Canadian Government Launches
Major Projects Management Office

The Government of Canada has created a Major Projects Management Office (MPMO) to overcome delays and a lack of coordination in Canada's regulatory system. The Honorable Gary Lunn, Canada’s Minister of Natural Resources, announced the program on October 1 in Vancouver, BC. The new MPMO is part of a $150 million initiative to improve Canada's efforts to protect the environment and improve the competitiveness of Canada's resource industries. The goal of the MPMO is to improve coordination within Canada's regulatory system by providing industry with a single, efficient point of entry into the federal process.

Our government is taking action and reducing red tape to give Canada's natural resources industry greater certainty, improved predictability, increased transparency, and ultimately, more timely regulatory reviews," said Minister Lunn (pictured). "Environmental protection is absolutely key for Canada's New Government, and the additional capacity within the federal system will ensure we have resources dedicated to properly assess these major projects in a timely fashion."

One of the services the MPMO will provide is the integration of Crown consultation requirements with Aboriginal groups at the beginning of the process - further demonstrating the government's commitment to consulting with and listening to Canadians, particularly those who would be most directly affected by resource development projects.

According to their new website, the MPMO will advance the principles of transparency, predictability, timeliness and accountability in the Government of Canada's approach to the review of major resource project applications, maximizing the efficiency and effectiveness of the regulatory review process. The MPMO will:

• provide a single point of entry into the federal regulatory process for industry and for all interested Canadians;

• develop project-specific agreements among federal departments and agencies, and advance the use of time lines and service standards;

• work with federal regulatory departments and agencies to make sure all lines of communication are open and everyone understands their role;

• maintain a project tracking and monitoring system so that industry and interested Canadians can monitor major resource project applications as they proceed through the environmental assessment and regulatory review process;

• report progress to Canadian on a biannual basis;

• recommend longer term improvements to the regulatory system, based on ongoing monitoring data, on research and on the best information available; and

• strive to improve the integration of all Canadian regulatory jurisdictions as they apply to major natural resource projects.

Given high commodity prices and demand for resources, the number of major resource projects has grown by 200 percent between 2003 and 2006, and the trend is continuing. As much as $300 billion in capital investment in resource projects is possible in the next 5 to 10 years. The current regulatory system cannot keep up with this demand.

The Government of Canada is committed to a modern, efficient and effective regulatory system that will protect the environment and improve competitiveness. The MPMO and the related investment in the regulatory system is complementary to a number of other initiatives announced in Budget 2007. For example, the Government of Canada implemented a new regulatory policy, the Cabinet Directive on Streamlining Regulation, and committed to reducing the regulatory and administrative paper burden on small business by 20 percent. The Government also committed $22 million over two years to enhance its environmental law enforcement capacity.

The MPMO will report to Cabinet through the Minister of Natural Resources. The MPMO will also support an interdepartmental Deputy Ministers' Committee, which will comprise Deputy Ministers from Natural Resources Canada, Environment Canada, Fisheries and Oceans Canada, Transport Canada, Indian and Northern Affairs Canada, and the President of the Canadian Environmental Assessment Agency. Further information can be found at: http://www.mpmo-bggp.gc.ca/index-e.php.

Top of Page

---

Stabilizing and Rebuilding Iraq - New GAO Report
Calls for Better and More Integrated Strategy by US

The US Government Accountability Office (GAO) has issued a new report entitled
“Stabilizing and Rebuilding Iraq: U.S. Ministry Capacity Development Efforts Need
an Overall Integrated Strategy to Guide Efforts and Manage Risk”.

According to the report’s introduction, over the past 4 years, U.S. efforts to help build the capacity of the Iraqi national government have been characterized by (1) multiple U.S. agencies leading individual efforts, without overarching direction from a lead entity that integrates their efforts; and (2) shifting timeframes and priorities in response to deteriorating security and the reorganization of the U.S. mission in Iraq.

First, no single agency is in charge of leading the U.S. ministry capacity development efforts, although State took steps to improve coordination in early 2007. State, DOD and USAID have led separate efforts at Iraqi ministries. About $169 million in funds were allocated in 2005 and 2006 for these efforts. As of mid-2007, State and USAID were providing 169 capacity development advisors to 10 key civilian ministries and DOD was providing 215 to the Ministries of Defense and Interior. Second, the focus of U.S. capacity development efforts has shifted from long-term institution-building projects, such as helping the Iraqi government develop its own capacity development strategy, to an immediate effort to help Iraqi ministries overcome their inability to spend their capital budgets and deliver essential services to the Iraqi people.

U.S. ministry capacity efforts face four key challenges that pose a risk to their success and long-term sustainability. First, Iraqi ministries lack personnel with key skills, such as budgeting and procurement. Second, sectarian influence over ministry leadership and staff complicates efforts to build a professional and non-aligned civil service. Third, pervasive corruption in the Iraqi ministries impedes the effectiveness of U.S. efforts. Fourth, poor security limits U.S. advisors’ access to their Iraqi counterparts, preventing ministry staff from attending planned training sessions and contributing to the exodus of skilled professionals to other countries.

The U.S. government is beginning to develop an integrated strategy for U.S. capacity development efforts in Iraq, although agencies have been implementing separate programs since 2003. GAO’s previous analyses of U.S. multi-agency national strategies demonstrate that such a strategy should integrate the efforts of the involved agencies with the priorities of the Iraqi government, and include a clear purpose and scope; a delineation of U.S. roles, responsibilities, and coordination with other donors, including the United Nations; desired goals and objectives; performance measures; and a description of benefits and costs. Moreover, it should attempt to address and mitigate the risks associated with the four challenges identified above.

U.S. ministry capacity efforts to date have included some but not all of these components. For example, agencies are working to clarify roles and responsibilities. However, U.S. efforts lack clear ties to Iraqi-identified priorities at all ministries, clear performance measures to determine results at civilian ministries, and information on how resources will be targeted to achieve the desired end-state.

To see the full report, visit http://www.gao.gov/new.items/d08117.pdf

Top of Page

---

Canada's Export Credit Agency adapts Equator Principles for Project Finance - Follows National Australia Bank Announcement

Export Development Canada (EDC) announced on October 25, 2007 that it has become a signatory to the Equator Principles, an international financial industry benchmark for assessing and managing social and environmental risk in project financing.

"Adopting the Equator Principles reflects EDC's ongoing commitment to conduct its international business in a socially and environmentally responsible manner and confirms the strength of its existing corporate social responsibility (CSR) policies," said Eric Siegel, President and CEO of EDC (pictured).

For private sector financial institutions, the Equator Principles are the acknowledged standard of measurement of CSR in funding of projects in emerging markets. For public sector financial institutions like export credit agencies, the OECD's Common Approaches binds members to specific CSR practices. Adopting the Equator Principles reflects EDC's unique position as an institution that operates on commercial principles while fulfilling a public policy mandate.

The Equator Principles apply to projects in emerging markets valued in excess of USD 10 million. EDC is only the second export credit agency in the world to adopt the Equator Principles and joins the five large Canadian banks, thus harmonizing the Canadian private and public banking sectors as they undertake international business activities. This is important for EDC which is recognized for its project finance expertise and whose business includes structuring complex, limited recourse financing transactions for large-scale global infrastructure, extractive, and industrial projects.

EDC is Canada's export credit agency, offering innovative commercial solutions to help Canadian exporters and investors expand their international business. EDC's knowledge and partnerships are used by 6400 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining and is a recognized leader in financial reporting, economic analysis and has been named one of Canada's Top 100 Employers for seven consecutive years.

Thursday’s announcement followed a press release issued in Melbourne earlier in the day that National Australia Bank (NAB), through its institutional banking and capital markets division nabCapital, had also agreed to the global social and environmental benchmark for financing projects greater than US$10 million by adopting the Equator Principles. NAB joined other global banks from 21 countries adhering to the policies set down by the World Bank and International Finance Corporation.

The Equator Principles are a set of globally recognised, voluntary guidelines to assess and manage social and environmental project financing risk, especially in emerging markets. NAB's Project Finance activities reside within the nabCapital business. For further information on the Equator Principles and the OECD Common Approaches, visit: http://www.equator-principles.com/..

Top of Page

---

Jordan Buys Back Debt Owed To Paris Club

Reported by Ammar Mango in Amman

According to the World Bank, Jordan has announced that the Paris Club of creditor countries has agreed to allow the ... nation to buy back some $2.153 billion in previously rescheduled debt at a discount rate of 11 percent.

The agreement, signed in Paris late Wednesday, October 17, underlines 'confidence' in Jordanian reforms and will boost the sustainability of domestic development efforts, according to a royal palace statement. ..." [The Associated Press/Factiva]

Xinhua writes that Finance Minister Hamad Kasasbeh "...said the deal will reduce Jordan's debt service obligations, allowing increased investment in education, healthcare and other vital sectors. It will also improve Jordan's balance of payment position, international credit rating and international investors' confidence in the country's economy, said the Jordanian official.

The face value of Jordan's total external debt stands at around 7.051 billion dollars, or about 45 percent of GDP, down from over 84 percent in 2000 and 64 percent in 2004. ..." [Xinhua/Factiva]

Reuters noted that "... 'This prepayment reflects the strong economic and financial performance of Jordan and the government's sound debt management strategy,' the Paris Club said in a statement after two days of discussions between Jordan and the creditors.

It said the Paris Club had accepted the principle of a buyback of Jordan's debt at market value and said that it would then be up to each country to decide whether to accept the early repayment. ..." [Reuters/Factiva]

Dow Jones adds that "...Repayment is scheduled to take place between January 1 and March 31, 2008, after the conclusion of bilateral implementation agreements, the statement added. ..." [Dow Jones/Factiva]

Top of Page

---

Malaysia Launches New $33 Billion Development Plan

According to a World Bank report on Monday, 29 October, Malaysia has announced the launch of a major development program for the country.

Prime Minister Abdullah Ahmad Badawi on Monday launched a $33.2 billion economic plan aimed at boosting growth and reducing poverty in Malaysia's rural east. The East Coast Economic Corridor (ECER) project, drawn up by the national oil company Petronas, is the third and final of a series of big-spending development master plans which have been rolled out ahead of expected snap polls.

The government said the 12-year plan was designed to create 560,000 new jobs and raise income levels for nearly four million people -- some 15 percent of the population. It will involve more than 200 projects in transportation, infrastructure, tourism, education, manufacturing, the oil and gas industries and agriculture. ..." [Agence France Presse (10/28)/Factiva]

The Associated Press (AP) reported that "...The government is expected to fund more than half the investment for the east coast project, while the remainder is to come mainly from the private sector. Public funds will soon be poured in to jump-start the project, 'signaling the government's commitment to realize the efforts of delivering development' to the states, Abdullah said. ..." [The Associated Press (10/29)/Factiva]

Reuters adds that "... In a televised speech, Abdullah also announced an initial 6 billion ringgit ($1.80 billion) budget to kickstart the economic zone. Agriculture and tourism are key focus areas, with nearly half the funds earmarked to strengthen transport links and infrastructure in some of the poorest states, home to nearly 4 million people in Malaysia's northeast. ...

In July Malaysia launched a $51 billion development plan to turn its mainly agricultural north into a logistics, food-processing and tourism zone by 2025. Last November, it unveiled an ambitious two-decade blueprint to turn 2,200 square km (850 square miles) of Johor next to Singapore into an industrial and tourist zone." [Reuters (12/29)/Factiva]

Source: World Bank newsletter on October 29, 2007

Top of Page