Date of Submission to Coordination Unit:
April 8, 2014
A. GENERAL INFORMATION
1. Activity Name
Integrated Inspection Management System “IIMS”– Jordan
2. Requestor Information
Name: Ibrahim Saif
Title: Minister of Planning and International Cooperation
Organization and Address:
Ministry of Planning and International Cooperation of the Hashemite Kingdom of Jordan;
Zahran Street; Tawfiq Abul Huda Street - Jabal Amman, 3rd circle
Amman, Jordan
Telephone: +962 6 4652824
Email: [email protected]
3. Recipient Entity
Name: Hatem Halawani
Title: Minister of Industry and Trade and Supply
Organization and Address:
Ministry of Industry and Trade and Supply of the Hashemite Kingdom of Jordan;
Al-Sharif Al-Radi Street, Abdali
Amman, Jordan
Telephone: +962 6 5629030
Email: [email protected]
4. ISA SC Representative
Name: Luke Haggarty
Title: Regional Head, IFC Advisory Services – Middle East
and North Africa
Organization and Address:
International Finance Corporation
Nile City Towers, 2005 C Cornishe El Nil, North Tower, 24th Floor
Cairo, Egypt
Telephone: +2 0-2-2461-4330
Email: [email protected]
5. Type of Execution (check the applicable box)
√
Type
Country-Execution
Joint Country/ISA-Execution
√
ISA-Execution for Country
Endorsements
Attach written endorsement
from designated ISA
Attach written endorsement
from designated ISA
Attach written endorsement
from designated ISA
Justification
(Provide justification for ISA-Execution)
The “IIMS” project builds on a national ongoing
effort to reform business inspections in Jordan,
where IFC and the Government of Jordan
started a project for implementing a national
inspection reform strategy, with the support of
the United States Agency for International
Development. IFC is currently managing this
project with a budget of over $2.0M and has
proven to have the expertise, skills and
capabilities to implement programs in this
scale.
Should the Integrated Inspection Management
System project be approved, it will be an
extension of the Jordan Inspection Reform
Project, ID# 574387, approved on January 9,
2012.
ISA-Execution for
Parliaments
Attach written endorsements
from designated Ministry and
ISA
6. Geographic Focus
√
Individual country (name of country): Jordan
Regional or multiple countries (list countries):
7. Amount Requested (USD)
Amount Requested for direct Project Activities:
(of which Amount Requested for direct ISA-Executed Project Activities):
USD 2,290,000
Amount Requested for ISA Indirect Costs: 1
USD 352,105
Total Amount Requested:
USD 2,642,105
8. Expected Project Start, Closing and Final Disbursement Dates
Start Date:
1
July 1, 2014
Closing
Date:
July 1, 2017
End Disbursement
Date:
October 1, 2017
ISA indirect costs are for grant preparation, administration, management (implementation support/supervision) including
staff time, travel, consultant costs, etc.
9. Pillar(s) to which Activity Responds
Pillar
Primary
Investing in Sustainable Growth.
√
This could include such topics as
innovation and technology policy,
enhancing the business environment
(including for small and medium-sized
enterprises as well as for local and foreign
investment
promotion), competition
policy, private sector development
strategies, access to finance, addressing
urban congestion and energy intensity.
Inclusive Development and Job
Creation. This could include support of
policies for integrating lagging regions,
skills and labor market policies, increasing
youth employability, enhancing female
labor force participation, integrating
people with disabilities, vocational
training, pension reform, improving job
conditions and regulations, financial
inclusion, promoting equitable fiscal
policies and social safety net reform.
(One only)
Secondary
(All that apply)
Pillar
Enhancing Economic Governance.
This could include areas such as
transparency,
anti-corruption
and
accountability policies, asset recovery,
public
financial
management
and
oversight, public sector audit and
evaluation, integrity, procurement reform,
regulatory quality and administrative
simplification, investor and consumer
protection, access to economic data and
information,
management
of
environmental and social impacts,
capacity building for local government and
decentralization, support for the Open
Government Partnership, creation of new
and innovative government agencies
related to new transitional reforms,
reform of public service delivery in the
social and infrastructure sectors, and
sound banking systems.
Primary
(One only)
Secondary
(All that apply)
√
Competitiveness and Integration.
This could include such topics as logistics,
behind-the-border
regulatory
convergence,
trade
strategy
and
negotiations, planning and facilitation of
cross-border
infrastructure,
and
promoting and facilitating infrastructure
projects, particularly in the areas of urban
infrastructure, transport, trade facilitation
and private sector development.
B. STRATEGIC CONTEXT
10. Country and Sector Issues
Jordan is an upper middle income country with a population of 6.53M people (Department of Statistics, 2013), and
GDP growth of 2.7% in 2012 (World Bank country data). According to the Department of Statistics’ economic census
in 2011, there are about 166,000 operating businesses in Jordan. 91.5% of these businesses are small, employing less
than 5 employees. 45.8% of businesses are based in Amman, followed by 16.7% in Irbid, and 14.8% in Zarqa.
The private sector in Jordan faces several administrative barriers that hinder its ability to operate its facilities
efficiently. In particular, businesses are facing several challenges with the inspection functions that are conducted by
government agencies on their facilities to ensure compliance with public health, safety, environment, and labor
requirements. Such challenges include the burden caused by the overlapping and duplicating mandates of
inspectorates, the frequent and unplanned visits carried out by inspectorates, the lack of coordination and
collaboration mechanisms among inspectorates that are needed for them to coordinate visits and exchange
information, and the lack of awareness of the private sector on the legal and technical obligations required by
inspectorates which makes it harder for them to achieve compliance.
Currently, inspectorates do not have sufficient information about the facilities subject to inspection; there are around
166,000 operating businesses making planning and risk-based targeting almost impossible. Most inspectorates still
rely on paper-based system while some have developed simple tools to document data about enterprises and
facilities, however; these systems do not collect all the required information nor do they provide adequate support for
risk assessment and inspections planning required to adequately managing these activities. Furthermore,
inspectorates lack the necessary communication and information sharing tools that should enable them to share and
exchange information especially about the inter-related inspection areas or functions. As a result, the private sector in
Jordan receives multiple inspection visits from the various agencies, and is forced to submit multiple samples for the
same tests due to overlapping mandates. This has an adverse impact on the efficiency and use of resources for both
the inspectorates and businesses, and is causing confusion and ambiguity for businesses about the proper inspection
requirements.
11. Alignment with Transition Fund Objective
The purpose of this project is to support the Government of Jordan in improving the business inspection in Jordan
through streamlining the procedures, reducing the time and cost, and making the process predictable and
transparent.
Reforming the business inspection in Jordan by building a shared enterprise registry for inspectorates and automating
processes will lead to reducing the burden on the private sector resulting from the frequent and unplanned visit; it
will encourage entrepreneurs and informal business to become formal and therefore benefit from the opportunities
and advantages that formal business enjoy such as enhanced access to finance. Such system will also allow for
interaction with the private sector about visit schedules, visit results, dissemination of information; leading to
enhanced transparency and accountability.
This is in line with the objective of the Transition Fund which is to improve the lives of citizens in Jordan; since the
project objectives are directly related to two of the four main thematic areas of the Transition Fund: Investing in
sustainable growth (by enhancing the business environment especially for entrepreneurs and SME’s), and enhancing
economic governance (by improving transparency and reducing corruption, and regulatory quality and administrative
simplification)
12. Alignment with Country’s National Strategy
The Government of Jordan is reforming its inspection regime with the objectives of building high quality inspection
services that reduce compliance costs for businesses and effectively utilize government resources by applying riskbased inspection. The International Finance Corporation “IFC” has been supporting the Government of Jordan on
inspection reforms since 2007 where inspection reform initiatives were successfully piloted and implemented, and
based on this initial success, Jordan Prime Minister and upon the recommendation of the Ministerial Economic
Committee has approved the pursuance to rollout inspection reform on the national level. In 2008, IFC assisted the
Government of Jordan in developing the national inspection reform strategy that aims to increasing transparency,
private sector compliance, efficiency and effectiveness of inspections, and reducing uncertainty on private businesses,
thus increasing private sector competitiveness and safeguarding the public good. The strategy was approved by the
Prime Minister of Jordan in December 2008, and the Ministry of Industry and Trade (MoIT) was appointed as the
national coordinator responsible for its implementation in coordination and collaboration with the concerned
inspectorates.
The national inspection reform strategy is comprised of the following pillars:
Pillar (1) Support the development and adoption of inspection strategies and plans within inspectorates
This entails application of strategic planning concepts at the management of inspection directorates; e.g.
setting inspection plans and targets, translating plans into actions, and monitoring the implementation of
plans using key performance indicators.
Pillar (2) Adoption of risk-based inspection
Inspectorates should set their inspection targets using the risk level of businesses, i.e. the extent to which
the business is likely to harm the environment, labor conditions, public health and safety, etc. Risk
assessment should be used as a tool for determining visits frequency and developing inspection schedules.
Pillar (3) Development of inspection operations and procedures
This pillar entails the development of inspection processes and procedures based on best practices in this
field, such as conducting visits, use of checklists, writing visit reports, taking actions in case of noncompliance, promotion of announced inspection visits, etc.
Pillar (4) Human resources management and capacity building
This pillar is about the development of the inspection cadre in terms of having clear job descriptions,
performance appraisal systems, and incentives schemes, as well as competency models for inspectors. It
entails shifting paradigm from policing and punishment to ensuring compliance through awareness raising,
consultation, and advice.
Pillar (5) Resolution of cross-cutting issues among inspectorates
This pillar addresses the lack of coordination and collaboration between inspectorates, the multiplicity of
inspectorates visiting businesses, and the overlap and duplication in the inspection mandates of those
inspectorates.
With the support of IFC and the United States Agency for International Development “USAID”, the Government of
Jordan started a project for implementation of the national inspection reform strategy. The project includes
inspectorates at 10 government agencies covering inspection areas related to labor, environment, occupational safety
and health, public health, public safety, and food safety. The scope of this project covers the five pillars of the national
inspection reform strategy listed above, where some components have already been completed and others are in
progress, as follows:
-
Pillars 1 and 3 have been completed; each inspectorate now has an “inspection manual” that contains
guidelines for inspection as well as detailed standard operating procedures covering inspection planning,
targeting, scheduling, and monitoring the implementation of plans; procedures for conducting the various
types of visits such as routine, complaints, accidents, and special inspections; handling appeals on inspection
decisions and feedback provided by businesses on inspection and inspectors. Such manuals were formally
adopted by inspectorates, and inspectors were trained on the use of manuals.
-
Under Pillar 4 – Human Resources: a code of conduct was developed for inspectors in general to govern the
ethical and behavioral aspects of the inspection profession. A skills booklet was developed for inspectors
detailing the soft skills needed to help them perform their jobs. Both the code of conduct and the skills
booklet were included in the inspection manual. Training and capacity building of inspectors is done
continuously, where training was provided to inspectors on the use of the newly developed manuals and soft
skills. More training will be provided as needed. The development of a framework for managing human
resources is in progress and will be completed later this year.
-
Pillar 5 – Resolution of cross-cutting issues is in progress. First of all, a regulatory impact assessment was
carried out to assess various alternatives for the best national inspection model that Jordan should adopt.
Based on this assessment, it was found that there was no national umbrella that oversees inspection in Jordan
and that inspection is scattered among line ministries and agencies. Therefore, a Higher Committee (board)
for Inspection Reform was established to act as the national umbrella for inspection in Jordan. This is a
permanent committee and its mandate is to set inspection policies and procedures, oversee inspection reform
initiatives, and monitor implementation of policies and reforms by the various inspectorates. IFC developed a
detailed framework for this committee outlining its mandate, roles and responsibilities, the role of its
secretariat, etc.
After that, IFC initiated a comprehensive legal and institutional review to validate the legal basis of
inspectorates and determine the exact areas of overlap and duplication between them. Inspectorates were
divided into 4 main thematic areas (Labor, Environment/Water, Health/Food/Drugs, and Safety), and the
initial results of the analysis were completed. The analysis results will be subject to consultation with the
relevant inspectorates; based on that the final recommendations report will be developed and will go through
another round of consultation with public and private sector stakeholders. Such recommendations will
basically answer the question of “who should inspect on what” with the aim of reducing the overlap between
entities and reducing or eliminating unjustified visits frequency.
An inspection law will also be drafted as part of this component, which is expected to be completed by
October this year.
-
The risk assessment pillar (2) will depend on the outcomes of the recommendations report mentioned above.
Assessment tools will be designed and will comprise of weighted criteria and rating guidelines to be applied
to businesses.
The project also included the development of a high-level design for an Integrated Inspection Management System
based on Information and Communication Technology “ICT” applications. The IIMS directly supports Pillar 5 of the
national inspection reform strategy since having such system in place will allow inspectorates to have a shared
registry of businesses subject to inspection, so they can share information about their inspection plans and visit
results. This way, they can rationalize the frequency of inspection visits to the same sectors or businesses, or
substitute the need to visit certain businesses by accessing the results of similar inspections done by other entities.
The IIMS is also relevant to all other pillars in the strategy since it will support and automate the implementation of
newly designed “paper-based” systems, such as the development of inspection plans and schedules, tracking
performance indicators and extracting reports and statistics, implementation of risk-assessment tools using the
enterprise registry, automating day-to-day procedures such as checklists, visit reports, documenting visit results, etc.
The IIMS can also help with the management and allocation of inspection personnel, and maintaining their files and
profiles.
IFC has been working with the Government of Jordan on this area since 2007 and has gained a deep understanding of
the local context and the issues and challenges faced in this area, and has proven to have the expertise, skills and
capabilities to implement programs of this scale. The Government of Jordan is very keen to reform its inspection
regime and achieve the desired results; later in 2013, the Prime Minister of Jordan reiterated the importance of
reforming business inspection and requested the inspectorates to work together to reduce overlap and duplication
and enhance communication, collaboration, and sharing of information between them. This request came as a result of
the strong and continuous demand from the private sector to reform the inspection regime.
The Government of Jordan has expressed their willingness to finance the procurement of the necessary hardware and
infrastructure needed for the implementation of the IIMS.
C. PROJECT DESCRIPTION
13. Project Objective
The objectives are to reduce unnecessary time and cost burden on the private sector caused by multiple,
uncoordinated, and frequent inspection visits, enhance efficiency and use of resources for both inspectorates and
businesses, and increase private sector awareness of requirements.
The purpose of this project is to support the government of Jordan in implementing the national inspection reform
strategy, by developing an integrated inspection management system “IIMS” based on shared technology platform.
The private sector will benefit from increased transparency in inspection criteria and processes, improved quality of
inspections as well as reduced duplication and overlap in inspections -- leading to reduced costs of dealing with
inspectors, improved compliance with the relevant standards and improved competitiveness overall.
14. Project Components
Key Components:
IFC will support the Government of Jordan in the design, development, and implementation of the IIMS which is a
secure, shared web-based application for carrying out inspection operations in line with international best practices.
The components of this project will comprise of the following:
1- Design, development, and deployment of the application (enterprise registry and software), consisting of:
Database of enterprises subject to inspection; this registry shall be shared among inspectorates and each
inspectorate will have the ability of updating it with inspection plans and inspection visit results;
Automated workflow capabilities for carrying out inspection activities such as planning, scheduling, risk
assessment, documenting visit checklists, reports and actions, communication with business via e-mail or
SMS, etc.;
Reporting engine to enable inspectorates to generate reports and statistics about their inspection
activities and results;
Document management and archiving capabilities to handle attachments uploaded to the system, such as
lab results, photos, and other documents obtained.
2- Training of inspection personnel on the newly developed system, including end-user training, and technical
training for system administrators; ensuring proper hand-over and change management.
3- One-year implementation support
-
Beneficiaries:
The direct beneficiary from this project is the inspectorates participating in the national inspection reform strategy,
which include:
Ministry of Labor
Ministry of Environment
Ministry of Health
Greater Amman Municipality
Jordan Food and Drug Administration
Social Security Corporation
Civil Defense
Ministry of Agriculture
Ministry of Tourism
Ministry of Energy
General Features of the IIMS:
The IIMS will be based around a shared national database of the enterprises and their facilities subject to inspection in
Jordan, containing the information about these facilities necessary to support risk-based inspections planning. The
database should be used to share information between inspectorates about their inspection plans and the results of
their inspection visits. This will enable inspectorates to properly plan their activities, establish proper targeting of
facilities based on risk assessment, estimate resource requirements, obtain necessary information about facilities,
resolve violations and share their own findings with the other agencies. It will also help inspectorates coordinate with
each other and streamline their inspection visits.
Key features of the IIMS is that it will directly interact with the private sector be it through notifications of visits,
sharing inspection reports, and sharing information about new developments, regulations and the like. It also
provides important tools such as satisfaction questionnaires, suggestions and complaints, and appeal procedures that
will allow the private sector to file their complaints and grievances with the inspection processes and the inspectors’
behavior in the field. This is expected to have direct positive impact on increasing transparency and effectiveness of
the inspection functions. The IIMS will provide synthesized reports, based on data collected nationally, to the top
management in the Government of Jordan about the effectiveness of the reform process and eventually the inspection
regime in Jordan.
Expected Benefits:
The implementation of the IIMS is expected to achieve the following benefits:
Improve the performance of inspectorates since they will have the information they need to function
available at one location and accessible by all.
Enhance coordination, collaboration and information exchange among inspectorates, which in turn will
enhance the efficiency of the private sector and reduce ambiguity around inspection requirements
Help inspectorates in setting accurate and comprehensive plans and enhance targeting by enabling the
application of risk-based mechanisms
Eliminate or reduce the paper-based systems at inspectorates therefore enhance the accuracy of the
information gathered and facilitate access to those concerned
-
-
Increase workflow efficiency and hence decision making process
Maintain information about enterprises’ history of performance and compliance to be fed into the risk based
targeting
Facilitate the electronic generation of accurate reports to be published internally or to the public this enhance
the GoJ knowledge of the inspection performance and hence embark on initiatives to continuously improve
the inspection functions
Monitor the performance of the inspectors and their workload
15. Key Indicators Linked to Objectives
Project Development Objectives:
Reduction of the number of inspection visits per enterprise per year by 30%
Reduction of the number of inspectorates visiting an enterprise per year from 7 to 4
Improving compliance: two indicators on compliance as follows:
 Reduction of violations and fines issued against enterprises by 20%
 Reduction of complaints made by the citizens against enterprises by 20%
Intermediate Results:
Number of training sessions, workshops, and awareness raising events conducted (Target 10)
Number of participants in training sessions, workshops, and awareness raising events (Target 200)
Number of inspectorates implementing the automated system (Target 10)
IMPLEMENTATION
16. Partnership Arrangements (if applicable)
N/A
17. Coordination with Country-led Mechanism/Donor Implemented Activities
This project is a continuation of the current inspection reform initiative which the Government of Jordan is
undertaking with support from IFC and USAID with an overall budget of over $2 million. USAID is supportive of this
proposal which builds on the reforms achieved through the current initiative and is expected to contribute to
achieving the required outcomes and impacts.
Inspection Reform contributes to the enhancement of business environment and it is very much related to other parts
of the business lifecycle, including licensing and permitting. In fact, inspection done for licensing/permitting purposes
was included in the scope of this project. This project is also country-wide and benefits SMS’s in all sectors.
The project complements other initiatives in Jordan such as the Competitiveness and Investment initiative which is a
joint World Bank – OECD initiative which, among other aspects, entails addressing constraints to doing business and
investment on the national level.
18. Institutional and Implementation Arrangements
The project is fully developed and is ready to be implemented by IFC in cooperation with the Ministry of Industry and
Trade, which was appointed by the Prime Minister to act as the national coordinator for the inspection reform
initiative and follow up on its implementation. IFC completed an ICT capacity assessment for the targeted
inspectorates, gathered main system requirements, and developed a high-level design and implementation plan for
the IIMS. IFC and the Government of Jordan are ready to proceed with implementation of the IIMS as soon as the
required funding is available. The system will be hosted at the government’s National IT Center, and will make use of
the secured government network and the enterprise service bus services provided by Jordan’s e-Government
program.
A higher committee for inspection reform was established in 2013 to act as the national umbrella for inspection, its
mandate includes overseeing inspection reform efforts on the national level in Jordan, setting inspection strategies
and policies, and monitoring the implementation of such reforms. The committee is co-chaired by the Minister of
Industry and Trade, and Minister of Public Sector Development. Its members include secretary generals/general
directors of the line ministries and agencies involved in inspection such as Greater Amman Municipality, Ministry of
Environment, Ministry of Labor, Ministry of Health, Ministry of Tourism, Ministry of Energy, Ministry of Agriculture,
Civil Defense Department, Jordan Food and Drugs Administration, Social Security Corporation, among others.
Each of these agencies has appointed a focal point to work with IFC and the Ministry of Industry and Trade on all
inspection reform initiatives.
IFC will have a project officer and project team that are based in IFC Amman office to work closely with all
stakeholders on the management and implementation of this project.
19. Monitoring and Evaluation of Results
A monitoring and evaluation model was designed in agreement with the client. The indicators used were mainly based
on IFC’s Investment Climate core indicators in addition to some custom indicators tailored to the project and
consistent with the country’s needs. Baselines were determined, and targets were set using historical benchmarks and
nature of interventions; data sources were identified for each indicator including government records, private sector,
and project data.
Throughout the project duration, monitoring and evaluation will be done as follows:
1. Indicators will be tracked based on the pre-set frequency
2. Reasons for deviations from targets will be assessed (if any)
3. In case of deviation, corrective actions will be taken
4. The Higher Committee for Inspection Reform and selected private sector representation shall follow up on
reform and track results pre and post completion
5. Results will be disseminated through workshops and awareness raising activities.
D. PROJECT BUDGETING AND FINANCING
20. Project Financing (including ISA Direct Costs2)
Cost by Component
Building and Implementing a database and workflows
for the inspectorates
IFC staff time
IFC staff travel
Short-term consultant for supervision and quality
assurance
Hardware, infrastructure, networking
Total Project Cost
2
Transition
Fund
(USD)
1,880,000
Country CoFinancing
(USD)
Total
(USD)
1,880,000
300,000
30,000
80,000
2,290,000
Other CoFinancing
(USD)
315,000
315,000
67,000
20,000
95,000
367,000
50,000
175,000
182,000
315,000
2,787,000
ISA direct costs are those costs related to the ISA’s direct provision of technical assistance within the project.
21. Budget Breakdown of Indirect Costs Requested (USD)
Description
For grant preparation, administration and implementation support:
Indirect costs for grant preparation, administration and implementation
support
Total Indirect Costs
Amount (USD)
352,105
352,105
E. Results Framework and Monitoring
Project Development Objective (PDO):
Cumulative Target Values**
PDO Level Results
Indicators*
Unit of
Measure
Baselin
e
Frequency
YR 1
YR 2
YR 3
YR 4
(PostCompletion)
Data Source/
Methodology
Responsibility
for Data
Collection
Description (indicator
definition etc.)
This indicator measures the
overall number of visits
conducted by the various
inspectorates to a single business
This indicator measures the
average number of inspectorates
that visit a single business per
year
This indicator is used to help
measure improvement in private
sector compliance
Indicator One: Average
number of inspection
visits per enterprise per
year
Number
31
31
26
26
20
Annual
Inspectorates’
records
IFC/Ministry of
Industry &
Trade
Indicator Two:
Average number of
inspectorates visiting
an enterprise per year
Number
7
7
5
5
4
Annual
Inspectorates’
records
IFC/Ministry of
Industry &
Trade
Indicator Three:
Number of violations
and fine issued against
enterprises by
inspectorates
Indicator Four:
Number of complaints
made by citizens
against enterprises
Number
106,700
106,700
96,000
96,000
85,360
Annual
Inspectorates’
records
IFC/Ministry of
Industry &
Trade
Number
14,400
14,400
13,000
13,000
11,520
Annual
Inspectorates’
records
IFC/Ministry of
Industry &
Trade
Semi-annual
Project records
IFC
INTERMEDIATE RESULTS
Intermediate Result:
Intermediate Result
indicator One:
Number of training
sessions, workshops,
and awareness raising
events conducted
Number
0
4
3
3
0
This indicator is used to help
measure improvement in private
sector compliance by observing
the number of complaints made
by citizens about private sector
violations
Intermediate Result
indicator Two:
Number of participants
in training sessions,
workshops, and
awareness raising
events
Intermediate Result
indicator Three:
Number of
inspectorates
implementing the
automated system
Number
0
80
60
60
0
Semi-annual
Project records
IFC
Number
0
4
3
3
0
Annual
Project records,
Inspectorates
records
IFC/Ministry of
Industry &
Trade