I. Background and Context (Baseline course of action)

Introduction

1. The Black Sea is one of the most remarkable regional seas in the world. It is almost cut off from the rest of the world’s oceans but is up to 2212 metres deep and receives the drainage from a 2 million square kilometre basin, covering about one third of the area of continental Europe. Its only connection is through the winding Bosphorus Straits, a 35 Km natural channel, as little as 40 metres deep in places. Every year, about 350 cubic kilometres of river water pour into the Black Sea from an area covering almost a third of continental Europe and including significant areas of seventeen countries: Austria, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Georgia, Germany, Hungary, Moldova, Slovakia, Slovenia, Romania, Russia, Turkey, Ukraine, Yugoslavia. Europe’s second, third and fourth rivers (the Danube, Dnipro and Don) all flow to the Black Sea. The Bosphorus has a two layer flow, carrying about 300 cubic kilometres of seawater to the Black Sea from the Mediterranean along the bottom layer and returning a mixture of seawater and freshwater with twice this volume in the upper layer.

2. Isolation from the flushing effects of the open ocean, coupled with its huge catchment, have made the Black Sea particularly susceptible to eutrophication (the phenomenon that results from an overenrichment of the sea by plant nutrients). Eutrophication has led to radical changes in the Black Sea ecosystem in the past three decades with a major transboundary impact on biological diversity and human use of the sea, including fisheries and recreation. The North Western shelf of the Black Sea for example, was converted from a unique system based upon rich and extensive beds of red algae and bivalves, to an anoxic “dead zone”, the seasonal occurrence of which persists until present time. The nitrogen and phosphorus compounds triggering eutrophication come from all over the Black Sea Basin. The Black Sea Transboundary Diagnostic Analysis (1996) indicatess that, in 1992, 70% of the nutrients were coming from the six Black Sea countries (three of which - Romania, Bulgaria and Ukraine - discharge much of their nutrient load through the Danube) and the remaining 30% comes from the non-coastal countries, mostly of the upper Danube. Studies by the Danube Basin Environmental Programme suggest that about half the nutrients discharged to the river are from agriculture, one quarter from industry and a similar proportion from domestic sources. The current loads of nutrients entering the Black Sea from the Danube has fallen in recent years due to the collapse of the economies of most lower Danubian and former Soviet countries, the measures taken to reduce nutrient discharge in the upper Danube countries, and the implementation of a ban in polyphosphate detergents in some countries. Current phosphate levels appear to be roughly the same as in the 1960s but total nitrogen levels are still at least four times as high as those observed during that period. There is evidence of some recovery in Black Sea ecosystems but these observations lack scientific rigour owing to the collapse of infrastructure to monitor and evaluate changes in the system. It is widely considered however, that nutrient discharges are likely to rise again with consequent damage to the Black Sea, unless action is taken to implement nutrient discharge control measures as part of the economic development strategies.

Previous response

3. Prior to the 1990s, little or no action had been taken to protect the Black Sea. Political differences during the Soviet era, coupled with a lack of general knowledge of the environmental situation resulted in an absence of effective response. Perestroika changed this By 1992 the Black Sea countries were ready and willing to co-operate. They had just signed the Bucharest Convention. However they still lacked the policies which would enable necessary measures to protect the sea. Agenda 21 provided a good model for a first Black Sea Ministerial Declaration, the Odessa Declaration. Indeed, the Black Sea was the first region to take up the challenge of Rio. This inspired the GEF and other donors, particularly the European Union, to provide more than US$17 million support to the region to help implement the Odessa Declaration and to formulate the longer-term Black Sea Strategic Action Plan. This new project, under the guidance of the United Nations Development Programme, was named the Black Sea Environmental Programme.

4. The GEF Black Sea Environmental Programme (BSEP) was formally launched in June 1993. Its first task was to help create a strong international network of institutions, specialists and other stakeholders. The BSEP established its headquarters in Istanbul with the support of the Government of Turkey. The Programme was governed by a Steering Committee that included senior government officials from all Black Sea countries, the sponsoring organisations (the GEF and other donors), and representatives of the Black Sea NGO forum (as observers). In order to spread the technical responsibilities of the programme throughout the region and to make best use of the excellent specialists in the region, a system of Regional Activity Centres and Working Parties was devised. Each country agreed to sponsor one of its existing institutions as a regional centre for a particular field of expertise. The regional centres in turn organised Working Parties, specialist networks involving institutions from all six Black Sea countries. Using this structure, it was possible to bring together specialists who had sometimes not been able to co-operate previously. All of the institutions were provided with equipment (computers, analytical instruments, etc.) and specialist training and a new and productive dialogue began.

5. The BSEP Working Parties completed a series of background studies that enabled a Transboundary Diagnostic Analysis to be finalized in June 1996. On the basis of this comprehensive report senior government officials negotiated the Black Sea Strategic Action Plan (BS-SAP), signed on October 31^st at a Ministerial Conference in Istanbul. The consensus on the BS-SAP was very broad. It provides a very modern approach to environmental policy making and agrees on the following key matters:

· That the principle cause for the decline of the Black Sea ecosystem is eutrophication;

· That without full co-operation with riparian countries of the main tributary rivers (Danube and Dnipro) this problem cannot be addressed;

· That the institutional structure of the BSEP should be incorporated into that of the Istanbul Commission for the Bucharest Convention;

· That an adaptive management approach should be adopted for the control of pollution in the Black Sea;

· That biological diversity and fisheries concerns should be part of the future agenda of the Commission;

· That greater stakeholder participation and transparency should be ensured (in line with the provisions of the Aarhus Convention.

6. Following the signature of the BS-SAP, GEF funding was sustained, albeit at a lower level, in order to enable countries to complete National Black Sea Strategic Action Plans and for the negotiations on the institutionalization of the Istanbul Commission’s Secretariat to be completed. This was a very protracted three-year process as countries struggled to overcome technical and legal issues of establishing the Secretariat. In the meantime however, progress was made in implementing part of the BS-SAP thanks to GEF seed money and considerable support from the European Commission by Tacis or direct support. Main achievements were:

· Establishment of the ad-hoc technical working group with the ICPDR and joint analysis of the problem of eutrophication in the Black Sea, including recommendations for target for nutrient control;

· Continued support the BSEP Activity Centres and real progress through demonstration projects in the areas of data quality control, oil spill response, coastal zone management, aquaculture and biological diversity;

· Strengthening of the programme for public participation, particularly through the Tacis small grants initiative, largely focussed on actions around Black Sea (as a reminder of commitments to the BS-SAP);

· Publication of the State of Pollution in the Black Sea report (see summary in Annex 5) and the Black Sea Red Data Book;

· Agreement on a new set of water quality objectives to propose to the ICBS as required by the BS-SAP.

7. In April 2000, a breakthrough was finally made in the negotiations for establishing the Commission’s Secretariat. The Secretariat became operational in October 2000, following the selection of its senior officials at an extraordinary session of the ICBS on September 10-11, 2000. Four countries (Bulgaria, Romania, Turkey and Ukraine) already made their financial contributions to the Commission. In addition, the Republic of Turkey is providing the facilities for the Secretariat, to be shared with the PIU.

II. Rationale and Objectives (Alternative course of action)

8. The objectives, expected outputs and activities of this project have been driven by the results of the TDA and the SAP that were developed by the countries as part of their work under the previous GEF projects. They are also driven by the recently published Pollution Assessment of the Black Sea (Black Sea Technical Series No. 10, UN Publications New York – see executive summary in Annex 5), the work of the ad hoc working group between the ICPDR and the ICBS, and the results of the studies published during execution of the PDF-B. These studies clearly demonstrate the overriding significance of eutrophication as the transboundary issue having greatest long-term impact on the Black Sea. It is also the issue involving more stakeholders distributed over a wider geographical area than any of the other issues impacting the Black Sea. There are a number of other transboundary issues requiring attention however, some of which may be the subject of action by other donors:

Ø A major decline in Black Sea commercial fish stocks and non-optimal harvesting of living resources;

Ø Introduction of opportunistic species by ships and releases from aquaculture;

Ø High accident risk of tankers, especially in the Turkish Straits;

Ø Deterioration in beach and nearshore habitat quality due to marine-based sources of oil and garbage as a result of tanker operations and disposal of garbage at sea;

Ø Physical destruction and alteration of coastal habitats and landscapes;

Ø Lack of full understanding of the distribution of toxic organic compounds (heavy metals do not appear to be a transboundary problem);

Short term objectives

9. The main focus of the current proposal is the issue of eutrophication. This requires co-ordinated actions to achieve three objectives:

· Reduction of the nitrogen and phosphorus loads to the Black Sea;

· Enhancement of the service function of wetlands and benthic (seabed) plant communities for the assimilation of nutrients;

· Improved management of fisheries to permit their economic recovery in parallel with improvements to the ecosystem.

In addition to the above, and where appropriate, attention will also be given to transboundary contamination by hazardous substances, particularly where these have similar sources to nutrients. In the case of oil pollution (a significant problem in the Black Sea), attention will also be given to measures that may reduce the risk of spillage by ships.

10. The actions identified in the current proposal are far-reaching and involve activities by the national and local governments, regional organizations, the GEF, other donors, the private sector, NGOs and the public in general. Eutrophication on the Black Sea results from the failure of a wide range of sectors to understand the relationship between their activities and the decline of remote marine and coastal ecosystems. Reversal of this situation requires: (a) better understanding of the situation at all levels; (b) common environmental objectives; (c) a reappraisal of values, both economic and ethical; (d) the availability of cost-effective practical alternatives to current practices; (e) their institutionalization in education, policy and law, (f) effective structures for implementation; and (g) statutory procedures for monitoring compliance, trends and emerging issues. The current project seeks to address each of these requirements in order to control eutrophication in a sustainable manner.

11. Effective reduction of eutrophication in the Black Sea requires the full co-operation between all 17 countries within the Basin. The present proposal builds on the co-operation already established between the ICBS and the ICPDR, extending this further to include the proposed Dnipro Commission. The cooperation builds on a process of joint goal setting based upon the adaptive management approach. It will enable the Basin countries to complete the first iteration in this process and to set new targets for the future, based upon objective technical information and pragmatic economic considerations.

Long-term project objective

12. The long-term and intermediate objectives of the project are those established by the Joint ad-hoc Working Group between the ICBS and the ICPDR (1999), namely:

The long-term objective is for all Black Sea basin countries to take measures to reduce nutrient levels and other hazardous substances to such levels necessary to permit Black Sea ecosystems to recover to similar conditions as those observed in the 1960s.

As an intermediate objective, urgent control measures should be taken by all countries in the Black Sea basin, in order to avoid that discharges of nitrogen and phosphorus to the Black Sea exceed those levels observed in 1997. This will require countries to adopt and declare strategies that permit economic development whilst ensuring appropriate practices and measures to limit nutrient discharge, and to rehabilitate ecosystems which assimilate nitrogen and phosphorus. This target, monitored and reported annually, shall be reviewed in 2007 with a view to considering further measures which may be required for meeting the long-term objective.

This project has been developed and coordinated in parallel with the World Bank/GEF Strategic Partnership for Nutrient Reduction to help stimulate investments towards these goals (see paragraph 57).

III. Rationale for GEF Financing

13. The projected outputs, activities, and relationship of those outputs and activities with those of the countries, regional entities, and other donors are seen as compatible with the three elements of the GEF-funded International Waters activities to meet the incremental costs of:

a) assisting groups of countries better understand the environmental concerns of their international waters and work collaboratively to address them;

b) building capacity of existing institutions, or through new institutional arrangements, to utilize a more comprehensive approach for addressing transboundary water-related environmental concerns; and

c) implementing sustainable measures that address priority transboundary environmental concerns.

The GEF has been involved in the earlier stages of support to the Black Sea and Danube Basin. The project on the ''Control of Eutrophication, Hazardous Substances and Related Measures for Rehabilitating the Black Sea Ecosystem'' represents the second stage of support and is part of an “International Waters Programmatic Approach” (see Annex 11) agreed between the GEF and its implementing agencies. This Approach has been developed to accelerate on the ground implementation of policy, institutional and legal reforms, and facilitate priority investments. Additionally it is intended to simplify implementation, ensure collaboration according to IA comparative advantage and to involve other donor organizations. Based on the decisions reached between the GEF Secretariat and IAs in consultation with the participating countries following the November 2000 Meeting of the GEF Council, where inclusion of the comprehensive 5 years project proposal submitted had to be deferred due to resource constraints, the project was split into two phases. The present proposal constitutes the 1^st phase of the comprehensive project proposal that has been designed with a view to provide the critically needed support to the Black Sea coastal states in addressing the transboundary problems specified above.

IV. PROJECT OUTPUTS/COMPONENTS AND EXPECTED RESULTS

14. This project which constitutes the 1^st phase of the Black Sea regional project is divided into five components encompassing a total of eight specific objectives. They are summarized below and additional information is given in Table 1. This Table also includes a list of relevant activities, responsibility (lead agency and partners) for implementing these activities and indicative costs. Table 1 refers to GEF funded activities only and does not incorporate the additional activities funded by Tacis and other partners. Attention is drawn to the role of the ICBS Activity Centres in the implementation of specific project components. The network of Centres and associated Advisory Groups is one of the strongest elements of previous interventions that will be sustained by governments throughout the implementation of the present project. GEF support will be given to them for specific tasks related to project implementation. On the other hand, an indicative list of objectives, activities, outputs, target dates and resource requirements for the second phase is provided in the Appendix to the project brief.

COMPONENT I. CO-ORDINATION, INSTITUTIONAL CAPACITY BUILDING AND LEGAL REFORM

Objective 1. Support the integration of a sustainable Secretariat for the Bucharest Convention

Rationale:

15. The meeting of the Istanbul Commission held on 25-26 April, 2000 agreed on a mechanism for institutionalising its Secretariat and for co-operating with the GEF Implementing Agencies in order to sustain the work of the Black Sea Environmental Programme. The current Project Implementation Unit will continue to operate within the framework of the Commission as the “body to provide support for specific projects and processes related to the implementation of [the Black Sea] Strategic Action Plan” as defined in the Action Plan itself. For the duration of the current project, administrative arrangements will include the Istanbul Commission with executive functions, a Joint Management Committee to regularly oversee project management, and a Project Implementation Unit for the day-to-day co-ordination of project activities. The PIU will be an integral part of the Secretariat of the Commission (the relationship is described below). Regional Activity Centres will continue to operate in the manner described in the BS-SAP, in most cases supported by a blend of National and collateral donor funding. GEF support will focus on enhancing the work of Commission to address the key issues that are the subject of the present proposal and to help it achieve long-term sustainability.

Outputs

1.1 A management regime capable of coordinating regional actions to overcome the key transboundary issues facing the Black Sea, primarily the control and abatement of eutrophication and hazardous substances but also the improved management of fisheries (see component V).

1.2 A permanent mechanism for co-operation with the ICPDR (Danube) and other emergent river basin commissions in the Black Sea Basin.

1.3 Publicly accessible programme materials in all Black Sea languages

Success criteria

· Programme Implementation Unit (PIU) fully staffed and operational

· Joint Management Committee established and operational

· Advisory Groups and Activity Centres operational and engaged in addressing transboundary issues

· Istanbul Commission able to raise funding for transboundary projects

· Inter-Commission Working Group operating and setting common management objectives

· Information in the public domain throughout the Black Sea coastal region regarding the transboundary problems and solutions offered.

Description of approach (see also paragraph 56 for details of basin-wide co-ordination)

16. Good coordination is a prerequisite for solving transboundary environmental problems. The nascent core Secretariat of the Istanbul Commission will have insufficient capacity to manage a large international project in addition to its legal and administrative responsibilities. For this reason, the ICBS has encouraged the creation of a Project Implementation Unit, working within its structure in a semi-autonomous manner. It will share the facilities of the Secretariat and be linked to the ICBC through the Joint Management Committee (JMC). The JMC will consist of the Black Sea Commissioners (or their designated representatives), representatives of the GEF implementing agencies and other major donors, the Executive Director of the Secretariat and the Project Co-ordinator. Two NGO representatives and a representative of UNOPS (the Executing Agency) will be invited as observers. The JMC will meet twice annually, review progress and set the workplan and timetable for the project. Staff of the PIU and the Secretariat will liaise closely on a day-to-day basis and be mutually supportive but with clearly defined individual responsibilities. The PIU will provide technical support to the Secretariat of the ICBS for establishing basin-wide consultative groups (see table 1, Activity 1.2), National Intersectoral Bodies (Activity 1.3) and for assisting with the administration of the Activity Centres and Advisory Groups (Activity 1.4). The working procedure for this support will be agreed at the JMC.

17. A particularly important facet of the coordinating role of the PIU will be diffusion of project outputs through newsletters, posters, technical reports, public information bulletins and update and maintenance of the existing BSEP web site. The target audience should include the general public and local administrations. Translation of the public information material into local languages is essential. Another key product for diffusion should be one or more TV clips on the issues behind eutrophication, to be made freely available to local TV stations.

Objective 2. Regional actions for improving LBA legislation to control eutrophication and for tackling emergent problems.

Rationale

18. Work conducted during the PDF-B phase of the project by UNEP has shown that there is a significant gap between the existing Protocol for the Control of Land Based Sources of Pollution of the Bucharest Convention and the requirements for (a), meeting the goals of limiting nutrient loads to the Black Sea to their 1997 levels and (b), implementing the Global Programme of Action for Land-Based Activities, embodied in the 1995 Washington Declaration. This objective will assist the Commission and Contracting Parties to close this legislative gap.

19. The need for action concerning emergent problems responds to the prerogative for a more proactive and precautionary approach. Long-term planning strategies for emergent transboundary issues will be identified, modelled and prioritised using the methodology created for the GEF Global International Waters Assessment

Outputs:

2.1 A new and more comprehensive protocol for the control of land-based activities in the Black Sea. This will pay particular attention to the integral control of eutrophication.

2.2 A detailed study of emergent problems in the Black Sea and their social and economic root causes based on application of the GIWA methodology.

Success criteria:

· New LBA Protocol approved and endorsed

· Black Sea Futures report approved by the Istanbul Commission and published.

Description of approach

20. Activities regarding the LBA Protocol (2.1) and the study of emergent transboundary problems (2.2) will be carried out in cooperation with UNEP. The PIU will provide local support to these activities in all instances.

Work on the LBA protocol will consist of technical assistance to the ICBS to help prepare a new draft protocol to the Bucharest Convention in order to make it fully compatible with the GPA and the prerogative for controlling eutrophication. Close co-operation will be maintained with the GPA Secretariat during this work. In the case of the study of emergent transboundary problems, the work will build on the study planned by the Global International Waters Assessment but will enable it to conduct a complete analysis of environmental and socio-economic impacts and their root causes for all relevant GIWA issues.

COMPONENT II. SECTORAL LEGAL AND POLICY REFORMS, MONITORING AND EVALUATION OF NUTRIENT CONTROL MEASURES AND REVIEWING TARGETS FOR ADAPTIVE MANAGEMENT

21. This is one of the core elements of the project. The PDF-B studies have clearly demonstrated that: (a) existing information on the nutrient load to the Black Sea and the response of the system is insufficient to enable more concrete goals to be set, and (b) the countries do not have a mechanism for monitoring and evaluating indicators that will enable the measurement of achievement of eutrophication control targets (including nutrient reduction measures).

Objective 3. Assist countries to improve their knowledge of the process of eutrophication in the Black Sea

Rationale

22. Despite compelling evidence of eutrophication and the degradation of marine habitats and communities, there have been no system-wide studies of this problem in the Black Sea. Evidence has been pieced together from fragmentary studies but there are huge gaps and uncertainties. This makes it difficult to convince non-coastal states of the need for response or to measure future changes. Joint studies at the beginning of the five year period will correct this situation and better define subsequent monitoring needs (Objective 4). Work will focus on the most impacted areas (e.g. the NW Shelf) and will make extensive use of remote sensing.

Outputs:

3.1 State of the Black Sea report (as required by the SAP), focusing on eutrophication and hazardous substances, in May 2003 (to coincide with the tenth anniversary of the signature of the Odesa Declaration). This activity will enable the report to be made despite the absence of a functional monitoring network (see Objective 4).

Success criteria:

· Integration of international study group on Black Sea Eutrophication.

· Peer reviewed study plan.

· Completion of 4 surveys in 2001-2002, and studies of nutrient sources, sinks and fluxes.

· Publication of State of the Black Sea Report, 2003

· Use of the information in setting new adaptive management goals

Description of approach

23. In order to make rational management decisions in the region it is necessary to count on a sound basic knowledge of the current environmental situation in the Black Sea. The ICPDR/ICBS joint ad-hoc Working Group recognised that the existing gaps in knowledge are very large (much larger than any other comparable system in the world) and must be filled in order to make better management decisions. The integrated monitoring system that will be developed within Objective 4, will not produce results early enough in the project to influence the development of the project itself or to guide the investments of the Strategic Partnership. This is why an initial intensive study is proposed.

24. In order to implement this objective, an “International Study Group” will be formed on an ad-hoc basis in order to consolidate the best available expertise. Specialists (maximum 10) will be appointed to the group by the Project Coordinator (in consultation with the Executive Director of the ICBS) on the basis of their scientific merits and institutional capacity (this is not a capacity building exercise) and will be drawn from government institutions, academies of science and overseas institutions with a proven track record of studying the Black Sea. The initial work will consist of consolidating existing information and formulating a one year study plan. This will be peer reviewed and approved by the JMC.

25. The study itself will include four seasonal surveys focussing on the most impacted areas. An example of the need for this work is that there is no information as to whether the massive Zernov red algal field (the “keystone” species in the NW Black Sea benthic system) has shown any recovery as a result of decreasing nutrient loads and accurate information is lacking on the loads themselves. In addition to the surveys, a regional satellite tracking station will be used to download interpret and freely distribute colour scan data regularly over the entire project period. This will enable real-time analysis and decision making regarding seasonality and exceptional algal blooms.

Another large gap in existing knowledge is that regarding airborne nutrient inputs. Existing meteorological observation networks will be capacitated to conduct these studies and an estimate of the total annual load and its distribution will be made.

26. The results of all of these observations will be employed for the preparation of a new State of the Black Sea Report to be completed by May 2003. This will also include information on hazardous substances.

Objective 4. Introduce new sectoral policies and a system of process, stress reduction and environmental status indicators for monitoring the effectiveness of measures to control eutrophication (and hazardous substances where appropriate)

Rationale

27. Currently there are few coordinated sectoral plans for nutrient reduction (see PDF-B report in Annex 7). Effective legal and policy instruments are needed at a sectoral level but the work must extend beyond this to consider the issue of implementation and enforcement. Additionally, there are almost no regularly monitored indicators of success or failure of the measures taken to protect the Black Sea. This is particularly evident for indicators related to eutrophication and hazardous substances. A system of process and stress reduction indicators would help to facilitate intersectoral negotiations, ensure greater transparency and raise the level of priority for nutrient control. Environmental status indicators would enable the achievement of objectives to be properly tracked and eventually replace the need for ad-hoc studies (Objective 3) with a more permanent and sustainable mechanism. Work conducted in the PDF-B phase has led to a detailed proposal for indicators and is the basis of the activities indicated under this objective.

Outputs:

4.1 Sectoral nutrient control master plans and associated indicators (agriculture, industry, municipalities) for each country.

4.2 Amended laws and policies, as appropriate.

4.3 National nutrient reduction strategies.

4.4 An Istanbul Commission information base, initially managed by the PIU.

4.5 A pilot environmental status monitoring programme will be carried out with possible integration of process and stress reduction indicators in the 2^nd phase.

Success criteria:

· Agreement of the agricultural, industrial and municipal sectors in each country to cooperate on specific indicators and to help to develop and implement measures within their area of responsibility.

· Use of the information base by all six countries.

· Indicator data employed for drafting and gradually implementing new policies.

Description of approach

28. This objective is focussed on achieving the participation of all relevant sectors in nutrient reduction. It seeks to bring together managers from the key sectors (agriculture, industry, municipalities), in separate regional workshops in order to stimulate participation. Each sector will then develop national sectoral masterplans of pragmatic priorities. These may involve adjustments to policy and law (e.g. legislation against phosphate detergents). The sectoral masterplans which will have to be reviewed every two years together will form national nutrient reduction strategies. This work will require considerable co-ordination and a full-time specialist will be engaged in the PIU for this purpose. He/she will also work closely with the UNDP-COs.

29. The work envisaged within this objective also requires the development and implementation of an effective M & E programme based upon process, stress reduction and status indicators, its pilot and full scale operation in the 2^nd phase, official status reports and an ICBS nutrient information base. Further details of the approach are as follows:

Point sources

30. Develop a simple cost-efficiency approach (US$/kg of N, P, etc. removed) to compare the costs of tackling different point sources of pollution. Use this approach to prioritise capital and maintenance budgets for pollution control. Review and where appropriate update funding of environmental enforcement bodies to ensure that monies raised from prosecuting polluters are used to fund these agencies. Similarly, review funding of regulatory monitoring of industrial plants/WWTPs. Fines should be set at an appropriate index-linked level to prevent repeated offences. Where possible, move towards a system of increased self-monitoring by dischargers (preferably using composite samples rather than spot samples), with greater regulatory agency involvement in QA/QC. Where possible, discharge consent conditions should be based on chemical loads (not concentration). The revision of consent conditions should involve all interested parties.

A. Municipalities. Review/revise discharge consent conditions and consent compliance data for WWTPs. Improve specifications for the development/construction of future landfill sites. Improve prosecution rates for illegal dumping of waste. Increase the use of sewage sludge as an organic fertiliser, particularly for forestry.

B. Industry. Review/revise conditions for trade waste discharge to sewer and direct discharge to surface waters. For the food processing/chemical industries, discharge consent conditions should include limits on total P, total N and total ammonia. Where appropriate, industrial discharge consents should include heavy metal conditions. For discharges containing high levels of toxic substances, COD consent conditions should be applied in addition to/instead of BOD conditions.

Diffuse sources

C. Agriculture. Develop guidance and educate farmers on cost-effective fertiliser application levels for different crops. This guidance should be for total (organic and inorganic) nutrient application rates, so should include advice on estimating the nutrient content of livestock manure. The guidance will promote the use of organic fertiliser and the development of mixed livestock/arable farms. Where possible, develop maximum livestock densities for farms, dependent on waste handling/disposal strategies. Provide advice/education to farmers on good agricultural practice to minimise land erosion.

D. Forestry. Develop and implement a strategy for sustainable development of forestry.

Indicators

32. Use currently available information to develop indicators of process and stress for nutrient use/export from the agricultural, industrial and municipal sectors. Design and implement an environmental monitoring programme, using the results to develop environmental stress indicators. Develop indicator targets and assess compliance with these targets in the status reports. Use target compliance to monitor the success of the Regional Action Plan and, if necessary, review/revise the plan on both a national and sectoral basis.

Objective 5. Support the Commissions in their periodic review of Adaptive Management objectives.

Rationale

33. By the end of the two phases, the 1997 nutrient ‘cap’ should be replaced by goals based on results of the present project and its Danube counterpart. During the 1^st phase environmental status indicators will be developed and implemented while information from the two Black Sea system response studies and the Danube and Black Sea M & E indicators will provide the basis for discussions on setting new adaptive management targets in the 2^nd phase. The initial forum for these discussions will be the ICBS and ICPDR Joint Working Group (JWG) set up on the basis of the MOU of 2000. This may be extended to incorporate emergent Commissions for the Dnipro, Dniester and other major tributary basins (see Obj. 1). The present objective is to support the necessary technical discussions. Obj. 6 will help assess the most cost-effective ways of implementing the new targets.

Outputs:

5.1 A benefit/cost study of the application of the recommendations (to be conducted jointly with the ICPDR)

Success criteria:

· Publication and positive reception of the Benefit-cost study

Description of the approach

34. This activity will be managed by UNDP in close co-operation with the ICPDR, World Bank, UNEP and the CEC and builds on the results of objectives 3, 4, 7 and the WB/GEF strategic partnership. It will provide the ICBS and ICPDR with basic information to set new targets for nutrient control. The activities will include a benefit/cost analysis of the actions proposed in the sectoral master plans and National Strategies and the preparation of technical documents to the Commissions for recommending new targets.

COMPONENT III. SUPPORTING PUBLIC INVOLVEMENT IN NUTRIENT CONTROL.

Objective 6. Assist the public in implementing activities to reduce eutrophication through a programme of grants for small projects and support to regional NGOs.

Rationale

36. Environmental protection of the Black Sea depends not only on international agreements, but also on the daily actions of the coastal population. The PDF-B provided support to develop a portfolio of small public initiatives contributing to nutrient reduction in the Black Sea. These were submitted, evaluated and prioritised through a competitive process including peer review. Selected NGO proposals are directed at minimising eutrophication in the Black Sea through: (1) restoration of wetlands (Ukraine, Russia, Moldova), (2) promotion of cost-effective water treatment facilities (Ukraine), (3) constructed wetlands (Bulgaria), (4) development of organic farming (Georgia, Bulgaria), (5) production of educational materials for schools and general public (Bulgaria, Romania, Russia, Turkey, Ukraine), (6) public awareness and involvement campaigns (Turkey, Romania). Based on the outcome of these initiatives, a second tranche of small projects is proposed after a two-year period. Project implementation will be monitored from the PIU. Additionally activities to strengthen the regional network of NGOs are included. The strengthening of WWF’s role in wetland management in the region is also foreseen.

Outputs:

6.1 Reports describing 29 completed actions in the first tranche (e.g. wetlands restored, videos produced, farms converted to organic production, etc.)

6.2 Proposals for the second tranche.

6.3 Regional NGO newsletter ‘Black Sea Shared’ produced and distributed quarterly (mainly electronically)

6.4 Regional report on wetland protection and restoration and recommendation for local actions (WWF)

Success criteria:

· Full implementation of first tranche of 29 projects (independent review).

· Successful second call for proposals.

· Effective contribution of NGO evinced by the establishment of a regional NGO WG on nutrient reduction, media reports and presence at significant regional open meetings.

· Increased number of wetlands protected and/or restored (WWF)

Description of approach

37. The PDF-B process has already resulted in a portfolio of peer reviewed projects that will enable this activity to get underway immediately after project approval. A public participation specialist from the region will be appointed to coordinate this initiative and ensure reporting and evaluation. She/he will also develop a regionally based evaluation mechanism for a second tranche of proposals, to be submitted early in 2003. The specialist will also ensure that the entire GEF project respects the provisions of the Aarhus Convention (Convention on Access to Information, Public Participation in Decision-Making and Access to justice in Environmental Matters).

In addition to the small projects initiative, some support will be given to the Black Sea NGO network for a region-wide project and for publication of their newsletter. Training of the general public and target groups will be facilitated through close collaboration with the Black Sea component of the GEF Train-Sea-Coast Programme as well as the recently initiated Black Sea Environmental Education Project, mostly funded by independent donors and by Tacis. In order to extend to the Black Sea the excellent work of WWF in the Danube and in other European Seas, funds will be made available to this organisation for work on wetland restoration and on fisheries conservation and policy. This will enable the participation of Black Sea countries in these important Europe-wide initiatives.

COMPONENT IV. INNOVATIVE ECONOMIC INSTRUMENTS FOR THE CONTROL OF EUTROPHICATION

Objective 7. Formulate proposals for market-based or alternative economic instruments for limiting nutrient emissions and establish private-public sector partnerships for environmental protection in the Black Sea.

Rationale

38. For the current project to be successful, it must assist the ICBS to take measures that are financially sustainable. The lack of funding for environmental protection has been a perennial problem in the Black Sea region. Innovative approaches cannot simply be imported from the West as the circumstances of countries in transition are unique and complex; they must be created with full understanding of the priorities and economic realities of the region. Currently, environmental protection is not high on the political agenda though it is becoming increasingly important for the three countries seeking accession to the EU (Bulgaria, Romania, Turkey). It is important to have closer dialogue with the economy sector (treasuries, ministries of finance and economy), the private sector and with the national and regional financial institutions such as the Black Sea Regional Development Bank. The following outputs will enable the ICBS to examine pragmatic options for improving financing, especially in the period following the implementation of the Strategic Partnership (i.e. after GEF funding has expired):

Outputs:

7.1. ‘Gap analysis’ published, showing difference between the current use of economic instruments and those that would be required for the effective implementation of national nutrient reduction strategies.

7.2. Letters of agreement and other practical arrangements with regional/national funding institutions.

Success criteria:

· Actions taken within countries to correct identified gaps in the application of instruments.

· Loans for nutrient-related investments channeled through regional or national development banks.

Description of approach

39. As part of its sectoral analysis of measures to reduce nutrient discharges, special attention will be required to economic instruments, national and regional. This component will be managed by UNDP in close cooperation with the World Bank. During a three year period, a full time economist will be engaged to help the PIU to liaise with sectors within countries (including the finance sector) to explore how economic instruments can be devised and better integrated into national strategies for nutrient reduction.

Work within this objective will also focus on widening the basis of financial support through private-public sector partnerships and the use of national or regional development banks to manage funding for small/medium sized investment projects (such as small municipal WWTPs).

COMPONENT V. SUSTAINABLE EXPOITATION OF FISH STOCKS AS PART OF AN ECOSYSTEM APPROACH

Objective 8. A fisheries exploited within its maximum sustainable yield and incorporating measures to protect ecologically sensitive areas.

Rationale

40. There is evidence to indicate that the fish stocks and fisheries in the Black Sea has been heavily impacted by the loss of habitat caused by eutrophication and overexploitation. Articles 58 and 59 of the Black Sea Strategic Action Plan call for specific measures:

(58) In order to rehabilitate ecosystems, which are of particular importance to Black Sea fisheries as a whole, Phyllophora fields and other critical nursery areas will receive special protection, spawning areas of anadromous species will be restored, and coastal lagoons will be rehabilitated. By 2000, each Black Sea State will develop at least one pilot project which will contribute to the restoration of areas vital to the recovery of Black Sea fish stocks.

(59) In order to rehabilitate the Black Sea ecosystem and achieve sustainable fisheries in the Black Sea, fisheries management policies need to be enhanced and fishing effort needs to be adjusted to the status of the stocks. In this regard, the Black Sea coastal states are expected to expedite the adoption of the Fisheries Convention as soon as possible so as to develop a fisheries management system which consists of the following components: regular regionally coordinated stock assessments; national fishing authorisations for all Black Sea fishing vessels; a regional licensing system; and a quota system. In addition, enforcement of fisheries regulations urgently needs to be improved. These measures and others, which are required to attain more sustainable fisheries in the Black Sea, should be taken in close cooperation with the fishing sector.

Article 58 has particular synergy with the measures proposed to enhance the service function of coastal and wetland systems for nutrient removal. Neither of these articles has been implemented as yet and serious conflicts have recently emerged between coastal countries over illegal fishing for much diminished stocks. The present projects seeks to implement (58) and catalyse (59)

Outputs:

8.1. Identification of the zones where fisheries would need to be regulated /banned to allow for restoration of macrophyte habitats and recovery of nursery grounds.

8.2. Design of measures for enforcement.

8.3. Progress in/ conclusion of the fisheries convention with measures to limit fishing effort and provisions for enforcement.

Success criteria:

· Gradual introduction of sensitive habitats as fisheries free zones which ultimately will help in the recovery of macrophyte beds (including those damaged by trawling gear).

· Possible signing of the Fisheries Convention

· Signature, ratification and implementation of the new Biodiversity Protocol to the Bucharest Convention (prepared with BSEP (GEF and Tacis) funding.

Description of approach

41. Negotiations on a new fisheries convention for the Black Sea are currently stalled but countries have expressed their willingness to resume and complete the process. The Black Sea Economic Cooperation is also attempting to facilitate the discussions. It is proposed that the ICBS should join them in this work in conformity with their agreed responsibility as stated in the BS-SAP.

42. For new fisheries regulations to be effective in restoring stocks there should be measures in place to protect key relevant underwater habitats that are expected to recover as nutrient loads to the Black Sea are reduced. This implies a policy of restricted or fisheries-free zones, an effective procedure that is not part of the draft Convention. An intensive effort will be required if this application of the LME rationale is to be accepted. The best mechanism for achieving this goal is to complete and ratify the Landscape and Biological Diversity Protocol to the Bucharest Convention in parallel to the negotiations on the Fisheries Convention itself. Activity 8.2 provides the basis for completing this work. Fisheries-free zones (usually a temporary measure) and Marine Protected Areas (a more permanent measure) are useful tools to ensure better habitat conservation. Finally, the other imperative for rational fisheries management is to improve knowledge of the transboundary populations of fish species and to enhance the understanding of the impact of particular fishing practices on the sustainability of populations. Surprisingly, this has never been realized in the Black Sea though detailed plans for a multi-country assessment were prepared as part of the GEF Pilot Phase intervention and available at the PIU.

Activities

Lead Agencies

National counterparts (Black Sea countries)

Target date for completion

Associated Int. Partners

Indicative GEF fund allocation

Activity 1.1a Establish and operate the Joint Management Committee.

Activity 1.1b Two year operation of the Black Sea Project Implementation Unit of the Istanbul Commission (BS-PIU) to facilitate, co-ordinate, and communicate on the implementation of priority activities identified in this document.

ICBS/PIU

*UNDP-GEF

CBCs/DRs (MoE)

All bodies established by September 2001

UNEP

World Bank

CEC

$580,000**

Activity 1.2a. Establish joint mechanisms between the Istanbul Commission and the ICPDR for implementing and strengthening the MOU agreed at their spring 2000 meetings.

Activity 1.2b. To extend this process to cover formal river basin commissions in other areas of the Black Sea Basin. A Black Sea Basin Inter-Commission Consultative Group should be established by 2002 and should meet on an annual basis to discuss issues of common concern.

ICBS

PIU

ICPDR

CBCs

Annual meetings from 2001 - 2003

UNDP

UNEP

CEC

$40,000

Activity 1.3. Assist with the establishment or strengthening of National intersectoral bodies and with providing them with technical information on the transboundary issues included in this project.

UNDP

ICBS/PIU

CBCs/DRs (MoE)

Sectoral focal points

All bodies to be operating by Jan. 2002

WB, UNEP,

CEC

$48,000

Activity 1.4 Provide administrative support to Commission’s Advisory Groups (co-ordinated by Regional Activity Centres) to conduct specific projects related to the priorities defined in this document (see later sections).

UNDP

ICBS/PIU

CBCs/DRs (MoE)

ACs

Technical Focal Points

UNDP COs

Workplan for ACs by

July 2001

UNEP, WB

CEC

$140,000

Activity 1.5. Diffusion of information .through the following:

a. publication of at least one newsletter and one poster annually,

b. production of short information clips for coastal TV stations

c. production of non-technical leaflets about the project

d. production of technical reports

e. update and maintenance of the BSEP web site

ICBS/PIU

UNDP

CBCs/DPs

ACs

All Focal Points

NGOs

UNDP-COs

First materials by

July 2001

BSNN

Tacis

$128,700

*operational responsibilities for UNDP-GEF will be managed by UNOPS

**budget covers project co-ordinator, local staff, travel, O &M, JMC costs, capital equipment

TOTAL

$936,700

Table 1. Activities, lead agencies and associate partners, counterparts, completion dates and funding.

COMPONENT I. CO-ORDINATION, INSTITUTIONAL CAPACITY BUILDING AND LEGAL REFORM

Objective 1. Support the integration of a sustainable Secretariat for the Bucharest Convention

Objective 2. Regional actions for improving LBA legislation to control eutrophication and for tackling emergent problems.

Activities	Lead Agencies	National counterparts (Black Sea countries)	Target date for completion
	Associated Int. Partners		Indicative GEF fund allocation
Activity 2.1a Preparation of recommendations for the draft LBA Protocol and joint facilitation (with the ICBS) of negotiations on the new Protocol. This work is a continuation of the PDF-B study. Activity 2.1b Joint study (GPA Secretariat/ Istanbul Commission) of improving the implementation of the GPA in the Black Sea.	UNEP ICBS/PIU	.CBCs/DRs (MoE) Technical Focal Points ACs	1a May 2002 1b October 2001
	UNDP ACs ICPDR		$90,000 (meeting costs included in Objective 1.)
Activity 2.2. Evaluation of future threats to the Black Sea, the social and economic root causes of environmental degradation and the cost effectiveness of interventions to correct current and emergent transboundary problems (using the GIWA methodology, including full impact assessment)	UNEP ICBS/PIU	CBCs/DPs Technical Focal Points ACs	Oct. 2002
			Total $70,000
			TOTAL $160,000

COMPONENT II. SECTORAL LEGAL AND POLICY REFORMS, MONITORING AND EVALUATION OF NUTRIENT CONTROL MEASURES AND REVIEWING TARGETS FOR ADAPTIVE MANAGEMENT

Objective 3. Assist countries to improve their knowledge of the process of eutrophication in the Black Sea

Activities	Lead Agencies	National counterparts (Black Sea countries)	Target date for completion
	Associated Int. Partners		Indicative GEF fund allocation
Activity 3.1. Integration of an international study group (ISG) to plan and conduct the practical studies. Formulation of the detailed study plan (eutrophication and hazardous substances) and its submission to peer review. Appointment of (existing) remote sensing centre.	UNDP ICBS-PIU	DRs, ACs and Technical Focal Points, Specialists from Academies of Science selected on scientific merits and experience.	October 2001
	2-3 specialist institutions experienced in other impacted areas		$20,000
Activity 3.2. Two survey cruises in the entire Black Sea but with special emphasis on the impacted NW Shelf (and possibly Sea of Azov) covering period January – December 2002.	UNDP	Institutions identified by ISG	December 2002
	ISG		$510,000
Activity 3.3. Download, interpretation and distribution of weekly SeaWifs colour scan satellite data, July 2001- May 2003	UNDP	Institution identified by ISG	May 2003
	ISG		$90,000
Activity 3.4. Interpretation of results, drafting of new State of the Black Sea Environment Report (to be known as the Odessa Declaration + 10 Report), formulation of recommendations.	UNDP	All institutions engaged in the study + CBCs/DRs for review	May 2003
	ISG		$40,000
			TOTAL $660,000

Activities

Lead Agencies

National counterparts (Black Sea countries)

Target date for completion

Associated Int. Partners

Indicative GEF fund allocation

Activity 4.1a Thee regional workshops, each for representatives of one of the three key sectors (agriculture, industry, municipalities), together with ICBS officials, experts, etc., to explore actions to reduce nutrient emissions.

Activity 4.1b Sectoral master plans to be developed for nutrient control in each coastal country. These will incorporate revisions and amendments in laws and policies and common indicators of process and stress reduction , and will be reviewed every 2 years.

Activity 4.1c Development and govt. approval of national nutrient reduction strategies and presentation to the ICBS , and will be reviewed every 2 years.

UNDP-CO

ICBS/PIU

CBCs/DRs (MoE)

Sectors

1a. Sept. 2002

1b. Feb. 2003

1c. May 2003

CEC, WB

AC for ICZM (Krasnodar) for municipal sector.

AC for Pollution Control (Istanbul) for Ind. Sector.

ICPDR (liaison)

$410,000***

Activity 4.2a. Designation of monitoring institutions, provision of basic equipment and training in the new scheme (2x2 week practical courses/ country)

Activity 4.2b. Design of new monitoring programme incorporating environmental status indicators and its approval by the ICBS

Activity 4.2c Establishment of QA/QC procedures including intercomparison exercises.

UNDP

ICBS/PIU

CBCs (to designate monitoring institutions)

Technical focal points

2a. Sept. 2001

2b. May. 2002

2c. May 2002

AC for Pollution Assessment (Odesa)

CEC, ICPDR (liaison)

$275,000

Additional activities may be co-funded by CEC

Activity 4.3 Pilot implementation of new environmental status programme.

UNDP

ICBS/PIU

Monitoring institutions

CBCs/DRs (MoE)

May 2003

AC for Pollution Assessment (Odesa)

CEC

$120,000 (pilot phase only. Operation of the full-scale programme govt. responsibility).

Activity 4.4 Develop and implement ICBS information base. Operation at the PIU.

UNDP

ICBS/PIU

CBCs/DRs (MoE)

All technical focal points

from January 2002-May 2003

UNEP-GRID, ICPDR

$100,000****

***Includes senior F/T staff member

****Includes F/T information officer

TOTAL

$905,000

Objective 5. Support the Commissions in their periodic review of Adaptive Management objectives.

Activities	Lead Agencies	National counterparts (Black Sea countries)	Target date for completion
	Associated Int. Partners		Indicative GEF fund allocation
Activity 5 Economic benefit/cost studies of the actions proposed in the Sectoral Master Plans and the National strategies (Obj. 4, Activity 1). The recent study of the economics of nutrient control in the Baltic (Gren, Turner, et al. 2000) will serve as a working model. A specialist team will be appointed for this work by the JWG. They will also pay attention to wetland restoration economics.	UNDP ICBS/PIU ICPDR Dnipro Comm.	DRs (MoE) Technical focal points	May 2003 (completion)
	WB, UNEP CEC		$120,000 (BS component)
			TOTAL $120,000

COMPONENT III. SUPPORTING PUBLIC INVOLVEMENT IN NUTRIENT CONTROL.

Objective 6. Assist the public in implementing activities to reduce eutrophication through a programme of grants for small projects and support to regional NGOs.

Activities	Lead Agencies	National counterparts (Black Sea countries)	Target date for completion
	Associated Int. Partners		Indicative GEF fund allocation
Activity 6.1a. Appointment of regional public participation specialist at the PIU, inter-alia to coordinate the small projects initiative. Activity 6.1b. Implementation and evaluation of the first tranche of small projects identified and reviewed through the PDF-B process..	UNDP, ICBS/PIU	NGOs, Local governments Private sector	1a. June 2001- May 2003 1b. January 2003
	CEC		1a. $60,000 1b. $320,000
Activity 6.2 Second call for proposals and design of a fully transparent project appraisal mechanism.	UNDP, ICBS/PIU	NGOs, Local governments Private sector	February 2003
	CEC		(salary inc. in 6.1)
Activity 6.3. Support to the BSNN and BSEEP for increased involvement in regional aspects of reduction of eutrophication and for work on environmental education in schools.	UNDP, ICBS/PIU	NGOs	Review by March 2003
	CEC		$50,000
Activity 6.4. Independent report on wetland conservation and restoration in the Black Sea region	WWF ICBS/PIU	NGOs Technical and scientific institutes Governments	December 2001
	WB		$40,000
			TOTAL $470,000

COMPONENT IV. INNOVATIVE ECONOMIC INSTRUMENTS FOR THE CONTROL OF EUTROPHICATION

Objective 7. Formulate proposals for market-based or alternative economic instruments for limiting nutrient emissions to the Black Sea and establish private-public sector partnerships for environmental protection.

Activities	Lead Agencies	National counterparts (Black Sea countries)	Target date for completion
	Associated Int. Partners		Indicative GEF fund allocation
Activity 7.1. Review the implementation of economic instruments for protecting the Black Sea from pollution (including nutrients) on a country-by country basis and suggest improvements where relevant. F/T economist to be appointed (3 year appointment) at the PIU, inter alia to conduct and co-ordinate this work.	UNDP, ICBS/PIU	CBCs/DRs (MoE) Finance sector Intersectoral committee	December 2002
	WB, ICPDR, CEC		$250,000
Activity 7.2. Examine opportunities for public-private sector partnership in measures to limit nutrients (e.g. introduction of phosphate-free detergents, new technology, organic farming, etc.). To be co-ordinated by the PIU economist.	UNDP ICBS/PIU	CBCs, DRs (MoE) Private sector organisations (Chambers of Commerce, etc.) UNDP-COs	March 2002
	WB, EBRD BSEC Business Forum		$28,000 (salary in Act. 1)
Activity 7.3 Evaluate the potential of the local and/or regional financial intermediaries (eg.Black Sea Regional Development Bank) as a means of channelling funding to small/medium sized bankable projects related to nutrient limitation and habitat restoration.	UNDP ICBS/PIU	Finance sector CBCs/DRs (MoE)	March 2002
	WB, BSRDB EBRD		$14,000 (salary in Act. 1)
			TOTAL $292,000

COMPONENT V. SUSTAINABLE EXPOITATION OF FISH STOCKS AS PART OF AN ECOSYSTEM APPROACH

Objective 8. A fisheries exploited within its maximum sustainable yield and incorporating measures to protect ecologically sensitive areas.

Activities	Lead Agencies	National counterparts (Black Sea countries)	Target date for completion
	Associated Int. Partners		Indicative GEF fund allocation
Activity 8.1 Support to the process of concluding the regional Fisheries Convention negotiations, particularly in relationship with the need to protect key habitats.	UNDP ICBS/PIU	Fisheries Committees/Ministries CBCs	March 2002
	BSEC		$60,000
Activity 8.2. Preliminary study on the evaluation of potential fisheries-free zones and Marine Protected Areas, their promotion with Black Sea governments and stakeholders; their incorporation into the Landscape and Biological Diversity Protocol to the Bucharest Convention and training of coastguards etc. for their enforcement.	UNDP	CBCs/DRs (MoE) Intersectoral Committees Technical focal points	May 2003
	UNEP, WWF, Fisheries Convention Sec. Fisheries Activity Centre (Constanta), Biodiversity AC (Batumi)		$50,000
Activity 8.3 Assessment of transboundary populations of fish species and their relationship with current fishing practices.	UNDP ICBS/PIU	Fisheries Committees/Ministries CBCs	July 2002
	Fisheries and Biodi. ACs., FAO, CEC		$50,000
			TOTAL 160,000

GRAND TOTAL FOR PROJECT	Net of support costs	$3,703,700
GRAND TOTAL FOR PROJECT	Gross, including support costs at 8% (UNOPS)	$4,000,000

V. Risks and Sustainability

Issues/Actions and Risks/Country Commitment

43. The long term success of regional scale environmental management programs, such as the one proposed here depend, inter alia, on the political willingness of the participating countries to cooperate, their willingness to continue project programs and approaches after the life of the GEF intervention, and the extent to which activities successfully engage system users of the resources that are the subject of intervention.

44. In relation to political willingness, the countries have demonstrated their interest and ability to cooperate in a consistent manner since the signature of the Odessa Declaration in April 1993. The Pilot Phase GEF intervention was one of the few IW projects completed exactly according to schedule and with all of the anticipated outputs. This should not however be interpreted to imply that all obstacles have been overcome and that risks are negligible. Negotiations on the establishment of a Secretariat for the Bucharest Convention took eight years to complete, partly because of the changing political and financial circumstances of the Contracting Parties. There are also frequent changes in the political and institutional structures in some of the coastal countries and the profile of environmental protection may vary from time to time according to the importance attributed to environment by central governments. In the case of the three countries in the process of accession to the European Union (Bulgaria, Romania, Turkey) there is the additional prerogative to approximation of their laws and policies to the EU Directives. This in itself carries the risk that there will be a widening gap between the policies and laws in the accession and non-accession countries to the detriment of the Black Sea. The support of the EU Tacis programme and the continued cooperation of the CIS Black Sea countries should help to avoid this gap becoming a reason for poor protection of the Black Sea.

Sustainability

45. The risk of this GEF-initiated programme and activities related to it, ending after the life of the project are also seen as low. The project is designed to support agreements that are already in place and have been incorporated in national laws and policies. The IAs have been cautious to delay submission of the project until there is a demonstrated commitment of the coastal countries to the full institutionalization of the Bucharest Convention Secretariat. The project itself is designed to anchor each achievement in legal and policy agreements that help to increase its sustainability. In addition, the strong public awareness/participation component will raise public expectations and, together with the provisions of the Aarhus Convention, ensure accountability.

46. Project management will be firmly rooted within the ICBS Secretariat and it is anticipated that the PIU staff (including its coordinator) will include a high proportion of nationals of the Black Sea countries. By maintaining the PIU as a semi-autonomous unit, the statutory functions of the ICBS will not be confused with the technical tasks of the PIU. This will be important for sustainability, as any tendency to over-rely on the presence of project staff for completing the work of the Commission should be avoided. The network of BSEP Activity Centres will be part of the structure of the Commission and should ensure a process of continued decentralization of responsibilities that also promotes sustainability.

47. Ultimately sustainability will depend upon the perception of local people around the shores of the Black Sea that this work is important for their daily lives and for future generations. If the project abstracts itself from the public, this basic requirement will not be met and will inevitably fail. Authoritarian impositions and institutionalized secrecy are a guarantee of long term unsustainability. Elements of the project to promote public information are one of the best tools for longer-term success.

Financial Sustainability

48. Financial sustainability is somewhat enhanced by the country commitment to sustain the Secretariat of the Bucharest Convention. Care has been taken to place emphasis on economic instruments as an essential tool for future nutrient control strategies. This by itself however, is insufficient. There needs to be a clear understanding that the long-term benefits outweigh the immediate costs of environmental protection. This is the main reason for incorporating a benefit/cost study into the project strategy. There also has to be an understanding that many of the short-term measures also generate short-term domestic benefits. The equivocal message that eutrophication control is a purely remote and long-term matter should be avoided. The recent rapid response of the system to lowered nutrient loads offers the perspective of more transparent and attractive waters for coastal tourism, even in the short term. This message should not be lost against the background of the lengthy process of full ecosystem recovery.

VI. Stakeholder Participation

49. The design of the current project incorporated a wide range of stakeholders. Consultations on regional priorities began with the broad consensus achieved during negotiations on the BS-SAP. It was estimated that over one thousand specialists, officials and NGO members were incorporated into this process. The consultations continued through (1) the development of the National Black Sea Strategic Action Plans, (2) consultations by the Activity Centres; (3) a symposium of religious leaders, scientists and public officials (summer 1997); (4) annual celebrations of Black Sea Day[2] in coastal towns throughout the region; (5) during the 17 country July 2000 Black Sea Basin stocktaking meeting; and (6) during the preparation of the current proposal. A good example of active stakeholder involvement was the preparation of the small projects initiative where a call for proposals was widely announced in all six countries and attracted considerable attention. It resulted in strong proposals, all of which included counterpart funding from the beneficiary organizations.

50. It is clear that successful project implementation will require that the stakeholder participation is broadened further in order to include representatives of a wider spectrum of sectors. In the case of domestic sources of nutrients there needs to be a greater involvement of municipalities. The earlier GEF interventions focussed on central governments, particularly Ministries of Environment. Though these remain the principal national counterparts, direct contacts must be established with other sectors including ministries or departments of agriculture, fisheries, industry, finance and municipal authorities. Contacts will be established with civil society organizations including business associations, private banks, NGOs (via the Black Sea NGO Network) and teachers (through the newly established Black Sea Environmental Education Project).

51. Various mechanisms exist for promoting increased stakeholder involvement. Greater sectoral involvement is incorporated in Objective 4 (sector consultations) and by supporting the continued development of National Intersectoral Committees (Objective 1). In addition where appropriate, UNDP will organize country dialogues to provide additional impetus to this process.

52. In conformity with the recommendations of the BS-SAP and the Aarhus Convention, provisions will be made to enhance public participation in the project decision making process. In the first instance, this will be ensured by inviting two NGO representatives to attend meetings of the JMG. The small projects initiative is designed specifically to encourage active public participation in project implementation. There are also provisions in the budget for diffusion of information to the general public and for the production of at least one film clip.

VII. Project Implementation, Institutional Framework and National and Regional Institutions

Project Implementation

53. The United Nations Office of Program Services (UNOPS) will be the Executing Agency for the project and on behalf of the six participating countries. It will establish inter-agency agreements with UNEP for activities in which it acts as lead agency. The UNDP Resident Representative in Turkey will act as Principal Project Resident Representative.

54. The Project will have a very simple management structure (see description in paragraph 16) linking it to the organic structure of the ICBS and to the major donors and IAs. The Project Chief Technical Advisor (Black Sea Project Co-ordinator) will serve for renewable terms of two years, and will be appointed consistent with standard UNDP procedures in consultation with the participating countries. The UNDP Project Document governing implementation of the project will include full terms of reference of all project staff. It is envisaged that the following staff will be appointed as specified in Table 1 (source of funding in parenthesis):

· Project Co-ordinator (CTA, Objective 1)

· Sectoral reform and M & E specialist (Objective 4)

· Data base and information manager (Activities in objectives 1,3 and 4)

· Economist (Objective 5 and 7)

· Public participation specialist (Objective 6)

Management responsibilities will be distributed amongst these specialists by the CTA. It is hoped that additional staff may be provided by secondments from governments or other donors. Consultants will be retained as necessary and priority will be given to the recruitment of national consultants as available. In addition, the CTA will appoint the support staff specified in Table 1, Objective 1.

55. The lead Implementing Agency (UNDP) will establish memoranda of understanding with other major donors regarding task sharing within the PIU for managing project implementation. A very good working relationship was established with DG Environment and Tacis in the previous GEF project and it is proposed to build upon this example in the future. UNDP will also support the project through its Country Offices where possible. UNOPS will provide administrative support and will be responsible for commitments such as major contracting and overall financial management and reporting.

Programmatic Linkages to Other Agency Programs

56. The proposed project is an integral part of the GEF Danube/Black Sea Basin Programmatic Approach. Co-ordination is the essence of this approach and close co-operation will be maintained with other international projects in the region throughout project implementation. In particular, this project has been specifically designed to complement a proposed GEF project in support of the ICPDR; a proposed GEF/World Bank Strategic Partnership for Nutrient Reduction in the Black Sea and Danube Basin; and to harmonize with the EU Nutrient Reduction Directives.

ICPDR

57. Many of the activities listed in Table 1 specify the ICPDR as a partner organization and it would be difficult to implement them without a working relationship and full and regular consultations. For this purpose, special provisions have been included for two bodies that should meet on an annual basis to discuss issues of common concern:

A. Joint Working Group (JWG) between the Istanbul Commission and the ICPDR, established through an inter-commission MOU agreed at their spring/summer 2000 meetings.

B. Black Sea Basin Inter-Commission Consultative Group to extend this process to cover all formal river basin commissions in the Black Sea Basin.

It is assumed that the Inter-Commission Consultative Group would eventually replace the JWG and would include the Dnipro and eventually the Dniester Commissions. In addition, the JWG or its successor may wish to establish joint ad-hoc working groups to which they would assign specific functions. Since the JWG will be an inter-commission group, it will work under the authority of the Directors of the ICPDR and ICBS who will be responsible for convening the meetings and establishing working procedures. This would not preclude the possibility of additional informal contacts between the various GEF projects working in the region.

World Bank/GEF Strategic Partnership for Nutrient Reduction

58. The World Bank/GEF Strategic Partnership is proposed as a mechanism to streamline the processing of GEF funds toward nutrient reduction investments in the Black Sea and Danube River countries. In addition to the World Bank’s role as a GEF implementing agency for Partnership funds, it has agreed to promote nutrient reduction policies and Danube/Black Sea restoration objectives in its ongoing policy dialogue with the 15 GEF-recipient countries of these Basins. The World Bank’s role in the Partnership requires close involvement with the Black Sea Commission activities and this project since knowledge of and input toward ongoing activities is essential to carrying out it’s country dialogue and investment promotion commitments. Outputs of this project such as development of a regional monitoring and evaluation program; sectoral masterplans for nutrient reduction; benefit cost analysis studies; and nutrient reduction policy assessments will help recipient countries develop (and the Bank to appraise) more comprehensive investment proposals for the Partnership. Similarly, the proposed Partnership provides a mechanism for convening partners toward follow-up and implementation of key policy and investment recommendations of this project.

European Union

59. Three of the countries in the region are at various stages in the process of accession to the European Union. Two of these (Bulgaria and Romania) are beneficiaries of the EU’s Accession programme and support for the third (Turkey) is currently being negotiated. The process of accession has considerable bearing on the development of the project objectives and outputs and great care has been taken to avoid actions that will be in conflict with EU policy. This is defined through the Directives of the European Commission, those related to the control of phosphorus and nitrogen compounds (the Phosphate and Nitrate Directives) and the recent Water Framework Directive. Close coordination will be maintained with DG-Environment throughout project execution. In the case of the non-accession countries (Georgia, Russia and Ukraine), these are beneficiaries of the Tacis programme and have already received over 10 million Euros of Tacis support as part of the previous and on-going Tacis Black Sea Programme, an integral part of the BSEP. Tacis is currently formulating a new project for continuing its support to the Black Sea region and this is expected to include a regional element as a collateral project to the GEF intervention and a country-specific investment element that will work in close parallel to the Strategic Partnership. The European Commission (through DG-Environment and Tacis) will be part of the JMG in order to achieve the highest level of co-ordination and it is hoped that Tacis will continue to provide staff support to the PIU.

Other donors and agencies

60. Close co-ordination will also be maintained with other international agencies, many of whom have projects directly or indirectly related to the Black Sea. These include FAO, IOC (of Unesco), IMO, WHO, WMO, EBRD. A special relationship will be developed with the Black Sea Economic Cooperation, which works closely with foreign ministries in all Black Sea countries and beyond and has its own environmental committee. Closer relationships will also be developed where relevant with the BSEC Business Council and the Black Sea Trade and Development Bank. There are also a number of bilateral donors that support Black Sea region-wide programmes. Examples include USAID’s assistance on oil spill response, Dutch support to the Association of Black Sea Harbourmasters or the recent assistance from the British Council for bringing together young people around the theme of Black Sea Protection.

Country-specific projects

61. Much of the current support to collateral activities is in the form of country-specific projects and where possible, these programmes will be invited to collaborate with the Black Sea Basin Programmatic Approach. The largest single donor is without doubt the European Union particularly through its Accession Programme (formerly Phare) in Romania and Bulgaria but also through a large number of smaller Tacis projects/Tacis Interstate Programme. UNDP has been mainstreaming environment into its technical assistance and many of its national projects include work on relevant environmental issues. There are also a very large number of smaller bilateral projects in the region and the PIU will integrate an information base of these initiatives in co-operation with the UNDP-COs. Examples include the Danish Technical Assistance Programme support to Romania for upgrading coastal WWTPs or Japan’s assistance to fisheries management in Turkey.

VIII. Incremental Costs and Project Financing

62. The overall cost of the project is US$ 8,294,920. GEF financing (net of support costs and the pdf-b) is in the amount US$ 3,703,700. Co-finance from National Governments (independently or via the ICBS), Tacis, UNDP, UNEP, other UN Agencies, independent donors, etc. amount to US$ 3,945,000. Approximately 85% of the GEF contribution will be disbursed within the region. Project costs, the full details of which including information related to the baseline are to be found in Annex 1B are summarised in Table 2. Please note that baseline costs have been restricted to quantifiable activities of direct relevance to the aims and objectives of the project. It probably considerably underestimates real costs but reflects the current lack of information on small initiatives described in paragraph 58. Following is a tabular summary of the GEF contribution by Output and Activity.

Table 2- Summary of Project Costs

*Component*	*Objective*	Baseline (B)	Alternative (A)	Increment (A-B)
				Gov	GEF	UNDP	UNEP	Tacis	Others[3].	TOTAL
I. Co-ordination, institutional capacity building and legal reform	1. Support the integration of a sustainable Secretariat for the Bucharest Convention	1,080,000	3,194,700	1,150,000	936,700				28,000	2,114,700
	2. Regional actions for improving LBA legislation to control eutrophication and for tackling emergent problems	30,000	245,000		160,000		55,000			215,000
II. Sectoral legal and policy reforms, monitoring and evaluation of nutrient control measures and reviewing targets for adaptive management	3. Assist countries to improve their knowledge of the process of eutrophication in the Black Sea	947,000	1,619,000		660,000				12,000	672,000
	4. Introduce new sectoral policies and a system of process, stress reduction and environmental status indicators for monitoring the effectiveness of measures to control eutrophication (and hazardous substances where appropriate)	5,552,000	7,497,000		905,000	[240,000]		[800,000]		1,945,000
	5. Support the Commission in their periodic review of Adaptive Management objectives.	60,400	220,400		120,000			[40,000]		160,000
III. Supporting public involvement in nutrient control	6. Assist the public in implementing activities to reduce eutrophication through a programme of grants for small projects and support to regional NGOs.	472,520	1,142,520		470,000			[200,000]		670,000
IV. Innovative economic instruments for the control of eutrophication	7. Formulate proposals for market-based or alternative economic instruments for limiting nutrient emissions and establish private-public sector partnerships for environmental protection in the Black Sea.	1,648,000	3,140,000		292,000			[1,200,000]		1,492,000
V. Sustainable exploitation of fish stocks as part of an ecosystem approach	8. A fishery exploited within its maximum sustainable yield and incorporating measures to protect ecologically sensitive areas.	360,000	740,000		160,000			[200,000]	20,000	380,000
Agency Support Costs					296,300					296,300
PDF-B					349,920					349,920
	Total	10,149,920	18,444,840	1,150,000	4,349,920	240,000	55,000	[2,440,000]	60,000	8,294,920

IX. Monitoring and Evaluation

63. Project objectives, outputs and emerging issues will be regularly reviewed and evaluated annually by the PSC. The project will be subject to the various evaluation and review mechanisms of the UNDP, including the Project Performance and Evaluation Review (PPER), the Tri-Partite Review (TPR), and an external Evaluation and Final Report prior to termination of the Project. The project will also participate in the annual Project Implementation Review (PIR) of the GEF. Particular emphasis will be given to emerging GEF policy with regard to monitoring and evaluation in the context of GEF IW projects. This document generally, and more specifically the logframe in this document, will be used to identify relevant Process Indicators, Stress Reduction Indicators, and Environmental Status Indicators that will serve to inform the M&E process and be adopted by the participating countries. This work will be considerably expanded as a result of Objective 4 of the project itself which is focussed on the establishment of sustainable M & E procedures for the entire region.

64. In addition to the monitoring and evaluation described above, monitoring of the project will be undertaken by a contracted supervision firm, and by a balanced group of experts selected by UNDP. The extensive experience by UNDP in monitoring large programs will be drawn upon to ensure that the project activities are carefully documented. There will be two evaluation periods, one at mid-term and another at the end of the Program.

65. The mid-point review will focus on relevance, performance (effectiveness, efficiency and timeliness), issues requiring decisions and actions and initial lessons learned about project design, implementation and management. The final evaluation will focus on similar issues as the mid-term evaluation but will also look at early signs of potential impact and sustainability of results, including the contribution to capacity development and the achievement of global environmental goals. Recommendations on follow-up activities will also be provided.

66. Approximately 1% of project funds will be allocated for the monitoring and evaluation (M&E) to be undertaken by independent experts and UNDP. The evaluation process will be carried out according to standard procedures and formats in line with GEF requirements. The process will include the collection and analysis of data on the Program and its various projects including an overall assessment, the achievement of clearly defined objectives and performance with verifiable indicators, annual reviews, and description and analysis of stakeholder participation in the Program design and implementation. Explanations will be given on how the monitoring and evaluation results will be used to adjust the implementation of the Program if required and to replicate the results throughout the region. As far as possible, the M&E process will be measured according to a detailed workplan and a Logical Framework Analysis approach developed and tabulated in the project document.

X. Lessons Learned and Technical Reviews

67. This project, together with those for the Danube and Dnipro, consititute the first application of a basin-wide approach to the GEF IW Programme. It is thus extremely important to review the lessons learned and to examine their applicability in other candidate regions of the world. As in the case of earlier interventions, the project will be involved in the GEF International Waters Learning, Exchange and Resource Network Program (IW: LEARN). IW:LEARN is a distance education program whose purpose is to improve global management of transboundary water systems. It will provide structured interactive conferencing capability across and within the GEF International Waters Portfolio and will allow participants in GEF IW projects to share learning related to oceans, coastal zone management and to other river basins in the region and beyond. For environmental professionals working on GEF related projects IW:LEARN will greatly expand opportunities for peer to peer, collaborative research with physically distant colleagues, opportunities to exchange best practices and training modules among projects, and the delivery of short courses.

List of Mandatory Annexes

Annex 1A - Incremental Cost Narrative

Annex 1B - Full Incremental Cost Matrix

Annex 2 - Logical Framework Matrix

Annex 3 - GEF Operational Country Focal Point Endorsement Letters

Annex 4A - STAP Review

Annex 4B – Response to STAP Review

List of Optional Annexes

Annex 5 - State of the Pollution in the Black Sea report (Executive Summary), 1999.

Annex 6 - Report of the May 2000 meeting of the Istanbul Commission

Thematic Reports Prepared During the PDF-B Project Phase

Annex 7 - Report on current policy and legislation for nutrient control in Black Sea countries.

Annex 8 - The development of process, stress reduction and environmental status indicators to monitor the effects of nutrients within the Black Sea Basin

Annex 9. - Report on the development of a programme for public participation in the Black Sea including grants for small projects

Annex 10 - Development of a new Protocol for Land Based Activities in the Black Sea

Annex 11 - Danube/Black Sea Basin Programmatic Approach

Appendix - Indicative list of objectives, activities, completion dates and funding requirements for the 2nd phase.

Short term objectives

COMPONENT I. CO-ORDINATION, INSTITUTIONAL CAPACITY BUILDING AND LEGAL REFORM

Success criteria

Description of approach (see also paragraph 56 for details of basin-wide co-ordination)

Description of approach

Point sources

Diffuse sources

Indicators

Objective 6. Assist the public in implementing activities to reduce eutrophication through a programme of grants for small projects and support to regional NGOs.

Rationale

Description of approach

Objective 7. Formulate proposals for market-based or alternative economic instruments for limiting nutrient emissions and establish private-public sector partnerships for environmental protection in the Black Sea.

Rationale

Objective 8. A fisheries exploited within its maximum sustainable yield and incorporating measures to protect ecologically sensitive areas.

Rationale

Description of approach

Table 1. Activities, lead agencies and associate partners, counterparts, completion dates and funding.

COMPONENT I. CO-ORDINATION, INSTITUTIONAL CAPACITY BUILDING AND LEGAL REFORM

Objective 6. Assist the public in implementing activities to reduce eutrophication through a programme of grants for small projects and support to regional NGOs.

Objective 7. Formulate proposals for market-based or alternative economic instruments for limiting nutrient emissions to the Black Sea and establish private-public sector partnerships for environmental protection.

Objective 8. A fisheries exploited within its maximum sustainable yield and incorporating measures to protect ecologically sensitive areas.

Net of support costs

Sustainability

World Bank/GEF Strategic Partnership for Nutrient Reduction

VIII. Incremental Costs and Project Financing