BioCarbon Fund Initiative for Sustainable Forest Landscapes Terms of Reference Emission Reductions Program Document Assessment

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1 Background The BioCarbon Fund Initiative for Sustainable Forest Landscapes (ISFL) is a multilateral facility that promotes and rewards reduced greenhouse gas emissions and increased sequestration through better land management, including REDD+, climate smart agriculture, and smarter land use planning and policies. The ISFL will pilot programs and interventions at a jurisdictional scale utilizing a landscape approach, which requires stakeholders to consider the trade-offs and synergies between different sectors that may compete in a jurisdiction for land use such as forests, agriculture, energy, mining, and infrastructure. ISFL programs may obtain implementation grant funding and/or results-based payments for emission reductions. The ISFL support programs that engage in Emission Reduction Purchase Agreements (ERPAs) to receive results-based payments for GHG emission reductions and removals and are referred to as ER programs. In order to be eligible for receiving results-based payments, ER Programs in the ISFL must meet the ISFL ER Program Requirements and associated guidelines 1. Details on how the ER programs meet the requirements are included in ER Program Documents which are to be submitted to the World Bank (as Trustee of the ISFL) prior to signature of an ER Purchase Agreement (ERPA). The ISFL ER Program Requirements outline an approach for comprehensive landscape GHG accounting. Full comprehensiveness ideally requires accounting for all emissions and removals related to agriculture, forestry, and other land use (AFOLU) sectors with data of sufficient quality and accuracy to allow for results-based payments. However, ISFL program countries are at different stages in terms of the availability and quality of GHG data. Therefore, the ISFL developed an innovative phased approach to GHG accounting to enable countries to account for GHG emissions as they meet requirements for data quality and availability. 2. At the beginning of each phase, ER Program Documents will be assessed by an independent third party. The primary purpose of the independent assessment will be to review the document for correctness and completeness, assess compliance of the ER Program with ISFL ER Program Requirements and provide expert opinion on aspects of program design to inform the World Bank s and Contributors review of the ISFL ER Program. The World Bank is now seeking to contract a firm to assess the ER Program Documents for up to five ER Programs covering the first phase of the ERPA. Requested Services and Deliverables Objectives For each of the Emission Reduction Programs in the ISFL: Ensure the information provided in the ER Program Document Review is correct and complete (ie not leaving out information that might affect the opinion of the reader) More information on the phased approach can be found in the ISFL ER Program Requirements ( Page 1 of 8

2 Conduct an independent assessment of the compliance against the approved ISFL ER Program Requirements and associated guidelines Apply expert judgement to evaluate the feasibility of program design aspects and identify areas of improvement to inform the World Bank s and Contributors review of the ISFL ER Program. Scope of the assessment The scope of the assessment will include inter alia the following aspects: Aspect Drivers of AFOLU emissions and removals Description and justification of the ISFL ER Program s planned actions and interventions Financing plan for implementing the planned actions and interventions of the ISFL ER Program Analysis of laws, statutes, and other regulatory frameworks Expected scope of the assessment Correctness and completeness of the analysis on historic and future trends (qualitative and quantitative) in drivers of AFOLU emissions and removals Expert judgement of the analysis, including the barriers to mitigation Expert judgement whether the proposed actions and interventions address drivers of emissions and are informed by the contribution of key sources and sinks to the total GHG emissions and removals in the Program GHG Inventory and the analysis of trends Expert judgement of continued private sector engagement achieved or planned in addressing drivers of emissions Expert judgement of risks to implementation and potential benefits of planned actions and interventions Expert judgment if the non-carbon benefits have been sufficiently considered during program selection and design Correctness and completeness of information on the transaction costs and the identified funding gaps for the ISFL ER Program and the plan for mitigating gaps Expert judgement whether the identified sources of finance are sufficient to affect the land use activities and drivers of emissions and removals Expert judgement of the financial and economic analyses, discount rates, and flows of funds Correctness and completeness of the information provided in the program document Expert judgement to identify any known legal or regulatory issues in the program area that can affect the program design, including benefit sharing Risk for displacement Correctness and completeness of the information provided in the analysis of displacement risk Expert judgement on the effectiveness of the proposed strategy to mitigate and/or minimize, to the extent possible, potential Displacement Description of stakeholder consultation process Correctness and completeness of the information provided on the stakeholder consultation process Page 2 of 8

3 Description of the Feedback and Grievance Redress Mechanism Assessment of land and resource tenure in the Program Area Expert judgement if the full, effective, and on-going participation of relevant stakeholders has occurred Expert judgement whether the FGRM is operational and accessible to relevant stakeholders, or if not yet in place, whether the proposed mechanism is technically feasible and builds on existing structures that are tested Assess whether a description of FGRM procedures has been made public at the local, ISFL ER Program, and national levels, in a language understandable to relevant stakeholders Correctness and completeness of the analysis. Assess whether (i) the assessment of the land and resource tenure regimes has been made publicly available, (ii) if the assessment sufficiently includes land and resource tenure rights, the legal status of such rights, areas subject to significant conflicts or disputes, and any potential impacts of the ISFL ER Program on existing land and resource tenure in the Program Area; and (iii) that the assessment has been conducted in a consultative, transparent, and participatory manner, reflecting inputs from relevant stakeholders Expert judgement of the implications of the land and resource tenure assessment for program design, and for the ISFL ER Program s ability to transfer title to ERs to the ISFL Benefit Sharing Arrangements Assess whether the Benefit Sharing Arrangements have been designed in a consultative, transparent, and participatory manner appropriate to the country context and that reflects inputs and broad community support by relevant stakeholders Assess whether the description of the Benefits Sharing Arrangement contains the required information and the information provided is correct and complete Expert judgement whether the Benefit Sharing Arrangements will provide incentive structures and contribute to the sustainability of the program Expert judgement whether the proposed benefits correspond with the drivers of emissions analysis and anticipated ERs Expert judgement whether the benefit sharing arrangements are technically feasible, including mechanisms for distributing benefits and any issues related to nested projects, etc. Ability to transfer title to ERs Expert judgement whether the analysis of the ability to transfer title to ERs or any roadmap towards demonstrating such ability prior to ERPA signature is comprehensive and conclusive. Page 3 of 8

4 Participation under other GHG initiatives Data management and registry systems to avoid multiple claims to ERs Expert judgement on risks of contests/disputes to title to ERs and mitigation measures. Correctness and completeness of the information provided whether parts of the program area, or projects in the program area, are included in other GHG initiatives and if this creates a risk of double counting, and/or double payment If applicable, expert judgement whether the Program and Projects Data Management System is sufficient, secure, and robust If the ISFL ER Program is not using the World Bank s transaction registry for FCPF and ISFL ER Programs, expert judgement whether the transaction registry is sufficient, secure, and robust If applicable, expert judgement of the data management and registry systems to recognize nested projects and avoid multiple claims to ERs ISFL Reporting Assess whether the GHG Inventory is comparable in its use of definitions, categories and subcategories with national processes such as the national GHG inventory, REDD+ and the Biannual Update Report Assess whether the best available data sets, methods, models and assumptions have been used in the ISFL Reporting and that the inventory applies the general IPCC principles of transparency, completeness, consistency, accuracy and comprehensiveness. Selection of subcategories for accounting Correctness and completeness of the data and information provided on the choice of the subcategories Assess whether the quality and baseline setting requirements have been applied correctly and the choice of the subcategories is correct and justified Assess whether all significant pools and sources of greenhouse gas emissions are included. If a major carbon pool/ or gas is excluded, assess whether this has been sufficiently explained and justified, provided it is not a significant pool. Emissions baseline Assess whether the methods used to construct are in line with the IPCC and best practice approaches as defined, for example by the GFOI Correctness and completeness of the data used to construct the baseline Assess whether the baseline requirements have been applied correctly and the Emissions Baseline estimate is calculated correctly Assess whether the uncertainty in the Emissions Baseline has been correctly identified and assessed in accordance with IPCC good practice Page 4 of 8

5 Time bound plan to increase the completeness of the scope of accounting and improve data and methods for the subsequent ERPA Phases during the ERPA Term Ex-ante estimation of the emission reductions Expert judgement whether the proposed plan is feasible, addresses priority subcategories and is likely to increase the completeness of the scope of accounting and improve data and methods for the subsequent ERPA Phases Expert judgement if the assumed effectiveness of the program in addressing the drivers and its impact on the emissions is justified and based on reasonable assumptions Monitoring approach Assess whether the data and methods proposed for monitoring are consistent enough with the data and methods used for the determination of the baseline to allow for meaningful comparison and calculation of the emission reductions Assess whether the proposed monitoring methods and arrangements are in place as described in the Program Document and are technically capable of collecting the data Assess whether the uncertainty in the data and parameters to be monitored has been correctly identified and assessed and if the proposed approach to manage and reduce uncertainty reflects good practice Reversals Correctness and completeness of the data and assumption used in the assessment of the reversal risk Assess whether the ISFL Buffer Requirements have been applied correctly Geographical scope The portfolio of the ISFL contains the following countries and programs: Country Colombia Ethiopia Indonesia Mexico Zambia Jurisdiction Orinoquia Oromia Regional State Jambi province Chihuahua, Coahuila, Durango, and Nuevo Leon Eastern Province Methodology The exact methodology for the assignment will be discussed with the firm based on the inception report. However, in general it is expected that the firm shall conduct a desk review, a country visit and any other methods required to assess the accuracy, conservativeness, relevance, completeness, consistency and transparency of the information provided in the ER Program Documents and any other additional information provided by the program. The firm shall apply consistent criteria across the five programs to determine whether information provided by the programs is reliable and credible. Page 5 of 8

6 The firm shall base its findings and conclusions on objective evidence and not omit evidence that is likely to alter the opinion of the World Bank or the ISFL Contributors. All information in the report shall be presented in a factual, neutral and coherent manner and the firm shall document all assumptions, provide references to background material, and identify changes made to the documentation. In carrying out the independent assessment of the compliance against the approved ISFL ER Program Requirements and associated guidelines, the firm is expected to follow ISO :2013 or a similar standard and its own quality management systems to apply a risk-based approach, concentrating on the likely sources of material misstatements. Deliverables The firm is expected to provide the following deliverables: Inception report containing: o User requirement analysis to define the basis of the assignment; o An outline of the proposed approach, including the expected level of assurance for the independent assessment and the procedures to be applied; o Checklists and other materials to be used for each assignment including the draft assessment checklist highlighting how the ISFL ER Program requirements will be assessed (based on the scope identified in this ToR and the ISFL ER Program Requirements and its associated guidelines). For each assessment of an individual program: o o o o Audit plan outlining the overall approach to the assessment and the proposed schedule for the site visit, including list of people (based on position) to be interviewed, data to be reviewed etc.; List of findings from the assessment; Draft assessment report; Final assessment report and opinion, including a discussion of the findings with the ISFL Contributors through a videoconference; Timeline of Services The primary contract for the five assessments will run from July 2018 until December 2019 (or earlier if all assessments have been completed). Within 4 of the start of the assignment, the firm is expected to provide the inception report. The inception report will be discussed with the World Bank. Once the approach and materials are agreed, the timeline for each individual assignment is expected to follow the tentative timetable below. Tentative Timetable for each individual assessment Page 6 of 8

7 Date Milestone Deliverable Starting Submission of ER Program Document to firm date Starting Outline Audit Plan Audit plan Date + 1 Week Starting Document review and identification of any findings. Findings Date + 3 Starting Site visit to verify compliance and data, raising findings if Updated findings Date + 4 necessary Starting date + 6 World Bank submits relevant documentation addressing findings in one submission to firm Starting date + 8 Starting date + 9 Review by the firm of documentation submitted. Closure of Findings, if appropriate. Technical Review (finding(s) may be raised at this stage. World Bank will endeavor to submit relevant documentation addressing the finding(s) within 15 days of notification.) Draft assessment report. Final assessment report and opinion. Qualifications Experience with applying an auditing approach, such as ISO 14064:3 or comparable approaches under other accreditation schemes; Good understanding of the UNFCCC decisions related to REDD+, REDD+ projects and jurisdictional programs, and national GHG inventories; Lead experts with excellent writing and communication skills in English and Spanish, and preferably Bahasa Indonesia; Access to experts with excellent understanding of: o Carbon accounting, project and program information management systems and project registries; o Social and environmental safeguards; o Benefit sharing mechanisms; o Land tenure; o Legal aspects of carbon transactions; o Financial/economic analysis. Access to experts with experience in the five target countries including knowledge of the countries laws, regulatory requirements and issues around land use. Page 7 of 8

8 Other requirements Communications All communications regarding the assignment with any ER Program representatives, ISFL Contributors or the general public, must be authorized. Materials All materials shared with, collected by or produced as part of this service are the property of the World Bank, and should not be shared with any other party without specific authorization from the World Bank. Right of Review of Documents The World Bank retains the right to review any and all documents, prior to them being shared with the ER Program representatives. Staffing and Change of Staffing The firm must inform the World Bank of any change in the composition of team members for the assessment. In case of failure to inform about changes in the composition of team members, the World Bank retains the right to cancel or modify the original contract. Page 8 of 8