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FOR OFFICIAL USE ONLY Report No: PAD2919

INTERNATIONAL DEVELOPMENT ASSOCIATION

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED GRANT

IN THE AMOUNT OF SDR 71.7 MILLION

(US$100 MILLION EQUIVALENT)

TO THE

REPUBLIC OF MOZAMBIQUE

FOR A

MOZAMBIQUE LAND ADMINISTRATION PROJECT (TERRA SEGURA)

November 9, 2018 Social, Urban, Rural And Resilience Global Practice Africa Region

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

(Exchange Rate Effective September 30, 2018)

Currency Unit = New Mozambique Metical (MZN)

US$1 = SDR 0.71671743

SDR 1 = US$1.39525000

US$1 = MZN 61.125

FISCAL YEAR

January 1 ‐ December 31

Regional Vice President: Hafez M. H. Ghanem

Country Director: Mark R. Lundell

Senior Global Practice Director: Ede Jorge Ijjasz‐Vasquez

Practice Manager: Jorge A. Munoz

Task Team Leader(s): Anna Corsi

ABBREVIATIONS AND ACRONYMS

CENACARTA National Centre for Cartography and Remote Sensing (Portuguese Acronym)

CERC Contingent Emergency Response Component CORS Continuously Operating Reference Station

CPF Country Partnership Framework

CPS Country Partnership Strategy

DELCOM Community Delimitation

DINAT National Directorate of Lands (Portuguese Acronym)

DLI Disbursement‐Linked Indicator

DPTADER Ministry of Land, Environment and Rural Development’s Provincial Directorates (Portuguese Acronym)

DUATs Direitos de Uso e Aproveitamento da Terra (Rights to Use and Benefit from Land)

EA Environmental Assessment

EMP Environmental Management Plan

ESMF Environmental and Social Management Framework

FAO Food and Agriculture Organization

FCT Forum de Consulta sobre Terras (Land Consultative Forum)

FNDS National Fund for Sustainable Development (Portuguese Acronym)

GHG Greenhouse Gas

GRM Grievance Redress Mechanisms

GRS Grievance Redress Service

ICT Information and Communication Technologies

IDA International Development Association

IFR Interim Financial Report

IRM Immediate Response Mechanism

LTR Land Tenure Regularization

LULUCF Land Use, Land Use Change and Forestry

M&E Monitoring and Evaluation

MAEPF Ministry of State Administration and Public Function

MCC Millennium Challenge Corporation

MITADER Ministry of Land, Environment and Rural Development (Portuguese Acronym)

MozFIP Mozambique Forest Investment Project

MozNET National Geodetic Network (Portuguese Acronym)

MPA Multiphase Programmatic Approach

NGO Non‐governmental organization

NLP National Land Policy

NSDI National Spatial Data Infrastructure

NUIT Unique Tax Identification Number (Portuguese Acronym)

OP/BP World Bank's Operation Policies/Bank Procedures

PCU Project Coordination Unit

PDO Project Development Objective

PF Process Framework

POM Project Operations Manual

RPF Resettlement Policy Framework

SDAE District Service for Economic Activities (Portuguese Acronym)

SDPI District Planning and Infrastructure Service (Portuguese Acronym)

SIA Social Impact Assessment

SiGIT Sistema de Gestão de Informação da Terra (Land Information Management System)

SIRP Real Property Register System (Portuguese Acronym)

SPEED+ Supporting the Policy Environment for Economic Development

SPGCs Provincial Cadastral Offices (Serviços Provinciais de Geografia e Cadastro)

Sustenta Agricultural and Natural Resources Landscape Management Project

USAID United States Agency for International Development

WB World Bank

The World Bank Mozambique Land Administration Project (Terra Segura) (P164551)

TABLE OF CONTENTS

DATASHEET ............................................................................................................................. 1

I. STRATEGIC CONTEXT ................................................................................................. 8

A. Country Context ................................................................................................................................ 8

B. Sectoral and Institutional Context .................................................................................................... 9

C. Relevance to Higher Level Objectives ............................................................................................. 12

II. PROJECT DESCRIPTION ............................................................................................ 13

A. Project Development Objective ..................................................................................................... 13

B. Project Components ....................................................................................................................... 14

C. Project Beneficiaries ....................................................................................................................... 20

D. Results Chain .................................................................................................................................. 21

E. Rationale for Bank Involvement and Role of Partners ................................................................... 22

F. Lessons Learned and Reflected in the Project Design .................................................................... 23

III. IMPLEMENTATION ARRANGEMENTS ................................................................... 26

A. Institutional and Implementation Arrangements .......................................................................... 26

B. Results Monitoring and Evaluation Arrangements ......................................................................... 27

C. Sustainability ................................................................................................................................... 27

IV. PROJECT APPRAISAL SUMMARY ........................................................................... 28

A. Technical, Economic and Financial Analysis (if applicable) ............................................................ 28

B. Fiduciary .......................................................................................................................................... 31

C. Safeguards ...................................................................................................................................... 31

V. KEY RISKS ................................................................................................................. 34

A. Overall Risk Rating and Explanation of Key Risks ........................................................................... 34

VI. RESULTS FRAMEWORK AND MONITORING .......................................................... 38

ANNEX 1: Implementation Arrangements and Support Plan ........................................... 47

ANNEX 2: Institutional and Legal Context ....................................................................... 60

ANNEX 3: Methodology for DELCOM and LTR – Key Steps .............................................. 66

ANNEX 4: Project Map .................................................................................................... 75


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DATASHEET

BASIC INFORMATION BASIC INFO TABLE

Country(ies) Project Name

Mozambique Mozambique Land Administration Project (Terra Segura)

Project ID Financing Instrument Environmental Assessment Category

P164551 Investment Project Financing

B‐Partial Assessment

Financing & Implementation Modalities

[ ] Multiphase Programmatic Approach (MPA) [ ] Contingent Emergency Response Component (CERC)

[ ] Series of Projects (SOP) [ ] Fragile State(s)

[ ] Disbursement‐linked Indicators (DLIs) [ ] Small State(s)

[ ] Financial Intermediaries (FI) [ ] Fragile within a non‐fragile Country

[ ] Project‐Based Guarantee [ ] Conflict

[ ] Deferred Drawdown [ ] Responding to Natural or Man‐made Disaster

[ ] Alternate Procurement Arrangements (APA)

Expected Approval Date Expected Closing Date

04‐Dec‐2018 29‐Mar‐2024

Bank/IFC Collaboration Joint Level

Yes Complementary or Interdependent project requiring active coordination

Proposed Development Objective(s) The Project Development Objective is to strengthen land tenure security in selected districts and improve the efficiency and accessibility of land administration services.


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Components Component Name Cost (US$, millions)

Institutional Development and Strengthening of the Legal Framework 22.40

Systematic Land Regularization 64.90

Project Management and Coordination 12.70

Contingent Emergency Response Component (CERC) 0.00

Organizations Borrower: Ministry of Economy and Finance

Implementing Agency: Ministry of Land, Environment and Rural Development

PROJECT FINANCING DATA (US$, Millions)

SUMMARY‐NewFin1

Total Project Cost 100.00

Total Financing 100.00

of which IBRD/IDA 100.00

Financing Gap 0.00

DETAILS‐NewFinEnh1

World Bank Group Financing

International Development Association (IDA) 100.00

IDA Grant 100.00

IDA Resources (in US$, Millions)

Credit Amount Grant Amount Total Amount

National PBA 0.00 100.00 100.00

Total 0.00 100.00 100.00


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Expected Disbursements (in US$, Millions)

WB Fiscal Year 2019 2020 2021 2022 2023 2024

Annual 2.85 12.66 20.67 23.53 24.25 16.05

Cumulative 2.85 15.51 36.18 59.71 83.95 100.00

INSTITUTIONAL DATA

Practice Area (Lead) Contributing Practice Areas

Social, Urban, Rural and Resilience Global Practice

Agriculture, Environment & Natural Resources

Climate Change and Disaster Screening

This operation has been screened for short and long‐term climate change and disaster risks

Gender Tag

Does the project plan to undertake any of the following?

a. Analysis to identify Project‐relevant gaps between males and females, especially in light of country gaps identified through SCD and CPF

Yes

b. Specific action(s) to address the gender gaps identified in (a) and/or to improve women or men's empowerment

Yes

c. Include Indicators in results framework to monitor outcomes from actions identified in (b) Yes

SYSTEMATIC OPERATIONS RISK‐RATING TOOL (SORT)

Risk Category Rating

1. Political and Governance Substantial

2. Macroeconomic Moderate

3. Sector Strategies and Policies Moderate

4. Technical Design of Project or Program Substantial

5. Institutional Capacity for Implementation and Sustainability Substantial

6. Fiduciary Substantial


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7. Environment and Social High

8. Stakeholders Moderate

9. Other

10. Overall Substantial

COMPLIANCE

Policy Does the project depart from the CPF in content or in other significant respects?

[ ] Yes [✓] No

Does the project require any waivers of Bank policies?

[ ] Yes [✓] No

Safeguard Policies Triggered by the Project Yes No

Environmental Assessment OP/BP 4.01 ✔ Performance Standards for Private Sector Activities OP/BP 4.03 ✔

Natural Habitats OP/BP 4.04 ✔ Forests OP/BP 4.36 ✔ Pest Management OP 4.09 ✔

Physical Cultural Resources OP/BP 4.11 ✔ Indigenous Peoples OP/BP 4.10 ✔

Involuntary Resettlement OP/BP 4.12 ✔ Safety of Dams OP/BP 4.37 ✔

Projects on International Waterways OP/BP 7.50 ✔

Projects in Disputed Areas OP/BP 7.60 ✔

Legal Covenants

Sections and Description Schedule 2, Section I, A.1. No later than 60 days after the Effective Date, the Recipient shall maintain during implementation of the Project


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the Project Steering Committee (PSC) chaired by FNDS and composed of two representatives of DINAT, and one representative each of FNDS, CENACARTA, DNOT and the FCT Reflection Group. Representatives of the National Directorate of Territorial Planning and Resettlement, the National Directorate of Registration and Notary, and other entities as needed will participate as observers. FNDS will serve as the Secretariat of the Steering Committee and it will be responsible for (i) providing overall policy guidance and decision‐making on all issues relating to the Project; (ii) facilitating coordination among the relevant agencies; (iii) reviewing and approving annual work and expenditure plans, and (iv) assessing risks of strategic impact and identifying solutions. Sections and Description Schedule 2, Section I, A.2. No later than 30 days after the Effective Date, the Recipient, through FNDS, shall enter into a Memorandum of Understanding (MoU) among CENACARTA, DNOT and FNDS, establishing the roles and responsibilities of each entity for the collaboration on the implementation of the relevant activities under the Project. Sections and Description Schedule 2, Section IV, A. Not later than 60 days after the Effective date, the Recipient shall customize its accounting software, for the purposes of maintaining separate records and ledger accounts for the Project. Sections and Description Schedule 2, Section I, A.3. The Recipient shall: (a) maintain, until the completion of the Project: (i) a unit within FNDS (the PCU), responsible for the management, coordination, supervision, monitoring and evaluation of the Project; and (ii) not later than 60 days after the Effective Date establish and thereafter operate and maintain until the completion of the Project, three (3) provincial PCUs covering the Recipient’s territory, responsible for the coordination and implementation of Project activities in the selected provinces, including the responsibility to ensure integration and quality of activities under the Project; and (b) cause the units mentioned in (a) above to maintain, until completion of the Project, a structure, responsibilities, and key staff with functions, experience, responsibilities and qualifications acceptable to the Association described in the Project Operations Manual, including: (i) for the PCU, a Project coordinator and technical specialists in the areas of cadaster, land administration, land law, ICT, procurement, financial management, M&E, social development, gender, environment, and communication; and (ii) for the provincial PCUs each with a land administration specialist, a safeguards specialist and an accountant. Sections and Description Schedule 2, Section I, A. 4. The Recipient shall prepare and furnish to the Association for its approval, not later than November 15 of each year during the implementation of the Project, or such later date as the Association may agree, the Annual Work Plans and Budget containing all activities to be carried out in the following fiscal year, modified in a manner satisfactory to the Association, taking into account the Association’s comments and views on the matter. Sections and Description


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Schedule 2, Section I, A.5. The Recipient, through FNDS, prior to the launching of the bidding process for the systematic land regularization process under Part 2 of the Project, shall hire an independent process quality assurance entity, under terms of reference acceptable to the Association, for the purposes of ensuring quality in all phases of the regularization process, including: (i) carrying out independent quality verification of the regularization process, including assessing and confirming the readiness of communities to advance from one phase of the process to the next; (ii) ensuring safeguards compliance including support for the application of safeguards in specific cases; (iii) overseeing and supporting the implementation of the GRM and its coordination with related local mechanisms; (iv) sensitizing communities and service providers regarding the regularization process; and (v) training facilitators, paralegals and other technical and legal assistance providers on legal land rights and the program methodology and procedures. Conditions Type Description

Effectiveness The Subsidiary Agreement has been executed on behalf of the Recipient and FNDS in

accordance with terms and conditions satisfactory to the Association. Type Description

Effectiveness The Project Operations Manual has been adopted by the Recipient in a manner satisfactory

to the Association. Type Description

Effectiveness The Recipient, through its Ministry of Justice, has issued a Despacho ordering, for all DUATs

issued under the Terra Segura Program: (i) without prejudice to the obligation to promote

registration set forth in Chapter I, Section I, Article 11(1)(d) of the Real Property Registry Law,

the ninety (90) day period set forth in Chapter I, Section I, Article 12(e) is extended until the

necessary technical conditions are in place to effect electronic registration of such DUATs, as

per Chapter II, Article 50(1) of said law; and (ii) in accordance with Article 187, paragraph 3 of

the Real Property Registry Law, the exemption from fees, emoluments and other charges for

the first‐time registration of the DUATs in the Real Property Register. Type Description

Disbursement Section III, B, 1, (b):

Notwithstanding the provisions of Part A above, no withdrawal shall be made:

(b) under Category (2), for Emergency Expenditures under Part 4 of the Project, unless

and until the Association is satisfied, and notified the Recipient of its satisfaction, that all of

the following conditions have been met in respect of said activities:

(i) the Recipient has determined that an Eligible Crisis or Emergency has occurred, has

furnished to the Association a request to include said activities in the IRM Part in order to

respond to said Eligible Crisis or Emergency, and the Association has agreed with such

determination, accepted said request and notified the Recipient thereof;


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(ii) the Recipient has prepared and disclosed all Safeguards Instruments required for said

activities, and the Recipient has implemented any actions which are required to be taken

under said instruments, all in accordance with the provisions of Section I.G of Schedule 2 to

this Agreement;

(iii) the Recipient’s Coordinating Authority has adequate staff and resources, in

accordance with the provisions of Section I.G of this Schedule 2 to this Agreement, for the

purposes of said activities; and

(iv) the Recipient has adopted an IRM Operations Manual in form, substance and manner

acceptable to the Association and the provisions of the IRM Operations Manual remain ‐ or

have been updated in accordance with the provisions of Section I.G of this Schedule 2 so as

to be appropriate for the inclusion and implementation of said activities under the IRM Part.


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I. STRATEGIC CONTEXT

A. Country Context 1. Mozambique’s economic performance has been strong since the end of the civil war in 1992, but growth has not been inclusive and rural areas show persistently high levels of poverty. Growth rates averaged 7.9 percent per year from 1993‐2014 largely driven by foreign investments in capital‐ and import‐ intensive projects with limited linkages to the local economy. Despite this growth, Mozambique remains extremely poor and unequal. Most poor people reside in the rural zones of the North and Center regions and their livelihood relies heavily on the management of Mozambique’s substantial natural capital, including land. Poverty has fallen only slightly from 56 to 52 percent between 2003 and 2009. More recent figures from UNU‐WIDER (June 2016), based on data from the Mozambique National Institute of Statistics, show a better trajectory between 2008 and 2014: although the poverty headcount has declined nationally, this has been most significant in urban areas and the south of the country. There has been little convergence in welfare levels between the rural and urban zones, or by geographical region, with central and northern regions and rural areas displaying disproportionately higher poverty rates. Per capita income in 2014 was US$586, about one‐third of the Sub‐Saharan African average. The weakening correlation between economic growth and the poverty rate suggests that growth in the last 12 years has been less inclusive. The bottom 40 percent of the population, located mostly in rural areas, has benefited less from growth than the overall population. 2. Despite its growth prospects, the Mozambican economy faces significant short‐term economic difficulties. The recent debt crisis has produced a strong reduction in the pace of Mozambique’s economic growth, from 7.4 percent in 2014 to 3.7 percent in 20171. The relative weight of the extractives sector is increasing, as the role of manufacturing and agriculture is decreasing. This could be worrying in terms of diversification and income distribution. This has been accompanied by a weak external position and heightened levels of inflation. In a context of increasing reliance on extractive resource wealth (particularly in the gas sector), the short‐term challenge will be to maintain macroeconomic stability, while also pursuing diversification for inclusive growth in other sectors such as agriculture. The focus on major capital‐intensive projects runs the risk of further accentuating the current development pattern in which rapid growth is not generating significant poverty reduction or expanded employment opportunities. It also risks exacerbating existing factors of fragility, particularly around land controversies, community displacement, and weak governance. 3. Climate change will cause additional challenges for development and poverty reduction efforts. Climate change is expected to increase the occurrence and intensity climate disasters such as coastal flooding, cyclones, droughts and wildfires. There is also some evidence that river and urban flooding will be increased, however, the climate models are somewhat incoherent on the topic. These disasters have already caused massive temporal relocations, which are only assumed to increase in the future due to climate change2. The National Adaptation Strategy requires improved relocation processes and protection of property to enhance the climate disaster response and recovery. Besides the challenges in disaster risk management, climate change is also going to have negative impacts on agriculture, water, coastal and natural resource management. Both Mozambique’s World Bank Group Country Partnership Framework (CPF) (FY 2017–2021) and Adaptation Strategy urge improved monitoring of climate change impacts in and beyond these sectors and integrating climate change adaptation consideration into planning of infrastructure, land use, housing and services. The majority of Mozambique’s greenhouse gas (GHG) emissions are caused by the land use, land use change and forestry (LULUCF) sector. The National Mitigation Strategy aims to reduce these GHG emissions through enhanced land

1 IMF, International Financial Statistics. 2 National Climate Change Adaptation and Mitigation Strategy: http://www.cgcmc.gov.mz/attachments/article/148/National%20Climate%20Change%20Strategy_lowerres.pdf


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management, regularization of land use changes, promotion of tree planting, local forestry and biodiversity conservation.

4. Strengthening land rights is critical for Mozambique’s development and poverty reduction efforts. The use of land for social and economic development, particularly for agriculture production and food security, remain an important foundation of the national economic agenda. The last decade has seen an elevated level of interest in large‐scale land acquisitions by foreign investors in Mozambique. These projects have targeted rural areas already occupied by local communities, whose livelihoods are very strongly linked to accessing land and associated natural resources. Tensions have arisen between the Government’s strong interest in promoting foreign investment and agro‐industry, versus a rural population that is insufficiently aware of, and not able to exercise, their legal tenure rights, due to many factors but among the more important the lack of capable and accountable legal representation. This situation causes frequent conflicts between the government, investors and communities. As such, security of land tenure rights and promotion of land‐based economic development through partnerships between communities and investors have become the proposed pillars of a land governance strategy for the country.

B. Sectoral and Institutional Context 5. Mozambique has made significant progress in the past twenty years to improve access to land and security of land rights for all citizens, particularly by strengthening its land‐related policy and legal frameworks and the functioning of its land administration and management system. The country is widely regarded as having one of the most progressive land policy and legislative frameworks for sustainable and equitable land governance in Africa. According to the 1997 Land Law and the 2004 Constitution, citizens and local communities have statutory recognition of their rights to use and benefit from land they occupy (Direitos de Uso e Aproveitamento da Terra, DUATs), based on customary and good faith occupation. However, the law and regulations still present significant gaps with respect to the legal representation of communities and the management of communal lands and natural resources. These gaps are exacerbated in practice by the weaknesses in community capacity, lack of clarity as to the scope of certain rights at the local level, and weaknesses in the land administration system especially at the local levels. 6. Local communities can request that their boundaries be identified (“delimited”) and recorded in the cadastre in agreement with neighboring communities, and that a certificate of the respective DUAT be issued by the State. Individuals or households can also request that their individual/family plots be delimited and registered in the national cadastral system through a cadastral certificate; both processes are specifically provided for in the Technical Annex to the Land Law.34 (see Annex 2 – Institutional and Legal Context).

7. In 2015, the Government carried out an important reform seeking to rationalize the institutional framework, bringing responsibilities for the roles of land administration and land management together in a single Ministry. The Ministry of Land, Environment and Rural Development (MITADER) now oversees national land policy, which along with land administration responsibilities was removed from the Ministry of Agriculture where it had been previously located. A Land Information Management System (Sistema de Gestão de Informação da Terra, SiGIT) was introduced in 2012 to promote access to, and use of, reliable land information by the public and by private parties.

8. Albeit fundamental, these reforms have yet to bring about the desired benefits. Institutional weaknesses and

3 Articles 2(3) and Chapter III, Technical Annex to the Land Law Regulations. 4 The approach adopted by the Government to date has involved the titling of these individual areas, which the Land Law makes express provision for in article 13(5): “Individual men and women who are members of a local community may request individual titles, after the particular plot of land has been partitioned from the relevant community land” (translation to English as provided in “Land Law Legislation”, MozLegal Lda, Maputo, 2002.


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the inability to perform basic land administration tasks especially at decentralized (district) level, including harnessing the available technologies to facilitate land regularization activities at large scale, have been a major obstacle to the implementation of the Land Law. The land sector’s capacity to delimit communities and to issue and monitor DUAT titles to individuals in general and investors in particular remains extremely low. It is estimated that there are still more than ten million land parcels or about 90 percent of total occupations for which land rights have not been formally registered by the State5. First attempts to undertake the regularization of individual DUAT titles were carried out in the late 1990s but were left unfinished; they were resumed in 2008 with donors’ support with a focus on peri‐urban areas (see section

E. Rationale for Bank Involvement and Role of Partners). Most of the country's systematic cartography maps are very outdated and do not reflect the situation on the ground. Adequate topographic maps are also not available, which constitutes a major constraint in terms of the spatial information necessary for land administration and management. The National Geodetic Network (MozNET) requires further densification6 in order to support the land administration system. The existing land information system (SiGIT) suffers from insufficient technical and financial capacity for its maintenance and opportunities for further development are currently limited. The efficiency of the current system is further restricted by the inadequacy of the communication infrastructure, issues related to data quality, and unstable power supply. Moreover, cadastral data and land use information remains inaccessible to the public. 9. The full potential of community delimitation as an approach to securing tenure and stimulating local economic development has yet to be realized. Community delimitation exercises have been undertaken since soon after the passing of the complete regulatory framework in 2000. However, most of these efforts have been left to the NGO community, independently financed through bilateral donors, rather than through a proactive engagement from the cadastral authorities. As a result, the delimitation processes have not been implemented according to a common methodology, with different practices and standards applied in different parts of the country and with mixed results. Insufficient attention has been paid to the building of institutional capacity at community level. Notwithstanding the progress achieved thus far, the Land Law devolves significant land and natural resource management powers and responsibilities to communities but does not provide a framework or guidance for the establishment of a local entity, other than the ‘local community’ as defined broadly in the Law. Instead it leaves the matter open for other laws to determine. This is an element of the regulatory framework that needs further development (as required by Article 30 of the Land Law)7 (see Annex 2 ‐ Institutional and Legal Context). There has also been a failure to leverage community delimitation processes as part of creating more solid foundations for inclusive private investments in the agricultural and forestry sectors (although this is now being incorporated into ongoing Bank‐financed projects). Furthermore, opportunities to integrate local community views into the planning processes related to public and private investment activities are often lost. Consultation processes and community agreements required by law and needed to ensure sustainable investments and benefits to communities are often inadequate, absent or weakly enforced, resulting in conflicts, delays in investments and failure to deliver benefits. The consolidation of community governance and capacity to participate effectively in local economic development will require future investment by the Government including support by the Bank. 10. These challenges have resulted in an ineffective control of the process of occupation and distribution of land

5 So far, a total of 950 communities have been delimited, and about 500,000 DUATs have been recorded in the SiGIT. 6 Densification refers to “the establishment of additional geodetic control points linked to reference stations, reducing the spacing between points to achieve the density of the network sufficient to support the land and cadastral surveying.” 7. Article 30 of the Land Law states that “The mechanisms for representation of, and action by, local communities, with regard to the rights of land use and benefit, shall be established by law.” Although legislation dealing with community authorities and local agencies of the state has been passed, these laws do not address the issue raised by article 30, which is in respect to the community as a private, rights‐holding entity. New legislation can complement the existing law on ‘community authorities’, and that on local organs of the state, and help distinguish between the different representative roles involved in the public and private spheres.


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resources by public institutions and have contributed to an increased level of land‐related conflicts and the expansion of the informal land market, which is particularly dynamic in growing urban centers and peri‐urban areas. Lack of formal documentation and registration has proven to be a serious disadvantage in protecting land occupancy rights for the majority of the population, when pressure on land increases due to density and urbanization, in situations of conflict, or when negotiating with potential investors or establishing community based productive associations. As elsewhere in Sub‐Saharan Africa, this complexity can promote rent seeking, deter investment in land, leave the poorer communities and individuals vulnerable to loss or curtailment of their land rights, and limit the government’s capacity to derive revenues from land‐use taxation. Furthermore, the lack of integration of existing land information systems (at central and municipal levels) is an obstacle to the provision of effective land administration services and the ability of the government and the private sector to provide value‐added location‐based services needed to foster overall economic development. 11. To address pressure on land resulting from the expansion of urban centers, the construction of public infrastructure, the development of land‐based projects in rural areas, and new pressures on land from climate change, the Government of Mozambique adopted the Terra Segura Program in 2015, as part of the National Sustainable Development Program. Terra Segura provides political commitment to improve and expand Mozambique’s land administration and management system and services, to strengthen and protect the rights of all land users (in practice and in law) in a systematic manner, and to ensure the efficient and effective provision of services to institutions and citizens. Overall, the Terra Segura Program aims to contribute to creating the conditions for the country to develop in a sustainable manner and ensure the promotion of responsible investments that assure the recognition of rights and the flow of benefits to communities and to the poorest rural households. The Terra Segura Program sets out an ambitious goal of regularizing 5 million (individual) DUATs and completing the delimitation of 4,000 communities’ lands by the end of 2019.

12. In November 2017, the President launched a review of the national land policy and legal framework, a process being conducted under the auspices of the Land Consultative Forum (“Forum de Consulta sobre Terras, FCT”), a statutory body which brings together public, private and civil society land sector actors and other relevant stakeholders in the country. The FCT re‐confirmed that any change to the land policy and legal framework should take place within the parameters set by the Mozambican Constitution, which affirms that land is property of the State and cannot be sold or in any way alienated or mortgaged. The FCT mandated MITADER to prepare the National Land Policy; to prioritize the systematic formalization of land rights held by good faith and customary occupation; to consolidate the institutional framework through the establishment of an autonomous national land administration authority; to make recommendations on the transferability of DUATs (via the existing legal mechanism for sub‐leasing, known as the “cessao de exploracao”); and to consider the institutional and technological linkages between the land cadastre and the real property registration systems. In June 2018, a statutory commission8 was established by MITADER to oversee the process of revising the land policy as well as the institutional and legal framework. 13. In June 2018, the Council of Ministers approved a new Real Property Register Code (Registo Predial), which enters into force in November 2018. The Code regulates the registration of real property rights, which include all DUAT titles issued by the cadastral authorities.9 Although the purpose of the Code is to provide greater legal certainty to underpin a largely urban‐based market in real estate, it applies also to all rural land holdings (prédios rústicos) and will therefore apply to the titles issued under the Terra Segura program. Amongst the changes introduced by the Code are the mandatory registration of all property rights, the gradual introduction of a national digital information platform for

8 The Commission for the Revision of the National Land Policy, Ministerial Diploma 56/2018 of June 12, 2018. 9 The DUAT rights are considered to be ‘minor rights’ in rem; that is, they are property rights and enforceable against all other persons when registered, even though they fall short of the major right in rem, commonly referred to as ownership.


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registration, and the elimination of the territorial competency of the various registries.

C. Relevance to Higher Level Objectives 14. The Project will contribute to the Bank Group’s twin goals of ending extreme poverty and boosting shared prosperity, complementing the World Bank Group Country Partnership Framework (CPF) for Mozambique (FY 2017–2021). More specifically, the Project is likely to contribute to two of the three CPF Focus Areas, namely “Promoting Diversified Growth and Enhanced Productivity” and “Enhancing Sustainability and Resilience.” With regards to the first Focus Area, the Project may lead to an increase in agriculture growth (one of the CPF specific objectives); there is ample evidence suggesting that agricultural investment by rural households increases with more secure land tenure. With regards to the second sustainability Focus Area, the Project will contribute to increased accountability and transparency of government institutions, including at the local level (land administration ones) and will contribute to climate change adaptation and mitigation by improving tenure security in the cases of temporal relocation due to climate disasters, improving and disseminating geospatial cadastre and register data essential for monitoring climate change impacts and integrating climate considerations into planning, providing land rights certificates that enable improved performance‐based climate financing schemes, improving land management, regulating land use changes and defining local protected, reforestation and afforestation areas. Overall, the Project will provide significant contributions to key themes of the CPF, namely agricultural productivity, rural development and spatial planning. Through its land tenure strengthening activities and the capacity building at the community level required as the foundation of these activities, the proposed Project has the potential of improving the livelihoods of some of the most vulnerable rural households in the country and, by so doing, contribute to the Bank Group’s twin goals. 15. Systematic land regularization increases land tenure security, incentivizes greater land‐based investments that in turn can increase productivity. In the long run the increased transparency and efficiency resulting from a complete and comprehensive land administration system is expected to increase confidence and reduce the need to defend existing land claims and the time required to resolve disputes, thereby reducing related costs and further enhancing investment incentives for individual households, communities, and private investors in both rural and urban areas. Increasing land tenure security and enhancing land use planning have the potential to increase agricultural productivity, enhance the sustainable management of natural resources, and, provided community engagement is prioritized in the regularization methodology, empower the poorest strata of the Mozambican society. 16. The Project will directly support the implementation of the government’s Terra Segura program, and become one of Mozambique’s main vehicles for its implementation. Considering its regional and global experience, the Bank is uniquely positioned to help the country move closer to achieving its vision for the land administration sector, while enhancing sustainability through linkages to other development interventions. Specifically, the Project will coordinate with the ongoing Agricultural and Natural Resources Landscape Management Project (Sustenta, P149620) and the Mozambique Forest Investment Project (MozFIP, P160033), which have recently started to support the Government’s Terra Segura Program’s objective through the inclusion of community land delimitation and land tenure regularization (LTR) activities in selected areas prioritized by the CPF. Furthermore, it will complement and coordinate with ongoing operations supporting reforms of the Registo Predial and improvement of its system (Integrated Growth Poles Project (P127303); IFC – Investment Climate Project 2 (#603043)). Synergies will be created through the generation and exchange of spatial data (supported under the National Statistics and Data for Development Project, P162621), as well as the introduction and testing of a harmonized and streamlined land regularization methodology (Sustenta and MozFIP). Finally, the Project will coordinate with the National Urban Development and Decentralization Project (P163989), a complementary operation under preparation.


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II. PROJECT DESCRIPTION

A. Project Development Objective

PDO Statement The Project Development Objective is to strengthen land tenure security in selected districts and improve the efficiency and accessibility of land administration services. 17. The development objective of the Project will be achieved by: (i) accelerating the establishment of the cadastre and the registration of DUATs in rural areas; (ii) integrating basic land use planning with community delimitation and systematic land regularization activities; (iii) improving the legal and operational environment of the cadastre; (iv) strengthening the institutional and community capacity for land administration; (v) improving the cadastre registration system and accessibility of cadastral services and data to the public, and (vi) raising awareness regarding the importance of real property rights particularly at the community level. 18. Strengthening of land tenure security and modernization of land administration services, including building efficient and accessible systems and the capacity needed to operate and maintain them, is a continuous investment that requires long‐term coherent support. It will require years of detailed work and resolution of numerous contentious issues, which always arise when establishing a new system as fundamental as this. As such, this Project should be seen as the first phase of a longer‐term program and as a key building block of a modern system that facilitates economic development and good governance by having reliable and accessible records for all real property. The Project will focus on the systematic regularization of land use rights in priority rural areas and on building the institutional capacity to maintain this information, particularly through improving the land information system and the spatial data for its operationalization, including key strategy and regulatory reforms, as well as awareness of rights and of the value of formality and availability of tools for land use management at the community level. The Project will seek opportunities to scale up project activities through the engagement of other donors and by leveraging and pooling of resources, including potential additional IDA funds. Scaling up of activities would potentially allow to: (i) expand coverage of systematic regularization of land rights (potentially in urban areas as well); (ii) further decentralize land administration services; (iii) operationalize the adoption of legal reforms based on the outcomes of the national land policy revision; (iv) support institutional development towards a consolidated and autonomous land administration agency; and (v) establish interoperability of land information system with other relevant national information systems, such as those of the Real Property Register System (SIRP) and the Tax Authority (for tax identification (NUIT) attribution), as well as to the property tax systems (matrizes) maintained by the municipalities. Community capacity to participate effectively in the system will also need to continue to be enhanced, including through complementary programs. Once the fundamental system and information base for land administration has been developed, potential support in the longer‐term would focus on the next level interventions, including further development of a National Spatial Data Infrastructure (NSDI) and supporting the use of geospatial, registry and cadastral data for a variety of market economy services and fiscal purposes (such as disaster management, land use planning and development control, land development, property valuation and taxation).

PDO Level Indicators 19. The following are the key results indicators of the Project:

Community delimitation certificates recorded in the SiGIT in the name of the community, including an approved micro‐zoning plan

Beneficiaries who received a recorded DUATs in SiGIT (of which percentage recorded in the name of women or jointly)


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Satisfaction of DUAT beneficiaries with respect to the land tenure regularization (including percentage of women satisfied)

Reduction of cost to issue a DUAT registered in SiGIT under a systematic regularization process

SiGIT is upgraded, operational and available to use, including a WebPortal that enables public access to the national land cadastre data

B. Project Components 20. Component 1 – Institutional Development and Strengthening of the Legal Framework (SDR 16.1 million ‐ US$22.4 million equivalent). The objective of this Component is to improve the efficiency of existing land administration institutions and the standards or practices by which they collect, process, provide and maintain information on land, including the improvement of service delivery at district and provincial level, as well as the functioning of land information management systems. This Component will support the preparatory studies and feasibility analysis towards the establishment of an efficient and service‐oriented land administration agency with the goal of self‐financing. It will also support the process of the revision and implementation of the National Land Policy and the revision and improvement of the land‐related legal framework as necessary. The Component would further support education and training (including with respect to women’s land rights), construction of physical infrastructure, the densification of the existing geodetic network, and the improvement, operation, and maintenance of the SiGIT. An improved SiGIT will contribute to strengthening land tenure security at national level by ensuring that: a) parcels and communities are properly delimited and georeferenced; b) overlapping claims over the same parcel cannot be recorded; c) the cadastral information is available and can be accessed through a WebPortal. 21. Component 1 will address the climate vulnerability context by supporting the collection and maintenance of cadastre data in the land information system that will allow for (i) the monitoring of properties and people impacted by climate change and related disasters (Subcomponent 1.4). Subcomponent 1.4. will also (ii) help the distribution of the essential cadastre data to other government institutions responsible for integrating climate considerations into land use, infrastructure, housing and service provision planning. Improved relocation processes, monitoring climate change impacts and integrating climate change considerations into planning process are all activities requested in the National Adaptation Strategy and CPF. 22. The subcomponents and activities to be supported are the following: (i) Subcomponent 1.1 – Revision of the National Land Policy (NLP) and land‐related legal framework (SDR 0.7 million ‐ US$1 million equivalent). This subcomponent will finance technical assistance for policy and legal reform and other related expenses (workshops, consultations, operational costs). The revision to the NLP will set the foundations for work on improving the legislative framework, addressing issues related to, among others, DUAT transferability, community legal representation, joint titling, taxation, real property and rights registration in the Property Register, land information system (SiGIT) interoperability, and implication of the Partial Protection Zones. The elaboration of these instruments will require studies, drafting activities, extensive consultation processes including some policy discussions, and, in some cases, piloting activities to prove their applicability. Work will be carried out to ensure that legislative standards are carried through into operational directives and guidance to the decentralized levels of the land administration system, and appropriate training and communication materials are produced to disseminate the new framework, including to end users at the community level. In the short‐term, the subcomponent will support the revision of the current Technical Annex to the Land Law Regulations to improve the environment for systematic land tenure regularization (LTR) activities, allowing for the delimitation process as it applies to communities and individually‐held parcels to be more clearly elaborated, according to the methodology that is currently being enhanced and harmonized


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and that will be finalized prior to the commencement of the field activities. This methodology will include providing the community with a list of all community co‐rights holders including women, and the active promotion of co‐titling individual parcels. (ii) Subcomponent 1.2 – Institutional development and capacity building (SDR 0.4 million ‐ US$0.5 million equivalent). This subcomponent will finance human resource development and training for the existing land administration institutions on several land administration‐related topics (including women’s land rights). This includes strengthening for land and resource management entities at the community level. Training and capacity building activities will further be embedded in the land regularization contracts with service providers, as well as with consultancies financed by the Project to ensure training on the job and knowledge transfer and will include education of women and men about the land rights of women. The subcomponent will also finance preparatory technical, institutional and feasibility studies towards the establishment of an autonomous national land administration entity, and its strategic and business plans. Based on previous analytical activities, this subcomponent will also finance further technical assistance towards the improvement and operationalization of a land use tax system. (iii) Subcomponent 1.3 – Infrastructure improvement and equipment (SDR 8.7 million ‐ US$12.2 million equivalent). This subcomponent will finance technical and physical infrastructure, including related to Infrastructure and Communication Technology (ICT). It will finance the improvement of the provincial and district offices’ infrastructure to bring the land administration services closer to the customers, improve visitors’ access and conditions and the working conditions for the personnel. MITADER’s National Directorate of Lands (DINAT) is estimating the need for construction of about seven provincial office buildings, and seven district (regional) office buildings that would accommodate all the personnel of DINAT, the National Centre for Cartography and Remote Sensing (CENACARTA) and other land administration departments at the local level. The accommodating of land‐related local departments, including from the Property Registry, in one provincial office will create the conditions for the establishment of one‐stop‐shop for land administration services. The ongoing Infrastructure Needs Assessment is expected to provide the main requirements and specifications so that a decision regarding the construction and maintenance of buildings and ICT‐related infrastructure can be made. The subcomponent will also finance the modernization of the National Geodetic Network, including the design and establishment of the Continuously Operating Reference Stations (CORS) Network to enable the provision of the Real Time Kinematic (RTK) positional services to the customers in the selected project areas, thereby reducing the time and cost of the parcel boundaries survey. The CORS Network establishment will be phased, considering the size of the territory, priority areas, local capacity building needs, new GNSS technology development trends, as well as potential use of RTK services for a wide range of customers. The CORS establishment will include the Network Computation Center (NCC), establishment of new CORS and upgrading of existing sites, as well as the training and capacity building for personnel for the maintenance of the network and sustainable provision of the positional services to the customers. The CORS will also be an important part of the spatial data infrastructure supporting the development of the territory, roads and other infrastructure development projects. The number of stations and technical specifications will be defined based on the results of the Infrastructure Needs Assessment. (iv) Subcomponent 1.4 – Land Information Management System (SDR 6.2 million ‐ US$8.7 million equivalent). This subcomponent will finance activities related to the improvement, operation, and maintenance of SiGIT managed by MITADER (through DINAT) towards a nationwide fault‐tolerant, highly‐available and data‐intensive SiGIT, based on a feasible and pragmatic architecture. The system will enable the mobile acquisition, maintenance and distribution of cadastral data that is up‐to‐date, integrated, synchronized and interoperable with data sets from relevant sectors and agencies for the functioning of the NSDI.


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23. The existing SiGIT system is designed as a decentralized system and is deployed in 11 DINAT provincial offices (SPGCs), eight municipalities10, and DINAT. The central database in DINAT is asynchronously11 updated with the changes from the 11 SPGCs’ databases and serves primarily for analytical purposes. The system is neither fault‐tolerant nor highly‐available. Sustainability of the system is threatened by high maintenance costs, including expensive COTS12 licenses, and the lack of qualified IT specialists required to maintain the system deployed at provincial level. SiGIT is a monolithic system in which all modules and components are very tightly coupled and therefore complex, difficult and expensive to maintain. The Government is currently improving the ICT infrastructure at SPGCs and DINAT, thus ensuring the conditions for the operability of the decentralized SiGIT in the transition period13, and until the new SiGIT system becomes operational. 24. The upgraded and enhanced SiGIT system will be open to the public, support subsequent registration and updates following initial registration, and increase trust and confidence in data for all stakeholders. First data collection will guarantee integrity, quality, conformance of standard with clear guidelines. The integrated system will be designed and developed as a system composed of the following modules/subsystems: (i) a core subsystem for land regularization and cadastre; (ii) mobile data collection and mapping; (iii) document management; (iv) workflow management; (v) business rule management; and (vi) public WebPortal. The final design and development will take into consideration the recommendations of the ongoing technical review of the existing SiGIT, in particular software architecture, data model, workflow management, document management, business rules management and WebPortal. 25. Attention will be given to the system security at all levels (physical, network, application, file, procedural and user), reliability, scalability, as well as to data protection, including backup and recovery. This subcomponent will finance: (i) the development of an ICT strategy, including an enterprise architecture towards a centralized system architecture; (ii) the detailed design and improvement of the existing land information system to support the business processes defined in the streamlined land regularization methodology; (iii) the improvement of the SiGIT WebPortal to make geospatial and other data publicly available; (iv) enhancement of the SiGIT toward open cadastre data exchange and interoperability capabilities; (v) the improvement and expansion of DINAT’s Data Center capabilities by providing the needed ICT infrastructure for deploying SiGIT; (vi) supply and installation of ICT infrastructure in regional offices; and (vii) necessary human resources and capacity building for the system operationalization. In addition, the Project will finance the necessary equipment and infrastructure (power generators, computers and appropriate communication lines) as well as training of personnel to enable the operationalization of a reliable centralized SiGIT system. Attention will be given to the openness and interoperability of the SiGIT with the information systems of other agencies and institutions (among others, the Property Register under the Ministry of Justice, the National Interagency Spatial Planning Platform under the Ministry of Transport and Communications, the Mining Cadastre, the National Institute of Statistics, the Civil Registry, and the Tax Registry). For this purpose, the Project will finance consulting services for: (i) the specification of an open data exchange standard for land cadastre; (ii) the analysis of the current ICT and eGovernment‐related policy and legal framework to identify the necessary legal revisions; and (iii) the development of the methodology for data synchronisation as well as related business processes and rules. SiGIT interoperability capabilities will follow the eGIF4M (eGovernment Interoperability Framework for Mozambique) service delivery architecture. 26. Component 2– Systematic Land Regularization (SDR 46.5 million ‐ US$64.9 million equivalent). The objective of this Component is to strengthen land tenure security through the systematic regularization of land use rights in selected

10 Due to lack of adequate IT human resources, the system is operational only in two municipalities. 11 Changes from SPGCs are not sent immediately to the central database but rather deferred and sent at some later point in time. 12 Commercial Off‐The‐Shelf 13 The estimated transition period is about two years – during this period SiGIT deployed in the SPGCs will be in use.


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districts and the issuance of DUAT certificates to communities that delimit their land, and the provision of formal documentation for DUAT rights, obtained through occupation (customary and good faith), to individual households within those communities considering women’s legal rights and methodologies that promote gender equity. This Component will feed into the development of an improved Technical Annex, leveraging lessons learned on the ground, and support the roll‐out of a standard low‐cost, fit‐for‐purpose participatory methodology to deliver communities delimitation and land tenure regularization at a large scale. It will finance the acquisition of high‐resolution orthorectified imagery for base mapping at appropriate levels of accuracy for the selected priority districts. The regularization processes will further contribute to clarify the administrative boundaries of administrative posts that usually encompass more than one community. 27. Component 2 and its subcomponents will contribute to reducing vulnerability in the context of climate induced events and changes, as documentation of land tenure rights is essential for (i) protecting property rights during climate disaster response and recovery, as it allows people to relocate without fear of losing their land during displacement and not being able to repossess it after the disaster is over. Subcomponents 2.2 and 2.3 will also create and improve accessibility to geospatial cadastral and registry data that is essential for (ii) monitoring climate change impacts on people, and land occupation and related rights and (iii) integrating climate considerations into planning of disaster risk management, agriculture, land use, infrastructure and housing. Subcomponent 2.3. will also (iv) contribute to improving communities access to climate financing schemes (e.g. REDD+), as clear and recognized land rights are often the primary basis for performance‐based payments. Subcomponent 2.3. will further contribute to climate change mitigation by improving land management, regulating land use changes, identifying local protected areas and areas for tree planting and local forestry, which are all activities identified in the National Climate Change Adaptation and Mitigation Strategy. 28. The subcomponents and activities to be supported are the following: (i) Subcomponent 2.1 – Public Information and Awareness Campaign (SDR 1.3 million ‐ US$1.8 million equivalent). This subcomponent will finance a national‐level campaign (through TV, national newspapers, radio) that will precede the community delimitation (DELCOM) and land tenure regularization (LTR) activities and will be carried out continuously throughout project implementation by the FNDS. These activities will be inclusive in nature and targeted to ensure outreach to women and vulnerable groups. The communications campaign will include training on women’s rights, promotion of women as participants in producers’ associations or protagonists of women’s associations, promotion of women participation in the entity that represents the community and will be structured to provide opportunities for women to express their concerns and learn about mechanisms available to present any claims. This will be coupled with public awareness activities carried out by the service providers contracted to undertake systematic land regularization and community leaders and other key community actors (including women and youth) at the district and community level (see subcomponent 2.3). (ii) Subcomponent 2.2 ‐ Base Mapping (SDR 5.7 million ‐ US$7.9 million equivalent). This subcomponent will finance:

(i) the acquisition of high‐resolution orthorectified digital satellite or airborne imagery to support community land

delimitation, the regularization and issuance of DUAT titles to rights holders within those areas, as well as to serve as

background data for the SIGIT; (ii) the delimitation, or update, of the administrative boundaries up to the Administrative

Post level and the creation of the respective data sets for selected districts; and (iii) hardware, software, and training of

personnel for the production, quality control, use, and update of base maps, and other data sets required to support

the land administration process. The requirements and specifications for the base mapping will be based on the results

of the Cadastral Surveying and Mapping needs assessment, which is being finalized. The delimitation of administrative

boundaries will be done in cooperation with, and under the auspices of, the National Directorate of Territorial


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Organization (DNOT) of the Ministry of State Administration and Public Function (MAEPF) and the respective district‐

level authorities. The base map data and high‐resolution orthorectified imagery will contribute to (i) reducing the cost

of land regularization; (ii) improving the transparency of the land regularization process; (iii) increasing the data

reliability through support to land delimitation, including identification of protected areas, wetlands forestry, etc.; and

(iv) improving the quality of land information and control of the results of field surveys and overall quality of the land

administration services to the public.

(iii) Subcomponent 2.3 Community delimitation (DELCOM) and regularization of land use rights (LTR) (SDR 39.6 million ‐ US$55.2 million equivalent). This subcomponent will finance the delimitation of community land and the systematic LTR of the individual (households) use and benefit rights within these areas, including the compilation of land rights inventories, conducting appropriate boundary surveys, the public exposition of provisional claims, conflict management and resolution, quality control, the migration of existing cadastral data into the land information system, and the issuance of documentation in respect to legitimately‐acquired DUAT rights at the community and household levels. The methodology for DELCOM and LTR will include a local public information and awareness campaign, including capacity building for local authorities, community leadership and members, and civil society actors and stakeholders. The nature and content of the campaign will be defined by MITADER, in close consultation with the FCT, and coordinated by DINAT and its provincial services. The messages and communication strategy will also benefit from inputs from community and civil society representatives. Standardized messages and communication tools will be developed to support the accessibility of information and systems related to land use rights at the community level including women’s land rights, and to exercise quality control over the participatory nature of the DELCOM/LRT process. Prior to DELCOM and LTR activities, local authorities and civil society actors (including at the community level) will be trained to provide legal advice and monitoring of safeguards aspects and will be tasked to carry out the initial community sensitization phase, in coordination with the service providers. This subcomponent will also support land rights awareness and communication (with attention to gender and vulnerable groups), through community radio, community meetings, printed material, and relevant cultural channels, and the strengthening of DINAT’s land conflict resolution system at all levels, as well as the implementation of a Project Grievance Redress Mechanism. 29. Each community will be consulted and adequately informed, as part of the initial sensitization phase, of the extent of their legal rights and the options provided by the law with respect to regularization, including the differences in governance between communal lands and lands under individual DUAT. The information and consultation process will be designed to enable and allow community members to make an informed choice as to the approach that they would like to follow (i.e., DELCOM, LTR, both or neither). When community land delimitation is requested, it will include an inventory of current land uses and basic land use planning, including the identification of areas of common use, sacred areas, risk areas, protected areas, as well as existing third‐party DUATs previously issued by request for commercial use. The Social Impact Assessment (SIA) mapped stakeholders, identified vulnerable groups and social risks, and potential sources of land conflicts, and identified existing conflict resolution tools and processes to inform the design of the Project, particularly with respect to the Communication and Awareness Campaign (component 2.1) and the DELCOM and LRT methodology, including the conflict resolution mechanism and the Grievance Redress Mechanism. The SIA evaluated community governance aspects in the districts targeted by the Project to identify the most effective community consultation strategies, and to establish criteria to be included in the regularization methodology with respect to the combination and sequencing of community preparation (including proper representation and community election of the regularization options, DELCOM and LRT, including land use management tools and consolidation of community representation and governance rules with respect to land and natural resources). The social impacts and risks and the corresponding mitigation measures proposed by the SIA for inclusion in the methodology are described in Annex 3. DELCOM certificates will be issued in the name of the community. Communities choosing DELCOM will be


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assisted in establishing appropriate representation for effective participation in the process prior to initiating the DELCOM stage, and in formalizing such representation (through establishment of an entity with legal standing and statutes that support community resource management and accountability) by the end of the chosen regularization process. The regularization of individual plots, where communities request it, will be carried out in an inclusive manner (with attention to gender and other vulnerability factors) and will actively promote titling land to women heads of households and co‐titling of spouses. 30. To increase competition for such massive land regularization effort and reduce the cost per unit, the participation of international companies with proper resources and technology will be key. Due to the sensitivity of land issues, any such company will be encouraged to partner with and closely cooperate with local service providers and civil society organizations with relevant experience in the area. The Project will start working in the provinces where other Bank‐financed projects (Sustenta and MozFIP) are already carrying out land regularization activities and complement such activities with a view to completing the target districts. The community delimitation and the identification and issuance of documentation in respect to the individual DUATs will be carried out according to the Methodology for Community Delimitation and Land Regularization that is being tested under the Sustenta and MozFIP projects and will be enhanced and finalized by DINAT by project effectiveness (see Annex 3 for a summary of the key steps of the methodology including specific measures to strengthen adequate treatment of community rights). The Methodology will be geared to be in accordance with the ‘fit‐for‐purpose’ approach as articulated by FIG and other bodies, and to employ low cost technologies. The Methodology will also include key elements designed to safeguard the rights of all parties involved and to manage potential social impacts and risks as further outlined in the safeguards appendix of Annex 3. Finally, the subcomponent will support the establishment of a Quality Assurance and Quality Control (QAQC) system in DINAT at both central and provincial levels. 31. Component 3 – Project Management and Coordination (SDR 9.1 million ‐ US$12.7 million equivalent). This component will include support to MITADER and two of its Directorates (DINAT, the National Directorate of Lands, and CENACARTA, the National Centre for Cartography and Remote Sensing), and its National Fund for Sustainable Development (FNDS) to manage the Project through the financing of a Project Coordination Unit (PCU). FNDS, through the PCU, will be responsible for overall coordination, fiduciary aspects, safeguards, monitoring and evaluation, and the strategic planning for public awareness and outreach activities. Independent quality control of the application of the methodology, oversight of the safeguards and management of the Project Grievance Redress Mechanism during its implementation will also be supported by this component. 32. Component 4‐ Contingent Emergency Response Component (CERC) (SDR 0.0 million ‐ US$0.0 million equivalent). This component will provide immediate response to an Eligible Crisis or Emergency, as needed. This would finance emergency activities and expenditures in the case of a disaster event by including a "zero‐dollar" Contingency Emergency Response Component (CERC). This would help recover damage to infrastructure, ensure business continuity, and enable early rehabilitation. In parallel, following an adverse event that causes a major disaster, the Government of Mozambique may request the Bank to channel resources from this component into an Immediate Response Mechanism (IRM). The IRM would enable the use of up to 5 percent of uncommitted funds from the overall IDA portfolio to respond to emergencies. This IRM has already been established for Mozambique and is now operational. Specific details around this component (including activation criteria, eligible expenditures, and specific implementation arrangements as well as required staffing for the Coordinating Authority) are defined in greater detail in the IRM Operations Manual approved in April 2016.


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C. Project Beneficiaries 33. Project Beneficiaries. The Project’s direct beneficiaries include mostly rural land rights holders in selected districts targeted by the Project for systematic DELCOM and LTR activities. The Project will target beneficiaries in both rural and peri‐urban areas, which are not included in a Detailed or Urban Plan (issued by municipalities and district governments, respectively). Based on previous land regularization experiences in the country, it is estimated that each smallholder (man or woman) has an average of three parcels, with one DUAT for each parcel. Communities will also benefit from the delimitation of their lands, support to establish representative institutions, capacity enhancement to manage their lands and natural resources within their delimited areas, and increased opportunities to access and leverage benefit flows from natural resource concessions, potential investment projects‐ both public and private, and community‐based development opportunities. The direct institutional beneficiaries are two of MITADER’s Directorates (DINAT and CENACARTA) and its FNDS, the Ministry of State Administration and Public Function (MAEPF), as well as other key state institutions at district and central level managing geospatial data and carrying out land administration functions. Improvements in the land information system will not only benefit households within the Project area, but also specialized users (such as notaries, lawyers, financial institutions, and surveyors). In addition, authorities, technical staff, service providers and communities (at the local and central level) will directly benefit from technical assistance and training support, access to better land information, and improved coordination among land administration agencies. More generally, the Project is expected to benefit the recipient households in the Project area (who constitute about 12% of the rural population), the country’s population, including citizens, foreign individuals, and business entities that request DUAT titles for investment purposes, through the streamlining of methodologies and increased efficiencies within the land administration services. Mozambique is also amongst the most disaster‐prone countries in the world and the occurrence of natural disasters (floods, cyclones and drought) has consistently had a significant impact on its people and the economy. Investment in the geodetic infrastructure and cadastral mapping will benefit the government authorities responsible for disaster management planning and response and the scientific community responsible for earth monitoring. 34. Gender. Although the Mozambican constitution provides for gender equality in land ownership, in practice, implementation of this principle has been weak. In Mozambique’s rural areas, customary laws and cultural norms favor male access/control over land, with women having difficulties in defending their rights in the delimitation process. The Project will seek to benefit women by promoting issuance of DUAT to female‐headed households and jointly to husband and wife, by raising women’s and community awareness of women’s property rights, by ensuring that the consultation methodology includes specific outreach to women and Project coordination mechanisms are inclusive, by ensuring that women participate in the committees and groups established to lead the DELCOM/LTR participation processes, and by considering regulatory improvements that would improve current practices by mandating greater outreach to women. The results framework includes relevant gender‐differentiated indicators to measure progress on women’s access to land14, and the M&E methodology will include gender balance requirements. The Communication Strategy will include specific messages regarding women’s rights and the Regularization Methodology will include specific consultation requirements with respect to women. Particular attention will be given in the training of paralegals and community focal points with respect to land rights in including women as focal points and ensuring targeted focus on women’s land rights. Women will also benefit from the requirement that DELCOM certificates be accompanied by a formal list of all adult community members who are legally considered co‐holders of community land rights.

14 At the PDO level: (i) Women who received a DUAT recorded in SiGIT in their name or jointly (Percentage); and (ii) Satisfaction of women who are DUAT beneficiaries with respect to land tenure regularization (LTR). At the interndiate results level: (i) Women part of civil society actors and local government officials trained in legal and safeguard aspects related to land tenure regularization process; and (ii) Women participating in the consultation process. (See Section VI ‐ Results Framework and Monitoring).


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35. Citizen Engagement and Grievance Resolution. The Project will also enhance citizen engagement mechanisms. Public awareness campaigns will be carried out by the Project, and the grievance redress mechanism being established in the FNDS for the Agriculture and Natural Resources Landscape Management Project and the Forest Investment Project will be enhanced to incorporate the channels and processes needed to address any information requests and conflict resolution needs in the current program and to strengthen existing capabilities. The Grievance Redress Mechanism (GRM) will also be linked to DINAT’s land conflict resolution mechanism so that cases can be referred to this channel where needed. Project activities at the local and community level will inform stakeholders of their rights and of the channels available to address their concerns, including the existence of the grievance redress mechanism and of DINAT’s land conflict resolution mechanism, their various entry points, and how complaints received will be handled by the relevant agencies. The independent oversight entity will provide legal support to communities and vulnerable households in accessing these mechanisms and will track the response process. As part of the M&E component of the Project, beneficiaries will also be engaged in satisfaction surveys with respect to land administration services that will feed into Project results indicators.

D. Results Chain


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E. Rationale for Bank Involvement and Role of Partners 36. The World Bank is uniquely placed to support the Government of Mozambique in executing its ambitious land administration program as a result of its global experience, financial resources, and technical expertise. The World Bank has over thirty years of experience in supporting land administration systems and systematic registration‐cadastre processes around the world. The Bank can provide global good practices and knowledge to support project design and implementation. In addition, the Bank has accumulated growing regional experience on land administration in the Africa region. This combination of understanding of the local context with global knowledge of what works is unique to the Bank. The Bank will also bring experience implementing environmental and social safeguards and the Voluntary Guidelines on the Responsible Governance of Land, Forests and Fisheries, a global tool for good land governance. 37. The World Bank has the requisite convening power to support the Government of Mozambique in coordinating the multiple on‐going donor‐supported projects to ensure a coherent national land administration and policy implementation process. The scope, intervention areas, and activities of the Project will be complemented by ongoing and planned projects supported by other development partners. Opportunities to scale up Project activities by leveraging and pooling resources, including additional IDA funds, will be sought during implementation. The World Bank has met regularly with development partners and donors that are engaged in the land administration area to present advances on the preparation of the Project and to encourage coordination of different activities. The World Bank team will continue these efforts, particularly towards the revamping of the Donor Working Group on Land to serve as the platform for coordination.

38. Over recent years, the GESTERRA program, funded by the governments of the Netherlands and Sweden, has been the main channel for donor support; it replaced a previous capacity building program funded by the Millennium Challenge Corporation (MCC), which ran for 5 years from 2008. Earlier support to the central cadastral authorities was provided by USAID and the Swedish company SwedeSurvey, mainly focusing on the creation of a national land information management system.

39. GESTERRA focuses currently on sustaining the operations of the land information system (SiGIT) and is currently undertaking a review to select future potential activities. GESTERRA also provides key support for the operation of the FCT, a multi‐stakeholder space for land policy debate which was established by statute in 2010, as well as the testing of an improved methodology for LTR activities. The Governments of the Netherlands and Sweden plan to co‐finance a second phase land administration operation in support of Terra Segura in the near future. This will be an opportunity to pool resources for enhanced impacts, possibly through an Additional Financing.

40. The MCC Compact included the first contemporary attempts to undertake the regularization of individual DUAT titles,15 based on rights acquired through occupation. It focused largely on peri‐urban settlements, with less of a focus on rural holdings. Key lessons from these exercises included: a) the importance of engagement with and involvement of local administrative authorities in implementation activities, rather than adopting centrally‐driven processes; b) the need to avoid bottlenecks and unnecessarily elevated costs imposed by inappropriate survey standards;16 c) the need

15 Attempts in the late 1990s by the central cadastral authorities and SwedeSurvey to undertake similar activities in the south of the country were left unfinished, with many applications stuck within the local provincial offices as a result of bureaucratic inertia and insufficient engagement. 16 At the start, the project piloted a methodology which used satellite imagery to produce printed maps which were then brought to the field where parcels were drawn on these maps and later digitized. In the end, an approach using high precision GNSS equipment was adopted. Although the use of GNSS equipment was successful, it was not without serious challenges presented by frequent breakdown of


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to align closely with local planning authorities; d) the need to ensure the existence of data management methodologies and capacities; e) the fundamental importance of outreach and sensitization activities and f) the need to ensure direct engagement with community and local leaders.

41. The MCC Compact also included a regulatory reform component, aimed largely at relaxing the restrictions on DUAT transferability. Although the project and its proponents expended much energy in this regard, the final outcome was inconclusive, and the final report noted that “expectations should have been lowered within the context of the political environment” (HTSPE, 2013). This experience, and those of other initiatives (such as the first SPEED project of USAID), illustrates the challenges involved in engagement with policy and regulatory reform and the importance of incorporating advocacy activities aimed at influencing policy makers and policy influencers from all sectors of society.

42. USAID funds the Supporting the Policy Environment for Economic Development (SPEED+), a US$37.2 million project designed to improve the business enabling environment to attract investment, expand markets, and reduce costs. SPEED+ is helping the Government in developing regulations to clarify community consent and participation in land rights attribution. It also proposes amendments to the appropriate legal instruments to regulate the community consultations, both in the context of a third party DUAT application as well as in the context of community land delimitation. Finally, it finances proposed amendments to mechanisms of internal governance, decision‐making and representation of communities. Continuous coordination with USAID and the SPEED+ team will be maintained during implementation.

F. Lessons Learned and Reflected in the Project Design 43. Fit‐for‐purpose. The low overall rate of land registration in the region, including in Mozambique (where land rights of about 90 percent of total occupations have not been formally registered), highlights the need to design participatory regularization procedures using simple technologies that are affordable for local landholders and that provide a level of tenure security and accuracy commensurate with existing demand. Rural land tenure remains largely governed by customary practice and varies across the country. Moreover, while sub‐meter accuracy standards may be appropriate in more peri‐urban rural areas, where land values are generally higher and land markets are already emerging, experience from Ethiopia, Madagascar and even densely‐populated Rwanda suggests that highly accurate fixed boundaries are less important than general boundaries that are acknowledged by the local community and the government for low value rural lands with relatively limited land market activity. The Project will therefore adopt a participatory and cost‐effective process that builds on local knowledge of existing land rights, involves community members in regularization, can be undertaken without the involvement of formally accredited surveyors or surveying firms, uses simple and modern technologies, and ensures that the procedures align with existing capacity and land tenure practices. 44. Cadastre and land regularization activities should pay close attention to social aspects, in addition to technical issues. The experience of Mozambique and other countries with similar contexts has shown that ensuring beneficiaries’ support is as important as having adequate technical specifications and expertise for surveying and regularization. The Project, based on lessons learned from the previous regularization experience in the country, includes a communication strategy and a citizen engagement mechanism to promote strong socialization and awareness, and active involvement of beneficiaries, taking into consideration gender and cultural issues. It is evident that a critical element in this context is the figure of the Local Community.17 Adequate support for community level participation in the regularization process

equipment and the need for greater technical expertise on the survey teams (HTSPE, 2013). 17 The Land Law’s definition of a local community is as follows: “grouping of families and individuals, living in a territorial area that is at the level of a locality or smaller, which seeks to safeguard their common interests through the protection of areas for habitation or agriculture,


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and community representation with respect to land and resource governance during and following the DELCOM/LTR process are critical and must be embedded in the Methodology and independently assured through a well‐defined process of community readiness evaluation to be carried out by a specialized third party entity.

45. Community land delimitation processes offer significant potential to establish sound land governance relations at local level but require more attention from the cadastral authorities and greater integration into local development planning processes. Many of the lessons set out in a World Bank Policy Note from 2010 (Community Land Delimitation and Local Development, Nov 2010), which looked in detail at the implementation of community land delimitation programs, remain pertinent to the design of the Project. The stance of the 2010 Policy Note was that a more pro‐active, systematic and clearly targeted program of community land delimitation could bring about more efficient investments, in both the public and private spheres, with associated positive impacts. The key lessons that have been incorporated into the Project approach include: a) the need to ensure that community land delimitation processes focus on the creation of greater institutional capacity at community level; b) that systematically implemented cluster approaches to community land delimitation will reduce costs; c) that land delimitation coupled with local land‐use planning processes at community (and inter‐community level) will heighten local engagement in land management issues; d) that procedural guidelines for the more efficient and harmonized use of the Technical Annex, leading to a standardization of sensitization and capacity‐building activities through a state‐led initiative to undertake delimitation at scale, will increase the effectiveness and sustainability of the projects objectives, and e) that harmonizing the methodologies for community delimitation and systematic household LTR is important for building legitimacy and local capacities for land administration and conflict resolution. 46. Conflict prevention and conflict mediation: Given the potential for land rights formalization to bring previously latent land conflicts to the fore, the Project will incorporate various kinds of conflict prevention and mediation support involving local customary and formal authorities depending on the nature of the dispute. These activities will be tailored to the local socio‐cultural and political economy context based on the outcomes of the Social Assessment and the experience of the existing FNDS GRM. To ensure that disputed parcels or village boundaries do not indefinitely delay registration of agreed boundaries, alternative dispute resolution mechanisms will be supported through customary community leaders and local government authorities where land owners or villages cannot agree on a shared boundary. Legal support to communities and vulnerable households and individuals will be provided though training for paralegals and support for advisory services to assist parties in resolving disputes. Also, importantly, resources will be reserved to return to the conflict‐affected areas to complete the registration process once the dispute has been resolved.

47. Dialogue and consensus. Evidence from efforts supporting strengthening of communities in their negotiations with potential investors (private, state and NGOs) has stressed advantages for such investors when they respect community rights to land. Investors encounter greater risks if they do not take the time to negotiate in good faith and with patience with communities. And not just any community, but those who have a measure of secure tenure over their lands, community land management capability, and basic priorities for the uses of community lands. Preparing communities with these features is part of the stated objective of the land delimitation process in Mozambique. The Project will promote dialogue and consensus over how communities exercise governance over their lands and resources and how private (including internal) and State projects are implemented in areas covered by customarily‐acquired DUATs at the community and household levels. Support for community representation and governance must be embedded in the Methodology (see Annex 3) and will, among other things, rely upon enhancing and mobilizing independent local capacity (such as previously trained paralegals) to assist communities and vulnerable individuals

whether cultivated or lying fallow, forests, places of cultural importance, pastures, water sources and areas for expansion.”


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during the land regularization process particularly with respect to conflict resolution.18 48. Streamlined and long‐term land administration. Secure land tenure ultimately depends on effective land administration, which itself depends not only on the capacity of local authorities to manage and update land registry databases, but also on landholder demand for land services, including to register changes in land use rights. In contexts of no previous registration, as in Mozambique, experience – for example from Cambodia, Ethiopia, and Rwanda – suggests that land administration systems need to be designed not only for massive first‐time land registration, but also to allow for subsequent changes in land rights to be easily registered at low cost and with a minimum number of steps and institutions involved. The experience of Rwanda, where the government achieved an impressive scale of first‐time land registration, but land transactions remain largely informal, highlights the need to raise awareness of, and demand for, maintaining formal records of land rights as transactions and other changes in use and occupation inevitably occur. The tools proposed for delivery to delimited communities (georeferenced land use map, simple reference guide to legal rights and responsibilities, community members roster‐internal cadaster‐and instructions on updating it) would contribute to the awareness and capability of communities to keep the cadaster updated. 49. The impact of land administration and land regularization efforts can be enhanced through strong coordination with interventions in other sectors. Recognizing that land issues are relevant across various sectors the Project has been designed keeping in mind ongoing and new operations that would enhance development impacts in the project area or at the policy and institutional level. Opportunities for enhancing regional and country‐level impacts will continue to be sought during Project implementation. For example, the Consultative Forum on Land has been looking at community‐investor partnerships, linking communities in rural areas with private investors directly. Enhancing linkages to ongoing and new Bank projects through co‐location and mutual prioritization and considering a Community Driven Development (CDD) project to leverage the momentum of the regularization process should also be considered.

50. Building national technical capacity for land administration is important for both overall sustainability and adequate implementation. Incremental interventions, including piloting of innovations, tailored to the local context, have proven to be very useful to build technical capacity and sustain results. The Project builds on this lesson by helping expand and continue improving the DELCOM and land regularization methodology developed and used so far. Importantly, the Project will also help upgrade the SiGIT, while at the same time developing the in‐country IT capacity needed for its operation and maintenance. By building a system that responds to local capacities and conditions, improvements and changes are more likely to be institutionalized. The Project will support on‐the‐job training and knowledge transfer from contractors and consultants.

51. Gender. The Community Awareness plan and sensitization strategy will include materials and methods to reach out to women and ensure that all community members are involved in decisions about the use and management of their land. There is a legal imperative to look beyond local leaders and chiefs and ensure that everyone – men and women of all ages – are involved in the process. The SIA confirmed the relevance of ensuring full participation of women and youth in community consultation and in the community land use planning process, and these will be addressed in the proposed Communication and Awareness Plan and DELCOM/LTR Methodology with respect to promoting participation of women in consultations and decision‐making, actively promoting recognition of women’s land rights

18 After an initial FAO supported program trained just under 200 provincial and district level officers/individuals in the then new Land Law, Environment Law and Forest and Wildlife laws, the paralegal program was extended with funding from the iniciativa para Terra Comunitarias (iTC) program, and many paralegals now work in organizations and CBOs in Zambézia and other provinces and can be mobilized to support the Project.


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including co‐titling,19 recognizing the full extent of traditional family holdings, recognizing areas for community expansion, and ensuring youth and women participate in community representation mechanisms.

III. IMPLEMENTATION ARRANGEMENTS

A. Institutional and Implementation Arrangements 52. The Project will be implemented under the leadership of MITADER, through FNDS’s operational management and coordination, and with technical oversight to be provided by its relevant competent Directorates (DINAT, CENACARTA), as well as the relevant Directorate of the Ministry of State Administration and Public Function (MAEPF – National Directorate of Territorial Organization, DNOT), responsible for the delimitation of administrative boundaries. A Memorandum of Understanding (MoU) will be signed between CENACARTA, DNOT and FNDS and will establish the roles and responsibilities of each entity for the implementation of relevant field activities. 53. A Project Steering Committee will be established that will be responsible for (i) providing overall policy guidance and decision‐making on all issues relating to the Project; (ii) facilitating coordination among the relevant agencies; (iii) reviewing and approving annual work and expenditure plans, and (iv) assessing risks of strategic impact and identifying solutions. The Steering Committee will meet twice a year and hold extraordinary meetings when necessary. It will be chaired by FNDS and be composed of two representatives of DINAT, and one representative each of FNDS, CENACARTA, DNOT and the FCT Reflection Group (GRFCT). Representatives of the National Directorate of Territorial Planning and Resettlement, the National Directorate of Registration and Notary (of the Ministry of Justice and Religious Affairs), and other entities as needed will participate as observers. FNDS will serve as the Secretariat of the Steering Committee. 54. FNDS will provide overall coordination between the government entities involved in the implementation of Project activities through the establishment of a Project Coordination Unit (PCU). Fiduciary and safeguards implementation responsibilities will also lie with FNDS, and its Department of Project Management more specifically, which is currently implementing several other Bank‐financed operations. 55. The PCU will be under the leadership of a Project Coordinator and will include as its core staff technical specialists in the areas of cadastre, land administration, land law, ICT, procurement, financial management, M&E, social development and gender, environment, and communication. The Coordinator will have the overall responsibility to supervise the PCU staff in their planning, organizing, and executing of all day‐to‐day administrative, technical, and legal activities of the Project and ensuring close coordination with MITADER’s and MAEPF’s Directorates responsible for the technical aspects of implementation. Each entity will be involved in the preparation of the annual work plans, the progress reports, and all other implementation activities related to their areas of competence. The existing FNDS Operations Manual will be adjusted to include the Project PCU’s organizational structure and describe the duties and responsibilities of PCU staff and MITADER Directorates, along with the Project's technical, administrative, financial, procurement, safeguards, and M&E procedures. 56. At the provincial level, the implementation of Project activities will be the responsibility of the provincial cadastral offices of DINAT (Serviços Provinciais de Geografia e Cadastro, SPGCs), which will provide technical guidance, while Project coordination will be ensured through decentralized PCUs within the SPGCs (three decentralized PCUs, each covering several provinces). The decentralized PCUs will also ensure coordination with MITADER’s Provincial

19 See discussions in both the Nemus/Beta and SESA documents.


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Directorates (DPTADER), as well as relevant district authorities (the District Service for Economic Activities, SDAE and the District Planning and Infrastructure Service, SDPI). They will include land administration specialists, safeguards specialists and an accountant and their establishment will follow the implementation schedule of Project activities and leverage existing FNDS land regularization presence in the provinces of Cabo Delgado, Nampula, and Zambezia (under the Bank‐financed Sustenta and MozFIP projects). 57. Finally, FNDS and DINAT will maintain coordination and collaboration with relevant agencies on important aspects related to the Project, in particular the Mining Cadastre, the Real Property Registry, the Tax Authority, and the National Institute of Electronic Governance.

B. Results Monitoring and Evaluation Arrangements 58. FNDS, through its Planning and Monitoring Department and the central PCU will be responsible for Monitoring and Evaluation (M&E) of the Project, based on its experience of implementing other World Bank‐funded projects. The FNDS staff responsible for the entire M&E system in FNDS will supervise a full‐time specialist recruited exclusively for the Project. The M&E specialist in the PCU will: (i) collect, consolidate and report on Project performance data (including physical and financial progress); and (ii) provide periodic information on the Project indicators included in the Project Results Framework, and progress toward outcomes. Some of key indicators will be provided to the PCU by DINAT and SPGC offices through SiGIT, which guarantees the formal register of land use right of men, women and communities. Other important indicators will be measured through an external evaluation, which will be carried out every two years in order to assess the compliance with safeguards and beneficiary satisfaction, especially regarding the implementation of the communication and consultation processes, the GRM and Conflict Resolution Mechanisms. Baseline data aimed to assess the perception on tenure security will be collected by the service providers during the field works, and a final evaluation (to be carried out by FNDS/DINAT) on a sample of beneficiaries will enable to obtain information of the Project impact in this regard. A regular audit during the SiGIT development will be also carried out to ensure that the system is properly upgraded and operational (an indicator that measures the development of the different system modules has been included in the Results Framework). Project indicators, systems of data collection and results will be assessed during the Mid‐term Review, and a final evaluation by independent consultants. Since service providers carrying out the activities will collect much of the field level information, there will be a pronounced role of the PCU jointly with DINAT on both national and provincial level to monitor the accuracy of the data. Regular monitoring visits by the PCU and DINAT to all outsourced activities will thus be necessary. Under the supervision of the FNDS specialist, the PCU will prepare the semi‐annual progress reports throughout Project implementation.

C. Sustainability 59. Sustainability is an overarching theme, especially in the context of an investment of this magnitude for systematic land regularization in rural areas. The core elements of sustainability of Project results will be institutional, technical and financial. On the institutional side, a strong focus on decentralization of land administration services will be needed, coupled with capacity building and a customer focus and improvement in service delivery, including the ability of the agency to maintain and provide access to land information to the government, the private sector and local communities. Furthermore, the establishment of an autonomous national land administration entity in the longer term will also enable the strengthening of human resources availability and capacity. On the technical side, the ability to provide access to the land information system, to land administration authorities at decentralized/district level, through cost optimization of ICT infrastructure and overall system architecture, will significantly enhance sustainability. This needs to be complemented by systems and operating procedures that facilitate access to end‐users at the community level. On the


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financial side, a more efficient land regularization process will reduce costs and a potential expansion of the tax base will enhance cost recovery. The Project’s legal and institutional strengthening activities will create enabling conditions for sustainability. The Project aims to ensure sustainability by strengthening the country’s existing land administration institutions, including capacity building in ICT infrastructure and system maintenance, the incipient land policy reforms towards an autonomous national land administration entity, as well as legal reforms towards liberalizing land transfers and transactions in rural areas. Innovative and decentralized approaches to identifying, documenting and maintaining land rights data will be explored. These approaches will be explored as part of a long‐term strategy to ensure the sustainability of the Terra Segura program. Based on previous experience, the Project will also finance technical assistance towards the improvement and operationalization of a land use taxation system. Finally, the Project will support social sustainability by financing the improvement of internal community land governance processes that use the cadaster as a toll and supports its updating, and enhancing the existing land conflict resolution mechanism, including the development of its monitoring system and provide support for conflict resolution at the local and community levels.

IV. PROJECT APPRAISAL SUMMARY

A. Technical, Economic and Financial Analysis (if applicable) 60. Technical analysis. There is strong and demonstrable commitment to implement large‐scale, systematic land regularization, as well as modernize land administration services and institutions. Hence, the Project design and budget allocations strike a balance among regulatory and institutional reforms on the one hand and carrying out systematic land regularization on the other. 61. The Project area will cover 71 districts (45% of the 157 districts in the country) across all ten provinces20. The selection of the districts was based on a combination of factors and criteria21, including: i) the existence of development corridors and economic activity; ii) population density; iii) availability of land; iv) presence of national parks and natural reserves; vi) communication and access. 62. Several service providers, spread across the selected Project districts, will facilitate the systematic land regularization activities in defined areas, starting in those districts that are being (partially) covered by the Sustena and MozFIP projects. To ensure the uniformity of the land regularization results across the country the service providers will be required to use the standard, harmonized methodology that is being finalized and will be approved and published by DINAT. The requirements and specifications of the methodology, including quality control and criteria for deliverables’ acceptance, will include the requirements agreed upon by DINAT and the Bank and will be approved as part of the Project Operations Manual and included as a part of the Request for Bid document. The methodology will be based on fit‐for‐purpose approaches that allow the systematic capture of appropriate spatial and alpha‐numeric data to be collected in a transparent, inclusive and cost‐effective manner.

20 The districts are: Matutuine, Marracuene, Boane, Moamba, Manhiça (Maputo Province); Limpopo, Chokwe, Mabalane, Guija,Chongoene

(Gaza Province); Inharrime, Jangamo, Homoine, Morrumbene, Massinga, Vilankulo (Inhambane Province); Dondo, Chibabava, Machanga, Nhamatanda, Muanza, Cheringoma, Marromeu, Maringue (Sofala Province); Mossurize, Sussundenga, Gondola, Manica, Vanduzi, Barue, Guro (Manica Province); Doa, Changara, Moatize, Tsangano, Angonia, Macanga, Chifunde, Chiuta, Cahora_Bassa, Mutarara (Tete Province); Derre, Maquival, Milange, Mocuba, Morrumbala, Namacurra, Maganja Da Costa (Zambezia Province); Moma, Liupo, Mogovolas, Murrupula, Mogincual, Muecate, Nacaroa, Angoche, Meconta (Nampula Province); Mandimba, Ngauma, Mecanhelas, Sanga, Lago, Cuamba (Niassa Province); Montepuez, Mueda, Ibo, Ancuabe, Balama, Namuno, Chiure, Pemba (Cabo Delgado Province). 21 The selection criteria are based on statistical data from the most recent population census, including data on households’ size, estimated size of parcels and the area of districts.


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63. In general terms, the methodology will leverage the best practices of similar projects from other countries, within the context of local conditions, and build on the same basic methodology used by the Sustenta and MozFIP projects. The methodology will include extensive community preparation and consultation, including a rapid rural diagnostic, full information regarding rights, an explicit choice with respect to regularization options and the designation of a representative group/entity. In respect of DELCOM the methodology will include participatory surveying of limits, confrontation with neighboring communities, current land use mapping and delivery of DELCOM certificate and associated tools to the Community. In respect to LTR, the methodology will cover the procedures and approaches for the surveying and identification of parcels, the preparation of rights holders’ documentation, the upload of data to the SIGIT system database, the registration of DUATs in the system by provincial cadastral services and the issuance of documentation to land users. DINAT will establish proper quality assurance and quality control systems to ensure smooth and efficient verification and acceptance processes and the quality of deliverables. The service providers and provincial cadastral services will use high‐resolution orthorectified imagery, as well as the established CORS network, to verify field data and results of the land regularization. Each phase of the regularization process in each community will be evaluated independently before the SP is authorized to proceed to the next stage, based on spot checks during the process and quality checks on a sample of communities. Payments will be structured to reflect tasks accomplished in each stage.

64. The Project will build on the existing decentralized land information management system (SiGIT), and will adopt a cautious, incremental approach to its development, gradually intensifying the use of modern information technologies towards a system based on a centralized architecture. The system’s operationalization will be phased, and each new version will be piloted in test environments and deployed. This gradual approach will ensure reliable community delimitation and systematic land regularization operations at all times, while allowing progress towards an efficient, reliable and high‐available land information management system. This approach will further allow supporting investments with simple and realistic targets, with a strong focus on strengthening DINAT’s IT capacity for the system maintenance and further expansion. During the transition period the current version of SiGIT will remain operational and be maintained and supported by targeted technical assistance which will build DINAT ICT capacity through knowledge transfer. 65. The Project will not seek to address the challenges inherent in developing a link between the SiGIT and the digital registration platform (SIRP) of the Ministry of Justice and Religious Affairs. Although important in the long term, this Ministry is not yet ready to roll out the SIRP at scale. All the books in each registry across the country (except for Maputo and Matola where 90 percent of the books have been scanned) need to be scanned and indexed before the platform can allow institutional and public access to digital forms of registration, and it is likely to be several years before the territorial competence of the registries can be eliminated. If the SIRP is implemented in the target provinces during the Project lifetime, there will be opportunities to pilot the linking of the two platforms.

66. The status quo for registration modalities would therefore require the cadastral titles for the individual DUATs generated through the Project to be physically submitted by the cadastral authorities to the Real Property Registry in the relevant provincial capital. In the face of the enormous logistical and cost implications of this process, the Government has agreed to: (i) apply an extension of the ninety‐day period for registration until the necessary technical conditions are in place to effect electronic registration of DUATs, and (ii) apply an exemption from the costs of first‐time registration of DUATs in the Real Property Register. Because the Land Law provides specific and significant legal protection to the rights being titled under the Project, the non‐registration of the respective DUATs in the Real Property Register will not prejudice their status.


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67. Economic and Financial Analysis. An ex ante economic and financial analysis for the Project was undertaken by revising current and further estimated institutional costs and the possible additional income for beneficiaries (focus groups were carried out with previously titled farmers). As a result of the systematic land regularization process in all the provinces, the reduction in land conflicts, the improved efficiency in land administration services and access to the information on land tenure, the Project is expected to generate several economic and financial benefits. These include: i) an improved environment for enhancing rural investment for individual households, communities, and private investors; ii) a reduction in the cost for issuing DUATs, both for MITADER and farmers; and iii) an increase in tax collection related to commercial DUATs.

68. With respect to the economic analysis, it is estimated that an increase in only US$ 25/ha22 of agriculture incomes within 30 percent of the regularized parcels (average of 5 has), which are located in more favorable environments for investment, will be enough to obtain an IRR of around 20 percent and a NPV of US$ 88 million. Additional economic benefits were also estimated in relation to a reduction of almost 30 percent of the cost to issue a DUAT (outsourced services and institutional costs) and a two‐day decrease in the time spent to request and obtain a DUAT for 15 percent of the beneficiaries of the LTR process that may have requested them. Benefits in term of conflict reduction, ease of parcel inheritance, and an increased perception of tenure security (the benefit most mentioned during the focus group) are also expected but were not converted in monetary value for this conservative analysis. The Project will also contribute to the reduction from 80 percent to 50 percent of the gap between the taxes currently collected and the amount that might be obtained once the information on land use and payment is updated in SiGIT23. This achievement could support the creation of an autonomous land administration entity. Finally, the gain of land service efficiency and the improvement in the cadastre survey methodology and technology will enable DINAT to roll out the LTR in the rest of the districts with a cost saving of 30 percent. It is important to consider that the cost benefit of the Project is highly sensitive to the percentage of beneficiaries that will invest in their regularized parcel: a decrease from 30 to 15 percent of them would generate an IRR under 10 percent. For this reason, the Project is expected to issue a minimum of 30 percent of DUAT in peri‐urban areas and rural areas where investments in housing and agriculture are more likely to happen.

69. Rationale for public sector financing. Land administration is an essential public service that underpins economic growth and poverty reduction24. While the private sector has an important role to play, particularly in terms of land surveying, there are a number of reasons that public‐sector provisioning and financing is required. Firstly, the cost of first time land regularization, which requires one‐time up‐front procedures, including community delimitation and the issuance of individual titles to each parcel, far exceeds both the likely value of many rural land parcels and the capacity of poor rural landholders to pay for this. The very low levels of land registration in Mozambique (only about 10 percent of the land parcels), indicate that relying on private financing capacity is insufficient to incentivize nationwide land regularization. Secondly, on‐demand land regularization systems risk leading to elite capture, as the more wealthy and powerful are better able to take advantage of formal land registration processes than the poor and vulnerable25. To address both of these issues, systematic first‐time land regularization – accompanied by community delimitation, comprehensive outreach, consultation, sensitization and communications to ensure all landholders benefit – is

22 This is a reasonable figure taking into consideration the Ethiopia’s rural land registration program, which was found to increase investment and land productivity, and the recent mapping of customary land ownership in Benin (the first step in formal land registration) which led to a roughly 40 percent increase in the likelihood of household investments in perennial cash crops and trees on farms. 23 In 2015, DINAT collected US$ 670,000 out of the US$3.4 million to be potentially payed. 24 Deininger, K. 2003. Land Policies for Growth and Poverty Reduction. Washington, DC: The World Bank. 25 ] Ibid. See also Cotula, L., Toulmin, C., and C. Hesse. 2004. Land Tenure and Administration in Africa: Lessons of Experience and Emerging Issues. London: International Institute for Environment and Development.


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considered best practice, with subsequent transactions in rights being registered on demand26.

B. Fiduciary (i) Financial Management

70. A Financial Management Assessment was undertaken to evaluate the adequacy of the proposed Project financial management (FM) arrangements. The Assessment was carried out in accordance with the Directives and Policy for Investment Project Financing (IPF) and the Bank Guidance on FM in World Bank IPF Operations issued on February 28, 2017. The overall FM was assessed to be adequate, and the risk rating was assessed as Substantial due to country risk, capacity issues in the country, Project decentralization and the number of entities involved in the implementation of the Project. 71. The Assessment revealed that there are adequate financial management arrangements at FNDS, which has experience in managing Bank‐financed operations and is currently managing the Conservation Areas for Biodiversity and Development – Phase 1 (P131965 & PP132597), Mozambique Forest Investment Project (P160033), Mozambique Agriculture and Natural Resources Landscape Management (P149620). No major FM issues were raised under these projects. 72. The Project funds, expenditures, and resources will be accounted for using the existing multi automated accounting software and the basis of accounting will be cash basis. Disbursement of IDA funds will be done on a transactions basis (SOEs). The Project will make use of advances, direct payment, reimbursement and special commitment methods for disbursements. FNDS will prepare quarterly unaudited interim financial reports (IFRs) and provide such reports to the Bank within 45 days of the end of the calendar semester to which they relate. The Project financial statements will be audited by the Administrative Tribunal (TA) in accordance with International Standards on Auditing (ISA) as issued by the International Auditing and Assurance Standards Board (IAASB) within IFAC.

(ii) Procurement

73. The FNDS procurement unit, comprising seven procurement practitioners including procurement specialists and procurement assistants, will use the World Bank’s New Procurement Framework (NPF). All staff have experience in procurement and have been trained on the NPF, however, they do not have experience with it yet. One additional procurement specialist is being selected to enhance the capacity of the unit to respond to the demand resulting from the Project. The unit is well equipped with office space and all the means to perform the work satisfactorily. There is a need for improvement in the preparation of the bidding documents, the period for preparation and submission of the bids needs to be increased and record keeping system improved. More information on fiduciary aspects can be found in Annex 1.

C. Safeguards (i) Environmental Safeguards

74. Generally, the proposed Project is expected to provide positive environmental and social benefits. In accordance with OP/BP 4.01 the Project is classified as Category B, since anticipated environmental impacts will be minor and, if any, site specific and readily manageable. OP/BP 4.01 Environmental Assessment is triggered, as well as OP 4.04 –

26 Deininger, K. 2003. Land Policies for Growth and Poverty Reduction. Washington, DC: The World Bank.


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Natural Habitats, OP 4.36 – Forest, OP 4.11 – Physical Cultural Resources, and OP 4.12 – Involuntary Resettlement, based on: (i) Project support, under Component 2, for the improvement of the legal framework for land administration and land use planning, including the revision and harmonization of relevant legal and operational instruments which could directly and indirectly, especially in the context of demarcation and formalization, lead to changes in land use practice, migration and/or influx of newcomers, and increased or shifting pressure on natural resources and deforestation; and, (ii) Project financing of construction or rehabilitation of essential administrative infrastructures that has potential to generate adverse environmental and social impacts and risks, such as solid waste generation, air, soil and water quality due to dust emission, leakage or spills of hazardous materials or effluents, excavations, land clearance, including health and safety risks to contractor’s workers and community mainly during construction of the administrative facilities. The Project will avoid registering land rights in areas that are legally designated as protected areas or in areas of potential ecological or cultural significance, including forest and areas along riverbanks. 75. According to OP 4.01 Environmental Assessment, an Environmental and Social Management Framework (ESMF) was prepared to set forth guidance and procedures to identify all impacts and risks and includes mechanisms and measures to prevent, avoid, minimize, mitigate or compensate potential direct, indirect, and cumulative environmental and social impacts associated with physical investments, land rights delimitations and regulatory reforms in land use planning. The ESMF also contains screening tools to identify such impacts, a generic Environmental and Social Management Plan (ESMP) to provide safeguards guidance for subproject management attached to an Environmental and Social Clauses for Contractors and Supervisors, including detailed budget, and a capacity building strategy for the PCU (FNDS). A detailed methodology to provide detailed guidance for land delimitation processes built upon the existing regulatory framework considers the need to screen out areas with potential to cause adverse environmental and social risks. The ESMF was widely consulted upon and will be publicly disclosed in‐country and at the Bank’s website prior to appraisal. This instrument has built upon best practices and lessons learned from the ongoing World Bank‐funded projects within FNDS to maximize synergies and harmonize procedures. 76. Existing institutional capacity for addressing World Bank Safeguards Policies is good, and a sound environmental legislation, including monitoring capacity, is in place. Safeguards implementation responsibilities will lie with FNDS and its Department of Project Management more specifically, which is currently managing several other Bank‐financed operations. FNDS has a well‐established safeguards team which has developed acceptable procedures and protocols for safeguards management. The PCU, both at central and provincial level, will include social development and environment specialists and the Operations Manual will contain specific roles and responsibilities of all key staff to ensure full compliance with the Project’s safeguards requirements as well as applicable national regulations. 77. Other environmental safeguard policies (OP 4.09 Pest Management and OP 4.37 Safety of Dams) were not triggered. The Project will not support any activities promoting or associated with the use of pesticides and will not register land rights in areas or sites of great cultural significance or cultural patrimony. Execution of the subprojects will be unlikely to involve large excavations or earth movements of any sort, notwithstanding the OP 4.11 – Physical Cultural Resources is triggered and “Chance Finds” procedures were included in the ESMF.

(ii) Social Safeguards

78. The Social Impact Assessment (SIA) mapped stakeholders, identified vulnerable groups and social risks, and potential sources of land conflicts, and identified existing conflict resolution tools and processes to inform the design of the Project, particularly with respect to the Communication and Awareness Campaign (component 2.1) and the DELCOM and LRT methodology, including the conflict resolution and grievance redress mechanisms. The SIA evaluated


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community governance aspects in the districts targeted by the Project to identify the most effective community consultation strategies, and to establish criteria to be included in the regularization methodology with respect to the combination and sequencing of community preparation (including proper representation and community election of the regularization options, DELCOM, and LRT, including land use management tools and consolidation of community representation and governance rules with respect to land and natural resources). The social impacts and risks and the corresponding mitigation measures proposed by the SIA for inclusion in the methodology are described in Annex 3.

79. OP 4.12 is triggered because small scale civil works may lead to involuntary land acquisition and though unlikely, if residual impacts of the DELCOM/LTR process result in involuntary loss of home sites, the Resettlement Policy Framework (RPF) can be activated on a contingent basis. With respect to the small scale civil works, an RPF has been prepared to screen out any significant impacts and to address infrastructure related impacts through simple compensation plans. 80. The SIA identified limited potential social risks related to physical displacement or resource access restriction impacts that might occur as a result of (i) delimitation, demarcation, formalization or regulation, and related changes in enforcement and land use practices with respect to legally protected areas related to natural features and infrastructure; and (ii) households occupying areas where a prior DUAT may have been granted. It is not possible to quantify these impacts until the regularization process starts in each community, but the overall assessment is that there would be a limited number of cases. Experience shows that impacts on use and occupation as a result of the regularization process would not necessarily be immediate and could in most cases be resolved through re‐dimensioning of overlapping DUATs or allocation of alternative areas to the affected families by community authorities. The methodology and the grievance redress mechanism will include provisions to address these situations, and the RPF will only be activated for unresolved cases (other than those related strictly to conflicts among private parties).27 While it is expected that these situations will be rare and the Methodology and GRM will include several options to resolve them. If vulnerable families lose their homes or would become landless as a result of unresolvable conflicts, the RPF contains contingent provisions to provide them with resettlement assistance. 81. The more significant social issues identified in the SIA relate to gaps in the 1997 Land Law and related other legislation and regulations with respect to, among other things, legal community representation and the community governance of rights to land and natural resources. These gaps and the related social risks are exacerbated by weaknesses in community capacity, lack of clarity regarding implementation and enforcement of community rights, and deficiencies in the land administration system. 82. The Project is designed to improve security of land tenure rights and address many of these gaps. Given the government’s priorities to accelerate the visibility of the Project and the issuance of the DUAT certificates, the Project adopts an implementation strategy that will continue to carry out regularization based on current practices, and, in parallel, support the legal and regulatory reforms, capacity building and response to the identified gaps. In order to mitigate the risks posed by this approach, the safeguards measures described in the Table below and further detailed in the Social Risk Mitigation Strategy (Appendix to Annex 3) are required. The Borrower and the Bank can agree on adjustments to improve processes and efficiency and reflect changes and circumstances (such as regulatory and institutional changes). These measures constitute essential complementary and additional elements that must be integrated in the detailed DELCOM and LTR Methodology and will include, among other measures: (i) participatory

27 OP 4.12 does not apply to disputes between private parties in land titling projects, unless as a result of contextual factors these conflicts extinguish the rights of private parties in favor of the government (for example, leading to land being placed in a state reserve for future allocation).


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methodologies, including measures to ensure the participation of women and youth and the inclusion of more vulnerable groups in the community delimitation and DUAT issuing processes; (ii) measures to attenuate risks related to lack of governance of community rights and ineffective participation in the regularization process through community consultation requirements, readiness criteria and enhanced governance tools; and (iii) specific aspects to be addressed through the Project GRM and support through community legal advisory services to resolve potential conflicts. The phasing, sequencing an independent quality control of the methodology are critical for the effectiveness of the mitigation measures and the reduction of the related social risks. These measures must be integrated in the approved DELCOM and LTR Methodology when it is approved by the Bank as part of the Operations Manual and reflected in monitoring indicators. An Independent Process Quality Assurance (IQPA) entity28 will need to be hired.

(iii) Grievance Redress Mechanisms

83. Communities and individuals who believe that they are adversely affected by a World Bank (WB) supported project may submit complaints to existing project‐level grievance redress mechanisms or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project‐related concerns. Project affected communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of WB non‐compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/en/projects‐operations/products‐and‐services/grievance‐redress‐service. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org.

V. KEY RISKS

A. Overall Risk Rating and Explanation of Key Risks 84. Overall risk is considered Substantial. Strong Government commitment is evidenced by the recent establishment of MITADER and the integration of important land administration functions, as well as by the endorsement of the Terra Segura Program. Strengthening of property rights in a systematic manner and improving the land administration system and services have become a Government priority. While there is broad consensus on the need for land regularization in Mozambique, there remain concerns within government and in public sector institutions as to the best strategy to define and achieve the optimal allocation and use of land among households, communities, investors and public uses. There are important weaknesses at the institutional and technical level which create certain gaps and a lack of transparency which create opportunities for rent seeking behavior. There are also a number of areas in the law, which, although they do not prevent moving forward with the land regularization process, require clarification, particularly with respect to

28 Independent Process Quality Assurance (IPQA) entity: An NGO or other specialized independent entity (and other actors) contracted to accompany all phases of the regularization process at community level, including without limitation: (i) carrying out independent verification of the quality of the process, including assessing and confirming the readiness of communities to advance from one phase of the process to the next; (ii) ensuring safeguards compliance including support for the application of safeguards in specific cases; (iii) overseeing and supporting the implementation of the GRM and its coordination with related local mechanisms; (iv) sensitizing communities and service providers regarding the regularization process and specifically the issues set forth in the Social Risk Mitigation Strategy; (v) training facilitators, paralegals and other technical and legal assistance providers on legal land rights and the program methodology and procedures. The IPQA entity will be hired by the FNDS (PCU) at Project inception and will accompany the regularization process throughout its implementation.


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the definition, formalization and enforcement of community rights in the context of (1) the bundle of rights associated with a community DUAT, representation of the community as right holding entity, the legal effect of community consultation processes and land use agreements with investors/outsiders; (2) technical requirements for delimitation and demarcation; and (3) property rights registration (Real Property Register). 85. Most specific risks are also considered substantial. Potential risks are associated with: (i) weak capacity at the provincial and district level to support the cadastre and registration process, to ensure adequate quality control of DELCOM and LTR process and the reliability of the cadastral data and information; (ii) lack of clarity of institutional roles at the local level; (iii) lack of a standardized, fit‐for‐purpose methodology for land regularization and registration; (iv) inadequate communication infrastructure and ICT capacity for managing the land information system; and (v) weak awareness of communities and individuals in rural areas of their land rights and responsibilities, and weak capacity to access and participate in land administration and management processes. 86. Social Risk: High. The major social risks in systematic land regularization relate to conflict and undermining the rights of communities, and the rights of vulnerable persons, including women and youth. The realization of such risks is most often a result of weak consultation mechanisms, which are non‐inclusive. The Annual Reports of the DINAT point to several causes of conflicts; high demand for land for tourism investments in the coastal areas, poor dissemination of the legislation to local communities, weak community consultation processes, lack of proper and capable community representation, disputes over boundaries between communities and investors and the ‘non‐rigorous delimitation of areas’ (giving applicants more land than authorized). Also, poor dissemination of the procedures and legislation to local communities and lack of follow‐through with communities on the opportunities and risks of engaging with other stakeholders after a delimitation process increase social risks, and there are many examples of conflicts over expectations and fulfillment of community agreements for ceding of land occupation rights, with resulting delays for large investments and potential loss of benefit. In order to manage the high risks related to poor community representation and governance, and high vulnerability of rural households, the Project must ensure that: (i) community governance is strengthened; (ii) consultations with communities and individual rural households will take place ahead of delimitation and regularization processes, are participatory, inclusive, transparent and well documented; and (iii) a robust grievance management system is in place to address the land conflicts prevalent in rural Mozambique and the risks of the regularization process to vulnerable groups’ rights and access to resources, especially in view of the complexities and gaps related to community rights (as described in para. 44 and 75 above). In addition to the implementation of the ESMF and RPF, prior to Project effectiveness, the government will adopt the Social Risks Mitigation Strategy included as an Appendix to Annex 3, which will be an integral part of the DELCOM and LTR Methodology to be included in the Project’s Operations Manual. The strategy includes social safeguards, which provide for strengthened community representation and governance, participatory mechanisms that are sensitive to traditional governance structures and cultures, while enhancing the role of women, and robust conflict management tools. While overall social risk remains high, an adequate methodology with independent quality assurance can provide the necessary management tools to reduce the residual impacts and risks to the moderate level. 87. Technical Design of Project: Substantial. The Government has set ambitious targets for systematic land regularization under the Terra Segura program based on a methodology that requires streamlining and harmonization. Further, this is the first time that the country embarks on a systematic LTR process at this scale. The technical design of the Project has been developed in consultation with key stakeholders and independent experts and builds on lessons learned from recently initiated Bank operations in support of the sector (see lessons learned). Continued consultations, technical assistance, and hands‐on implementation support will drive revisions of the Project design as necessary throughout Project implementation. There are also substantial risks related to upgrading, enhancing and managing


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SiGIT: (i) inadequate ICT capacity for managing the land information system; (ii) unstable and unreliable communication infrastructure; and (iii) lack of quality documentation related to the design and development of the current SiGIT system. These risks will be mitigated by (i) the move towards a centralized SiGIT system architecture and inclusion of ICT experts in the ICT unit at DINAT data center; (ii) institutional capacity building; (iii) gradual deployment of SiGIT, depending on the reliability of the communication infrastructure at the SPGC sites; (iv) leased communication lines including backup from two different communication providers; and (v) improved and close cooperation with the developer of the current SiGIT. A centralized architecture, the development of the system based on OSS29 platforms and products, as well as the inclusion of ICT experts will significantly contribute to the system reliability, maintenance and sustainability. 88. Institutional Capacity for Implementation and Sustainability: Substantial. The project comprises a technically complex operation in an environment of low capacity. Capacity is particularly low at the provincial and district offices to support the systematic land regularization process, and to ensure adequate quality control and monitoring and evaluation, and the community level to participate effectively in the process. There are limited resources and weak systems and processes for implementation and maintenance; these constraints may have adverse impacts for sustainability beyond the Bank’s support. The Project will mitigate these risks by building capacity through a fit‐for‐purpose approach at the provincial and district level, while promoting further decentralization of land administration services and supporting community governance. The Project will have a strong focus on institutional development and capacity building in ICT infrastructure maintenance, addressing the long‐term challenges of sustainability of the land information management system. Towards this end, the Project will explore mechanisms to build ICT capacity, including the creation of a competent ICT unit within DINAT and eventually an autonomous land administration entity. Other critical ICT development and maintenance arrangements supported by the Project include: (i) use of open source software and platforms where applicable; and (ii) facilitation of knowledge transfer between the system developer and ICT unit. 89. Political and Governance: Substantial. The issuance of land delimitation certificates to communities has suffered from delays, inaccuracies and a lack of transparency, and a substantial percentage of the land that has been certified to local communities has not yet been inserted into the national cadastre. A further risk relates to the absence of a regulatory response to article 30 of the Land Law, which states that “The mechanisms for representation of, and action by, local communities, with regard to the rights of land use and benefit, shall be established by law”. This remains a gap in the regulatory framework, on which the Project will provide support, while also promoting improved governance arrangements in communities as they enter and as they complete the regularization process. Further, the project will support: (i) the adoption of an enhanced and harmonized methodology for both community delimitation and land regularization of individual land rights, which will include criteria for effective community consultations and proper representation; and (ii) independent verification of the quality of the land regularization process at the community level. 90. Stakeholders: Moderate. Inter‐institutional coordination among land administration agencies (both at the central and local level) is challenging. Land administration functions are shared between the Ministry of Justice (property registry), MITADER (cadastre), and municipalities (urban areas), and institutional responsibilities for managing and providing geospatial data are also fragmented (held by several stakeholders). Contrasting views and priority issues among the different institutional stakeholders are likely to appear. Mechanisms to provide intersectoral high level policy and technical guidance and consultation for the Project include: (i) at the decision‐making level, a Steering Committee composed of representatives from MITADER, MAEPF and civil society, as well as from other entities as observers (e.g., Ministry of Justice and Religious Affairs); (ii) at the technical and operational level, FNDS will ensure coordination between MITADER and MAEPF. The institutional strengthening component will explore options to improve

29 Open‐Source Software


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interinstitutional coordination on a permanent basis. Furthermore, communities and households may be reluctant to engage due to lack of incentives and occasionally distrust or disinterest in the formal processes. This is expected to be mitigated through the communication campaign, sensitization and legal advice to be carried out prior to, and during DELCOM and LTR activities. These activities will aim to explain the value of formalization and the risks of continuing to rely on informal approaches. 91. Macroeconomic: Moderate. The increase in debt levels, falling capital inflows, slower economic growth rate and weaker price outlook for coal and aluminum (which accounts for 61% of the exports) have heightened Mozambique’s macroeconomic vulnerability and exposure to fiscal risk, which may force the government to reduce its spending/GDP ratio compared with current levels. On the other hand, a modest monetary and inflation stability coupled with lower but steady economic growth is expected during the Project period30. In this context, potential cost overruns and macroeconomic risks can be minimized by following basic fiduciary strategies against inflation and exchange rate fluctuations, and through policy dialogue and technical assistance. 92. Sector Strategies and Policies: Moderate. The Project’s technical investment agenda can advance in parallel while policy and regulatory changes are defined and implemented but achieving its long‐term goals and maximizing its impact will require legal and regulatory changes. Such changes will be needed in particular for transferability of DUATs, legal representation of communities, land information systems interoperability, accessibility of the land administration services at the local level, land taxation.

93. Fiduciary: Substantial: Financial management and procurement arrangements at FNDS are adequate, given its experience in managing Bank‐financed operations. However, fiduciary risks remain Substantial due to country risk, capacity issues, Project decentralization and the number of entities involved in implementation, and lack of experience with the New Procurement Framework (NPF) and complex land regularization contracts. The Project will follow the procedures documented in the Manual de Administração Financeira (MAF), which has been designed to mitigate internal control risk, and those to be documented in the Project Operations Manual (POM). The accounting software will be customized to maintain separate records and ledger accounts. A Contract Management Plan will be put in place for complex contracts that will include milestones, deliverables, potential risks and mitigating measures. An additional procurement specialist is being recruited, and the Bank procurement team will continue to work closely with FNDS to enhance its capacity to efficiently process the procurement activities, improve the record keeping and take advantage of the flexibility of the NPF.

.

30 Inflation has declined sharply in 2018 and is expected to stay below six percent during the Project. A similar prospect is expected for the Metical which appreciated against the dollar in 2018 but will slowly decrease approximately 10% during the Project (source: The economist Intelligence Unit Forecast).


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VI. RESULTS FRAMEWORK AND MONITORING

Results Framework

COUNTRY: Mozambique Mozambique Land Administration Project (Terra Segura)

Project Development Objectives(s)

The Project Development Objective is to strengthen land tenure security in selected districts and improve the efficiency and accessibility of land administration services.

Project Development Objective Indicators

RESULT_FRAME_TBL_PDO

Indicator Name DLI Baseline End Target

To strengthen land tenure security in selected districts

Community delimitation certificates recorded in SiGIT in the name of the community, including an approved micro‐zoning plan (Number)

0.00 1,200.00

Beneficiaries who received a DUAT recorded in SiGIT (Number) 0.00 700,000.00

Women who received a DUAT recorded in SiGIT in their name or jointly (Percentage)

0.00 40.00

To improve the efficiency and accessibility of land administration services

Satisfaction of DUAT beneficiaries with respect to land tenure regularization (LTR) (Percentage)

0.00 75.00

Satisfaction of women who are DUAT beneficiaries with respect to land tenure regularization (LTR) (Percentage)

0.00 75.00

Reduction of cost to record a DUAT in SiGIT under a systematic regularization process (Amount(USD))

50.00 35.00


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RESULT_FRAME_TBL_PDO


SiGIT is upgraded, operational and available to use, including a Web Portal that enables public access to the national land cadastre data (Percentage)

0.00 90.00

PDO Table SPACE

Intermediate Results Indicators by Components

RESULT_FRAME_TBL_IO


Institutional Development and Strengthening of the Legal Framework

The final draft of land policy reform is submitted to the Council of Ministers (Yes/No) No Yes

Final draft proposal and business plan for the creation of an autonomous Land Administration entity is submitted to the Council of Ministers (Yes/No)

No Yes

New Provincial/District offices built and operational (Number) 0.00 10.00

Quality Assurance and Quality Control procedures for land regularization are developed and implemented (Yes/No) No Yes

Systematic Land Regularization

DUATs regularized and recorded in SIGIT (Number) 0.00 2,000,000.00

Community awareness and communication campaign is implemented (Percentage) 0.00 100.00

End users who received training to use SiGIT (Number) 0.00 100.00

Civil society actors and local government officials trained in legal and safeguard aspects related to land tenure regularization process (gender disaggregated) (Number)

0.00 500.00

Women part of civil society actors and local government officials trained in legal and safeguard aspects related to land tenure 0.00 40.00


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RESULT_FRAME_TBL_IO


regularization process (Percentage)

Districts where land regularization process was finalized (Percentage) 0.00 80.00

Identified land conflicts adressed within the established conflict resolution mechanism at DINAT and Project level (Percentage) 0.00 80.00

Women participating in the consultation process (Percentage) 0.00 40.00

Project Management and Coordination

Household survey completed (Number) 0.00 3.00 IO Table SPACE

UL Table SPACE

Monitoring & Evaluation Plan: PDO Indicators

Indicator Name Definition/Description Frequency Datasource Methodology for Data Collection

Responsibility for Data Collection

Community delimitation certificates recorded in SiGIT in the name of the community, including an approved micro‐zoning plan

This indicator measures the progress in the delimitation of the Community, which is a key step for ensuring a participatory and smooth process before the delimitation of the individual parcels and issuing the DUATs.

Quarterly

SiGIT

Data will be obtained through the SIGiT where certificates are registered, and compared to information provided by the Service Provider (SP) in charge of DelCom and DUAT. It will require 800 new delimitations and 400 already delimited but

Project M&E team based on DINAT inputs from SiGIT


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not registered in SiGIT.

Beneficiaries who received a DUAT recorded in SiGIT

This indicator measures the number of direct beneficiaries who will formally receive a DUAT in their name as a result of the LTR process. It is estimated that each smallholder (man or woman) has an average of three parcels, with one DUAT for each parcel.

Quarterly

SiGIT

Data will be obtained through SiGIT, where DUATs are registered, and compared to information provided by the Service Provider


Women who received a DUAT recorded in SiGIT in their name or jointly

This indicator measures the percentage of women who will formally receive a DUAT in their name and obtain in this way formal recognition of their tenure rights

Quarterly

SiGIT

Data will be obtained through SiGIT, where DUATs are registered, and compared to information provided by the Service Provider


Satisfaction of DUAT beneficiaries with respect to land tenure regularization (LTR)

This indicator measures the percentage of people who received a DUAT and are satisfied with the LTR process, taking into consideration the communication, the participatory consultation, the conflict resolution mechanism and the issuance of the documentation.

Biannually

Surveys

Surveys are carried out where community certificates and DUATs are being issued. An index will be developed taking into consideration beneficiary perceptions on: communication, consultations, delimitation, conflict management, DUAT issuance among others.

Project M&E team based on inputs from consultants


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Satisfaction of women who are DUAT beneficiaries with respect to land tenure regularization (LTR)

This indicator measures the percentage of women who received a DUAT and are satisfied with the LTR process, taking into consideration the communication, the participatory consultation, the conflict resolution mechanism and the issuance of the documentation.

Biannually

Surveys

Surveys are carried out where community certificates and DUATs are being issued. An index will be developed taking into consideration beneficiary perceptions on: communication, consultations, delimitation, conflict management, DUAT issuance among others.

Project M&E team based on inputs from consultants

Reduction of cost to record a DUAT in SiGIT under a systematic regularization process

This indicator measures the reduction in cost to issue a DUAT for MITADER, taking into consideration both costs of the outsourced services and institutional ones

Baseline, MTR, and end of project

Service Provider contracts and DINAT' budget

Indicator measured according to the cost of the contracts with SP and DINAT’s institutional costs

Project M&E team based on inputs from SiGIT consultants inputs

SiGIT is upgraded, operational and available to use, including a Web Portal that enables public access to the national land cadastre data

This indicator measures the progress in the development and functionality of the key modules of the SiGIT: SiGIT technical review and redesign (10%); Improvement and expansion of DINAT’s Data Center

Baseline, MTR, and end of project

DINAT and consultants' reports

Evaluation of progress in the completion of SiGIT based on the completion of 5 system modules plus the redesign proposal

Project M&E team based on DINAT and consultant report


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capabilities (20%); Upgraded, enhanced and operational SiGIT system including interoperability capability (40%); Development of data exchange model and standard (10%); Redesigned, upgraded and operational WebPortal (20%)

ME PDO Table SPACE

Monitoring & Evaluation Plan: Intermediate Results Indicators

Indicator Name Definition/Description Frequency Datasource Methodology for Data Collection

Responsibility for Data Collection

The final draft of land policy reform is submitted to the Council of Ministers

This indicator evaluates the achievement of the preparation of a revised land policy, which will improve the sustainability of the LTR process and the Cadastre at national level.

Semi‐annually

MITADER report

Copy of the submission letter of the draft to the Council of Ministers and the consultation process of the Reform

Project M&E team based on MITADER report

Final draft proposal and business plan for the creation of an autonomous Land Administration entity is submitted to the Council of Ministers

This indicator evaluates the preparation of the technical and financial proposals to reform the functions of the Land Administration Institutions

Semi‐annually

MITADER report

Copy of the submission letter of the proposal and business plan to the Council of Ministers

Project M&E team based on MITADER report

New Provincial/District offices built and operational

This indicator measures progress in the construction of the buildings that SPGC,

Semi‐annually

Work supervision reports

Work supervision reports on official rehabilitation/construct

Project M&E team based on work


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Districts and DINAT require to facilitate the LTR process and the sustainable management of the Cadastre at national level.

ion process

supervision reports

Quality Assurance and Quality Control procedures for land regularization are developed and implemented

This indicator evaluates the establishment of a systematic process of quality and assurance control of the alphanumeric and geospatial data during the field collection of data and the registry in SiGIT

Semi‐annually

DINAT reports

Evidence of official procedures provided by DINAT

Project M&E team based on DINAT reports

DUATs regularized and recorded in SIGIT

This indicator measures the number of formal documents issued as a result of the LTR process. Each DUAT corresponds to one parcel, but usually landholders own more than one (the average is three)

Quarterly

SiGIT

Data will be obtained through SiGIT


Community awareness and communication campaign is implemented

This indicator measures the quality of the development of the communication and awareness campaigns, which are key to enable the actors to obtain proper information on the process and its benefits

Quarterly

Consultants report

Evaluation according to the harmonized methodology and plan describing the minimum communication and awareness activities

Project M&E team based on consultants inputs

End users who received training to use SiGIT

This indicator measures the number of users from institutions, NGO and

Quarterly

DINAT reports

Number of certificates delivered by DINAT

Project M&E team based on DINAT reports


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private companies who will be trained to manage SiGIT and participate in the LTR process

Civil society actors and local government officials trained in legal and safeguard aspects related to land tenure regularization process (gender disaggregated)

This indicator measures the number of civil society actors and local government officials who will be trained to ensure that the Project complies with the Project social and environmental safeguards

Quarterly

Training entity report

Number of certificates delivered by the private entities in charge of training

Project M&E team based on the training entity report

Women part of civil society actors and local government officials trained in legal and safeguard aspects related to land tenure regularization process

This indicator measures the percentage of women that are part of civil society actors and local government officials who will be trained to ensure that the Project complies with the Project social and environmental safeguards

Quarterly

Training entity report.

Number of certificates delivered by the private entities in charge of training.

Project M&E team based on the training entity report.

Districts where land regularization process was finalized

This indicator measures the number of districts where the LTR process is completed

Quarterly

SiGIT

Report from SPGC about number of communities that conclude the process vs those that start it. A district is considered completed when at least 90% of the area subject to regularization has been covered

Project M&E team based on SiGIT information


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Identified land conflicts adressed within the established conflict resolution mechanism at DINAT and Project level

This indicator measures the reliability of the reporting system of conflicts resolution mechanism, as well as the share of the cases that are properly addressed.

Quarterly

DINAT system and consultant reports

Status Report of the conflicts resolution within the system; three external evaluations during the project life cycle

Project M&E team based on DINAT system and consultant inputs

Women participating in the consultation process

This indicator measures the level of participation of women during the consultation process, before the start of the LTR process.

Quarterly

DINAT system and consultant report

Evidence of the consultation process and participants provided by SPGC. External review during MTR

Project M&E team based on DINAT system and consultant input

Household survey completed

This indicator measures the level of appropriate management of the project M&E system, which is key to report on progress for all the indicators.

Baseline, mid‐term, and end of project

Consultants reports

Project files, reports and final survey

Project M&E team and MTR revision

ME IO Table SPACE


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ANNEX 1: Implementation Arrangements and Support Plan

COUNTRY: Mozambique

Mozambique Land Administration Project (Terra Segura)

Project Institutional and Implementation Arrangements 1. The Project will be implemented under the leadership of MITADER, through FNDS’s operational management and coordination, and with technical oversight to be provided by its relevant competent Directorates (DINAT, CENACARTA), as well as the relevant Directorate of the Ministry of State Administration and Public Function (MAEPF – National Directorate of Territorial Organization, DNOT), responsible for the delimitation of administrative boundaries. A Memorandum of Understanding (MoU) will be signed between CENACARTA, DNOT and FNDS and will establish the roles and responsibilities of each entity for the implementation of relevant field activities. 2. A Project Steering Committee will be established that will be responsible for (i) providing overall policy guidance and decision‐making on all issues relating to the Project; (ii) facilitating coordination among the relevant agencies; (iii) reviewing and approving annual work and expenditure plans, and (iv) assessing risks of strategic impact and identifying solutions. The Steering Committee will meet twice a year and hold extraordinary meetings when necessary. It will be chaired by FNDS and be composed of two representatives of DINAT, and one representative each of FNDS, CENACARTA, DNOT and the FCT Reflection Group (GRFCT). Representatives of the National Directorate of Territorial Planning and Resettlement, the National Directorate of Registration and Notary (of the Ministry of Justice and Religious Affairs), and other entities as needed will participate as observers. FNDS will serve as the Secretariat of the Steering Committee. 3. FNDS's broad objectives are to coordinate the implementation of MITADER’s projects funded by international financial institutions, in close coordination with relevant Directorates, and to raise national and international funding for the implementation of the Ministry's strategic vision. FNDS will provide overall coordination between the government entities involved in the implementation of Project activities through the establishment of a Project Coordination Unit (PCU). Fiduciary and safeguards implementation responsibilities will also lie with FNDS, and its Department of Project Management more specifically, which is currently implementing several other Bank‐financed operations.

4. At the provincial level, the implementation of Project activities will be the responsibility of the provincial cadastral offices of DINAT (Serviços Provinciais de Geografia e Cadastro, SPGC), which will provide technical guidance, while Project coordination will be ensured through decentralized PCUs within the SPGCs (three decentralized PCU, each covering several provinces). The decentralized PCUs will also ensure coordination with MITADER’s Provincial Directorates (DPTADER), as well as relevant district authorities (the District Service for Economic Activities, SDAE and the District Planning and Infrastructure Service, SDPI). They will include land administration specialists, safeguards specialists and an accountant and their establishment will follow the implementation schedule of Project activities, leveraging existing FNDS land regularization presence in the provinces of Cabo Delgado, Nampula, and Zambezia (under the Bank‐financed Sustenta and MozFIP projects).


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Figure 1: Project’s Institutional Arrangements

5. The PCU will be under the leadership of a Project Coordinator and will include as its core staff technical specialists in the areas of cadastre, land administration, land law, ICT, procurement, financial management, M&E, social development and gender, environment, and communication. The Coordinator will have the overall responsibility to supervise the PCU staff in their planning, organizing, and executing of all day‐to‐day administrative, technical, and legal activities of the Project and ensuring close coordination with MITADER’s and MAEPF’s Directorates responsible for the technical aspects of implementation. Each entity will be involved in the preparation of the annual work plans, the progress reports, and all other implementation activities related to their areas of competence. The existing FNDS Operations Manual will be adjusted to include the Project PCU’s organizational structure and describe the duties and responsibilities of PCU staff and MITADER Directorates, along with the Project's technical, administrative, financial, procurement, safeguards, and M&E procedures. 6. Finally, FNDS and DINAT will maintain coordination and collaboration with relevant agencies on important aspects related to the Project, in particular the Mining Cadastre, the Real Property Registry, the Tax Authority, and the National Institute of Electronic Governance.


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Figure 2: Project’s PCU team within FNDS structure

Financial Management 7. A Financial Management Assessment was undertaken to evaluate the adequacy of the proposed Project financial management (FM) arrangements. The Assessment was carried out in accordance with the Directives and Policy for Investment Project Financing (IPF) and the Bank Guidance on FM in World Bank IPF Operations issued on February 28, 2017. The Assessment revealed that there are adequate financial management arrangements at FNDS, which has experience in managing Bank‐financed operations and is currently managing the Conservation Areas for Biodiversity and Development – Phase 1 (P131965 & PP132597), Mozambique Forest Investment Project (P160033), Mozambique Agriculture and Natural Resources Landscape Management (P149620). No major FM issues were raised under these projects. The overall FM was assessed to be adequate, and the risk rating was assessed as Substantial due to country risk, capacity issues in the country, Project decentralization and the number of entities involved in the implementation of the Project.


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Risk assessment and mitigation measures

Risk factors/Description of Risk Risk Rating

Risk Mitigating Measures Incorporated into the Project Design

Conditions of Negotiations, Board or Effectiveness (Yes or No)

Residual Risk Rating

Inherent Risk:

Country level: Shortage of human resources and limited capacities for key FM functions and weak internal controls and auditing may impact negatively the implementation of this proposed Project expenditures.

H

The Government of Mozambique is committed to implement further reforms of the country’s PFMs with support from the Bank and other development partners.

No S

Entity level: FNDS has experience in handling FM matters of Bank‐financed operations, however the fact FNDS is currently managing several projects financed by different organizations poses a risk as this could jeopardize its ability to perform well for all projects

S The entity’s capacity will be reassessed during implementation support missions and strengthened as needed. The Project implementation arrangements will be documented in the POM.

No M

Project level: Project design relatively complex since it involves activities at local level.

S Clearly defined FM procedures and funds flows, accountability and reporting will be documented in the POM. The Project will be periodically supervised by the FMS as well as government institutions.

No S

Control Risk:

Budgeting: FNDS may not be able to produce realistic and comprehensive budget as the Project is decentralized. Weak budget monitoring system which can lead to budget overrun

S The budget preparation, execution, and monitoring will be documented in the POM. The budget preparation will involve all the participating entities at provincial level and FNDS will coordinate the process. FNDS will produce periodic financial reports comparing planned and actual Project expenditures. The budget preparation, execution and monitoring procedures will be documented in the POM.

No S

Accounting: Due to capacity issues, managing multiple projects using the same system may pose a major risk as the FNDS finance team may be confused in handling record of the Project transactions.

S FNDS has finance staff capable of performing their duties and responsibilities and they have experience in handling multiple projects. The accounting package will be customized for separate recording of Project transactions and production of

No S


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Risk factors/Description of Risk Risk Rating

Risk Mitigating Measures Incorporated into the Project Design

Conditions of Negotiations, Board or Effectiveness (Yes or No)

Residual Risk Rating

financial reports.

Internal control: Non‐compliance with key project internal control procedures due to weak internal control environment and oversight mechanisms in the country. In addition, the IGF and FNDS internal audit unit may not be able to cover the operations of the Project due to capacity constraints.

S The Project will follow the procedures documented in the Manual de Administração Financeira (MAF), which has been designed to mitigate internal control risk, and those to be documented in the POM. The oversight bodies IGF and FNDS’s Internal Audit may review the operations of this proposed Project. In addition, the regular supervision will be carried out by the Bank.

No S

Funds flow: Delays in funds flow may affect implementation of the Project at local level.

M The disbursement arrangements will be documented in the POM. Sub‐accounts at three Provinces at each region will be opened and maintained to facilitate financing of activities at provincial level. FNDS team will provide support and coaching to the finance staff at these three provinces. The Bank team will provide support to FNDS throughout implementation.

No M

Financial reporting: IFR may not be submitted timely due to uses of projects funds to finance local eligible expenditures.

M FNDS has experience in preparing and submitting good quality IFR on time for decentralized projects

No M

Auditing: Delays in submission of audit reports. M Acceptable accounting system in place allowing timely production of the financial statements. The Project financial statements will be audited by the Administrative Tribunal

No M

OVERALL FM RISK S S

Note: S = Substantial; and M = Moderate


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FM action plan

8. To mitigate FM risks, the following measures should be taken:

Number Action Responsibility Completion Date

1 Develop the Project Operations Manual including FM procedure

FNDS By effectiveness

2 Customize the accounting software to maintain separate records and ledger accounts for the proposed Project.

FNDS 60 days after effectiveness

9. Budgeting. Budget preparation will follow national procedures and those to be documented in the Project Operations Manual (POM). The preparation of annual work plans (AWPs) and budgets will involve all Project beneficiaries. The FNDS will consolidate the AWPS and budgets to be prepared by entities at central level and Serviços Provinciais de Geografia e Cadastro (SPGC) under the MITADER at provincial level. The detailed budget preparation, execution, and monitoring will be documented in the Financial Procedures Manual. The Project budget will be registered with the National Budget Directorate (DNO) and the National Treasury Directorate (DNT) to allow the use of the country FM systems. Budget execution will be monitored through the FNDS existing accounting system. FNDS will prepare variance analysis reports comparing planned with actual expenditures that will be part of the quarterly interim unaudited financial (IFR). 10. Staffing. The FNDS will be responsible for fiduciary aspects of the Project. It has a Financial Manager with acceptable skills and experiences to handle FM and disbursement matters of the Bank‐financed operations. He is supported by two finance staff. The Project activities at local level are coordinated through the three regional Project Coordination Units, each with one financial assistant to handle the Project funds. 11. Internal controls. Internal controls system and procedures of the Project will be based on national procedures, defined in the Manual de Administração Financeira (MAF) and Project Operations Manual (POM). The internal audit unit (Gabinete de Auditoria), based at the FNDS will be responsible for the internal audit. A review will be carried out at least once a year and the reports will be shared with the Bank. The Project may also be subject to the review of the General Inspectorate of Finance (IGF‐ Inspeção Geral das Finanças) based at the Ministry of Economy and Finance. In addition, alternative measures such as regular supervision should be also carried out by the Bank. 12. Accounting. FNDS will account for funds, expenditures, and resources of the proposed Project using the existing multi accounting software. This accounting software is adequate as it can produce reliable financial reports required to monitor and manage effectively the progress of the Project. The accounting software will be customized to maintain separate records and ledger accounts for the proposed Project and allow preparation of financial reports required to monitor and manage effectively the proposed Project. The supporting documentation for all transactions at regional level will be sent to the headquarters for consolidation.

13. Financial Reporting. FNDS is producing regular financial reports for the ongoing projects. For the proposed Project, it will prepare quarterly IFRs for the project in form and content satisfactory to the World Bank, which will be


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submitted to the World Bank within 45 days after the end of the calendar quarter to which they relate. At the end of each fiscal year, FNDS will also produce annual project financial statements (PFS) in accordance Financial Reporting under Cash Basis of Accounting. In addition, the PFS’s components will be outlined in the terms of reference for audit of this proposed Project. Disbursement 14. Funds Flow. FNDS will open a Designated Account (DA) in US dollars with the Bank of Mozambique (Central Bank) to receive funds from IDA. In addition, it will also open and maintain sub‐accounts in local currency with commercial banks in three provinces for each region. From the DA, the FNDS will: (i) make payments to consultants and suppliers of goods and services; (ii) transfer funds to three (iii) sub‐accounts at the regions, in local currency, to facilitate payments of local eligible Project expenditures. The figure below depicts the funds flow mechanism for the proposed Project.

15. Disbursement arrangements. Disbursements of IDA funds will be done on a transaction basis. An initial advance will be made into the Designated Accounts upon the effectiveness of the Financing Agreement, based on the DA ceiling and at the request of FNDS. The advances will be based on the estimated cash requirements to meet the Project expenditure for the first four months. 16. The option of disbursing the IDA funds through direct payment, reimbursement, and special commitment will also available. The Bank will issue the Disbursement Letter and Financial Information Letter which will specify the additional instructions for withdrawal of the proceeds of the IPF. The payments for eligible expenditures at the decentralized level will made from the sub‐accounts to be opened and maintained in three provinces in each region. 17. Auditing. The Administrative Tribunal (the country’s supreme audit institution) is mandated to audit all government funds, including donors‐financed projects. As such, the Project financial statements will be audited by the Tribunal in in accordance with International Standards on Auditing as issued by the International Auditing and Assurance Standards Board (IAASB) within IFAC. The audit report together with Management Letter will be submitted to the Bank within six months after the financial year‐end; that is June 30th of each following year. 18. Effectiveness condition. The following FM action is a condition of effectiveness: preparation and adoption of POM including FM procedures;

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Sub-Accounts (Meticais)

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19. Dated covenant. The following FM action is a dated covenant: customization of the accounting software to maintain separate records and ledger accounts for the proposed Project within 60 days after the Project effectiveness date. 20. Implementation support plan. Based on the current Substantial overall FM risk of this operation, the Project will be supervised twice a year. In addition to desk‐based reviews, the FM will perform field visits to ensure that Project’s FM arrangements operate as intended.

Procurement

21. Procurement procedures. The Borrower will carry out procurement under the proposed Project in accordance with the World Bank’s “Procurement Regulations for IPF Borrowers” (Procurement Regulations) dated July 2016, revised November 2017 and August 2018 under the “New Procurement Framework (NPF), and the “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants”, dated October 15, 2006 and revised in January 2011 and as of July 1, 2016. The proposed Mozambique Land Administration Project will be implemented by the International Fund Management Unit (UGFI) within the National Fund for Sustainable Development (FNDS) under MITADER. 22. Procurement Capacity Assessment: FNDS’s procurement capacity was recently assessed by an independent firm (ML Consultancy). The firm identified the existing capacity, weaknesses, challenges and opportunities and prepared an action plan to improve the performance of this implementing agency, including the allocation of procurement practitioners by procurement category. The Bank also assessed the unit as part of the FY17 Procurement Post Review (PPR)

23. According to the assessment the unit comprises seven procurement practitioners, including procurement officers and procurement assistants. The team has experience with implementing World Bank‐financed projects but, although it has recently participated in the Bank’s New Procurement Framework (NPF) training, the team is still not fully familiar with it. The unit is well equipped with office space and all the means to satisfactorily perform the work. There is a need for improvement in the quality of the bidding documents prepared, the period for preparation and submission of the bids and record keeping system. 24. Mitigating Measures: Considering the findings of the independent firm assessment and the results of the Bank’s FY17 PPR assessment, the above‐mentioned division of procurement practitioners by category needs to be assessed from time to time to ascertain the fitness of the proposed approach. Although a group of three procurement officers attended a Training Workshop on the New Procurement Framework, the Bank procurement team will continue working closely with the client to enhance the capacity of the implementing agency to efficiently process the procurement activities, improve the record keeping and allow the client to use the advantages and flexibility of NPF to get the better development results with adequate focus on results and value for money. To continue enhancing the capacity of the unit to respond to the demand resulting from this project, one additional procurement specialist is being recruited.

25. Project Procurement Strategy for Development (PPSD): The Project will follow the Bank's New Procurement Policy and the New Procurement Framework (NPF), as such the Borrower was required to prepare a Project Procurement Strategy for Development (PPSD), which was submitted to the Bank on October 15, 2018. Based on the complexity of


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the Project, a simplified PPSD was used. The PPSD sets out market approaches and selection methods to be followed during Project implementation, as well as procurement risks and mitigation measures.

26. Under the Project contracts for the delimitation of communities, including basic land use planning, and land tenure regularization (2,000,000 parcels), including local public awareness campaign, boundaries surveys, preparation and issuance of DUATs for a total estimated amount of US$53,900,000, have been identified as complex contracts. These contracts will be carried out under the category of non‐consulting service, open and international approach and selection method will be request for bids (RFB).

27. Due to the sensitivity of land issues, the need for proper contract management skills, technology on one hand and the need for local knowledge on other hand, will be key for the success of the Project. Thus, participation of international companies associated with local firms will be paramount. To ensure good competition, international firms will be encouraged to partner with and closely cooperate with local service providers and civil society organizations with relevant experience in the area.

28. To address the complexity of these contracts a mandatory Contract Management Plan will be required to be in place to ensure that the roles of all stakeholders involved and the Implementing Agency have the same understanding of the process to ensure that any problem that may arise in terms of authorization delay, information provision and any other tasks is known as to who will handle it, thus avoiding delays by sending information to the wrong persons. The Contract Management Plan will include milestones, deliverables, potential risks and mitigating measures and ensure that the communication lines are made clear. The communication and reporting procedures will be laid down and made available to all key stakeholders for the Project. This will help manage any disputes between the client and the service provider.

29. Apart from the above contracts, most of the activities of the Project are of relatively small value and the local market is considered able to respond to the demand using the national procurement procedures which have been assessed by the World Bank and found acceptable subject to minor modifications.

30. Procurement Risk: The procurement risk associated with the Project in view of the finding indicated above is Substantial.

31. Procedures for selection of consultants. Open competition using the Quality and Cost Based Selection (QCBS) method will be the approach for most of the contracts for selection of consulting firms, for instance: (i) consolidation, maintenance and upgrade of SiGIT software toward a centralized system architecture (data quality, increased volume data, high availability, communication and licenses cost) (estimated at total of US$3,800,000), (ii) Hiring a service provider for Public Information and Sensitization campaign (estimated at total of US$1,000,000), (iii) Design and supervision works of building offices (Regional & Provincial) (estimated at total of US$1,150,000) among others. The selection of Auditors will be done through open competition using the Least Cost Selection (LCS) method and other small activities will use Consultant Qualification Selection (CQS) (i.e. (i) Interoperability and e‐Government integration (estimated at total of US$350,000, (ii) Redesign and upgrade of SIGIT web‐portal (estimated at total of US$250,000). The Project will have other several specialized activities that will not require a team and will be processed through the Individual Consultant Selection method. 32. Procedures for procurement of works, goods and non‐consulting services. Open competition using the Request for Bid (RFB) method will be the approach for most of the contracts for procurement of works, goods and non‐consulting


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services, for instance: (i) various contracts for delimitation of communities and basic land use planning and land regularization (2,000,000 parcels), parcels demarcation, boundaries survey, preparation and issuance of DUATs (estimated at total of US$53,900,000); (ii) ICT equipment and network installation and maintenance for the new provincial and regional offices (estimated at total of US$2,000,000), (iii) construction of buildings for Provincial (7) and Regional (7) offices (estimated at total of US$6,500,000); iv) acquisition of high resolution orthorectified imagery (base map) (estimated at total of US$6,600,000); (v) hardware licensing for Data Centre capabilities, security (estimated at total of US$1,500,000), and other activities. Procurement of other goods and services of small value, estimated to cost less than US$100,000 per contract, will be procured through the Request for Quotations (RfQ) method. 33. Procurement Plan: One of the results of the PPSD is the procurement plan covering the first 18 months of the Project. The procurement plan includes the selection methods, market approach and arrangements to be followed by the Borrower for procurement of goods, works, non‐consulting services, and consulting services. The procurement plan was submitted and cleared by the Bank on October 15, 2018 and will be updated, subject to the World Bank no‐objection at least every 12 months, or as required, to reflect the actual Project implementation needs.

34. Review by the World Bank of procurement decisions. Table below indicates the initial values for prior Review by the World Bank. All activities estimated to cost below these amounts shall be treated as post review and will be reviewed by the World Bank during the Implementation Support Mission under a post procurement review exercise. Direct Contracting/Single Source Selection will be subject to prior review only for contracts estimated to cost more than the amounts indicated in the Table below. The World Bank may, from time to time, review the amounts, based on the performance of the implementing agencies.

Table of Prior Review Thresholds

Procurement Type Prior Review

(US$)

Works 10,000,000

Goods and non‐consulting services 2,000,000

Consultants (Firms) 1,000,000

Individual consultants 300,000

35. Assessment of National Procedures. The Mozambique Procurement Regulation, the Decree 5/2016 of March 8, has been assessed as required under the World Bank’s Procurement Framework. The assessment indicated that the Country’s Regulations are generally consistent with international best practice for the following reasons: (a) there is adequate advertising in national media; (b) the procurement is generally open to eligible firms from any country; (c) contracts documents have an appropriate allocation of responsibilities, risks, and liabilities; (d) there is publication of contract award information in local newspapers of wide circulation; (e) the national regulations do not preclude the World Bank from its rights to review procurement documentation and activities under the financing; (f) there is an acceptable complaints mechanism; and (g) maintenance of records of the procurement process. 36. However, the request for bids/request for proposals document shall require that bidders/proposers submitting bids/proposals present a signed acceptance at the time of bidding, to be incorporated in any resulting contracts,


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confirming application of, and compliance with, the World Bank’s Anti‐Corruption Guidelines, including without limitation the World Bank’s right to sanction and the Bank’s inspection and audit rights.

37. With the incorporation of the above provision, the Mozambique Procurement Regulation will be acceptable to be used under those procurements not subject to the World Bank’s Prior Review, as the thresholds indicated in Table above, or any updates indicated by the World Bank in the Procurement Plan.

Strategy and Approach for Implementation Support

38. The strategy for Project Implementation Support (IS) by the Bank reflects the nature of the Project and its risk profile. The strategy aims at making IS to the client more efficient while remaining focused on implementation of the risk mitigation measures identified in the SORT. The strategy is also an indicative and flexible instrument which will be revisited during Project implementation and as part of the Implementation Status and Results Report (ISR) reviews and adjusted based on emerging project challenges and field conditions. 39. Overall Project Implementation. Project supervision will support the following critical areas: (a) social and environmental factors with respect to the regularization of community and individual land rights; (b) technical expertise on surveying, cadastre, land regularization, dispute resolution, ICT, institutional assessment, and other land administration functions to support the implementation of DELCOM and LTR process; c) fiduciary to promote the establishment of adequate internal control systems and overall governance; (d) communication campaigns to keep stakeholders informed of their land rights and responsibilities, and engaged to access and participate in land administration and management processes; (e) gender strategy to ensure that Project benefits are gender inclusive.

40. Environmental and Social aspects. The Bank will try to mitigate any social risks during the systematic land regularization process related to conflict and undermining the rights of vulnerable persons, including women, and emphasize opportunities for social development and environmental sustainability provided by the Project. Within this framework, the Bank will help to strengthen consultation and participatory mechanism and monitor the implementation of activities and of safeguard instruments. Bank social and environmental specialists will be available to provide timely guidance to DINAT, FNDS and co‐executing agencies and will participate in field visits on a regular basis to maintain a good and ongoing understanding of the situation on the ground.

41. Fiduciary aspects. The Bank will: (a) provide implementation support and training as necessary; (b) follow up on the Project's financial management system and its adherence to the Operations Manual, including but not limited to accounting, reporting and internal controls; (c) provide guidance on Procurement Guidelines to the PCU; (d) review procurement documents and provide timely feedback to the PCU; and (e) help monitor procurement progress against the Procurement Plan. The Bank’s new procurement regulations provide the possibility for increased procurement support for supervision of complex procurement or where capacity is an issue. The Bank team will ensure proper support is provided for FNDS on complex community delimitation and land use rights activities related procurements, including specialized IT procurement capacity as needed, either from Bank staff or experienced consultants.

42. Information and Communication. A Communication Strategy will support the implementation of the Project in its different areas of intervention, including communication campaign, sensitization and legal advice to be carried out prior to, and during DELCOM and LTR activities. The strategy will also seek to support implementation of consultative and accountability processes, including a grievance redress mechanism.


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Implementation Support Plan and Resource Requirements

43. Task team leadership and technical aspects will be managed from the Bank's office in Washington, in close collaboration with the Country Office in Maputo. Implementation support for Project procurement and financial management will be carried out from the Maputo office. International and national consultants will be hired to provide advisory services in specialized land administration issues. Formal supervision and field visits will be carried out semi‐annually or as needed to help promote satisfactory Project implementation. 44. The focus of implementation support is summarized below:

Time Focus Skill Needed/Resource Estimate

Partner Role

First 12 months (SWs/year) (days/year)

Technical and procurement review of the bidding documents

Cadastral Survey Specialist 30 days Procurement Specialist 4 SWs

NA

FM supervision FM Specialist 4SWs

Social Development and Gender – Supervision and training

Social Specialist 5 SWs Gender Specialist 2 SWs

Environmental Sustainability and Safeguards – Supervision and Training

Environmental Specialist 3 SWs

Project Management and Communication/Information

Task Team Leader 8 SWs Land Administration Specialist 4 SWs

Months 13‐48 (SWs/year) (days/year)

Cadastral surveying and land regularization

Cadastral Survey Specialists 30 days Land Lawyer 30 days Procurement Specialist 3 SWs

ICT development ICT Specialist 4SWs

Social Sustainability and Safeguards Social Specialist 5 SWs

Environmental Sustainability and Safeguards

Environment Specialist 3 SWs

Financial Management, Disbursement and Procurement

FM Specialist 4 SWs Procurement Specialist 4 SWs

Project Management and Communication/Information

Task Team Leader 8SWs Land Administration Specialist 6SWs


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45. Skill mix required is summarized below:

Skills Needed Number of Staff Weeks Number of Trips Comments

Task Team Leader 12 – 16/across the Team

2/year

Land Administration 2/year

Land Law, dispute resolution 3/year Should be intense during the first 2 years

Surveying/mapping 3/year Should be intense during the first 2 years

IT Expertise 3/year

Procurement Min. two field trips

Financial Management Min. two field trips

Country Office‐based

Social Specialist/gender Field trips as required

Environmental Specialist Field trips as required

Communications Specialist 3‐5 2/year


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ANNEX 2: Institutional and Legal Context

COUNTRY : Mozambique Mozambique Land Administration Project (Terra Segura)

A. Overview of the Institutional Framework

1. In Mozambique a distinction is made between land administration and land management functions. Land administration concerns the recognition and allocation of DUATs and the maintenance of information about rights to land, land use and the value of land. Land management, in turn, concerns guidance on uses of land as a resource from environmental, social and economic perspectives. The latter includes land use and urban planning and territorial planning. These two land governance functions were historically distributed across a range of government entities, forming a complex governance framework with overlapping remits and, often, contradictory decision‐making that resulted in a haphazard implementation of land policy and legislation. 2. From 2015, the government has sought to rationalize the institutional framework, bringing responsibilities for the roles of land administration and land management together in a single Ministry. The Ministry of Land, Environment and Rural Development (MITADER) now oversees national land policy, which along with land administration responsibilities was removed from the Ministry of Agriculture where it had been previously located. Within MITADER, the National Directorate of Land (DINAT) is the key department for land policy and is responsible for the national cadastral system. With other directorates within the MITADER charged with environmental due diligence and territorial planning, the government has taken a significant step forward in increasing policy coherence. 3. Most land administration functions are carried out at provincial level by the Provincial Services for Geography and Cadastre (SPGC). Cadastral maps and records of DUATs are maintained at this level. District cadastral services are also sometimes available, within the District Services for Economic Activities (SDAE) or the District Services for Infrastructure and Planning (SDIP). 4. Other key entities regarding land administration comprise the ministries and agencies overseeing the areas of mining and mineral resources, water resources, energy, public works, transports and communication, that oversee land concessions for public works (such as transport and communication networks and dams) and strategic economic activities (such as mining). Provincial governors and the Council of Ministers also have land administration responsibilities, specifically in the DUAT authorization process that grants land access for investments: • Areas up to 1,000 hectares can be authorized by the Provincial Governor; • Areas between 1,000‐10,000 hectares are authorized by MITADER; and • Areas larger than 10,000 hectares are authorized by the Council of Ministers. 5. Land management functions are performed by the environmental and territorial planning departments that are now also in MITADER (and were until recently in a separate Ministry of Environment, MICOA), respectively the National Directorate of Environmental Impact Assessment (DINAIA) and the National Directorate of Territorial Planning (DINAPOT). Other key land management entities, involved in land use planning for investments in economic activities, include the Ministry of the Economy and Finance, the Agency for the Promotion of Investment and Exports (APIEX), the Ministry of Agriculture and Food Security (MASA), the Ministry of Natural Resources and Energy, and the Ministry of Infrastructures.


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6. Mozambique has often been cited as having one of the most progressive legal and policy frameworks for land on the continent. The 1995 National Land Policy and the 1997 Land Law constitute the central pillars of the legal framework for land governance, establishing statutory use rights for millions of legitimate and customary land holders. The Rural Land Regulations and accompanying Technical Annex, approved in 1998, provide further guidance on how to implement the law, and how to identify and document these acquired rights. The guidance applies to the rights of individual households as well as to local communities, as land‐holding entities, although most implementation experience to date has been through the recognition of the latter. 7. The 1995 National Land Policy for Mozambique, still in force today, starts from the basic premise that land belongs to the state. A key element to the policy, later incorporated into the Land Law (Law 19/1997), is the recognition given to the legitimacy of customary land management systems and to informal and customary occupation. The Law introduces long term leaseholds, known as Direitos de Uso e Aproveitamento da Terra (DUATs), which are either acquired by certain land occupants through operation of the law, or awarded as discretionary concessions by the state.

8. The legal framework contains several innovative approaches to securing property rights. These include:

a. establishing a single land tenure right, the ‘DUAT’, which is an exclusive, inheritable and transmittable (subject to state approval) right, and that applies to both customary and administratively requested land occupation and use;

b. recognizing DUATs obtained through customary and good faith land occupation (thus formalizing customary rights through the operation of the law);

c. providing secure rights for investors through a renewable 50‐year state leasehold (also attributed as a DUAT, but awarded with conditions attached and subject to a rental payment (the annual land ‘tax’);

d. requiring applicants for new DUATs to consult with local communities and people to determine if the land they want is occupied and, if so, establishing the conditions for the investor to take over the pre‐existing DUAT;

e. formalizing the participation of local communities and people in land and natural resources management (as in the consultation process above); and, maintaining a flexible approach to approving and spatially defining the DUATs acquired through customary and good faith occupation.

9. DUATs obtained through customary and good faith occupation are recognized and protected by law; these customary and good faith forms of occupation are still the main ways in which the rural poor get land rights, and they can be proved through oral evidence provided by local community members. A Technical Annex (Ministerial Diploma 29A/2000) to the Rural Land Law Regulations (Decree 66/1998) provides a flexible methodology for identifying and recording these rights, which can be applied to the ‘group right’ of a local community, or to individual ‘good faith’ occupants (see below). 10. Full registration of the DUATs requires both cadastral title registration (defining the spatial extent of the rights), through the National Directorate of Lands (DINAT) in the MITADER, and property registration, through the Real Property Register (Registo Predial) in the Ministry of Justice. The Real Property Register essentially guarantees rights by making them public, and thereby protecting them against claims by third parties. Until the passing of the new Real Property Register Code in June 2018, the registration of DUAT titles issued by the cadastral authorities was voluntary. In the case of DUATs acquired through occupation, the lack of either cadastral title or property registration does not affect their enforceability. This remains the case in terms of the protections offered by the Land Law, but the revisions to the Real Property Register Code have now introduced an obligation on the cadastral services to promote the registration of all DUAT titles which they issue. The cadastral authorities are required to submit the DUAT titles to the Registry within a


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period of 90 days from their issuance. 11. Property registration in the Real Property Register is an important element of defining rights and enabling them to be transacted. Although the DUAT holder cannot own the land (merely the use right), he or she can own any fixed assets on that land, such as houses, buildings, infrastructure, trees or other improvements. No matter how they are acquired, DUATs are recognized by Mozambican law as real rights31 to a plot of land, urban or rural, and they are transmissible as part of transactions involving the fixed assets upon the land in question. However, for these real rights to be recognized, and thus transactable, they must be registered in the Real Property Register. 12. The ‘land delimitation’ process, defined in the Technical Annex, is a flexible and participatory mechanism through which local communities can, in effect, define themselves and the areas of land over which they claim a right to use and occupy land. This self‐definition approach is well suited to a country like Mozambique, where numerous cultural and geographical contexts determine land occupation and use. Delimitation can be applied to traditional units based on clans or chieftainships, extended families or simply a group of neighbors. Delimitation achieves two major legal and practical objectives:

a. it proves the existence of the DUAT by occupation, and; b. it establishes the spatial characteristics of the DUAT, including its limits and the presence of public and

customary rights‐of‐way or of any other interests over the land in question. A map of the community DUAT with any other information, such as rights‐of‐way, is then registered in the national cadastral system and a Certificate of Delimitation is issued in the name of the community.

13. The issuance of a certificate for a community DUAT is a formal recognition of a pre‐existing, perpetual and constitutionally‐protected customary right, and not the grant of such a right. No discretionary power vests within the state to deny or approve these rights; if they are properly established and identified as set out in the legal framework, and neighboring community groups agree with the proposed boundaries, then the certificate in respect to the DUAT is issued by the cadastral authorities3233. 14. A more precise process, known as demarcation, is used by the cadastral authorities to define the spatial boundaries of parcels of land that are awarded to users as discretionary concessions, or when a community or individual opts to title their acquired rights rather than just having them certified through delimitation. The demarcation and titling of land permits the holder of the DUAT, under certain conditions, to undertake certain transactions. As noted, one of these conditions is the registration of the DUAT title in the Real Property Register. 15. Although the demarcation process is mandatory and must be undertaken within one year of the award of the provisional DUAT, the process is initiated, and must be paid for, by the land holder. In all cases, this process must be preceded by a consultation with the community, and in no case can it involve the invoking of rights over areas of

31 The rights are considered to be ‘minor rights’ in rem; that is, they are property rights and enforceable against all other persons, even though they fall short of the major right in rem, commonly referred to as ownership. 32 This contrasts with the discretionary titles for DUATs, issued to investors, which are subject to approval by the executive authorities. 33 A local community can opt instead to demarcate and title its DUAT, but this is a more expensive route to identify and prove the same right, the DUAT, and adds no additional protection in terms of tenure security. Since the amendment to article 35 of the Land Law Regulations in 2007 (Decree 50/2007), the titling of local community land rights has also been brought under discretionary political authority, and now mirrors the approval process necessary for the ceding of DUAT rights to investors; that is, the provincial governors (up to 1,000 hectares), the Minister responsible for land (between 1,000 and 10,000 hectares) or the Council of Ministers (above 10,00 hectares).


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common use.34 Any investment on, or improvement to, the land is considered to be private property that can be bought, sold and mortgaged. However, (other than by inheritance) the DUAT can only be transferred if authorized by the competent authority and if the subject of the transaction relates to improvements on the land, rather than the land itself.

16. Some provisions in these instruments have been subsequently revisited and amended. Table 1 provides an overview of the key legal instruments. Besides those pertaining to land directly, other pieces of legislation are also relevant as they affect land rights and tenure security, including legislation on forestry and wildlife, decentralization, territorial planning, investments and resettlements.

Table 1: Key legal instruments for land governance in Mozambique

Year Title Short description

1997 Law 19/97 (1 October)

Land Law: establishes key norms for land administration and tenure, including the concept of a unitary right (DUAT), rights acquired through good faith and customary occupation and the local community as a land‐holding entity.

1998 Decree 66/98 (8 December)

Rural Land Law Regulations & Technical Annex: specify procedures for community consultations, community land delimitations and land demarcation for the purposes of titling.

1999 Law 10/99 (12 July)

Forestry and wildlife law: Adopts the same definition of ‘local community’, providing exploitation rights for subsistence purposes and rights to be consulted regarding forest product extraction licensing.

2003 Decree 1/2003 (18 February)

Amendment to Land Law Regulations, specifically allowing local communities to register delimited land in the Real Property Register (Registo Predial).

Law 8/2003 (27 March)

Legislation on local state administration, known as LOLE. It sets the district as the territorial planning base for economic development and the locality as the lowest level of state administration.

2005 Ministerial Diploma 93/2005 (4 May)

Regulates the distribution among local communities of the 20% of tax revenue from forestry concessions and specifies the establishment of natural resource management committees at community level as a requirement for receipt of payments.

Decree 11/2005 (10 June)

Regulations of Law 8/2003 on local state administration organisms, introducing statutory consultative councils at various levels.

Law 8/2005 (23 December)

Law on establishment of agro‐livestock associations with simpler procedures and requirements for establishing a legal association.

2007 Law 19/2007 (18 July)

Territorial Planning Law: provides specific planning tools and plan types recognized for (i) different levels (national, provincial, inter‐provincial, district, inter‐district) and (ii) different planning environments (rural and municipal).

Decree 50/2007 (16 October)

Amends Article 35 of the Land Law Regulations to require local communities to request government authorization for the titling of their acquired DUAT rights.

2008 Decree 70/2008 (30 December)

Investment guidelines that introduce further regulations on large scale land acquisitions (>10,000 ha).

Decree 23/2008 (1 July)

Territorial Planning Regulations

2010 Decree 43/2010 (10 October)

Introduces changes in the nº2 of Article 27 of and Land Regulations (Decree 66/98) regarding the signing off process for community consultations.

2011 Ministerial Diploma 158/2011 (15 June)

Details the stages for community consultation process.

34 Article 15(1) of the Land Law Regulations.


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2012 Decree 31/2012 (8 August)

Regulations on resettlements resulting from economic activities, including the rights to fair compensation of resettled population.

Decree 35/2012 (5 October)

Participation of community authorities in planning processes

2018 Decree‐Law 2/2018 (23 August)

Revises the Code for the Real Property Register and introduces mandatory registration for DUAT titles issued by the cadastral authorities.

Responding to Remaining Challenges 17. Notwithstanding the progress achieved thus far, Mozambique still has room for finetuning the legal and institutional framework. The Land Law devolves significant land and natural resource management powers and responsibilities to communities but does not provide a framework or guidance for the establishment of a local entity, other than the ‘local community’ as defined broadly in the law. Instead it leaves the matter open for other laws to determine35. This is an element of the regulatory framework that needs further development (as required by Article 30 of the Land Law). For some commentators, the issue has been dealt with through the enactment of Decree 15/2000. Others suggest that this decree relates to representation of the ‘local communities’ as public bodies and does not deal with the issue of representation where it relates to the community as a private, land‐holding entity. They argue that the ‘local community’ identified in the Land Law is distinct from ‘the community’ as a demographic and administrative unit, which is the subject of Decree (15/2000) dealing with ‘community authorities’.36 18. There are other institutional structures that have been created through the decentralization process which also address the ‘public face’ of the local community and its role in local level discussions about various development and other natural resource management issues. Such entities cannot represent the community as the holder of the private DUAT accorded to them by the Land Law. The situation has therefore been complicated by the new rules and policies for bringing ‘local authorities’ (who are often traditional leaders) more formally into the public administration system of the State. The Regulations for Decree 15/2000, for example, have their own definition of ‘local communities’: ‘groupings of population and persons collectively encompassed in a particular unit of territorial organization, namely locality, administrative post and district.37 This is more like a constituency or administrative unit and is not the landholding unit defined in the Land Law. 19. A simple and easily implementable regulatory framework needs to be developed through which ‘local communities’ under the Land Law, which conduct delimitation exercises and thereby register their land rights, could more formally discuss, adopt and codify their internal land management arrangements. These would regulate for mechanisms (to be discussed and decided upon by the group) that deal with issues on which the Land Law and Technical Annex are currently silent: representation and regularity of elections, acquisition of rights by incoming members to the group, etc. Many countries in the region have laws that allows for specific partnerships and trusts for precisely this purpose and there is evidence that they have improved land management practices and increased the participation of (and reduced discriminatory practices against) women at a local level.

35 1997 Land Law, Article 30. Ex‐members of the Land Commission Technical Secretariat confirm that an attempt was made to draft such a new law on local community representation, but it never got beyond a first draft. 36 The decree is part of a process that began in the early 1990s to recognize the continuing legitimacy of ‘traditional’ leaders and other local authority figures in the eyes of local people. Article 4 creates potential confusion with the Land Law by specifying amongst other things, the ‘use and benefit of land’ as an area of ‘articulation between local State bodies and community authorities’. 37 Diploma 107‐A/2000, Article 1, Number 5


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20. It is important to bear in mind that where new legal instruments have been designed (e.g. equity sharing schemes and Communal Property Associations in South Africa), considerable planning and outreach efforts are still required to determine membership, assess resources, evaluate land use potential, build skills, extend knowledge, design governance structures and generally adapt and apply legal instruments to localized conditions and populations with meagre resources. This points to the need for support to NGO groups that are working with local communities on natural resource management issues. As communities are delimited, their DUATs are being vested on an entity that is presumed to represent them. It is important that the Regularization Methodology support communities in establishing a legally viable entity to hold these rights on their behalf, which is governed by rules they understand to exercise governance over their land and resources with accountability to the group.


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ANNEX 3: Methodology for DELCOM and LTR – Key Steps

COUNTRY : Mozambique Mozambique Land Administration Project (Terra Segura)

FLOW OF ACTIVITIES AND RESPONSIBILITY SHARING FOR DUAT AND COMMUNITY DELIMITATION

PHASE Activities Output/Responsible entity Regulation associated

1. Preparation activities at Province level

MITADER informs the local authorities about the regularization process at every level Collection and analysis of available geospatial data and maps on land tenure, mining and forestry concessions, protected and fragile areas, and administrative boundaries DINAT/FNDS negotiates with the firm the timeline to issue DUAT and DELCOM at provincial level Communication campaign is initiated at different levels Contracting of NGOs and other actors that will accompany the process at community level Training and technical support to ensure Safeguards’ compliance and gender inclusiveness

Project is formally launched

Number and location of communities to be delimited (DINAT/SPGC)

Timelines for the entire process for the first year (DINAT‐SP)

Communication messages are largely spread (FNDS/PCU)

Unclear boundaries identified (DINAT/Min. of State Admin)

Imagery and geospatial information with key information are ready for field works (DINAT/CENACARTA)

Exclusion areas identified and approved by DINOTER

GRMS and Conflict resolution mechanisms are in place (UCP/NGOs)

Contract between the firm and FNDS. Technical Annex of the Land Law regulation Forestry and mining laws Project Operation Manual


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2. Community and parcel delimitation

Once the list and the timeline of the communities’ delimitation process is ready, the entity in charge of safeguards compliance will start the communication, training and consultation activities. Participative rural diagnostic and planning is carried out at community level and methods consider household dynamics and provide specific opportunities for women’s participation According to the decision of the communities, the delimitation and regularization of individual, joint and collective parcels is developed Community members are trained to actively participate in the delimitation activities, gender aspects are emphasized to ensure inclusion in all the steps and women are trained with respect to their rights

Committees in charge of Land Tenure Regularization established with the participation of women

Evidence of the community consent and women participation regarding the delimitation and regularization process (entity in charge of Safeguards)

Agreement on the community limits with their neighbors (SP and Communities)

Micro‐delimitation map of the community

Land survey blocks established

Community delimitation proposal, with SiGIT compatible geospatial data

Parcel delimitation proposal, with SiGIT compatible geospatial data (SP)

Technical Annex of the Land Law regulation Project Safeguards Project Operation Manual

3. Cadastral Survey Display

Possible parcel overlapping or lag, repeated codes; lag between unrealistic size are identified and adjusted by the SP Based on the final version, the map is presented to the community members to facilitate the endorsement, adjustment or identification of unresolved conflicts The share of women claiming DUAT, alone or jointly will be revised to ensure inclusiveness during the process Local authorities and conflicts resolution specialists address the conflicts

Preliminary community and parcel delimitations, including

geospatial and alphanumeric data, which are compatible

with SiGIT, are ready (SP)

Maps of community and parcel delimitations are prepared

and publicly exposed to the members of the community

(SP)

List and data of all the landholders are ready and also

presented to the community members (SP). The share of

women claiming DUAT is revised

Conflicts are identified and addressed through the Conflict Resolution Mechanisms (PCU and specialized entity)

The whole participatory process and Safeguards compliance and gender inclusiveness are validated (PCU and specialized entity)

Technical Annex to the Land Law regulations Project Safeguards Project Operation Manual Quality control procedures in the field Conflict Resolution Mechanism procedures


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Report of regularization progress in the M&E system (PCU)

4. SIGIT data management

After the previous quality and participatory quality control the alphanumeric and geospatial data of communities’ delimitation, parcels and landholders are submitted to SiGIT SPGC carries out the quality control through the corresponding SIGIT application and confirms to the SP the validity of the provided data. In case of data quality issues, SPGC reports and addresses the possible quality issues with the SP

Community delimitation (geospatial and alphanumeric

data), after quality control, are recorded in SiGIT (SPGC, SP)

Parcel delimitation (geospatial and alphanumeric data),

after quality control, are recorded in SiGIT (SPGC, SP)

New parcel delimitation resulting from the resolution of

landholders’ conflict is also incorporated in SiGIT (SPGC, SP)

Report of regularization progress in the M&E system (PCU)

Technical Annex of the Land Law regulations Project Operation Manual Quality control procedures in SIGIT

5. Printing and issuance of DUATs and Community certification

SPGC and DINAT prepare the Community Delimitation certificates SPGC provincial Director submits to the Governor the blocks of DUATs SPGC prints the individual DUATs (individual or joint) Communities are trained to ensure the maintenance of the information related to DUAT

Community certificates and printed DUATs are delivered to Community committees and community members

Maps and registers are delivered to the community to facilitate the maintenance of DUAT alphanumeric data

Community committees are trained to maintain the DUAT information regarding their holders and delimitation.

Technical Annex of the Land Law regulation Project Operation Manual Procedure to maintain DUATs at community and SPGC Level

6. Maintenance of DUATs

Communities register the change in DUAT holders (including co‐titling upon marriage) and delimitation within the register book and physical map in a temporary register Possible new conflicts are identified DINAT District offices check the modification in community register and maps and validate the information.

DUAT information is maintained at community and SPGC level

In case they occur, new land conflicts are identified and addressed

Women are trained on their land rights

Procedure to maintain DUATs at community and SPGC Level Technical Annex of the Land Law regulations Quality control procedures in field and SiGIT


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Modifications are digitized in a SiGIT compatible application

Conflict Resolution Mechanism procedures


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APPENDIX TO ANNEX 3 SOCIAL RISK MITIGATION STRATEGY

1. The 1997 Land Law and other legislation and regulations that establish the rights of communities and rural households to land, and the regularization procedures for those rights in Mozambique present significant gaps with respect to, among other things, legal community representation and the community governance of rights to land and natural resources. These gaps and the related social risks are exacerbated by weaknesses in community capacity, lack of clarity regarding implementation and enforcement of community rights, and deficiencies in the land administration system. 2. The Project is designed to improve security of land tenure rights and improve the land administration system, including the management capacity of all actors involved in the system down to the level of communities themselves. To this end, the Project includes institutional improvements, capacity building and regularization processes of community delimitation (DELCOM) and issuance of DUAT certificates (not registered) at the individual (household) level. Given GOM priorities and to accelerate the visibility of the Project and the issuance of the DUAT certificates, the Project is adopting an implementation strategy that will continue to implement the regularization process based on current practices, and, in parallel, support the legal and regulatory reforms, capacity building and response to the identified gaps.

3. In order to mitigate the risks posed by these gaps in this context of parallel actions, the safeguards measures described in the Table below are required. The Borrower and the Bank may agree on adjustments to improve processes and efficiency and reflect changes and circumstances (such as regulatory and institutional changes). These measures constitute essential complementary and additional elements that must be integrated in the detailed Regularization Methodology to be used to carry out the Project regularization component (and eventually formalized as part of the Technical Annex that regulates the DELCOM/LTR processes and other legal instruments.

RISKS MITIGATION MEASURES Base risk Mitigated Inadequate quality of the regularization processes

Hire an NGO or another specialized entity to carry out independent process quality assurance, support application of safeguards in specific cases, implement the GRM, sensitize the community and the service providers regarding the specific issues set forth in this table; and train facilitators, paralegals and other technical and legal assistance providers on legal land rights and the program methodology and procedures.

High Moderate/ Low

Inadequate treatment and support of community rights

Regulate and monitor the quality of the regularization process through an independent technical entity which, among other tasks will verify the readiness of each community to advance from one phase of regularization to the next. Divide the regularization process in three phases separated by community readiness criteria to be independently evaluated before the Service Provider can advance to the next phase (and get paid for the completed phase):

1) Community preparation and consultation concluding with the decision of the community regarding whether to proceed with DELCOM and /or LRT (R‐DUAT) (sensitization,

High Substantial/ Moderate


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RISKS MITIGATION MEASURES Base risk Mitigated PRA, designation of the group that will represent the community in the regularization process and agreement on its preliminary statutes/rules)

2) DELCOM concluding with the validation stage (cartogram, plotting, georeferencing)

3) LRT (R‐DUAT) including submission to the SPGC and distribution of certificates; preparation of the community agenda; legal constitution of the entity that will represent the community and its statutes (membership control, land governance rules, member selection, accountability).

The readiness criteria can be defined in greater detail, but for phase 1 they will include the documentation of the community consultation and the decision on how to regulate (including the formal request from the community to the district to be delimited), and the designation of the group representing the community and a proposal of its rules of operation and legal identity. Minimum deadlines for each step will be clearly established to comply with the law (e.g., 30 days for revision of the R‐DUAT) and can be extended at the request of the communities.

Standardize and strengthen the content of the delimitation certificates so that they are clear about the scope and legal framework of the rights; e.g., “certifies the rights described in article XX and certifies the delimitation carried out in accordance with Article XX and establishes the area on which the Community exercises all the rights laid down in the applicable laws.”

Accompany the delivery of the certificate with the delivery of Tools to facilitate the exercise of rights

1) Geo‐referenced Map of the Delimited Area showing current use and areas of communal interest (instructions on how to update)

2) List (census) of community members (Co title holders) (instructions on how to update)

3) Summary of the rights and obligations of the communities in relation to their delimited land area and the resources therein, with reference to relevant legal instruments (used with the community in the awareness process). Note: The summary of rights and obligations should also be delivered along with the R‐DUAT

Ensure appropriate technical and legal definitions

The family or individual R‐DUAT must recognize the area of occupation according to customary norms and legitimized by the community, regardless of its state of use

The representative entity must be developed by the Community considering the existing leadership and governance structures in the community


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RISKS MITIGATION MEASURES Base risk Mitigated Areas of community use/interest must be identified and

not covered by R‐DUAT or covered with an access easement

Vulnerability and Special cases:

The Methodology should address specifically (especially in terms of awareness and preparation), the following themes:

Gender equity: 1) Promotion of Co‐titling between spouses and heirs; 2) Readiness verification includes reviewing that all women who can be co‐holders of R‐DUAT understand their rights and couples make a joint decision on how to title with SPs trained to actively encourage women to be o the title; 3) Any single women working the land, (including widows and divorcees) are encouraged to claim an R_DUAT of their own and leaders are trained to support women’s legal rights; 4) Women are trained on their rights, encouraged to participate in validation exercises and encouraged and supported to use the GRM and land dispute resolution mechanismGuidance for non‐Mozambican nationals (on the request of a DUAT)

Agreements between communities to share resources in border areas of common use among their members

Guidance to land users who wish to form a productive association and obtain the corresponding DUAT, or to existing associations that need to perfect their DUATs

Possibility of re‐dimensioning of DUAT areas in case of conflicts between occupants (with potential claims) and holders of DUAT

Exclusion of previously resettled groups except when a community has resources and willingness to integrate them

Free and effective legal support to the community and its members

Substantial Moderate/ Low

People lose land rights /shelter in Exclusion zones" (full and partial protection zones)

The Land Law establishes areas of total protection (in general environmental protection‐margins of water bodies, hills, etc.), and partial protection (areas established as a result of the installation of infrastructures of the process of regularization. In these areas it is not possible to obtain a DUAT, so they will be delimited and excluded from the R‐DUAT emission process. The rights of communities in these areas are defined in sectoral laws. Impacts on acquired rights and on the livelihood of people occupying said areas should be addressed as follows:

1) People in areas of permanent protection (environmental) do not have DUATs: a) will not be resettled by the Project b) will be directed to seek options for having parcels assigned within the community; c) In the case of immediate eviction, they will be oriented to the MDR for a vulnerability assessment and if vulnerable will be assisted according to the RPF

Substantial Moderate


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RISKS MITIGATION MEASURES Base risk Mitigated 2) People in areas of partial protection (infrastructure) will: a)

receive a DUAT to the remaining area of their parcel that is eligible for DUAT, excluding the PPZ; b) receive proof of occupation of the PPZ area not eligible for DUAT; c) be directed to the GRM for legal guidance: Determine whether they potentially had a DUAT before the infrastructure was installed; if so receive guidance on options — expropriation or special license; d) In case of eviction, vulnerability determination and if positive, assistance according to the RPF.

Note: The possibility of eviction is remote since the Project does not require it, but it could occur if the housing is in the PPZ and the remaining parcel is not viable.

Conflicts between DUATs result in Households losing rights or becoming landless

Administrative DUATs will be excluded from the process of regularization. So, their relevance will be limited to cases where there are occupations and claims of rights on their areas. In these cases:

Valid DUATs with occupation by informally authorized users do not require any action, but in case of eviction the affected party will have access to the GRM for assistance with facilitation of Voluntary re‐dimensioning or application for receiving other Community Lands If possible

In case of loss of residence and vulnerability they will be assisted according to the RPF

In the case of expired or invalid DUATs and the possibility of valid rights on the part of the occupants, they will receive legal support to present their complaints before the proper authorities in order to establish their rights and obtain an R‐DUAT

Moderate Low

Conflicts between neighbors or others are not resolved or forwarded to suitable instances; Communities or individuals lose rights in the process due to lack of legal guidance

The Project must include a suitable mechanism for resolution of complaints. This mechanism will be led by the quality control entity and complemented by the existing mechanisms at the local and national levels. The IPQA entity will register all complaints and conflicts and will support communities and service providers in their resolution or channeling to other instances. In the first instance, the IPQA entity will screen the claims and act as the first instance of resolution to resolve basic conflicts (of boundaries between parcels, limits and sharing of benefits between communities, voluntary DUAT re‐dimensioning agreements, or reassignment of community land, etc.). More complex cases will be duly registered and referred to the relevant instances. The IPQA entity will follow‐up to re‐integrate the area under conflict to the regularization program whenever possible, or to document the case for future follow‐up by local authorities. The team of Paralegals or similar of the IPQA entity will provide the necessary legal support to the communities and their members throughout the process.

Substantial Moderate / Low

The community The value of secure tenure and the importance of keeping the Substantial Moderate


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RISKS MITIGATION MEASURES Base risk Mitigated does not value the DUAT and/or the land and, therefore does not updated the cadaster; does not exercise the effective governance of community areas and resources; And/or does not negotiate effective agreements for mutual benefits with partners

cadaster up to date will be addressed during sensitization, community preparation and throughout the process. Phase 3 will include the consolidation of the Community Representation entity (with defined legal personality and statutes approved by the community), and post regularization community capacity building that deepens the socialization of the Community Agenda; reinforces the messages and tools from prior phases and connects the community with potential sources of information, service providers, NGOs and other partners who could eventually support the implementation of the Community agenda. It is understood that this is a first step in a long process, which must concentrate efforts on the empowerment of the entity that legally represents the community and any other community level management committees, with an emphasis on natural resource management, community financial management, and accountability processes; and cadastral updates. Where possible, this should include actions to integrate the community with other programs available in its area of influence, and with sources of information on the value of their land and the terms and conditions of partnerships in production sectors where the community has some potential.


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ANNEX 4: Project Map

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