Contingency Planning

Operations Planning: Linking Early Warning to Early Response

Linking early warning to early response requires the quick mobilization of funds to implement pre-planned response activities.  The pre-planning process, or Contingency/Operations Planning, ensures that potential ARC Ltd payouts are used quickly and effectively and that ARC funds reach the most vulnerable populations in an efficient and timely manner.  It allows participating governments to make evidence-based decisions, with a clear understanding of the financial resources available to them in times of disaster and the types of activities required to save lives as well as livelihoods.

Ensuring that early response activities reach those most impacted by extreme weather events in Africa is one of the ARC’s primary objectives. Operations Planning saves governments both time and money, as the ARC Cost Benefit Analysis (CBA) concluded that substantial speed, cost and targeting gains can be achieved through improved contingency planning.

The planning process will require countries to identify the optimal use of funds from an ARC Insurance Company  Ltd payout given the existing national risk management structures and the needs of potential beneficiaries.  Each Operations Plan should be government-driven and based on in-country priorities for risk management in the context of food security. In fact, the CBA shows that the magnitude of contingency planning benefits is much greater when the plans involve scaling up existing programmes – such as safety net programmes – on account of both improved targeting and gains in speed. Conversely, an ARC payout plan that has no contingency planning, and therefore no speed advantages, offers no economic gains over traditional response mechanisms and therefore no benefits that would outweigh the cost of running a facility like ARC.

For the purposes of ARC, Contingency Planning refers to both the Operations Plan and a Final Implementation Plan (FIP) that would be submitted by the national government shortly before a imminent Company payout, and would include detailed information on how the ARC payout would be deployed given the specific situation. These plans are developed collaboratively between national governments, in-country partners, and where needed, the ARC Secretariat.

Based on a comprehensive study into the cost-saving benefits of early response, the ARC has developed Contingency Planning Guidelines that help countries to link early warning to livelihood saving early response activities.

Principles Guiding the Contingency Planning Guidelines of ARC

Time Sensitive and/or Catalytic – ARC Insurance Company Ltd payouts must be used for time-sensitive activities that would not be possible without “first available funds,”  ideally  implemented within 120 days of an ARC payout, and/or activities that prompt or enable other activities to ensure faster and more effective action for the overall response.

Livelihood Savings – ARC Insurance Company Ltd payouts should not be used for general investment activities but instead should aim to protect livelihoods of beneficiaries who would be more negatively impacted if they need to wait to receive assistance.

Duration – Each activity that will be funded by an ARC Insurance Company Ltd payout should be completed within six months to ensure that financial resources are utilized in a timely and efficient manner.  This will make sure that countries capitalize on the “first available” funds principle of ARC.