Public Disclosure Authorized Independent Evaluation Group (IEG) 1. Project Data Report Number : ICRR0020198 Public Disclosure Authorized Project ID P087106 Country Guatemala Project Name GT (APL2)LAND ADMINISTRATION Practice Area(Lead) Social, Urban, Rural and Resilience Global Practice L/C/TF Number(s) Closing Date (Original) Total Project Cost (USD) IBRD-74170 01-Dec-2013 64,300,000.00 Bank Approval Date 14-Dec-2006 Closing Date (Actual) 01-Sep-2015 IBRD/IDA (USD) Grants (USD) Public Disclosure Authorized Public Disclosure Authorized Original Commitment 62,300,000.00 0.00 Revised Commitment 49,769,437.40 0.00 Actual 49,769,437.40 0.00 Sector(s) Central Government (Central Agencies)(66%):Sub-National Government(34%) Theme(s) Land administration and management(25%):rural markets(25%):personal and property rights(24%):municipal governance and institution building(13%):indigenous peoples(13%) Prepared by Reviewed by ICR Review Coordinator Group Cynthia Nunez-Ollero George T. K. Pitman Christopher David Nelson IEGSD (Unit 4) 2. Project Objectives and Components a. Objectives This project represents the second of a three-phase 12 year Adjustable Program Loan (APL) 1998-2010 supporting the Guatemala Land Administration Program to (1) increase legal security of land tenure in Guatemala; and (2) strengthen the legal and institutional framework for land registry and cadastral services nationwide. Phase I and II were to cover six departments each and Phase III was to cover the remaining 10 departments for a total of 22 departments. The objectives of Phase I project were to (a) increase the legal security of land tenure in El Peten; and (b) strengthen the legal and institutional framework for land registry and cadastral services in El Peten. According to the February 2008 Financial Agreement (FA, p.8), the Project Development Objective (PDO) for this second phase is: "to foster the process of achieving land tenure security in the Project Area through the provision of efficient and accessible
cadastral and land administration services." The Project Appraisal Document (PAD, p.4) identified the seven new departments comprising the project area - Alta Verapaz, Baja Verapaz, Chiquimula, Escuintla, Izabal, Sacatepequez, and Zacapa and the municipality of Palachum in the Department of Quiche. b. Were the project objectives/key associated outcome targets revised during implementation? No c. Components 1. Cadastral and land regularization processes (US$ 31.95 million at appraisal, amended to US$ 38.75 in 2010, US$ 26.78 million actual) financed technical assistance, equipment, and training conducted by the Implementing Agency, the Registry of Cadastral Information (Registro de Informacion Catastral or RIC), and assist the Land Fund (Fondo de Tierras or FONTIERRAS) in regularizing and titling of national lands identified in the cadastral survey of the Project Areas. The project also financed titling and regularization of parcels originally in 55 municipalities, later amended to 41, including delimitation of territorial reserves, delimitation and geo-referencing of archaeological and ceremonial sites, and certification and registration of communal lands. Regularization activities financed annotation of titles in the Property Registry, processing of titling cases of previously unregistered lands. 2. Cadastral information maintenance and municipal land administration services (US$ 13.32 million at appraisal, amended to US$ 12.14 million in 2010, US$ 15.24 million actual) established Municipal Cluster Offices in the Cadastral Zones to support RIC in establishing and maintaining the cadaster. Cadastral and land administration services include a systematic beneficiary diagnosis, communication campaign, mapping, rights verification, properties delimitation, field conflict resolution, results notification, information transfer into the cadastral registry and integrated cadastral and property registry services. Cadastral maintenance activities included developing norms and procedures, designing and implementing a technological-operational platform and training end users such as municipalities, private surveyors, and notaries. The 2010 amendment, restated this activity as "establishment of Municipal Cluster Offices in the Cadastral Zones" (2010 Restructuring Paper, p.2) removed the target value (8) associated with the Municipal Cluster Offices and added activities to strengthen local capacity to administer and collect property taxes or Impuesto Unicoso sobre Immuebles (IUSI). 3. Legal reforms and institutional strengthening of the registry and cadaster for land administration (US$ 7.76 million at appraisal, amended to US$ 5.09 in 2010, US$ 3.05 million actual). This component financed training and technical assistance to participating agencies to improve the legal framework and strengthen institutional capacity for land administration by financing and implementing an integrated cadaster-registry computerized system, modernize the Property Registry, and develop RIC s business plans. The 2010 amendment renamed this component "Institutional Strengthening for Land Administration" and removed the drafting of the Regularization Law because the law was not a pre-requisite to the cadastral process (ICR, p.5), did not contribute to meeting the PDO, and was beyond the control of the Government. 4. Project management and monitoring, and evaluation (US$ 8.62 million at appraisal, amended to US$ 6.17 in 2010, US$ 4.54 million actual). This component financed training, technical assistance, and equipment to support the Project Coordination Unit (PCU) to manage the project, conduct inter-institutional coordination, implement the project's monitoring and evaluation systems as well as a parcel-level, spatial data infrastructure system. The 2010 amendment renamed this component "Institutional Strengthening for Land Administration" and clarified that the training and technical assistance to RIC will be for the preparation of the Specific Regulations on Communal Lands. d. Comments on Project Cost, Financing, Borrower Contribution, and Dates Project Cost: The total project cost was US$ 49.8 million, 20% less than appraisal estimate because planned activities could not be completed due to three factors: (1) a 17-month delay in loan effectiveness because of late loan approval by Congress, plus another year delay in Government approval of the Specific Regulation on Communal Lands which was a condition of disbursement for field activities under component 1; (2) up to 20% increase in costs of the cadastral process arising from new (2008) regulatory requirements under the RIC Law, difficulties in estimating the number and size of rural parcels, and higher market prices by the time of start-up; and (3) initial weak implementation capacity. Financing: This second phase of the Land Administration Program was supported by a US$ 62.30 million IBRD Adaptable Program Loan (APL). At closure, the project had disbursed US$49.77 million and US$12.53 million was cancelled. Borrower Contribution: There are no Borrower contributions. Dates: The original closing date was December 31, 2013. Beginning in 2010, four restructurings were approved each year with no change in the Project Development Objective (PDO):
The June 2010 level 2 restructuring reduced the project area (from 55 to 41 municipalities); modified the project activities, reallocated funds based on revised scope; added indicators to measure intermediate results not originally identified and include gender-disaggregated results; established an inter-institutional and technical committees to strengthen project implementation and coordination; and required semi-annual rather than quarterly, financial and progress reports. The November 2011 level 2 restructuring allowed the use of "Service Delivery Contractors" as a procurement method for individual consultant services and adopted the latest edition of the Procurement and Consultant Guidelines. The July 2012 level 1 restructuring triggered the Involuntary Resettlement Operational Policy (OP 4.12) in relation to the potential restriction of access to natural resources that could occur as a result of demarcation activities in the project area. The August 2013 level 2 restructuring simplified the Project Results Framework and extended the closing date by 21 months (ICR, p.6) to September 2015. 3. Relevance of Objectives & Design a. Relevance of Objectives The project objectives - to foster the process of achieving land tenure security in the Project Area through the provision of efficient and accessible cadastral and land administration services - are substantially relevant to the country's current development strategy as contained in its 2032 K'atun National Development Plan of Guatemala. The plan is anchored on five axes: (I) Welfare for the people; (ii) Wealth for All; (iii) Natural resources for today and tomorrow; (iv) the hub of Urban and Rural Guatemala; and (v) the state as guarantor of rights and driver of development. Its long term vision aims to institutionalize development planning at territorial, sectoral, and institutional levels within the State and its agencies. The objective is also relevant to the World Bank Country Partnership Strategy (CPS) for 2013-2016 with strategic focus on (a) strengthening public policies for social development; and (b) promoting inclusive and sustainable economic growth. In particular, the project objective contributes to Outcome 20 of Results Area 2 (Environment and Disaster Risk Management) which aims for satisfaction by 75% of users (and by at least 50% of female users and indigenous population) of the services offered by the Cadastral Information Registry (Regisrto de Inoformacion Catastral or RIC), the implementing entity for this project. Rating Substantial b. Relevance of Design The project is designed as the second of a three-phased, 12-year program financed by an Adaptable Program Loan (APL). An APL was appropriate because the land administration program required time to build consensus and convince diverse actors of the benefits of reforms. The APL is part of the Government's efforts to strengthen land tenure as a platform to trigger economic growth with the help of private investments. Completion of Phase I (El Peten) triggered the launch of Phase II. Phase II expanded program coverage to 7 additional departments, bringing the total area covered to 50% of the country. The seven departments include Alta Verapaz, Baja Verapaz, Chiquimula, Escuintal, Izabal, Sacatepéquez, Zacapa, and one municipality (Palachum) in the department of Quiche. Phase III will cover the rest of the country. Design drew lessons from Phase I. These included: (1) integrating cadaster and registry into a technological platform based on international best practices (e.g., Honduras, El Salvador); (2) streamlining and standardizing participatory processes for massive cadastral surveying and land regularization; (3) conflict resolution using the Secretariat of Agrarian Affairs (SAA) Special Commission of Land Conflict Resolution (Dependencia Presidential de Asistencia Legal y Resolucion de Conflictos sobre la Tierra or CONTIERRA); (iv) centrality of communication and beneficiary participation during implementation; and (v) partnering with municipalities to regularizing urban lands and territorial planning. Delimitation and investigation steps were separated from legalization and titling to avoid bottlenecks from unresolved titling or contested issues. This Phase II project design was built on the outcome of Phase I. IEG rated the outcome of Phase I as Moderately Unsatisfactory in 2007 because of modest efficacy in achieving objectives, shortcomings in relevance of design, and uncertainty in estimating efficiency. This Phase I project outcome was further downgraded to Unsatisfactory in 2010 (under the Project Performance Assessment Review No. 55341) because of project design flaws: (I) land tenure characteristics in El Peten were different from other parts of the country and therefore, lessons learned from that operation were not transferrable to the rest of the country, (ii) rural titling had low completion rates, and (iii) registry (legal property rights or deed based) and cadaster (geographic characteristics of
urban/rural parcels or parcel based) had limited integration (ICR, footnote, p.8). Phase II project design inherited some of these shortcomings such as insufficient attention to the long-term strategy, an inadequate results framework, and a complex and expensive cadastral process. First, a 12-year APL period was no longer relevant during Phase II since Phase I was already extended by more than three years bringing the total Phase I period to 9 years. A revised implementation period to achieve countrywide coverage under the APL should have been considered. Second, the target area selection strategy did not assess need or implementation capacity but only that the Phase I implementing entity, the Technical and Legal Unit (Unidad Tecnica y Juridica or UTJ) was already implementing donor-financed land related projects (financed by Sweden, the Netherlands, Germany, and the European Commission) in these departments. Third, the results framework introduced new indicators during the first restructuring only to be dropped (outputs not outcomes) or further clarified during the fourth and final restructuring. Fourth, cumbersome legal procedures (ICR, p. 19) were expensive and led to operational challenges and a seven year implementation period. Project design underestimated the time, costs, human resources, and inter institutional coordination required to carry out the cadastral process. Inter-institutional coordination was affected by limited resources of several co-executing agencies as well as by recurrent fiscal constraints. The ICR even notes that the cadastral strategy was updated four times to remain relevant (ICR, para 82). Rating Modest 4. Achievement of Objectives (Efficacy) PHREVISEDTBL Objective 1 Objective The overall project objectives are to foster the process of achieving land tenure security in the Project Area through the provision of efficient and accessible cadastral and land administration services. The two sub-objectives rated below are: to foster the process of achieving land tenure security in the Project Area through the provision of efficient cadastral and land administration services. to foster the process of achieving land tenure security in the Project Area through the provision of accessible cadastral and land administration services Objective 1 The objective of the Project is to foster the process of achieving land tenure security in the Project Area through the provision of efficient cadastral and land administration services. Rationale OUTPUTS The project surveyed 274,000 parcels (original target 300,000 added during the fourth restructuring, unmet); 45,000 of these (16%) were registered in RIC s Public Registry (original target was 50%, revised to 35% in the fourth and final restructuring, unmet); and 96,000 parcels were owned solely or jointly by women (target 85,000 added during the fourth restructuring, exceeded). In these 274,000 parcels, 8,000 (3%) owners or occupants were reported absent (original target less than 10%, exceeded, noting that this indicator was added during the fourth and final restructuring to replace the indicator on target participation). RIC approved two regulations, the Regulation on the RIC Law, and the Regulations on the Certification of Communal Lands (target 2, achieved). Use or ownership rights for 965,000 beneficiaries were recorded (target of 1.1 million added during the fourth restructuring, unmet), of which 492,000 were recorded for women (original target of 575,000 representing 51% of the original target of 1.1 million, unmet but the ICR claimed this was achieved 492,000 of 965,000). In accordance with the Regulations for Communal Lands and Indigenous Peoples Development Plan (IPDP), the project identified 45 potential cases of communal lands in 25 municipalities of which 25 requested certification. RIC surveyed the external perimeters of 18 of these but many had boundary conflicts. RIC certified 4, with one indigenous (original target was 80% of communal lands of which 50% are in indigenous peoples
communal lands, unmet). The project identified 5,000 parcels eligible for regularization or special titling and registered in the General Property Registry (Registro General de la Propiedad or RGP), 1,679 (33%) were titled and registered, all benefiting indigenous peoples and 1,000 benefited women (target was revised during the fourth restructuring to 60%, not achieved). All new transactions concerning change of rights in the project area s General Property Registry were incorporated into the RIC s Public Registry (target of 100% revised during the fourth restructuring, achieved). Land Fund issued 1,289 titles out of 5,000 eligible on national lands, regularized 224 titles on municipal lands, a new modality made operational towards the end of the project. 166 titles were issued 3 months after the project closed. The project delimited 463 km of the boundaries of protected areas and demarcated 306 km and delimited and demarcated 74 km of natural reserve areas (this indicator was added during the first restructuring and the original target of 13 protected areas was revised to 427 km of protected areas and 100 km of natural reserve areas during the fourth restructuring with targets partially achieved). There were 299 archaeological and 25 ceremonial sites identified, geo-referenced and incorporated into the Registry of the Department of Cultural Resources (target revised during the fourth restructuring to 195 archaeological and 25 ceremonial sites, exceeded) Twenty-two (22) municipalities (original target 20, exceeded) use RIC cadastral database to update their own cadasters and develop territorial planning initiatives. Nine of these municipalities installed SITMuni for cadastral management and six initiated the use of SITMuni for territorial planning. SITMuni uses open-source software Certified and registered 766 professional surveyors (target 100, exceeded) and 1,088 technical surveyors (target 250, exceeded) into RIC s Registry of Surveyors. Established 9 cluster offices, 7 permanently offer cadastral services (target 6, revised during the first restructuring, achieved). The project s Environmental Management Plan trained 662 individuals in environmental education, financed 20 workshops in territorial planning, 18 workshops on payment for environmental services, 20 workshops on ecological vulnerability in communal lands and protected areas. Several modules of an integrated Registry-Cadaster information platform operates satisfactorily (target revised during the fourth restructuring to 100%, partially achieved at 80%). There were eight original PDO indicators but three were later dropped. There were also 26 original intermediate indicators, 12 of which were later dropped (see Section 10 (b) for details). OUTCOMES Land tenure security improved for about 1 million residents as evidenced by reduced land conflicts. The cadastral process facilitated exact boundaries using accurate information collected from surveys whose findings were was required to be displayed in public. Beneficiaries could confirm the accuracy of the data or correct potential errors. Conflict resolution, however, was below target because of external factors such as complexity of the nature of the dispute, or willingness of parties to dialogue. The Secretariat of Agrarian Affairs (Secretaria de Asuntos Agrarios) identified 250 conflicts in the project area and resolved 65 or 26% (original target added during the fourth restructuring was 30%, partially achieved). Women (individual and joint land holders) received titles over land assets and this contributes to gender equity. The project contributed to land administration solutions that have the potential to enhance sustainable land use and cultural preservation. Registered archaeological and ceremonial sites will receive state protection, essential for the preservation of archaeological heritage and safeguarding access to ceremonial sites of indigenous peoples. The delimitation and demarcation of protected areas' boundaries contribute to the capacity of the National Council for Protected Areas (Consejo Nacional de Areas Protegidas or CONAP) to monitor compliance with zoning and environmental regulations as well as increased awareness among the population on sustainable management of natural resources. The project strengthened RIC capacity and those of municipalities for cadastral and land administration services. The project contributed to developing the System of Municipal Territorial Information (SITMuni) which establishes a link between RIC and municipalities to share cadastral information. The link could update cadastral information and develop territorial planning initiatives. Systems' efficiency and sustainability because of low maintenance needs and programming agility could be attributed to the open source software. The project had limited impact on land regularization. A broad definition of land regularization is the process of "bringing de facto or irregular situation into compliance with the law" (Real Academia Espanola, 2013). Land regularization can include some or all activities related to cadastral surveys, adjudication, titling, and registration. The special titling modality, the only modality for regularization under the RIC Law, could not be implemented during the project. RIC could not make any progress in a few cases identified for special titling because of the absence of special regulations which were still under preparation even as the project was closing. The project did not regularize any indigenous communal lands. Certification however was achieved but this is only an administrative procedure that does not transfer legal rights whereas regularization does. Municipal boundary conflicts external to the project's control, contributed to not achieving targets. Progress to APL III In December 2014, the Government initiated the third and final phase of the APL with an estimated financial cost of US $50 million to consolidate the results from Phase II, expand to new areas in eastern Guatemala (the rest of the country) and continue to strengthen land governance and its institutions. 2015 was a presidential election year. There was limited budget allocated to the project and the World Bank agreed to provide technical assistance while waiting for the new government's request for Phase III.
Rating Substantial PHREVISEDTBL Objective 2 Objective The objective of the Project is to foster the process of achieving land tenure security in the Project Area through the provision of accessible cadastral and land administration services. Rationale OUTPUTS: The outputs discussed under Objective 1 are also related to this Objective. OUTCOMES: The high level of participation reflect the inclusiveness and reliability of the cadastral process and shows that cadastral services could be made accessible. An intensive, multi-media social communication campaign contributed to the low absenteeism rate. The project improved access to cadastral and land administration services to indigenous and peasant communities by establishing a process to certify and register communal lands. Technical assistance facilitated the approval and operationalization of the implementation of the Specific Regulation on Communal Lands. RIC was only able to register 4 communal lands or 16% of those identified, one of them, indigenous. The project established a mechanism that can be applied to other communities. The project contributed to establishing technological platforms to improve land administration services. The technological platform linked the RIC database with that of the Property Registry and are in the process of consolidating automated processes to better integrate these databases. An audit of the integrated cadaster-registry information platform identified weaknesses in the infrastructure and platform that could compromise the security of the information. Incomplete registration in RIC's Public Registry may mean risk of losing individual land rights or inability to transact in land deals. Individuals are yet to receive notification on the status of their parcels. RIC cannot proceed with cadastral maintenance unless all parcels in a municipality are notified about the status of their land. RIC continues to update the cadastral database to reflect recent land transactions. Rating Substantial 5. Efficiency Economic and Financial Efficiency: The PAD reports an Internal Rate of Return (IRR) at appraisal of 40%, using the Net Present Value (NPV) of benefits valued at US$ 64.3 million. Benefits were assumed to come from long term investments from using property as collateral for loans, resolution of land disputes, and guaranteed property rights. Benefits were estimated based on the added property value observed from previously regularized properties. The IRR was reduced to 14% at the 2010 restructuring because of the reduced number of target municipalities, hence reducing the scope of land regularization activities. An ex-post cost benefit analysis evaluated the economic efficiency of the project using actual implementation expenses, post implementation operating costs, and actual physical outputs. Since the project only regularized 1,500 parcels (15,000 parcels were assumed in the ex ante analysis) the ex-post analysis displays negative feasibility indicators. NPV is less than zero and IRR is less than the discount rate of 12%. The project needed to regularize 10,000 parcels to break even under the ex-ante assumptions. Since the ex-ante analysis excluded land tenure security benefits from the cadastral process, the project reached a 30% IRR based on the upward effect of the cadastral process and not just land regularization.
The ICR presents a cost-effectiveness analysis (ICR, p. 52) indicating that the project's approach to cadastral surveying costs 3.7 times less than a demand-driven process but suggests a more thorough review of alternatives is needed. A financial sustainability analysis indicates moderate self-sufficiency (generated revenues to cover operations) while fiscal impact analysis offers a positive outlook but absent precise figures because participating municipalities are still updating their tax registries (ICR, p. 55). Financial analysis conducted for RIC assessed the capacity of the new institution to be self sustaining. Results concluded that the income from cadastral certifications was not enough to cover production costs. The PAD offers that by project end, RIC will recover at least the marginal costs associated with the new services (PAD, p. 13) but evidence in the ICR indicates that the rate at which income covered operational costs in all offices was modest at best, ranging from as little as 5% in 2011 to 87% in 2015 and averaging 67% during the project period (ICR, paragraph 61 and Annex 3, section 4). Administrative and Operational Efficiency: The project was restructured four times, every year, beginning in 2010. The project was completed in seven rather than the planned six years due to implementation challenges arising from the complex project design and rising project costs related to cadastral surveying and legal and registry analyses. The last restructuring added 21 more months to complete the project. The Results Framework was revised in that fourth and final restructuring. Several key activities planned for the final year of implementation had to be cancelled such as the cadastral surveying of two municipalities, partnering with participating municipalities to support land regularization, and setting up a new RIC Data Center. Efficiency Rating Modest a. If available, enter the Economic Rate of Return (ERR) and/or Financial Rate of Return (FRR) at appraisal and the re-estimated value at evaluation: Rate Available? Point value (%) *Coverage/Scope (%) Appraisal 40.00 ICR Estimate 12.00 85.00 Not Applicable 56.00 Not Applicable * Refers to percent of total project cost for which ERR/FRR was calculated. 6. Outcome Relevance of objective is rated substantial. Relevance of design is rated modest because of the complex design and fragmented results framework. The efficacy of Objectives 1and 2 are each rated substantial. Efficiency is rated modest. There were moderate shortcomings on the relevance of design and efficiency and outcome is rated moderately satisfactory. a. Outcome Rating Moderately Satisfactory 7. Rationale for Risk to Development Outcome Rating
Institutional: The implementing agency continues to need institutional strengthening (ICR, pp. 21,24) such as planning for country-wide coverage and sustaining service delivery through operational revenues. Even with a specialized unit within the RIC organization dealing with the regularization of communal lands stipulated in the RIC law, progress may be hindered by lack of financial and technical contributions once the project closed. There is substantial risk too that RIC may not have sustained capacity to manage complex operations and unable to address its weak fiduciary capacity. The Government commented that institutional processes may deteriorate over time (ICR, p. 67). There is a risk of further conflicts (ICR, p. 43) because municipal authorities may not reach agreements over boundaries arising from imprecise base cartography. Since the Land Regularization Law has not been approved, many rural households may feel land insecure even if they have access to updated cadastral information (ICR, p.24). Recent political crisis poses a high risk to the uncertainty of Phase III and an unfinished legal framework. Financial: The RIC prepared a transition plan between the end of Phase II and beginning of Phase III where parcels already surveyed were prioritized for regularization, but by January 2016, the RIC was unable to secure sufficient funding for the first year of the transition plan (ICR, p. 14). The Government also commented that the cadastral process may not be sustained by revenues from cadastral products and services may not cover operational costs. Technical: The Government commented that cadastral information remains incomplete and the information technology platform may not be adequately maintained or updated (ICR, pp. 67-68). a. Risk to Development Outcome Rating High 8. Assessment of Bank Performance a. Quality-at-Entry This is a second phase of a three-phased APL. The first phase covered the Province of El Peten and provided the following lessons for Phase II: integrating cadaster and registry using a technological platform; streamlined, standardized, participatory massive cadastral surveying and land regularization; implement effective conflict resolution mechanisms; communication and beneficiary participation during implementation through massive dissemination of information; and critical role of municipalities in regularizing urban lands and territorial planning by having Cooperation Agreements between the RIC and participating municipalities. This second phase expanded improved land management to seven additional provinces to cover half of the country by the end of two phases. Lessons learned from Phase 1 informed this second phase design, However, because the Phase I project area (El Peten) was unlike the project area in Phase II, these lessons could not be transferred. Phase I contributed to strengthening the legal and institutional framework for land administration services, notably the approval of the RIC Law. But in a 2010 Project Performance Assessment Review, IEG downgraded the outcome of Phase I as Unsatisfactory because of design flaws such as the land tenure situation in Peten being incongruous to the rest of the country, low completion rates for rural titling and limited integration of registry and cadaster. The design of phase II adhered to the APL framework, the RIC Law, and lessons from Phase I. However, the APL program design to achieve countrywide coverage was not revised even if the implementation period was no longer achievable. The Loan Agreement condition (approval of the Specific Regulation on Communal Lands) delayed implementation even if it clarified regularization procedures for communal lands (ICR, p. 24). The project areas selected were not based on adequate assessment of implementation or readiness capacity. El Peten was pointed as a poor choice for Phase I and lessons from its operations could not be transferred to the Phase II project areas. The Bank underestimated the technical and fiduciary capacity of the new implementing agency. The results framework lacked methodology to measure indicators (ICR,p. 25). Targets appear to be unrealistic since most were not achieved. M&E design was deficient. There were shortcomings in risks assessed. For example, there was a shortcoming in identifying the safeguard pertaining to involuntary resettlement. This was added by the time of the third restructuring. There was also a shortcoming in assessing fiduciary risks (see Section 11 below). Quality-at-Entry Rating Moderately Unsatisfactory
b. Quality of supervision The Bank regularly supervised the project and strengthened RIC capacity during the implementation of the RIC Law. The team used four project restructurings every year beginning in 2010 to maintain relevance and account for the results in the face of challenging circumstances. However, outcome indicators which were outputs were introduced in the first restructuring but later dropped in the fourth restructuring. The 2012 Mid Term Review was thorough and recommended (i) a 21 month extension to complete project activities, and (ii) simplify the results framework to better account for outcomes. Prior to the MTR, disbursements were slow but improved thereafter. The Bank also organized two international exchanges in Guatemala to share experiences in land administration programs. Quality of Supervision Rating Moderately Satisfactory Overall Bank Performance Rating Moderately Satisfactory 9. Assessment of Borrower Performance a. Government Performance The 1996 Peace Accords point to a strengthened land tenure as a trigger to generate private investments that would spur economic growth. Efforts began in 1997 with pilot projects to establish a cadaster supported by donors and the first project under the Land Administration program. These efforts informed the passing of the RIC Law in 2005. This law lay the ground for this second project under the program. Nevertheless, the phase II project was delayed by 17 months due to Congressional delay in approving the loan and the Specific Regulation on Communal Lands. The latter was a condition for disbursing funds under the first component. This meant that during the first year of implementation, the Project had no access to critical loan funds. The Project did not fully start implementation until 2010. This was similar to the experience in Phase I when the Board approved the project in December 1998 and the Guatemalan Congress approved the loan in March 2000. The Government used another Bank-financed project to bridge the implementation gap but fiscal constraints caused reduced resources for the project especially at critical implementation junctures, including toward the end of the project. Changes in central and local authorities in 2012 required renewed dialogues to convince current officials of the project's relevance. Budget allocation in 2012 was also substantially lower than projections to carry out planned activities. The Government only signed the third (2012) restructuring in February 2013. In its final years, implementation slowed once again because of lack of adequate budget allocation due to the country's fiscal constraints. There was also a political crisis at that time arising from corruption investigations which affected high level officials. Key activities planned for the final year were cancelled (cadastral surveying of 2 municipalities, support land regularization in partnership with participating municipalities, setting up of a new RIC Data Center (ICR, p. 10)). Almost two decades after the peace accords, indigenous land rights continue to be a contentious issue and key legislation related to land regularization and rural development are still pending congressional approval in February 2016. Government Performance Rating Moderately Unsatisfactory b. Implementing Agency Performance The implementing agency is the Registry of Cadastral Information or Registro de Informacion Catastral (RIC). The RIC was constrained operationally and administratively because the Technical and Legal Unit (UTJ) which implemented the Phase I project was not fully absorbed to the newly formed RIC. UTJ's fiduciary capacity was also overestimated since UNDP handled Phase I fund administration and procurement. RIC itself was newly formed, inexperienced in applying the new cadastral process methodology, including the legal analysis, lacked effective inter- and intra-institutional coordination mechanisms and had little fiduciary capacity. Even after an interinstitutional committee was established, RIC continued to experience coordinating issues because of lack of clarity in the role and responsibilities among seven co-implementing agencies. The land administration legal framework was launched amidst controversies surrounding communal lands and land rights of indigenous peoples and this further complicated RIC's management task. The Implementing Rules and Regulations of the RIC Law were approved during the first year of implementation. Preparatory activities for cadastral surveying in six municipalities, modernization of the Property Registry, and the development of a technological platform to integrate cadastral and registry information, were only identified or clarified after the project was approved. Project implementation was
strengthened after the first restructuring (2010). New specialists were added to cover financial management, communications, and legal issues, The PCU were also now given operational and administrative autonomy, coordinating internally within the various RIC departments, and externally with seven co-executing agencies and 55 participating municipalities. However, key posts were vacant for periods of time because of difficulties in hiring and maintaining qualified staff (ICR, p. 26). Procurement and supervision of survey contracts proved intractable. The integration of the PCU into the RIC delayed decisions and slowed administrative and fiduciary processes. Targets were revised in 2010 because 3 municipalities refused to participate in the project and projects costs were higher than estimated (cadastral surveying activities and legal and registry analyses). As a result, only urban parcels in five municipalities were included. But the intermediate outcome indicators were not changed at that time. In the last year of project implementation, RIC cancelled cadastral surveying in two municipalities due to insufficient budget allocation reflecting the country's fiscal constraints. Project implementation slowed again during the first quarter of 2013 due to the change in RIC director. Amendment relating to the third (2012) project restructuring was countersigned by the Minister of Finance only in February 2013. RIC agreed to hire a Cadastre Specialist so that the Technical Coordinator can be focused on his specific tasks; and a procurement specialist, and replace the Financial Management Specialist who left during the transition of RIC management. by the end of May 2013. The Bank and the PCU estimated that 40 people should be hired, trained and incorporated into the activities of cadastral supervision and quality control, and the technical guide updated no later than June 2013. The RIC faced tremendous cadastral activities challenges. There were long standing land conflicts, increasing security concerns, a slow learning curve regarding country conditions by the firms contracted to carry out field work, changes in local authorities following the 2012 elections, and RIC's own limited experience in managing large contracts. These conditions and the absence of procedures for partial certification led to limited land regularization of indigenous communal lands. Implementing Agency Performance Rating Moderately Unsatisfactory Overall Borrower Performance Rating Moderately Unsatisfactory 10. M&E Design, Implementation, & Utilization a. M&E Design The design of Phase II M&E built on the existing Phase I system (Sistema de Seguimiento y Evaluacion del RIC or SISERIC). The system included four modules: (I) household surveys, (ii) Land Fund beneficiary surveys; (iii) municipal surveys; and (iv) community characterization surveys. There were also participatory evaluation mechanisms, both qualitative and quantitative, to capture feedback from beneficiaries including indigenous people (PAD p. 10, ICR, p. 11). The ICR, however, notes that the indicators used were inadequate to measure outcomes. The results framework contained indicators that were not specific, measurable, realistic, or relevant to adequately measure outcomes. Some indicators were too ambitious considering the budget, increasing project costs, and country conditions. PDO and intermediate indicators were revised during implementation to better reflect activities that led to establishing the cadastral process, strengthened municipal capacity, and lay the ground for land tenure regulations. Revised indicators were introduced during the first restructuring and then dropped (because these were outputs rather than outcomes) or refined during the final and fourth restructuring (see section 4 on Efficacy for details). b. M&E Implementation The ICR reports that the project relied on data provided by Sistema de Seguimiento y Evaluacion del RIC or SISERIC through the different departments of RIC in its initial years (ICR, p. 11). However, the same ICR states that the RIC's institutional M&E system did not meet the Bank's reporting requirements (ICR,p. 38). SISERIC was not linked to financial administration system and did not monitor the Project's physical and financial progress. SISERIC also did not generate required reporting needs. Financial management information was kept in an Excel file (ICR, p. 38) rather than the envisaged system that would allow physical and financial monitoring of progress. The United Nations Food and Agriculture Organization Cooperation Program - Investment Center (FAO-TCI) assisted the PCU to improve the project s monitoring by regularly updating the results matrix using a web-based evaluation toolkit for land administration projects (ICR, p. 25). During the MTR a
baseline established governance arrangements in communal lands, the results matrix clarified, measures and indicators adjusted to better reflect updated project activities. Cadastral surveying procedures included a social monitoring questionnaire to identify beneficiary ethnicity and land conflicts. At the fourth restructuring in 2013, the results framework was revised, rationalized, and strengthened. Overall capacity of RIC to implement and utilize the M&E framework was strengthened with the help of international experts and updated its M&E system. Three of the eight original PDO outcome indicators were dropped or replaced. Twelve of 26 intermediate outcome indicators were replaced or dropped. Those that were dropped were added in the first restructuring and then removed in the fourth restructuring (outputs, not outcomes). One indicator, the Land Regularization Law was dropped because reaching a consensus on the draft was deemed not relevant to reaching the project outcome (ICR, p.5). A baseline for the impact evaluation at the household and municipal levels was conducted in 2011 using treatment and control groups. A follow-up survey was planned for the final evaluation but the ICR reports (p.11) that procurement was too late to deliver a report before the project closed. Evaluation remained a weakness (ICR, p.11). c. M&E Utilization The project supported in 2010 an inter-institutional initiative with the National Council for Protected Areas (Consejo Nacional de Areas Protegidas or CONAP) to monitor forest cover for future impact evaluation of demarcating and registering protected land. RIC commissioned a final project evaluation which provided data for the ICR. M&E Quality Rating Modest 11. Other Issues a. Safeguards This was a Category 'B' project under OP/BP 4.01 Environmental Assessment. An Environmental Assessment identified potential direct and indirect impacts from the project concluding that the positive impact outweighed potential negative impacts. In addition, four safeguards were triggered: Natural Habitats (OP/BP 4.04), Forest (OP/BP 4.36), Cultural Property (OPN 11.03), and Indigenous Peoples (OD 4.20). The environmental assessment identified communal lands because many of these are still covered by native forests. The Involuntary Resettlement Policy (OP 4.12) was triggered under the third restructuring in 2012. The cadastral process involves the delimitation and demarcation of protected areas. At appraisal, the risk was considered negligible. While the likelihood has not changed by the time of the third restructuring, the project team decided to prepare the borrower and strengthen their capacity to understand and manage potential case of involuntary restriction of access since similar projects in the region triggered this safeguard policy (e.g., Honduras, Nicaragua, and Panama). Activities that could involve a risk of involuntary restriction of access include the delimitation and demarcation of protected areas and proposed protected areas under Part 1 (Cadastral and Land Regularization) of the project. The project is only financing demarcation of external boundaries of the buffer zones of the selected protected areas. The Environmental Management Plan was mainstreamed into project activities and no negative environmental effects were identified. The EMP provides for (I) physical demarcation of protected area boundary corners; (ii) demarcation and legalization of indigenous community lands; (iii) demarcation of archaeological and other cultural sites; (iv) delineation of natural hazard zones in municipal land use plans; (v) communication activities for environmental aspects to rural project beneficiaries; and (vi) land use impact monitoring (PAD, p. 16). The PCU includes an environmental and a social specialist and social facilitators in regional offices. Safeguards compliance is reported satisfactory (ICR, paragraph 37). Safeguard instruments were implemented as planned supported by a communication strategy. A social impact assessment was carried out to analyze key socio economic factors, identify risks and impacts and recommend mitigating measures, identify stakeholders and recommend mechanisms for including them in project design, and regularize indigenous people's lands. Three consultation workshops were held in 2005 (PAD, p.15) An Indigenous Peoples Development Plan (IPDP) in compliance with OP 4.12 was prepared allocating technical, financial, and social resources for the participation of indigenous peoples in the project. Because of the complexity of this issue, the Bank was to conduct specialized supervision and specific monitoring and evaluation of IPDP implementation. The ICR notes that an independent social evaluation rated compliance with the IPDP as satisfactory (ICR, p. 13). With regard to the IPDP, improved access to benefits could have been better addressed by certifying more indigenous communal lands but the national legal framework itself limited recognizing IP land rights. The project satisfactorily minimized and mitigated negative impacts.
b. Fiduciary Compliance Financial Management The Financial Management capacity assessment rated this task as low risk (PAD, p.14) because the RIC was assumed to include the experienced staff from Phase I but because this turn over did not happen, an action plan called for hiring qualified staff. The ICR reports financial management as moderately satisfactory even as the Government's own completion report notes weaknesses in timely resolution of problems and fiduciary shortcomings (ICR, p. 68). The ICR (p. 13) points to a weak fiduciary performance in the first three years of implementation as evidenced by the delay in hiring financial management and procurement staff with sufficient experience in managing Bankfinanced projects but also cites progressively strengthening capacity in the course of implementing the project. Key shortcomings noted include staffing, lack of autonomy by the project team, insufficient budget allocations which resulted in project delays. Financial management improved after the first amendment (2010) and as RIC was strengthened throughout implementation. Procurement Procurement was rated satisfactory even though RIC initially lacked staff and had a limited experience in managing large contracts which contributed to implementation delays. A certification program was introduced to address the limited supply of technicians and professional surveyors. Inaccurate contract documents derived from outdated geo-spatial census data, number and size of land parcels contained in bid documents led to multiple deadline extensions, changes in payment schedules of contracted firms, and other modifications. RIC's limited contracting experience, firms new to implementing cadastral activities, and long standing land conflicts and increasing security concerns, amplified RIC's nascent procurement capacity. c. Unintended impacts (Positive or Negative) --- d. Other --- 12. Ratings Ratings ICR IEG Outcome Moderately Satisfactory Moderately Satisfactory --- Risk to Development Outcome High High --- Bank Performance Moderately Unsatisfactory Moderately Satisfactory Borrower Performance Moderately Satisfactory Moderately Unsatisfactory Quality of ICR Substantial --- Reason for Disagreements/Comment Following the harmonized guidelines, when the Outcome rating is above the line, the rounding of the two ratings for Bank performance goes up. Delay in effectiveness, weak implementing capacity, lack of inter-institutional arrangement hampered implementation. Note When insufficient information is provided by the Bank for IEG to arrive at a clear rating, IEG will downgrade the relevant ratings as warranted beginning July 1, 2006. The "Reason for Disagreement/Comments" column could cross-reference other sections of the ICR Review, as appropriate.