Eligibility requirement: the development of contingency plans

A key feature of the ARC arrangement is that ARC member states must submit contingency plans to be eligible for insurance payouts. ARC's Agency Governing Board must approve these contingency plans.

The eligibility process entails two steps: First, countries must apply for a Certificate of Good Standing (CoGS). To obtain that certificate countries must submit a provisional “operation plan” exposing the measures they intend to implement in the case of an insurance payout. The plans are reviewed by the Governing Board of the ARC Agency according to a set of preestablished criteria (see the following). Second, shortly before an insurance payout, the countries must update this plan and submit a “Final Implementation Plan" (FIP) entailing “comprehensive information on how the payout will be deployed” (ARC, 2012b, p. 2).

While the operations plan entails a set of measures that could be implemented, the FIP lists the measures that will be implemented by taking into account the country's (fiscal, political, food security) situation at the time of the emergency situation (ibid., p. 9). Hence, in order to receive an insurance payout, ARC member countries must make two submissions to the ARC Agency’s Governing Board. The measures are evaluated according to three criteria (ibid., p. 7):

  • 1 Time sensitivity and/or catalyst: the measures must be implementable within 120 days and/or enable other activities
  • 2 Livelihood saving: the measures must aim at saving livelihoods of beneficiaries. They must be not aimed at general investment
  • 3 Duration: the measures must be completable within a six-month time frame

In its illustration of eligibility requirements, the ARC Agency list exemplarily some measures that fulfill these criteria. They include conditional or unconditional cash-transfer (to the most vulnerable), targeted food distribution, the issuance of food stamps, vouchers and coupons and feeding activities (ibid., p. 23). In more general terms, the ARC Agency urges its member countries to develop contingency plans that complement or scale-up—that is, expand in scope and target—potentially existing social safety net programs. The ARC Agency also underscores that the countries may adopt different solutions according to contextual circumstances: “It is possible that a country could find itself in a situation where the best use of an ARC payout is an activity that was not included ... then the country should seek to amend its Operations Plan” (ibid., p. 31). Hence, the ARC Agency does not insist on a specific plan or set of instruments but on a plan in the first place. Once a payout has been made, the countries are required to monitor and evaluate the measures they decided to implement.

Voluntary ‘capacity building' as add-on

As most of ARC members have never had contingency plans in place and therefore the lack the knowledge and administrative capacities to develop and

The African Risk Capacity (ARC) 143 implement these (Kimetrica, 2014), the ARC Agency offers ARC members a capacity building program in the run-up of the development of contingency plans and the customization of insurance policies. The program is intended

to prepare in-country government staff for the prospect of risk transfer to the international market. Countries formalize their engagement with the ARC Agency by signing a Memorandum of Understanding (MoU), which commit resources both from the ARC Agency and the government to undertake the capacity development programme.

(ARC, 2014f)

The ARC Agency developed and offers workshops, trainings and conferences with national and international actors involved in disaster risk management to transfer knowledge and build up and strengthen skills. The activities offered include support in the use of Africa Risk View software; support in the quantification of the country’s drought risk and selection of appropriate tools for the different layers of the risk transfer model, including risk transfer parameters for ARC; support in the drafting of operations plans for the use of a potential payout; and support in the securing of funds for the premium payment.

The goal of the capacity building program is to build up knowledge—expertise and skills—on disaster risk management at various technical and political levels. The adoption of this capacity building program is not an eligibility requirement for taking out insurance but an offer. During the second season, in November 2014, nine ARC member countries (Malawi, Kenya, Niger, Lesotho, Senegal, Burkina Faso, Mozambique, Mauritania, Zimbabwe)1 signed up for the capacity building program.

By making the submission of contingency plans an eligibility requirement, the ARC Agency has some power to influence disaster response policies and politics at the national level. By providing financial incentives to engage in disaster response planning the ARC Agency is, in fact, in a unique position to disseminate and harmonize public disaster management policies across the African continent. The power to disseminate and harmonize disaster management policies across the African continent manifests also in a more subtle way: In the context of the capacity building program, ARC teaches and familiarizes African countries with what counts as ‘best practice’. It shows countries what other countries have implemented. This knowledge transmission reflects a ‘soft’ form of power. Yet, it is important to not overstate the power of ARC. The ARC Agency has no enforcing ‘hard power’ to institutionalize and harmonize disaster management across the African continent. It cannot (or does not want to) prescribe specific policies. Countries are still free in terms of how to govern disasters. Moreover, from a post-colonial perspective, it is also important to underscore that the ARC Governing Board, the Board which approves the contingency plans and issue the certificates of good standing, is composed primarily of political representatives from the African states. Hence the subtle structuring form of power is African-owned.

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