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executive_summary

Remotely managed and monitored international development projects have been an expanding mode of practice in environments where security risks are high. This trend has been further accelerated and broadened by the COVID-19 pandemic. The ensuing travel restrictions and social distancing measures have caused a shift in thinking about how work can be accomplished remotely and may significantly expand the use of Remote Management, Monitoring, and Verification (RMMV) methods to allow interna- tional development cooperation practitioners to continue operating in areas with severely limited or no access.

Box 1: KfW’s Mandate in International Development Cooperation

KfW, the development bank of the German government, is one of the world’s leading development banks. Its ownership is split between the Federal Republic of Germany (80%) and the German Federal States (20%), and it has been committed to improving economic, social, and environmental living conditions across the globe on behalf of the Ger- man Government since 1948. Through international Financial Cooperation (FC), KfW finances development cooperation projects around the world on behalf of the German Fede- ral Ministry for Economic Cooperation and Development (BMZ). KfW’s FC division has local offices in almost 70 countries around the world. The spec- trum of projects supported ranges from investments in large-scale infra- structure—for example, renewables, urban transport systems, water sup- ply, and wastewater disposal—to cre- dit lines for small- and medium-sized enterprises and the development of basic social services. In addition to the direct impact of its individual pro- jects, KfW also supports structural reforms to contribute to sustainable development on a permanent basis.

As an experienced bank and specialist institution for development coopera- tion, KfW promotes and verifies the progress of each project from its con- ception and implementation to the final review and ex-post evaluation (project cycle). In addition, RMMV approaches and tools may improve the quality of monitoring for pro- jects without access problems, but covering many locations (e.g. in decentralization, health or education sectors) or widespread areas, such as forestry, biodiversity or agricultural programs. RMMV is a framework developed by KfW that responds to challenges that arise for stakeholders of KfW-financed development cooperation projects if they cannot travel to project sites and opens opportunities for digitally supported project implementation and management. It offers a methodology, institutional approaches, technical tools, data sources, and practical advice for ways to overcome difficulties when managing, monitoring, and verifying projects remotely (for the KfW definition of RMMV, [> Section][1.2 What is RMMV from a KfW Perspective?]as well as a short video explaining the con- cept: https://youtu.be/aBWp2OzEUCE) An earlier internal version of this Guidebook had been developed in 2018 and was sub- stantially updated and expanded during the pandemic. During this overhaul, it became more and more obvious that this version might be not only useful for KfW but all its partners and the international development community globally. For this reason, the RMMV Guidebook is now being published as a basis for the further collective develop- ment of RMMV approaches and tools as a global public good. The purpose of this Guidebook is to give an overview of KfW’s current RMMV approaches and how to apply them in donor-funded projects. After an introduction to RMMV and an overview of institutional approaches, technical tools, and data sources, the core of the Guidebook explains how to utilize RMMV within a typical KfW project cycle. The Guidebook assembles KfW’s experience and complements it with the experi- ence of other development partners in using RMMV approaches. It synthesizes the knowledge of relevant projects and builds on their best practices and lessons learned. After introducing the general concept of RMMV in > Section 1 Introduction to RMMV,Section 2 RMMV Approaches and Tools explains the main types of institutional RMMV approaches, technical tools, and data sources, as well as the most important legal, regulatory and human rights aspects to be considered with regards to RMMV and IT- infrastructure aspects. These aspects need to be considered when using the updated and expanded RMMV Decision Matrix in > Section 2.5. This RMMV Decision Matrix serves as the basis for selecting and combining the appropriate institutional approaches, tool types, and data sources for the project. In > Section 3 RMMV within the FC Project Cycle, the Guidebook includes practical tools that can be chosen to assemble the appropriate mix of RMMV approaches at each stage of the FC project cycle—from project preparation to project end, including such topics as government negotiations, feasibility studies, tendering of consulting services, project progress, and final reviews. > Section 4 KfW RMMV Project Experience includes best–practice project examples. Additional resources, such as a glossary of RMMV terms, Fact Sheets on the RMMV tool types and data sources, the new KfW project location data collection guide- lines, and a list of relevant literature are included in the > Annexes.

The information gathered in this Guidebook has been collected from a review of KfW pro- ject documents, RMMV guidelines and studies, input from experienced KfW staff who are already applying RMMV approaches in their daily work, internal and external workshops, as well as input from KfW technical experts, legal, contract and procurement specialists, team leaders and sector economists since 2017. KfW’s experience is complemented by a body of literature on RMMV and interviews with partners, other donors, consultants, RMMV service providers, and other non-development actors that use RMMV approaches, for example in the private sector.

Although this Guidebook refers to KfW’s mode of operation, the RMMV principles, recommendations, approaches, methods, tools, and data sources can be transferred to the needs and business models of other international development stakeholders.

RMMV can be implemented within a project using the most appropriate combination of institutional approaches, technical tool types, and data sources:

  • Institutional RMMV approaches: Project stakeholders with continued access to the region—such as national/local staff, local consultants, and/or the target group itself— collect information, thus substituting and/or complementing KfW international staff and the Project Executing Agency (PEA) and/or consultant. For a full overview of insti- tutional approaches, > Section 2.1.1.

  • Technical tool types: Information and communication technology (ICT) that facilita- tes collecting, transmitting, aggregating, structuring, analyzing, verifying, visualizing, and interpreting information. For a full overview of technical tool types,- Section 2.2.1.

  • Data Sources: There is a wealth of internal and external, open and proprietary data sources already available that can be used for comparison with the data collected via institutional approaches and technical tools. This helps in verifying the information given in feasibility studies and progress reports. For a full overview of the uses of data sources, > Section 2.2.3.

In any given project, institutional approaches, technical tools, and data sources are com- bined and tailored to the respective project needs and environment.

How To Integrate RMMV Into the Financial Cooperation Project Cycle​

Choosing an adequate RMMV approach for a project depends on a variety of parameters. KfW staff, together with the PEA, and/or the consultant need to decide:

  • What information and what level of data insight are required, and how often (the project partners staff may compare this with the general reporting requirements set out for the consultant to answer this question)?
  • Who needs to have remote access to the information and which stakeholders need to be involved to obtain the information?
  • What could be an adequate source of information (e.g., Open Data, national KfW experts, Third-Party Monitoring, satellite pictures, video proof, 360 images/films, local consultants conducting focus group discussions or environmental sensor data) or a suitable (technical) tool type to collect the required information?

KfW’s RMMV Guidebook provides advice on how to integrate RMMV approaches through- out the different steps of the project cycle. In each step, specific aspects need to be taken into consideration to ensure the effective and efficient integration of RMMV approaches.

Throughout the project cycle, RMMV activities need to be planned and agreed upon as early as possible, especially if they require significant investment, are exceptions from current regulations, or potentially entail data risks. For example, project preparation and appraisal can be informed through feasibility studies that are facilitated by consultants using RMMV approaches.

During implementation, RMMV requires increased effort from KfW and project implementa- tion staff since data and information collection is often more complex and requires the trian- gulation of different data sources. Also, RMMV approaches often come with additional requirements regarding standard project management procedures—more frequent communi- cation with the PEA and other stakeholders may be needed throughout the project cycle if the portfolio manager cannot visit the PEA in person. Training and involving the national KfW office staff in establishing and implementing RMMV approaches require additional time and resources. In some cases, deviations from standard management procedures may be neces- sary, such as replacing progress review missions to project sites with virtual progress reviews.

An appropriate institutional setup is crucial for successful RMMV, distinguishing between the following three roles: the controller of the data/tool, the monitoring agent/data collector, and the data verifier; > Section 2.1.2 Institutional Setup and Changing Stakeholder Roles in RMMV. To plan and implement projects correctly, a clear distinction is necessary between the two levels of monitoring: the first level is the Remote Monitoring conducted by the PEA/the project’s Implementation Consultant, which informs the regular project monitoring reports (i.e., usually the data owner and data collector) and the second level is the Remote Verification of the project monitoring information to be conducted by the KfW project staff responsible for the respective project (usually the data reader and data verifier); > Section 1.2 What is RMMV from a KfW Perspective?

To provide orientation on the usefulness of different institutional approaches, technical tools and data sources, information needs have been clustered into five general types that occur at different stages throughout the project cycle:

Table 1.1: Clustering of Information Needs within the FC Project Cycle​

Because of the multitude of different institutional approaches, technical tools and data sources a Decision Matrix has been developed to help KfW portfolio managers (PMs) determine which of them are particularly useful for which type of information to be collected for the spe- cific project and if there are potentially limiting human rights or legal conditions to be consid- ered; > Section 2.5 The RMMV Decision Matrix for Selecting the Appropriate Mix of Institu- tional Approaches Approaches, Tool Types and Data Sources.

Limitations and Risks of RMMV Under certain conditions, projects cannot be implemented even when using RMMV:​

  • Complex projects that require a constant international staff presence or that have obvious high environmental and social risks, such as large hydropower plant construction, should be avoided in regions where international staff do not have access.
  • Project areas that are mostly or completely inaccessible to national staff and/or where the use of electronic data collection devices is not allowed should be avoided.
  • Projects that require the direct involvement of target groups in RMMV should not be implemented in countries/regions that have a significant lack of freedom of expression if this risk cannot be sufficiently mitigated within the project design, since the social risk would be too high that an individual becomes negatively affected by his/her participation or feedback, which would be unacceptable for KfW.

Despite the use of RMMV approaches, KfW’s ability to detect and counter undesirable develop- ments early might be limited for projects with access issues. One of the biggest challenges is usually the collection of the necessary data. Often, the existing or accessible data does not address the questions that need to be answered or the data quality is too low for meaningful interpretation. Local project staff who take over monitoring and verification responsibilities may not have the same perceived capacity, neutrality, or authority as their international team leaders and may be at higher risk of extortion than their HQ-based colleagues. Regular site supervision and other quality assurance mechanisms may be more difficult to implement. This leads to higher reputational risks for KfW and quality deterioration risks that can only be par- tially mitigated. In the long term, direct human contact between project stakeholders cannot be entirely replaced by technical means.

Even if a project has successfully set up an RMMV system and KfW HQ staff have direct access to the project’s monitoring/management information systems, KfW’s liability risks remain since it is not feasible in terms of cost and effort for financing institutions such as KfW to review all of the information available in such systems. To mitigate these risks, the respon- sibilities of KfW staff need to be clearly defined, by establishing clear procedures for when and how the system’s data is reviewed by KfW, for example, through “virtual project review mis- sions”; > Section 3.3 Remote Verification of Project Progress by KfW.

Further, the following main risks are involved in projects using RMMV:

  • Do-no-harm risks. The lack of international staff presence may increase pressure, as well as social and political expectations, on local or national project staff to ignore, exclude, or favor parts of target groups over others, especially from authoritarian governments, extractive industries, or other powerful third parties. Partiality in targeting beneficiaries, contractors, and suppliers is a potentially damaging outcome. The results could be land grabbing attempts towards indigenous groups, project-affected persons entitled to com- pensation being left out, or women receiving more workload than benefits from the project.

  • Increased risk of corruption. In many cases, RMMV approaches cannot fully replace international staff visits that are critical for preventing and detecting corruption.

  • Increased security threats and risks to project personnel, communities, and target groups. RMMV approaches may imply a shift of threats and risks from international staff to national or local staff. Often, consultants or partner organizations may not have the same security systems in place for local staff. To mitigate this risk, appropriate security management strategies must be implemented. Security strategies based on deterrence may interfere with security strategies based on local assimilation and acceptance.

A full overview of all the risks is provided in > Section 1.5 Limitations and Risks of RMMV.

Recommendations​

Vis-à-vis development partners and donors:​

Develop RMMV pilot projects with partner countries and evaluate them. This enhances everybody’s knowledge and experience and broadens the mix of RMMV approaches available. Intensify the exchange on RMMV with other develop- ment partners, thus reducing risks for all. Explain the potential of RMMV for FC in fragile and conflict-affected states to donors. In contexts such as Afghanistan or Somalia, where travel limitations for international staff are severe, the ability to successfully implement projects may be questioned. Therefore, financing and implementing institutions should present their RMMV experience in a consolidated manner to inform their donors about RMMV’s potential, while not neglecting its limitations. International development partners should intensify their efforts in financing third- party monitoring (TPM) approaches for several projects or a whole country portfolio to benefit from economies of scale. In contexts prone to human rights issues (such as exclusion or harm of parts of the population, data privacy, information access issues, etc.), risks need to be addressed during government negotiations to surface issues that might present themselves at later stages in the project cycle; > Section 1.5 Limitations and Risks. Use approaches to involve target groups and project-affected people more systematically in RMMV processes. KfW is piloting approaches to involve target groups more systematically in RMMV processes through technical tools. However, these initiatives are still in the early stages and more testing is required. Being able to verify whether the projects could be improved by addressing the needs of differ- ent parts of the target group is crucial in contexts of conflict and fragility. There- fore, such approaches should be implemented more systematically in relevant pro- jects, especially when direct access to target areas is limited. The dangers of technology-driven programming as opposed to Human-Centered Design also apply to RMMV and therefore need to be taken seriously.

Vis-à-vis PEA, consulting companies and firms:​

Continue to foster RMMV innovation in collaboration with PEA and Imple- mentation Consultants. Much of the innovation in technical tools for RMMV has occurred in collaboration with PEA and consultants—for example, the development of (Remote) Management Information Systems (R/MIS) and the use of webcams and low-cost sensors or satellite images. PEA and consulting companies are encour- aged to propose innovative and successfully tested approaches and tools in projects using RMMV and to develop the relevant capacities of their staff. Develop partnerships with satellite operators. Development partners are cur- rently engaging in collaborations with satellite operators across their portfolios to obtain satellite imagery at lower costs. Consulting companies and other firms may wish to evaluate whether such a collaboration could be beneficial in their respective cases as well. Start with your project’s information needs and institutional approaches, not with technical tools!

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