with sound technical, financial
and management practices (collectively, the ``Government
Responsibilities''). Unless otherwise expressly provided, any reference
to the Government Responsibilities or any other responsibilities or
obligations of the Government herein shall be deemed to apply to any
Government Affiliate and any of their respective directors, officers,
employees, contractors, sub-contractors, grantees, sub-grantees, agents
or representatives.
(b) The Government shall ensure that no person or entity shall
participate in the selection, award, administration, or oversight of a
contract, grant or other benefit or transaction funded in whole or in
part (directly or indirectly) by MCC Funding, in which (i) the entity,
the person, members of the person's immediate family or household or
his or her business partners, or organizations controlled by or
substantially involving such person or entity, has or have a direct or
indirect financial or other interest or (ii) the person or entity is
negotiating or has any arrangement concerning prospective employment,
unless such person or entity has first disclosed in writing to the
Government the conflict of interest and, following such disclosure, the
Parties agree in writing to proceed notwithstanding such conflict. The
Government shall ensure that no person or entity involved in the
selection, award, administration, oversight or implementation of any
contract, grant or other benefit or transaction funded in whole or in
part (directly or indirectly) by MCC Funding shall solicit or accept
from or offer to a third party or seek or be promised directly or
indirectly for itself or for another person or entity any gift,
gratuity, favor or benefit, other than items of de minimis value and
otherwise consistent with such guidance as MCC may provide from time to
time.
(c) The Government shall not designate any person or entity,
including any Government Affiliate, to implement, in whole or in part,
this Compact or any Supplemental Agreement between the Parties
(including any Government Responsibilities or any other
responsibilities or obligations of the Government under this Compact or
any Supplemental Agreement between the Parties) or to exercise any
rights of the Government under this Compact or any Supplemental
Agreement between the Parties, except as expressly provided herein or
with the prior written consent of MCC; provided, however, the
Government may designate MCA-Benin or, with the prior written consent
of MCC, such other mutually acceptable persons or entities, (each, a
``Permitted Designee'') to implement some or all of the Government
Responsibilities or any other responsibilities or obligations of the
Government or to exercise any rights of the Government under this
Compact or any Supplemental Agreement between the Parties each in
accordance with the terms and conditions set forth
[[Page 12941]]
in this Compact or such Supplemental Agreement (referred to herein
collectively as ``Designated Rights and Responsibilities'').
Notwithstanding any provision herein or any other agreement to the
contrary, no such designation shall relieve the Government of such
Designated Rights and Responsibilities, for which the Government shall
retain ultimate responsibility. In the event that the Government
designates any person or entity, including any Government Affiliate, to
implement any portion of the Government Responsibilities or other
responsibilities or obligations of the Government, or to exercise any
rights of the Government under this Compact or any Supplemental
Agreement between the Parties, in accordance with this Section 3.2(c),
then the Government shall (i) cause such person or entity to perform
such Designated Rights and Responsibilities in the same manner and to
the full extent to which the Government is obligated to perform such
Designated Rights and Responsibilities, (ii) ensure that such person or
entity does not assign, delegate or contract (or otherwise transfer)
any of such Designated Rights and Responsibilities to any person or
entity and (iii) cause such person or entity to certify to MCC in
writing that it will so perform such Designated Rights and
Responsibilities and will not assign, delegate, or contract (or
otherwise transfer) any of such Designated Rights and Responsibilities
to any person or entity without the prior written consent of MCC.
(d) The Government shall, upon a request from MCC, execute, or
ensure the execution of, an assignment to MCC of any cause of action
which may accrue to the benefit of the Government, a Government
Affiliate or any Permitted Designee, including MCA-Benin, in connection
with or arising out of any activities funded in whole or in part
(directly or indirectly) by MCC Funding.
(e) The Government shall ensure that (i) no decision of MCA-Benin
is modified, supplemented, unduly influenced or rescinded by any
governmental authority, except by a non-appealable judicial decision,
and (ii) the authority of MCA-Benin shall not be expanded, restricted,
or otherwise modified, except in accordance with this Compact, the
Governance Agreement, the Governing Documents or any other Supplemental
Agreement between the Parties.
(f) The Government shall ensure that all persons and individuals
that enter into agreements to provide goods, services or works under
the Program or in furtherance of this Compact shall do so in accordance
with the Procurement Guidelines and shall obtain all necessary
immigration, business and other permits, licenses, consents and
approvals to enable them and their personnel to fully perform under
such agreements.
Section 3.3 Government Deliveries. The Government shall proceed,
and cause others to proceed, in a timely manner to deliver to MCC all
reports, notices, certificates, documents or other deliveries required
to be delivered by the Government under this Compact or any
Supplemental Agreement between the Parties, in form and substance as
set forth in this Compact or in any such Supplemental Agreement.
Section 3.4 Government Assurances. The Government hereby provides
the following assurances to MCC that as of the date this Compact is
signed:
(a) The information contained in the Proposal and any agreement,
report, statement, communication, document or otherwise delivered or
otherwise communicated to MCC by or on behalf of the Government on or
after the date of the submission of the Proposal (i) are true, correct
and complete in all material respects and (ii) do not omit any fact
known to the Government that if disclosed would (A) alter in any
material respect the information delivered, (B) likely have a material
adverse effect on the Government's ability to effectively implement, or
ensure the effective implementation of, the Program or any Project or
to otherwise carry out its responsibilities or obligations under or in
furtherance of this Compact, or (C) have likely adversely affected
MCC's determination to enter into this Compact or any Supplemental
Agreement between the Parties.
(b) Unless otherwise disclosed in writing to MCC, the MCC Funding
made available hereunder is in addition to the normal and expected
resources that the Government usually receives or budgets for the
activities contemplated herein from external or domestic sources.
(c) This Compact does not conflict and will not conflict with any
international agreement or obligation to which the Government is a
party or by which it is bound.
(d) No payments have been (i) received by any official of the
Government or any other government body in connection with the
procurement of goods, services or works to be undertaken or funded in
whole or in part (directly or indirectly) by MCC Funding, except fees,
taxes, or similar payments legally established in the Republic of Benin
(subject to Section 2.3(e)) and consistent with the applicable
requirement of Beninese law or (ii) made to any third party, in
connection with or in furtherance of this Compact, in violation of the
United States Foreign Corrupt Practices Act of 1977, as amended (15
U.S.C. 78a et seq.).
Section 3.5 Implementation Letters; Supplemental Agreements.
(a) MCC may, from time to time, issue one or more letters to
furnish additional information or guidance to assist the Government in
the implementation of this Compact (each, an ``Implementation
Letter''). The Government shall apply such guidance in implementing
this Compact.
(b) The details of any funding, implementing and other arrangements
in furtherance of this Compact may be memorialized in one or more
agreements between (A) the Government (or any Government Affiliate or
Permitted Designee) and MCC, (B) MCC and/or the Government (or any
Government Affiliate or Permitted Designee) and any third party,
including any of the Providers or Permitted Designee or (C) any third
parties where neither MCC nor the Government is a party, before, on or
after the Entry into Force (each, a ``Supplemental Agreement''). The
Government shall deliver, or cause to be delivered, to MCC within five
(5) days of its execution a copy of any Supplemental Agreement to which
MCC is not a party.
Section 3.6 Procurement; Awards of Assistance.
(a) The Government shall ensure that the procurement of all goods,
services and works by the Government or any Provider in furtherance of
this Compact shall be consistent with the procurement guidelines (the
``Procurement Guidelines'') reflected in a Supplemental Agreement
between the Government (and/or a mutually acceptable Government
Affiliate or MCA-Benin) and MCC (the ``Procurement Agreement''), which
Procurement Guidelines shall include the following requirements:
(i) Internationally accepted procurement rules with open, fair and
competitive procedures are used in a transparent manner to solicit,
award and administer contracts, grants, and other agreements and to
procure goods, services and works;
(ii) Solicitations for goods, services, and works shall be based
upon a clear and accurate description of the goods, services or works
to be acquired;
(iii) Contracts shall be awarded only to qualified and capable
contractors that have the capability and willingness to perform the
contracts in accordance with the terms and conditions of the
[[Page 12942]]
applicable contracts and on a cost effective and timely basis; and
(iv) No more than a commercially reasonable price, as determined,
for example, by a comparison of price quotations and market prices,
shall be paid to procure goods, services, and works.
(b) The Government shall maintain, and shall use its best efforts
to ensure that all Providers maintain, records regarding the receipt
and use of goods, services and works acquired in furtherance of this
Compact, the nature and extent of solicitations of prospective
suppliers of goods, services and works acquired in furtherance of this
Compact, and the basis of award of contracts, grants and other
agreements in furtherance of this Compact.
(c) The Government shall use its best efforts to ensure that
information, including solicitations, regarding procurement, grant and
other agreement actions funded (or to be funded) in whole or in part
(directly or indirectly) by MCC Funding shall be made publicly
available in the manner outlined in the Procurement Guidelines or in
any other manner agreed upon by the Parties in writing.
(d) The Government shall ensure that no goods, services or works
may be funded in whole or in part (directly or indirectly) by MCC
Funding which are procured pursuant to orders or contracts firmly
placed or entered into prior to the Entry into Force, except as the
Parties may otherwise agree in writing.
(e) The Government shall ensure that MCA-Benin and any other
Permitted Designee follows, and uses its best efforts to ensure that
all Providers follow, the Procurement Guidelines in procuring
(including soliciting) goods, services and works and in awarding and
administering contracts, grants and other agreements in furtherance of
this Compact, and shall furnish MCC evidence of the adoption of the
Procurement Guidelines by MCA-Benin no later than the time specified in
the Disbursement Agreement.
(f) The Government shall include, or ensure the inclusion of, the
requirements of this Section 3.6 into all Supplemental Agreements
between the Government, any Government Affiliate or Permitted Designee
or any of their respective directors, officers, employees, Affiliates,
contractors, sub-contractors, grantees, sub-grantees, representatives
or agents, on the one hand, and a Provider, on the other hand.
Section 3.7 Policy Performance; Policy Reforms. In addition to the
specific policy and legal reform commitments identified in Annex I and
the Schedules thereto, the Government shall seek to maintain and to
improve its level of performance under the policy criteria identified
in Section 607 of the Act, and the MCA selection criteria and
methodology published by MCC pursuant to Section 607 of the Act from
time to time (``MCA Eligibility Criteria'').
Section 3.8 Records and Information; Access; Audits; Reviews.
(a) Reports and Information. The Government shall furnish to MCC,
and shall use its best efforts to ensure that all Providers and any
other third party receiving MCC Funding, as appropriate, furnish to the
Government (and the Government shall provide to MCC), any records and
other information required to be maintained under this Section 3.8 and
such other information, documents and reports as may be necessary or
appropriate for the Government to effectively carry out its obligations
under this Compact, including under Section 3.12.
(b) Government Books and Records. The Government shall maintain,
and shall use its best efforts to ensure that all Providers maintain,
accounting books, records, documents and other evidence relating to
this Compact adequate to show, to the satisfaction of MCC, without
limitation, the use of all MCC Funding, including all costs incurred by
the Government and the Providers in furtherance of this Compact, the
receipt, acceptance and use of goods, services and works acquired in
furtherance of this Compact by the Government and the Providers,
agreed-upon cost sharing requirements, the nature and extent of
solicitations of prospective suppliers of goods, services and works
acquired by the Government and the Providers in furtherance of this
Compact, the basis of award of Government and other contracts and
orders in furtherance of this Compact, the overall progress of the
implementation of the Program, and any documents required by this
Compact or any Supplemental Agreement between the Parties or reasonably
requested by MCC upon reasonable notice (``Compact Records''). The
Government shall maintain, and shall use its best efforts to ensure
that all Covered Providers maintain, Compact Records in accordance with
generally accepted accounting principles prevailing in the United
States, or at the Government's option and with the prior written
approval by MCC, other accounting principles, such as those (1)
prescribed by the International Accounting Standards Committee (an
affiliate of the International Federation of Accountants) or (2) then
prevailing in Benin. Compact Records shall be maintained for at least
five (5) years after the end of the Compact Term or for such longer
period, if any, required to resolve any litigation, claims or audit
findings or any statutory requirements.
(c) Access. Upon the request of MCC, the Government, at all
reasonable times, shall permit, or cause to be permitted, authorized
representatives of MCC, the Inspector General, the United States
Government Accountability Office, any auditor responsible for an audit
contemplated herein or otherwise conducted in furtherance of this
Compact, and any agents or representatives engaged by MCC or a
Permitted Designee to conduct any assessment, review or evaluation of
the Program, at all reasonable times the opportunity to audit, review,
evaluate or inspect activities funded in whole or in part (directly or
indirectly) by MCC Funding or undertaken in connection with the
Program, the utilization of goods and services purchased or funded in
whole or in part (directly or indirectly) by MCC Funding, and Compact
Records, including of the Government or any Provider, relating to
activities funded or undertaken in furtherance of, or otherwise
relating to, this Compact, and shall use its best efforts to ensure
access by MCC, the Inspector General, the United States Government
Accountability Office or relevant auditor, reviewer or evaluator or
their respective representatives or agents to all relevant directors,
officers, employees, Affiliates, contractors, representatives and
agents of the Government or any Provider.
(d) Audits.
(i) Government Audits. The Government shall, on at least an annual
basis and as the Parties may otherwise agree in writing, conduct, or
cause to be conducted, financial audits of all MCC Disbursements and
Re-Disbursements during the year since the Entry into Force or since
the prior anniversary of the Entry into Force in accordance with the
following terms, except as the Parties may otherwise agree in writing.
As requested by MCC in writing, the Government shall use, or cause to
be used, or select or cause to be selected, an auditor named on the
approved list of auditors in accordance with the ``Guidelines for
Financial Audits Contracted by Foreign Recipients'' (the ``Audit
Guidelines'') issued by the Inspector General of the United States
Agency for International Development (the ``Inspector General''), and
as approved by MCC, to conduct such annual audits. Such audits shall be
performed in accordance with such Audit Guidelines and be subject to
quality assurance oversight by the
[[Page 12943]]
Inspector General in accordance with such Audit Guidelines. An audit
shall be completed and delivered to MCC no later than 90 days after the
first period to be audited and no later than 90 days after each
anniversary of the Entry into Force thereafter, or such other period as
the Parties may otherwise agree in writing.
(ii) Audits of U.S. Entities. The Government shall ensure that
Supplemental Agreements between the Government or any Provider, on the
one hand, and a United States non-profit organization, on the other
hand, state that the United States organization is subject to the
applicable audit requirements contained in OMB Circular A-133,
notwithstanding any other provision of this Compact to the contrary.
The Government shall ensure that Supplemental Agreements between the
Government or any Provider, on the one hand, and a United States for-
profit Covered Provider, on the other hand, state that the United
States organization is subject to audit by the cognizant United States
Government agency, unless the Government and MCC agree otherwise in
writing.
(iii) Audit Plan. The Government shall submit, or cause to be
submitted, to MCC no later than 20 days prior to the date of its
adoption a plan, in accordance with the Audit Guidelines, for the audit
of the expenditures of any Covered Providers, which audit plan, in the
form and substance as approved by MCC, the Government shall adopt, or
cause to be adopted, no later than sixty (60) days prior to the end of
the first period to be audited (such plan, the ``Audit Plan'').
(iv) Covered Provider. A ``Covered Provider'' is (A) a non-United
States Provider that receives (other than pursuant to a direct contract
or agreement with MCC) USD $300,000 or more of MCC Funding in any MCA-
Benin fiscal year or any other non-United States person or entity that
receives, directly or indirectly, USD $300,000 or more of MCC Funding
from any Provider in such fiscal year or (B) any United States Provider
that receives (other than pursuant to a direct contract or agreement
with MCC) USD $500,000 or more of MCC Funding in any MCA-Benin fiscal
year or any other United States person or entity that receives,
directly or indirectly, USD $500,000 or more of MCC Funding from any
Provider in such fiscal year.
(v) Corrective Actions. The Government shall use its best efforts
to ensure that Covered Providers take, where necessary, appropriate and
timely corrective actions in response to audits, consider whether a
Covered Provider's audit necessitates adjustment of its own records,
and require each such Covered Provider to permit independent auditors
to have access to its records and financial statements as necessary.
(vi) Audit Reports. The Government shall furnish, or use its best
efforts to cause to be furnished, to MCC an audit report in a form
satisfactory to MCC for each audit required by this Section 3.8, other
than audits arranged for by MCC, no later than 90 days after the end of
the period under audit, or such other time as may be agreed by the
Parties from time to time.
(vii) Other Providers. For Providers who receive MCC Funding under
this Compact pursuant to direct contracts or agreements with MCC, MCC
shall include appropriate audit requirements in such contracts or
agreements and shall, on behalf of the Government, unless otherwise
agreed by the Parties, conduct the follow-up activities with regard to
the audit reports furnished pursuant to such requirements.
(viii) Audit by MCC. MCC retains the right to perform, or cause to
be performed, the audits required under this Section 3.8 by utilizing
MCC Funding or other resources available to MCC for this purpose, and
to audit, conduct a financial review, or otherwise ensure
accountability of any Provider or any other third party receiving MCC
Funding, regardless of the requirements of this Section 3.8.
(e) Application to Providers. The Government shall include, or
ensure the inclusion of, at a minimum, the requirements of:
(i) Paragraphs (a), (b), (c), (d)(ii), (d)(iii), (d)(v), (d)(vi),
and (d)(viii) of this Section 3.8 into all Supplemental Agreements
between the Government, any Government Affiliate, any Permitted
Designee or any of their respective directors, officers, employees,
Affiliates, contractors, sub-contractors, grantees, sub-grantees,
representatives or agents (each, a ``Government Party''), on the one
hand, and a Covered Provider that is not a non-profit organization
domiciled in the United States, on the other hand;
(ii) Paragraphs (a), (b), (c), (d)(ii), and (d)(viii) of this
Section 3.8 into all Supplemental Agreements between a Government Party
and a Provider that does not meet the definition of a Covered Provider;
and
(iii) Paragraphs (a), (b), (c), (d)(ii), (d)(v) and (d)(viii) of
this Section 3.8 into all Supplemental Agreements between a Government
Party and a Covered Provider that is a non-profit organization
domiciled in the United States.
(f) Reviews or Evaluations. The Government shall conduct, or cause
to be conducted, such performance reviews, data quality reviews,
environmental and social audits, or program evaluations during the
Compact Term or otherwise and in accordance with the M&E Plan or as
otherwise agreed in writing by the Parties.
(g) Cost of Audits, Reviews or Evaluations. MCC Funding may be used
to fund the costs of any Audits, reviews or evaluations required under
this Compact, including as reflected on Exhibit A to Annex II, and in
no event shall the Government be responsible for the costs of any such
Audits, reviews or evaluations from financial sources other than MCC
Funding.
Section 3.9 Insurance; Performance Guarantees. The Government
shall, to MCC's satisfaction, insure or cause to be insured all Program
Assets and shall obtain or cause to be obtained such other appropriate
insurance and other protections to cover against risks or liabilities
associated with the operations of the Program, including by requiring
Providers to obtain adequate insurance and post adequate performance
bonds or other guarantees. MCA-Benin or the Implementing Entity, as
applicable, shall be named as the payee on any such insurance and the
beneficiary of any such guarantee, including performance bonds. MCC,
and to the extent it is not named as the insured party, MCA-Benin shall
be named as additional insureds on any such insurance or other
guarantee, to the extent permissible under applicable laws. The
Government shall ensure that any proceeds from claims paid under such
insurance or any other form of guarantee shall be used to replace or
repair any loss of Program Assets or to pursue the procurement of the
covered goods, services, works, or otherwise; provided, however, at
MCC's election, such proceeds shall be deposited in a Permitted Account
as designated by MCA-Benin and acceptable to MCC or as otherwise
directed by MCC. To the extent MCA-Benin is held liable under any
indemnification or other similar provision of any agreement between
MCA-Benin, on the one hand, and any other Provider or other third
party, on the other hand, the Government shall pay in full on behalf of
MCA-Benin any such obligation; provided, further, the Government shall
apply national funds to satisfy its obligations under this Section 3.9
and no MCC Funding, Accrued Interest, or Program Asset may be applied
by the Government in satisfaction of its obligations under this Section
3.9.
[[Page 12944]]
Section 3.10 Domestic Requirements. The Government shall proceed in
a timely manner to seek ratification of this Compact, as necessary or
required by the laws of the Republic of Benin, or similar domestic
requirement, in order that (i) this Compact shall be given the status
of an international agreement, (ii) this Compact shall take precedence
and prevail over the domestic laws of Benin now or hereafter in effect
and (iii) each of the provisions of this Compact is valid, binding and
in full force and effect under Beninese law. The Government shall
initiate such process promptly after the conclusion of this Compact.
Notwithstanding anything to the contrary in this Compact, this Section
3.10 shall provisionally apply prior to Entry into Force.
Section 3.11 No Conflict. The Government shall undertake not to
enter into any agreement in conflict with this Compact or any
Supplemental Agreement during the Compact Term.
Section 3.12 Reports. The Government shall provide, or cause to be
provided, to MCC at least on each anniversary of the Entry into Force
(or such other anniversary agreed by the Parties in writing) and
otherwise within thirty (30) days of any written request by MCC, or as
otherwise agreed in writing by the Parties, the following information:
(a) The name of each entity to which MCC Funding has been provided;
(b) The amount of MCC Funding provided to such entity;
(c) A description of the Program and each Project funded in
furtherance of this Compact, including:
(i) A statement of whether the Program or any Project was solicited
or unsolicited; and
(ii) A detailed description of the objectives and measures for
results of the Program or Project;
(d) The progress made by Benin toward achieving the Compact Goal
and Objectives;
(e) A description of the extent to which MCC Funding has been
effective in helping Benin to achieve the Compact Goal and Objectives;
(f) A description of the coordination of MCC Funding with other
United States foreign assistance and other related trade policies;
(g) A description of the coordination of MCC Funding with
assistance provided by other donor countries;
(h) Any report, document or filing that the Government, any
Government Affiliate or any Permitted Designee submits to any
government body in connection with this Compact;
(i) Any report or document required to be delivered to MCC under
the Environmental Guidelines, any Audit Plan, or any component of the
Implementation Plan; and
(j) Any other report, document or information requested by MCC or
required by this Compact or any Supplemental Agreement between the
Parties.
Article IV. Conditions Precedent; Deliveries
Section 4.1 Conditions Prior to the Entry into Force and
Deliveries. As conditions precedent to the Entry into Force, the
Parties shall satisfy the conditions set forth in this Section 4.1.
(a) The Government (or a mutually acceptable Government Affiliate)
and MCC shall execute a Disbursement Agreement, which agreement shall
be in full force and effect as of the Entry into Force.
(b) (i) The Government shall deliver one or more of the
Supplemental Agreements or other document identified on Exhibit B
attached hereto, which agreements or other documents shall be fully
executed by the parties thereto and in full force and effect, or (ii)
the Government (or a mutually acceptable Government Affiliate) and MCC
execute one or more term sheets that set forth the material and
principal terms and conditions that will be included in any such
Supplemental Agreement or document that has not been entered into or
effective as of the Entry into Force (the ``Supplemental Agreement Term
Sheets'').
(c) The Government (or a mutually acceptable Government Affiliate)
and MCC shall execute a Procurement Agreement, which agreement shall be
in full force and effect as of the Entry into Force.
(d) The Government shall deliver a written statement as to the
incumbency and specimen signature of the Principal Representative and
each Additional Representative of the Government executing any document
under this Compact, such written statement to be signed by a duly
authorized official of the Government other than the Principal
Representative or any such Additional Representative.
(e) The Government shall deliver a certificate signed and dated by
the Principal Representative of the Government, or such other duly
authorized representative of the Government acceptable to MCC, that:
(i) Certifies the Government has completed all of its domestic
requirements for (1) this Compact to be given the status of an
international agreement, (2) this Compact to take precedence and
prevail over the domestic laws of Benin now or hereafter in effect and
(3) each of the provisions of this Compact to be valid, binding and in
full force and effect under Beninese law; and
(ii) Attaches thereto, and certifies that such attachments are,
true, correct and complete copies of all decrees, legislation,
regulations or other governmental documents relating to its domestic
requirements for this Compact to enter into force and the satisfaction
of Section 3.10, which MCC may post on its Web site or otherwise make
publicly available.
(f) MCC shall deliver a written statement as to the incumbency and
specimen signature of the Principal Representative and each Additional
Representative of MCC executing any document under this Compact such
written statement to be signed by a duly authorized official of MCC
other than the Principal Representative or any such Additional
Representative.
(g) The Government has not engaged subsequent to the conclusion of
this Compact in any action or omission inconsistent with the MCA
Eligibility Criteria, as determined by MCC in its sole discretion.
Section 4.2 Conditions Precedent to MCC Disbursements or Re-
Disbursements. Prior to, and as condition precedent to, any MCC
Disbursement or Re-Disbursement, the Government shall satisfy, or
ensure the satisfaction of, all applicable conditions precedent in the
Disbursement Agreement.
Article V. Final Clauses
Section 5.1 Communications. Unless otherwise expressly stated in
this Compact or otherwise agreed in writing by the Parties, any notice,
certificate, request, report, document or other communication required,
permitted, or submitted by either Party to the other under this Compact
shall be (a) in writing, (b) in English and (c) deemed duly given: (i)
Upon personal delivery to the Party to be notified; (ii) when sent by
confirmed facsimile or electronic mail, if sent during normal business
hours of the recipient Party, if not, then on the next business day; or
(iii) three (3) business days after deposit with an internationally
recognized overnight courier, specifying next day delivery, with
written verification of receipt to the Party to be notified at the
address indicated below, or at such other address as such Party may
designate:
To MCC: Millennium Challenge Corporation, Attention: Vice President
of Operations (with a copy to the Vice President and General Counsel),
875
[[Page 12945]]
Fifteenth Street, NW., Washington, DC 20005, United States of America,
Facsimile: (202) 521-3700, Phone: (202) 521-3600, e-mail:
VPOperations@mcc.gov (Vice President of Operations);
VPGeneralCounsel@mcc.gov (Vice President and General Counsel).
To the Government: Ministry of Finance and Economy, Attention:
Minister of Finance and Economy, Route de l'Aeroport, P.O. Box 302,
Cotonou, Republic of Benin, Facsimile: 229 21 30 18 51, Phone: 229 21
30 69 38.
With a copy to: Office of the Head of State, Attention: Chief of
Staff, Presidence de la Republique, Avenue de la Marina, Cotonou,
Republic of Benin, Facsimile: 229 21 30 00 90, Phone: 229 21 30 06 36,
MCA-Benin (to be formed), Attention: National Coordinator, Immeuble
Espace Dina, 6th Floor, Boulevard Saint Michel, Cotonou, Republic of
Benin, Facsimile: 229 21 32 83 22, Phone: 229 21 32 83 19, e-mail:
mcabenin@yahoo.com.
Notwithstanding the foregoing, any audit report delivered pursuant
to Section 3.8, if delivered by facsimile or electronic mail, shall be
followed by an original in overnight express mail. This Section 5.1
shall not apply to the exchange of letters contemplated in Section 1.3
or any amendments under Section 5.3.
Section 5.2 Representatives. Unless otherwise agreed in writing by
the Parties, for all purposes relevant to this Compact, the Government
shall be represented by the individual holding the position of, or
acting as, Minister of Finance and Economy of the Republic of Benin,
and MCC shall be represented by the individual holding the position of,
or acting as, Vice President for Operations (each, a ``Principal
Representative''), each of whom, by written notice to the other Party,
may designate one or more additional representatives (each, an
``Additional Representative'') for all purposes other than signing
amendments to this Compact. The names of the Principal Representative
and any Additional Representative of each of the Parties shall be
provided, with specimen signatures, to the other Party, and the Parties
may accept as duly authorized any instrument signed by such
representatives relating to the implementation of this Compact, until
receipt of written notice of revocation of their authority. A Party may
change its Principal Representative to a new representative of
equivalent or higher rank upon written notice to the other Party, which
notice shall include the specimen signature of the new Principal
Representative.
Section 5.3 Amendments. The Parties may amend this Compact only by
a written agreement signed by the Principal Representatives of the
Parties and subject to the respective domestic approval requirements to
which this Compact was subject.
Section 5.4 Termination; Suspension.
(a) Subject to Section 2.5, either Party may terminate this Compact
in its entirety by giving the other Party thirty (30) days' written
notice.
(b) Notwithstanding any other provision of this Compact, including
Section 2.1, or any Supplemental Agreement between the Parties, subject
to Section 2.5, MCC may suspend or terminate this Compact or MCC
Funding, in whole or in part, and any obligation or sub-obligation
related thereto, upon giving the Government written notice, if MCC
determines, in its sole discretion, that:
(i) Any use or proposed use of MCC Funding or Program Assets or
continued implementation of the Compact would be in violation of
applicable law or United States Government policy, whether now or
hereafter in effect;
(ii) The Government, any Provider, or any other third party
receiving MCC Funding or using Program Assets is engaged in activities
that are contrary to the national security interests of the United
States;
(iii) The Government or any Permitted Designee has committed an act
or omission or an event has occurred that would render the Republic of
Benin ineligible to receive United States economic assistance under
Part I of the Foreign Assistance Act of 1961, as amended (22 U.S.C.
2151 et seq.), by reason of the application of any provision of the
Foreign Assistance Act of 1961 or any other provision of law;
(iv) The Government or any Permitted Designee has engaged in a
pattern of actions or omissions inconsistent with the MCA Eligibility
Criteria, or there has occurred a significant decline in the
performance of the Republic of Benin on one or more of the eligibility
indicators contained therein;
(v) The Government or any Provider has materially breached one or
more of its assurances or any covenants, obligations or
responsibilities under this Compact or any Supplemental Agreement;
(vi) An audit, review, report or any other document delivered in
furtherance of the Compact or any Supplemental Agreement or any other
evidence reveals that actual expenditures for the Program or any
Project or Project Activity were greater than the projected expenditure
for such activities identified in the applicable Detailed Financial
Plan or are projected to be greater than projected expenditures for
such activities;
(vii) If the Government (A) materially reallocates or reduces the
allocation in its national budget or any other Government budget of the
normal and expected resources that the Government would have otherwise
received or budgeted, from external or domestic sources, for the
activities contemplated herein, (B) fails to contribute or provide the
amount, level, type and quality of resources required to effectively
carry out the Government Responsibilities or any other responsibilities
or obligations of the Government under or in furtherance of this
Compact, or (C) fails to pay any of its obligations as required under
this Compact or any Supplemental Agreement, including such obligations
which shall be paid solely out of national funds;
(viii) If the Government, any Provider, or any other third party
receiving MCC Funding or using Program Assets, or any of their
respective directors, officers, employees, Affiliates, contractors,
sub-contractors, grantee, sub-grantee, representatives or agents, is
found to have been convicted of a narcotics offense or to have been
engaged in drug trafficking;
(ix) Any MCC Funding or Program Assets are applied, directly or
indirectly, to the provision of resources and support to, individuals
and organizations associated with terrorism, sex trafficking or
prostitution;
(x) An event or condition of any character has occurred that: (A)
Materially and adversely affects, or is likely to materially and
adversely affect, the ability of the Government or any other party to
effectively implement, or ensure the effective implementation of, the
Program or any Project or to otherwise carry out its responsibilities
or obligations under or in furtherance of this Compact or any
Supplemental Agreement or to perform its obligations under or in
furtherance of this Compact or any Supplemental Agreement or to
exercise its rights thereunder; (B) makes it improbable that the
Objectives will be achieved during the Compact Term; (C) materially and
adversely affects the Program Assets or any Permitted Account or (D)
constitutes misconduct injurious to MCC, or constitutes a fraud or a
felony, by the Government, any Government Affiliate, Permitted Designee
or Provider, or any officer, director, employee, agent, representative,
Affiliate, contractor,
[[Page 12946]]
grantee, subcontractor or sub-grantee of any of the foregoing;
(xi) The Government or any Permitted Designee or Provider has taken
any action or omission or engaged in any activity in violation of, or
inconsistent with, the requirements of this Compact or any Supplemental
Agreement to which the Government or any Permitted Designee or Provider
is a party;
(xii) There has occurred a failure to meet a condition precedent or
series of conditions precedent or any other requirements or conditions
in connection with MCC Disbursement as set out in and in accordance
with any Supplemental Agreement between the Parties; or
(xiii) Any MCC Funding, Accrued Interest or Program Asset becomes
subject to a Lien without the prior approval of MCC, and the Government
fails to obtain the release of such Lien (at its own expense and not
with MCC Funding, Accrued Interest, or Program Assets) within thirty
(30) days after the imposition of such Lien.
(c) MCC may reinstate any suspended or terminated MCC Funding under
this Compact or any Supplemental Agreement if MCC determines, in its
sole discretion, that the Government or other relevant party has
demonstrated a commitment to correcting each condition for which MCC
Funding was suspended or terminated.
(d) The authority to suspend or terminate this Compact or any MCC
Funding under this Section 5.4 includes the authority to suspend or
terminate any obligations or sub-obligations relating to MCC Funding
under any Supplemental Agreement without any liability to MCC
whatsoever.
(e) All MCC Disbursements and Re-Disbursements shall cease upon
expiration, suspension, or termination of this Compact; provided,
however, (i) reasonable expenditures for goods, services and works that
are properly incurred under or in furtherance of this Compact before
expiration, suspension or termination of this Compact and (ii)
reasonable expenditures for goods and services (including certain
administrative expenses) properly incurred within one hundred and
twenty (120) days after the expiration, suspension or termination of
the Compact in connection with the winding up of the Program may be
paid from MCC Funding, provided that in the case of clauses (i) and
(ii) the request for such payment is (A) properly submitted within
ninety (90) days after the expiration, suspension or termination of the
Compact and (B) subject to the prior written consent of MCC.
(f) Other than payments permitted pursuant to Section 5.4(e), in
the event of the suspension or termination of this Compact or any
Supplemental Agreement, in whole or in part, the Party, at MCC's sole
discretion, shall suspend, for the period of the suspension, or
terminate, or ensure the suspension or termination of, as applicable,
any obligation or sub-obligation of the Parties to provide financial or
other resources under this Compact or any Supplemental Agreement, or to
the suspended or terminated portion of this Compact or such
Supplemental Agreement, as applicable. In the event of such suspension
or termination, the Government shall use its best efforts to suspend or
terminate, or ensure the suspension or termination of, as applicable,
all such noncancelable commitments related to the suspended or
terminated MCC Funding. Any portion of this Compact or any such
Supplemental Agreement that is not suspended or terminated shall remain
in full force and effect.
(g) Upon the full or partial suspension or termination of this
Compact or any MCC Funding, MCC may, at its expense, direct that title
to Program Assets be transferred to MCC if such Program Assets are in a
deliverable state; provided, for any Program Asset(s) partially
purchased or funded (directly or indirectly) by MCC Funding, the
Government shall reimburse to a United States Government account
designated by MCC the cash equivalent of the portion of the value of
such Program Asset(s), such value as determined by MCC.
(h) Prior to the expiration of this Compact or upon termination of
this Compact, the Parties shall consult in good faith with a view to
reaching an agreement in writing on (i) the post-Compact Term treatment
of MCA-Benin, (ii) the process for ensuring the refunds of MCC
Disbursements that have not yet been released from a Permitted Account
through a valid Re-Disbursement or otherwise committed in accordance
with Section 5.4(e), or (iii) any other matter related to the winding
up of the Program and this Compact.
Section 5.5 Privileges and Immunities. MCC is an agency of the
Government of the United States of America and its personnel assigned
to the Republic of Benin will be notified pursuant to the Vienna
Convention on Diplomatic Relations as members of the mission of the
Embassy of the United States of America. The Government shall ensure
that any personnel of MCC so notified, including individuals detailed
to or contracted by MCC, and the members of the families of such
personnel, while such personnel are performing duties in the Republic
of Benin, shall enjoy the privileges and immunities that are enjoyed by
a member of the United States Foreign Service, or the family of a
member of the United States Foreign Service so notified, as
appropriate, of comparable rank and salary of such personnel, if such
personnel or the members of the families of such personnel are not a
national of, or permanently resident in, the Republic of Benin.
Section 5.6 Attachments. Any annex, schedule, exhibit, table,
appendix or other attachment expressly attached hereto (collectively,
the ``Attachments'') is incorporated herein by reference and shall
constitute an integral part of this Compact.
Section 5.7 Inconsistencies.
(a) Conflicts or inconsistencies between any parts of this Compact
shall be resolved by applying the following descending order of
precedence:
(i) Articles I through V and
(ii) Any Attachments.
(b) In the event of any conflict or inconsistency between this
Compact and any Supplemental Agreement between the Parties, the terms
of this Compact shall prevail. In the event of any conflict or
inconsistency between any Supplemental Agreement between the Parties
and any other Supplemental Agreement, the terms of the Supplemental
Agreement between the Parties shall prevail. In the event of any
conflict or inconsistency between Supplemental Agreements between any
parties, the terms of a more recently executed Supplemental Agreement
between such parties shall take precedence over a previously executed
Supplemental Agreement between such parties. In the event of any
inconsistency between a Supplemental Agreement between the Parties and
any component of the Implementation Plan, the terms of the relevant
Supplemental Agreement shall prevail.
Section 5.8 Indemnification. The Government shall indemnify and
hold MCC and any MCC officer, director, employee, Affiliate,
contractor, agent or representative (each of MCC and any such persons,
an ``MCC Indemnified Party'') harmless from and against, and shall
compensate, reimburse and pay such MCC Indemnified Party for, any
liability or other damages which (i) are directly or indirectly
suffered or incurred by such MCC Indemnified Party, or to which any MCC
Indemnified Party may otherwise become subject, regardless of whether
or not such damages relate to any third-party claim, and (ii) arise
from or as a result of the
[[Page 12947]]
negligence or willful misconduct of the Government, any Government
Affiliate, MCA-Benin or any Permitted Designee, directly or indirectly
connected with, any activities (including acts or omissions) undertaken
in furtherance of this Compact; provided, however, the Government shall
apply national funds to satisfy its obligations under this Section 5.8
and no MCC Funding, Accrued Interest, or Program Asset may be applied
by the Government in satisfaction of its obligations under this Section
5.8.
Section 5.9 Headings. The Section and Subsection headings used in
this Compact are included for convenience only and are not to be
considered in construing or interpreting this Compact.
Section 5.10 Interpretation; Definitions.
(a) Any reference to the term ``including'' in this Compact shall
be deemed to mean ``including without limitation'' except as expressly
provided otherwise.
(b) Any reference to activities undertaken ``in furtherance of this
Compact'' or similar language shall include activities undertaken by
the Government, any Government Affiliate, any Permitted Designee, any
Provider or any other third party receiving MCC Funding involved in
carrying out the purposes of this Compact or any Supplemental
Agreement, including their respective directors, officers, employees,
Affiliates, contractors, sub-contractors, grantees, sub-grantees,
representatives or agents, whether pursuant to the terms of this
Compact, any Supplemental Agreement or otherwise.
(c) References to ``day'' or ``days'' shall be calendar days unless
provided otherwise.
(d) The term ``United States Government'' shall, for the purposes
of this Compact, mean any branch, agency, bureau, government
corporation, government chartered entity or other body of the Federal
government of the United States.
(e) The term ``Affiliate'' of a party is a person or entity that
controls, is controlled by, or is under the same control as the party
in question, whether by ownership or by voting, financial or other
power or means of influence.
(f) The term ``Government Affiliate'' is an Affiliate, ministry,
bureau, department, agency, government corporation or any other entity
chartered or established by the Government.
(g) References to any Affiliate or Government Affiliate herein
shall include any of their respective directors, officers, employees,
affiliates, contractors, sub-contractors, grantees, sub-grantees,
representatives, and agents.
(h) Any references to ``Supplemental Agreement between the
Parties'' shall mean any agreement between MCC on the one hand, and the
Government or any Government Affiliate or Permitted Designee on the
other hand.
(i) A compendium of capitalized terms defined herein is included,
for convenience only, in Exhibit A attached hereto.
Section 5.11 Signatures. A signature to this Compact or an
amendment to this Compact pursuant to Section 5.3 shall be delivered
only as an original signature. With respect to all other signatures, a
signature delivered by facsimile or electronic mail in accordance with
Section 5.1 shall be deemed an original signature, and the Parties
hereby waive any objection to such signature or to the validity of the
underlying document, certificate, notice, instrument or agreement on
the basis of the signature's legal effect, validity or enforceability
solely because it is in facsimile or electronic form; without limiting
the foregoing, a signature on an audit report or a signature evidencing
any modification identified in Sections 2(b) and (4)(a)(iv) of Annex I,
Section 4 of Annex II or Section 5(c) Annex III shall be followed by an
original in overnight express mail. Such signature shall be accepted by
the receiving Party as an original signature and shall be binding on
the Party delivering such signature.
Section 5.12 Designation. MCC may designate any Affiliate, agent,
or representative to implement, in whole or in part, its obligations,
and exercise any of its rights, under this Compact or any Supplemental
Agreement between the Parties. MCC shall inform the Government of any
such designation.
Section 5.13 Survival. Any Government Responsibilities, covenants,
or obligations or other responsibilities to be performed by the
Government after the Compact Term shall survive the termination or
expiration of this Compact and expire in accordance with their
respective terms. Notwithstanding the termination or expiration of this
Compact, the following provisions shall remain in force: Sections 2.2,
2.3, 2.5, 3.2, 3.3, 3.4, 3.5, 3.8, 3.9 (for one year), 3.12, 5.1, 5.2,
5.4(d), 5.4(e) (for one hundred and twenty days), 5.4(f), 5.4(g),
5.4(h), 5.5, 5.6, 5.7, 5.8, 5.9, 5.10, 5.11, 5.12, this Section 5.13,
5.14, and 5.15.
Section 5.14 Consultation. Either Party may, at any time, request
consultations relating to the interpretation or implementation of this
Compact or any Supplemental Agreement between the Parties. Such
consultations shall begin at the earliest possible date. The request
for consultations shall designate a representative for the requesting
Party with the authority to enter consultations and the other Party
shall endeavor to designate a representative of equal or comparable
rank. If such representatives are unable to resolve the matter within
20 days from the commencement of the consultations then each Party
shall forward the consultation to the Principal Representative or such
other representative of comparable or higher rank. The consultations
shall last no longer than 45 days from date of commencement. If the
matter is not resolved within such time period, either Party may
terminate this Compact pursuant to Section 5.4(a). The Parties shall
enter any such consultations guided by the principle of achieving the
Compact Goal in a timely and cost-effective manner and by the
principles of international law. Any dispute arising under or related
to this Compact shall be determined exclusively through the
consultation mechanism set forth in this Section 5.14.
Section 5.15 MCC Status. MCC is a United States government
corporation acting on behalf of the United States Government in the
implementation of this Compact. As such, MCC has no liability under
this Compact, is immune from any action or proceeding arising under or
relating to this Compact and the Government hereby waives and releases
all claims related to any such liability. In matters arising under or
relating to this Compact, MCC is not subject to the jurisdiction of the
courts or other body of Benin or any other jurisdiction and all
disputes arising under or relating to this Compact shall be determined
in accordance with Section 5.14.
Section 5.16 Language. This Compact is prepared in English and in
the event of any ambiguity or conflict between this official English
version and any other version translated into any language for the
convenience of the Parties, this official English version shall
prevail.
Section 5.17 Publicity; Information and Marking. The Government
shall give appropriate publicity to this Compact as a program to which
the United States, through MCC, has contributed, including by posting
this Compact, and any amendments thereto, on the Web site operated by
MCA-Benin (``MCA-Benin Website''), identifying Program activity sites,
and marking Program Assets; provided, any announcement, press release
or
[[Page 12948]]
statement regarding MCC or the fact that MCC is funding the Program or
any other publicity materials referencing MCC, including the publicity
described in this Section 5.17, shall be subject to prior approval by
MCC and shall be consistent with any instructions provided by MCC from
time to time in relevant Implementation Letters. Upon the termination
or expiration of this Compact, MCC may request the removal of, and the
Government shall, upon such request, remove, or cause the removal of,
any such markings and any references to MCC in any publicity materials
or on the MCA-Benin Website. MCC may post this Compact, and any
amendments thereto, on the Web site of MCC. MCC shall have the right to
use any information or data provided in any report or document provided
to MCC for the purpose of satisfying MCC reporting requirements or in
any other manner.
In Witness Whereof, the undersigned, duly authorized by their
respective governments, have signed this Compact this 22nd day of
February, 2006 and this Compact shall enter into force in accordance
with Section 1.3.
Done at Washington, DC in English.
For the United States of America, acting through the Millennium
Challenge Corporation, Name: John J. Danilovich, Title: Chief Executive
Officer.
For the Government of the Republic of Benin, Name: Cosme Sehlin,
Title: Minister of Finance and Economy.
Exhibit A--Definitions
The following compendium of capitalized terms that are used herein
is provided for the convenience of the reader. To the extent that there
is a conflict or inconsistency between the definitions in this Exhibit
A and the definitions elsewhere in the text of this Compact, the
definition elsewhere in this Compact shall prevail over the definition
in this Exhibit A.
2006 Baseline Data Survey shall have the meaning set forth in
Section 2(a)(i) of Annex III.
Accrued Interest is any interest or other earnings on MCC Funding
that accrues as specified in Section 2.1(c).
Act means the Millennium Challenge Act of 2003, as amended.
Additional Representative is a representative as may be designated
by a Principal Representative, by written notice, for all purposes
other than signing amendments to this Compact.
ADR means alternative dispute resolution.
AFD means the Agence Fran[ccedil]aise de D[eacute]veloppement.
Advisory Council shall have the meaning set forth in Section
3(e)(i) of Annex I.
Affiliate means the affiliate of a party, which is a person or
entity that controls, is controlled by, or is under the same control as
the party in question, whether by ownership or by voting, financial or
other power or means of influence. References to Affiliate herein shall
include any of their respective directors, officers, employees,
affiliates, contractors, sub-contractors, grantees, sub-grantees,
representatives, and agents.
Arbitration Center Activity is the Project Activity related to
expansion of the arbitration center under the Justice Project described
in Section 2(a) of Schedule 3 to Annex I.
Attachments are any annex, schedule, exhibit, table, appendix or
other attachment expressly attached to this Compact.
Audit Guidelines means the ``Guidelines for Financial Audits
Contracted by Foreign Recipients'' issued by the Inspector General of
the United States Agency for International Development.
Audit Plan means a plan, in accordance with the Audit Guidelines,
for the audit of the expenditures of any Covered Providers, which audit
plan, in the form and substance as approved by MCC, the Government
shall adopt, or cause to be adopted, no later than sixty (60) days
prior to the end of the first period to be audited.
Auditor means the auditor(s) as defined in, and engaged pursuant
to, Section 3(h) of Annex I and as required by Section 3.8(d) of the
Compact.
Auditor/Reviewer Agreement is an agreement between MCA-Benin and
each Auditor or Reviewer, in form and substance satisfactory to MCC,
that sets forth the roles and responsibilities of the Auditor or
Reviewer with respect to the audit, review or evaluation, including
access rights, required form and content of the applicable audit,
review or evaluation and other terms and conditions such as payment of
the Auditor or Reviewer.
Bank(s) means each individually and collectively, any bank holding
an account referenced in Section 4(d) of Annex I.
Bank Agreement means an agreement between MCA-Benin and a Bank,
satisfactory to MCC, that sets forth the signatory authority, access
rights, anti-money laundering and anti-terrorist financing provisions,
and other terms related to the Permitted Account.
BDS means business development services.
Beneficiaries means the intended beneficiaries identified in
accordance with Annex I.
Bilateral Agreement means the Economic, Technical and Related
Assistance Agreement by and between the Government of the United States
of America and the Government of the Republic of Benin, dated May 27,
1961, as amended from time to time.
BNC means Benin National Committee.
Board means the independent board of directors of MCA-Benin to
oversee MCA-Benin's responsibilities and obligations under this
Compact.
BOC means the fish/seafood inspection handling facility at the
Port.
Business Registration Activity is the Project Activity related to
the business registration center under the Justice Project described in
Section 2(b) of Schedule 3 to Annex I.
CAMeC means the Centre d'Arbitrage, Mediation et Conciliation.
Capacity Building Activity is the Project Activity related to
financial institution and borrower capacity building under the
Financial Services Project described in Section 2(a) of Schedule 2 of
Annex I.
Cellule means the Cellule de Microfinance.
Chair means the Chair of the Board of Directors.
Challenge Facility means a financial innovation and expansion
challenge facility or FINECF described in Section 2(a) of Schedule 2 to
Annex I.
Chamber means the Chamber of Commerce.
Civil Member(s) means the representatives for the positions
identified in Sections 3(d)(ii)(2)(A)(vii)-(xi) of Annex I designated
to serve as voting members on the Board for a one-year period.
Compact means the Millennium Challenge Compact made between the
United States of America, acting through the Millennium Challenge
Corporation, and the Government of the Republic of Benin.
Compact Goal means advancing economic growth and poverty reduction
in Benin.
Compact Goal Indicator(s) means the Indicators that will measure
the results for the overall Program on the intended Beneficiaries, as
set out in the table at Section 2(a)(i) of Annex III.
Compact Implementation Funding shall have the meaning set forth in
Section 2.1(a)(iii).
Compact Records shall have the meaning set forth in Section 3.8(b).
Compact Reports are any documents or reports delivered to MCC in
satisfaction of the Government's
[[Page 12949]]
reporting requirements under this Compact or any Supplemental Agreement
between the Parties.
Compact Term means the term for which this Compact shall remain in
force, which shall be the five (5) year period from the Entry into
Force, unless earlier terminated in accordance with Section 5.4.
Component shall have the meaning set forth in Section 2(a)(ii)(7)
in Schedule 2 of Annex I.
Courts Activity is the Project Activity related to improved
services of courts under the Justice Project described in Section 2(c)
of Schedule 1 to Annex I.
Covered Provider shall have the meaning set forth in Section
3.8(d)(iv).
Designated Rights and Responsibilities shall have the meaning set
forth in Section 3.2(c).
Detailed Financial Plan means the financial plans that specify
respectively the annual and quarterly detailed budget and projected
cash requirements for the Program (including monitoring and evaluation
and administrative costs) and each Project, projected both on a
commitment and cash requirement basis.
Disbursement Agreement is a Supplemental Agreement that MCC, the
Government (or a mutually acceptable Government Affiliate and MCA-Benin
shall enter into that (i) further specifies the terms and conditions of
any MCC Disbursements and Re-Disbursements, (ii) is in a form and
substance mutually satisfactory to the Parties, and (iii) is signed by
the Principal Representative of each Party (or in the case of the
Government, the principal representative of the applicable Government
Affiliate) and of MCA-Benin.
EMICoV means Benin's national household living standards
measurement survey (L'Enquete Modulaire Integree sur les Conditions de
Vie).
EMPs means Environmental Management Plans.
Entry into Force shall have the meaning set forth in Section 1.3.
Environmental Guidelines means the environmental guidelines
delivered by MCC to the Government or posted by MCC on its website or
otherwise publicly made available, as such guidelines may be amended
from time to time.
ESI Officer means the Environmental and Social Assessment Director,
an Officer of MCA-Benin.
ESIAs means environmental and social impact assessments.
EU means the European Union.
Evaluation Component means the component of the M&E Plan that
specifies a methodology, process and timeline for the evaluation of
planned, ongoing, or completed Project Activities to determine their
impact and likely sustainability.
Exempt Uses shall have the meaning set forth in Section 2.3(e)(ii).
Facility Manager means the qualified independent management entity
or entities that shall manage and implement the Challenge Facility.
Final Evaluation shall have the meaning set forth in Section 3(a)
of Annex III.
Financial Advisory Committee is a stakeholders group that will
provide feedback and input to the Financial Services Project Division.
Financial Enabling Environment Activity is the Project Activity
related to financial enabling environment under the Financial Services
Project described in Section 2(b) of Schedule 2 to Annex I.
Financial Plan means collectively, the Multi-Year Financial Plan,
each Detailed Financial Plan, and each amendment, supplement or other
change thereto.
Financial Plan Annex means Annex II of this Compact, which
summarizes the Multi-Year Financial Plan for the Program.
Financial Services Objective is a Project Objective of this Compact
and means to expand access to financial services.
Financial Services Project is the Access to Financial Services
Project, and the Project described in Schedule 2 to Annex I, that the
Parties intend to implement in furtherance of the Financial Services
Objective.
FINECF means a financial innovation and expansion challenge
facility or the Challenge Facility described in Section 2(a) of
Schedule 2 of Annex I.
Fiscal Accountability Plan shall have the meaning set forth in
Section 4(c) of Annex I.
Fiscal Agent shall have the mean set forth in Section 3(g) of Annex
I.
Fiscal Agent Agreement is an agreement between MCA-Benin and each
Fiscal Agent, in form and substance satisfactory to MCC, that sets
forth the roles and responsibilities of the Fiscal Agent and other
appropriate terms and conditions, such as payment of the Fiscal Agent.
``goods'' refers to any supplies, equipment, materials, property or
other goods.
Governing Document means any decree, legislation, regulation,
contractual arrangement (including a governance agreement by and among
the Government (or a mutually acceptable Government Affiliate), MCA-
Benin and MCC), or other charter document establishing or governing
MCA-Benin.
Government means the Government of the Republic of Benin.
Government Affiliate is an Affiliate, ministry, bureau, department,
agency, government, corporation or any other entity chartered or
established by the Government. References to Government Affiliate shall
include any of their respective directors, officers, employees,
affiliates, contractors, sub-contractors, grantees, sub-grantees,
representatives, and agents.
Government Members are the government members identified in Section
3(d)(ii)(2)(A)(i)-(vi) of Annex I serving as voting members on the
Board, and any replacements thereof in accordance with Section
3(d)(ii)(2)(A) of Annex I.
Government Party means the Government, any Government Affiliate,
any Permitted Designee or any of their respective directors, officers,
employees, Affiliates, contractors, sub-contractors, grantees, sub-
grantees, representatives or agents.
Government Responsibilities shall have the meaning set forth in
Section 3.2(a).
GTZ means Deutsche Gessellschaft Fur Technische Zusammenarbeit,
GmbH.
IEC means information, education and communication campaign.
IEC Activity is the Project Activity related to information,
education, and communication Project Activity under the Land Project
described in Section 2(d) of Schedule 1 of Annex I.
IFC means the International Finance Corporation.
Implementation Letter is a letter that may be issued by MCC from
time to time to furnish additional information or guidance to assist
the Government in the implementation of this Compact.
Implementation Plan is a detailed plan for the implementation of
the Program and each Project, which will be memorialized in one or more
documents and shall consist of: (i) A Multi-Year Financial Plan; (ii)
Detailed Financial Plans; (iii) Fiscal Accountability Plan; (iv)
Procurement Plan; (v) Program and Project Work Plans; and (vi) M&E
Plan.
Implementing Entity means a Government Affiliate, nongovernmental
organization or other public- or private-sector entity or persons to
which MCA-Benin may provide MCC funding, directly or indirectly,
through an Outside Project Manager, to implement and carry out the
Projects or any other activities to be carried out in furtherance of
this Compact.
Implementing Entity Agreement is an agreement between MCA-Benin (or
the
[[Page 12950]]
appropriate Outside Project Manager) and an Implementing Entity, in
form and substance satisfactory to MCC, that sets forth the roles and
responsibilities of such Implementing Entity and other appropriate
terms and conditions, such as payment of the Implementing Entity.
Indicators shall mean the quantitative, objective and reliable data
that the M&E Plan will use to measure the results of the Program.
Initial Technical Studies means the initial technical studies
(engineering pre-feasibilty, environmental and economic) related to the
Markets Project described in Section 2(a) of Schedule 4 of Annex I.
Inspector General means the Inspector General of the United States
Agency for International Development.
ISPS means the International Ship and Port Security Code.
Justice Advisory Committee is a stakeholders group that will
provide feedback and input to the Justice Project Division.
Justice Objective is a Project Objective of this Compact and means
to improve the ability of the judicial system to enforce contracts and
resolve claims.
Justice Project is the Access to Justice Project, and the Project
described in Schedule 3 of Annex I, that the Parties intend to
implement in furtherance of the Justice Objective.
Land Objective is a Project Objective of this Compact and means to
strengthen property rights and investment.
Land Project is the Access to Land Project, and the Project
described in Schedule 1 to Annex I, that the Parties intend to
implement in furtherance of the Land Project Objective.
Land Project Steering Group is a stakeholders group that will
provide feedback and input to the Land Project Division.
Lien means any lien, attachment, enforcement of judgment, pledge,
or encumbrance of any kind.
Local Account is an interest-bearing local currency of Benin bank
account at a commercial bank, subject to MCC approval, to which the
Fiscal Agent may authorize transfer from any U.S. Dollar Permitted
Account for the purpose of making Re-Disbursements payable in local
currency.
M&E Annex means Annex III of this Compact, which generally
describes the components of the M&E Plan for the Program.
M&E Plan means the plan to measure and evaluate progress toward
achievement of the Compact Goal and Objectives of this Compact.
Management means the management team or national program
coordination team of MCA-Benin to have overall management
responsibility for the implementation of this Compact.
Markets Objective is a Project Objective of this Compact and means
to improve the Port of Cotonou.
Markets Project is the Access to Markets Project, and the Project
described in Schedule 4 of Annex I, that the Parties intend to
implement in furtherance of the Markets Objective.
Material Agreement shall have the meaning set forth in
Section3(c)(i)(5) of Annex I.
Material Re-Disbursement means any Re-Disbursement that requires
MCC approval under applicable law, the Procurement Agreement, any
Governing Document, or any Supplemental Agreement.
Material Terms of Reference means any terms of reference for the
procurement of goods, services or works that requires MCC approval
under applicable law, the Procurement Agreement, any Governing
Document, or any Supplemental Agreement.
MCA means the Millennium Challenge Account.
MCA-Benin shall have the meaning set forth in Section 3(b) of Annex
I and as is further described in Section 3(d) of Annex I.
MCA-Benin Website means the website operated by MCA-Benin.
MCA Eligibility Criteria means the MCA selection criteria and
methodology published by MCC pursuant to Section 607 of the Act from
time to time.
MCA National Coordinator means the National Coordinator of the
Millennium Challenge Account under the Benin National Committee, as
described in Section 1(b) of Annex I.
MCC means the Millennium Challenge Corporation.
MCC Disbursement means the disbursement of MCC Funding by MCC from
time to time to a Permitted Account or through such other mechanism
agreed by the Parties as defined in and in accordance with Section
2.1(b)(i).
MCC Disbursement Request means the applicable request that the
Government and MCA-Benin will jointly submit for an MCC Disbursement as
may be specified in the Disbursement Agreement.
MCC Funding shall have the meaning set forth in Section 2.1(a).
MCC Indemnified Party means MCC and any MCC officer, director,
employee, Affiliate, contractor, agent or representative.
MCC Representative is a representative designated by MCC to serve
as an Observer on the Board.
MFIs means micro-finance institutions.
Monitoring Component means the component of the M&E Plan that
specifies how the implementation of the Program and progress toward the
Compact Goal and Objectives will be monitored.
MSMEs means micro and small- and medium-scale enterprises.
Multi-Year Financial Plan means the multi-year financial plan for
the Program and for each Project, which is summarized in Annex II to
this Compact.
Multi-Year Financial Plan Summary means a multi-year Financial plan
summary attached to this Compact as Exhibit A of Annex II.
``national'' means, for purposes of Section 2.3(e), organizations
established under the laws currently or hereafter in effect in the
Republic of Benin, other than MCA-Benin or any other entity established
solely for purposes of managing or overseeing the implementation of the
Program or any wholly-owned subsidiaries, divisions, or Affiliates of
entities not registered or established under the laws currently or
hereafter in effect in the Republic of Benin.
National Coordinator means the National Coordinator of MCA-Benin as
defined in Section 3(c)(i) of Annex I.
NGOs means non-governmental organizations.
Objective(s) are the Program Objective together with the following
project-level objectives of this Compact that have been identified by
the Parties, each of which is (i) key to advancing the Compact Goal and
(ii) described in more detail in the Annexes attached hereto: (a) the
Land Objective, (b) the Financial Services Objective (c) the Justice
Objective and (d) the Markets Objective.
Objective Indicator means the Indicator for each Objective that
will measure the ultimate result for each of the individual Projects. A
table of Objective Indicator definitions is set forth at Section
2(a)(ii) of Annex III.
Observer(s) means the non-voting members of the Board as identified
in Section 3(d)(ii)(2)(B) of Annex I.
Officers shall have the meaning set forth in 3(d)(iii)(3) of Annex
I.
OHADA means Organization for the Harmonization of Business Law in
Africa.
Outcome Indicator means the Indicator in the M&E Plan that will
measure the intermediate results achieved under each of the Project
Activities in order to provide early measures of progress towards the
accomplishment of the Project Objective. A table of Outcome Indicator
definitions is set forth at Section 2(a)(ii) of Annex III.
[[Page 12951]]
Output Indicator means the Indicator in the M&E Plan to measure the
direct outputs of the Project Activities.
Outside Project Manager means the qualified persons or entities
engaged by Management, on behalf of MCA-Benin, to serve as outside
project managers in accordance with Section 3(d)(iii)(5) of Annex I.
PAC means the Port Autonome de Cotonou.
Panel shall have the meaning set forth in Section 2(a)(ii)(3) of
Schedule 2 to Annex I.
Parties means the United States of America, acting through MCC, and
the Government.
Party means (i) the United States of America, acting through MCC or
(ii) the Government.
Permitted Account(s) shall have the meaning set forth in Section
4(d) of Annex I.
Permitted Designee shall have the meaning set forth in Section
3.2(c).
PFR means Plan Foncier Rural.
Pledge means any pledge of any MCC Funding or any Program Assets,
or any guarantee directly or indirectly of any indebtedness.
Policy Activity is the Project Activity related to policy and legal
reform under the Land Project described in Section 2(a) of Schedule 1
of Annex I.
Port means the Port of Cotonou.
Port Advisory Committee is a stakeholders group representing the
Markets Project beneficiaries that will provide feedback and input to
the Markets Project Division.
Port Institutional Activity means the port institutional and
systems improvements Project Activity of the Markets Project as
described in Section 2(b) of Schedule 4 to Annex I.
Port Security and Landside Improvements Activity means the port
security and landside improvements Project Activity of the Markets
Project as described in Section 2(c) of Schedule 4 to Annex I.
Principal Representative means (i) for the Government, the
individual holding the position of, or acting as the Minister of State
in Charge of Planning and Development of the Republic of Benin, and
(ii) for MCC, the individual holding the position of, or acting as, the
Vice President for Operations.
Procedural Code shall have the meaning set forth in Section
2(c)(v)(1) of Schedule 3 to Annex I.
Procurement Agent shall have the meaning set forth in Section 3(i)
of Annex I.
Procurement Agent Agreement is an agreement between MCA-Benin and
each Procurement Agent, in form and substance satisfactory to MCC, that
sets forth the roles and responsibilities of the Procurement Agent with
respect to the conduct, monitoring, and review of procurements and
other appropriate terms and conditions, such as payment of the
Procurement Agent.
Procurement Agreement is a Supplemental Agreement between the
Government (and/or a mutually accepted Government Affiliate or MCA-
Benin) and MCC, which includes the Procurement Guidelines, and governs
the procurement of all goods, services and works by the Government or
any Provider in furtherance of this Compact.
Procurement Guidelines shall have the meaning set forth in Section
3.6(a).
Procurement Plan means a procurement plan adopted by MCA-Benin as
set forth in Section 3(i) of Annex I.
Program means a program, to be implemented under this Compact,
using MCC Funding to advance Benin's progress towards economic growth
and poverty reduction.
Program Annex means Annex I to this Compact, which generally
describes the Program that MCC Funding will support in Benin during the
Compact Term and the results to be achieved from the investment of MCC
Funding.
Program Assets means (i) MCC Funding, (ii) Accrued Interest, or
(iii) any assets, goods, or property (real, tangible, or intangible)
purchased or financed in whole or in part by MCC Funding.
Program Objective means the overall objective of the Program to
which the Project Objectives contribute and means to increase
investment and private sector activity in Benin, which is key to
advancing the Compact Goal.
Project(s) are the specific projects and the policy reforms, and
other activities related thereto that the Government will carry out, or
cause to be carried out in furtherance of this Compact to achieve the
Objectives and the Compact Goal, specifically the Land Project, the
Financial Services Project, the Justice Project and the Markets
Project.
Project Activity means the activities that will be undertaken in
furtherance of each Project.
Project Director shall have the meaning set forth in Section
3(d)(iii)(3) of Annex I.
Project Division means the divisions that manage the implementation
of each Project.
Project Objective(s) means the project-level objectives that will
advance the Program Objective and Compact Goal, each of which is
described in more detail in the Annexes of this Compact.
Proposal is the proposal for use of MCA assistance submitted to
MCC, as revised, by the Government on September 5, 2005.
Provider shall have the meaning set forth in Section 2.4(b).
PRSP means the Poverty Reduction Strategy Paper.
RAPs means Resettlement Action Plans.
Re-Disbursement is the release of MCC Funding from a Permitted
Account.
Registration Activity is the Project Activity related to achieving
formal property rights under the Land Project described in Section 2(b)
of Schedule 1 of Annex I.
Reviewer shall have the meaning set forth in Section 3(h) of Annex
I.
Services and Information Activity is the Project Activity related
to improving land registration services and land information management
under the Land Project described in Section 2(c) of Schedule 1 of Annex
I.
Special Account means a single, completely separate U.S. Dollar
interest-bearing account at a commercial bank, acceptable to MCC, to
receive MCC Disbursements.
Studies Activity means the feasibility studies and assessments
Project Activity of the Markets Project described in Section 2(a) of
Schedule 4 to Annex I.
Supplemental Agreement shall have the meaning set forth in Section
3.5(b).
Supplemental Agreement between the Parties means any agreement
between MCC on the one hand, and the Government or any Government
Affiliate or Permitted Designee on the other hand.
Supplemental Agreement Term Sheets means one or more term sheets
that the Government (or mutually acceptable Government Affiliate) and
MCC shall execute that set forth the material and principal terms and
conditions of each of the Supplemental Agreements identified in Exhibit
B attached hereto.
Support Strategy Activity is the Project Activity related to
strategy and programmatic coordination under the Land Project described
in Section 2(e) of Schedule 1 of Annex I.
Target means each Indicator will have one or more targets that
quantifies the result and the expected time by which that result will
be achieved.
Tax(es) shall have the meaning set forth in Section 2.3(e)(i).
TEU means twenty-foot equivalent unit, in Euro.
TPI shall have the meaning set forth in Section 2(c)(v) of Schedule
3 to Annex I.
United States Dollars (USD) means the currency of the United States
of America.
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United States Government shall mean any branch, agency, bureau,
government corporation, government chartered entity or other body of
the Federal government of the United States.
WAEMU means the West African Economic and Monetary Union.
Waterside Improvements Activity means the waterside improvements
Project Activity described in Section 2(d) of Schedule 4 to Annex I.
Work Plans means work plans for the overall administration of the
Program and for each Project.
Exhibit B--List of Certain Supplemental Agreements
1. Governing Document Principles.
2. Fiscal Agent Agreement.
3. Procurement Agent Agreement.
4. Form of Implementing Entity Agreement.
5. Form of Bank Agreement.
Schedule 2.1(a)(iii)--Description of Compact Implementation Funding
Compact Implementation Funding
The Compact Implementation Funding provided pursuant to Section
2.1(a)(iii) shall support the following activities and expenditures in
an amount not to exceed the amounts specified below:
(a) Conduct some or all Initial Technical Studies as described in
Section 2(a)(i) of Schedule 4 of Annex I, in an amount not to exceed
USD $800,000.\a\*
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\a\* Notwithstanding the amount specified for this activity or
payment, the total amount of funds disbursed in accordance with
Section 2.1(a)(iii) shall not exceed the amount set forth in Section
2.1(a)(iii).
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(b) Conduct the activities related to the 2006 Baseline Data Survey
as described in Section 2(a)(i) of Annex III, including: communication
and transportation of survey staff, supervision and quality assurance,
and data management, in an amount not to exceed USD $600,000.*
(c) Conduct fiscal and procurement administration activities, in an
amount not to exceed USD $500,000.*
(d) Payments for reasonable and normal staff salaries and
administrative expenses of MCA-Benin (or mutually acceptable Government
Affiliate) such as rent, computers, and other information technology
equipment, in an amount not to exceed USD $500,000.*
Annex I--Program Description
This Annex I to the Compact (the ``Program Annex'') generally
describes the Program that MCC Funding will support in Benin during the
Compact Term and the results to be achieved from the investment of MCC
Funding. Prior to any MCC Disbursement or Re-Disbursement, including
for the Projects described herein, MCC, the Government (or a mutually
acceptable Government Affiliate) and MCA-Benin shall enter into a
Supplemental Agreement that (i) further specifies the terms and
conditions of such MCC Disbursements and Re-Disbursements, (ii) is in a
form and substance mutually satisfactory to the Parties, and (iii) is
signed by the Principal Representative of each Party (or in the case of
the Government, the principal representative of the applicable
Government Affiliate) and of MCA-Benin (the ``Disbursement
Agreement''). Except as specifically provided herein, the Parties may
amend this Program Annex only by written agreement signed by the
Principal Representative of each Party. Each capitalized term in this
Program Annex shall have the same meaning given such term elsewhere in
this Compact. Unless otherwise expressly stated, each Section reference
herein is to the relevant Section of the main body of the Compact.
1. Background and Benin Development Strategy; Consultative Process
(a) Background and Benin Development Strategy
Situated in West Africa, between Nigeria and Togo in the Gulf of
Guinea, Benin is a small and very poor country with a population of
nearly seven million, a third of which live in poverty. Progress in
development is largely a result of reforms initiated in the early 1990s
as Benin transitioned from a Marxist-Leninist state towards a
pluralistic democracy and market economy.
Despite growth rates averaging 5% per year in the past decade, per
capita income in Benin remains below the sub-Sahara African average and
rural poverty has increased in recent years. Private sector activity
and broad-based investment that would lead to sustainable growth and
poverty reduction are hindered by land insecurity, lack of access to
capital, an inefficient judicial system, and an uncompetitive Port of
Cotonou.
The Program is a series of strategic investments designed to
increase investment and private sector activity by improving core
physical and institutional infrastructure. The objectives of the
Compact are fully consistent with, and directly support, the priority
areas identified by the Government in the Poverty Reduction Strategy
Paper (``PRSP''). Benin's PRSP was developed in 2002 with broad
participation from Beninese society. Its development plan is based on
four pillars: (i) Strengthening the macroeconomic framework over the
medium-term; (ii) developing human capital and environmental
management; (iii) strengthening good governance and institutional
capacity; and (iv) promoting employment and strengthening the ability
of the poor to participate in decision-making and production processes.
The Program is focused primarily on supporting the fourth pillar of the
PRSP.
(b) Consultative Process
The Proposal was the product of a genuine, meaningful and
participatory consultative process. By decree, the Government
designated the National Coordinator of the Millennium Challenge Account
(``MCA National Coordinator''), empowered the Benin National Committee
(``BNC'') to oversee the Proposal development and charged a Technical
Team with shaping the Proposal. The MCA National Coordinator sought the
participation of various stakeholders through workshops, meetings, and
radio and television events. Initially a vision for the Program was
presented to representatives from the government (both central and
municipal), the private sector, civil society, labor unions, artisans,
and the agricultural sector. Among these groups, members were elected
or delegated by their respective constituencies to form the BNC. This
MCA working group consists of six government Ministers, three Chamber
of Commerce representatives, three civil society representatives
(elected), three labor union representatives, two representatives of
the Agricultural Chamber (elected), and one representative of the
artisan community. Included in the working group are two women, the
Vice President of the Chamber of Commerce and another who was elected
by NGOs promoting women's rights.
Working sessions were held based on the PRSP to discuss the major
constraints to growth. Several iterations of the Proposal's projects
were vetted by a broad audience through nationally broadcast radio
programs to garner feedback from the targeted beneficiaries. In
September the MCA National Coordinator convened a stakeholder meeting
in which mayors from all 77 communes, and representatives of
microfinance institutions, the donor community and the central
government gathered to discuss the land tenure, and financial services
components of the Proposal. Continuing consultation
[[Page 12953]]
throughout the proposal development process has resulted in widespread
endorsement by potential beneficiaries. On-going consultations with
stakeholders and beneficiaries are planned during the Compact Term,
including at the Project-level.
Following MCC's review of the Proposal and discussions and
negotiations of the Parties, the Parties have identified certain
mutually acceptable components of the Proposal and other components
developed through the discussions of the Parties that together shall
constitute the Program. The Program is fully consistent with, and
directly supports PRSP, in particular the promoting employment and
strengthening the ability of the poor to participate in decision-making
and production processes as noted above.
2. Overview
(a) Program Objectives. The Program Goal and Objectives of the
Compact are expected to have a substantial impact on increasing
economic growth and reducing poverty in Benin. The Program will
accelerate economic growth and reduce poverty by removing constraints
to investment in key sectors of the Beninese economy. The Program aims
to increase investment and private sector activity by improving key
institutional and physical infrastructures through four Projects:
Access to Land, Access to Financial Services, Access to Justice, and
Access to Markets. Respectively, the Projects will address: Insecure
land tenure rights; insufficient access to financial services for
micro, small and medium-enterprises (MSMEs); an inefficient and under-
equipped judicial system; and the degrading competitiveness of the
Port. The Projects are complementary and support each other. The Land
Project and Financial Services Project will enhance the use of land
titles as collateral for loans or refinancing. The Justice Project will
support this relationship by increasing the confidence in the judicial
system to enforce contracts and collateral interests. The Markets
Project will increase the flow of goods through the Port of Cotonou. In
turn, improvements to the physical infrastructure will enhance the
success of Projects focusing on the institutional environment. The
sequencing and geographic selection criteria for activities undertaken
in Projects will be influenced by each of the other Projects.
(b) Projects. The Parties have identified, for each Objective,
Projects that the Government will implement, or cause to be
implemented, using MCC Funding. Each Project is described in the
Schedules to this Program Annex. The Schedules to this Program Annex
identify the activities that will be undertaken in furtherance of each
Project (each, a ``Project Activity'') as well as the various
activities within a Project Activity. Notwithstanding anything to the
contrary in this Compact, the Parties may agree to modify, amend,
terminate or suspend these Projects or to create a new project by
written agreement signed by the Principal Representative of each Party
without amending this Compact; provided, however, any such modification
or amendment of a Project or creation of a new project is (i)
consistent with the Objectives; (ii) does not cause the amount of MCC
Funding to exceed the aggregate amount specified in Section 2.1(a) of
this Compact; (iii) does not cause the Government's responsibilities or
contribution of resources to be less than specified in Section 2.2 of
this Compact or elsewhere in this Compact; and (iv) does not extend the
Compact Term. Certain Project Activities of the Program such as the
policy reforms, the extension of financial services and court services,
and improvements to the Port, will have an impact at the national
level. The Land Project will be undertaken in targeted geographic areas
of Benin, which are yet to be determined, but will be selected based on
the criteria set forth in the applicable Schedule.
(c) Beneficiaries. The intended beneficiaries of each Project are
described in the respective Schedule to this Program Annex and Annex
III to the extent identified as of the date hereof. The intended
beneficiaries shall be identified more precisely during the initial
phases of implementation of the Program. The Government shall provide
to MCC information on the population of the areas in which the Projects
will be active, disaggregated by gender, income level and age. The
Parties shall agree upon the description of the intended beneficiaries
and the Parties will make publicly available a more detailed
description of the intended beneficiaries of the Program, including
publishing such description on the MCA-Benin Website. For each Project,
the Government shall ensure that MCA-Benin presents to the Advisory
Council (i) a detailed description of the intended beneficiaries and
(ii) the methodology used to determine the intended beneficiaries
within sixty (60) days after the commencement of the Project
implementation and completion of the analysis of the intended
beneficiaries therein, disaggregated, to the maximum extent
practicable, by income level, gender, and age. The Land Project is
expected to assist an estimated 115,000 rural and urban households with
more secure and useful tenure, contribute to a 50% reduction in court
cases related to land disputes, and result in a 10% increase in
investment in rural land and a 20% increase in investment in urban
property. The Financial Services Project is expected to increase MSME
value added and incomes of the poor that own, are employed by, or do
business with those enterprises. The expected result is that by the end
of the Compact Term, financial services to MSMEs will have expanded by
nearly $60 million, which represents a multiple of three times the
Project's funding. A more efficient Port will contribute to importer
and exporter value-added through reducing transportation costs.
Moreover, because Benin's road transport industry is relatively
competitive, it is likely that the anticipated reduction in shipping
costs will be passed on to wholesalers and traders, and ultimately be
reflected in consumer prices. The Justice Project is expected to
benefit land occupants, title holders, businesses and legal
professionals in the jurisdictions where the Project will be active.
Overall, the Program is expected to impact an estimated five
million beneficiaries and raise one quarter of a million Beninese out
of poverty by 2015.
(d) Civil Society. Civil Society shall participate in overseeing
the implementation of the program through its representation on the
Board of Directors and the Advisory Council (which will include
representatives from non-governmental organizations and private sector
entities), as provided in Section 3(d) and Section 3(e), respectively,
of this Program Annex. Stakeholders will be able to weigh in by a Land
Project steering group and discussion groups for studies, the White
Paper, and related legislative drafting. The Financial Services Project
and the Markets Project will also incorporate the input of Stakeholders
in advisory committees comprising non-governmental organizations and
private sector entities. Finally, members of civil society may be
recipients of training, technical assistance, or other public awareness
programs that are integral to the Projects. In addition, the Work Plans
or Procurement Plans for each Project shall note the extent to which
civil society will have a role in the implementation of or
participation in a particular Project or Project Activity.
(e) Monitoring and Evaluation (``M&E''). Annex III of this Compact
generally describes the plan to measure
[[Page 12954]]
and evaluate progress toward achievement of the Compact Goal and
Objectives of this Compact (the ``M&E Plan''). As outlined in the
Disbursement Agreement and other Supplemental Agreements, continued
disbursement of MCC Funding under this Compact (whether as MCC
Disbursements and Re-Disbursements) shall be contingent, among other
things, on successful achievement of targets set forth in the M&E Plan.
3. Implementation Framework
The implementation framework and the plan for ensuring adequate
governance, oversight, management, monitoring, evaluation and fiscal
accountability for the use of MCC Funding is summarized below and in
the Schedules attached to this Program Annex, or as may otherwise be
agreed in writing by the Parties.
(a) General. The elements of the implementation framework will be
further described in relevant Supplemental Agreements and in a detailed
plan for the implementation of the Program and each Project, which will
be memorialized in one or more documents and shall consist of a Multi-
Year Financial Plan, Detailed Financial Plans, a Fiscal Accountability
Plan, a Procurement Plan, Program and Project Work Plans, and an M&E
Plan (the ``Implementation Plan''). MCA-Benin shall adopt each
component of the Implementation Plan in accordance with the
requirements and timeframe as may be specified in this Program Annex,
the Disbursement Agreement or as may otherwise be agreed by the Parties
from time to time. MCA-Benin may amend the Implementation Plan or any
component thereof without amending this Compact, provided any material
amendment of the Implementation Plan or any component thereof has been
approved by MCC and is otherwise consistent with the requirements of
this Compact and any relevant Supplemental Agreement between the
Parties. By such time as may be specified in the Disbursement Agreement
or as may otherwise be agreed by the Parties from time to time, MCA-
Benin shall adopt one or more work plans for the overall administration
of the Program and for each Project (collectively, the ``Work Plans'').
The Work Plan(s) shall set forth the details of each activity to be
undertaken or funded by MCC Funding as well as the allocation of roles
and responsibilities for specific Project activities, or other
programmatic guidelines, performance requirements, targets, or other
expectations for a Project.
(b) Government.
(i) The Government shall promptly take all necessary and
appropriate actions to carry out the Government Responsibilities and
other obligations or responsibilities of the Government under and in
furtherance of this Compact, including undertaking or pursuing such
legal, legislative or regulatory actions or procedural changes and
contractual arrangements as may be necessary or appropriate to achieve
the Objectives, to successfully implement the Program, to designate any
rights or responsibilities to any Permitted Designee, and to establish
a legal entity, in a form mutually agreeable to the Parties, the form,
structure and other features of such legal entity to be determined and
agreed upon by the Parties on or before the time specified in the
Disbursement Agreement (``MCA-Benin''), which shall be a Permitted
Designee and shall be responsible for the oversight and management of
the implementation of this Compact on behalf of the Government. The
Government shall promptly deliver to MCC certified copies of any
documents, orders, decrees, laws or regulations evidencing such legal,
legislative, regulatory, procedural, contractual or other actions.
(ii) The Government shall ensure that MCA-Benin is duly authorized
and organized, sufficiently staffed and empowered to fully carry out
the Designated Rights and Responsibilities. Without limiting the
generality of the preceding sentence, MCA-Benin shall be organized, and
have such roles and responsibilities, as described in Section 3(d) of
this Program Annex and as provided in any Governing Documents;
provided, however, the Government or another Permitted Designee may,
subject to MCC approval, carry out any of the roles and
responsibilities designated to be carried out by MCA-Benin and
described in Section 3(d) of this Program Annex or elsewhere in this
Program Annex, any Governing Document, or any other Supplemental
Agreement prior to and during the initial period of the establishment
and staffing and operational formation of MCA-Benin, but in no event
longer than the earlier of (1) the formation and convening of
organizational meetings of the Steering Committee, formation and
operational establishment of MCA-Benin (including the selection and
engagement of Officers and key employees), and engagement of the
Officers and (2) six months from the Entry into Force, unless otherwise
agreed by the Parties in writing.
(iii) Various ministries, bureaus and agencies of the Government
may serve as Implementing Entities.
(c) MCC.
(i) Notwithstanding Section 3.1 of this Compact or any provision in
this Program Annex to the contrary, and except as may be otherwise
agreed upon by the Parties from time to time, MCC must approve in
writing each of the following transactions, activities, agreements and
documents prior to the execution or carrying out of such transaction,
activity, agreement or document and prior to MCC Disbursements or Re-
Disbursements in connection therewith:
(1) MCC Disbursements;
(2) Each Detailed Financial Plan, and any amendments thereto;
(3) The Multi-Year Financial Plan and any amendments and annual
supplements thereto;
(4) Any Audit Plan;
(5) Agreements (i) between the Government and MCA-Benin, (ii)
between the Government, a Government Affiliate, MCA-Benin or any other
Permitted Designee on the one hand, and any Provider or Affiliate of a
Provider, on the other hand, which require such MCC approval under
applicable law, the Procurement Agreement, any Governing Document, or
any other Supplemental Agreement or (iii) in which the Government, a
Government Affiliate, MCA-Benin or any other Permitted Designee
appoints, hires, or engages any of the following in furtherance of this
Compact:
(A) Auditor;
(B) Reviewer;
(C) Fiscal Agent;
(D) Procurement Agent;
(E) Each Bank;
(F) Outside Project Manager;
(G) Implementing Entity; and
(H) Board of Directors member, Observer, Officer, and other key
employee of MCA-Benin (including any compensation for such person).
(Any agreement described in clause (i) through (iii) of this Section
3(c)(i)(5) and any amendments and supplements thereto, each, a
``Material Agreement'');
(6) Any modification, termination or suspension of a Material
Agreement, or any action that would have the effect of such a
modification, termination or suspension of a Material Agreement;
(7) Any agreement that is (A) not at arm's length or (B) with a
party related to the Government or MCA-Benin or any of their respective
Affiliates;
(8) Any Re-Disbursement (each, a ``Material Re-Disbursement'') that
requires such MCC approval under applicable law, the Procurement
[[Page 12955]]
Agreement, any Governing Document, or any Supplemental Agreement;
(9) Any terms of reference (each, a ``Material Terms of
Reference'') for the procurement of goods, services or works that
requires such MCC approval under applicable law, the Procurement
Agreement, any Governing Document, or any Supplemental Agreement;
(10) The Implementation Plan, including each component plan
thereto, and any material amendments and supplements to the
Implementation Plan or any component thereto;
(11) Any pledge of any MCC Funding or any Program Assets or any
guarantee directly or indirectly of any indebtedness (each, a
``Pledge'');
(12) Any decree, legislation, regulation, contractual arrangement
(including a governance agreement by and among the Government (or a
mutually acceptable Government Affiliate), MCA-Benin and MCC), or other
charter document establishing or governing MCA-Benin (``Governing
Document'');
(13) Any disposition (in whole or in part), liquidation,
dissolution, winding up, reorganization or other change of (A) MCA-
Benin, including any revocation or modification of or supplement to any
Governing Document related thereto, or (B) any subsidiary or Affiliate
of MCA-Benin;
(14) Any change in character or location of any Permitted Account;
(15) Formation or acquisition of any subsidiary (direct or
indirect) or other Affiliate of MCA-Benin;
(16) Any (A) change of a Board of Directors member, Observer,
Officer or other key employee or contractor of MCA-Benin, or change in
the composition of the Board of Directors of MCA-Benin, including
approval of the nominee for Chair, (B) filling of any vacant seat of
the Chair, Board of Directors member, or an Observer or vacant position
of an Officer, key employee or contractor of MCA-Benin, (C) filling of
the seats designated as representatives nominated by the Advisory
Council, if any, to the Board of Directors, and (D) filling any vacant
seat on the Advisory Council;
(17) The management information system to be developed and
maintained by the Management of MCA-Benin, and any material
modifications to such system;
(18) Any decision to amend, supplement, replace, terminate, or
otherwise change any of the foregoing; and
(19) Any other activity, agreement, document or transaction
requiring the approval of MCC in this Compact, applicable law, any
Governing Document, the Procurement Agreement, the Disbursement
Agreement, or any other Supplemental Agreement between the Parties. The
Chair of the Board of Directors (the ``Chair'') and/or the National
Coordinator of MCA-Benin (the ``National Coordinator'') or other
designated Officer, as provided in applicable Governing Document, shall
certify any documents or reports delivered to MCC in satisfaction of
the Government's reporting requirements under this Compact or any
Supplemental Agreement between the Parties (the ``Compact Reports'').
(ii) MCC shall have the authority to exercise its approval rights
set forth in this Section 3(c) in its sole discretion and independent
of any participation or position taken by the MCC Representative at a
meeting of the Board of Directors. MCC retains the right to revoke its
approval of any matter, agreement, or action if MCC concludes, in its
sole discretion, that its approval was issued on the basis of
incomplete, inaccurate or misleading information furnished by the
Government, MCA-Benin, or any Government Affiliate or Permitted
Designee. Notwithstanding any provision in this Compact or any
Supplemental Agreement to the contrary, the exercise by MCC of its
approval rights under this Compact or any Supplemental Agreement shall
not (1) diminish or otherwise affect the Government Responsibilities or
any other obligations or responsibilities of the Government under this
Compact or any Supplemental Agreement, (2) transfer any such
obligations or responsibilities of the Government, or (3) otherwise
subject MCC to any liability.
(d) MCA-Benin.
(i) General. Unless otherwise agreed by the Parties in writing,
MCA-Benin shall, as a Permitted Designee, be responsible for the
oversight and management of the implementation of this Compact. MCA-
Benin shall be governed by applicable law and any Governing Documents,
each such Governing Document to be in a form and substance satisfactory
to MCC and effective on or before the time specified in the
Disbursement Agreement, and based on the following principles:
(1) The Government shall ensure that MCA-Benin shall not assign,
delegate or contract any of the Designated Rights and Responsibilities
without the prior written consent of the Government and MCC. MCA-Benin
shall not establish any Affiliates or subsidiaries (direct or indirect)
without the prior written consent of the Government and MCC.
(2) Unless otherwise agreed by the Parties in writing, MCA-Benin
shall consist of (a) an independent board of directors (the ``Board'')
to oversee MCA-Benin's responsibilities and obligations under this
Compact (including any Designated Rights and Responsibilities) and (b)
a management team or national program coordination team
(``Management'') to have overall management responsibility for the
implementation of this Compact.
(ii) Board.
(1) Formation. The Government shall ensure that the Board shall be
formed, constituted, governed and operated in accordance with the terms
and conditions set forth in the applicable Governing Document and any
other relevant Supplemental Agreement.
(2) Composition. Unless otherwise agreed by the Parties in writing,
the Board shall consist of at least nine (9) and no more than eleven
(11) voting members, one of whom shall be appointed as the Chair as
provided in applicable law, any Governing Document and subject to MCC
approval, and the non-voting observers identified below.
(A) The Board shall initially be composed of eleven voting members
as follows, provided that the Government members identified in
subsections (i)--(vi) below (the ``Government Members'') may be
replaced by another government official of comparable rank from a
ministry or other government body relevant to the Program activities,
subject to approval by the Government and MCC (such replacement to be
referred to thereafter as a Government Member):
(i) Chief of Staff of the Office of the Presidency of the Republic
of Benin;
(ii) Chief of Staff of the Ministry of Economy and Finance;
(iii) Chief of Staff of the Ministry of Planning and Development;
(iv) Chief of Staff of the Ministry of Agriculture;
(v) Chief of Staff of the Ministry of Public Works and
Transportation;
(vi) Chief of Staff of the Ministry of the Environment, Housing and
Urban Planning;
(vii) Representative from civil society (selected following a
national assembly of the non-governmental organizations and civil
society and based upon selection criteria to be agreed by the Parties,
including the capacity and expertise of the individual to hold such
position);
(viii) President of the Chamber of Commerce and Industry;
(ix) The Chairman of the Chamber of Agriculture;
(x) Representative from the Mayors' Council (which shall be the
public official holding the relevant office as
[[Page 12956]]
such office is selected following a national assembly of the mayors
throughout Benin); and
(xi) A member of the Board of the National Assembly as designated
by the National Assembly.
(B) The non-voting observers (each, an ``Observer'') shall be:
(i) A representative designated by MCC (the ``MCC
Representative'');
(ii) A representative from the Advisory Council; and
(iii) Representatives-elect for Civil Members (defined below), who
will be non-voting observers for a one-year period.
(C) Each Government Member position shall be filled by the
individual, during the Compact Term, holding the office identified and
such individuals shall serve in their capacity as the applicable
Government official and not in their personal capacity; in the event
that such member is unable to participate in a meeting of the Board
such member's principal deputy may participate in the member's stead.
(D) The positions identified in Section 3(d)(ii)(2)(A)(vii)-(xi) of
this Program Annex shall be each individually referred to as a ``Civil
Member'' and collectively as ``Civil Members.'' Each Civil Member
position shall be filled by the individual, during the Compact Term,
holding the office or position identified in, or selected pursuant to,
Section 3(d)(ii)(2)(A)(viii)--(xi) and such individuals shall serve in
their capacity as the incumbent in such office or position and not in
their personal capacity; in the event that such member is unable to
participate in a meeting of the Board such member's principal deputy
may participate in the member's stead, provided, however, any action
shall be taken only by a proxy signed by the Civil Member. The Civil
Member identified in Section 3(d)(ii)(2)(A)(vii) shall serve in their
personal capacity and if such member is unable to participate in a
meeting of the Board, such member may only send a substitute as
permitted in the applicable Governing Document, provided, any action
shall be taken only by a proxy signed by the Civil Member. The term of
each Civil Member's appointment to the Board shall be thirty (30)
months; other than the Civil Member identified in Section
3(d)(2)(ii)(A)(viii) and (ix) which position shall be filled by the
individual holding such position during the Compact Term; provided,
further if the Civil Member designated pursuant to Section
3(d)(ii)(2)(A)(xi) resigns or is removed from the Board of the National
Assembly, the National Assembly shall designate another member of the
Board of the National Assembly to fill this seat on the Board.
(E) The voting members identified in Section 3(d)(ii)(2)(A) by
majority vote may alter the size of the Board in accordance with the
applicable Governing Document, so long as the total does not exceed
eleven members; in the event that such action is taken, any change in
the composition of the voting seats shall be subject to the approval of
the Government and MCC.
(F) Subject to the Governing Documents, the Parties contemplate
that the Chief of Staff of the Office of the Presidency shall initially
fill the seat of Chair.
(G) Each Observer shall have rights to attend all meetings of the
Board, participate in the discussions of the Board, and receive all
information and documents provided to the Board, together with any
other rights of access to records, employees or facilities as would be
granted to a member of the Board under any Governing Document.
(H) The voting members identified in Section 3(d)(ii)(2)(A) shall
exercise their duties solely in accordance with the best interests of
MCA-Benin and the Program and its Objectives and may not undertake any
action that is contrary to those interests or would result in personal
gain or a conflict of interest.
(3) Roles and Responsibilities.
(A) The Board shall oversee the Management, the overall
implementation of the Program, and the performance of the Designated
Rights and Responsibilities.
(B) Certain actions may be taken and certain agreements, documents
or instruments executed and delivered, as the case may be, by MCA-Benin
only upon the approval and authorization of the Board provided under
applicable law or as set forth in any Governing Document, including
each MCC Disbursement Request, selection or termination of certain
Providers, any component of the Implementation Plan, certain Re-
Disbursements and certain terms of reference.
(C) The Chair shall certify the approval by the Board of all
Compact Reports or any other documents or reports from time to time
delivered to MCC by MCA-Benin (whether or not such documents or reports
are required to be delivered to MCC), and that such documents or
reports are true, correct and complete.
(D) Without limiting the generality of the Designated Rights and
Responsibilities that the Government may designate to MCA-Benin, and
subject to MCC's contractual rights of approval as set forth in Section
3(c) of this Program Annex or elsewhere in this Compact or any relevant
Supplemental Agreement, the Board shall have the exclusive authority as
between the Board and the Management for all actions defined for the
Board in any Governing Document and which are expressly designated
therein as responsibilities that cannot be delegated further.
(4) Indemnification of Civil Members; Observers; and Officers. The
Government shall ensure, at the Government's sole cost and expense,
that appropriate insurance is obtained and appropriate indemnifications
and other protections are provided, acceptable to MCC and to the
fullest extent permitted under the laws of the Republic of Benin, to
ensure that (A) as Civil Members and Observers shall not be held
personally liable for the actions or omissions of the Board or MCA-
Benin and (B) as Officers shall not be held personally liable for the
actions or omissions of the Board, MCA-Benin or actions or omissions of
the Officer so long as properly within the scope of Officer's
authority. Pursuant to Section 5.5 and Section 5.8 of this Compact, the
Government and MCA-Benin shall hold harmless the MCC Representative for
any liability or action arising out of the MCC Representative's role as
a non-voting observer on the Board. The Government hereby waives and
releases all claims related to any such liability and acknowledges that
the MCC Representative has no fiduciary duty to MCA-Benin. In matters
arising under or relating to the Compact, the MCC Representative is not
subject to the jurisdiction of the courts or any other body of Benin.
MCA-Benin shall provide a written waiver and acknowledgement that no
fiduciary duty to MCA-Benin is owed by the MCC Representative.
(iii) Management. Unless otherwise agreed in writing by the
Parties, the Management shall report, through the National Coordinator
or other Officer as designated in any Governing Document, directly to
the Board and shall have the composition, roles and responsibilities
described below and set forth more particularly in any Governing
Document.
(1) Appointment of the National Coordinator. The National
Coordinator of MCA-Benin shall be selected by the Board and hired after
an open and competitive recruitment and selection process, which
appointment shall be subject to MCC approval. Such appointment shall be
further evidenced by such document as the Parties may agree.
(2) Appointment of Other Officers. Unless otherwise specified in
any
[[Page 12957]]
Governing Document, the other Officers of MCA-Benin shall be selected
and hired by the National Coordinator after an open and competitive
recruitment and selection process, which appointment shall be subject
to the approval of the Board and MCC.
(3) Composition. The Government shall ensure that the Management
shall be composed of qualified experts from the public or private
sectors, including such offices and staff as may be necessary to carry
out effectively its responsibilities, each with such powers and
responsibilities as set forth in any Governing Document, and from time
to time in any Supplemental Agreement between the Parties, including
without limitation the following: (i) National Coordinator; (ii)
Administration and Finance Director; (iii) Monitoring and Evaluation
Director; (iv) Land Project Director, Financial Services Project
Director, Justice Project Director and Markets Project Director (each
a, ``Project Director''); (v) Environmental and Social Assessment
Director; (vi) Legal Counsel and (vii) Procurement Director (the
persons holding the positions in sub-clauses (i) through (vii) and such
other offices as may be created and designated in accordance with any
Governing Document and any other Supplemental Agreement between the
Parties, shall be collectively referred to as ``Officers''). In
addition, MCA-Benin will have an implementation staff in each of the
Project divisions as described below and administrative or other
assistants and staff in other divisions as appropriate and budgeted in
the Detailed Financial Plan and provided for in the applicable Work
Plan or other Implementation Plan component, and as otherwise agreed by
MCC. The Administration and Finance Division and the Procurement
Division shall have separate authorizations, duties and
responsibilities and each shall report directly only to the National
Coordinator and the Board. The Parties contemplate that for purposes of
the initial period of operations, and in no event longer than six
months, MCA-Benin may appoint an acting National Coordinator, subject
to the approval of MCC; provided, following such period, the Board
shall ratify the actions of such acting National Coordinator and the
Board shall select a permanent National Coordinator through a
competitive selection process and subject to MCC approval in accordance
with this Annex I. The divisions that manage the implementation of each
Project (``Project Division'') shall have the following general
organizational structure, or such other structure as may be agreed by
the Parties in writing and specified in the applicable Governing
Document:
(A) Land Project Division. In addition to the Project Director,
there shall be (i) a Senior Land Administration Advisor for period to
be specified in the Work Plan, (ii) a National Land Policy Reform
Coordinator, and (iii) up to two Activity Implementation Managers. The
Land Project Division will also receive feedback and input from a
stakeholders group (the ``Land Project Steering Group''), the
composition and formation of which shall be specified in the applicable
Governing Document or Implementation Plan.
(B) Financial Services Project Division. In addition to the Project
Director, there shall be (i) an Enabling Environment Activity
Coordinator and (ii) a Capacity Building Activity Coordinator. The
Financial Services Project Division will also receive feedback and
input from a stakeholders group (the ``Financial Advisory Committee''),
the composition and formation of which shall be specified in the
applicable Governing Document or Implementation Plan.
(C) Justice Project Division. In addition to the Project Director,
there shall be a Justice Project Coordinator. The Justice Project
Division will also receive feedback and input from a stakeholders group
(the ``Justice Advisory Committee''), the composition and formation of
which shall be specified in the applicable Governing Document or
Implementation Plan component.
(D) Markets Project Division. The Markets Project Division will
also receive feedback and input from a stakeholders group representing
the Markets Project beneficiaries (the ``Port Advisory Committee''),
the composition and formation of which shall be specified in the
applicable Governing Document or Implementation Plan.
(4) Roles and Responsibilities.
(A) Management shall assist the Board in overseeing the
implementation of the Program and shall have principal responsibility
(subject to the direction and oversight of the Board and subject to
MCC's contractual rights of approval as set forth in Section 3(c) of
this Program Annex or elsewhere in this Compact or any relevant
Supplemental Agreement) for the overall management of the
implementation of the Program.
(B) Without limiting the foregoing general responsibilities or the
generality of Designated Rights and Responsibilities that the
Government may designate MCA-Benin, Management shall develop the
components of the Implementation Plan, oversee the implementation of
the Projects, manage and coordinate monitoring and evaluation, maintain
internal accounting records, conduct and oversee certain procurements,
and such other responsibilities as set out in the applicable Governing
Document or delegated to Management by the Board from time to time.
(C) Appropriate Officers as designated in the Governing Documents
shall have the authority to contract on behalf of MCA-Benin under any
procurement under the Program undertaken in accordance with the
Procurement Agreement and Procurement Guidelines.
(D) Management shall have the obligation and right to approve
certain actions and documents or agreements, including certain Re-
Disbursements, MCC Disbursement Requests, Compact Reports, certain
human resources decisions and other certain actions, as provided in the
applicable Governing Document.
(5) Additional Resources. Management, on behalf of MCA-Benin, shall
have the authority to engage qualified persons or entities to serve as
outside project managers (each, an ``Outside Project Manager'') in the
event that it is advisable to do so for the proper and efficient day-
to-day management of a Project; provided, however, that the appointment
or engagement of any Outside Project Manager, after a competitive
selection process, shall be subject to approval by the Board and MCC
prior to such appointment or engagement. Upon Board approval,
Management, on behalf of MCA-Benin, may delegate, assign, or contract
to the Outside Project Managers such duties and responsibilities as it
deems appropriate with respect to the management of the Implementing
Entities and the implementation of the specific Projects or Project
Activities, subject to Section 3.2(c) of the Compact; provided,
however, that the Management and the relevant Project Manager shall
remain accountable for those duties and responsibilities and all
reports delivered by the Outside Project Manager. Independent of any
request from Management, the Board may determine that it is advisable
for MCA-Benin to engage one or more Outside Project Managers and the
Board may direct Management to commence and conduct the competitive
selection process for such Outside Project Manager. Upon a finding by
the Board that Management has not responded to such a Board directive,
the Board may direct the Procurement Agent to commence and conduct the
competitive selection process for one or more Outside Project Managers.
[[Page 12958]]
(e) Advisory Council.
(i) Formation and Composition. The Government shall ensure the
establishment of an advisory council with both governmental, private
sector and non-governmental representatives (the ``Advisory Council'')
consisting of at least eight (8) and no more than eleven (11) members,
unless otherwise agreed by the Parties, and comprised of the following
members: (A) Chief of Staff of the Ministry of Foreign Affairs and
African Integration; (B) Chief of Staff of the Ministry of Industry and
Commerce; (C) Chief of Staff of the Ministry of the Interior, Security,
and Decentralization; (D) Chief of Staff of the Ministry of Justice;
(E) a representative from the Private Sector (selected following a
national assembly of the private sector); (F) a representative from the
labor unions (selected following a national assembly of the labor
unions); (G) a representative from the regional organizations (selected
following a national assembly of the regional organizations); and (H) a
representative from the National Artisan Federation (selected following
a national assembly of the National Artisan Federation).
Representatives described in (E) through (H) shall be selected and
vacancies filled in accordance with the manner and criteria set forth
in the applicable Governing Document, subject to MCC approval.
Following the selection of the representatives described in (E) through
(H), the results of the selection shall be posted on the MCA-Benin
Website and published in the local newspaper. The Government shall take
all action necessary and appropriate actions to ensure the Advisory is
established consistent with this Section 3(e) and as otherwise
specified in the Governing Document or otherwise agreed in writing by
the Parties. The composition of the Advisory Council may be adjusted by
agreement of the Parties from time to time to ensure, among other
things, a cross-section representative of the intended beneficiaries.
The number of members of the Advisory Council may be increased, but in
no event more than eleven (11), upon the majority vote of the then
existing members and the vacancies created by such increase shall be
filled by the majority vote of the then existing members, subject to
the approval of the Government and MCC.
(1) Each member position identified in Sections 3(e)(i) of this
Program Annex shall be filled by the individual, during the Compact
Term, holding the office identified and such individuals shall serve in
their capacity as the applicable Government official and not in their
personal capacity. In the event that such member is unable to
participate in a meeting of the Advisory Council such member's
principal deputy may participate in the member's stead.
(2) In the event of a vacancy in positions identified in Sections
3(e)(i) (E) through (H) such vacancy to be filled by nomination of the
organization or group for whom such seat is designated and in the same
manner as described in Section 3(e)(i) for the initial designation and
as otherwise set forth in the applicable Governing Document.
(ii) Role. The Advisory Council shall be a mechanism to provide
representatives of the private sector, civil society and local and
regional governments the opportunity to provide advice and input to
MCA-Benin regarding the implementation of the Compact. During quarterly
meetings of the Advisory Council, Management shall present an update on
the implementation of this Compact and progress towards achievement of
the Objectives. The Advisory Council will have an opportunity to
regularly provide to the Board, via the Chair, its views or
recommendations on the performance and progress on the Projects and
Project Activities, components of the Implementation Plan, procurement,
financial management or such other issues as may be presented from time
to time to the Advisory Council or as otherwise raised by the Advisory
Council. Management shall provide copies of the M&E Plan and related
reports to the Advisory Council simultaneously with the transmittal to
the Advisory Council of such documents and reports. The Board may, in
response to the Advisory Council, require Management to provide such
other information and documents as the Board deems advisable and
subject to appropriate treatment of the information by the Advisory
Council and its members.
(iii) Meetings. The Advisory Council shall hold quarterly meetings
of the full Advisory Council as well as such other periodic meetings of
the Advisory Council or subcommittees thereof designated along
sectoral, regional, or other lines, as may be necessary or appropriate
from time to time.
(iv) Board Observer. The Advisory Council shall nominate, by
majority decision, one individual, either from the Advisory Council or
otherwise, to serve as an Observer to the Board for a one-year term.
The Advisory Council shall rotate its representative each year. Any
vacancy of the Observer seat designated for the Advisory Council shall
be filled by the Advisory Council in same manner as it would the annual
nomination.
(v) Accessibility; Transparency. Advisory Council members will be
accessible to the beneficiaries they represent to receive the
beneficiaries' comments or suggestions regarding the Program. The
minutes of all meetings of the Advisory Council meetings and any
subcommittees shall be made public on the MCA-Benin Website in a timely
manner.
(f) Implementing Entities. Subject to the terms and conditions of
this Compact and any other Supplemental Agreement between the Parties,
MCA-Benin may provide MCC Funding, directly or indirectly through an
Outside Project Manager, to one or more Government Affiliates or to one
or more nongovernmental organizations or other public- or private-
sector entities or persons to implement and carry out the Projects or
any other activities to be carried out in furtherance of this Compact
(each, an ``Implementing Entity''). The Government shall ensure that
MCA-Benin (or the appropriate Outside Project Manager) enters into an
agreement with each Implementing Entity, in form and substance
satisfactory to MCC, that sets forth the roles and responsibilities of
such Implementing Entity and other appropriate terms and conditions,
such as payment of the Implementing Entity (the ``Implementing Entity
Agreement''). An Implementing Entity shall report directly to the
relevant Project Manager or Outside Project Manager, as designated in
the applicable Implementing Entity Agreement or as otherwise agreed by
the Parties. The Implementing Entities shall be either (i) pre-
determined ministries, bureaus or agencies of the Government based on
their sector expertise with respect to certain activities or (ii)
government bodies, businesses, micro-finance institutions (``MFIs'')
and/or non-governmental organizations, vendors and contractors selected
according to a the Procurement Guidelines.
(g) Fiscal Agent. The Government shall ensure that MCA-Benin
engages one fiscal agent following an international competitive process
(a ``Fiscal Agent'') who shall be responsible for, among other things:
(i) Assisting MCA-Benin in preparing the Fiscal Accountability Plan,
(ii) ensuring and certifying that Re-Disbursements are properly
authorized and documented in accordance with established control
procedures set forth in the Disbursement Agreement, the Fiscal Agent
Agreement and other relevant Supplemental Agreements; (iii) Re-
Disbursing from, cash management and
[[Page 12959]]
account reconciliation of a Bank Account established and maintained by
the Fiscal Agent for the purpose of instructing Bank to make Re-
Disbursements from a Permitted Account (to which Fiscal Agent has sole
signature authority), following applicable certification by the Fiscal
Agent; (iv) providing applicable certifications for MCC Disbursement
Requests; (v) maintaining and retaining proper accounting, records and
document disaster recovery system of all MCC Funded financial
transactions and certain other accounting functions; (vi) producing
reports on MCC Disbursements and Re-Disbursements (including any
requests therefore) in accordance with established procedures set forth
in the Disbursement Agreement, the Fiscal Agent Agreement, the Fiscal
Accountability Plan, or any other relevant Supplemental Agreements,
(vii) preparing budget development procedures and the Compact
implementation budget, (viii) managing funds control, (ix) inventory
control, and (x) internal management of the Fiscal Agent operations.
Upon the written request of MCC, the Government shall ensure that MCA-
Benin terminates the Fiscal Agent, without any liability to MCC, and
the Government shall ensure that MCA-Benin engages a new Fiscal Agent,
subject to the approval by the Board and MCC. The Government shall
ensure that MCA-Benin enters into an agreement with each Fiscal Agent,
in form and substance satisfactory to MCC, that sets forth the roles
and responsibilities of the Fiscal Agent and other appropriate terms
and conditions, such as payment of the Fiscal Agent (each, a ``Fiscal
Agent Agreement''), such Fiscal Agent Agreement shall not be terminated
until MCA-Benin has engaged a successor Fiscal Agent or as otherwise
agreed by MCC in writing.
(h) Auditors and Reviewers. The Government shall ensure that MCA-
Benin carries out the Government's audit responsibilities as provided
in Sections 3.8(d), (e) and (f) of this Compact, including engaging one
or more auditors (each, an ``Auditor'') required by Section 3.8(d) of
this Compact. As requested by MCC in writing from time to time, the
Government shall ensure that MCA-Benin also engages (i) an independent
reviewer to conduct reviews of performance and compliance under this
Compact pursuant to Section 3.8(f) of this Compact, which reviewer
shall have the capacity to (A) conduct general reviews of performance
or compliance, (B) conduct environmental audits, (C) conduct data
quality assessments in accordance with the M&E Plan, as described more
fully in Annex III, and/or (ii) an independent evaluator to assess
performance as required under the M&E Plan (each, a ``Reviewer''). MCA-
Benin shall select the Auditor(s) or Reviewers in accordance with any
Governing Document or other relevant Supplemental Agreement. The
Government shall ensure that MCA-Benin enters into an agreement with
each Auditor or Reviewer, in form and substance satisfactory to MCC,
that sets forth the roles and responsibilities of the Auditor or
Reviewer with respect to the audit, review or evaluation, including
access rights, required form and content of the applicable audit,
review or evaluation and other appropriate terms and conditions such as
payment of the Auditor or Reviewer (the ``Auditor/Reviewer
Agreement''). In the case of a financial audit required by Section
3.8(f) of the Compact, such Auditor/Reviewer Agreement shall be
effective no later than 120 days prior to the end of the relevant
fiscal year or other period to be audited; provided, however, if MCC
requires concurrent audits of financial information or reviews of
performance and compliance under this Compact, then such Auditor/
Reviewer Agreement shall be effective no later than the date agreed by
the Parties in writing.
(i) Procurement Agent. The Government shall ensure that MCA-Benin
engages one or more procurement agents through international
competitive process (each, a ``Procurement Agent'') to carry out and/or
certify specified procurement activities in furtherance of this Compact
on behalf of the Government, MCA-Benin, the Project Manager or
Implementing Entity. The roles and responsibilities of such Procurement
Agent and the criteria for selection of a Procurement Agent shall be as
set forth in the applicable Implementation Letter or Supplemental
Agreement. The Government shall ensure that MCA-Benin enters into an
agreement with the Procurement Agent, in form and substance
satisfactory to MCC, that sets forth the roles and responsibilities of
the Procurement Agent with respect to the conduct, monitoring and
review of procurements and other appropriate terms and conditions, such
as payment of the Procurement Agent (the ``Procurement Agent
Agreement''). Any Procurement Agent shall adhere to the procurement
standards set forth in the Procurement Agreement and Procurement
Guidelines and ensure procurements are consistent with the procurement
plan adopted by MCA-Benin pursuant to the Procurement Agreement (the
``Procurement Plan'').
4. Finances and Fiscal Accountability
(a) Financial Plans.
(i) Multi-Year Financial Plan. The multi-year financial plan for
the Program and for each Project (the ``Multi-Year Financial Plan'') is
summarized in Annex II to this Compact.
(ii) Detailed Financial Plan. During the Compact Term, the
Government shall ensure that MCA-Benin timely delivers to MCC financial
plans that specify respectively the annual and quarterly detailed
budget and projected cash requirements for the Program (including
monitoring and evaluation and administrative costs) and each Project,
projected both on a commitment and cash requirement basis (each a
``Detailed Financial Plan''). Each Detailed Financial Plan shall be
delivered by such time as specified in the Disbursement Agreement or as
may otherwise be agreed by the Parties. The Multi-Year Financial Plan
and each Detailed Financial Plan and each amendment, supplement or
other change thereto are collectively, the ``Financial Plan.''
(iii) Expenditures. No financial commitment involving MCC Funding
shall be made, no obligation of MCC Funding shall be incurred, and no
Re-Disbursement shall be made or MCC Disbursement Request submitted for
any activity or expenditure, unless the expense is provided for in the
Detailed Financial Plan and unless uncommitted funds exist in the
balance of the Detailed Financial Plan for the relevant period or
unless the Parties otherwise agree in writing.
(iv) Modifications to Multi-Year Financial Plan or Detailed
Financial Plan. Notwithstanding anything to the contrary in this
Compact, MCA-Benin may amend or supplement the Multi-Year Financial
Plan, or any component thereof or any Detailed Financial Plan without
amending this Compact, provided any material amendment or supplement
has been approved by MCC and is otherwise consistent with the
requirements of this Compact including Section 4 of Annex II and any
relevant Supplemental Agreement between the Parties; provided, however,
MCA-Benin may modify the Detailed Financial Plan to reallocate MCC
Funding without MCC prior approval to the extent that in the aggregate
during the Compact Term the:
(1) Reallocation of funds within a Project would not reduce or
increase any line item in the Detailed Financial Plan for a Project
Activity more than the
[[Page 12960]]
lesser of 10% of such relevant line item in the Detailed Financial Plan
or USD $2,000,000, taking into account any modifications made pursuant
to paragraph (B) such that any modifications made pursuant to (A) and
(B) in the aggregate shall not exceed USD $2,000,000;
(2) Re-allocation of funds within a Project Activity would not
reduce or increase any line item in the Detailed Financial Plan for a
sub-activity more than the lesser of 10% of the relevant line item in
the Detailed Financial Plan or USD $2,000,000 taking into account any
modifications made pursuant to paragraph (A) such that any
modifications made pursuant to (A) and (B) in the aggregate shall not
exceed USD $2,000,000;
(3) Re-allocation of funds between Projects would not reduce or
increase any line item in the Detailed Financial Plan for a Project
Activity more than the lesser of 10% of the relevant line item in the
Detailed Financial Plan or USD $500,000;
(4) Re-allocation of funds within Monitoring and Evaluation
category of the Detailed Financial Plan would not reduce or increase
more than the lesser of 10% of the relevant line item in the Detailed
Financial Plan for the M&E activity or USD $500,000; or
(5) Re-allocation of funds within Program Administration category
of the Detailed Financial Plan would not reduce or increase more than
the lesser of 10% of the relevant line item in the Detailed Financial
Plan for the Program Administration expense category or USD $500,000.
With respect to any modification pursuant to subparagraphs (1)-(5)
above, such modification (A) shall be consistent with the Objectives
and the Implementation Plan; (B) shall not materially adversely impact
the applicable Project, Project Activity, sub-activity, M&E activity or
Program administration activity; (C) shall not cause the amount of MCC
Funding to exceed the aggregate amount specified in Section 2.1(a) of
this Compact; and (D) shall not cause the Government's obligations or
responsibilities or overall contribution of resources to be less than
as specified in Section 2.2(a) of this Compact, this Annex I or
elsewhere in this Compact; provided, further, that MCA-Benin shall
promptly deliver to MCC any such modified Detailed Financial Plan,
together with a modified Multi-Year Financial Plan to reflect the
corresponding modifications, and further reflected in the Detailed
Financial Plan submitted with the MCC Disbursement Request at the next
Disbursement Period.
(b) Disbursement and Re-Disbursement. The Disbursement Agreement
(and disbursement schedules thereto), as amended from time to time,
shall specify the terms, conditions and procedures on which MCC
Disbursements and Re-Disbursements shall be made. The obligation of MCC
to make MCC Disbursements or approve Re-Disbursements is subject to the
fulfillment, waiver or deferral of any such terms and conditions. The
Government and MCA-Benin shall jointly submit the applicable request
for an MCC Disbursement (the ``MCC Disbursement Request'') as may be
specified in the Disbursement Agreement. MCC will make MCC
Disbursements in tranches to a Permitted Account from time to time as
provided in the Disbursement Agreement or as may otherwise be agreed by
the Parties, subject to Program requirements and performance by the
Government, MCA-Benin and other relevant parties in furtherance of this
Compact. Re-Disbursements will be made from time to time based on
requests by an authorized representative of the appropriate party
designated for the size and type of Re-Disbursement in accordance with
any Governing Document and Disbursement Agreement; provided, however,
unless otherwise agreed by the Parties in writing, no Re-Disbursement
shall be made unless and until the written approvals specified herein
or in any Governing Document and Disbursement Agreement for such Re-
Disbursement have been obtained and delivered to the Fiscal Agent.
(c) Fiscal Accountability Plan. By such time as specified in the
Disbursement Agreement or as otherwise agreed by the Parties, MCA-Benin
shall adopt as part of the Implementation Plan a fiscal accountability
plan that identifies the principles, mechanisms and procedures to
ensure appropriate fiscal accountability for the use of MCC Funding
provided under this Compact, including the process to ensure that open,
fair, and competitive procedures will be used in a transparent manner
in the administration of grants or cooperative agreements and the
procurement of goods and services for the accomplishment of the
Objectives (the ``Fiscal Accountability Plan''). The Fiscal
Accountability Plan shall set forth, among other things, requirements
with respect to the following matters: (i) Re-Disbursement, cash
management and account reconciliation; (ii) funds control and
documentation; (iii) accounting standards and systems; (iv) content and
timing of reports; (v) preparing budget development procedures and the
Compact implementation budget; (vi) policies concerning records,
document disaster recovery and public availability of all financial
information; (vii) procurement and contracting practices, including
timely payment to vendors; (viii) inventory control; (ix) the role of
independent auditors; (x) the roles of fiscal agents and procurement
agents; (xi) separation of duties and internal controls; and (xii)
certifications, powers, authorities and delegations.
(d) Permitted Accounts. The Government shall establish, or cause to
be established, such accounts (each, a ``Permitted Account,'' and
collectively ``Permitted Accounts'') as may be agreed by the Parties in
writing from time to time, including:
(i) A single, completely separate U.S. Dollar interest-bearing
account (the ``Special Account'') at a commercial bank, subject to MCC
approval, that is procured through a competitive process;
(ii) If necessary, an interest-bearing local currency of Benin
account (the ``Local Account'') at a commercial bank, subject to MCC
approval, that is procured through a competitive process to which the
Fiscal Agent may authorize transfer from any U.S. Dollar Permitted
Account for the purpose of making Re-Disbursements payable in local
currency; and
(iii) Such other interest-bearing accounts to receive MCC
Disbursements in such banks as the Parties mutually agree upon in
writing.
No other funds shall be commingled in a Permitted Account other
than MCC Funding and Accrued Interest thereon. All MCC Funding held in
an interest-bearing Permitted Account shall earn interest at a rate of
no less than such amount as the Parties may agree in the respective
Bank Agreement or otherwise. MCC shall have the right, among other
things, to view any Permitted Account statements and activity directly
on-line, where feasible, or at such other frequency as the Parties may
otherwise agree. By such time as shall be specified in the Disbursement
Agreement or as otherwise agreed by the Parties, the Government shall
ensure that MCA-Benin enters into an agreement with each Bank,
respectively, satisfactory to MCC, that sets forth the signatory
authority, access rights, anti-money laundering and anti-terrorist
financing provisions, and other terms related to the Permitted Account,
respectively (each, a ``Bank Agreement''). For purposes of this
Compact, the banks holding an account referenced in Sections 4(d) of
this Program Annex are each a ``Bank'' and
[[Page 12961]]
are collectively referred to as the ``Banks.''
(e) Currency Exchange. The Bank shall convert MCC Funding to the
currency of Benin at a rate to which the parties to the Bank Agreement
mutually agree with the Bank in the Bank Agreement, subject to MCC
approval.
5. Transparency; Accountability
Transparency and accountability to MCC and to the beneficiaries are
important aspects of the Program and Projects. Without limiting the
generality of the foregoing, in an effort to achieve the goals of
transparency and accountability, the Government shall ensure that MCA-
Benin:
(a) Establishes an e-mail suggestion box as well as a means for
other written comments that interested persons may use to communicate
ideas, suggestions or feedback to MCA-Benin.
(b) Considers as a factor in its decision-making the
recommendations of the Board, particularly in MCA-Benin's deliberations
over pending key Management decisions and key Board decisions as shall
be specified in the relevant Governing Document.
(c) Develops and maintains the MCA-Benin Web site in a timely,
accurate and appropriately comprehensive manner, such MCA-Benin Web
site to include postings of information and documents in English and
French.
(d) Posts on the MCA-Benin Website and otherwise makes publicly
available via appropriate mediums (including radio and print) in the
appropriate language the following documents or information from time
to time:
(i) All minutes of the meetings of the Advisory Council and the
meetings of the Board; provided, however, in certain instances of
sensitivity and solely as specified and in accordance with the
Governing Documents meeting minutes may be maintained solely in the
corporate records of MCA-Benin without public release;
(ii) The M&E Plan, as amended from time to time, along with
periodic reports on Program performance;
(iii) Such financial information as may be required by this Compact
or as may otherwise be agreed from time to time by the Parties;
(iv) All Compact Reports;
(v) All audit reports by an Auditor and any periodic reports or
evaluations by a Reviewer;
(vi) All relevant Environmental Impact Assessments and supporting
documents, and such other environmental documentation as MCC may
request;
(vii) A copy of the Disbursement Agreement, as amended from time to
time;
(viii) A copy of any documents related to the formation,
organization and governance of MCA-Benin including any Governing
Documents, together with any amendments thereto;
(ix) A copy of the Procurement Agreement (including Procurement
Guidelines), as amended from time to time and any procurement policies
or procedures and standard documents; and
(x) A copy of information derived from each Procurement Plan, as
specified in the Procurement Agreement, and all bid requests and
awarded contracts.
Schedule 1 to Annex I--Access to Land Project
This Schedule 1 generally describes and summarizes the key elements
of an Access to Land Project (the ``Land Project'') that the Parties
intend to implement in furtherance of the Land Project Objective.
Additional details regarding the implementation of the Land Project
will be included in the Implementation Plan and in relevant
Supplemental Agreements.
1. Background
Insecure access to land is a determinant of poverty and a major
barrier to income growth in Benin as reflected in the Government's
Action Plan and the Poverty Reduction Strategy Document. Investment
climate studies list land access among the top constraints to business
development in Benin. Therefore, the Government's Access to Land
proposal was met with strong civil society support. Inclusion of the
Land Project in the Program reflects an understanding of the importance
of sound property rights to overall economic growth and to the owners
and users of land across Benin.
Currently, the title registration system is expensive, slow, and
complex. For a small urban land parcel, titling and registration costs
approximately $1,400 and can take up to two years to complete. As a
result, only 1% of households hold a formal title to their land and a
majority of the rural population relies on oral customary land rights.
In urban areas, individuals occupy land under a weak administrative
permit while enterprises occupy state land by concession. Land disputes
are prevalent and are estimated to comprise more than 70% of all civil
court cases in Benin. Women are often disadvantaged under current
practices while investors are unable to acquire sites with confidence.
Public investment in infrastructure is hindered by the lack of land use
planning and adequate property tax administration. The lack of
registered land rights also limits access to credit, particularly since
Benin adheres to agreements under the Organization for Harmonization of
Business Law in Africa (``OHADA'') requiring land titles as a basis for
pledging real property as collateral.
The Government is committed to changing this scenario. The
Government has demonstrated a commitment to adopting improved laws,
regulations, administrative processes and techniques to meet its
ambitious land policy vision. It has already undertaken important legal
reforms and experimented with new approaches to formalizing property
rights. The Government's view of the importance of converting to
titles, albeit in a progressive, voluntary approach, will be promoted
and ways to make the process easier will be identified through this
Project. With MCA support, a new land policy framework will be
developed and over 100,000 households will attain registered land
rights. The Land Project will serve both rural and urban areas and will
lead to: significantly reduced time and costs to obtain titles and
record transfers; fewer land disputes; and increased sense of land
security. These improvements should, in turn, motivate investment and
contribute, along with other Projects, to income growth.
2. Summary of Projects and Activities in Project and Expected Results
The Land Project is designed to establish secure access to land and
efficient land administration services. MCC Funding will support the
following Project Activities:
Policy and Legal Reform: To enable sustainable, efficient
land registration services, gender equity, land dispute resolution and
expanded use of land as collateral, MCC Funding will support legal,
regulatory, administrative and informational reforms within a national
land policy framework encompassing both rural and urban land.
Achieving Formal Property Rights to Land: To provide
citizens with more secure and useful records of their land rights, MCC
Funding will support conversion of 30,000 occupancy permits to land
titles in urban areas and formally document land rights to 300 rural
villages directly benefiting around 85,000 households with certificates
or titles.
Improve Land Registration Services and Land Information
Management: To reduce time and costs to register land and expand access
to land information for public and private uses, MCC
[[Page 12962]]
Funding will be used to upgrade and decentralize title registration
services in twenty four communes and introduce map-based land
information systems in twelve of these communes.
Information, Education and Communication: To create broad
awareness of land policy reform, especially among more vulnerable
groups, in order to help citizens understand, protect and use their
land rights.
Support Land Program Coordination: To strengthen the
capacity to manage the reform process and to encourage active
participation of key stakeholder representatives, support policy and
program coordination advisors, convene a Project steering group, and
establish working groups for particular studies.
The M&E Plan (described in Annex III) will set forth anticipated
results and, where appropriate, regular benchmarks that may be used to
monitor implementation progress. Performance against these benchmarks
and the overall impact of the Land Project will be assessed and
reported at the intervals to be specified in the M&E Plan or as
otherwise agreed by the Parties from time to time. The Parties expect
that additional indicators will be identified during the implementation
of the Land Project. The expected results from, and the key benchmarks
to measure progress on the Project, Project Activities and sub-
activities undertaken or funded under the Land Project are set forth in
Annex III.
Estimated amounts of MCC Funding for each Project Activity for the
Land Project are identified in Annex II of this Compact. Conditions
precedent to each Land Project Activity and sequencing of these Project
Activities shall be set forth in the Disbursement Agreement or other
relevant Supplemental Agreements or component of the Implementation
Plan.
The following summarizes the Land Project Activities:
(a) Project Activity: Policy and Legal Reform (the ``Policy
Activity'').
Building from the Government's commitment to land reform, under
this Policy Activity, MCC funds will support three-stages to establish
a more cohesive, functional land policy. The three stages are analysis,
policy formulation and legal reform. This Policy Activity is national
in scope and will address both urban and rural issues. MCA-Benin shall
take account of the relevant outputs of the Policy Activity, as
described below, in the full Implementation Plan (to be adopted
following the completion of the relevant assessments in this Policy
Activity). It is also anticipated that the Policy Activity will affect
the implementation strategy to be used for certain other Land Project
activities or sub-activities.
Detailed assessments of a series of topics will be produced by
commissioned experts working in consultation with key stakeholder
representatives. As a result, decision-makers will be better informed
of best options for detailing the legal, administrative and technical
solutions needed to achieve secure land rights and efficient land
access. Based on the assessment process, a Land Policy White Paper will
be prepared to guide public and private actors regarding the reform
process. Endorsement from senior Government of Benin officials,
including all relevant Ministers will be sought by MCA-Benin. The
Policy Activity will also support drafting of a National Land Policy
Decree, drafting of any needed legislation and/or amendments, and,
finally, the compilation of land laws into a new Land Code to reinforce
cohesiveness.
MCC Funding will support the following activities:
(i) Conduct of assessments that will inform policy decisions and
Land Project implementation strategies. The assessments will further
clarify issues and provide recommendations for refining the reform
strategy. Efficiency, affordability, sustainability, gender equity, and
the ability to manage the reform process with minimum risk will be
considered. The assessments listed below will be conducted by experts
and MCA-Benin will convene working groups of stakeholder
representatives that will consult on the terms of reference for and the
preparation of the assessments described below. MCA-Benin shall ensure
that the results of these assessments are incorporated as relevant in
the complete and final Work Plans for the activities described in
Sections 2(b)-(d) of this Schedule 1. The assessments shall include the
following topics, unless otherwise agreed by the Parties:
(1) A review of current practice and proposed reforms related to
the administrative structure and functions of national, regional and
local agencies involved in implementation of land policy; clarify roles
and responsibilities and propose an approach to achieve greater
operational efficiency and coherence;
(2) A review of the processes for titling (conversion) and
registration to identify specific bottlenecks to an accelerated,
quality implementation pace, including a review of technical norms,
administrative procedures, evidences accepted and proofs required to
participate; taxes, fees and budget parameters; and the technical
specifications of the certification processes (particularly of the Plan
Foncier Rural ``PFR''); make recommendations for changes to make the
process more affordable and/or efficient and its results more
sustainable;
(3) An assessment of the number and types of land conflicts
encountered in the past under rural and urban pilot activities and how/
if these conflicts have been resolved; recommend a strategy for
strengthening the capacity to resolve land conflicts under formal and
informal means;
(4) An analysis of how to effectively improve women's access to
land and the security of their tenure; propose a gender strategy on
policy, legal, administrative, and/or project implementation measures
and provide guidelines for its implementation;
(5) Following the completion of the assessment described in
paragraph (1) above, compare technology options to meet information
management needs at national, regional and local levels including
mapping data, registration data, land market information and land use
planning; compare initial investment costs as well as implied
operational and maintenance costs and capacity to sustain the systems;
and
(6) An analysis of the operational modalities for the communes in
implementing the proposed new rural land law and related financing
needs; make recommendations for the content for the regulations to this
law.
(ii) Development, formalization and dissemination of a new land
policy framework for Benin, that draws on the assessments conducted
under the sub-activity described in Section 2(a)(i) above:
(1) Draft and promote a Land Policy White Paper covering rural and
urban land and addressing the findings of the assessments conducted
under sub-activity described in Section 2(a)(i); seek its immediate
endorsement by relevant senior Government of Benin officials for use in
implementation of Projects and also a legislative mandate for
compliance with its key provisions;
(2) Upon completion of sub-activity described in Section 2(a)(i)
above, prepare a new procedural manual for the transformation of urban
and rural certificates into land titles;
(3) Review of relevant current law and proposed legislation
compared to the requirements of the Land Policy White Paper;
(4) Based on the conclusions reached in paragraph 3 of this Section
2(a)(ii), support the drafting of new or amended laws and regulations
as called for such
[[Page 12963]]
that the resulting body of land legislation removes disincentives to
register land rights and transactions, facilitates compliance with
relevant agreements under OHADA; and safeguards vulnerable populations
to the extent feasible from risks and undue tax burdens;
(5) Following completion of the sub-activity described in paragraph
(4) of this Section 2(a)(ii), support the preparation of a draft
unified Land Code for submission to Parliament; and
(6) Conduct public consultation on and dissemination of the new
legislation and procedures.
(b) Project Activity: Achieving Formal Property Rights (the
``Registration Activity''). By providing roughly 115,000 citizens with
more secure and useful property rights, this Registration Activity will
demonstrate the effectiveness of Benin's new policy and approaches.
Support will be provided for the conversion of urban housing land use
permits into land titles in selected neighborhoods primarily in
Cotonou, Parakou and Porto Novo. In roughly 300 selected rural
villages, the recording of rural land rights through written land plans
and certificates of customary ownership will be undertaken using an
existing methodology. Additionally, converting rural land certificates
to land titles will also be facilitated for beneficiaries that choose
to participate. To facilitate progress in the Government's title
conversion approach, the Registration Activity will support mapping and
related technology improvements and will help communities to identify
and resolve any case-specific issues that could arise during tenure
formalization.
Specifically, MCC Funding will support the following:
(i) Expansion of formal registration of land rights in urban areas.
Based on lessons learned in a pilot project recently conducted by the
Government, improve and continue the process of transforming urban
housing land permits to titles in selected neighborhoods in Cotonou,
Parakou, Porto Novo and possibly other cities. For each neighborhood
selected:
(1) Investigation of the current status of land tenure and records
and take measures to organize data and prepare the areas for the
conversion process;
(2) Organization and engagement of the community as active and
informed participants in the conversion process; and
(3) Measurement and mapping individual parcels, conduct public
review of parcel maps to gain agreement among community members on the
boundaries indicated on the maps, and issuance of registered land
titles (incorporating recommendations of the relevant assessments
conducted under sub-activity described in Section 2(a)(i)).
(ii) Expansion of formal land rights in rural areas. Consistent
with existing standards and guidelines, expand the creation of rural
land plans, land tenure certificates and local land management
capacity:
(1) For each rural commune meeting the site selection criteria and
chosen by MCA-Benin for participation, (A) conduct of information
campaigns, (B) assessment of the socio-economic and land tenure
conditions of villages in the area and (C) prepare village profiles
including documentation of any location-specific land tenure terms and
norms;
(2) Based on the conclusions reached in paragraph (1) above and the
application of the more general site selection criteria to the villages
within each commune, final selection of villages for implementing the
PFR process;
(3) For selected villages, production of land use and tenure maps
(the PFR) using a participatory method and submission of the plan for
public review and comment; and
(4) Based on the PFR, issuance of rural land use certificates and
facilitation of formal, written records of subordinate land rights such
as tenancies using improved approaches (e.g., standard lease template).
(iii) Facilitation of voluntary, ``on-demand'' conversion of rural
land certificates into land titles. Conversion of rural land
certificates to land titles through an efficient, affordable process.
Priority will be given to villages that already have a PFR in place.
(iv) Improvements in capacity for mapping and surveying. To
facilitate more rapid registration of land rights and to establish
databases that support land information services e.g., for planning and
fiscal purposes and for land market research, support the following
actions, incorporating as relevant recommendations from sub-activity
described in Section 2(a)(i):
(1) Creation of up-to-date digital imagery of Benin's land
resources;
(2) Creation of regional scale maps for selected areas of the
country indicating major topographic features and infrastructure
systems, such regional scale maps will be an important tool to the
production of an integrated set of parcel maps generated through the
process of property rights formalization; and
(3) Following the completion of the design strategy described in
Section 2(d)(iii), training for public and private professionals in use
of digital imagery and in improved surveying and mapping techniques.
(v) Improvement of local capacity to adapt to changing land tenure
and use patterns and to resolve case-specific issues that might arise
during the implementation of land tenure reforms by:
(1) Supporting communes in rural areas to develop improved social
programs and planning for the specific needs of landless peasants and
migrants;
(2) Supporting the provision of paralegal, informational and other
advisory services related to land access and tenure security to
citizens who otherwise would not have access to such services;
(3) Improvement of the capacity of citizens, local authorities and
tribunals to resolve disputes related to land tenure;
(4) Establishment of transitional measures, in urban areas, to
protect the rights of land occupants with certificates who delay or
opt-out of the conversion process; and
(5) In a few pilot sites, introduction of the use of parcel layout
plans in irregularly developed neighborhoods as a step prior to the
permit-title conversion process (any site in which such plans would
call for resettlement of persons to sites outside the neighborhood
prior to the conversion of permits to titles may not be selected for
participation).
The activities contemplated under this Registration Activity may
begin with preparatory activities such as those described in Sections
2(b)(i)(1) and (2), 2(b)(ii)(1) and (2), and 2(b)(v) above under a
provisional work plan; provided, however, full implementation will
require a complete and final work plan which adopts, to MCC's
satisfaction, the recommendations and findings of the relevant reports
produced under the Project Activity described in Section 2(a)(i).
(c) Project Activity: Improve Land Registration Services and Land
Information Management (the ``Services and Information Activity'').
To launch the process of moving Benin's land registration system
services to the local level, new offices of the national property
registry will be established (i.e., deconcentration) , and, select
communes will be supported as authority is transferred to them to
manage their land (i.e., decentralization). This Activity will help
design, equip and adequately staff new local registry offices. Communes
should be chosen from among those in which implementation of the
Registration Activity will occur, unless
[[Page 12964]]
otherwise agreed in writing with MCC. Some communes will also
experiment with a cadastre or parcel-based registration system that may
include additional land information used for planning and fiscal
purposes. Finally, the Services and Information Activity will help make
reliable land market information (e.g., recent sales and prices)
available for use by households, investors and public offices.
Pending completion of the relevant studies in Policy Activity and
incorporation of the recommendations into implementation plans, MCC
Funding will support the design and implementation of more accessible,
efficient, reliable land registration and information services. The
implementation strategy for each sub-activity described below in
paragraphs (i), (ii) and (iii) shall promote, to the extent
practicable, the harmonization of national, regional, and communal land
data and uses including the mapping and certificate lists generated
during the PFR process.
Specifically, MCC Funding will support:
(i) Deconcentration of the National Land Registration Services.
(1) The establishment of regional offices in Benin's 12 prefectures
and communal service offices in 24 selected communes; and
(2) In the offices established pursuant to paragraph (1) of this
Section 2(c)(i), replacement of the manual system of document
administration with an automated, digital records management system and
training of land registry office staff in the operation of these
systems.
(ii) Decentralization of Land Administration.
(1) Assist in development of capacity of approximately 50 communes
for land administration, such assistance to include training,
acquisition of equipment and transitional operational support; and
(2) Design and implementation of a pilot parcel-based or cadastre-
registration system in 12 of the communes where MCC Funding will
support decentralization; this sub-activity will support a more
comprehensive, systematic approach to the establishment of a cadastre
may be demonstrated in three of these twelve communes (one rural, one
urban and one peri-urban).
(iii) Design and establishment of an electronic national land
market data system.
(iv) Provision of technical assistance, training (consistent with
the design strategy completed pursuant to Section 2(d)(iii)) and in
relation to the capacity to manage and to quality control the land
information systems established in (i) and (ii) of this Section 2(c).
(d) Project Activity: Information, Education and Communication
(``IEC'') (the ``IEC Activity'').
MCA-Benin has an opportunity to promote good governance through
appropriate transparency and consultation on the Project throughout the
Compact Term. Moreover, informed and widespread participation in
planning, dispute resolution and decision-making are necessary for an
effective system of land registration. The IEC Activity will ensure
citizens have a clear understanding of their rights and
responsibilities, and are able to participate fully in the new
processes of planning, land securitization and dispute resolution.
Specifically, MCC Funding will support IEC campaigns throughout the
Compact Term to include but not limited to the following topics (other
topics for these campaigns may be implemented, subject to MCC
approval):
(i) Creation of broad awareness and understanding of the changing
land policy regime and how it affects the rights of citizens; new
processes and services; gender considerations, and, land markets and
access to credit.
(ii) Conduct of specific public notice and awareness of each
activity and sub-activity and of the results relevant to particular
groups or communities.
(iii) Design of a training strategy precedent to implementation of
any training in the Registration Activity or Services and Information
Activity.
(e) Project Activity: Support Strategy and Programmatic
Coordination (the ``Support Strategy Activity'').
This Project Activity will ensure coordination across the various
Project Activities and sub-Activities of the Land Project, across
agencies involved in the land policy reform process, and facilitate
ongoing consultation with stakeholder groups. In the near term, this is
critical to the Project effectiveness in undertaking a comprehensive
and diverse set of reform actions. By the end of the Compact Term, the
MCA-Benin Access to Land Project division could be transformed into a
national coordination unit to lead the completion of the reform
implementation process over a longer time period.
Specifically, in addition to an overall Land Project Director and
the ordinary Project-related operating expenses, MCC Funding will
support:
(i) Complement MCA-Benin management staff with a group of
professionals dedicated to ``change management and coordination,''
namely a National Land Policy Reform Coordinator and a long term policy
advisor familiar with international best practice in land
administration. Among their roles are, potentially, to (A) lead the
process of incorporation of the results of the Policy Activity into
practice by both project implementing partners and more generally, in
Benin; (B) provide guidance on policy and implementation oversight
issues to senior Government officials and MCA-Benin management; (C)
facilitate linkages with the Financial Services Project activities as
relevant; (D) engage other donors in Project specific coordination;
and, (E) respond to beneficiary requests and queries.
(ii) Establishment (including rules regarding selection,
composition, roles and frequency of meetings) and convening of a
Steering Group for periodic consultations on the implementation of the
Land Project e.g., the development of annual work plans, key terms of
reference, draft reports and otherwise as appropriate; including key
stakeholder representatives, at least one person from each of the MCA-
Benin Finance Services Project and the Justice Project divisions, and a
gender expert.
(iii) Convening of discussion groups for each of the assessments in
Section (2)(a)(i) and for the White Paper and corresponding legal
reform work.
(iv) Selection of sites for activities undertaken under this
Project. Sites shall be chosen by applying selection criteria developed
by MCA-Benin, subject to MCC approval, in a fair and transparent
manner. MCA-Benin will publicize, including posting on the MCA-Benin
Website, both the criteria for selection and the actual sites chosen,
giving a brief justification for each site. These criteria will ensure
that sites have the following characteristics, among others:
representation of the North, South and Central regions of Benin; sites
that exhibit both poverty and near-term economic opportunity e.g.,
urbanizing areas, high-value crop production sites, and places where
market participation is expanding; willingness to comply with Benin's
Family Code; site of activity under the Financial Services Project and
the Justice Project; and location within the scope of the decentralized
registry and land information systems to be established under Services
and Information Activity set forth in Section 2(c) of this Schedule 1.
These characteristics will be strategic to choosing sites that will
more readily experience near-term, economically meaningful results
including for the poor and women. The completion of this site selection
shall be a condition
[[Page 12965]]
precedent to certain activities under this Project.
(v) Strengthening of the National Land Commission for the
transformation of urban land permits to titles by providing the
resources and guidance to enhance the quality and quantity of work it
can perform.
3. Beneficiaries
The Land Project will encourage investment in urban and rural land.
A new policy framework will enable a progressive transition between
customary and administrative land management to markets and a title
registration system. With lower transactions costs and fewer disputes,
the climate for investment, productivity and finance will be improved.
The Land Project will strengthen women's land rights under the law and,
more importantly, work to ensure the new family code is practiced
widely. In Cotonou, Porto-Novo and Parakou, the three main cities in
Benin, up to 30,000 properties currently under administrative
certificates will have titles. In twenty-four selected rural communes,
as many as 83,000 families in 300 villages will receive a certificate,
which can be subsequently turned into a land title. Other rural land
users, without full ownership rights, will also have recorded
agreements. Accurate land rights information will benefit potential
local and international investors, including Benin's diaspora. For
example, reliable and cost-effective inquiries of local records will be
possible before entering leases or purchasing land. Finally, there will
be better capacity for local planning and tax administration which will
benefit local municipalities and civil society.
Roughly 115,000 rural and urban households will have more secure
and useful tenure, affordable access to reliable land related
information and services; a 50% reduction in court cases related to
land disputes is targeted, and a modest 10% to 20% investment response
is expected to boost income earning opportunities.
4. Donor Coordination; Private Sector; Role of Civil Society
In rural Benin, both Deutsche Gesellschaft fur Technische
Zusammenarbeit (``GTZ'') GmbH (German) and Agence Francaise de
Developpement (``AFD'') (French) have supported successful land use
pilot projects under the Program for Natural Resources Conservation and
Management. A first phase of these pilot projects has recently ended
and both donors have expressed interested in continuing this work. The
approach has been standardized and guidelines established which will be
used in implementation of this Project.
In urban areas the Government recently completed a pilot titling
project that had positive but limited results. The limited results were
due to substantial titling fees, a reluctance to being the initial
participant (``first adopter''), insufficient public outreach, and
administrative problems relating to certificates previously pledged as
collateral. These limitations were identified in the Proposal and will
be further addressed in the Implementation Plan for the Registration
Activity.
The ``Transformation of Assets into Usable Capital in the Least
Developed Countries'' project initiated by the International Land
Coalition has chosen Benin as a pilot country. Under this International
Land Coalition initiative, the UNDP will support a stakeholder analysis
that could be used to refine the relevant components of the Project
Activity Implementation Plans. The Foreign Investors Advisory Service
of the International Finance Corporation (``IFC'') will soon complete a
study of land access and investment. Their preliminary recommendations
are generally consistent with this Project, with some sub-activities
herein having been derived from it.
Private professionals, e.g., surveyors, are currently called on by
the government to implement tasks within the formalization process. To
the extent feasible, the Land Project will promote out-sourcing and
development of private sector services related to land registration and
land markets. Among the key stakeholders that will guide the project
implementation planning and participate in the studies undertaken
pursuant to the Policy Activity, are bankers and businessmen and civil
society organizations, e.g., women's groups. These are the end-users of
the improved formal property registration system and their perspectives
will provide much-needed insight into final definition of land policy
and of the most practical approaches to implementation.
5. U.S. Agency for International Development
No USAID projects focus specifically on land access and security in
Benin. However, MCA-Benin will continue to dialogue with USAID to
identify areas in which it can complement or coordinate with e.g.,
women's legal aid.
6. Sustainability
One of the prime concerns that will underlie the series of
evaluations conducted in the Policy Activity is the need to ensure that
investments can be sustained and that near-term results translate into
long'term sustainable change. The Government has set ambitious targets
for decreasing costs of land titling and registration and will be
considering further rationalizing fee structures. The final choice of
technical solutions for information management and for supporting the
process of formalizing land tenure will be chosen on a best-value for
cost in the specific context of Benin. The extensive consultation,
information dissemination and training embedded across all the Project
Activities will reinforce consensus and make it more likely that people
can take advantage of the new land policy framework. The review of the
law will identify and address disincentives to keep land records formal
over time. All together, these features lend themselves to
sustainability.
7. Policy; Legal Reform; and Procedural Changes
The Parties have identified the following policy, legal and
regulatory reforms and actions that the Government shall pursue in
support, and to reach the full benefits, of the Land Project, the
satisfactory implementation of which will be conditions precedent to
certain MCC Disbursements as provided in the Disbursement Agreement:
(a) Undertake policy, legal and/or procedural changes as called for
in the final approved assessment reports produced under the Policy
Activity: to simplify, streamline and make affordable all processes
related to formal registration of land rights;
(b) Endorse a Land Policy White Paper produced in conjunction with
this Project; issue a National Land Policy Decree endorsing its vision,
adopt a law requiring compliance with it and pass a unified Land Code
to consolidate the body of law that affects land rights;
(c) Reform laws, regulations and administrative processes as needed
to remove constraints to the use of land as collateral;
(d) Undertake measures to improve the enforcement of Benin's Family
Code, Rural Code, and other legislation, as identified in the gender
strategy undertaken pursuant to the Policy Activity, which give and
protect women's rights to land; and
(e) Undertake measures to ensure the property taxes do not
discourage registration of land transactions and that safeguard against
undue tax burdens.
8. Proposals
Under the Land Project, public solicitations for proposals are
[[Page 12966]]
anticipated to procure goods and services, as needed, to implement all
Land Project Activities. MCA-Benin will develop, subject to MCC
approval, a process for consideration of both such proposals. While
competitive procurement will be the norm for this Land Project, MCA-
Benin may also consider, using a process developed subject to MCC
approval, any unsolicited proposals it might receive. Under Strategy
Support Activity of this Land Project, a Land Project Steering Group
and several working groups will be comprised to guide implementation
planning and implementation of the assessments to be conducted under
the Policy Activity. MCA-Benin will determine the number and types of
participants in these groups. A public call for expressions of interest
to participate will be made and candidates will be selected by a panel
comprised of MCA-Benin's Land Project Director, Finance Project
Director and one other person to be determined by MCA-Benin with MCC
approval. The composition of this panel shall be made publicly
available as will be their final selection for any particular group.
This Land Project also involves selection of particular communes,
villages or urban neighborhoods to participate in Project Activities
described in Sections 2(b) and (c) of this Schedule 1. As described in
Sections 2(b) and (c), selection criteria for identifying communes,
villages or urban neighborhoods to participate and a method to apply
these will be developed by MCA-Benin, subject to MCC approval. The
criteria, method and final selections (including justifications) will
be made known to the public. In addition, MCA-Benin will incorporate
into the method for applying the selection criteria a process for
consideration of unsolicited offers of participation by particular
communes, villages or urban neighborhoods.
Schedule 2 to Annex I--Access to Financial Services Project
This Schedule 2 generally describes and summarizes the key elements
of the Access to Financial Services Project (the ``Financial Services
Project'') that the Parties intend to implement in furtherance of the
Financial Services Objective. Additional details regarding the
implementation of the Financial Services Project will be included in
the Implementation Plan and in relevant Supplemental Agreements.
1. Background
Benin has a shallow financial sector that provides limited services
to micro and small- and medium-scale enterprises (one or more of such
categories of enterprises, ``MSMEs''), particularly those that are
involved directly or indirectly in the production of goods in Benin.
For example, the banking sector, while possessing significant
liquidity, has focused much of its credit services on short-term
financings and on larger companies, such as multinationals with
branches in Benin. Savings services in Benin have had limited
penetration, with only a small fraction of the population owning a bank
account. Although the microfinance sector is relatively vibrant in
Benin, it faces significant challenges, including the weak
institutional capacity of many MFIs and the need for additional
monitoring and supervision. Moreover, much of the financial sector has
focused on urban areas and on short-term commerce rather than long-term
production.
The following factors contribute to the limited scope of financial
services to MSMEs:
High transaction costs, especially in rural areas;
Lack of reliable information on clients;
Lack of creditworthiness of many borrowers;
Limited resources and capacity of some of the financial
intermediaries; and
Perceived risk of clients, in part due to lack of
sufficient collateral (such as title) and the inability of lenders to
effectively enforce debts or sell collateral upon default, and price
and yield risks inherent in agriculture.
These factors constrain the growth of MSMEs in Benin. The high cost
or unavailability of credit and other financial services, including
savings, limits the capacity of small businesses in Benin to expand
production and employment, to respond to business opportunities and to
manage risk. Accordingly, alleviating these constraints, and creating a
broader and deeper financial sector, should increase incomes of the
poor that own, are employed by, or do business with MSMEs.
2. Summary of Projects and Activities in Project and Expected Results
The Financial Services Project is designed to improve the ability
of MSMEs, particularly those directly or indirectly involved in
production in Benin, to access financial services that will help them
improve the sustainability of their businesses.
The Financial Services Project includes the following two
Project Activities:
Financial Institution and Borrower Capacity Building
Activity: This Project Activity aims to (a) improve the capacity of
financial institutions to expand existing or establish new services for
MSMEs and (b) improve the capacity of MSMEs to access and use expanded
financial services productively by improving their creditworthiness;
and
Financial Enabling Environment Activity: This Project
Activity will undertake to identify and support legal and policy
changes that are needed to facilitate the expansion of the financial
sector in Benin.
The M&E Plan (described in Annex III) will set forth anticipated
results and, where appropriate, regular benchmarks that may be used to
monitor implementation progress. Performance against these benchmarks
and the overall impact of Financial Services Project will be assessed
and reported at the intervals to be specified in the M&E Plan or as
otherwise agreed by the Parties from time to time. The Parties expect
that additional indicators will be identified during the implementation
of the Financial Services Project. The expected results from, and the
key benchmarks to measure progress on, the Project, Project Activities
and sub-activities undertaken or funded under the Financial Services
Project are set forth in Annex III.
Estimated amounts of MCC Funding for each Project Activity for the
Financial Services Project are identified in Annex II of this Compact.
Conditions precedent to each Financial Services Project Activity and
sequencing of these Project Activities shall be set forth in the
Disbursement Agreement or other relevant Supplemental Agreements or
applicable component of the Implementation Plan.
The following summarizes the Financial Services Project Activities:
(a) Project Activity: Financial Institution and Borrower Capacity
Building (the ``Capacity Building Activity'')
The overall goal of this Project Activity is to broaden and deepen
the financial sector in Benin by improving both the supply of and
demand for financial services. It is intended to build the capacity of
financial institutions, as well as to improve MSMEs' creditworthiness
and ability to use financial services productively.
This Project Activity involves two sub-activities:
Demand and feasibility assessments; and
A financial innovation and expansion challenge facility
(``FINECF'' or the ``Challenge Facility'').
[[Page 12967]]
(i) Demand and Feasibility Assessments. This sub-activity is
intended to help shape the criteria and guidelines for the Challenge
Facility described in Section 2(a)(ii), and to build on existing
studies and improve the quality of information available to potential
applicants. Satisfactory completion of these studies, and dissemination
of the key findings, shall therefore be conditions precedent to the
Challenge Facility. The below studies shall be conducted by an expert
or experts retained after an international competitive procurement;
terms of reference and procurement for these studies shall be subject
to MCC approval. The results of the studies may be further divided or
combined into one or more reports, so long as they cover the topics
mentioned below or such other topics as the Parties may agree in
writing. MCC and MCA-Benin shall consider cost structures where public
and private costs for the studies are shared, with the private portion
to expand over time.
MCC Funding, together with potential parallel or co-financing from
other sources, shall support the following:
(1) Conduct of demand study for services to MSMEs. This will study
the demand for innovative and expanded financial services (especially
credit and savings) that may be provided to MSMEs by MFIs, banks and
other financial institutions. To the extent practical, the study will
assess demand particularly among MSMEs involved in production in Benin
and in areas where Land Project is likely to be active.
(2) Conduct of economic feasibility and cost assessment. An
economic feasibility and cost assessment will determine the
effectiveness of certain MFI investments in technologies that have the
potential to reduce operating costs, increase the scale of operations
and expand services to MSMEs in previously underserved regions and
sectors. The technologies that may be explored and identified include,
without limitation, smart cards, e-payment systems, management
information systems, and biometric technology. To the extent practical,
these studies will focus on MFIs operating in areas where the Land
Project is likely to be active.
(3) Conduct of demand study for business development services. This
will study the demand for, and capacity within Benin to supply,
business development services (``BDS'') to MSMEs involved in
agricultural and non-agricultural sectors. In order to determine
capacity to supply such services, the study will investigate
specialized BDS providers, MFIs and agricultural and rural
organizations. To the extent practical, these studies will focus on BDS
in areas where the Land Project is likely to be active.
(4) Conduct of follow-up research and studies or assessments, as
needed during the Compact Term, in the areas covered by the studies and
assessments, set forth in paragraphs (1)-(3) of this sub-activity or
other similar types of studies.
(ii) Financial Innovation and Expansion Challenge Facility. MCC
Funding shall support a demand-driven and competitive mechanism that
will co-fund with participants technical assistance and capacity
building for both financial institutions and MSMEs. This mechanism
requires potential beneficiaries to compete for support based on
transparent criteria and to contribute a significant portion of the
project costs. These elements help ensure that resources are directed
to the most motivated institutions and to the most promising projects.
MCC Funding shall finance up to 66% of the cost of selected projects
with the share funded by MCC Funding decreasing over time (this is a
cap, and in some cases the program criteria may set a lower percentage
of support by MCC Funding). Operating costs shall not be eligible for
support and the remainder of a project's costs must be provided by
private enterprises (which may include NGOs). The Challenge Facility
shall emphasize and encourage support for local service providers.
A qualified independent management entity or entities shall manage
and implement the Challenge Facility (the ``Facility Manager''),
acceptable to MCC and MCA-Benin, selected after a competitive tender.
Funding for the Challenge Facility shall be conditioned upon: (a)
Feasibility and demand studies having been satisfactorily concluded;
(b) terms of reference and procurement of Facility Manager being
satisfactory to MCC and (c) operating guidelines and criteria for each
Component of Challenge Facility having been developed in form and
substance satisfactory to MCC. The Challenge Facility itself will not
be making debt or equity investments or issuing guarantees to
recipients of support; however, its support, it is expected, will
enable institutions to better mobilize that capital from others.
MCC Funding will support the following activities, to be undertaken
in the manner described:
(1) Identification of viable applicants. The Facility Manager shall
filter expressions of interest and identify viable applicants for the
three facility components described below in paragraph (7).
(2) Provision of guidance to applicants and development of
operating manual. The Facility Manager will provide guidance to
applicants throughout the application procedure; including guiding
viable applicants through the process of preparing a brief concept note
for review, and ultimately providing assistance with development of the
full application. Challenge Facility funds shall assist (where
appropriate, based on need) in the development of applications that
submit a concept note with significant potential. The Facility Manager
shall develop a policy as part of the operating manual that will
identify criteria for this assistance.
(3) Review of applications and selection of funding awards.
Following submission of applications, an independent panel (the
``Panel'') shall review applications and make awards based on selection
criteria described below and subject to MCC approval. MCA-Benin shall
post on the MCA-Benin Website the names and descriptions of
applications that receive awards, including amounts of awards.
(4) Development of award criteria. The Facility Manager shall
develop (A) award criteria consistent with paragraph (6) below and (B)
an operating procedures manual, each subject to MCC and MCA-Benin
approval. In developing the award criteria, efforts shall be made to
support activities that extend financial services to places outside
Cotonou where the Land Project is (or is likely to be) active. Awards,
if practical, will be awarded in kind rather than in cash, where
technical assistance or equipment or services are required. Unless
otherwise agreed by the Parties, the Facility Manager shall be
responsible for selecting the provider through a competitive tender, in
accordance with the procurement guidelines that govern the Compact.
(5) Support of donor coordination related to the Project Activity.
The Facility Manager, to the extent practical, shall support capacity
building activities that leverage other donor support or enable the
beneficiary to attract financing from other sources (for example,
enabling an MFI to attract long-term financing from a bank or enabling
an MSME to obtain a loan). MCA-Benin and the Facility Manager shall
seek to coordinate with other donors to ensure that the MCA assistance
is as effective as possible.
(6) Development of criteria for support by the Challenge Facility.
The selection criteria for funding under the Components shall be
determined by the
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Facility Manager, subject to approval by MCC and MCA-Benin. The Parties
anticipate that the criteria will include (without limitation) the
following categories:
(A) Market demand (there must be a demonstrated need for the
project);
(B) Impact (the project must be expected to contribute, directly or
indirectly, to improved incomes and opportunities for a substantial
number of poor people; the applicant's commitment to gender issues will
be a positive factor);
(C) Effectiveness (the project's impact must be expected to exceed
its costs);
(D) Implementation Capacity (applicants must have the capacity to
implement the project successfully);
(E) Demonstration effect (the project must be unlikely to be
undertaken without the requested financial support. In particular,
projects suggested by for-profit entities, while permitted, shall be
scrutinized. In addition, pilot projects shall be preferred over
projects that involve larger, untested ideas);
(F) Commitment (applicants must show their commitment through the
share of project funding they are willing to contribute);
(G) Sustainability (the project must be expected to lead to the
improved financial sustainability of funding recipients, and the impact
of the project must be expected to extend beyond the termination of
funding);
(H) Timing (the financial support of the project must be completed
prior to the termination of the proposed Program);
(I) Limitations on Use of Funding (the proposed project must comply
with the limitations on use and treatment of MCC Funding as set forth
in Section 2.3 of this Compact); and
(J) Other (the Facility Manager shall develop such other selection
criteria for Components, including any criteria unique to particular
Component).
MCA-Benin shall post on the MCA-Benin Website the selection
criteria developed by the Facility Manager, as approved by MCC and MCA-
Benin.
(7) Implementation of Challenge Facility Projects. Unless otherwise
agreed by the Parties, there shall be the following three sub-
facilities (each a ``Component'' and each described more fully below)
and to be funded equally; provided, however, there may be changes in
allocations between the Components, subject to MCC approval:
The Innovation Component;
The Institutional Strengthening Component; and
The MSME Business Development Component.
Support under each Component is expected to range from $25,000 to
$250,000 per institution. Applications can come from individual
institutions or groups of up to ten institutions with one institution
taking the lead. Where the total project cost exceeds $500,000, the
application shall be subject to heightened review and additional
selection criteria. A call for applications shall be made up to twice
per year, and the guidelines and criteria will be clearly communicated.
Applications must be supported by a sound business plan by one of the
eligible parties. In the event MCA-Benin receives any unsolicited
written applications or proposals and such proposals have not been
otherwise submitted to the Facility Manager through the call for
applications, MCA-Benin shall forward such applications to the Facility
Manager. The Facility Manager will evaluate such unsolicited
applications in the same manner as those received through the call and
identify viable applications in accordance with paragraph (1) above.
(A) The Innovation Component shall support financial institutions
(non-banks and banks) that expand their product offering to MSMEs in
previously underserved regions and sectors or introduce innovative
technologies that lead to economies of scale and reduced operating
costs and risks. For example, funding may be used to support
investments in technology, management information or communications
services, or to provide technical assistance and staff training to
assist with the design, implementation and marketing of new financial
products or services.
(B) The Institutional Strengthening Component shall seek to
strengthen the capacity of selected microfinance institutions in Benin
by improving internal controls, transparency, management, and ability
to access additional stable financial resources from commercial banks
and investors at reduced costs. As a result, MFIs shall be able to
provide better quality and cheaper products and services to MSMEs. This
Component shall fund technical assistance and grants for equipment or
supplies to build capacity within MFIs that significantly serve MSMEs.
Unless otherwise agreed by the Parties, 10% of grants under this
Component shall go to each of the following:
(i) Promotion of transparency and good governance at MFIs, such as
external audits and ratings and internal controls.
(ii) Improvement of management/analysis of long-term credit
extended by MFIs with national or regional scope.
(iii) Training or other mechanisms to improve the ability of MFI
management to access long-term financing and other stable resources.
(iv) Assistance with compliance with regulatory requirements.
(v) Evaluations of, and technical assistance to improve, operating
capacity and efficiency of MFIs.
(C) The MSME Business Development Component shall support business
development services for agricultural and non-agricultural MSMEs. The
objective is to improve access to finance by improving the MSMEs'
creditworthiness and ability to use financial services productively.
This Component may include the following types of funding:
(i) Funding to financial institutions, such as MFIs: Assistance
designed to improve financial literacy and business management
(including through improved marketing, internal controls and
accounting), as well as to improve the ability of borrowers to complete
credit applications and access credit.
(ii) Funding to rural networks and organizations (such as co-ops
and associations): Training and technology to agricultural and rural
networks and organizations that present plans to build the
creditworthiness and productivity of their MSME members.
(iii) Funding to specialized BDS providers: Training and technology
to assist local specialized business development service providers in
improving their capacity to provide sustainable services.
(8) Monitoring of progress of the Challenge Facility projects.
Funding agreements with entities receiving benefits shall include
annual performance benchmarks to indicate progress in meeting
objectives, with the form of such agreements subject to the approval of
MCA-Benin and MCC and will be specified as conditions to certain Re-
Disbursements for the selected Challenge Facility project. In the case
of the Institutional Strengthening Component, this might include items
such as capitalization and other financial reporting requirements. In
the case of the Innovation Component, this might include items such as
increased amount of services, number of new clients for all services
and number of new credit clients. Failure to meet these benchmarks may
lead to termination of project support and in some cases a requirement
that the entity repay a portion of the assistance received. Repaid
funds shall be used as grant funding to finance other activities under
the Challenge Facility.
(9) Conduct of information, education, and communications campaign.
To
[[Page 12969]]
improve the quality and responsiveness of proposals, a portion of the
MCC Funding for FINECF shall be used to support market information
campaigns. The campaigns shall inform potential applicants about
FINECF's objectives and guidelines for targeted technical assistance
and grants. Where appropriate, certain trainings, technical assistance,
and services will be provided through FINECF to incorporate information
on strategies for avoiding environmental and social risks, using
environmental and social review criteria and enhancing the
sustainability of loans.
(b) Project Activity: Financial Enabling Environment Activity (the
``Financial Enabling Environment Activity'').
The objective of the Financial Enabling Environment Activity is to
identify and support legal and policy changes that are needed to
facilitate the deepening and expansion of the financial sector in
Benin.
The Financial Enabling Environment Activity consists of the
following sub-activities:
Strengthening of Microfinance Supervision: Support for
Cellule de Microfinance (``Cellule''), microfinance supervisory
authority in the Ministry of Finance, and for audits of microfinance
institutions.
Multi-stakeholder forums: Conduct of electronic and/or
physical forums to discuss potential improvements to laws and policies
relating to an expanded financial sector and use of land titles as
collateral.
Improvement of regulatory environment: Support for
financial sector regulatory changes by funding the analysis of and
advocacy for such changes.
Credit Bureau capacity building: Building the capacity of
the MFI credit information bureau so that it can track the payment
history of borrowers more accurately.
Land titles as collateral: Provision of support to assist
ability of financial institutions to use land titles as collateral in
loans or refinancings.
MCC Funding will support the following activities:
(i) Strengthening of Microfinance Supervision.
(1) Build capacity of the Ministry of Finance and Economy's Cellule
de Microfinance, which currently serves as the supervisory authority
for microfinance in Benin, by providing support in areas such as
technical assistance, training, and acquisition of software and
equipment. The goal of this support is to improve the supervision,
transparency and governance of MFIs in Benin. MCC Funding will not be
used for salaries of Cellule staff. This sub-activity will improve the
capacity of the Cellule to increase its monitoring and licensing
activities and use resources more effectively;
(2) Improvement of rules and procedures for microfinance. An
outside advisor shall be engaged to work with the Cellule to improve
rules and procedures in Benin regarding microfinance, and improve the
efficiency and effectiveness of the Cellule. It is intended that the
advisor shall come for approximately two weeks a quarter, at least for
the first year, with limited follow-up visits thereafter; and
(3) Conduct of audits of microfinance institutions, with the goal
of further strengthening the supervision of MFIs in Benin. Institutions
to be audited will be recommended by the Cellule, with the criteria for
selection submitted to MCC for approval. Funding for audits will be
conditioned on the development by the Ministry of Finance and Economy
of a plan, approved by MCC, for the sustainability of the conduct of
audits beyond the Compact Term.
(ii) Multi-stakeholder forums.
(1) Design workshops and electronic forums to promote the
discussion and exchange of ideas on policies and strategies for
expanding access to financial services. Where relevant, implementers of
other Projects in this Program (especially Land Project and Justice
Project) will also have representatives involved in the design and
implementation of these forums; and
(2) Conduct of workshops and electronic forums designed under
paragraph (1) above. Topics for these forums shall be approved by MCC
and MCA-Benin and are expected to include, for example (1) actions and
initiatives needed to ensure successful use of land titles as
collateral for loans (with the participation of the implementers of the
Land Project, including the MCA-Benin Land Project division); and (2)
legal and regulatory hurdles, at the national and regional level, to
development and implementation of expanded financial services and new
products. The Government, including the Ministry of Finance, shall
participate in these forums and respond to reasonable issues raised
therein. The presentations to and results or feedback generated from
these forums shall be posted on the MCA-Benin Web site.
(iii) Improvement of regulatory environment. Following completion
of initial multi-stakeholder forums convened pursuant to paragraph (ii)
above, MCC Funding shall support analysis of, and advocacy for, changes
in West African regional and Benin national regulations of the
financial sector that are intended to expand access to financial
services prudently. On an annual basis, areas of focus for these
regulatory changes shall be agreed upon between MCC and MCA-Benin, and
are expected to include the priority reforms identified in the multi-
stakeholder forums described above. Other stakeholders may, at this
stage, present to MCA-Benin unsolicited proposals for interventions or
activities that were not identified in the multi-stakeholder forums. In
implementing these activities, MCA-Benin shall coordinate with other
development organizations and government agencies involved in the
financial sector in Benin and in West Africa.
MCC Funding will support the following:
(1) Technical assistance in identifying areas of regulatory reform;
and
(2) Drafting of regulations and/or policy papers, and other
acceptable advocacy and consensus building mechanisms in areas of
regulatory focus approved by MCC and MCA-Benin of the areas of focus.
(iv) Credit bureau capacity building. To build the capacity of the
Consortium Alafia (a microfinance trade association) credit information
bureau, MCC Funding will support the following:
(1) Conduct of studies to assess demand, feasibility and cost-
effectiveness of the recommended improvements; and
(2) Improvements to Consortium Alafia (a microfinance trade
association) credit information bureau, following completion of the
studies conducted pursuant to paragraph (1) above and subject to
agreement between MCC and MCA-Benin that: there is sufficient demand,
that the feasibility has been demonstrated, and that the proposed costs
are acceptable. This activity will build capacity of the credit
information bureau to track information and more precisely identify
customers in a credit information database, including not just negative
(i.e., missed payment) information, but also positive (i.e., satisfied
payment) information of clients. The activity may also link the credit
bureau database with databases that include bank customer data.
(v) Land titles as collateral for loans. This sub-activity will
provide technical assistance and other capacity building for financial
institutions, particularly MFIs, to support their ability to make
title-based-loans or refinance portfolios of loans secured by land
titles. The financial institutions to receive this
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assistance shall be selected based on criteria developed by MCA-Benin,
subject to MCC approval. It is expected that these financial
institutions shall be located or serve areas covered by the Land
Project. MCA-Benin shall post on the MCA-Benin Web site the selection
criteria.
The activities MCC Funding will support under this sub-activity are
expected to include, without limitation:
(1) Technical assistance to MFIs to improve credit management and
assessment for secured loans and to assist them in using portfolios of
secured loans as collateral for MFI financing obtained from banks;
(2) Development of standardized forms; and
(3) Installation of mechanisms of collaboration between financial
institutions and land authorities to facilitate and accelerate the
treatment of the files of application for credit.
3. Beneficiaries
The principal beneficiaries of the Financial Services Project are
expected to be people who own, are employed by, or do business with
MSMEs in Benin. Particular efforts shall be made to reach MSMEs in
traditionally underserved areas of the country, as well as in areas
where the Land Project is likely to be active.
The urban and rural poor will benefit directly, due to their (or
the MSME with whom they do business or are employed) gaining access to
a broader and more effective menu of financial products and services.
They will also benefit indirectly, because financial sector deepening
has been shown to lead to economic growth and disproportionately
benefit the poor. The Financial Services Project, in particular, will
benefit poor women. When managed effectively, microfinance has
significant economic and social benefits for women, and by
strengthening the microfinance sector in Benin, this Project will
extend these benefits to a larger percent of the population. Showing
commitment to gender issues will be weighted positively in the criteria
for allocating funding in FINECF.
4. Donor Coordination; Private Sector; Role of Civil Society
Donor Coordination: The Financial Services Project complements the
activities of other donors. The World Bank, United Nations Development
Program, African Development Bank, and several bilateral donors have
been active in MFI and other financial sector activities. The demand-
driven nature of the FINECF and the requirement for applicants to
demonstrate the need for funding should enhance rather than duplicate
donor efforts. In addition, policy and regulatory initiatives funded
under this Project will be designed to complement and support the
efforts of other donors that are leading similar initiatives at the
regional level.
Private Sector: MSMEs are a particular focus of this project, and
an assessment of their financial services needs will help drive the
focus of the Challenge Facility and efforts to support policy and legal
reforms.
Civil Society: The multi-stakeholder forums are designed to solicit
suggestions from a wide range of voices in society to improve the
regulatory and policy environment. In addition, a number of the
recipients of FINECF funding are likely to be local NGOs.
5. U.S. Agency for International Development
USAID was consulted during the design of the Project, and their
input will be solicited throughout the implementation and monitoring of
the Financial Services Project. This Project will benefit from the
lessons learned from USAID's main microfinance project which is nearing
the end of its term. To the extent applicable, this Project will be
coordinated with ongoing and future agricultural and other programs
focused on increasing the breadth and quality of demand for financial
services.
6. Sustainability
The Financial Services Project is not intended to create a new,
sustainable institution or financial mechanism. Rather, it is intended
to enhance the success of existing commercial actors that service MSMEs
and make them more sustainable. Beneficiary institutions of the
Challenge Facility, for example, can be expected to continue to
implement improvements in financial technologies and institutional
capacities after Program support ends, since participating institutions
are required to present sustainable, economically viable, plans for
assistance and demonstrate their financial commitment to the project.
Moreover, by demonstrating best practices, the Project will also
encourage other financial institutions or business development service
providers to follow the innovations of participating institutions.
Support for portions of the Financial Enabling Environment Activity
shall be conditioned on Benin having presented and developed a funding
and sustainability plan for the microfinance supervisory authority in
the Ministry of Finance that is satisfactory to MCC; such plan may
include mechanism for funding via national funds and private funds and
adjustments in staffing.
7. Policy; Legal Reform; and Procedural Changes
The Parties have identified the following policy, legal and
regulatory reforms and actions that the Government shall pursue in
support, and to reach the full benefits, of the Financial Services
Project, the satisfactory implementation of which will be conditions
precedent to certain MCC Disbursements as provided in the Disbursement
Agreement:
(a) The implementers of the Financial Services Project, including
the MCA-Benin Financial Services Project division, shall participate in
the development of the Land Policy White Paper through representation
on the Land Project Steering Committee and in the relevant working
group(s). The Government shall commit to adopt the reforms consistent
with this Land Policy White Paper that are necessary to ensure
effective use of land titles as collateral for loans and to enable
financial institutions to effectively enforce their collateral interest
in such title;
(b) The Government shall develop a funding and sustainability plan
for the Cellule that shows appropriate use of MCC Funding and is
satisfactory to MCC, including a commitment to finance significantly
increased and adequate staffing for the Cellule as soon as practical
through the budget, fees, or another sustainable mechanism. The amount
funded by this sustainable funding mechanism must grow over time and
eventually replace the MCC Funding. This commitment must be in form and
substance acceptable to MCC. In addition, the Government shall commit
to working with the outside advisor to the Cellule funded under the
Compact and adopting reasonable reforms suggested by advisor;
(c) The Government shall develop and seek MCC approval of a funding
and sustainability plan for the implementation of regular audits of
microfinance institutions, as well as of a plan for selection of these
institutions;
(d) Support for improvements to the credit bureau for microfinance
shall be conditioned upon the results of a study (or studies) of
feasibility and demand (with procurement approved by MCC). An
implementation plan and detailed budget for improvements, based on the
results of the feasibility and demand study (or studies), shall be
submitted to MCC for approval;
(e) The National Policy for Microfinance shall be adopted in form
and substance satisfactory to MCC; and
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(f) The Government shall develop and advocate for, and use its best
efforts to adopt and implement, those reasonable legal and regulatory
reforms, if any, that are identified by the multi-stakeholder forums in
the Financial Enabling Environment Activity as necessary to expand,
significantly and sustainably, financial services offered to MSMEs. A
yearly report, including a summary of the forums and a resulting work
plan, shall be submitted to MCC for approval.
8. Proposals
Mechanisms for consideration of solicited and unsolicited Challenge
Facility applications shall be as described above in Section 2(a)(ii).
Mechanisms for consideration of solicited and unsolicited proposals
for regulatory reforms shall be as described above in Section 2(b)(ii).
In addition, as appropriate, MCA-Benin will develop, subject to MCC
approval, a process for consideration of solicited and unsolicited
proposals. With respect to solicited proposals, the evaluation process
will include, consistent as appropriate with the Procurement
Guidelines, the issuance of a published request for proposals with
specific identified evaluation criteria and peer reviewers.
Schedule 3 to Annex I--Access to Justice
This Schedule 3 generally describes the key elements of an Access
to Justice Project (the ``Justice Project'') that the Parties intend to
implement. Additional details regarding the implementation of the
Access to Justice Project will be included in the Implementation Plan
and in relevant Supplemental Agreements.
1. Background
A major obstacle to Benin's economic growth is the inadequate
physical and institutional infrastructure of the judicial system. The
judicial system and courthouses serving Benin at independence in 1960
are largely the same system and courthouses that serves Benin now.
Archaic laws, few and insufficiently trained judges, insufficient
administrative capacity, and poor access to legal information combine
with few and old courthouses to deny access to justice to many
Beninese. If individuals or businesses dare to proceed into the maze of
the courts, expense, delays (it takes an average of 570 days to enforce
a contract), and the risk of corruption mean that justice is a highly
uncertain result. Business decisions are skewed, and business expansion
is stifled by the reality of slow, costly and uncertain justice.
Throughout West Africa alternative dispute resolution (``ADR'') is
becoming an increasingly viable means to resolve commercial disputes.
As part of Benin's obligations under OHADA, the Centre d'Arbitrage,
Mediation et Conciliation (``CAMeC'') has been formed within the
Chamber of Commerce and Industry in Cotonou. It has not yet begun to
conduct arbitrations or other ADR activities.
The Chamber of Commerce (the ``Chamber'') has initiated and is
managing a successful program in business registration that this
Justice Project will build upon. Rather than a lengthy corporate
registration proceeding through many offices in many agencies, the
Chamber has developed a service that has already reduced the average
time for the registration of companies from over three months to ten
days by centrally managing the process of corporate registrations. The
Business Registration Center is based in Cotonou with small satellite
offices in Porto-Novo, Abomey, and Parakou.
The Government has already begun an extensive process of legal
reform: hiring additional new judges and court personnel, improving
court administration, and building new courthouses. In addition, other
donors have already made commitments to the improvement of Benin's
judicial infrastructure. The Inspection General service provides
supervision for the courts. It assures that courts are all performing
with uniform quality, provides guidance to new judges, and initiates
investigations when improper behavior by court personnel is reported.
MCC's contribution will fit with Benin's ongoing legal reform plans and
complement the work of other donors. A notable failure of the current
judicial system is the lack of access to legal information and the
absence of a central location for legal information--whether it is the
decisions of courts, the laws of Benin, or legal texts, either in paper
or electronic form. Greater knowledge of the laws and courts of Benin
for large numbers of people will lead to greater certainty in
commercial transactions, reduced demand for courts in minor disputes,
and less fear of the judicial system for more serious disputes.
Informed public awareness of legal and judicial issues is critical to
public confidence in the judicial system. For this reason, the
Government proposed the creation of a Legal Information Center.
This Project also aims at assisting litigants in Benin currently
suffering from case backlogs and litigants or potential litigants who
live great distances from current courts. New courts will be built, to
an established modern design, beginning late in year two of the Justice
Project. Training of current judges and other court personnel will
begin in year one of the Justice Project. A financing facility to
support legal aid to assist poorer litigants will also be established.
The construction of the courts will be linked to growth and training of
new judges; as noted Section 6 below, the Government of Benin will hire
new judges and other personnel on an appropriate schedule to staff the
new courts and to allow for training prior to their assignment to the
courts. Finally, the Justice Project will increase the likelihood of
success of both the Land Project and Financial Services Project by
increasing speed and likelihood of contract enforcement.
2. Summary of Project Activities
The overall objective of the Justice Project is to improve the
investment climate by increasing the confidence in the judicial system
to enforce contracts. In response to the conditions noted above, this
Project has three main components:
Support the expansion of the Center of Arbitration,
Mediation and Conciliation at the Chamber of Commerce;
Improvement of the Registration Center (Guichet Unique);
and
Improved services of courts including capacity building
and training for judges, court personnel, legal aid, and Inspection
General service; creation of a legal information center; development of
a public awareness campaign; and the construction of new courthouses.
The following summarizes the contemplated Justice Project
Activities. The M&E Plan (described in Annex III) will set forth
anticipated results and, where appropriate, regular benchmarks that may
be used to monitor implementation progress. Performance against the
benchmarks and the overall impact of the Justice Project will be
assessed and reported at the intervals to be specified in the M&E Plan
or as otherwise agreed by the Parties from time to time. The Parties
expect that additional benchmarks will be identified during the
implementation of the Justice Project. Estimated amounts of MCC Funding
for each Project Activity for the Justice Project are identified in
Annex II of this Compact. Conditions precedent to each Project Activity
and sequencing of the Project Activities shall be set forth in the
Disbursement Agreement, other relevant
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Supplemental Agreements, or component of the Implementation Plan.
(a) Project Activity: Expansion of the Arbitration Center
(``Arbitration Center Activity'').
Increased access to ADR will reduce the burden on courts, reduce
the cost of dispute resolution, and allow for faster resolution of
commercial disputes. Companies and individuals engaging in commercial
activities are the expected beneficiaries for this Project Activity.
Increased economic activity and a growing number of entrants to
commercial activity are expected results, supporting the Program
Objective. This Project Activity will facilitate a plan to fully launch
operations of CAMeC involves capacity building, public outreach, and
budgetary support (e.g., staff costs).
MCC Funding will support the following activities:
(i) Training for arbitrators and CAMeC staff in arbitration
procedures and ADR and arbitration management.
(ii) Development of institutional management and operational
procedures.
(iii) Promotion of public outreach, including production of
training and publicity materials and maintaining of Web site with
relevant documents and information.
(iv) Support for staff salaries at the CAMeC; provided, however,
MCC Funding will gradually phase out over the Compact Term as an
incentive for CAMeC to promote a commercially viable pricing structure
for provision of and access to services of the Arbitration Center and
to ensure sustainability of the activity after the Compact Term.
(v) Acquisition of new equipment and some additional rented space
for CAMeC as increased caseload warrants.
(b) Project Activity: Business Registration Center (Guichet Unique)
(``Business Registration Activity'').
The Business Registration Project Activity is intended to greatly
reduce the steps required to register a company. This Project Activity
will track the reduction of registration time year by year, from the
current average of twenty days. MCC support will strengthen current
operations in Cotonou, Porto-Novo, Abomey and Parakou and support
opening new satellite offices in Natitingou and Lokossa. Investment in
existing and new offices will further speed, simplify and reduce the
cost of corporate registration, and make this service available to more
enterprises. It is expected that these improvements will encourage the
formation of companies, boost employment in the formal sector and
increase incomes.
MCC Funding will support the following activities:
(i) Evaluation of the performance of existing offices to identify
necessary improvements and assist with design of new offices and
services of the Business Registration Center.
(ii) Introduction of new services such as a system for registration
under the Investment Code.
(iii) Training of new staff in regulations, rules and procedures
related to formation of companies.
(iv) Development and maintenance of an electronic database of
companies in Benin.
(v) Provision of computers and other office equipment for new
offices of the Business Registration Center.
(vi) Conduct of public outreach to business community including
seminars and publicity or informational materials.
(c) Project Activity: Improved Services of Courts (``Courts
Activity'').
The Courts Activity will allow Benin to move forward its ten year
plan for improvement of the judiciary by providing basic training,
court management, guidance, and physical and institutional
infrastructure.
MCC Funding will support the following activities:
(i) Training of judges and court personnel.
(1) Prior to commencing of activities described in paragraphs (2)
through (5) below, design of a comprehensive capacity building strategy
for judges and court personnel;
(2) Training of both new and current judges in substantive and
procedural matters, particularly in commercial issues as the laws of
Benin are modernized and harmonized, under the OHADA process, with the
rest of francophone West Africa;
(3) Training of court personnel, including clerks and court
officials, in modern case management procedures, use of technology, and
other substantive and procedural matters as the courts modernize;
(4) Continuing training of current judges and court staff as well
as training of new hires, particularly on commercial issues. This
activity will build on training programs already underway supported by
various European aid agencies; and
(5) Development of comprehensive training materials and judicial
bench-books and other documents to support improved functioning of the
courts and further development of local training capacity, to support
efforts to institutionalize the capacity building process.
(ii) Inspection General Service. To improve the efficiency of the
Inspection General Service and its ability to serve the increased
number of courts contemplated by Benin's legal reform plan, the work of
other donors and this Project:
(1) Training of new and existing personnel of the Inspection
General Service to improve their ability to supervise the courts,
advise court staff, and identify unethical behavior; and
(2) Development of training materials to build Inspection General
Service capacity.
(iii) Legal Information Center. The proposed Legal Information
Center to be located in Cotonou will serve not just as law library, but
as a center for the disseminating of court decisions, laws, and other
legal information. The Legal Information Center will be open to the
public, both physically and electronically. The Legal Information
Center will: Serve as a central location for case records; convert case
records and other legal documents to electronic media; provide public
access to laws and other legal documents; serve as a resource and
training center for judges, court personnel, and government officials.
MCC Funding will support the following activities:
(1) Following the completion of the Category B environmental and
social assessment framework specified in Section 2(c)(v)(3) and an
individual EMP or environmental assessment (including an EMP) as
determined according to the framework and subject to adoption of the
Procedural Code and other Codes specified in Section 2(c)(v)(1),
construction and equipment of a new Legal Information Center. Hazardous
and toxic materials will not be permitted to be used or result as by-
products from construction and operation of the buildings;
(2) Development of an electronic database of legal information and
documents; and
(3) Conduct of a public awareness campaign to demystify law and
legal proceedings to the broader public. This will involve ``open
days'' at the courts and the Legal Information Center, publication of
legal information for non-lawyers, information dissemination via the
media, and other outreach efforts such as coordination with the
outreach activities of the CAMeC and Business Registration Center to
introduce consumers and the broader public to the workings of each
institution. Media outreach will also be an important aspect to the
public awareness campaign, along with publication of informational and
legal materials in French and major local languages, and the
development of a web-based
[[Page 12973]]
information system based at the Legal Information Center.
(iv) Legal Aid.
(1) Support of poorer litigants gaining access to legal services by
law professionals (lawyers and others) and to information materials
such as on processes and rights by establishing a fund for this
purpose. Initial funding will be USD$1,000,000. An additional matching
amount of up to USD$1,500,000 will be provided from MCC Funding on a
dollar for dollar basis to match funds provided by non-MCC sources,
such as other bi-lateral or multilateral donors, foundations or
corporations; and
(2) Funding shall be provided to, and services provided by,
existing non-governmental organizations (``NGOs'') active in Benin, or
by a not-for-profit entity established in the future to provide these
services. MCA-Benin shall conduct a competitive selection process to
determine the best value providers of legal aid services eligible for
funding. The selection process shall include an evaluation by, among
others, the Justice Project Manager of proposals by candidate NGO for
use of funds. Final selection of NGOs and awards shall be subject to
MCC approval. Funding shall support selected NGOs implement the
proposed legal aid services.
(v) New Courthouses.
This sub-activity, the capstone to the Justice Project, will
support the creation of new courthouses `` one appellate court in
Abomey, a region that is currently lacking in appellate court capacity,
and eight courts of first instance (Tribunaux de Premier Instance)
(``TPI'') distributed throughout the country. Another key requirement
for this activity will be that a system for case management is
developed as described in Section 2(c)(vi) and that support of legal
aid services is undertaken as described in Section 2(c)(iv), likewise
in keeping with modern best practices, and implemented prior to
construction of the courthouses.
MCC Funding will support the following:
(1) Evaluation of Codes to be adopted. As condition to MCC
Disbursements and prior to commencement of construction, a new Code of
Civil Commercial, Administrative and Social Procedure of Benin
(``Procedural Code'') and such other codes as may be identified by the
time specified in the Disbursement Agreement and agreed by the Parties,
must be passed by the legislature and adopted by the Government. The
Procedural Code, as passed by the legislature must be in keeping with
regional best practices, as determined by independent experts;
(2) Select sites for courthouses. MCA-Benin shall select sites
based on its identification of viable sites. MCA-Benin shall consider
input from civil society and other stakeholders, including any
unsolicited proposals for sites from communities or others. The
criteria for selection of courthouse locations shall be as follows: (i)
Population density in surrounding area; (ii) commercial activity in the
surrounding area; (iii) proximity of proposed court site to underserved
populations and other courts; (iv) links to other Projects, in
particular the Land Project and Financial Services Project and (v)
restrictions on selection of sites that are (A) contaminated with toxic
or hazardous waste, (B) require major service infrastructure
improvements (such as new roads, water supply or treatment,
transmission lines or sewage treatment), or (C) in sensitive locations
as defined in Appendix C of the Environmental Guidelines;
(3) Preparation of a Category B environmental and social
assessment, pursuant to the Environmental Guidelines, for the
courthouses and the Legal Information Center will be required to
provide pertinent guidance in the form of a framework document. This
will allow more rapid and efficient environmental and social assessment
of the courthouses and the Legal Information Center. This document will
be used to screen sites, according to MCC Environmental Guidelines,
focus the content of Environmental Management Plans (``EMPs'') or any
Resettlement Action Plans (``RAPs''), and provide standard contract/bid
clauses for impact mitigation during construction and operation. The
framework document will provide criteria for determining when
individual environmental and social assessments or solely EMPs of the
buildings are needed and will incorporate procedures to address
economic or physical displacement consistent with the World Bank policy
on Involuntary Resettlement in effect as of the date hereof;
(4) Subject to completion and satisfactory results of the
environmental and social assessment framework conducted under paragraph
(1) above and an individual EMP or environmental and social assessment
(including an EMP) for each construction, as determined according to
the framework, construction of courthouses. Construction of four TPI
and one appellate court can commence as early as the end of year two of
compact, assuming code modernization, case management, and training
goals and other conditions precedent have been achieved. Process of
construction of final four courthouses may commence one year after
construction starts for first set of TPI, assuming continued
satisfaction of conditions precedent and other criteria such as case
management and training. Hazardous and toxic materials will not be
permitted to be used or result as by-products from construction and
operation of the buildings; and
(5) Following the construction undertaken in accordance with
paragraph (2) above, equip newly constructed courthouses. This includes
computers, furniture, and other necessary items and systems.
(vi) Case Management. To the facilitate increasing the speed and
efficiency of the processing cases through judicial system, MCC Funding
will support the following:
(1) Conduct of a survey of current case management system and
develop recommendations for improvement in case management and will
include recommendations regarding administrative risks including time
limits to process cases, procedures for assignment of judges to cases,
and technology to manage case flow though court system; and
(2) Development by the courts of improved regulations and more
effective administrative processes to manage cases and implementation
of those regulations and processes. Implementation will include
incorporation of recommendations developed in paragraph (1) above which
MCA-Benin and MCC deem advisable.
3. Beneficiaries
The intended beneficiaries of the Justice Project will be ordinary
citizens as well as MSMEs and other commercial actors. Currently only
8% of commercial cases received in a given year are treated by the
system. This case backlog diminishes confidence in the system and
increases the potential for corruption. Benin was recently rated by the
World Bank's ``Doing Business in 2006'' as among the most difficult
countries in the world to do business. By improving the capacity of the
court system to resolve claims, the Project will benefit all users
hindered by delays and backlogs. It will also support the benefits of
the Land Project and Financial Services Project by increasing the
likelihood of timely and appropriate enforcement of contracts and
resolution of other disputes. The Legal Information Center is expected
to reach a large class of beneficiaries including judges, government
officials, business
[[Page 12974]]
representatives, and the general public. Poorer litigants will benefit
from the legal aid services.
4. Donor Coordination; Role of Private Sector and Civil Society
(a) Donors. The Justice Project will benefit significantly from
lessons learned by the European Union (``EU'') regarding the
construction and equipping of new courthouses. A current EU project is
underway to refurbish several existing courthouses and build four new
TPIs and appellate court. Assuming the Beninese and others are
satisfied with the design of the courts being built by the EU, the
Justice Project would follow the same design. Several donors have been
engaged with projects related to Access to Justice. Bi-lateral
assistance from France and Belgium has supported re-drafting of codes
for which MCC will require enactment as conditions precedent to court
construction. MCC will coordinate with in particular AFD in connection
with the adoption and development of the Procedural Code as the AFD has
supported the code redrafting efforts. Their involvement provides some
comfort that the codes are modern and harmonized, where appropriate,
with codes of neighboring countries. Neither the World Bank nor the
African Development Bank have justice sector projects in Benin but both
are interested in promoting passage of modernized codes as it will
increase the likelihood and degree of success of other World Bank
programs. It is anticipated that some of the NGOs supported by the
legal aid services activity described in Section 2(c)(iv) may funded as
well by other donors and it is also possible that some of the matching
funds contemplated with respect to that activity could be provided by
other bilateral or multilateral donors (as well as private sector or
other sources).
(b) Private Sector. It is anticipated that members of the private
bar and business sector will actively participate in the public
outreach and other activities of the Business Registration Center,
Legal Information Center, and the CAMeC.
(c) Civil Society. Civil society and other stakeholders, including
communities or municipalities, will have the opportunity to participate
in courthouse selection process or submit proposals for sites as
described in Section 2(c)(v)(2).
5. U.S. Agency for International Development
USAID supports a Women's Legal Rights Initiative in Benin that has
offered valuable assistance in the development of this Project.
6. Sustainability
To sustain the Justice Project there will need to be sufficient
demand for Alternative Dispute Resolution in Benin and satisfaction by
the Government of key conditions precedent related to of court
construction, and court design and maintenance. To mitigate the risk of
insufficient ADR-related demand, market pricing mechanisms will be
built into the CAMeC support. This will promote development of a fee-
supported ADR system. Initiation of court construction process will be
set at the end of year two of the Compact Term, which will give the
Government time to make necessary required Project-related legal
reforms. Construction and maintenance will also benefit, respectively,
from EU experience in court construction, and be sustained by the
increased annual budget of the Ministry of Justice. The Government will
ensure the sustainability of the Legal Information Center by ensuring
support for adequate staffing of Legal Information Center during and
following the Compact Term.
The key to ensuring environmental and social sustainability of the
Project is ongoing public consultation. By the time specified in the
Disbursement Agreement, MCA-Benin shall engage the Environment and
Social Assessment Director, subject to MCC approval, as described in
Section 3(d)(iii)(3) of Annex I.
Environmental and social analyses of the courthouses and the Legal
Information Center will be conducted as part of the technical survey
and design to determine the environmental impacts and existence of
economic and physical displacement. In addition to the analyses, EMPs
satisfactory to MCC will be developed, implemented and monitored during
project implementation.
Disbursement of MCC Funding will be contingent upon issuance of
environmental licenses, as needed, or any other required permits and
subject to the environmental and social assessment review described as
requirements under Sections 2(c)(v)(3) and (4).
7. Policy; Legal Reform; and Procedural Changes
The Parties have identified the following policy, legal and
regulatory reforms and actions that the Government shall pursue in
support, and to reach the full benefits, of the Justice Project, the
satisfactory implementation of which will be conditions precedent to
certain MCC Disbursements as provided in the Disbursement Agreement:
(a) Passage of the new Procedural Code and other codes as
identified in accordance with Section 2(c)(v)(1). The new Procedural
Code should include adequate provisions pertaining to the speed with
which court cases are heard, and the means by which cases proceed
through the courts;
(b) Development and implementation of enhanced case management
techniques and implementation of the case management system developed
based on recommendations formed pursuant to Section 2(c)(vi), including
modernized methods of case assignment and case tracking, even though
not required as part of the Procedural Code;
(c) Development of CAMeC activities by measures, acceptable to MCC,
to facilitate the removal of old cases from the TPI to CACeM;
(d) Undertake, as necessary, steps to support the enforceability of
arbitral awards;
(e) As necessary and if evaluation of Business Registration Center
indicates warranted, undertake improvements in regulations, policies or
procedures related to business registration and company formation;
(f) Hire and train new judges and court personnel sufficient to
staff new courts; and
(g) Commitment by the Government of budgetary resources to support
salaries for judges and other court personnel and for the maintenance
of those courts constructed under this Project.
8. Proposals
Objective selection criteria for the selection of NGOs to be
supported by the legal aid sub-activity of the Courts Activity shall be
as specified in Section 2(c)(iv)(2). Objective selection criteria and
procedures for determining the locations (towns) of the courthouses to
be constructed under the Courts Activity shall be as specified in
Section 2(c)(v)(2).
Schedule 4 to Annex I--Access to Markets Project
This Schedule 4 generally describes and summarizes the key elements
of an Access to Markets Project that the Parties intend to implement in
furtherance of the Markets Objective (the ``Markets Project'').
Additional details regarding the implementation of the Access to
Markets Project will be included in the Implementation Plan and in
relevant Supplemental Agreements.
[[Page 12975]]
1. Background
Benin's economy is dependent on cotton production, subsistence
agriculture and an increasingly uncompetitive Port of Cotonou (the
``Port''). Key impediments to sustainable economic growth are its poor
investment climate and lack of dynamic private sector activity. Benin
has long been a strategic trading center and a keystone in the trade
corridor that links the landlocked countries of the West African
Economic and Monetary Union (``WAEMU'') with Nigeria, Europe, and the
Americas. Trade and transport have traditionally made up a large part
of the nation's economy, and limitations in Benin's transportation
network have increased costs for raw materials to the country and the
region. The bottleneck at the Port has impeded access to external
markets by agricultural and fish/shrimp producers and processors.
Improved Port facilities will lower production and marketing costs and
encourage greater agricultural production as well as increased trade
between Benin and other countries.
This Project is designed to promote access to markets by
improvements to the Port of Cotonou, including a fish inspection
facility. This Project aims to improve Port performance and security,
expand capacity, and reduce costs. A more efficient Port will
contribute to importer and exporter value-added through reducing
transportation costs and improving product quality. Moreover, because
Benin's road transport industry is relatively competitive, it is likely
that the anticipated reduction in shipping costs will be passed on to
wholesalers and traders, and ultimately be reflected in consumer
prices. Finally, both the Project Activities and the policy or other
actions the Government will undertake as set forth in Section 6 of this
Schedule 4 are designed to reduce the potential for corruption at the
Port.
Expanding the Port to meet Benin's long-term developmental needs
will require a significant number of large investments. Due to the
complexity and scope of the Port expansion plan, not only will it take
several years to design, build and construct the facilities to meet a
growing future demand but it will also be necessary to accommodate
current demands by upgrading existing Port facilities.
2. Summary of Projects and Activities in Project and Expected Results
The objective of the Markets Project is to improve the Port of
Cotonou through increasing the efficiency at the Port and volume of
goods flowing through the Port and reducing vehicle operating costs.
The Markets Project includes the following Project Activities:
Studies and Port Institutional Activity: This Project
Activity will include key feasibility studies, environmental
assessments and revision of master plan for the Port, as well as the
computerization and streamlining of customs clearance procedures for
merchandise, technical assistance and training in information systems
and Port management, and improvements to legal, fiscal and
institutional frameworks that govern the sub-activities.
Port Security and Landside Improvements: This Project
Activity will address the safety and security aspects of the Port for
compliance with international safety requirements (conforming to
International Ship and Port Security Code (``ISPS'') standards). The
expansion and reconfiguration plan for the Port under this Project
Activity includes: major improvements to the physical infrastructure
including the access gates, access road, vehicle access facilities,
storage areas, and the construction of a compulsory inspection facility
for fish and seafood products with associated training and technical
assistance.
Waterside Improvements: This Project Activity will support
the construction of a new South wharf to accommodate additional
containerized merchant marine vessels and a dry bulk conveyor system;
environmental management improvements; and, an environmentally
appropriate solution to address sedimentation of the Port's entrance.
The M&E Plan (described in Annex III) will set forth anticipated
results and, where appropriate, regular benchmarks that may be used to
monitor implementation progress. Performance against these benchmarks
and the overall impact of the Markets Project will be assessed and
reported at the intervals to be specified in the M&E Plan or as
otherwise agreed by the Parties from time to time. The Parties expect
that additional indicators will be identified during the implementation
of the Markets Project. The expected results from, and the key
benchmarks to measure progress on the Project, Project Activities and
sub-activities undertaken or funded under the Markets Project are set
forth in Annex III.
Estimated amount of MCC Funding for the Project Activity for this
Markets Project is identified in Annex II of this Compact. Conditions
precedent to the Project Activities and sequencing of the Project
Activities shall be set forth in the Disbursement Agreement or other
relevant Supplemental Agreements or component of the Implementation
Plan.
The following summarizes the Markets Project:
The Project will address institutional, landside and waterside
improvements necessary to meet the unmet demand and address resulting
inefficiencies. Because of the complexity and timing of the sub-
activities, the environmental and social assessment requirements will
be implemented in a phased manner.
To support the expansion and improvement of the Port, MCC Funding
will be used for the following activities:
(a) Project Activity: Feasibility Studies and Assessments
(``Studies Activity'').
(i) Conduct of initial technical studies (engineering pre-
feasibility, environmental and economic) (``Initial Technical
Studies'') to evaluate in further detail the costs, engineering and
environmental aspects of the key waterside components of the Markets
Project. These Initial Technical Studies will:
(1) Objectively evaluate alternative schemes that address
sedimentation of the harbor access, including but not limited, to the
use of other studies and proposals related to erosion control and
environmental impacts;
(2) Evaluate the dredging for the new South wharf;
(3) Perform any additional sampling and testing of sediments
related to the wharf or other areas to be dredged as part of the harbor
access;
(4) Determine needs as well as options for disposal of dredged
material;
(5) Evaluate the engineering to the pre-feasibility level; and
(6) Provide expanded information on costs and benefits.
Based on the recommendations of the Initial Technical Studies, the
Government shall select, subject to MCC approval, its preferred option
that will both reduce sedimentation of the Port access channel and not
adversely impact coastal erosion and also select, subject to MCC
approval, disposal of dredged material and other key waterside
component options.
(ii) Following the satisfactory completion of the Initial Technical
Studies, conduct of detailed engineering and economic feasibility
studies of the entire Markets Project, including studies to ensure
appropriate scheduling and budgeting have been established. These
feasibility studies shall include, but not be limited to, studies
regarding:
(1) Port container scanning system; and
(2) A dry port facility at Tori.
(iii) Following the satisfactory completion of the Initial
Technical
[[Page 12976]]
Studies, conduct of Environmental and Social Impact Assessments
(``ESIAs'') for landside improvements described in Section 2(c)(ii),
fish/seafood inspection and handling facility services described in
Section 2(c)(iii), and waterside improvements described in Section
2(d). The ESIAs will address landside and waterside in the following
manner:
(1) The ESIA for Port landside rehabilitation/ restructuring shall
incorporate an Environmental Management Plan/System (based on an audit
of existing operations as well as the assessment of the proposed
activities), an overall Environmental Management Plan, language for bid
solicitations and construction contracts to implement the EMP, and, if
needed, a Resettlement Action Plan (consistent with World Bank Policy
on Involuntary Resettlement), all of which shall be subject to MCC
approval. Port Autonome de Cotonou (``PAC'') shall adopt the EMP/EMS,
implement the HIV/AIDS awareness program and implement any RAP, prior
to initiation of construction under the landside improvements activity
described in Section 2(c)(ii).
(2) The ESIA for waterside improvements will include an EMP as well
as language for bid solicitations and construction contracts to
implement the EMP, all of which shall be subject to MCC approval. Such
language must cover capital and maintenance dredging and dredged
material disposal as well as construction work. PAC shall adopt the EMP
prior to initiation of any construction. The ESIA for the waterside may
be combined with the ESIA for the landside, if timing of construction
activity permits.
(iv) Following the satisfactory completion of the Initial Technical
Studies and feasibility studies work to be conducted under Section
2(a)(ii), development of a revised master plan for the Port that
consolidates the expected improvements, operational environment and
land use for long term planning purposes which master plan shall be
completed in conjunction with the feasibility studies work to be
conducted under Section 2(a)(ii) and which master plan may be updated
periodically thereafter.
(b) Project Activity: Port Institutional and Systems Improvements
(``Port Institutional Activity'').
(i) Computerization and streamlining of customs clearance
procedures for merchandise including information technology systems,
warehouse computer management system, and transit cargo system;
(ii) Improvements in the legal, fiscal and institutional frameworks
that govern Port activities including restructuring concession
agreements with stevedoring companies, conducting independent financial
audits and project reviews, and implementing with additional
consultants the existing and new Port rules and regulations based upon
consultant recommendations for port best practices. PAC and the
Government will cooperate with the MCA-Benin consultant(s) including
providing unlimited access to the PAC Director General, Customs
Department and other PAC related entities for development,
recommendation and evaluation of potential improvements in PAC and
Customs Department policies, procedures, rules and regulation; and
(iii) Training for tug boat and ship pilots for night docking of
petroleum cargo ships.
(c) Project Activity: Port Security and Landside Improvements (the
``Port Security and Landside Improvements Activity'').
Subject to the satisfactory results of the Studies Activity
assessments and studies described in Section 2(a), a plan for
renegotiation of PAC concessions and reallocation of berths and land
usage satisfactory to MCC, implementation of any RAP, adoption of the
EMP and implementation of the HIV/AIDS awareness plan, MCC Funding will
support the following capital improvements and other goods and services
at the Port:
(i) Port security. Acquisition and installation of, and training
associated with, an integrated security system for compliance with ISPS
standards, including oceanographic monitoring systems, video
surveillance systems, and radio communications systems.
(ii) Landside Improvements.
(1) Front-end engineering and design for major civil and mechanical
facilities and works, which shall be completed prior to any sub-
activities set forth in this Section 2(c)(ii);
(2) Port road construction and rehabilitation including upgrading
and expanding existing Port roads, illumination, and gate system. Other
works include constructing an east-side gate, rezoning by berth usage,
land and warehousing to achieve efficient operations;
(3) Construction of a dry bulk conveyor system leading to storage/
truck loading bins provided by private sector operators;
(4) North wharf structural improvements including reinforcements to
wharf substructure (as needed) to accommodate rail mounted gantries and
mobile cranes;
(5) Acquisition and implementation of pollution control equipment
necessary to respond to significant discharges of hazardous materials
in the Port and other equipment and activities related to the EMP/EMS;
(6) Installation of fire control and prevention equipment;
(7) Construction of a compulsory inspection base for fish and
seafood products and facilities for efficiently off-loading and
handling product before transport to processing centers, market, or
ships for export; and
(8) Technical assistance and training of appropriate regulatory
agency staff in seafood/fish inspection and safety administration.
(iii) Fish/seafood inspection and handling facility (``BOC'')
services.
(1) Development and adoption of a management plan for the BOC
including required training and technical assistance program targeted
at inspectors, other employees, and user associations;
(2) Adoption of improved design and procedures for BOC including
mechanized off-loading based on required demand study; and
(3) Development and implementation of a user fee system to defray
some operation and maintenance costs of the BOC.
(d) Project Activity: Waterside Improvements (the ``Waterside
Improvements Activity''). Upon completion, satisfactory to MCC, of the
Studies Activity described in Section 2(a) and the execution of PAC
concessions and reallocation of berths and land usage, each with
results satisfactory to MCC and subject to adoption of the EMP and
implementation of the HIV/AIDS awareness plan, MCC Funding will support
the following waterside improvements:
(i) Front-end engineering and design for major civil and mechanical
facilities, works and dredging and dredged material disposal, which
shall be completed prior to any sub-activities set forth in this
Section 2(d).
(ii) New South wharf construction of approximately 595 meters of
berth space for new terminal operations, and mitigating measures
associated with dredging and dredged material disposal, in accordance
with the results of the Initial Technical Studies.
(iii) Sedimentation control scheme that permits reduction of the
sedimentation at the Port entrance and does not adversely impact
coastal erosion, in accordance with the results of the Initial
Technical Studies.
(iv) Acquisition of additional tug boat with necessary pilot
training.
[[Page 12977]]
3. Beneficiaries
The principal beneficiaries of the Markets Project are expected to
be Beninese importers, exporters and consumers, including individuals
and businesses, through improved quality of transportation services and
fish processing facilities following the upgrades to and expansion of
the Port. The intended beneficiaries will be identified more precisely,
and where possible disaggregated by gender, age, location and income
level during the initial phases of the implementation of the Markets
Project.
The principal intended beneficiaries of this Project are
potentially quite broad. As the economy of Benin is driven by foreign
trade and that foreign trade is dependent the Port, both consumers of
imported products and exporters of Beninese products will benefit
directly or indirectly from efficiency gains in Port operations that
translate into lower transportation costs of goods or increased
operating margins for Beninese operators and businesses.
4. Donor Coordination; Private Sector
(a) Donor Coordination. The World Bank has been working with the
Government to expand private management at the Port. The Markets
Project Activities will be coordinated with the study of privatization
options and competitiveness at the Port that the World Bank expects to
complete by December 2006. The Danish and Dutch governments have been
active in supporting analyses of improvements at the Port. The Danish
and other studies were used to assess the sedimentation and erosion
control problems. MCC will coordinate with DANIDA (the Danish aid
agency), the Dutch embassy, the Japanese International Cooperation
Agency, the World Bank, Islamic Development Bank, African Development
Bank, Arab Bank for Economic Development in Africa, OPEC Funds, Saudi
Funds, and the Government to (i) assess and address the erosion and
port sedimentation problems and (ii) ensure all sub-activities support
Port improvements to maximize the benefits available of donor
activities.
(b) Private Sector. In order to achieve the expected benefits from
MCC Funding, several improvements at the Port are dependent on private
sector complementary investments and expanded private sector management
services associated with the operations of the Port. MCA-Benin will
work with PAC to coordinate with existing private sector operators at
the Port, and MCA-Benin and PAC will establish the appropriate private
sector participation at each stage of the sub-activities including
renegotiation of existing concession agreements to provide for the
appropriate investments by the private operators in the Port.
5. U.S. Agency for International Development; U.S. Government Agencies
MCC will seek to coordinate with USAID during the Compact Term, as
appropriate, though there is not currently any USAID activity in this
area. In addition MCC will seek to coordinate with the U.S. Department
of Homeland Security and U.S. Coast Guard on the Markets Project.
6. Sustainability
(a) Improvements to the cargo handling operations and the physical
layout of the Port will improve the financial performance of the Port.
The introduction of private sector participation in operations is also
critical to the sustainability of the Markets Project. Part of the
restructuring of the Port needs to include revenue from the
concessions, which are now paid to a different Government agency as a
conduit to the state owned stevedoring company, in order to support
port services and to increase transparency and Port efficiency.
(b) Investments by private sector tenants and other users of the
Port will provide complementary improvements that will contribute to
the long-term sustainability of the Port's ability to meet market
demand.
(c) The Port's financial condition has suffered from declining
revenues and from increasing labor costs. In addition, its revenues
have been declining recently due to restrictions on Nigerian import
policies.
(d) A rationalized user fee schedule for the BOC will be developed
as part of a required demand study to help defray some of the
inspection costs associated with its operation and maintenance.
(e) Essential to the environmental sustainability of the Markets
Project is the conduct of the Initial Technical Studies, as well as the
landside ESIA, the waterside ESIA and the associated EMPs, each as
described in Section 2(a).
(f) The key to ensuring environmental and social sustainability of
the Project is ongoing public consultation. By the time specified in
the Disbursement Agreement, MCA-Benin shall engage the Environment and
Social Assessment Director (``ESI Officer''), subject to MCC approval,
as described in Section 3(d)(iii)(3) Annex I.
7. Policy; Legal Reform; and Procedural Changes
The Parties have identified the following policy, legal and
regulatory reforms and actions that the Government shall pursue in
support, and to reach the full benefits, of the Access to Markets, the
satisfactory implementation of which will be conditions precedent to
certain MCC Disbursements as provided in the Disbursement Agreement:
(a) Renegotiation of existing lease and concession agreements and
port leases on terms acceptable to MCC that provide for capital
investment based upon the market demand for Port services; in all
cases, for any concession within the port right-of-way the PAC shall be
the grantor and the beneficiary of the income resulting from the
concession or lease. To the extent not covered in the renegotiation of
the existing concession agreements, completion of new concession
agreements for terminal operations of the new South wharf berths shall
include private capital investments acceptable to MCC based upon the
demand for Port services;
(b) The Government and PAC shall agree to enforce maritime-related
international and regional conventions and agreements to which they are
signatory, including the MARPOL International Convention for the
Prevention of Pollution from Ships and the UN Convention on the Law of
the Sea, and shall also agree to internationally accepted practices,
such as the London Dumping Convention and Protocol (to which Benin is
not signatory) for the disposal of dredged material, including
contaminated material, and the control of pollution in the harbor, its
entrance and the landside Port operations;
(c) By the time specified in the Disbursement Agreement, PAC shall
create and fill the permanent staff position of PAC Environmental
Manager, whose qualifications, selection and replacement shall be
acceptable to MCC. The PAC Environmental Manager shall serve as the PAC
representative concerning the environmental aspects of the Project
Activities and other environmental management activities of PAC. The
Government shall ensure that the PAC provides appropriate resources to
the PAC Environmental Manager as identified by PAC and as recommended
by MCA-Benin port advisor consultant as provided for in Section
2(b)(ii) above and the ESI Officer.
(d) The Government and PAC shall provide a permanent office for the
MCA-Benin port advisor adjacent to the office
[[Page 12978]]
of the Director General of the PAC. The Government and PAC Board of
Directors shall facilitate and endorse the assistance by the MCA-Benin
port advisor to the Director General of the PAC in the implementation
of private management activities and operational improvements
associated with the Markets Project;
(e) Execution of private management or concession agreements
satisfactory to MCC for the dry bulk conveyor, and the BOC, and other
new facilities to be constructed at the Port; Satisfactory progress on
meeting ISPS certification, in particular implementing recommendations
as specified by MCC in the Disbursement Agreement or otherwise;
(g) Development and ongoing satisfactory implementation of a
program to accomplish financial control and other recommendations as
may be specified by the independent financial auditor contemplated by
the Markets Project;
(h) Commitment shall be made by the Government to fund, or
commitments shall be made by another funding source satisfactory to
MCC, for amounts in excess of budgeted amount in the financial plan
including amounts that may be necessary for environmental mitigation
and remediation. All Beninese environmental and other permits
(including any necessary or advisable environmental certificates under
Benin law) shall be issued, valid and in full effect;
(i) Support the redesign of the BOC to ensure that specifications
address likely traffic and activity requirements, including equipment
for mechanical unloading of seafood cargo, and that a demand study is
completed as specified by MCC;
(j) Support the design, approval and implementation of a
rationalized user fee system for the BOC;
(k) Support the design, approval, and implementation of a capacity
building training and technical assistance plan for cold chain, product
quality assurance;
(l) Satisfactory results from customs and warehouse systems
implementation reflected in reduced in Port cargo processing time;
(m) The Government agrees not to institute a container scanning
system at the Port (1) until after a study of the effectiveness of such
a scanning system has been completed pursuant to Section 2(a)(i) or (2)
in the event that MCC determines that the Government proposed scanning
system would be detrimental to the effectiveness of MCC investments at
the Port;
(n) The Government agrees not to institute or continue a tax, levy,
duty, or other charge or any delivery procedure or requirement at the
Port or elsewhere since commencement of MCC review on August 1, 2005 of
the port proposal which may affect the competitiveness of the Port
without the prior consent of MCC; and
(o) Completion of the World Bank privatization and competitiveness
study by the time specified in the Disbursement Agreement, with
commitments by the PAC and other Government Affiliates to implement
recommendations as requested by MCC and satisfactory implementation of
such recommendations.
Annex II--Summary of Multi-Year Financial Plan
This Annex II to this Compact (the ``Financial Plan Annex'')
summarizes the Multi-Year Financial Plan for the Program. Each
capitalized term in this Financial Plan Annex shall have the same
meaning given such term elsewhere in this Compact.
1. General
A multi-year financial plan summary (``Multi-Year Financial Plan
Summary'') is attached hereto as Exhibit A. By such time as specified
in the Disbursement Agreement, MCA-Benin will adopt, subject to MCC
approval, a Multi-Year Financial Plan that includes, in addition to the
multi-year summary of anticipated estimated MCC Funding and the
Government's contribution of funds and resources, an estimated draw-
down rate for the first year of the Compact Term based on the
achievement of performance milestones, as appropriate, and the
satisfaction or waiver of conditions precedent. Each year, at least 30
days prior to the anniversary of Entry into Force, the Parties shall
mutually agree in writing to a Detailed Financial Plan for the upcoming
year of the Program, which shall include a more detailed plan for such
year, taking into account the status of the Program at such time and
making any necessary adjustments to the Multi-Year Financial Plan.
2. Implementation and Oversight
The Multi-Year Financial Plan and each Detailed Financial Plan
shall be implemented by MCA-Benin, consistent with the approval and
oversight rights of MCC and the Government as provided in this Compact,
the Governing Documents and the Disbursement Agreement.\b\
---------------------------------------------------------------------------
\b\ The role of civil society in the implementation of this
Compact (including through participants on the Stakeholders'
Committee and Steering Committee), the responsibilities of the
Government and MCC in achieving the Compact Goal and Objectives, and
the process for the identification of beneficiaries are addressed
elsewhere in this Compact and therefore are not repeated here.
---------------------------------------------------------------------------
3. Estimated Contributions of the Parties
The Multi-Year Financial Plan Summary identifies the estimated
annual contribution of MCC Funding for Program administration,
monitoring and evaluation, and each Project. The Government's
contribution of resources to Program administration, monitoring and
evaluation, and each Project shall consist of (a) ``in-kind''
contributions in the form of Government Responsibilities and any other
obligations and responsibilities of the Government identified in this
Compact, including contributions identified in the notes to the Multi-
Year Financial Plan Summary, (b) such other contributions or amounts as
identified in notes to the Multi-Year Financial Plan Summary, and (c)
such other contributions or amounts as may be identified in relevant
Supplemental Agreements between the Parties or as may otherwise be
agreed by the Parties; provided, in no event shall the Government's
contribution of resources be less than the amount, level, type and
quality of resources required to effectively carry out the Government
Responsibilities or any other responsibilities or obligations of the
Government under or in furtherance of this Compact.
4. Modifications
The Parties recognize that the anticipated distribution of MCC
Funding between and among the various Program activities and Project
and Project Activities will likely require adjustment from time to time
during the Compact Term. In order to preserve flexibility in the
administration of the Program, in addition to Section 4(a)(iv) of Annex
I, the Parties may, upon agreement of the Parties in writing and
without amending this Compact, change the designations and allocations
of funds between Program administration and a Project, between one
Project and another Project, between different activities within a
Project, or between a Project identified as of the Entry into Force and
a new Project, without amending this Compact; provided, however, that
such reallocation (a) is consistent with the Objectives, (b) does not
cause the amount of MCC Funding to exceed the aggregate amount
specified in Section 2.1(a) of this Compact, and (c) does not cause the
Government's obligations or responsibilities or overall contribution
[[Page 12979]]
of resources to be less than specified in Section 2.2(a) of this
Compact, this Annex II or elsewhere in this Compact.
5. Conditions Precedent; Sequencing
MCC Funding will be disbursed in tranches. The obligation of MCC to
approve MCC Disbursements and Material Re-Disbursements for the Program
and each Project is subject to satisfactory progress in achieving the
Objectives and on the fulfillment or waiver of any conditions precedent
specified in the Disbursement Agreement for the relevant Program
activity or Project or Project Activity. The sequencing of Project
Activities or sub-activities and other aspects of how the Parties
intend the Projects to be implemented will be set forth in the
Implementation Plan, including Work Plans for the applicable Project,
and MCC Disbursements and Re-Disbursements will be disbursed consistent
with that sequencing.
Exhibit A.--Multi-Year Financial Plan Summary
[In thousands]
----------------------------------------------------------------------------------------------------------------
Project Year 1 Year 2 Year 3 Year 4 Year 5 Total
----------------------------------------------------------------------------------------------------------------
1. Access to Land:
(a) Policy Activity........... 520 260 520 0 0 1,300
(b) Registration Activity..... 3,310 6,550 4,605 4,375 4,320 23,160
(c) Services and Information 510 3,350 3,205 2,775 620 10,460
Activity \1\.................
(d) IEC Activity.............. 100 150 100 100 50 500
(e) Support Strategy Activity. 120 120 120 120 120 600
Sub-Total................. 4,560 10,430 8,550 7,370 5,110 36,020
----------------------------------------------------------------------------------------------------------------
2. Access to Financial Services:
----------------------------------------------------------------------------------------------------------------
(a) Capacity Building Activity 1,770 3,570 3,870 3,570 270 13,050
(b) Financial Enabling 1,380 1,850 1,540 1,140 690 6,600
Environment Activity.........
Sub-Total................. 3,150 5,420 5,410 4,710 960 19,650
----------------------------------------------------------------------------------------------------------------
3. Access to Justice Activity:
(a) Arbitration Center (CAMeC) 400 160 140 180 0 880
(b) Business Registration 470 830 330 200 0 1,830
Activity.....................
(c) Courts Activity \2\ \3\... 2,960 6,860 8,590 6,590 6,560 31,560
Sub-Total................. 3,830 7,850 9,060 6,970 6,560 34,270
----------------------------------------------------------------------------------------------------------------
4. Access to Markets:
(a) Studies Activity.......... 5,993 2,101 0 0 0 8,094
(b) Port Institutional 3,251 4,876 1,196 980 1,016 11,319
Activity.....................
(c) Port Security and Landside 200 23,154 42,158 8,151 200 73,863
Improvements Activity \4\....
(d) Waterside Improvements 0 0 22,939 53,232 0 76,171
Activity \5\.................
Sub-Total................. 9,444 30,131 66,293 62,363 1,216 169,447
----------------------------------------------------------------------------------------------------------------
Monitoring and Evaluation......... 3,190 1,690 1,240 1,240 1,420 8,780
Sub-Total................. 3,190 1,690 1,240 1,240 1,420 8,780
----------------------------------------------------------------------------------------------------------------
Program Administration and
Control:
(a) Program Administration \6\ 3,395 2,795 2,933 2,919 3,015 15,057
(b) Fiscal and Procurement 3,398,688 3,398,688 3,398,688 3,398,688 3,398,688 16,993,440
Agent........................
(c) Audits.................... 1,416,120 1,416,120 1,416,120 1,416,120 1,416,120 7,080,600
-----------------------------------------------------------------------------
Sub-Total \7\............. 8,209,808 7,609,808 7,747,808 7,733,808 7,829,808 39,131,040
-----------------------------------------------------------------------------
Total Estimated MCC 32,383,808 63,130,808 98,300,808 90,386,808 23,095,808 307,298,040
Contribution \8\.........
----------------------------------------------------------------------------------------------------------------
\1\ MCC Disbursements in connection with this Activity shall be conditioned upon, among others, the completion,
satisfactory to MCC, of the relevant studies in Policy Activity and incorporation of the recommendations into
implementation plans as appropriate.
\2\ After the first $1 million for the legal aid services sub-activity described in Section 2(c)(iv) of Schedule
3 to Annex I, any additional MCC Disbursement for this sub-activity shall be conditioned upon the Government
obtaining matching funds to support the legal aid services program described in Section 2(c)(iv) of Schedule 3
of Annex I.
\3\ MCC Disbursements in connection with the new courthouses sub-activity described in Section 2(c)(v) of
Schedule 3 to Annex I, shall be conditioned upon, among others, passage of the Procedural Code and certain
other codes, which codes should contain adequate provisions in areas as may be specified by MCC in the
relevant Supplemental Agreement (including with respect to the Procedural Code, provisions pertaining to the
speed with which court cases are heard, and the means by which cases proceed through the courts).
\4\ MCC Disbursements in connection within the landside improvements sub-activity described in Section 2(c)(ii)
of Schedule 4 of Annex I shall be conditioned upon, among others, the following: (i) Renegotiation of existing
concession and lease agreements on terms acceptable to MCC that provide for capital investment based upon the
demand for Port services, (ii) a contract management program of the dry bulk conveyor system acceptable to
MCC, (iii) the completion of Initial Technical Studies, (iv) a Government commitment of funding, or
commitments obtained from another funding source (satisfactory to MCC) for amounts in excess of budgeted
amount in the Detailed Financial Plan, including amounts that may be necessary for environmental and
mitigation, and (v) subject to results, satisfactory to MCC, of feasibility studies and ESIA that includes an
environmental audit and EMP, (vi) redesign of the fish inspection facility, (vii) completion of a World Bank
privatization and competitiveness study, and (viii) selection of a construction management agent.
[[Page 12980]]
\5\ MCC Disbursement in connection with the waterside improvements sub-activity described in Section 2(d) of
Schedule 4 of Annex I shall be conditioned upon, among others, the following: (i) Satisfactory results of the
Initial Technical Studies, (ii) demonstration, satisfactory to MCC, of improvements in customs and warehouse
systems operations, (iii) implementation of recommendations of the independent financial auditor, (iv)
obtaining environmental permits, (v) a Government commitment of funding, or commitments obtained from another
funding source (satisfactory to MCC) for amounts in excess of budgeted amount in the Detailed Financial Plan,
including amounts that may be necessary for environmental and mitigation, (vi) results, satisfactory to MCC,
of feasibility studies and ESIA that includes an environmental audit and EMP and (vii) the completion of a
long-term management services agreement for the operation of a Port sedimentation facility (or other harbor
dredging program, as appropriate) on terms satisfactory to MCC.
\6\ The total administration budget as a percentage of the Program cost is equal to 5.61%.
\7\ The total implementation budget as a percentage of the Program cost is equal to 14.59%.
\8\ Total Government contribution of 5 billion CFA to be included in the annual national budget (1.25 billion
CFA per year during the first four years of Compact) and to be allocated in a manner agreed upon by the
Parties in writing.
Annex III--Description of the M&E Plan
This Annex III to the Compact (the ``M&E Annex'') generally
describes the components of the Monitoring and Evaluation (M&E) Plan
for the Benin Program, and how progress toward the Compact Goal will be
measured. Each capitalized term in this Annex III shall have the same
meaning given such term elsewhere in this Compact. This Annex
represents the agreement between the Government of Benin and the MCC on
the Goals and Objectives of the MCA program and the timeline for
achieving them.
1. Overview
Prior to disbursement for any Project (other than administrative
expenses), the parties shall formulate an M&E Plan that specifies (a)
how the implementation of the Program and progress toward the Compact
Goal and Objectives will be monitored (the ``Monitoring Component''),
(b) a methodology, process and timeline for the evaluation of planned,
ongoing, or completed Project Activities to determine their impact and
likely sustainability (the ``Evaluation Component''), and (c) other
components of the M&E Plan described below. Information regarding the
Program's performance, including the M&E Plan, and any amendments or
modifications thereto, as well as periodically-generated reports, will
be made publicly available on the MCA-Benin Web site and elsewhere. The
Compact Goal, Objectives and Outcomes of the MCA-Benin Program are
summarized in the following diagram:
[GRAPHIC] [TIFF OMITTED] TN13MR06.005
2. Monitoring Component
To monitor progress toward the achievement of the Compact Goal,
Objectives and Outcomes, the Monitoring Component of the M&E Plan shall
contain the following elements:
(a) Indicators. The M&E Plan shall measure the results of the
Program using quantitative, objective and reliable data
(``Indicators''). Each Indicator will have one or more targets that
quantifies the result and the expected time by which that result will
be achieved (``Target''). The M&E Plan will detail the process for
measuring and reporting on Indicators at several levels. First, the
indicators for the Compact Goal (each, a ``Compact Goal Indicator'')
will measure the results for the overall Program on the intended
beneficiaries (collectively, the ``Beneficiaries'').
Second, the indicators for each Objective (each, an ``Objective
Indicator'') will measure the ultimate
[[Page 12981]]
result for each of the individual Projects. Third, intermediate
indicators (each, an ``Outcome Indicator'') will measure the
intermediate results achieved under each of the Project Activities in
order to provide early measures of progress towards the accomplishment
of the Project Objective. Further, other indicators will be included in
the M&E Plan to measure the direct outputs of the Project Activities
(each, an ``Output Indicator'').
Benin's national household living standards measurement survey
(L'Enqu[eacute]te Modulaire Integr[eacute]e sur les Conditions de Vie
(``EMICoV'') will provide baseline data where identified. MCC Funding
will support the 2006 baseline survey as well as regular follow-up
surveys as described in the M&E Plan (``2006 Baseline Data Survey'').
The Government will also fund a portion of the 2006 baseline survey.
All EMICoV data will be disaggregated by gender, income and age group
where appropriate. MCC Funding in connection with the 2006 Baseline
Data Survey shall support activities such as the following:
Training of field and data entry staff;
Conducting pilot test of survey questionnaire;
Communication and transportation for survey staff;
Supervision and Quality Assurance; and
Data Management.
For all indicators, data collection will be disaggregated by
gender, income level and age, where appropriate and to the extent
practicable. For some indicators baseline data was not available as of
the date of conclusion on the Compact. For such indicators identified
in the tables that follow, the M&E Plan and Disbursement Agreement will
specify requirements for baseline data collection that shall be met
prior to disbursing funds for each Project or Project Activity. Subject
to prior written approval from MCC, MCA-Benin may modify and add
Indicators or refine the Targets of existing Indicators.
(i) Compact Goal Indicators. The M&E Plan shall contain the Compact
Goal Indicators and their definitions, as listed in the table below.
The corresponding Targets to be achieved are in the tables that follow.
Compact Goal Indicators
------------------------------------------------------------------------
Definition of
Purpose Indicator indicator
------------------------------------------------------------------------
Increase household income in Average annual Average revenue
land and finance-targeted areas. household income and consumption
in the land and level per
finance areas. household land/
finance areas
measured through
the national
living standards
measurement
survey (EMICoV).
Increase value added to MSMEs... Profits and wages Additional profits
of MSMEs and wages of
benefiting from MSMEs that are
Access to Finance clients of
capacity building institutions that
activity. are beneficiaries
of the Challenge
Facility.
Increase value added due to port Profits and wages Additional profits
infrastructure improvements. of Port users. and wages of Port
users.
------------------------------------------------------------------------
Compact Goal Targets
--------------------------------------------------------------------------------------------------------------------------------------------------------
Indicators Baseline Year 1 Year 2 Year 3 Year 4 Year 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average household income in the TBD \1\............ ................... .................. .................. .................. Estimated at 7%
land and finance areas. increase in
treated areas
compared to
untreated areas
Profits and wages of MSMEs Zero \2\........... ................... .................. .................. .................. USD$5 million.
benefiting from the Capacity
Building Activity.
Additional annual profits and Zero............... ................... .................. .................. .................. USD$36
wages of Port users. million.\3\
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ EMICoV will provide baseline data to be available starting in August 2006. 2004 GNP per capita is estimated at USD$538.
\2\ Benin will estimate current wages and profits of client enterprises of MFIs in the Demand Study at the end of the third quarter, Year 1 of the
Compact Term.
\3\ Port users include: Ship-owners, firms operating within the port and trucks transporting cargo to and from the Port.
(ii) Objective and Outcome Indicators. The M&E Plan shall contain
the Objective and Outcome Indicators and their definitions, as listed
in the tables below. The corresponding Targets to be achieved are in
the tables following the definitions.
Access to Land Project Indicators
------------------------------------------------------------------------
Definition of
Purpose Indicator indicator
------------------------------------------------------------------------
Objective:
Strengthen property rights Total value of Value of
and increase investment in additional investments made
rural and urban land. investment in to rural land
targeted rural parcels per year;
land parcels. land investment
data will come
from self-
reported data
through EMICoV.
Total value of Value of
additional investments made
investment in to urban land
targeted urban parcels per year;
land parcels. land investment
data will come
from self-
reported data
through EMICoV.
Outcomes:
[[Page 12982]]
Reduced time to obtain new Average time Average time
land title. required to associated with
obtain a new land obtaining land
title. title,
disaggregated by
rural and urban
areas.\1\
Reduced costs to obtain new Average cost Average cost
land title. required to associated with
obtain a new land obtaining land
title. title,
disaggregated by
rural and urban
areas.\1\
Perception of land tenure Percent of Share of
security increased. respondents respondents
perceiving perceiving land
greater land tenure security;
security. as measured
through EMICoV.
Data should be
disaggregated by
inhabitants of
communities
benefiting from
the Registration
Activity and
those that are
not.
Reduction in number of land Number of land Total number of
disputes. disputes brought land disputes
to court. registered at
TPIs, per year.
Number of land Total number of
disputes reported land disputes
by commune heads. (not brought to
formal court) as
reported by
commune heads as
measured through
EMICoV.
------------------------------------------------------------------------
\1\ Disaggregated time and costs to obtain a land title was not
available as of the date of conclusion of the Compact. Going forward,
data will be collected and reported for the rural and urban areas
separately.
Access to Land Project Targets
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline Year 1 Year 2 Year 3 Year 4 Year 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Objective Level Indicators
(Metric of Project success
observable by end of Compact
Term).
Total value of additional Zero \1\.......... .................. .................. 5% increase from .................. 10% increase from
investment in targeted rural baseline. baseline.
land parcels.
Total value of additional Zero (Current .................. .................. 8% increase from 15% increase from 20% increase from
investment in targeted urban level for Cotonou baseline. baseline. baseline.
land parcels. only is USD$310
million).
Outcome Level Indicators (Early
indicators of Project Activities
impact on Objectives).
Average time required to obtain a 12 months......... .................. .................. 10 months......... .................. 6 months.
new land title.
Average cost required to obtain a USD$1,300......... .................. .................. .................. .................. USD$180.
new land title.
Percent of respondents perceiving TBD \1\........... .................. .................. 30% increase from .................. 50% increase from
greater land security. baseline for baseline for
beneficiary beneficiary
communes. communities.
Number of land disputes brought 8000 \2\.......... .................. .................. .................. .................. 50% reduction in
to court. MCA-targeted
zones.
Number of land disputes reported TBD \1\........... .................. .................. .................. .................. .
by commune heads.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ EMICoV will provide baseline data to be available starting in August 2006.
\2\ This baseline figure is an estimate. Data will be verified by quarter 3 of Year 1 of the Compact Term.
Access to Finance Project Indicators
------------------------------------------------------------------------
Definition of
Purpose Indicator Indicator
------------------------------------------------------------------------
Objective:
Expand access to financial Value of new Total incremental
services. financial increase in value
services offered of new credit
by financial extended and
institutions. savings received
by financial
institutions
participating in
the project.\1\
Outcomes:
[[Page 12983]]
Strengthened capacity of select Average portfolio- Share of value of
financial institutions. at-risk > 30 days all loans
participating outstanding that
MFIs. have one or more
installments of
principal past
due over 30 days.
Participating
institutions
institutions will
be compared to a
national average.
Operational self- Operating revenue/
sufficiency of (financial
participating expense + loan
MFIs (%). loss provision +
operating
expense).
Measures extent
of cost coverage
from operating
revenues.
Participating
institutions will
be compared to
national average.
Indicator values
are illustrative
of each class/
cohort's
performance.
Strengthened monitoring capacity Number of MFIs Total number of
of Supervisory Authority. supervised by the micro finance
Microfinance institutions that
Cellule. are supervised
and have received
recommendations
from the Ministry
of Finance
Supervisory
Authority.
Improved use of land titles as Number of new bank Total number of
collateral. credits loans guaranteed
guaranteed with by land titles,
land titles. per year.
------------------------------------------------------------------------
\1\ Indicator and target will be amended if services other than credit
and savings are offered.
Access to Finance Project Targets
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline Year 1 Year 2 Year 3 Year 4 Year 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Objective Level Indicators
(Metric of Project success
observable by end of Compact
Term):
Value of new financial USD$155 Million in .................. .................. USD$24 Million.... .................. USD$59 Million.
services offered by Credit and USD$73
financial institutions Million in
savings.\1\.
Outcome Level Indicators
(Early indicators of Project
Activities impact on
Objectives):
Average portfolio-at-risk > 10% \2\........... .................. 8%................ 7%................ 6%................ 5%
30 days of participating
financial institutions.
Operational self-sufficiency 103% \2\.......... .................. 106%.............. 109%.............. .................. 112%
of participating financial
institutions.
Number of MFIs supervised by 27................ .................. 35................ 40................ 50................ 75
the Microfinance Cellule.
Number of new bank credits 60................ .................. .................. 100............... 150............... 200
guaranteed with land titles.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Current aggregate value of savings and credit offered in system as cited in National Policy for Micro finance.
\2\ These baseline values represent the national average. Once financial institutions are selected, baselines will be recalculated. Targets values are
average values for cohort/class entering the Program after 2, 3, 4, and 5 years.
Access to Justice Project Indicators
------------------------------------------------------------------------
Definition of
Purpose Indicator Indicator
------------------------------------------------------------------------
Objective:
Improved ability of justice Average time Number of days
system to enforce contracts and required to associated with
reconcile claims. enforce a filing payment
contract. dispute in court
until moment of
actual payment.
Percent of firms Percent of
reporting manufacturing
confidence in the firms who agree
judicial system. with statement
``I have
confidence in the
judicial
system.''
Outcomes:
Increased efficiency and Number of cases Number of cases
improved services of courts and processed at processed at
the arbitration center. Arbitration Chamber of
Center. Commerce
Arbitration
Center, per year.
Percent of all Share of number of
cases resolved in cases resolved of
TPI courts per total cases filed
year. at all TPIs, per
year.
Percent of all Share of number of
cases resolved in cases resolved of
court of appeals total cases filed
per year. at court of
appeals, per
year.
Increased access to court system Average distance Distance between
required to reach village and
TPI (km). jurisdictional
TPI in
kilometers.
[[Page 12984]]
Improved enterprise registration Number of Annual number of
center. enterprises enterprises
registered registered with
through the Chamber of
registration Commerce Guichet
center. Unique central or
satellite
offices.
Average time Number of days
required to associated with
reigster an registering
enterprise (days). enterprise with
Chamber of
Commerce Guichet
Unique central or
satellite
offices, per
year.
------------------------------------------------------------------------
Access to Justice Project Targets
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline Year 1 Year 2 Year 3 Year 4 Year 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Objective Level Indicators
(Metric of Project success
observable by end of Compact
Term):
Average time required to enforce 570............... .................. .................. 470............... .................. 370
a contract (days).
Percent of firms reporting 35%............... .................. .................. 47%............... .................. 60%
confidence in the judicial
system.
Outcome Level Baseline Year
Indicators (Early indicators of
Project Activities impact on
Objectives)
Number of cases processed at 0................. .................. 25................ 150............... 200............... 250
Arbitration Center.
Percent of all cases resolved in 40%............... .................. .................. 45%............... .................. 50%
TPIs per year.
Percent of all cases resolved in 8%................ 12%............... 15%............... 18%............... 21%............... 24%
court of appeals per year.
Average Distance required to 50................ .................. .................. .................. .................. 34
reach TPI (km).
Number of enterprises registered 9,600 (total to .................. .................. 1,400............. 1,000............. 500
through the business 2004).
registration center.
Average time required to register 20................ .................. .................. 10................ .................. 3
an enterprise (days).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Access to Markets Project Indicators
------------------------------------------------------------------------
Definition of
Purpose Indicator indicator
------------------------------------------------------------------------
Objective:
Improve access to markets Volume of Total volume of
through improvements to the merchandise exports and
Port of Cotonou. traffic through imports passing
the PAC (million through Port of
metric tons). Cotonou, per year
in million metric
tons.
Port surcharges Surcharge
due to delay. associated with
congestion per
twenty-foot
equivalent unit
(``TEU''), in
Euro.
Outcomes:
Reduced ship wait time.......... Bulk ship carriers Number of days
waiting times at bulk carrier must
the Port (days). wait at anchor
(before
proceeding to
berth) and at
berth.
Streamlined customs clearance Average customs Time associated
procedures. clearance times with moving
at Port. merchandise
through customs
procedures.
Increased satisfaction with Port Port user Share of port
operations among users. satisfaction. users satisfied
with Port
operations,
estimated through
Port user survey.
Reduced average duration of stay Average duration Average duration
of trucks at Port. of stay of trucks of stay trucks at
at Port. Port.
Increased usage of import/export Volume of seafood Total volume of
facilities of Port among exports processed seafood exports
fishing/seafood businesses. through BOC processed through
(tons). the BOC (tons).
------------------------------------------------------------------------
Access to Markets Project Targets
----------------------------------------------------------------------------------------------------------------
Baseline Year 1 Year 2 Year 3 Year 4 Year 5
----------------------------------------------------------------------------------------------------------------
Objective Level Indicators (Metric
of Project success observable by
end of Compact Term):
Volume of merchandise traffic 4.1 4.9 5.2 5.6 5.9 6.3
through the PAC (million
metric tons).................
Port surcharges due to delay 125 ........... ........... ........... 50 25
(Euros)......................
Outcomes--Bulk ship carriers 7 ........... ........... ........... 5 3
waiting times at the Port (days):
[[Page 12985]]
Average customs clearance 5 ........... ........... 3 ........... 1
times at the Port (days).....
Port user satisfaction........ 50% ........... ........... 65% 70% 75%
Average duration of stay of 24 ........... ........... 18 12 7
trucks at Port (hours).......
Volume of seafood exports 0 ........... ........... ........... 250 500
processed through BOC (tons).
----------------------------------------------------------------------------------------------------------------
Note: Attainment of most targets in the Markets Project tables in the years specified depends on the successful
completion of early sub-activities.
(iii) The final M&E Plan will also include a number of activity-
level (Output) measures that will track progress toward realizing the
direct outputs of the Projects and Activities. Examples of the
indicators likely to be included are:
(1) Number of villages with plan foncier rural (PFRs);
(2) Number of urban land titles transformed from permis d'habiter
or living permits in Cotonou, Parakou and Porto Novo;
(3) Number of clients of financial service providers trained;
(4) Average cost of registering an enterprise with Chamber of
Commerce Guichet Unique;
(5) Number of judicial employees receiving pre-service training;
and
(6) Port meeting ISPS standards.
(b) Beneficiaries. The M&E plan shall describe the beneficiaries of
the Program in detail, including the expected number of beneficiaries,
their income, gender and other general demographic characteristics.
(c) Data Collection and Reporting. The M&E Plan shall establish
guidelines for data collection and a reporting framework, including a
schedule of Program reporting and responsible parties. In addition,
MCA-Benin shall conduct regular assessments of program performance to
measure progress on the Goals and Objectives and to alert all parties
to any problems in implementation. These assessments will report actual
results compared to the Targets on the Indicators referenced in the
Monitoring Component, explain deviations between these actual results
and Targets, and describe any planned actions to address performance
problems. With respect to any data or reports received by MCA-Benin,
MCA-Benin shall promptly deliver such reports to MCC along with any
other related documents, as specified in the M&E Plan or as may be
requested from time to time by MCC, and will make these assessments
available to the public on their Web site.
(d) Data Quality Reviews. As determined in the M&E Plan or as
otherwise requested by MCC, the quality of the data gathered through
the M&E Plan shall be reviewed to ensure that data reported are as
reliable, timely and valid as resources will allow. The objective of
any data quality review will be to verify the quality and the
consistency of performance data, across different implementation units
and reporting institutions. Such data quality reviews also will serve
to identify where consistent levels of quality are not possible, given
in-country capacity or other constraints.
3. Evaluation Component
The Program shall be evaluated on the extent to which the
interventions contribute to the Compact Goal and Objectives. The
Evaluation Component shall contain the methodology for conducting the
most rigorous impact evaluations feasible and cost-effective, as well
as the process and timeline for analyzing data. The Evaluation
Component shall contain two types of reports: A Final Program
Evaluation and Project, Project Activity, or Interim Evaluations.
(a) Final Evaluation. MCC will engage an independent evaluator to
conduct a program evaluation at the expiration or termination of the
Program (``Final Evaluation''). The evaluation methodology, timeline,
data collection, and analysis requirements will be finalized and
detailed in the M&E Plan. The Final Evaluations must at a minimum (i)
estimate quantitatively and in a statistically valid way, the causal
relationship between the Compact Goals (to the extent possible), the
Objectives and Outcomes; (ii) determine if and analyze the reasons why
the Compact Goals, Objectives and Outcomes were or were not achieved;
and (iii) assess the overlapping benefits of the Projects.
(b) Project or Interim Evaluations. The Evaluation Component in the
M&E Plan will also describe other individual Project, Project Activity,
or Interim Evaluations. The evaluation methodology, timeline, data
collection, and analysis requirements will be finalized and detailed in
the M&E Plan. Determination of the evaluation methodologies will be
condition precedent for specified MCC Disbursements.
(c) Ad Hoc Evaluations or Special Studies. In addition to the
evaluations described in the M&E Plan, MCC may require ad hoc
evaluations or special studies prior to the expiration of the Compact
Term. If MCA-Benin engages an evaluator, the evaluator will be an
externally contracted independent source subject to the prior written
approval of MCC for terms of reference and final selection, following a
tender in accordance with the Procurement Guidelines, and otherwise in
accordance with any relevant Implementation Letter or Supplemental
Agreement. The cost of an independent evaluation or special study may
be paid from MCC Funding. If MCA-Benin requires an ad hoc independent
evaluation or special study at the request of the Government for any
reason, including for the purpose of contesting an MCC determination
with respect to a Project or Project Activity or to seek funding from
other donors, no MCC Funding or MCA-Benin resources may be applied to
such evaluation or special study without MCC's prior written approval.
4. Other Components of the M&E Plan
In addition to the Monitoring and Evaluation Components, the M&E
Plan shall include the following components for the Program, Projects
and Project Activities, including, where appropriate, roles and
responsibilities of the relevant parties and Providers:
(a) Costs. A detailed annual budget estimate for all components of
the M&E Plan.
(b) Assumptions and Risks. Any assumptions and risks external to
the Program that underlie the accomplishment of the Objectives and
Outcomes; provided such assumptions and risks shall not excuse
performance of the Parties, unless otherwise expressly agreed to in
writing by the Parties.
[[Page 12986]]
5. Implementation of the M&E Plan
(a) Approval and Implementation. The approval and implementation of
the M&E Plan, as amended from time to time, shall be in accordance with
this M&E Annex, and any other relevant Supplemental Agreement.
Stakeholders' Committee's review of the completed portions of the M&E
Plan shall be required prior to the expiration of the first year of the
Program. Review and approval of the M&E Plan shall be completed by time
specified in the Disbursement Agreement.
(b) MCC Disbursement and Re-Disbursement for a Project Activity. As
a condition to each MCC Disbursement or Re-Disbursement there shall be
satisfactory progress on the M&E Plan for the relevant Project or
Project Activity, and substantial compliance with the M&E Plan,
including any reporting requirements. In addition, for certain
activities, collection of baseline data will be condition precedent for
specified MCC Disbursements.
(c) Modifications. Notwithstanding anything to the contrary in the
Compact, including the requirements of this M&E Annex, the Parties may
modify or amend the M&E Plan or any component thereof, including those
elements described herein, without amending the Compact; provided, any
such modification or amendment of the M&E Plan is reviewed by the
Stakeholders' Committee and has been approved by MCC in writing and is
otherwise consistent with the requirements of this Compact and its
Objectives, and any relevant Supplemental Agreement between the
Parties.
[FR Doc. 06-2252 Filed 3-10-06; 8:45 am]
BILLING CODE 9210-01-P