Business Case and Intervention Summary
Intervention Summary
Title: Technical Assistance to the Palestinian Negotiations Support Project in the
Occupied Palestinian Territories
What support will the UK provide?
This intervention will help strengthen Palestinian technical capacities needed to effectively
pursue peace, at a cost of up to £1 million over three financial years (July 2012 to June 2014).
Why is UK support required?
The British Government seeks a negotiated two-state solution to the Israeli-Palestinian conflict
as the best way to meet the aspirations of the Israeli and Palestinian peoples and lead to a
sovereign, viable and contiguous Palestinian state living in peace and security alongside a
safe and secure Israel and their other neighbours in the region. A just resolution of the conflict
is ultimately the only way to achieve sustainable poverty reduction and development for the
Palestinian people, and to move away from a dependency on foreign aid. The Palestine
Liberation Organisation (PLO) remains committed to negotiations. In the absence of progress
towards a Final Status Agreement, the PLO is seeking to protect Palestinian interests and the
viability of a two-state solution, and reach a coherent position from which to negotiate. Without
progress towards achieving peace and the end of the Israeli occupation, there is a risk of
losing Palestinian public support for the non-violent political path pursued by the current PLO
leadership. It is important that the PLO effectively communicates its positions to its own public,
Israel and the international community.
There remains a need for international assistance to help strengthen Palestinian technical
capacity for developing and communicating strategies to achieve peace. Without the
development of professional institutional capacity, strategies and negotiation positions
adopted by the Palestinians are likely to be less effective, risk losing public and international
support, and hold greater risks for achieving a just and viable two-state solution.
The intervention provides funding to the Negotiation Affairs Department (NAD) of the Palestine
Liberation Organisation (PLO). NAD is mandated by the PLO to provide policy and technical
support to those involved in negotiations. UK funding will be managed by Norway, which leads
the Core Donor Group to the Palestinian Negotiations Support Project (PNSP). DFID
investment in NAD would build on previous support, and represents tangible UK support for a
peaceful, just and viable solution to the conflict.
What are the expected results?
At the Impact level the intervention seeks to contribute to achieving a viable, just, lasting and
comprehensive two state solution to the Israeli Palestinian conflict on the basis of a negotiated
settlement and international resolutions.
The Outcome of the project will be a Palestinian leadership empowered for effective
negotiations with Israel and for engagement with the international community and in diplomatic
efforts.
The Outputs of the project are:
1. Effective technical support to the Palestinian leadership.
2. Coherent and effective messages delivered in support of negotiations and Permanent
Status positions.
3. Enhanced national sustainable capacity to promote effective support for negotiations.
In short a more effective negotiating apparatus makes it more likely that negotiations will take
place and that a sustainable outcome be achieved from these negotiations.
Business Case
Strategic Case
A. Context and need for a DFID intervention
The British Government seeks a negotiated two-state solution to the Israeli-Palestinian
conflict as the best way to meet the aspirations of the Israeli and Palestinian peoples and
lead to a sovereign, viable and contiguous Palestinian state living in peace and security
alongside a safe and secure Israel and their other neighbours in the region. The UK has
humanitarian, strategic and national security interests in seeing a just and sustainable
resolution of the conflict. The conflict has plagued generations in Israel, the Occupied
Palestinian Territories (OPTs) and the region, generating frequent violence and widespread
insecurity, poverty, and undermining human rights. It has been a source of regional instability
and radicalisation both internationally and in the UK.
There is also an increasingly strong economic interest: The unresolved conflict, the effects of
the occupation and outbreaks of new violence have led the OPTs to become one of the most
aid dependent places in the world. Significant international support has been directed at
building the Palestinian state as a means to promote the peace process and in readiness for
the two-state solution. Without progress towards a peace settlement, there is a risk that high
international aid flows could be unsustainable. Resolution of the conflict will unlock the
development potential of the OPTs and provide a basis for moving away from aid
dependency and towards economic self-sustainability and poverty reduction.
The Palestine Liberation Organisation (PLO) is committed to a negotiated solution. At the
same time, in the absence of progress towards a Final Status Agreement, the PLO is
seeking to protect Palestinian interests and the viability of a two-state solution, and reach a
coherent position from which to negotiate. Without progress towards achieving peace and
the end of the Israeli occupation, there is a risk of losing Palestinian public support for the
non-violent political path being taken by the moderate PLO leadership, and the risk of an
escalation of violent conflict. To be an effective partner for peace, the PLO needs to purse
well-considered strategies and effectively communicate its positions to its own public, the
Israel Government and public, and the international community.
DFID’s state-building and peace-building approach identifies the importance of making longterm investments in building capacities for resolving conflict.1 In a conflict situation, building
national institutional capacity for effective peace negotiations is key for successful conflict
resolution, and represents the development of a core state function. The general theory of
change underpinning such interventions is articulated by the respected international
peacebuilding organisation ‘Conciliation Resources’, based on evidence from many peace
processes around the world:
Ultimately it is the ability of those in conflict to resolve their differences that is decisive in a
negotiated war-to-peace transition. External actors can make important contributions by
helping them to build negotiation skills and to address capacity asymmetries between the
parties. Leaders may be more inclined to choose to negotiate if they believe negotiations
might deliver the desired results.
In turn, the negotiations are more likely to be successful when the parties have an effective
strategy and skilled negotiators, capable of attaining their interests through peaceful means.
Cultivating these capacities is in everyone’s interests in the long run. If one side is at a
serious disadvantage in terms of their skills and knowledge, the likelihood of anyone coming
away from the table satisfied decreases.
Even prior to the emergence of sustained political negotiations, external actors can provide
support to governments, armed groups, political parties and civil society actors to prepare
them for effective participation in peace processes. They can provide training and capacity
building in analysing the conflict and potential solutions to it, policy formulation and
negotiation. This is an investment for both the peace process and for later democratic
participation in policy processes and ‘good politics’ after the settlement. 2
Current Palestinian national institutional capacity
The Palestinian Liberation Organisation (PLO) established a Negotiations Affairs Department
(NAD) in 1994 to carry out the implementation of the 1994 Israeli-PLO Oslo Accords. NAD
was involved during the multiple rounds of subsequent negotiations that took place from
1994 to 2001 and 2007 to 2008. NAD is the only body mandated by the PLO to provide
policy and technical support to those involved in negotiations. It reports to the Chairman of
1
2
Building Peaceful States and Societies, DFID Practice Paper, 2010.
Conciliation Resources, Policy Brief: Ending war: the need for peace process support strategies,
November 2009. Accessible at: http://www.c-r.org/our-work/influencing-policy/peace-process-supportstrategies.php . Accessed 08/12/2011. DFID has provided funding to Conciliation Resources’ work on
lessons learning from peace processes for a number of years.
the PLO, currently President Mahmoud Abbas.
DFID began supporting NAD in 1999 in order to address the need to strengthen technical
negotiations support capacity to promote more effective negotiations between the parties.
Four other donors (Norway, Sweden, Netherlands and Denmark) joined to form the Core
Funding Group (CFG) of the ‘Palestinian Negotiations Support Project (PNSP)’. DFID funded
the PNSP and acted as lead donor until July 2011. An international advisory firm
implemented the project during this period. From July 2011, which marked the beginning of a
new phase of the PNSP, project management was transferred to NAD itself. Norway
assumed the lead donor role, and the other original donors have since resumed funding.
The PNSP principally covers the work of the Legal & Policy and Communications
Departments in NAD. They provide technical advice on permanent status matters and
other issues (including security, settlements, the status of Jerusalem, refugees, borders,
water and economic relations), help develop strategy and positions, and conduct
communications and outreach to explain Palestinian positions.3
There remains a need for international assistance to help strengthen Palestinian technical
capacity for developing and more effectively communicating strategies to achieve peace.
Without a professional institutional capacity, strategies and negotiation positions adopted by
the Palestinians are likely to be less effective, risk losing public and international support,
and hold greater risks for achieving a just and viable two-state solution. Such capacity is
essential to enable the Palestinians to effectively pursue peace with Israel.
DFID intervention
DFID proposes to continue to support Palestinian capacity to develop and communicate
policy positions and to engage effectively in negotiation processes.
This intervention is relevant to Priority Four of DFID’s Business Plan 2011-2015, which
commits DFID to ‘Strengthen governance and security in fragile and conflict-affected
countries’ and to ‘Improve the coherence and performance of British international
development policy in fragile and conflict-affected countries…’.4
This peacebuilding intervention compliments UK diplomatic efforts and support for
Palestinian statebuilding. Whilst relatively small in funding terms, it represents a strategic
and direct funding investment in encouraging progress towards a peace agreement. It
represents tangible UK support for a negotiated and just solution to the conflict which will
ultimately benefit poor and vulnerable Palestinians: peaceful resolution of the conflict
represents the only route to reduced aid dependency and the economic self-sufficiency of a
Palestinian state. As such, there is a significant long-term value for money aspect to
investing in this area in order to reduce the need for UK aid, as well as protecting the UK’s
past investments.
DFID is in a strong position to bring particular added-value through this intervention both
alongside other donors, as well as in relation to other UK funding avenues (such as the
3
Source: NAD website: http://www.nad-plo.org/etemplate.php?id=182
Department for International Development Business Plan 2011-2015, May 2011, p3. Accessible at:
http://dfid.gov.uk/Documents/DFID-business-plan.pdf . Accessed 09/12/2011.
4
Conflict Pool):
 DFID brings lessons learned through previous support in this area in the OPTs;
 We bring technical expertise as a leading bilateral donor working at the leading-edge
of the relationship between conflict resolution and development assistance both
internationally and in the OPTs;
 We have a joined-up approach between DFID on the development side and the
Foreign and Commonwealth Office on the diplomatic side;
 We bring a rigorous approach to results and value for money
B. Impact and Outcome that we expect to achieve
At the Impact level the intervention seeks to contribute to achieving a viable, just, lasting and
comprehensive two state solution to the Israeli Palestinian conflict on the basis of a
negotiated settlement and international resolutions.
The Outcome of the intervention will be a Palestinian leadership empowered for effective
negotiations with Israel and for engagement with the international community and in
diplomatic efforts.
Impact
Outcome
Viable, just, lasting and comprehensive two state
solution to the Israeli Palestinian conflict on the
basis of a negotiated settlement and international
resolutions
Palestinian leadership empowered for effective
negotiations with Israel and for engagement with
the international community and in diplomatic
efforts
Appraisal Case
A. What are the feasible options that address the need set out in the Strategic case?
The following options for achieving the identified Outcome have been carefully considered:
A. Support for some form of Palestinian think tank or academic centre
B. Looking to support the technical role of the Palestinian Authority (PA) in support of the
peace process, for example the Ministry of Foreign Affairs
C. Support the NAD PNSP
D. Do nothing
Option A and B would not achieve the desired results and do not therefore represent feasible
options, as:
i) the PLO leads on the peace process and NAD is the only body mandated by the PLO to
provide technical support for negotiations; and
ii) in line with the strategic case and evidence, it is essential to enhance national institutional
capacity, and for this to be even more effectively led by and embedded in the PLO - whilst
individuals and certain ministries within the PA do input to peace process issues, and NAD
engages inputs from think tanks and academics for example, NAD leads and coordinates for
the PLO.
Initial options A and B were therefore judged as infeasible at the initial stage and were not
taken forward to full appraisal. The ‘do nothing’ and NAD PNSP options are fully appraised
below.
Appraisal of Option One: Do Nothing
The Strategic Case set out the case for investment in a negotiated solution to the conflict. It
also established the case for maintaining and strengthening Palestinian negotiations support
and communications capacity. At the strategic level, doing nothing to support these
objectives risks contributing to a further deterioration in the prospects for progress in
negotiations in the medium-long term, ineffective Palestinian positions and negotiators and
lack of progress towards (or an unviable or unsustainable) peace agreement. This would
result in continued occupation, increased risks of an escalation of violence, denial of basic
Palestinian rights and ongoing poverty and aid dependence. There is a strong case for
investing in this national capacity irrespective of whether substantive negotiations are
currently in train.
Not funding such a direct peace-related intervention would undermine the strategic approach
embodied in DFID’s OPT’s Operational Plan which is intended to promote statebuilding and
peacebuilding.5 Without progress towards peace, the expected results in DFID’s OPTs
Operational Plan from investments in statebuilding, wealth creation and tackling vulnerability
will be at risk, and the need for aid (including humanitarian funding) will continue.
UK Government policy seeks a just solution to the conflict, on the belief that this is the only
way to reach a sustainable peace. It is the UK’s considered view that the Palestinian party
In line with DFID’s approach to support in conflict-affected contexts, set out in: Building Peaceful
States and Societies, DFID Practice Paper, 2010.
5
continues to need international support to deepen its technical capacity to engage effectively
in peace-making. To not intervene to help strengthen this capacity would therefore do harm
to the prospects for a just and sustainable peace agreement, and thus harm UK moral,
political, strategic, national security and economic interests. The intervention is specifically
aimed at consolidating Palestinian national ownership of its own negotiations support
capacity.
Should DFID not fund the NAD PNSP specifically, the project is likely to continue anyway
with funding from the other donors making up the CFG. However, it would leave a funding
gap that could create instability for NAD, and limit the results it could achieve, undermining
UK interests. There is a chance that other donors would note DFID’s decision to discontinue
investing in NAD and consider withdrawing funding, potentially collapsing PNSP-supported
areas of NAD’s work. Any such instability would harm NAD’s ability to provide effective
inputs to the PLO’s engagement in peace process issues. Not supporting the new phase of
the PNSP would risk losing much of the benefit that past DFID investment has contributed,
including NAD’s important institutional memory (which the new project is protecting through
improved archiving for example) – which is key for effective negotiators. By not funding this
option, the CFG and NAD would not benefit from lessons learned through past DFID support
to the PNSP, our technical inputs and the value we add through our rigorous approach to
results and value for money, which would otherwise contribute to the project achieving
results desired by the UK.
A decision at this stage not to fund the new PNSP risks damaging UK relations with the PLO
and NAD. At an important political moment for the peace process, it could also risk sending
the wrong public signal to Palestinians, to Israel, the region and internationally that the UK is
no longer fully committed to supporting the parties in reaching a just two-state solution.
Appraisal of Option Two: support the NAD PNSP
NAD remains the only body mandated by the PLO to provide negotiations support capacity.
The period of DFID’s past support for the PNSP, during which DFID acted as lead donor in
the CFG, provides historical evidence for this appraisal. The design of the new phase of the
PNSP was informed by lessons learned in previous phases. The new phase of the project
has now been running for almost one year, with Norway acting as lead donor, and with
funding already in place from Norway, Sweden, the Netherlands, and Denmark. This period
has provided evidence of the new project’s performance and likelihood of achieving results.
At the Impact level, past phases of the PNSP did not see progress between Israel and the
PLO on resolving final status issues. At the Outcome and Output levels, the PNSP had a
mixed record. There is good evidence from reviews of past phases that NAD-PNSP
delivered results, for example there was consensus among Palestinian and international
stakeholders that the Palestinian negotiating teams were better prepared, better supported
and performed better during the Annapolis peace process in 2007-8 than in earlier
negotiations, and this was attributed in large measure to the high quality of support provided
by NAD.
There were also certain weaknesses in the performance of the PNSP, largely due to the way
the then Negotation Support Unit (NSU) was operated and the lack of a strategy for building
institutional capacity. It largely failed to serve or establish effective connections with key
members of the leadership, or those working in relevant technical areas within the
Palestinian Authority and the wider Palestinian sphere. This impacted on its relevance and
credibility. There was also limited development of Palestinian ownership and efforts at
building sustainability. This was linked to the reliance on international expertise and the
model of implementation through an international advisory firm. In late 2010/early 2011, the
leak and publication of sensitive documents from the NSU was a major blow to the credibility
of the NSU and by association the PNSP. It exposed weaknesses in document security
management, and also highlighted the reliance on international consultants employed under
the project. These factors incentivised the PLO and NAD itself to initiate an internal capacity
assessment of the NSU and to develop a major institutional development plan.
The new phase of the project is based on a reformed institutional strategy which addresses
these past weaknesses. NAD has also subsequently embraced suggestions from the CFG
on how to strengthen the project. The findings and recommendations from a 2010 CFG
review and DFID assessments of the last phase of the project are fully embedded in the new
project. We have invested advisory time in helping strengthen the project and the related
logical framework in order to safeguard our past investment and with a view to potential
future funding support.
The intended Outcome of the new phase of the NAD PNSP is a Palestinian leadership
empowered for effective negotiations with Israel and for engagement with the international
community and in diplomatic efforts. This will be measured through surveys and focus
groups of key stakeholders (including the Palestinian leadership and the diplomatic
community), and through surveys of perceptions of the population towards Palestinian
negotiation positions.
The 3 Outputs of the new PNSP project are:
1. Effective technical assistance to the Palestinian leadership, measured through the
production of high quality reference guides, strategy and position papers, and the increased
satisfaction of the leadership with NAD’s outputs.
2. Coherent and effective messages delivered in support of negotiations and Permanent
Status positions, measured through the number of joint media products with other key
PLO/PA bodies; the number of presentations, press releases, opening editorials, fact sheets,
question and answer sheets produced; the number of times the media draw on NAD’s
outputs; and increasing website hits.
3. Enhanced national sustainable capacity to promote effective support for negotiations
measured through the percentage of consultancy provided by local advisers/consultants; the
percentage of PLO negotiating documents stored on accessible document management
system; and the percentage of the PNSP budget provided by the Palestinian Authority.
This builds-into the results chain as follows:
Impact
Outcome
Outputs
Viable, just, lasting and comprehensive two state
solution to the Israeli Palestinian conflict on the
basis of a negotiated settlement and international
resolutions
Palestinian leadership empowered for effective
negotiations with Israel and for engagement with
the international community and in diplomatic
efforts
Effective technical
assistance to the
Palestinian
leadership
Coherent and
effective messages
delivered in support
of negotiations and
PS positions
Enhanced national
sustainable capacity
to promote effective
support for
negotiations
Inputs
Funding to technical assistance
The revised results framework for the project sets clear targets and milestones that will
monitor progress. Improved reporting mechanisms are providing donors with greater
transparency. There is direct evidence that NAD is using the logframe as a project results
management tool and as the framework against which it is providing detailed reporting to the
CFG. Project reporting to date provides evidence that the PNSP is making good progress
towards delivering results. A number of milestones have been exceeded. There has been a
challenge in identifying a baseline and obtaining sufficient feedback to support measurement
of leadership stakeholders’ views on NAD’s performance. NAD and the CFG will address
these issues following the annual review of the first year of the project, and the logframe may
be adjusted, including potentially increasing the ambition of some of the output targets, and
introducing different measurement methods such as interviews,
‘Palestinian-isation’ of the project has been the central theme of the new phase. The new
model has seen NAD take over project implementation and evidence to date suggests it has
done so very effectively. There has been a recruitment of Palestinian staff, and a move
towards the use of less expensive local consultants, with a tighter focus on ensuring value
for money from consultants (including e.g. reducing the number of consultancy days as well
as quality control in the recruitment of consultants). Furthermore, the Palestinian Authority
(PA) has committed to increasing its financing of NAD’s work, and the new project results
framework includes a specific target to increase that proportion over time. Despite the
financial pressures on the PA, the PA is delivering on its commitment so far. This will reduce
the need for donor funding in the longer-term.
The Foreign and Commonwealth Office is keen to see DFID continue funding to NAD, noting
the reliance of the Palestinian leadership on this resource and the vital need for such
capacity to support the key Palestinian negotiators in developing their positions and in
communicating these to the Israeli side and the Palestinian public. They agree that there is a
strong case for investing in this national capacity irrespective of whether substantive
negotiations are currently in train.
DFID support for the new phase would consolidate and build on our previous support. As a
leading bilateral donor internationally, working at the leading-edge of the relationship
between conflict resolution and development assistance, results and value for money,
support from DFID would bring valuable rigour and technical advice to the new phase of the
PNSP. This and our continuity with the project makes us a valuable partner for NAD and the
CFG.
Supported by the PNSP project, NAD is in an increasingly strong position to provide effective
inputs to the leadership in developing and negotiating positions and helping better
communicate them to domestic, Israeli and international audiences. Ultimately this
investment would enable NAD to maximise its contribution to preventing a deterioration in
the prospects for a peace agreement, and enhancing those prospects.
Empowering women
Empowering womens’ engagement in peace processes and promoting attention to security
issues of concern for women are UK Government priorities. Whilst it does not feature in the
results framework at the present time, NAD has recently committed to implementing UN
Security Council Resolution 1325 on Women, Peace and Security. Including through:
•
•
•
•
ensuring women’s interests/impact of the conflict are examined in its technical work;
targeting women in stakeholder surveys and disaggregating women’s views in
surveys of publics attitudes;
committing to a gender balance in NAD’s staff;
engaging women in Palestinian NGOs, civil society and the media, and seeking to
connect with women locally and internationally in its communications work.
NAD will report on progress in implementing this commitment through its regular project
reporting.
Options considered for alternative approaches to support for the PNSP
DFID has considered funding only specific aspects/results of the PNSP. However, this would
be sub-optimal as the PNSP represents a coherent and logical package of UK-desired
results (covering communications, legal and policy issues across the range of areas where
the PLO needs to have effective technical capacity). Earmarking would increase the
management and reporting burden on NAD which the PNSP and CFG arrangement is
intended to minimise in order to focus on results and efficiency, and would contradict DFID’s
commitment to good donor practice. On this basis, if the UK wishes to support NAD’s results,
there is no logical case for earmarking support to specific areas of the PNSP.
B. Assessing the strength of the evidence base for each feasible option
There is a general lack of strong evidence for achieving results at the Impact level from
investments in national negotiations capacity, although some sources exist and it is accepted
wisdom in the conflict resolution field that this does represent an important and value-formoney investment. Whilst it is not feasible to provide full evidence for the counter-factual ‘Do
Nothing’ option, available evidence shows that peace processes are less likely to succeed
without such investment.6 The above appraisal of the NAD PNSP option draws on evidence
from the past functioning of the PNSP, the strength of the new PNSP, and emerging
evidence from the performance of the new project to date. The combination of this evidence
– some strong and some limited – suggests overall the quality of evidence for the NADPNSP is ‘Medium’. On balance, the evidence for the ‘do nothing’ option is assessed as
Medium.
In the table below the quality of evidence for each option is rated as either Strong, Medium
or Limited
Option
1 – Do Nothing
2 – NAD PNSP
Evidence rating
Medium
Medium
What is the likely impact (positive and negative) on climate change and environment
for each feasible option?
Categorise as A, high potential risk / opportunity; B, medium / manageable potential risk /
opportunity; C, low / no risk / opportunity; or D, core contribution to a multilateral organisation.
Option
1 Do Nothing
2 NAD-PNSP
Climate change and environment
risks and impacts, Category (A,
B, C, D)
C
C
Climate
change
and
environment
opportunities, Category (A, B, C, D)
C
C
There are no high-level, significant and direct environmental/climate impacts or opportunities
identifiable from NAD/PNSP support. The overall categorisation is therefore C (low impact /
opportunity). However, there are some important secondary and indirect
environmental/climate benefits which are worthy of note:

PNSP involves support to negotiations which encompass broad environmental rights
and environmental issues of critical importance to the well-being and long-term
security of Palestinians - in particular: access to and control over water resources
(e.g. PNSP deliverables used by the Palestinian Water Authority) and productive land
assets. Rights and access to these ENRs (Environmental and Natural Resources) are
vital in terms of ensuring the sustenance, health, livelihoods and generic well-being of
the Palestinian population. Without negotiating clear rights to access and control,
these ENRs could become ‘triggers’ in further Israeli-Palestinian tensions and conflict.
NAD is already seeking to further solidify relations with key ENR-related ministries,
such as the Ministry of Agriculture and the Environmental Authority, recognising the
relevance
of
these
issues
to
broader
stability
and
security.

PNSP’s ultimate goal of Permanent Status and stability in the region will provide the
foundation for re-structuring and strengthening of Palestinian environmental policy /
management institutions. If the PNSP succeeds in contributing to these aims, or even
6
GSDRC Helpdesk Research Report: Impact and VFM of Capacity Building Support for Conflict
Parties in Negotiations, 09.12.2011 (http://www.gsdrc.org/go/display&type=Helpdesk&id=768 );
Conciliation Resources, Policy Brief: Ending war: the need for peace process support strategies,
November 2009. Accessible at: http://www.c-r.org/our-work/influencing-policy/peace-process-supportstrategies.php .
significantly improves levels of stability in the OPTs in the interim, then this will
provide the enabling environment essential for eventual rehabilitation and
strengthening of the environmental sector. Without such stability, the institutional and
governance environment required to improve environmental policy, sustainable
management
and
protection
measures
will
not
be
attainable;

The new PNSP strategy focuses on enhancing utilisation and capacity of local experts
and institutions, versus using international consultants and organisations, thereby
lowering the Carbon Footprint of advisory inputs – this increased focus on utilising
local expertise will reduce the need for air travel, and therefore significantly reduce
carbon emissions associated with PNSP inputs.
Whilst environmental outputs, outcomes and impacts are not captured explicitly in the
current results framework, NAD is very active on water and environmental issues, and
reports on activity and outputs in this area.
C. What are the costs and benefits of each feasible option?
The appraisal is of DFID’s funding of the NAD PNSP option compared to the counterfactual
of no DFID support. The counterfactual is that NAD fails to find alternative donor funding to
meet the gap in their needs and so experiences a funding shortfall of up to £1 million (up to
20% of the project budget). This scenario is realistic, as the current group of donors has
been the source of PNSP funding for a number of years, and the current donors have not
signalled scope to increase their contributions to the PNSP. There has been strong
encouragement from the other donors for DFID to join the project. It appears unlikely that a
new donor would come forward to meet NAD’s funding needs in the timeframe required.
Incremental costs
Our funding of PNSP is expected to have the following costs compared to the counterfactual:
 DFID financial contribution: up to £1 million over 2 financial years.
 DFID staff time: since the Norwegians have taken over from us as the lead donor, we
estimate that it will only require 10% of the time of a conflict adviser in Jerusalem and
5% of a project officer in Jerusalem.
The undiscounted incremental costs for each option may therefore be summarised as
follows:
Table 1 : Incremental Costs for NAD PNSP (£)
Cost
2012/13
2013/14
Total
DFID financial contribution 500,000
500,000 1,000,000
DFID staff time
32,500
32,500
65,000
Total cost
532,500
532,500 1,065,000
Incremental benefits
The main incremental benefit compared to the counterfactual Is: progress towards a two
state solution:
 Benefit: the Outcome of “a Palestinian leadership empowered for effective negotiations
with Israel and for engagement with the international community and in diplomatic
efforts” will increase the probability of a durable two state solution.
 Quantification: it is not possible to quantify the likely increase in the probability of a

durable two state solution as a result of the project. However, the project will measure
the change in the percentage of the Palestinian population reporting a positive
perception of Palestinian negotiation positions, and the change in the percentage of key
stakeholders viewing NAD positively (NAD is currently working on the baselines and
sources for this measurement). Around 20% of any such improvement can be attributed
to DFID given our likely share of the budget.
Monetisation: it is possible to estimate a monetary value for some of the benefits of a
permanent two state solution. We estimate that a two-state solution could result in
increased growth in the OPTs worth around $30 billion over 15 years. 7 This is consistent
with a recent study which conservatively estimated the annual cost of the occupation to
the Palestinian economy in 2010 at 85% GDP, or $6.9bn.8 However, since it is
impossible to estimate the extent to which this intervention will increase the probability of
a two-state solution, we cannot assign an expected value to this benefit.
Risks
Overall the PNSP option is rated as Medium risk. Achieving the outcome target of improving
public perceptions of Palestinian negotiating positions is Medium risk given that public
support for negotiating with the Israelis is not fully within the project’s control. Achieving the
outcome target of improved stakeholder perceptions of NAD is Medium risk: whilst it is more
fully within the project’s control and NAD is working hard to achieve improved perceptions
amongst its leadership stakeholders, there is more work to do and the approach to
measurement needs to be refined further.
Balance of costs and benefits
Given the large size of the potential ‘peace dividend’ compared to the total costs, the project
only needs to increase the probability of a two state solution by a small amount to have a
high expected return. If it is able to achieve the Outcomes of significantly improving
perceptions of the Palestinian public of Palestinian negotiating positions, and significantly
improving perceptions of key stakeholders of NAD’s work, then it seems likely that there will
be an increase in the probability of a two state solution by the minimum amount required.
However, with a Medium risk of achieving the Outcomes, such a return is not guaranteed.
Sensitivity analysis
This is not appropriate given the lack of monetised benefits.
D. What measures can be used to assess Value for Money for the intervention?
Economy
 Consultancy fee rates: daily fee rates for international consultants are $650-850 and
$350-450 for local consultants. The international rates are lower compared to when an
external contractor was responsible for procuring consultants, which has brought the
average fee rate down from £220 per day in 2009/10 to £186 in 2010/11. The quality of
consultants does not appear to have been affected, as some of the same consultants who
were contracted in the past have accepted these lower rates.
 Cost per advisory day: the project’s total costs divided by the number of advisory days
was £363 for 2010/11. This will be compared over time to ensure that costs are
7
Based on the growth scenarios in IMF (April 2011) Macroeconomic and Fiscal Framework for the
West Bank and Gaza: Seventh Review of Progress (www.imf.org).
8 Ministry of National Economy (September 2011) The economic costs of the Israeli occupation for
the Occupied Palestinian Territory (www.met.gov.ps/pdf/ecocostsIsraeloccupationPalestinian.pdf)
controlled. The total project cost has been reduced by 40% comparing the cost in 2009/10
with the estimated cost for 2011/12. In addition to the lower fee rates, this is from the
following measures: reducing the number of project managers; increasing the share of
local consultants compared to international consultants; and ensuring that the number of
days provided by international consultants are kept to a minimum. The services of NAD
will be monitored closely to ensure that these cuts in costs do not compromise quality.
Efficiency
 Cost per internal paper produced or updated: this refers to the average cost of each
paper produced in Output 1 (Reference Guide, position paper and presentation) produced
or updated each year. We will work with NAD to calculate and monitor this over time.
 Cost per media insertion: this refers to the average cost of getting the media to draw on
NAD’s products in Output 2 (presentations, press releases, editorials, fact sheets etc.).
We will work with NAD to calculate and monitor this over time.
E. Summary Value for Money Statement for the preferred option
The PNSP option represents value for money in two ways. Firstly, if it is able to achieve the
Outcomes of significantly improving perceptions of the Palestinian public of Palestinian
negotiating positions, and significantly improving perceptions of key stakeholders of NAD’s
work, then the benefits from increasing the probability of a two state solution will likely greatly
exceed the costs. Secondly, the project is being delivered in a way which minimises costs
while maintaining quality.
Commercial Case
Direct procurement – Not applicable
Indirect procurement
A. Why is the proposed funding mechanism/form of arrangement the right one for this
intervention, with this development partner?
The CFG remains the original group of donors – Norway, Denmark, Sweden, the
Netherlands, and the UK. This maintains a useful degree of continuity. The group is likeminded in its consistent support and tangible investment in the Palestinian capacity for
pursuing peace. The group has a collective interest in consolidating the benefits of its past
investment and seeing NAD now mature into a nationally-owned, professional and effective
institution. By mutual agreement in order to share the management burden, DFID handed
the lead donor role to Norway after more than ten years in the lead.
The funding will be channelled through the lead donor (The Norwegian Representative
Office). Over the first year of the current project, Norway has demonstrated it is managing
the project and donor disbursements effectively on behalf of the CFG. The CFG sign a
Delegated Cooperation Arrangement with Norway to manage the pooled fund. 9 The
continuation of the pooled-funding arrangement is intended to minimise the burden on the
development partner (NAD), in line with good donor practice. It also acts as a locus for
coordination among the donors and coherent engagement with NAD. The Norwegian
Representative Office has signed a Memorandum of Understanding with NAD. NAD will
manage the PNSP. There is no management overhead in the delegated cooperation
arrangement, representing good value for money.
B. Value for money through procurement
Due to NAD’s management and the new model of the project, the first year of the new PNSP
saw a significant reduction in budget from the last year of the previous PNSP phase, with
further reductions planned over the remaining two years. This is principally as a result of a
reduction in the use of expensive international consultancy days, but also cost control on
telephone usage, transportation and other areas. The PNSP budget breaks down as follows:



US $ 2,228,947 for the first year (26.7% reduction from 2010/2011 budget under
previous phase of the PNSP)
US $ 2,171,174 for the second year (2.6% reduction from 2011/2012 budget)
and US $ 2,042,906 for the third year (6% reduction from the 2012/2013 budget)
International consultants contracted by an international organisation have greater freedom of
movement and access in the OPTs than would be the case if they were contracted by NAD
directly. As such,.NAD uses a third party, currently through an agreement with UNDP to
manage the long-term consultants (but is exploring other options, including lower cost
options). Also NAD, intends to continue its cooperation with Adam Smith International for
9
Sweden (SIDA) has a bilateral agreement with NAD and are funding NAD directly, but have signed
onto the Delegated Cooperation Agreement.
the management of some of the short term consultants as and when appropriate, at reduced
fee rates. UNDP is providing the following service for NAD/PNSP:





Work visas for the long term advisors with international passports.
The UN practice for the procurement process (International standards).
Access to the UNDP experts and consultants database
Visas for visitors.
Security and alert messaging.
Financial Case
A. What are the costs, how are they profiled and how will you ensure accurate
forecasting?
The delegated arrangement will be signed with the Core Funding Group (CFG) and Norway
in US dollars for two years (over three financial years, however, DFID will make the
payments in Pounds Sterling and this amount will not vary).
The total amount of the three year project is (US $ 6,940,741). DFID contribution will be in
Sterling Pounds. The DFID contribution is 20.42% of the overall budget which equates to up
to £1,000,000. This includes 10% contingency for the exchange rate, as agreed with the
other four donors. The following is the percentage of the five donors contribution:





Netherlands 23.21%
Norway 28.52 %
DFID 20.42%
SIDA 19.49%
Denmark 8.35%
Payments will be made six months in advance to the lead donor’s (Norway) separate local
bank account to reduce the number of transactions as agreed between the five donors. The
lead donor will transfer the funds according to NAD’s needs. Advance payments are required
in order for NAD to make forward commitments, particularly to contracting personnel to fulfil
planned work commitments and in order to deliver the agreed results. NAD will provide their
financial requirement bi-annually in advance, based on six-monthly forecasts. After every six
months NAD will prepare the financial statements to reconcile their forecast with the
expenditures.
Total Project including
PMG
DFID contribution +10
% (up to)
2011/2012
US ($)
GBP (£)
2,407,10 1,525,731
9
2012/2013
US ($)
GBP (£)
2,341,850 1,484,318
777,000
500,000
2013/2014
US ($)
GBP (£)
2,191,782 1,388,977
777,622
500,000
Norway is contributing US $497,714 to cover a separate component - the Palestinian
Monitoring Group - that has recently been absorbed into the overall project framework.
Also the Palestinian Authority will contribute US $350,633 towards NAD’s administration
costs related to the project over the three years.
`
B. How will it be funded: capital/programme/admin?
The PNSP will be funded from the programme budget. Funding has been allocated in the
overall OPTs Operational Plan 2011-2015.
C. How will funds be paid out?
The plan is to pay two tranches in Sterling Pounds bi-annually to the Government of Norway,
The tranches will depend on the spending of the project, however, below is an estimate of
how the funds will break down:
1)
2)
3)
4)
First Tranche up to: £ 200,000
Second tranche up to: £ 300,000
Third Tranche up to: £ 300,000
Fourth Tranche: up to £ 200,000
Norway will manage the CFG funds through a local bank account and will transfer the funds
in US dollars directly to NAD according to NAD’s 6-monthly approved workplans.
D. What is the assessment of financial risk and fraud?
NAD has made a commitment to transparency and applying best practice in financial
management. NAD has recruited a Finance Manager who will prepare monthly accounting in
accordance with International Accounting Standards (IAS).
The project will be audited annually by an independent firm. NAD will draft the ToRs and will
share it with the CFG, after the approval from the CFG, NAD will undertake the procurement
of an audit firm following NAD’s procurement procedures
E. How will expenditure be monitored, reported, and accounted for?
A separate bank account for the project will be opened and expenses will be monitored by
NAD. NAD will provide the CFG with a signed financial report and statements every 6
months according with International Accounting Standards. This will be audited on a yearly
basis. NAD will seek the CFG approval for any over-expenditure and/or reallocation of funds.
The lead donor will monitor the assets and regularly provide the CFG with an updated list
(Norway will draw on the services of the auditor to provide these lists, which will be included
as an annex to the audit report). Any unspent funds will be returned to the UK through the
Lead Donor (Norway) as agreed in the Arrangement on Delegated Cooperation Agreement
between Norway and the CFG.
Management Case
A. What are the Management Arrangements for implementing the intervention?
The President and the Higher Negotiations Committee will be responsible for formulating the
overall political direction and strategic guidance on all negotiations related matters. The NAD
will be responsible for the day-to-day management of the PNSP implementation and finances
NAD has an agreement with UNDP to contract advisors, and may use other third parties for
contracting and related services.
The Core Funding Group partners (UK, Denmark, Sweden, and Netherlands) will disburse the
funds to Norway (the Lead Donor) in two transactions (every six months, after the work plan
and the six months budget are approved by the donors).The Government of Norway will
disburse the funds to NAD when is the funds are available and tranches are approved by the
donors.
During the Business Case process, the option was explored of funding this intervention
through the Conflict Pool under Foreign and Commonwealth Office (FCO) management.
However, it was determined that it makes sense to maintain continuity of the DFID lead in
Jerusalem, and FCO London and the British Consulate-General in Jerusalem supports DFID
remaining in the lead: DFID is best placed to bring together technical expertise on conflict
resolution and development, backed by good donor practice and our rigorous approach to
results and value for money.
B. What are the risks and how these will be managed?
This intervention is intended to contribute to achievement of the intended Impact, and in so
doing, to reduce the risks of a lack of progress towards a peace agreement or an unviable and
unsustainable agreement. Even so, the risk that the parties will not resume substantive
negotiations and reach a peace agreement is ultimately outside the control of the project. The
UK will continue to encourage progress at this higher level and to mitigate the risks of any
deterioration in the prospects for a negotiated two-state solution. The following risk
assessment focuses on the output to outcome risks:
Risk description
Impact
Probability
Political situation arises
which negatively affects the
intended results of the
programme (such as PLO
commitment to negotiated
solution, respect for human
rights)
H
L
NAD outputs contain
inaccurate information,
vilification or incitement
M
L
Mitigating
actions
Under the
terms of the
funding
agreement,
the donors
reserve the
right to
withhold or
suspend
disbursements
to the project
NAD
commitment
and quality
control. Under
the terms of
the funding
agreement,
the donors
reserve the
right to
withhold or
Residual
risk
M
Monitoring
L
NAD
reporting,
CFG and UK
Government
monitoring
and raising
any issues of
concern with
PLO/NAD
CFG, DFID
and UK
Foreign
Office
Negative views of NAD and
relevance/quality of outputs
leads to Palestinian
stakeholders failing to
request/act on NAD’s
advice
H
L
Poor quality of NAD’s
H
outputs leads to ineffective
strategy/
negotiators/communications
L
Failure to establish
appropriate results
monitoring data (surveys
etc)
M
L
Inability to recruit highly
qualified staff to fill key
advisory positions
Failure to demonstrate VFM
H
M
L
M
PA is unable to meet
targets for contributions to
NAD budget
L
M
Leakage of sensitive
information from NAD
H
L
suspend
disbursements
to the project
NAD will
M
conduct
systematic
outreach to
stakeholders
and elicit
regular
feedback
Improved
L
document
arching and
retrieval.
Recruitment of
high quality
individuals,
consultations
and quality
assurance
feedback
mechanisms
NAD are
L
working on
refining its
stakeholder
surveying
mechanisms
Recruitment
M
strategy.
Ensure strong
focus on VFM
in reporting
and
monitoring
NAD will
continue to
engage with
the PA to
secure target
contribution
levels are met
NAD internal
security and
document
management
system,
checking of
Project
reporting
through
focus
groups,
surveys and
reviews.
CFG
(including
UK Foreign
Office)
monitoring
Project
reporting
through
focus
groups,
surveys and
reviews.
CFG
(including
UK Foreign
Office)
monitoring
Project
reporting
Project
reporting
L
Project
reporting
and regular
meetings
M
Project
budget
reporting
L
Project
reporting.
CFG
monitoring
new recruits,
contracting
clauses
C. What conditions apply (for financial aid only)?
N/A
D. How will progress and results be monitored, measured and evaluated?
The new project incorporates strengthened progress reporting and monitoring arrangements
(including a logframe developed during a workshop with NAD and the CFG led by DFID’s
Middle East and North Africa Department Senior Results Adviser). This responds to previous
weaknesses of the project, including the lack of transparency and failure to work with other key
stakeholders. Early indications of more robust arrangements being put in place and a more
results-oriented approach are good, including NAD’s use of the logframe as the framework for
quarterly updates.
Regular meetings will take place during the project period as follows:
 NAD meeting with Office of the President (OoP)/PLO on a weekly basis to update on
progress and receive political guidance
 NAD with the CFG on a quarterly basis to get a feedback on work plans and political
developments
 CFG meeting with NAD and the OoP/PLO on a six-monthly basis to present a political
briefing, approve and monitor general progress and impact of the PNSP work against
the logframe and review progress and financial reports.
 NAD meeting with primary Palestinian stakeholders on a six-monthly and ad hoc basis
to get feedback and input on the nature and quality of the support provided by the
PNSP and the future interventions/activities required and enhancing communication
channels, transparency, sharing of information and cost effectiveness.
 Annual Review meeting between the CFG, NAD and other stakeholders to review
overall PNSP progress and agree on any major changes to the PNSP outputs and the
financial allocation.
 Annual political meeting or the CFG Head of Mission and HNC members and General
Coordinator of NAD to review CFG support for the PNSP.
NAD will provide six monthly work plans and budgets and report to the CFG on progress
against the logical framework outputs and activities on an annual basis. As per the logframe,
NAD will use a number of ways to measure progress at Outcome and Output levels, including
for example stakeholder surveys, focus groups, and media monitoring.
The UK Foreign and Commonwealth Office will assist DFID in monitoring the performance of
NAD and the quality of NAD’s outputs.
Given the relatively limited evidence internationally of the value of investing in national peace
capacities of this nature, evaluation and lessons learning will be valuable outputs in their own
right. An external review or evaluation will be conducted 18 months from the beginning of the
project, and a full external evaluation conducted at the end of the project. Terms of Reference
will be drafted collaboratively between the CFG and NAD. DFID will ensure the evaluation
approach conforms to DFID requirements and best practice, and will provide advice to the lead
donor and NAD, including via inputs from our Evaluation Adviser.
Lograme
Quest No of logframe for this intervention: 3559985