Language: English

Language: English

Original: English

PROJECT: Strengthening the Rule of Law: Enhancing Effective and Transparent Delivery of Justice and Rule-Making

COUNTRY: Arab Republic of Egypt

Proposal for a Grant from the Middle East and North Africa Transition Fund (MENA TF)

PROJECT APPRAISAL REPORT

Date: 21/03/2014

Appraisal Team / Team Leader
Team Members:
Sector Director:
Regional Director:
Sector Manager: / Ms. Carina SUGDEN, Senior Economist & PFM Specialist OSGE.2
Ms.Evelynne CHANGE, Principal Governance Officer OSGE.2
Mr. Labben MOHAMMED, Financial Management Specialist Consultant, ORPF 2.
Mr. Prajesh BHAKTA, Chief CPO, EGFO
Mr. Ayman ALGINDY, Procurement Officer , EGFO
Ms. Amira SOBHI, Disbursement Assistant, EGFO
Mr. Isaac LOBE NDOUMBE, Director, OSGE
Mr. Jacob KOLSTER, Director, ORNA
Mr. Jacob Diko MUKETE, Manager, OSGE.2
Peer Reviewers / (names, positions, units) / Mr. Ahmed YASSER, CPO ORNA
Mr. Wilfred ABIOLA, Chief Systems Analyst OSGE.O
Mr. Julien BANDIAKY, Snr Macro Economist, OSGE.1
Mr. Stephen OLANREWAJU, Consultant OSGE.O
Ms. Selpha NYAIRO, Snr. Procurement Specialist ORPF1

Table of contents

A. LIST OF TABLESii

B. LIST OF ANNEXESii

C. CURRENCY EQUIVALENTSii

D. FISCAL YEARii

E. ABBREVIATIONS AND ACRONYMSiii

F. GRANT Informationiv

G. RESULTS BASED LOGICAL FRAMEWORKv

I.INTRODUCTION

1.1.Background information

1.2.Project objectives

1.3.Sector Department responsible for preparing the request

1.4.Justification for the use of resources

IIPROJECT DESCRIPTION

2.1. Description of preparatory activities for whichresources are requested

IIICOST ESTIMATES FOR THE PREPARATORY ACTIVITIES...... 7

3.1. Detailed cost estimates...... 7

3.2. Financing plan

3.3. Cost estimates by component...... 8

3.4. Cost estimates by expenditures category...... 8

IVMODE OF PROCUREMENT OF SERVICES AND LIMITED GOODS FOR THE COUNTRY EXECUTED ACTIVITIES 9

VIMPLEMENTATION SCHEDULE...... 11

VIFINANCING ARRANGEMENTS...... 11

6.1.Terms of financing...... 11

Disbursement...... 11

Financial management...... 11

Institutional arrangements

Monitoring and evaluation

Audit

6.2.Suspension of disbursement

6.3.Letter of agreement and its annexes

VIICONCLUSIONS AND RECOMMENDATIONS FOR BANK’S CONSIDERATION 12

7.1.Conclusion...... 12

7.2.Recommendation

1. LIST of TABLEs

Table 1 Financing plan

Table 2 Cost estimates by component

Table 3 Cost estimates by expenditures category (Global)

Table 4 Cost estimates by expenditures category (MENA TF AfDB as ISA)

Table 5 Cost estimates by expenditure category (MENA TF OECD as ISA)

1. LIST of ANNEXES

Annex I
Annex II
Annex III
Annex IV
Annex V
Annex VI
Annex VII / Detailed Project Costs
Draft Implementation Schedule
Procurements Arrangements
Financial Management Assessment
Egypt Judicial System
Court of Cassation Structure
Selected Macroeconomic Indicators for Egypt

1. currency EQUIVALENts

March 2014

1 UA = 10.79 EGP

1 UA = 1.55 USD

1 USD = 6.97 EGP

1. fiscal year

1st July-30th June

1. ABBREVIATIONS AND ACRONYMS

AfDB:AfricanDevelopment Bank

CC: Court of Cassation

CPO: Country Programme Officer

CMS Court Management System

CSO: Civil Society Organization

GCI: Global Competitiveness Index

GoE: Government of Egypt.

EGFO: Egypt Field Office

EGP: Egyptian Pound

GAP II: Governance Strategic Framework and Action Plan 2014-208

GDP: Gross Domestic Product

GECL: AfDB Legal Department

GPN: General Procurement Notice

IMF: International Monetary Fund

IRD:Institut de Recherche pour le Développement

ISA: Implementation Support Agency

ISP: Bank Group Interim Strategy Paper

IT: Information Technology

MCIT:Ministry of Communication and Information Technology

MENA: Middle East and North Africa

MI: Mo Ibrahim Index

MIC-TAMiddle Income Countries Technical Assistance

MoJ: Ministry of Justice

MoPIC:Ministry of Planning and International Cooperation

MSAD:Ministry of State Administration and Development

OECD: Organization for Economic Co-operation and Development

ORNA: AfDB North Africa Regional Department 1

ORPF: AfDB Procurement and Fiduciary Service Department

OSGE: AfDB Governance, Economic and Financial Reforms Department.

PIT: Project Implementation Team

TF: Trust Fund

TYS: Bank Group Ten Year Strategy (2013-2022)

UNDB: United Nations Development Business

UNDP: United Nations Development Programme

USD: United States Dollar

WJP: World Justice Project

1. GRANT INFORMATION

Client’s information

BORROWER: THE ARAB REPUBLIC OF EGYPT

EXECUTING AGENCIES: MINISTRY OF JUSTICE AND THE COURT OF CASSATION

Financing plan

Source / Amount (in thousand $US) / Instrument
MENA Transition Fund / 4.121 / Grant
OECD as ISA / 1.500 / Grant
AfDB as ISA / 2.406 / Grant
Government / 2.000
AfDB MIC- TA / 0.320 / Grant
TOTAL COST / 6.226

ADB’sKey FinancingInformation

Grant currency / US dollars

Time-frame - Main Milestones (expected)

Project approval / May 2014
Effectiveness / September 2014
Completion / September 2017
Final Disbursement / April 2017

1. RESULTS-BASED LOGICAL FRAMEWORK

Country and project name: / EGYPT
Purpose of the project: / Consolidating the Rule of law and enhancing an enabling business environment through (i) enhancing efficiency and effectiveness in the delivery of justice and (ii) strengthening inclusion in the rule-making process.
Results chain / Performance indicators / Means of verification / Risks/mitigation measures
Indicator
(including CSI) / Baseline / Target
Impact / Improved and Transparent Rule of Law for Inclusive and Competitive Growth / Global Competitiveness Index (GCI)
World Justice Programme (WJP) Rule of Law Index
Mo Ibrahim Index (MI) / Overall 118/148 GCI 2013-14 (Institutions score 3.3)
2013 WJP 51/97 Open gvt, 73/97 Civil Justice, 56/97 Criminal Justice.
Overall 19/52 2013; Rule of law 50.8/100 / 3.7 GCI Institutions
45/97
55 Rule of Law, / GCI 2017-18
WJP 2016/17
60/97 Open gvt, 60/97 Civil Justice
48/97 Criminal Justice
MI 2018 / Risk #1 Macro-economic risk: Growing and unstable fiscal imbalances are a threat to macro-economicstabilityMitigation: These risks are well understood by gov, which is introducing vital policy reforms
Risk # 2 Political risk: The recent political environment in Egypt has been characterized by frequent changes in government. The coming election may lead to a configuration of the political players which could pose a risk to the project inerms of institutional memory and political commitment.
Mitigation measures: Continued engagement with the government through MoPICto ensure that there is universal support across political divide for the measures needed to reverse the current situation.
Outcome 1
Strengthened Institutions for effective justice delivery / Volume of backlog reduced %
% of case files archived
No. Court services in active use by the public / Backlog of up to 250,000 cases
Paper storage at the CCupto 1,000,000 cases not archived / 25% backlog reduced end 2017
All new concluded cases archived, old Cases upto 2010 archived by 2017
All key judgments of CC available by end 2016 / Website verification
Project Progress Reports
Outcomes / Outcome 2
Enhanced transparency accountability and participation in the justice sector / No. of laws enacted with public consultative process
No. of hits on the consultation Portal / Ineffective avenues of consultative processes at Ministry of Justice
CC website not dynamic or interactive / At least two laws enacted with Public consultation end 2017.
5 m hits on consultation portal end 2017 / Website verification
Project progress reports
Parliamentary reports
Component 1: Supporting the Efficient and Effective Delivery of Justice by the CC
Outputs / Output 1.1 Reform action plan for CC designed / Reform Action Plan / - / 2015 / Project Progress Report (PRG) / Risk # 3 Capacity and Implementation Constraints: Weak institutional and human capacities resources capacity could hamper implementation.
Mitigation: Capacity building has been built into the project components
Output 1.2
Automated Case management for CC system / Case mngmtsystem in place / No automated systemsin use / Case mngmtsystem in placeby 2017 / Project Progress Report
Output 1.3
Staff with capacity to use automated system / No.of staff trained disaggregated by men and women / Limited IT skills / 1000 staff trained on basic IT skills advanced training for 20 technicians / Project Progress Report
Output 1.4. Information disseminated and awareness raised on new court system / Production on promotional material
Awareness raising events for non-gov (CSO, Private sector etc.) and gov. stakeholders
Number of visitors on portal / - / Promotional material and training by end 2016 / Project Progress reports, website verification
Component 2: Supporting transparent and participatory law making in the Ministry of Justice
Output 2.1
System for effective stakeholder engagement in rule making / Consultation process designed / Action plan for inclusive rule making (2015) / Project Progress Report.
Output 2.2
Staff trained and inclusive rule-making / No. of staff trained disaggregated by gender
No. of toolkits developed
No. of secondment to OECD and vice versa to MoJ & CC / - / 50 number of staff trained by end 2016
At least 6 toolkits on legislative drafting developed end 2017
At least 2 secondments undertaken in project time-frame / Project Progress Report
Output 2.3. Laws amended/drafted with consultation / No. of laws amended or drafted with consultation / Limited consultation / At least four legislations drafted using new techniques end 2017 / Project Progress Report, Parliamentary reports
Output 2.4Consultation Portal and database established at MoJ / Existence of portal and database / - / MoJ portal with database for legislation and toolkits
2017 / Project progress reports
Website verification
Key activities / components / Inputs
The project will have three components
Component1: Supporting the Efficient and Effective Delivery of Justice by the CC
Component 2: Support Transparent and Participatory Rule Making at theMoJ Component 3: Project Management and Monitoring / MENA TF will provide USD 4, 226,000 to finance these components and related contingencies.
Government will provide network infrastructurecosted at USD 2 mill and other in kind support.

1

I.INTRODUCTION

1.1Background information

1.1.1 Egypt remains locked in a protracted process of political transition with social and economic challenges growing. There have been a number of regime changes since theresignation of the long-serving leader Hosni Mubarak in February 2011. Meanwhile, the country successfully approved a new Constitution in January 2014, thus achieving a key milestone of the transition roadmap that was issued after the ousting of President Morsi in July 2013. Presidential elections are planned to be held by July2014 followed by parliamentary elections for the establishment of new Parliament by September 2014.

1.1.2Economic activity in Egypt continues to be weighed down by political unrest, structural bottlenecks, and fiscal challenges. GDP growth has slumped down to about 2% post the January 2011 revolution and is expected to remain that way for the rest of 2014 and into 2015. The fiscal and balance-of-payments deficits have deteriorated with fiscal deficit projected to reach 11.5% of GDP in 2014. Three years after the Arab Spring, Egyptians are still waiting to reap the full benefits of lasting social, political and economic change.Poverty is on the rise with the head count ratio of national poverty rates for 2013 registered at 26.3% (up from 2.16% in 2011) .Egypt has potential both for structural transformation towards a more productive economy and for optimal use of its immense resource wealth, provided that vital policy reforms are introduced.

1.1.3Promoting an inclusive growth agenda will require significant efforts towards addressing longstanding governance challenges. The lack of solid citizenship participation mechanisms and limited access to public information have affected the ability of the government of Egypt to provide quality services to its citizens and be accountable to them. According to the 2013 World Justice Project (WJP) Rule of Law Index, Egypt was ranked 51 in terms of open government. The civil justice system is slow and subject to political pressure. Discrimination of women and minorities is also of concern. The 2014 WJP Index, ranks Egypt below theMENA regional average on Rule of Law, with particular weaknesses in areas such as due process of law, reasonable delay in processing of cases and right to information.Egypt was one of the greatest deteriorations in the 2013 Mo Ibrahim Index on the category of rule of law which also includes assessment on judicial process. The MI safety and rule of law score of 50.8/100 is a drop from the score of 57 the previous year and an overall decline of -12 since 2000. According to Transparency International’s 2013 Global Corruption Barometer only 16% percent of Egyptians believe that there has been an improvement in corruption control after the revolution (Nearly 65 percent of Egyptians feel that corruption has increased significantly or at least somewhat since the revolution).This can be a further signal of ineffective judicial systems and weakened rule of law.

1.1.4The judiciary in particular is confronted with a growing lack of trust. The Court of Cassation (CC), the highest Judicial body in Egypt, charged with among others interpretation and application of the rule of law, supervisory function over Judge’s actions and reposition of judicial precedent, meets an increased demand for service with inability to respond effectively given an archaic and rudimentary court management and case storage system. Apart from day- to-day cases, the CC faces a backlog of 250,000 cases growing by additional 30,000 cases per annum on average and a log-jam of close to 1,000,000 un-archived cases. This makes for a slow and ineffective system for the delivery of justice.

1.1.5The Ministry of Justice (MoJ) that is responsible for providing support for the administration of justice, lacks coherent and transparent procedures to draft legislation that meets the public interest.There are limited public consultation and accountability mechanisms to assure quality in legislation, which creates a risk of regulatory capture by powerful interest groups. Access to information around legislation, judicial proceedings and processes is also limitedThere is no system in place that allows for using standard legislative drafting techniques or to assess the impact of the proposed legislation. With the approval of the new Constitution in 2014, there is a need to amend several existing legislations and draft new pieces of legislation that are in conformity with the provisions of the new Constitution. It is therefore opportune to strengthen inclusion in the rule making process so as to meet the aspirations and needs of the public and the new Egypt.

1.1.6In the current environment of reform in Egypt, the national justice system can play a critical role in restoring confidence, promoting accountability and ultimately restructuring the national economy to promote competitiveness for economic growth and transformation. Apart from the crucial traditional role played by the Judiciary in safeguarding human rights, ensuring access to justice and maintaining rule of law, it is a central pillar in terms of enforcing contracts, protecting property and other rights, commercial dispute resolution, resolving matters relating to insolvency and bankruptcy all of which are important structural components of an attractive business environment.Developing institutions and mechanisms to ensure good rule making is of greater importance in Egypt post revolution than before. This is because regulations are the instruments that are used by governments to implement policies and effect change in society. They are essential elements of a successful transition. They need to serve the public interest and be informed by the legitimate needs of those interested in and affected by regulation

1.2 Project Objectives

1.2.1Overall the project aims at contributing to consolidating the rule of law and enhancing an enabling business environment through (i) enhancing efficiency and effectivenessin the delivery of justice and (ii) strengthening transparency and participation in the rule-making process.

1.2.2The first objective addresses the need to improve the delivery of justice, by strengthening rule of law - which is addressed at the level of the CC. The Project will aim to design and implement an automated case management system for the CC; build capacity of CC staff to use new systems; reduce case delays and improve the provision of judicial services to the public.

1.2.3The second objective is linked to the broader agenda of Government on ensuring greater transparency and access to information. The project will work with the MoJtobuild capacities in legislative drafting and inclusion in the rule-making process comprising activities such as training, technical assistance, peer exchanges, secondments and study tours and IT solutions.

1.2.4Several other incidental benefits will flow from this project. (1) Improvements to the CC will have a demonstration effect for other parts of the court system. The experiences in easier access to the court by means of electronic filing, improved case management, betterarchivingof documents and publishing judgments in real time electronically will serve as a best practice that can be adapted to other courts. (2) Improvements and developments in better regulation; the use of e-consultation in engaging stakeholders and the development of improved techniques of legislative drafting can also be applied with some modifications to other parts of the justice sector in Egypt for example the Council of State,which plays a crucial role in the review of draft legislation given its role in handling appeals on administrative matters.

1.3 Sector Department responsible for preparing the request

1.3.1The Governance, Economic & Financial Reforms Department (OSGE) has prepared this request, in close collaboration with Egypt Filed Office (EGFO), the Regional department (ORNA) and the Organization for Economic Co-operation and Development (OECD).

1.4 Justification for the use of resources

1.4.1A fair and effective justice system is an important guarantor of the rule of law, which will encourage inward investment and support the functioning of society and the economy. This in turn will foster sustainable and inclusive economic growth by ensuring that a central part of the state functions efficiently.This is aligned with the Transition Fund’s objective to strengthen governance and public institutions in Egypt, and drive change in the high impact area of justice, towards enhancing economic governance and sustainable growth.

1.4.2The project is in line with the national strategic priorities of the interim Government, as outlined on the 12th September 2013 in its Program for Economic Development and Social Justice for the transition period, specifically the priority to ensure fair and efficient public service delivery. This is to be achieved by, among other things, enhancing court management systems and rule making through the implementation of E-Government information technology and communications (ICT) systems. Egypt has a national ICT Strategy 2013-2017 which focuses on integrating ICT across all sectors to serve national development priorities. The automation of legal proceedings and focus on e-justice are a fundamental cornerstone of this strategy. The MoJ has been one of the first Ministries to embrace ICT techniquesand has piloted a number of e-justice projects, including automation of a select number of courts of first instance and notary services. It is these modest gains that the Project seeks to build upon and catalyze.

1.4.3The need to increase public trust and confidence in the justice sector by enhancing participation and engagement is also attuned to the current environment in post-revolution Egypt. The Post 2015 UNDP national consultations in Egypt revealed that stakeholders are eager to discuss the future they want for themselves as well as their country, with governance and accountability as one of the key areas of concern.