COSTA RICA-PANAMA
INTEGRATED ECOSYSTEM MANAGEMENT IN THE SIXAOLA
BINATIONAL RIVER BASIN
RS-X1017
PROJECT DOCUMENT
NON-REIMBURSABLE OPERATION FINANCED WITH GEF RESOURCES
This document was prepared by the Project Team of: Henrik Franklin (RE2/EN2),
Project Team Leader; Ana María Linares (RE2/EN2); Heli Nessim (RE2/EN2); Henry
Salazar (SDS/ENV); Rodrigo Coloane (COF/CPN); Luis Hernando Hintze (COF/CCR);
Maristella Aldana (LEG/OPR2); Coral Fernandez-Illescas (RE1/EN1); and Eliana Smith
(RE2/EN2).
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CONTENTS
Executive Summary
I. FRAME OF REFERENCE.................................................................................................. 1
A.
Regional sustainable development strategy and transboundary collaboration
in the Sixaola Binational River Basin ............................................................... 1
B.
Environmental importance of the Sixaola Binational River Basin ................... 1
C.
Environmental services provided by the Sixaola Binational River Basin......... 2
D. Socioeconomic
context...................................................................................... 3
E.
Regional and national policies and institutional frameworks............................ 6
F.
Threats and root cause analysis ......................................................................... 8
G. Project
strategy ................................................................................................ 10
H.
Coordination with strategies, projects and programs of the Bank, GEF,
and other development financing institutions in the Region........................... 12
II. PROJECT OBJECTIVES AND DESCRIPTION.................................................................... 14
A. Project
objectives............................................................................................. 14
B. Project
description........................................................................................... 14
1.
Strengthening of institutional frameworks and technical and operational
capacities required for integrated management...................................... 15
2.
Promotion of productive practices compatible with conservation and
sustainable use of water and soil resources ............................................ 17
3.
Conservation and sustainable use of biodiversity .................................. 19
III. COST AND FINANCING ................................................................................................ 20
IV. PROJECT EXECUTION .................................................................................................. 21
A.
Principles of project execution ........................................................................ 21
B.
Binational framework for integrated management.......................................... 22
C. Project
execution ............................................................................................. 23
D.
Procurement of works, goods and services ..................................................... 24
E. Disbursement
period........................................................................................ 25
F.
Special disbursement for Project start-up activities ........................................ 25
G.
Follow-up, evaluation and monitoring ............................................................ 25
V. BENEFITS, FEASIBILITY AND RISKS............................................................................. 26
A. Project
benefits ................................................................................................ 26
B.
Feasibility and sustainability ........................................................................... 27
1. Institutional............................................................................................. 27
2. Financial ................................................................................................. 28
3. Environmental
and
social ....................................................................... 28
C. Replicability .................................................................................................... 29
D.
Consultation with and participation of the stakeholders and beneficiaries ..... 29
E. Risks ................................................................................................................ 30
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ANNEXES
ANNEX 1 Logical Framework (Annex B of GEF Executive Summary)
ANNEX 2 GEF Executive Summary
APPENDIX
Project Resolution
INFORMATION AVAILABLE IN THE RE2 FILES
Annex 3: Map of the Sixaola Binational River Basin
Annex 4: Project Execution Framework
Appendixes to the GEF Executive Summary:
Appendix A: Incremental Cost Analysis
Appendix C: STAP Review
Appendix C1: Response of the Executing Agency to STAP Review
Appendix D: Copies of Endorsement Letters from GEF Focal Points
Appendix E1: BD-1 "Catalyzing Sustainability of Protected Areas" GEF Tracking Tool
Appendix E2: BD-2 "Mainstreaming Biodiversity in Production Landscapes and Sectors" GEF
Tracking Tool
Appendix F: Monitoring and Evaluation Plan
Appendix G: Threat and Root Cause Analysis
Appendix H: Stakeholder participation summary and plan (In Spanish)
Appendix I: Co-financing commitment letters
Technical Information in Support of Execution (RE2/EN2):
1.
Regional Sustainable Development Strategy (RSDS)
2.
Territorial Information System
3.
Draft technical reports prepared during PDF-B phase (EPYPSA/INCLAM/Cedarena)
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ACRONYMS
ADI
Asociación de Desarrollo Integral
ANAM
National
Environmental
Authority,
Panama
ANAI
Asociación ANAI
CATHALAC
Centro del Agua del Trópico Húmedo para América Latina y El Caribe
CATIE
Centro Agronómico Tropical de Investigación y Enseńanza
CBTC
Biological Corridor Talamanca-Caribe
CBD
Convention
of
Biological
Diversity
CI
Conservation
Internacional
CNE
Comisión Nacional de Emergencias de Costa Rica
COCABO Coordinadora Campesina Bocatoreńa
COVINERAS
Comité de Vigilancia Ribereńas
CRRH
Consejo Regional de la Región Huétar Atlántica (Costa Rica)
CSA
Certificado de Servicios Ambientales
DIGECA Dirección de Gestión Ambiental del MINAE
EARTH Escuela Agronómica de la Región del Trópico Húmedo
FONAFIFO
Fondo Nacional de Financiamiento Forestal
GEF
Global
Environmental
Facility
IDAAN Instituto de Acueductos y Alcantarillados de Panamá
ILO
International Labor Organization
IUCN
International Union for the Conservation of Nature
IW-LEARN International
Waters
(IW)
Learning Exchange-Resource Network Program
IWRN
Inter-American Water Resources Network
JAPDEVA
Junta Portuaria y de Desarrollo de la Vertiente Atlántica
MAG
Ministry of Agriculture, Costa Rica
MEF
Ministry of Economy and Finance, Panama
MIDEPLAN
Ministry of Economic Planning, Costa Rica
MIDA
Ministry of Agricultural Development, Panama
MINAE
Ministry of Environment and Energy, Costa Rica
NGO
Non-governmental
Organization
OAS
Organization of American States
PILA
La Amistad International Park
PROARCA
Regional Environmental Program for Central America
RSDS
Regional Sustainable Development Strategy
SINAC
Sistema Nacional de Áreas de Conservación (Costa Rica)
SINAPROC
National Civil Protection System, Panama
TNC
The
Nature
Conservancy
UNCCD
United Nations Convention to Combat Desertification (UNCCD)
UNDP
United Nations Development Program
UNEP
United Nations Environment Program
WWF
Worldwide Fund for Nature
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PROJECT SUMMARY
INTEGRATED ECOSYSTEM MANAGEMENT IN THE SIXAOLA BINATIONAL BASIN
(RS-X1017)
Financial Terms and Conditions
Beneficiaries: Republic of Costa Rica and Panama
Executing Agency: Ministry of Environment and Energy (MINAE) of Costa Rica and the National Environmental
Authority (ANAM) of Panama.
Disbursement Period:
48 months
Currency: US$
Source:
Amount
%
IDB (grant from the Global Environment Facility - GEF)1
3,500,000
18%
Co-financing from IDB-funded Program (1556/OC-CR)2 10,689,000
55%
Co-financing from IDB-funded Program (1439/OC-PN).3 4,216,000
22%
Local:
970,000
5%
Total:
19,375,000
100%
Associated financing (TNC, CI and European Commission)
980,000
Project at a Glance
Project objective:
Contribute to the sustainable use and conservation of biodiversity, water, and soil resources, through the creation of
an enabling environment and integral, cross-cutting management of the Sixaola Binational River Basin. The specific
objectives are to: (i) strengthen the technical and management capacities of the institutions, indigenous
organizations, and organizations of the civil society represented in the Basin, to ensure its sustainable management;
(ii) promote the adoption of productive models that are compatible with conservation and sustainable use of the
fragile natural resources in the Basin; and (iii) promote the conservation and sustainable use of globally important
biodiversity.
Special contractual clauses:
Prior to Project approval the following conditions shall be met: (i) creation of the Binational Commission for the
Sixaola River Basin with the required legal mandate and capacity (¶4.3); (ii) creation of the Binational Technical
Executing Unit for the Project with the required personnel and mandate, (¶4.4); (iii) the approval by MINAE and
ANAM of the Program Operations Manual previously agreed with the Bank (¶4.7). Prior to first disbursement:
(i) the financial administration firm will be hired (¶4.6); and (ii) the Project Coordinator will be selected (¶4.4).
Upon fulfillment of Article 4.01 (a), (b), (c), (e), and (g) of the General Conditions, ANAM and MINAE may
request an initial disbursement of up to US$100,000 from the Bank to finance project startup activities (¶4.12).
Exceptions to Bank policies:
There are no exceptions to Bank policies.
Project consistent with Country Strategy: Yes [ x ] No [ ]
Project qualifies for: SEQ[ ]
PTI [ ]
Sector [ ]
Geographic[ ] Headcount [ ]
Procurement: The procurement of works, goods and consulting services shall be carried out in accordance with the
new Purchasing Policies and Procedures of the Bank pursuant to documents GN-2349-6 and GN-2350-6.
Verified by CESI on: March 17, 2006
1. With the GEF donation, the Bank will make a grant in equal amounts (US$1,750,000) to Costa Rica and Panama, which will commit to use the
resources to finance jointly agreed activities under this binational Project.
2. Sixaola Binational River Basin Sustainable Development Program. This amount includes both IDB-loan and local counterpart
3. Bocas del Toro Multiphase Sustainable Development. This amount includes both IDB-loan and local counterpart.
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I. FRAME OF REFERENCE
A.
Regional sustainable development strategy and transboundary collaboration in the
Sixaola Binational River Basin
1.1
This Project responds to a series of agreements signed by the governments of Costa Rica
and Panama. In 1991, the Vice-presidents of the Central America countries signed
Resolution No 4-91 agreeing to promote the development of transboundary areas in an
effort to achieve regional integration. Further that year; the two governments signed an
agreement on transfrontier protected areas, officially establishing La Amistad
International Park (PILA), as well as the Costa Rica-Panama Border Cooperation
Development Agreement1. The latter agreement established a Permanent Binational
Commission with the mandate to promote an integrated Binational Sixaola River Basin
Sustainable Management Program. In 2003-2004, a Regional Strategy for the Sustainable
Development of the Binational Sixaola River Basin (RSDS) was formulated in a
participatory manner involving all relevant stakeholders, with the support of an IDB
grant. The RSDS is conceived as a comprehensive binational effort that considers short-,
medium-, and long-term views and interventions in different areas: strengthening of the
local/territorial management capacity, production diversification, natural resources
management, vulnerability reduction, and basic infrastructure. The Bank has approved
two related sustainable development programs (1439/OC-PN2 and 1556/OC-CR3) to
finance priority interventions in each country. Effective integrated management of the
Basin and its ecosystems, however, requires additional support for which non-
reimbursable GEF funding is requested4.
B.
Environmental importance of the Sixaola Binational River Basin
1.2
Biogeographical aspects. The Basin covers an area of 289,000 ha. that stretches from
the Caribbean coastland to mountainous regions of Talamanca in Costa Rica and Central
in Panama, reaching a maximum altitude of 3,820 meters above sea level (see Annex 3).
The area can be divided into three main areas: a larger, sparsely populated and mostly
forested upper sub-basin (204,000 ha.); a middle sub-basin comprised of the valley of
Talamanca, mostly populated by indigenous groups (51,000 ha.), and the smaller and
more developed lower sub-basin of the Sixaola valley (34,000 ha.) which contains the
largest portion of the Basin's population estimated at 33,500 inhabitants. In the lower
sub-basin, the Sixaola River forms the border between the two countries. 81% of the area
of the Basin falls on the Costa Rican side of the border, while the remaining 19% is
Panamanian territory.
1.3
Biological Diversity. The Basin contains spectacular biodiversity and ecosystems of
global importance. Representing one of the few larger tracts of virtually untouched forest
in Central America, the Basin presents impressive species density and endemism. It also
1
The Agreement was ratified by Panama on August 10, 1994 and by Costa Rica on July 24, 1995.
2
Bocas del Toro Multiphase Sustainable Development Program.
3
Sixaola Binational River Basin Sustainable Development Program.
4
The Presidents of the two countries signed a Joint Declaration in April 2005, emphasizing the importance of promoting joint
natural resources management programs, vulnerability reduction measures and integrated management of PILA.
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harbors important populations of threatened and endangered species5 of top conservation
priority and represents valuable resting and feeding areas for migratory bird species. A
large part of the Basin is covered with forests6 that contain a variety of ecosystems
including rare and fragile páramo and cienaga. The Talamanca-Central mountain range
contains at least 10% of the main habitat types of the planet, and the mountainous region
has been classified as one of the 200 global priority ecoregions defined by the Worldwide
Fund for Nature (WWF). In the upper sub-basin, PILA alone harbors an estimated 4% of
the planet's terrestrial species, including some 10,000 species of superior plants and more
than 40,000 inferior and non-vascular plants. Approximately, 80% of the mosses and the
majority of the 900 species of lichen known in Costa Rica can be found here, as well as
1,000 ferns and 1,000 orchid species. Between 30-40% of plant species (depending on
group) are endemic to this area7. In terms of fauna, the Talamanca mountain range
harbors more than 400 bird species, 263 species of amphibians and reptiles, as well as
215 mammal species8. The coastal ecosystems, including wetlands, mangroves, coral
reefs and seagrass beds, are home to a variety of threatened and endangered species9.
1.4
A total of six protected areas can be found in the Basin, covering an area of 143,000 ha.
hectares10 of the Basin. The protected areas are: (i) PILA, which is shared between Costa
Rica and Panama and is declared a Biosphere Reserve and World Heritage Site;
(ii) Chirripó National Park, Costa Rica; (iii) Hitoy Cerere Biological Reserve, Costa
Rica; (iv) Gandoca/Manzanillo Wildlife Refuge (RAMSAR Site), Costa Rica; (v) San San
Pond Sak Wetlands (RAMSAR site), Panama; and (vi) Palo Seco Protection Forest
(RAMSAR site), Panama11. The Mesoamerican Biological Corridor is represented in the
Basin through the corridors of Talamanca-Caribe in Costa Rica, and Atlántico Panameńo
in Panama, occupying a total of 110,100 ha. Both corridors link mountainous, forested
areas of the Talamanca-Central mountain range with the Caribbean Sea, and allow
interconnection of high, medium, and lowland forest with the fluvial plains of the Sixaola
River to the coastal Caribbean ecosystems. These corridors enhance connectivity and
thereby genetic exchange of meta-populations and migration of species.
C.
Environmental services provided by the Sixaola Binational River Basin
1.5
Water resources. The forests in the Basin capture an estimated 2,685 mm of
precipitation on an annual basis, resulting in an average multiannual flow of 172 m3/s,
representing a volume of 5,456,000 m3/year. While the water quality in the upper sub-
basin is generally good, the waters in the middle and lower sub-basins suffer from
5 In San San-Pond Sak, there are 2 mammal species included in CITES Appendix I, as well as 8 orchid species and 13 bird
species included in CITES Appendix II. In PILA, there are 5 mammal species and 1 bird species included in CITES
Appendix I, as well as 9 orchid species, 1 mammal species, 15 bird species and 2 amphibian species included in CITES
Appendix II.
6
The forest cover of 261,700 ha, representing approximately 89% of the Basin, is concentrated in the protected areas and the
indigenous territories of Bri Bri and Cabécar.
7 There are three main areas of endemism in Costa Rica: Osa, Talamanca and the central volcanic range.
8 Puma
(Felix concolor), jaguar (Pantera onca), capuchin monkey (Cebus capuchinus), Baird's tapir (Tapirus bairdii).
9 Including
crocodile
(Crocodylus acutus), cayman (Caiman crocodilus) manatee (Trichechus manatus), as well as several
species of sea turtles including leatherback turtle (Dermochelys coriacea), loggerhead (Caretta caretta), carey
(Eretmochelys imbricata) and green turtle (Chelonia midas)
10 Costa Rica: 121,000 ha.; Panama: 22,000 ha.
11 Of the six sites, the Project will only involve PILA, San San-Pond Sak, Gandoca/Manzanillo.
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pollution mainly from agriculture and human settlements. In the Yorkín and Brai
watersheds (in the middle sub-basin), for example, the Biotic Integrity Index12, which
reflects the health of the aquatic ecosystem, has a regular level (3 on a scale of 1-5),
indicating that water pollution and sedimentation are affecting the aquatic environment.
1.6
Soil resources. The forest cover protects the fragile soils in the mountainous areas. The
soils in this part of the Basin are not appropriate for agriculture due to their limited depth
and they are highly vulnerable to soil erosion if the forest cover is removed due to the
steep slopes and the continuous rainfall throughout the year. The lands appropriate for
agriculture are mainly located in the Talamanca valley (middle sub-basin) inhabited by
Bri Bri and Cabécar indigenous population, which cultivate organic bananas (2,450 ha.),
produce a combination of organic cacao and banana in agro-forestry systems (3,600 ha.),
and in the fertile flood plain in the lower part of the Basin there are extensive commercial
banana plantations (12,400 ha.). The process of land degradation is incipient and is
localized mainly in the following areas: (i) in the margins of the indigenous territories of
Bri Bri y Cabécar (middle sub-basin); (ii) in the Yorkín watershed, associated with cattle
grazing promoted by ladinos and non-native indigenous inhabitants (Ngöbe-Buglé);
(iii) in the Panamanian side of PILA; and (iv) on the hillsides and flood plain in the lower
sub-basin. At least 3,340 ha. in these areas are subject to conflicting land use, which
contributes to land degradation and soil erosion. In these areas, slash-and-burn practices
to prepare for cattle grazing contributes to soil erosion during the heavy rains affecting
the area throughout the year.
1.7
Other environmental goods and services. The forest cover in the Basin also mitigates
the effects of natural disasters such as tropical storms and earthquakes, acting as a
regulating sponge during torrential rains, reducing vulnerability to flash floods, mudslides
and landslides. It has the same effect in terms of holding and stabilizing steep slopes and
hill land areas during earthquakes. In addition, the forests, in combination with the
indigenous agroforestry systems, capture an estimated volume of 647,444 tons of carbon
(representing 2,374,000 tons of CO2) per year, contributing to climate change mitigation.
Finally, the scenic beauty provided by the variety of ecosystems, in combination with the
cultural values13 represented in the Basin, offers unique conditions for tourism.
D. Socioeconomic
context
1.8
Population. An estimated 33,500 people live in the Basin, of which 19,500 (58%) live in
Costa Rica (Talamanca Municipality) and 14,000 (42%) in Panamá (Changuinola
Municipality). In the upper sub-basin, there are 848 inhabitants of the Bri Bri and
Cabécar ethnic groups (0.42 inh./ha.); in the middle sub-basin 8,375 (16.4 inh./ha.), of
which 94% are indigenous from the Bri Bri and Cabécar groups; and in the lower sub-
basin 24,358 (72.5 inh./ha.), dominated by the ladino population and to a lesser extent
12 This is a bioindicator measured by the local non-governmental organization ANAI, analyzing the presence of certain
indicator species that indirectly reflects the quality of the aquatic environment in terms of pollutants and sedimentation. The
gradient goes from very poor, poor, regular, good and excellent.
13 The Basin has the highest concentration of indigenous population in Costa Rica (9,348 people), concentrated in the upper
and middle basin in the legally established indigenous territories.
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also by afrodescendants and native (Bri Bri and Cabécar) and non-native (Ngöbe-Buglé)
indigenous groups.
1.9
Poverty. The social indicators are significantly lower than in nearby areas and compared
to the national averages. This is particularly the case in the upper and medium sub-basins,
where more than 95% of the population is indigenous. The Basin is amongst the poorest
areas in the two countries. Talamanca is the municipality in Costa Rica with the lowest
Social Development Index14, whilst the Human Development Index in the District of
Changuinola in Panama is significantly lower than the national average15. The population
in the lower sub-basin has increased significantly during the past ten years; in the Costa
Rican side by 11.4% (compared to the 4.5% in the Limon province16) and in the
Panamanian side by 2.6% (compared to -0.4% in the Bocas del Toro province).
1.10 Access to basic services. 29% of the population (9,700 inhabitants) does not have access
to potable water. In the upper and middle sub-basins, the situation is graver, as the access
to potable water is only 83% and 47% respectively. The quality of the water is generally
low (with fecal coliform contamination) because of deficient treatment and distribution
systems. The human population in the upper and middle sub-basins gets its water from
the creeks and natural springs, whilst the aquifer (artisanal wells) is the main source for
water in the lower sub-basin. Whilst sewerage systems and treatments facilities are
inexistent in the Basin, latrines are extensively being used. Apart from in the settlements
of Bri Bri y Sixaola, there are no solid waste facilities. 76% of the population has access
to electricity (although of unreliable quality), mainly in the principal population centers
(Bri Bri and Sixaola). In the upper and middle sub-basins, however, the situation is
worse, as the access to electricity is only 3% and 41% respectively.
1.11 Culture and ethnic groups. The Basin contains six indigenous territories, four in Costa
Rica (the indigenous reserves Bri Bri of Keköldi, Talamanca, Cabécar of Talamanca and
Telire, totaling an area of 86,700 ha.) and two in Panama (Bri Bri and Naso totaling 261
km2), even though the two latter lack legal status as "comarca" or formal indigenous
territory. The human population in the Basin is pluricultural, with 58% being indigenous,
38% ladinos and 4% afrodescendants. The afrodescendant population is concentrated
along the coast, whilst the indigenous populations of Bri Bri and Cabécar are
concentrated in the upper and middle sub-basins, in the legally declared indigenous
reserves in Costa Rica (Cabécar de Telire, Talamanca and Bri Bri of Talamanca) and in
the Bri Bri and Naso Teribe areas in Panama (currently not declared as indigenous
territories), where respectively 100% and 94% of the population is indigenous. The
ladino population is mainly represented in the lower sub-Basin.
14 Talamanca has a Social Development Index (SDI) value of 0. SDI is an integrated indicator developed by MIDEPLAN to
measure social gaps between different geographical areas. It considers: educational infrastructure, access to educational
programs, infant mortality, deaths among the population under 5 years with regard to the general, delay in size on first grade
school population, average monthly consumption of residential electricity, and births of children of single mother. The
highest (100) value corresponds to the canton in the best socio-demographic situation and the lowest (0) to the one that is
most behind in its level of development.
15 Changuinola has a Human Development Index of 0.608 compared to the national average in Panama of 0.707.
16 Costa Rica national average of population growth for the same period is 2.9%.
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1.12 Land tenure: The Basin presents a diversity of legal land tenure regimes. Of the 289,000
ha, protected areas and formalized indigenous territories represent 50% and 20%, and the
remaining 20% is subject to a variety of legal regimes. In terms of the transboundary
protected areas, Gandoca Manzanillo and San San Pond Sak are both categorized as
multiple-use areas which allows private property within its limits. In PILA, on the other
hand, all lands are public17. In the Panamanian sector of Yorkín (within PILA), however,
illegal invasions have been reported. The indigenous territories are private collective
properties, where the Indigenous Government appears as the legal owner. Within these
territories, however, there are conflicts with non-indigenous people18. The size of the
properties in the lower sub-basin show a clear concentration of large landowners: 17% of
the properties are larger than 0.5 km2 (corresponding to 59% of the cultivated surface)
and 15% are smaller than 0.05 km2 (corresponding to 1.3% of the cultivated surface).
1.13 Economic activities. The Basin's economic and productive basis is concentrated in the
primary sector, representing mainly agriculture, and to a lesser extent cattle raising and
fishing19. There is some commercial activity in the lower sub-basin (concentrated in
Changuinola and Bri Bri), as well as in the border area, but industrial and/or
transformation activities are practically non-existent. The lower sub-basin is the most
important from a productive and employment point of view, with a high concentration of
export-oriented musaceas (plantain and banana) plantations, characterized by modern
production methods, high infrastructure investments, intense pesticide use20 and
prominence of large multinational companies, as well as the highest supply of
commercial items and services. On the Panamanian side from the border of the Sixaola
River down to San San-Pond Sak cattle grazing is prominent. In the middle sub-basin
(Talamanca Valley), the indigenous communities focus their productive activities mainly
on low-technology agriculture, including organic banana and cocoa production involving
approximately 1,100 producers increasingly linked to international markets, and to a
lesser extent forestry, low-scale cattle raising, fishing, as well as tourism on a
complementary level. Subsistence farming is also prominent, but lands used for annual
cultivations (beans, rice, corn) are increasingly being converted to musaceas cultivation.
Low productivity, insufficient information and technical assistance, scarce credit
opportunities, limited access and weak processing and commercialization mechanisms
constitute important barriers for the development of these communities. Tourism is a
dynamic sector that potentially could expand as a complementary source of revenues for
certain communities21. With the exception of the coastal sites Puerto Viejo (Costa Rica)
and Bocas del Toro (Panama), which are both experiencing tourism expansion, the sector
is currently not very developed. The Basin has a wealth of attractions to develop,
17 In both countries land regularization and conflict resolution in protected areas and indigenous territories are promoted. In
Costa Rica by the IDB-funded Cadastre Program and in Panama by PRONAT.
18 According to estimates of the National Development Program of Indigenous People, around 15% of the Cabecar territory
and 35% of the Bri Bri territory is in the hands of non-indigenous groups.
19 Approximately
33,000
ha. (11.4 % of territory) are used for cultivation and cattle grazing, concentrated in the lower and
middle basin: bananas (12,400 ha.), organic bananas (2,450 ha.), organic banana/cocoa (3,600 ha.), mixed cultivation (25
Km2), plantain (3,000 ha.), agro-forestry plantain production (1,100 ha.), mixed cultivation, grazing, unused farms (8,000
ha.).
20 The production of banana in Changuinola reports a rate of pesticide application that ascends to 75/ha/year.
21 The Tourist Network of Talamanca that operates in the lower and middle basins has over the last two years (2003-2005)
succeeded in attracting 6,338 tourists.
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including eco-tourism (such as trecking in the rain forest), river trips, ethno-tourism,
agro-tourism, but these products are in incipient development. Weak marketing, limited
local capacities in tourism management and access to financing is limiting tourism
development, thus preventing benefits to be expanded from the coastal areas towards the
middle and upper sub-basins. Finally, the productive activities carried out in the upper
sub-basin are constrained, among others, by the legal status of the protected areas.
Furthermore, the sustainable use of the resources is facilitated by the fact that the
indigenous communities govern important segments of that area, which promotes the
application of traditional knowledge in productive activities consistent with the carrying
capacities of the territory. The main productive subsistence activities are low-technology
cultivations (corn, beans, potato), complemented by small-scale cattle grazing, hunting
and fishing.
E.
Regional and national policies and institutional frameworks
1.14 Border cooperation. The Costa Rica-Panama Border Development Cooperation
Agreement signed in 1991 aims to strengthen and facilitate integration efforts and
promote the integrated management of the binational area. It establishes an institutional
framework for border area cooperation, including the Permanent Binational Commission
and its respective Executive Secretariats within the Ministry of Economy and Finance
(MEF) in Panama and the Ministry of Economic Planning (MIDEPLAN) in Costa Rica.
The proposed Project is conceived within this legal framework.
1.15 Basin management. At the national level, the proposed Project is consistent with
biodiversity, water and soil strategies and regulations. In Costa Rica, the National Water
Policy, the National Health Policy 2002-2006, the National Environmental Strategy
2005-2020 and the proposed Water Bill, stipulate that water resources should be managed
in an integrated, decentralized and participatory manner, where the watershed should be
the preferred unit of planning and management. The Biodiversity Law defines the
Ministry of Environment and Energy (MINAE) as the responsible institution for Basin
management. However, this requires close collaboration with other stakeholders, such as
MAG, which is responsible for applying the Soil Use, Management and Conservation
Law. The latter Law requires MAG to develop soil resources management and
conservation plans and associated instruments (such as certifications of sustainable land-
use), which in turn need to be coordinated with the municipalities in order to apply a
property tax-discount22. In Panama, the National Environmental Law gives ANAM the
main responsibility for watershed management, including development of corresponding
environmental land use plans23. With regards to binational basins, the Costa Rica-
Panama Border Development Cooperation Agreement gives MIDEPLAN and MEF a
special mandate to coordinate interventions. During the formulation of the RSDS, an
Indicative Functional Land Use Plan was developed in a participatory manner amongst
the stakeholders. It was conceived as a general guiding instrument for land-use
22 These instruments do not exist in the Sixaola River Basin.
23 This instrument does not exist in the Sixaola River Basin.
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planning24, but its effective implementation requires the development and approval of the
referred plans mentioned above.
1.16 Co-management of protected areas. In Costa Rica, the laws governing protected areas
are much more restrictive than similar laws in Panama, and more ambiguous with regard
to the issue co-management. There are, nevertheless, some experiences of co-
management, that recently have been subject to scrutiny by the Controller's Office. This
institution has not prohibited co-management, but it does acknowledge the need to
develop procedures and policies for its formalization. Panama's legislation, on the other
hand, provides for co-management of protected areas through concessions25 and the
application procedures are relatively clear.
1.17 Transboundary protected area management. The administration of the PILA has been
qualified as deficient by the Controller's Offices of both Costa Rica and Panama, and the
environmental authorities of both countries are called upon to improve the coordination
and binational management. In response, MINAE and ANAM, Panama established the
PILA Binational Commission, which is currently developing an action plan. One of the
principal aims is to harmonize the two existing management plans of PILA, especially
with regards to zoning and management criteria in the border areas. Among the priority
topics considered is the need to develop co-management arrangements, in particular
involving indigenous communities, in an effort to improve protected area management
effectiveness26. The environmental authorities, as well as the involved civil society
organizations, also acknowledge the need to enhance integration of the coastal
transboundary protected areas (San San Pond Sak and Gandoca Manzanillo), including
harmonized management plans and joint management activities.
1.18 Indigenous territories. Indigenous territories (called Indigenous Reserves in Costa Rica
and Regions in Panama) and the autonomy of indigenous peoples are recognized in
specific laws and in Treaty No. 169 of the International Labor Organization (ILO) ratified
in both countries. In Costa Rica, Law 6172 establishes that the indigenous government
are made up by the Associations of Integrated Development (ADI), and in Panama it is
established that each territory must define their form of government. Within the
territories, the Indigenous Governments act with a relative autonomy.
1.19 Schemes for the payment for environmental services. Costa Rica has several years of
experience in developing and implementing a variety of mechanisms for the payment of
environmental services, mainly through the Fund of Forest Financing (FONAFIFO)
linked to MINAE. Since 1999, FONAFIFO has involved a total of 6,567 hectares27 in the
Basin, of which almost half (3,707 hectares) are within indigenous territories. The
contracts in indigenous territories are signed with the ADI, which administrates and
defines the destination of the funds. For example with these funds ADI has paid the
24 The allocation of investments financed by the 1556/OC-CR and 1439/OC-PN Programs must follow this plan.
25 Thus article 66 of Law 41 of 1998 establishes that the ANAM is empowered to grant service and administration concessions
in the protected areas.
26 Panama is currently preparing a Services and Administration Concessions Plan to prioritize the protected areas to be granted
in concession, and PILA has been mentioned as a priority site.
27 Owners of properties under forest management receive approximately US$50/ha per year, for 5 years contracts.
- 8 -
salaries of some indigenous rangers. Currently, indigenous communities are seeking to
make the environmental services provided by their agro-forestry systems eligible for
participation in the payment scheme and they are also working on developing an
Indigenous Environmental Services Certificate to collect private funds. In Panama, an
Environmental Economy Unit linked to ANAM was established in 2004, in order to
develop the payment for environmental services system. As part of this process, the
Government has promoted two specific actions in the Basin: on one hand, it hired a
consultancy to carry out an economic valuation of the natural patrimony of the PILA, and
through the IDB-funded Program in Bocas del Toro (1439/OC-PN) a study is being
contracted to determine the viability of applying the concept in the Basin.
1.20 Environmental pollution control. Both countries have legislations and policies for
pollution control, including both regulatory and market-based (incentive) prescriptions.
Effective pollution control, however, is constrained by institutional overlaps, unclear
functions and jurisdictions, limited coordination and unharmonized procedures, and
variable technical capacities in these entities to monitor and enforce the legislation. In
both countries, mechanisms to tax polluting discharges to water bodies are currently
under incipient discussion. Costa Rica recently took a step forward in this process by
adopting regulations for the Creation of the Environmental Tax for Polluting Discharges,
but there is a need to implement the mechanism at the pilot level. In Panama this process
is advancing more slowly.
F.
Threats and root cause analysis
1.21 Although the overall environmental condition in the Basin is relatively good, a series of
emerging and interrelated problems affecting the biodiversity, water and soil resources
are threatening the medium and long-term functional integrity of its ecosystems. Some of
these threats appear to be relatively localized to certain areas on both sides of the
borderbut there is an eminent risk that these problems spread throughout the Basin and
worsen if priority and urgent actions are not taken. A summary of the main threats to the
integrity of the Basin's land, water and biodiversity resources are as follows:
1.22 Agricultural encroachment, inappropriate subsistence agricultural practices and large-
scale commercial crops. Although productive areas in the middle sub-basin are still
dominated by sustainable agro-forestry and silvo-pastoral practices, as local population
levels and livelihood needs increase, agricultural encroachment is bound to spread
throughout the middle sub-basin. Currently, encroachment is particularly heavy in the
Yorkín river watershed, but can also be observed elsewhere. Increasingly, unsustainable
practices can be observed, including reduced fallows, slash-and-burn agriculture and
agriculture on steep slopes. Some of the more evident results are nutrient depletion and
soil degradation, which are contributing towards declining farm productivity. This is also
a primary contributor towards habitat fragmentation, affecting some of the biological
corridors in the area. Additionally, monoculture of bananas in the lower sub-basin has
affected the agro-biodiversity presented in that part of the Basin.
1.23 Conversion of land to cattle ranching. Cattle ranching is not a typical activity for
indigenous groups in the Basin, and the introduction of cattle is mostly driven by ladino
- 9 -
ranchers. Given the fragile soils, cattle ranching is considered to be a highly inappropriate
land use. In the Yorkín watershed stocking intensities on rangelands do not to reflect their
carrying capacities and overgrazing is a problem, resulting in soil compactation and
permeability reduction, effectively reducing the chances of future regeneration of the
forest. Furthermore, as heavy rain falls on the impermeable grazing areas, soil is washed
off and contributes heavily to rampant sedimentation levels in the rivers and streams.
Cattle ranching is spreading rampantly in Panamanian areas adjacent to the Basin, and the
potential of expansion into the Basin is considerable. In fact, of the approximately 17,000
ha. of the PILA Panama that forms part of the Basin, an estimated 4,000 ha. have been
converted to grazing areas.
1.24 Logging. While deforestation in the Basin in general is not alarming, some zones show a
serious increase in unsustainable extraction of timber. Encroachment has been reported
on forested areas in the process of logging for commercial timber species, resulting in the
opening of tracks in the forests to facilitate access and transport the illegally harvested
timber through some Cabécar indigenous territories. These timber roads subsequently
tend to facilitate hunters' access to forest interiors of Gandoca Manzanillo, and the Bri Bri
de Keköldi indigenous territory.
1.25 Water pollution due to human and animal wastes, and agrochemical run-off. Cattle
ranching, as well as human wastes from human settlements without proper wastewater
and solid waste management systems, are contributing to the contamination of the
binational river system. Furthermore, runoff from extensive and agrochemically intensive
commercial banana production, as well as more limited but pesticide intensive small-
scale agriculture, reaches the waterways constantly throughout the year (because of year-
round heavy rainfall). As pollutants are transported downstream to the coastal and marine
areas, it affects the health of ecosystems, such as wetlands, mangroves and coral reefs, as
well as oceanic waters in the Caribbean Sea, and also has an impact on human health.
1.26 Over fishing and harmful fishing practice: Fish protein is an important complement to
local population diet, and several species are very sought after. Over fishing is a
widespread problem in the indigenous areas, and harmful fishing practices applying
poison and explosives has a negative impact on the aquatic ecosystem.
1.27 Hunting and extraction of flora and fauna. Local inhabitants in the upper and middle sub-
basins have traditionally supplemented their income by hunting of wildlife, both for food
and for the commercialization of animal fur and trophies. Species populations have been
drastically reduced or altogether disappeared from certain zones. For example, in and
around the indigenous territory of Naso Téribe, species like the howler monkey, ant eater,
while-tailed deer, harpy eagle, great curassow, and several parrot species have
disappeared28. In the coastal areas indiscriminate hunting of wildlife, mostly mammals, as
well as sea turtles for the commercialization of meat and eggs, has been registered. In
addition to hunting, certain animal species such as parrots, songbirds, and reptiles are
caught for domestication. Ornamental plant species such as orchids and heliconias are
extracted for their decorative and economic value.
28 Some of these species are protected in Panama by the law, due to the population reductions and threat of extinction.
- 10 -
1.28 The
main root causes contributing to the loss of biodiversity, the degradation of land
resources and the deterioration of the binational water body, include:
1.29 Limited sustainable alternative livelihoods. Poverty is widespread throughout the Basin,
but particularly rampant in the upper and middle parts, where the economic activities
currently practiced by the human population are largely limited to an intensification of
agricultural practices and the illegal extraction of flora and fauna in response to both
protein needs and economic driving forces. The problem is compounded because the
poor, often the indigenous communities, tend to have limited access to government
services, including support to enhance productivity and commercialization, as well as
credit support. This constitutes a key problem in those areas, because it correlates to a
propensity against technological innovation. While commercial production is increasing
in the lower sub-basin, the remaining areas remain very isolated in terms of sustainable
livelihood alternatives. The consumption needs of the increasing population must
therefore be absorbed by a limited pool of natural resources, leading to overexploitation.
1.30 Unsustainable economic activities are poorly regulated, monitored and controlled.
Unsustainable activities such as illegal logging, intensive agriculture (agro-chemical
intensive), destructive fishing applying dynamite and poison and extensive cattle grazing
are taking place in a context of a weak and unharmonized (between the two countries and
between sectors) regulatory, standards and control frameworks, including limited
opportunities for co-management and local involvement. Furthermore, there is an
insufficient presence of adequately trained and equipped personnel29 with responsibility
for monitoring and controlling such activities. This situation is further aggravated by the
fact that local inhabitants and producers seem to remain largely unaware of the
advantages of conserving and sustainably managing native flora and fauna and agro-
biodiversity, and of the existing natural resources protection laws and regulations.
1.31 Institutional limitations to mainstream ecological management objectives within the
development agenda. Despite recent efforts to develop the RSDS, there is an apparent
lack of functional binational institutional frameworks, as well as incipient technical and
operational capacities of the involved local and regional authorities (including the
indigenous ones), as well as civil society organizations, to effectively apply integrated
management and planning practices in a coordinated and participatory manner.
G. Project
strategy
1.32 The depicted state of the Basin is the result of a complex relationship between multiple
factors. During the Project's preparation phase, it was evident that having two countries
with parallel institutions with varying technical and operational capacities at the local
level, three sub-basins (upper, middle and lower) with very different problems and
realities, as well as interaction between multiple economic, social and ethnic sectors,
inhibits an appropriate coordinated response by the two Governments. The Project seeks
to ensure that the working relationship that already exists between the two countries will
be strengthened over the course of the Project, since a well functioning institutional
29 This includes personnel from public institutions at the regional and local level, as well as indigenous communities and civil
society organizations.
- 11 -
structure will be fundamental to the Project's success and sustainability. To that end,
Project implementation arrangements will seek to reinforce the binational decision-
making process responding to a single vision for the integrated management of the Basin,
with ample participation of all stakeholders.
1.33 An analysis of prior and current project interventions showed a tendency to focus on
single productive sectors, ethnic groups, or areas, evidencing a failure to not fully take
into consideration the interrelated nature of the problems in the Basin. In this context,
biodiversity loss cannot be halted without addressing problems related to the need of
increasing alternative livelihoods and sustainable economic activities. Land degradation
processes cannot be reversed without ensuring proper land use, through the promotion of
collaborative territorial management arrangements involving the local inhabitants and the
institutions, which need to be technically and operationally strengthened, acting under the
appropriate regulatory and incentive framework and guided by reliable information. The
integrity of the water system can only be achieved if the forested lands are preserved and
pollution levels are reduced, which requires effective mainstreaming of ecological
considerations in the development of the Basin.
1.34 This Project is consistent with the RSDS, which has been formulated jointly and in a
participatory manner by the governments of Costa Rica and Panama. The Strategy will be
implemented through two national programs financed by the Bank. The GEF resources
will serve to cover the incremental costs related to the global benefits of integrated
binational management of the Basin, while the above mentioned programs will finance
the necessary investments required for sustainable development in benefit of the local
populations. The proposed intervention has been developed through an integrated, as
opposed to sector-specific approach, characterized by increased levels of coordination
between the two countries, ample participation of institutions, social and ethnic groups, a
process initiated during the formulation of the RSDS.
1.35 The project has also been formulated in accordance with the GEF Operational Program
#12 (Multiple Focal Area), with the aim to (i) create the appropriate conditions in the
Binational Sixaola River Basin and in the two countries for developing and implementing
proper policies, regulations, and incentive structures to support integrated ecosystem
management; (ii) strengthen the capacities of institutions and the local population to work
in a coordinated and participatory manner to implement integrated ecosystem
management interventions; and (iii) make investments based in integrated ecosystem
approaches and stakeholder partnerships, to simultaneously address local/national, and
global environmental issues within the context of sustainable development.
1.36 The project is also in conformity with several GEF strategies and priorities established
in the GEF Strategic Business Planning, as follows: BD-1: "Catalyzing Sustainability of
Protected Areas"; BD-2 "Mainstreaming Biodiversity in Production Landscapes and
Sectors"; EM-1 "Integrated Approach to Ecosystem Management"; IW-1 "Catalyzing
Financial Resources for Implementation of Agreed Actions"; and SLM-2:
"Implementation of Innovative and Indigenous Sustainable Land management Practices".
Contributions to the GEF's strategic targets for biodiversity will be documented through
the GEF BD-1 and BD-2 Tracking Tools (see Appendix E). Lessons learned through the
- 12 -
recent "Review of the GEF Operational Program 12" have guided the project design,
particularly with regard to securing multifocality and synergy, but also by seeking to
replicate integrated approaches of top rated OP-12 projects.
1.37 The project responds to the Strategic Plan for the Convention of Biological Diversity
(CBD) and its design complies with its ecosystem approach principles, as defined in
decision VII/11. Also, United Nations Convention to Combat Desertification (UNCCD)
regarding integration of land degradation issues with other GEF focal areas, has been
followed.
1.38 The Project intervention has emphasized cost effectiveness by: (i) capitalizing on the
existing local and regional capacity and potential, thereby avoiding a considerably more
expensive project intervention based predominantly on extensive central government
control over the Basin's territory; (ii) enhancing binational coordination and integration
of management practices; and (iii) promoting long-term shifts in investments and
expenditure by public and private stakeholders, in favor of measures that will counteract
the emerging trends towards environmental degradation in the Basin and thus prevent
further negative impacts that are likely to be more costly to mitigate once they appear.
1.39 The proposed Project will capitalize on the experiences and lessons learned--both
positive and negative-acquired by the Bank during the preparation and execution of other
national and regional sustainable development projects30, including, among others: (i) the
need to promote effective integration among involved stakeholders, institutions across
sectors and associated donors and projects; (ii) design and implement activities that
address the priorities expressed by the communities, (iii) the importance of incorporating
conflict resolution activities; (iv) coupling long-term development objectives with
tangible short-term benefits to sustain the interest of the stakeholders; (v) the need to
constantly strengthen stakeholder capacities; and (vi) ensure effective and transparent
feedback mechanisms amongst all involved parties to promote accountability and
responsive project management.
H. Coordination
with
strategies, projects and programs of the Bank, GEF, and other
development financing institutions in the Region
1.40 Inter-American Development Bank. The Proposed Project responds to the sectoral,
regional and country level policies and strategies of the Bank. The Project will contribute
to implementation of aspects of the Bank's Environmental Strategy in its objectives to
strengthen regional environmental institutions and harmonizing regulatory frameworks,
as well as promoting the sustainable management of regional public environmental goods
and services. The Banks' country strategy for Panama focuses on boosting the economy's
competitiveness and building human and productive capital, including the development
of natural resources on a sustainable basis while consolidating the institutional, legal, and
regulatory framework for their management and promoting decentralization. In Costa
30 For example: Darién Sustainable Development program in Panama (1160/OC-PN), Sustainable Development Program the
Upper Lempa River Basin (CA-0034), Environmental Management of El Cajón Reservoir Watershed in Honduras (918/SF-
HO and 787/OC-HO), Integrateed Managament of the Montecristo Trinational Protected Area (RS-X1016), Environmental
Protection and Maritime Transport Pollution Control in the Gulf of Honduras (RS-X1009).
- 13 -
Rica, the Bank`s country strategy is broadly oriented to the consolidation of the
macroeconomy and accelerating economic growth, including the development of
investments in productive sectors and the sustainable development of the rural economy.
1.41 The Bank is financing the following two programs which will serve as co-financing to the
Project31: (a) Sixaola Binational River Basin Sustainable Development Program in Costa
Rica (approved in 2004, US$12,000,000), which has the following four components:
(i)
environment and natural resources management and vulnerability reduction;
(ii) productive diversification; (iii) public services and basic infrastructure; and
(iv) strengthening of management capacities at the local level, as well as at the basin and
binational levels, and (v) Multiphase Program for Sustainable Development of Bocas del
Toro in Panama (approved in 2002, US$16,900,000), which has the following three
components: (i) strengthening management capacities of local and provincial institutions
and civil society organizations; (ii) sustainable management of natural resources and
productive development; and (iii) basic services and transport infrastructure. All above
mentioned components will provide co-financing to the Project, with the exception of the
components related to basic services and infrastructure. The Bank is also preparing a
Program for Tourism in Protected Areas in Costa Rica (CR-L1001), which will include
Cahuita National Park (adjacent to the Basin) as a pilot site.
1.42 The Bank, together with the World Bank, is also serving as implementing agency for the
Regional GEF project on Integrated Ecosystem Management in Indigenous Communities,
which has the Talamanca - Bocas area as one of several priority sites in Central
America32. In Bri Bri y Cabécar indigenous lands located in Talamanca-Bocas del Toro,
the project will finance strengthening of indigenous organizations; support for organic
production, agro-industrialization, commercialization and the promotion of traditional
products; support for the development of tourism and environmental services; and
improve forest management and reduce illegal timber extraction. Coordination meetings
have been held with the Director of the referred project, and agreements have been
reached with regard to coordinating the preparation of annual work plans and ensuring
that project intervention strategies and methodologies are harmonized and in line with the
strategic priorities outlined in SLM-2.
1.43 Other GEF Projects. Costa Rica is currently preparing a UNDP/GEF project for the
consolidation of protected areas, including legal reform and institutional strengthening of
the National System for Conservation Areas (SINAC), enhancing participation of local
actors in the management of protected areas and improving the management of terrestrial
and marine protected areas. Coordination has been ensured through involvement of the
Director of SINAC in the binational advisory group established for the preparation of the
proposed Project and synergies will be sought particularly in the efforts to facilitate co-
management arrangements in the transboundary protected areas in the Basin. Also in
Costa Rica, a World Bank/GEF project is currently under preparation for mainstreaming
market based instruments for environmental management, including the development of
mechanisms for payments for environmental services. Collaboration will be sought to
31 Only the portions of these Programs directly applicable to the intervention are considered as co-financing.
32 Project financing includes US$5,000,000 from IDB/GEF and US$4,000,000 form WB/GEF for activities in seven countries.
- 14 -
ensure synergies with regards to activities carried out in the Talamanca mountain range.
At the regional level, UNEP is serving as implementing agency for a GEF project
focusing on reducing pesticide runoff to the Caribbean Sea off Colombia, Costa Rica and
Nicaragua. Collaboration will be sought in the efforts related to developing incentive
mechanisms to reduce pesticide use in the Basin (Component 2).
1.44 Other donors. The Nature Conservancy (TNC), through its Parks in Peril project, is
supporting ANAM and MINAE in strengthening the work of Binational Comission for
PILA, in particular related to the formulation of management plans, the design of a
biodiversity monitoring system for the park and promoting co-management initiatives
and strengthening of local guard and surveillance teams (COVIRENAS); as well as
initiatives to promote the sustainable use of biodiversity (eg. tourism, hunting, fishing,
medicinal plants, animal husbandry, non timber forest products). Conservation
International (CI), on its part, is supporting a manatee monitoring program in San San
Pond Sak, a tapir monitoring program in PILA and the indigenous territories, as well as
promoting the connectivity of the Talamanca-Caribe Biological Corridor. During the
preparation of the proposed Project, representatives from both TNC and CI have
participated in preparatory workshops and meetings. Synergies will be sought for
activities in all three components of the proposed Project and the resources from TNC
and CI are considered as associated funding. In addition, the European Commission is
financing a nationwide Program for strengthening municipal Government in Costa Rica.
It is expected that it will provide associated funding to strengthen the technical capacities
of the Talamanca Municipality.
II. PROJECT OBJECTIVES AND DESCRIPTION
A.
Project objectives
2.1 The
objective is to contribute to the sustainable use and conservation of biodiversity,
water, and soil resources, through the creation of an enabling environment for the
integrated and cross-cutting management of the binational Sixaola River basin.
2.2 The
specific objectives are to: (i) strengthen the binational institutional framework for
integrated basin management and enhance the required technical and operational
capacities of the involved institutions, indigenous organizations, and civil society
organizations; (ii) promote the adoption of productive models that are compatible with
the conservation and sustainable use of the water and soil resources; and (iii) promote the
conservation and sustainable use of globally important biodiversity.
B. Project
description
2.3
To reach to these objectives, the Project has been structured in the following three
interrelated components: (i) strengthening of the institutional framework and the
technical and operational capacities for integrated management; (ii) promotion of
productive practices compatible with the conservation and sustainable use of water and
soil resources; and (iii) conservation and sustainable use of biodiversity.
- 15 -
2.4
With the exception of paragraphs 2.11, 2.18 and 2.25, the following paragraphs detail the
use of the GEF grant and local counterpart resources. Paragraph 2.11, 2.18 and 2.25
summarize activities to be undertaken primarily through the implementation of the two
IDB financed programs (1556/OC-CR and 1439/OC-PN). The GEF grant will be
executed through an estimated four administrative service contracts, 11 technical service
contracts and three equipment contracts.
1.
Strengthening of institutional frameworks and technical and operational
capacities required for integrated management (US$4,025,000)
2.5
Actions under this component will strengthen the technical and operational capacities of
stakeholders at different levels, required for effective binational and integrated
cooperation around the common vision and goals set out in the RSDS, as follows.
2.6 To
strengthen the technical and operational capacities of key stakeholders of regional
and local public institutions, as well as social actors, the following activities will be
financed: (i) the technical and operational capacities of regional and local public
institutions33 involved in the management of the Basin will be strengthened in the
following manner: (a) based on existing strengthening plans; the technical and
operational capacities of MINAE and ANAM will be enhanced, particularly in the areas
of water pollution control and protected area management, both through on-the-job
training of technical staff and the provision of monitoring, mobilization, communication
and surveillance equipment; (b) technical staff from MAG-MIDA and the respective
Ministries of Health will receive practical training on the control of agro-chemical use,
and equipment will be provided for the establishment of a modern binational agro-
chemical registry; (c) technical staff of MAG-MIDA, the Municipalities of Talamanca
and Changuinola and ANAM will receive practical training on land-use planning; and (d)
installation of the Territorial Information System within the eight institutions; (ii) the
capacities of social actors to actively participate in the sustainable management of
natural resources will be enhanced by the following activities: (a) facilitating the
development of environmental management capacities of the Indigenous Authorities34;
(b) technical training of personnel from aqueduct associations in watershed management
practices; and (c) awareness raising of local actors on the legal and regulatory framework
for natural resources management, as well as practical training on participatory
environmental monitoring, conflict resolution and surveillance.
2.7 To strengthen the binational coordination frameworks, the following activities will be
financed: (i) provide organizational support to the Binational Commission for the Sixaola
River Basin and the sub-committees for the lower, middle and upper sub-basins (see
Section IV); (ii) legal advisory services to provide instrumental legal capacity to
binational entities, as a contribution to facilitating future binational administration of
projects and resources; (iii) development and implementation of mechanisms to ensure
coordination between projects in the Basin, including a consolidated project database,
33 ANAM, MINAE, MAG, MIDA, Municipalities of Talamanca and Changuinola, and the two Ministries of Health.
34 Including technical capacity building that embraces traditional knowledge and methods, as well as the introduction of
pertinent outside approaches, and the provision of basic equipment required for the functioning of environmental units.
These activities will be coordinated with the Integrated Ecosystem Management in Indigenous Communities Project.
- 16 -
linked to a publicly accessible web page, as well as the organization of periodic forums
and meetings between donors and project executors; and (iv) development of strategic
planning instruments, for the Binational Commission of PILA and the Binational
Commission of Wetlands, and facilitate the integration of both of them in a single
commission for transboundary protected areas.
2.8 To enhance sustainable financing for the management of the Basin, the Project will:
(i) accompany the relevant institutions in developing instruments to leverage resources,
including, among others, concession rights, entrance and resource use fees, payments for
environmental services, charges to activities with a high environmental impact; and
(ii) analyze the feasibility for establishing a Binational Trust Fund, including the
development of an associated funding strategy.
2.9 To
raise awareness and capitalize knowledge related to the sustainable use and
conservation of biodiversity, water and soil, the following activities will be financed:
(i) design and implement a locally adapted environmental awareness raising program
transmitted through local radio; (ii) interactive environmental awareness raising program
for children and youth developed and implemented in association with primary and
secondary schools, as well as local civil society organizations; (iii) enhancing horizontal
learning amongst indigenous communities by promoting interaction between young
producers and older segments of the communities, as well as the systematization of best
practices and experience in sustainable agriculture; (iv) targeted applied research grants
for students and researchers committed to produce information for adaptive management
in the Basin; (v) dissemination of results, experiences and lessons learned through
information bulletins, socialization in local and indigenous community events and formal
meetings, publications and a project website; and (vi) facilitate participation of involved
stakeholders in selected international working groups, workshops and meetings related to
the relevant issues (eg. IW-LEARN, IUCN WCPA working group on transboundary
protected areas, GWP, Inter-American Water Resources Network-OAS) and enable
stakeholder exchanges with similar transboundary projects in the Region (eg. the GEF-
supported San Juan River Basin).
2.10 To
complement these incremental activities, the Bank financed program (1439/OC-
PN), as well as associated funding35 are expected to co-finance the following activities:
(i) strengthening of the management capacity and service delivery by the municipalities
of Talamanca and Changuinola, including urban planning and development of tariff
systems for public services; (ii) enhancing the organizational and participatory capacity
of civil society, with special attention to women; (iii) improving technical capacities of
the provincial governments; (iv) administrative and operational strengthening of key
sectoral institutions at the regional level, including the preparation of plans and programs,
databases, standards and regulations; and (v) identification and development of proposals
for payment of environmental services (in Panama).
35 In Costa Rica associated funding is expected from the "Strengthening of Municipal Decentralization Program" (CR/B7-
310-99-0150) financed by the European Commission, which started in July 2005.
- 17 -
2.11 The
main
results expected from this component are as follows: (i) technical and
operational capacities of key institutions and actors in the basin strengthened;
(ii) effective mechanisms for coordination at the binational level consolidated, including
a functioning Binational Commission for the Basin; (iii) sustainable financing mechanism
designed; (iv) awareness among local inhabitants enhanced with regard to the value of
natural resources, ancestral and low-impact production techniques, and mechanisms for
the management of natural resources; and (v) systematization and dissemination of best
practices and lessons learned, including an annual report on the condition of the Basin.
2.
Promotion of productive practices compatible with conservation and
sustainable use of water and soil resources (US$10,725,000)
2.12 This component will contribute to shifting currently unsustainable productive practices in
the middle and lower sub-basins towards sustainable use of environmental goods and
services, thereby increasing ecosystem resilience and integrity, preserving soil fertility,
reducing soil erosion and sedimentation run-off, reducing agrochemical use to sustainable
levels, reducing contamination in the binational water body, and preserving hydrological
functions of rivers and streams. The component includes the following activities.
2.13 To develop incentive mechanisms to promote environmentally sustainable productive
practices, the following activities will be financed: (i) development of incentive
mechanisms to enhance the environmental performance of enterprises, organizations and
economic actors; (ii) technical assistance to develop harmonized binational economic
instruments to reduce pollution; (iii) support MAG (Costa Rica) in the installation and
use of a system for issuing "Appropriate Soil Use Certificates" as an instrument required
for the application of the incentives provided for in the Land Law36, and promote the
development of similar incentive mechanisms in Panama; (iv) provide technical
assistance to enable the Municipalities to develop systems that facilitate the application of
the above mentioned exemption for payment of real estates taxes (see footnote 36);
(v) establish a dialogue with the banking systems and public credit institutions in the two
countries to consider developing and applying environmental considerations for the
granting of loans for productive activities; and (vi) provide technical assistance for the
elaboration and implementation of payment for environmental services mechanisms
specifically designed for the Basin, considering existing experience mainly in Costa Rica
and promoting binational harmonization.
2.14 To promote the adoption and replication of sustainable productive practices, the Project
will finance the following activities: (i) farms applying sustainable production systems in
the middle sub-basin37 will be incorporated in a learning program in which the owners of
the properties are encouraged to provide technical horizontal assistance to neighboring
farms interested in adopting similar techniques; and (ii) provide "seed" funding to
36 The Law provides for a 40% reduction of real estate tax on agricultural lands certified by MAG to produce according to
their carrying capacity and that apply practices for the recovery and conservation of the land.
37 Taking advantage of the already existing experiences of organic production (eg. bananas and cacao), agroforestry systems
and integrated farms, currently involving approximately 4,500 hectares.
- 18 -
farmers particularly in the Yorkin watershed, to develop more environmentally
sustainable production38, whilst enhancing productivity and income generation.
2.15 To consolidate an integrated water and soil monitoring system, the Project will finance
the following activities: (i) design and implement initial actions of a cost-effective and
sustainable water and soil quality monitoring program; (ii) updating of a baseline of a
water and soil quality (to be published within the first year of the Project); (iii) generate a
map and databases on sources of contaminating agents and their possible origins to
facilitate the development of regulatory, policy and incentive instruments (see paragraph
2.13); and (iv) develop a binational registry of the agrochemicals. These actions will be
developed in tandem with the capacity enhancing interventions financed under
Component 1, and in concert with public and academic institutions and non-
governmental organizations with particular technical expertise in the area.
2.16 To
enhance functional land-use planning in the Basin, the following activities will be
financed: (i) technical assistance to MAG, ANAM and the two Municipalities for the
development, implementation and evaluation of specific plans and instruments necessary
to regulate and promote sustainable land-use and reduce related conflicts;
(ii) accompanying the indigenous groups within protected areas and buffer zones in their
efforts to develop and put in place appropriate measures for regulating land use, and
(iii) the participatory formulation of a long-term Basin Management Plan.
2.17 To improve the management of micro-watersheds with community participation, the
Project will collaborate with the aqueduct organizations to carry out the following
activities: (i) a comprehensive diagnostic of the micro-watersheds; (ii) participatory
development of micro-watershed management plans, including the design of measures to
protect perimeters of wells, springs, and sources of superficial waters; and (iii) small-
scale demonstration projects.
2.18 To
complement these incremental activities, the two Bank financed programs, among
others, are expected to co-finance the following activities: (i) market research, marketing
and feasibility studies to support sustainable production; (ii) agroforestry and sustainable
forestry projects; (iii) promotion of environmentally sound production
techniques/practices; (iv) preparation and implementation of land use plans;
(v) monitoring and control of water quality in and around human settlements in the lower
watershed and coastal area; and (vi) basic water and sanitation infrastructure.
2.19 The
main
results expected from this component are as follows: (i) incentive mechanisms
to promote sustainable production among small and agro-industrial producers;
(ii) demonstration projects to facilitate the adoption and replication of sustainable
production practices among small-scale producers; (iii) instruments for regulating and
promoting sustainable land-use; (iv) integrated water and soil resources monitoring
program to inform decision-making and policy development in the Basin; (v) micro-
watershed management plans with associated demonstration projects; and (vi) improved
basic water and sanitation facilities.
38 Cost-benefit analysis and counterpart inputs requirements will be established in the Project Operating Manual.
- 19 -
3.
Conservation and sustainable use of biodiversity (US$2,105,000)
2.20 A series of actions will be supported that will contribute to ensure the long-term health of
the Basin's biodiversity, in a way that facilitates conservation of its global value, while
simultaneously providing for a low-impact, long-term sustainable use by the local
communities. Special emphasis will be made on the Basin's transboundary protected
areas39, but certain interventions apply to the entire Basin.
2.21 To harmonize and implement the management plans of the transboundary protected
areas the Project will finance the following activities in collaboration with other actors
(eg. TNC and CI): (i) develop a binationally harmonized legal, policy and regulatory
framework for co-management involving indigenous communities and/or local
organizations in transboundary protected areas; (ii) binational harmonization of the
internal zoning and management criteria, particularly for the border zone, indigenous
lands and in the marine area40; and (iii) co-financing of the recurrent costs associated with
the implementation of priority actions identified in the binational Action Plans for each of
the transboundary protected areas, including joint and participatory biodiversity
monitoring and surveillance activities.
2.22 To establish an integrated monitoring system of terrestrial and aquatic biodiversity, the
Project will finance the development of a permanent and integrated biodiversity
monitoring system for the Basin in collaboration with associated partners. Emphasis will
be made to integrate all on-going monitoring efforts into an integrated system with
common goals, harmonized methodologies and standards for collecting and sharing data
in a continuous and permanent manner. The process of developing and agreeing on the
structure and requirements of the system will be supported and once adopted, the
corresponding training and equipment needs associated to Component 1 will be
delivered, promoting synergies and cost-sharing with other actors and financiers.
2.23 To promote ecosystem connectivity through biological corridors, the Project will
finance a participatory effort to: (i) determine in detail and through field inspections the
most critical areas where landscape restoration is needed; (ii) provide recommendations
on the most cost-effective measures to be applied on both sides of the border; and
(iii) formulate in a participatory manner a binational action plan for the consolidation of
biological corridors in the Basin to be disseminated amongst interested parties and
potential financiers.
2.24 To promote alternative livelihoods based on the sustainable use of biodiversity41, the
Project will finance the following activities: (i) a systematization of the lessons learned
from past and on-going alternative livelihood initiatives based on the sustainable use of
biodiversity, (ii) participatory preparation of locally adapted interactive guidelines (in
39 As the transboundary protected areas extend beyond the limits of the Basin, certain strategic activities related to the
harmonization of management plans will encompass the full extent of the protected areas beyond the limits of the Basin.
40 Support will be provided to improve the binational management of the marine areas associated with the coastal
transboundary protected areas of Gandoca Manzanillo (CR) and San San-Pond Sak (PN), including development of a
harmonized zoning scheme, management criteria and water quality and biodiversity monitoring.
41 For example: (i) growing and commercialization of native ornamental and medicinal plants; (ii) breeding of native fauna for
protein intake and commercialization; and (iii) agro, eco and/or cultural tourism.
- 20 -
both Spanish and indigenous languages) on techniques and approaches for developing
alternative livelihoods based on the sustainable use of biodiversity, as well as associated
dissemination and training; (iii) facilitate discussions with credit institutions (private and
public) on developing innovative credit instruments targeted to the above mentioned
alternative livelihoods; and (iv) feasibility studies42 for the development of a selection of
pilot projects to be financed.
2.25 To
complement these incremental activities, the two Bank financed programs, among
others, are expected to co-finance the following activities: (i) implementation of co-
management initiatives involving indigenous communities and/or local organizations in
critical zones of the transboundary protected areas; (ii)
promotion of tourism
development in the coastal area, creating production chains, and expanding benefits to the
middle and upper areas of the Basin, including the strengthening of a community-based
rural ecotourism network and priority infrastructure for tourism visitation in coastal
protected areas; and (iii) regeneration and reforestation of riverbanks, critical areas
associated with micro-watersheds and biological corridors43.
2.26 The
main
results expected from this component are as follows: (i) binational harmonized
legal, political and regulatory framework for co-management involving indigenous
communities and/or local organizations in transboundary protected areas; (ii) priority
elements of transboundary protected area management plans harmonized; (iii) park
managers and staff provided with on-the-ground experience in binational collaboration in
basic management tasks; (iv) binational biodiversity monitoring system established,
delivering accurate information for decision-making and adaptive management;
(v) binational action plan for the consolidation of biological corridors prepared and
implemented; (vi) an increase in alternative livelihoods based on the sustainable use of
biodiversity; (vii) enabling conditions improved for sustainable coastal tourism, with
expanding benefits to the middle and upper areas of the basin; and (viii) riverbanks,
critical areas associated with micro-watersheds and biological corridors regenerated.
III. COST AND FINANCING
3.1
The total cost of the Full Size Project is US$19,375,000. Of this amount, US$3,500,000
will be financed by a GEF donation to be administered by the Bank. With the GEF
donation, the Bank will make a grant in equal amounts (US$1,750,000) to Costa Rica and
Panama, which will commit to use the resources to finance jointly agreed activities under
this binational Project. An additional, US$14,905,000 will be provided as co-financing
from the two IDB-funded Sustainable Development Programs (1439/OC-PN and
1556/OC-CR). Finally, US$970,000 as incremental co-financing will be provided from
the governments of Costa Rica and Panama (mainly in-kind contributions). Table III-1
presents a summary of the distribution of funds by component and source.
42 Ecological carrying capacity, environmental impacts/mitigation measures, market analysis, cost-benefit analysis.
43 Taking into consideration the technical inputs provided by studies financed with GEF resources.
- 21 -
Table III-1: Indicative Budget by Source
(GEF, IDB and local counterpart) and Investment Item (In US$ thousands)
1556/OC-
Budget category
GEF-IDB
GOV-CR
GOV-PN
1439/OC-PN*
TOTAL
CR*
1. Direct costs
1.1 Component 1
925
160
160
160
2,620
4,025
1.2 Component 2
1,290
162
163
8,197
913
10,725
1.3 Component 3
600
90
90
1,182
143
2,105
SUB-TOTAL (Direct cost)
2,815
412
413
9,539
3,676
16,855
2. Project Administration
2.1 Binational Technical Executing
490
73
72
1,150
540
2,325
Unit for the Project**
2.2 Administration of funds (3%)
105
--
--
--
105
2.3 Financial audits
50
--
--
--
50
SUB-TOTAL
(Project Administration)
645
73
72
1,150
540
2,480
3. Contingencies
40
40
TOTAL
3,500
485
485
10,689
4,216
19,375
PERCENTAGE
18%
2.5%
2.5%
55%
22%
100%
* Including both IDB loans and local counterpart funding. ** This includes funds for implementation of the Project's replication and
monitoring strategy.
3.2
In addition, approximately US$420,000 and US$360,000 from complementary projects
funded by TNC and CI respectively are considered as associated funding for activities
relating to the management of the transboundary protected areas (PILA, San San-Pond
Sak), consolidation of biological corridors and biodiversity monitoring. Furthermore, it is
expected that the European Commission will contribute with an estimated US$200,000 to
strengthen the technical capacities of the municipality of Talamanca.
IV. PROJECT EXECUTION
A.
Principles of project execution
4.1
Project execution will be guided by five primary principles: (i) ensure the highest degree
of integration at the technical and programmatic levels; (ii) build on the existing
capacities of local, regional, and national actors to promote decentralized and local
execution as a means to maximize the potential for integrated management; (iii) establish
effective mechanisms for communication and feedback between stakeholders to promote
integration during and beyond execution; (iv) capitalize on previous efforts to promote
binational integration by strengthening the institutional framework established under the
Costa Rica-Panama Border Development Cooperation Agreement; and (v) grouping of
procurement packages to facilitate project implementation and supervision.
- 22 -
B.
Binational framework for integrated management
4.2
The Project beneficiaries are the Republics of Costa Rica and Panama. In the absence of
a binational entity with legal capacity to administer and execute funds for the Basin44 the
operation will be co-executed by MINAE and ANAM. To ensure the highest degree of
integration possible, the Bank will sign a tripartite agreement with both governments,
specifying the commitment of each to: (i) execute their respective part of the grant in a
joint manner and under a single workplan; (ii) create a Binational Commission for the
Sixaola River Basin and a Binational Technical Executing Unit for the Project, both
under the umbrella of the Costa Rica-Panama Border Development Cooperation
Agreement; and (iii) entrust the financial administration of GEF funds to a specialized
financial administration firm (See Annex 4).
4.3
With ample stakeholder participation45, the Binational Commission for the Sixaola
River Basin will provide the strategic policy direction and will be responsible for the
overall supervision of Project execution46. It will approve the Project´s annual work
plans and will submit them to the co-executing agencies, MINAE and ANAM, for their
formal endorsement. The rules of operation of the Commission will be detailed in the
Project´s Operating Manual and include specific terms for critical decisions such as the
approval of the annual work plan. Creation of the Commission with the required legal
mandate and capacity will be a condition precedent to Project approval.47
4.4 The
Binational Technical Executing Unit for the Project will act as the executive arm
of the Commission. It will have a technical coordinator financed by the Project,
supported by two specialists on sustainable environmental management of river basins
from each country, who will be on detail from MINAE and ANAM on a full-time basis,
as well as a representative from the Indigenous Authorities in Costa Rica. The Project
will also provide funds to hire short-term technical assistance and administrative support
for the Executing Unit. It will be responsible for the technical execution and supervision
of Project activities, specifically: (i) prepare the initial work plan, expected completion
dates and estimated budget; (ii) prepare subsequent annual work plans; (iii) conduct the
selection processes for the procurement of goods and services and instruct the financial
management firm to issue the contracts; (iv) supervise execution and approve payments
under all consulting services and purchase contracts; (v) coordinate and facilitate the
participation of all relevant actors; (vi) monitor and keep records of co-financing;
(vii) work with the sub-basin committees to incorporate their input into the planning and
execution of Project activities; (viii) present to the Commission the annual work plans for
44 The Cooperation Agreement between Costa Rica and Panama for Transfrontier Development, which came into force in
1995, established a Permanent Binational Commission to work on the area covered by the Project, but did not invest it with
legal capacity to administer and execute funds.
45 Its members would include: government agencies such as MINAE, ANAM, MIDA, MAG, CNE, SINAPROC, Health
(regional level); Municipalities of Changuinola, Talamanca; representative from the Huétar Limón Regional Council in
representation of MIDEPLAN, JAPDEVA, and the MEF´s Provincial Office in Bocas del Toro; one representative from
each country in the lower and middle sub-basin committees and one representative from the upper sub-basin (only Costa
Rica); Executive Secretariats of the Costa Rica-Panama Border Development Cooperation Agreement in each country.
46 The Governments have a shared long-term vision that the Commission gradually be enabled to formally manage the Basin.
47 Only the Permanent Binational Commission, the highest level of authority under the Costa Rica-Panama Border
Development Cooperation Agreement, has the power to approve work plans. For this operation, the Permanent Binational
Commission will delegate this authority to the Binational Commission for the Sixaola Binational River Basin.
- 23 -
their approval and submission to the co-executing agencies for endorsement;
(ix) supervise the financial management firm to ensure proper accounting, control and
reporting of Project funds; (x) consolidate and prepare all reports to be submitted to the
Bank; and (xi) submit requests for disbursement of Project funds with their supporting
documentation to the Bank. Creation of the Binational Technical Executing Unit for
the Project with the required personnel and mandate will be a condition precedent
to Project approval. Selection of the technical coordinator will be a condition
precedent to first disbursement.
4.5
There will be three sub-basin committees, one in each of the upper, middle and lower
sub-basins48. They will include representatives from indigenous communities,
development associations, small and medium farmers, environmental organizations and
other productive sectors such as tourism. Their main responsibility will be to participate
in the definition and prioritization of problems, in the planning of activities and in the
social audit of their execution.
4.6
The two governments will hire a financial administration firm that will be responsible
for the administration of the GEF funds. Specifically, the firm will: (i) receive direct
disbursements from the Bank to be exclusively used for Project execution; (ii) issue the
contracts and payments requested by the Executing Unit following procedures detailed in
the Project Operations Manual49; (iii) maintain adequate financial and accounting records
of all transactions50; (iv) prepare, for the submission to the Bank by the Executing Unit,
financial reports including a semi-annual report on the status of the revolving fund;
(v) maintain specific and separate bank accounts for the Bank´s financing and for
counterpart funds; and (vi) maintain proper filing systems for documentation supporting
disbursements. The financial administration firm will be hired as a condition
precedent to first disbursement.
4.7
The Project Operations Manual will set out the duties and responsibilities of MINAE,
ANAM, the Executing Unit and the Binational Commission for the Sixaola Binational
River Basin, the financial management firm, and all other relevant actors related to the
Project and the rules for its execution. Prior to Project approval, ANAM and MINAE
will approve the Program Operations Manual, previously reviewed by the
Binational Commission for the Sixaola River Basin and agreed upon with the Bank.
C. Project
execution
4.8
The execution structure for this operation builds upon the coordination and technical
execution capacities of the institutions responsible for sustainable management of river
basins in each country and is supplemented by a contractual arrangement to provide
financial management services to execute Project funds. The Executing Unit brings
together the technical expertise of both MINAE and ANAM to work together, under a
48 For the IDB Programs these have been established in each country (in the upper sub-basin only in Costa Rica). For the GEF
intervention, the middle and lower sub-basin committees in each country will be merged in one for the middle and lower
basin respectively.
49 The property rights and maintenance responsibilities for all the equipment will clearly be established prior to each purchase.
50 The firm will contract an independent financial audit firm, selected by the Binational Technical Executing Unit, to carry out
annual audits in accordance with Bank policies and procedures.
- 24 -
common vision, for the integrated management of the Basin. With the presence of the
Project Coordinator and with technical assistance financed by the Project, the Executing
Unit will ensure that all Project interventions are carried-out efficiently under an
integrated approach consistent with both countries´ policies and legal frameworks. The
execution structure is enhanced by the decision of both countries to hire a specialized
financial administration firm to handle Project funds51 under a unified single mechanism.
This firm will be selected competitively by the Executing Unit and hired by each country
through MINAE and ANAM. The firm will have, at a minimum: (i) the capacity to
operate in both countries; (ii) reliable and safe information and management systems able
to track, record, account for and report on all Project transactions; and (iii) previous
experience in the financial management of investment projects. Once contracted, the
Bank will be able to make direct disbursements to the firm, at the request of the
governments.
4.9
The Binational Technical Executing Unit will be installed in the Basin (either in Costa
Rica or Panama), taking advantage, to the extent possible, of the operational facilities of
the IDB Programs. The Bank will assign responsibility for the supervision of Project
execution to its Country Offices in Costa Rica and Panama52 with the backstop of a
specialist from RE2/EN2 at IDB Headquarters in Washington, the latter also serving as
contact person with the GEF.
D.
Procurement of works, goods and services
4.10 The procurement of works, goods and consulting services will be carried out following
the Policies and Procedures for Bank Procurement (GN-2349-6 and GN-2350-6) and in
accordance with the Procurement Plan currently being prepared for the Project. The GEF
grant will be executed through an estimated four administrative service contracts, 11
technical service contracts and three equipment contracts. No exceptions to Bank policies
are foreseen. The procurement limits are established in Table IV-1. National Public
Bidding and selection will be advertised in the two beneficiary countries. For shopping,
to the extent possible, providers from the two countries will be invited. The Bank will
apply ex-ante revisions for all purchases.
51 GEF and local counterpart resources only.
52 The final decision on where to install the Executing Unit will be taken by the two Governments before Project appraisal and
at that moment the Bank will also determine which Country Office that will have the lead supervision responsibility.
- 25 -
Table IV-1 Procurement Limits (in thousands US$)
International Public
Type
National Public Bidding
Bidding
Shopping
Goods
250 <250
and
50
< 50
Works
1,500 <1,500
and
250
< 250
International Selection
Selection Based on
Type
National Selection Process
Process
Consultant Qualifications
Consulting Services
200
< 200 and >100
<100 and 10
E. Disbursement
period
4.11 The disbursement period shall be 48 months from the date the contract goes into effect.
The tentative timetable for disbursements is indicated in Table IV-2.
Table IV-2 Indicative Timetable of Project Disbursement (in US$ thousands)
Source
Year 1 Year 2 Year 3 Year 4
Total
%
GEF
700
1,050
1,050
700
3,500
18%
Governments
195
290
290
195
970
5%
IDB
(1439/OC-PN
and
1556/OC-CR) 2,981 4,472 4,471 2,981 14,905
77%
Total
3,876 5,812 5,811 3,876 19,375 100%
Percentage
20%
30%
30%
20%
100%
F. Special
disbursement
for Project start-up activities
4.12 Upon fulfillment of Article 4.01 (a), (b), (c), (e), and (g) of the General Conditions,
ANAM and MINAE may request an initial disbursement of up to US$100,000 from the
Bank to finance project startup activities, including the hiring of the Project Coordinator.
G. Follow-up,
evaluation
and
monitoring
4.13 Throughout its lifetime, the impacts of the project intervention will be monitored using
the indicators in the logical framework matrix (Annex 1)53. Within the first year of
Project execution, the complete baseline of outcome indicators indicated in the log-frame
matrix will be consolidated and a detailed monitoring system54 will be made operational
(see Appendix F)55. To the extent possible, efforts will be made to take advantage of the
existing monitoring systems and capacities already installed for the Program in Bocas del
Toro. Building on existing initiatives promoted by associated partners in localized
segments of the Basin, a permanent and integrated monitoring system for the state of the
basin's biodiversity, soil, and water resources will be established (see Components 2, 3)
to facilitate decision making-processes and adaptive management by the stakeholders.
These systems will be internalized in existing institutions, involving their staff and other
local stakeholders, in order to ensure continuity after the life of the project. The project
will actively use the GEF BD-1 and BD-2 Tracking Tools to measure the effectiveness of
protected area management and the mainstreaming of biodiversity into production
landscapes.
53 As per GEF International Waters guidance, these include: (i) regional process indicators; (ii) stress reduction indicators; and
(iii) environmental indicators.
54 This will include the development of an evaluation methodology and results framework for the pilot projects.
55 Appendix F provides detailed information on the monitoring strategy for the main outcome indicators (incl. monitoring
methods, responsibilities and costs).
- 26 -
4.14 A
mid-term
review56 will be carried out when 50% of the GEF resources have been
disbursed or after 24 months after the Project contract goes into effect, whichever comes
first. This review will determine if the Project strategy is performing according to the
established objectives, or if adjustments are necessary. When 90% of the GEF resources
have been disbursed, a final evaluation will be performed to determine, among others, the
extent to which Project objectives have been reached, the level of stakeholder
participation in decision-making, positive changes in beneficiary behavior and practices
due to the intervention57, as well as its sustainability and cost-effectiveness. These
evaluations will be guided by the following questions: (i) Is the project successfully
contributing to mainstreaming biodiversity considerations in basin planning and
development and catalyzing the sustainability of the transboundary protected areas?;
(ii) Are producers internalizing sustainable production methods, thereby contributing to
reduce land degradation processes and contamination of rivers and streams?; (iii) Is the
basin wide governance structure enabling the involved stakeholders (institutions, social,
ethnic, and other civil society groups) to function in a effective and coordinated manner
to reach the goals outlined in the RSDS?; (iv) Is the Project contributing to enable basic
integrated basin management functions to be financially sustainable in the long term?,
and (v) Is The Project contributing to enhance the environmental quality of the Basin?
V. BENEFITS, FEASIBILITY AND RISKS
A. Project
benefits
5.1
The Project will consolidate an integrated ecosystem management model in Basin, in
which local and national institutions will be strengthened in order to improve governance
of the basin with participation of local stakeholder groups and productive sectors. The
proposed approach will deliver a series of benefits for the global environment, for the two
involved countries, as well as for the local population in the area.
5.2
The intervention will result in global environmental benefits within three of the GEF's
focal areas. Specific benefits in biodiversity include, among others: enhanced
conservation and sustainable use of species, protection of habitats, maintenance of
ecological functions (such as gene flow), and protection of buffer zones and biological
corridors. In terms of reducing land degradation, the benefits will include eliminating
harmful practices thereby enhancing resilience and integrity of this ecosystem of global
importance (promoting appropriate land use and reduction of soil erosion) and
capitalization of traditional indigenous knowledge for sustainable land management.
Specific benefits in international waters include reduction of contamination of the
binational water body (sedimentation, liquid and solid wastes, and agrochemicals) and
maintenance of hydrological functions. In accordance with the objectives of OP 12, the
project will generate global benefits through an integrated approach to basin-wide
56 The Mid-term and final evaluations will be performed by a team of consultants contracted by the IDB, using the fee
resources provided by the GEF.
57 As compared to initial estimates established at the beginning of the Project through surveys and participatory methods.
- 27 -
management, thus securing long-term, cross-cutting, synergic, holistic and sustainable
protection of the region's resources.
5.3
National and regional benefits include, among others: (i) improved technical and
operational capacities of institutions, civil society organizations, local governments and
indigenous authorities for integrated management; (ii) improved general environmental
awareness among the stakeholders; (iii) improved environmental monitoring and
enhanced access to environmental information systems to facilitate public and private
investment decisions and planning; (iv) enhanced transboundary protected area
management effectiveness; and (v) alternative sources of funding for environmental
management identified and leveraged. The project will also contribute to achieve regional
objectives, related, for example to the consolidation of the Mesoamerican Biological
Corridor and the implementation of the Mesoamerican Sustainable Development
Initiative of the Plan Puebla Panama.
5.4
Local benefits include, among others: (i) improved alternative livelihood options and
protein sources based on the sustainable use of biodiversity, land and water resources;
(ii) improved local socio-economic conditions through reduced water pollution and land
degradation, as well as increased access to water and sanitation facilitation, including
reduced occurrence of gastrointestinal diseases in the population; (iii) reduced
vulnerability to natural hazards through the regeneration of river banks and critical areas;
(iv) improved prospects for sustainable nature-based tourism; and (v) increased capacity
of national institutions to protect public goods against free riders will enhance the long-
term carrying capacity of the Basin. The achievement of benefits at local and national
levels will be largely financed by non-GEF co-financing.
B. Feasibility
and
sustainability
1. Institutional
5.5
The institutional feasibility of this operation is based on: (i) utilizing the existing
technical capacity of both governments´ institutions and providing reinforcement where
needed; (ii) promoting the active participation of a wide range of relevant actors under
clear guidelines to ensure efficient execution of Project activities; and (iii) supporting
both governments´ efforts to strengthen the institutional framework provided by the
Costa Rica-Panama Border Development Cooperation Agreement. The Executing Unit
will draw on the technical expertise of the specialists assigned by MINAE, ANAM and
the Indigenous Authorities in Costa Rica, under the guidance of a technical coordinator
who will have project management experience related to the sustainable management of
river basins. The Executing Unit will work closely with the Binational Commission for
the Sixaola River Basin, which, given its wide stakeholder representation, is expected to
result in targeted interventions. In addition, the three sub-basin committees will feed
directly into the Executing Unit's actions, fostering appropriation of the Project. Finally,
the commitment of both countries to implement this Project is strong, as evidenced by
their active participation during the design of the intervention. In addition, throughout
this process, multiple non-government actors have been also actively involved in
developing a joint vision for integrated management of the Basin.
- 28 -
2. Financial
5.6
The fact that the two governments are willing, not only to agree on a common vision for
the integrated development of RSDS, but also to increasingly commit public resources in
favor of its implementation is a strong sign in favor of financial sustainability.
Nevertheless, the Project strategy recognizes that limited public resources need to be
complemented by alternative sources. In this context, the Project will develop and put in
place a strategy for the sustainable financing of the recurrent costs associated with
management of the Basin. In particular, the Project will seek to accompany the relevant
institutions in developing appropriate instruments to leverage resources, including,
among others: entrance fees, concession rights, resource use fees, payments for
environmental services, charges to activities with a high environmental impact, and
voluntary payments from private donors. This effort will build upon existing experience
from the two countries58, capitalize on the initiatives being sought by the local
stakeholders59, collaborate with associated projects60 and will take advantage of ongoing
studies61 currently being developed. Furthermore, the Project will analyze the feasibility
for establishing a Binational Trust Fund, including the development of an associated
funding strategy. To further promote the binational integration of the transboundary
protected areas, the Project will support the initial implementation of priority joint actions
(eg. monitoring, surveillance). However, in order to encourage sustainability, the Project
approach will consistently limit its contribution to cover the recurrent operational costs,
with the expectation that the participating stakeholders gradually internalize these costs.
3.
Environmental and social
5.7
Overall, the operation will have a positive environmental impact associated with
measurable results in terms of: (i) increased binational capacities for integrated and
participatory water basin management, including water pollution and land degradation
control and biodiversity conservation and sustainable use; (ii) mainstreaming ecological
considerations in the development of the Basin; (iii) an increase in economic activities
involving sustainable practices and technologies; and (iv) protection of globally
significant terrestrial and aquatic ecosystems. Positive social impact is expected in terms
of enhanced participation of stakeholders not traditionally included in decision-making
processes pertaining to the development of the Basin, in particular the indigenous
groups62, women and civil society. Local residents will also benefit from improved
environmental conditions and enhanced opportunities for sustainable livelihoods. The
project will not result in significant or foreseeable adverse environmental or social
impacts due to the nature, scale and location of the activities to be financed by the GEF
grant and the co-financing. Nevertheless, its Project Operating Manual will include
environmental and social sustainability selection criteria for the pilot projects63, as well as
58 For example the GEF/WB funded Ecomarkets Project (20002006) and the fund-raising effort for the Osa Peninsula.
59 For example, efforts being made by the indigenous groups to develop mechanisms for payment for environmental services.
60 For example proposed GEF/WB project on mainstreaming market-based instruments for environmental management.
61 For example, the Bocas del Toro Program is financing a study on payment for environmental services in the Basin.
62 The operational policy on indigenous communities (GN-2386-8) has been considered during the design of the Project.
63 Based on the manuals of the IDB-financed programs, ensuring the application of specific measures to limit beneficiaries of
activities in indigenous territories to indigenous groups and guaranteeing that Project support for the breeding of flora and
fauna be limited to native species.
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appropriate environmental and social monitoring and supervision measures64.
Furthermore, all the technical studies financed by the Project will internalize
environmental considerations.
C. Replicability
5.8
The Project will provide lessons learned and experiences that could be replicated as
follows: (i) integrated management of transboundary protected areas and river basins65, of
particular interest at the global and regional levels; (ii) market-based instruments to
promote sustainable production, sustainable financing schemes and co-management of
protected areas involving indigenous communities and civil society, of particular interest
at the national level; and (iii) sustainable livelihoods, ecosystem restoration and water
source protection and management, of particular interest at the local level. The Project's
replication strategy66 will respond to the above intentions as follows: (i) establish
working relationships with other transboundary protected area and river basin projects in
the Region67; participate in international and regional working groups and fora68;
maintain an updated website; and produce working papers, publications and periodic
project newsletters to be disseminated in the Region; (ii) organize field visits and study
tours for public and private decision and policy makers to the Basin; promote exchanges
between co-management initiatives within and outside the Basin; proactively engage in
dialogue with legislation and policy makers, public and private financial institutions and
productive sector associations; and establish linkages with academic and research
institutions69; and (iii) facilitate horizontal learning exchanges within the Basin; establish
linkages with training institutions; socialization in local and indigenous community
events and formal meetings and ensure effective communication with other projects in
the Basin.
D.
Consultation with and participation of the stakeholders and beneficiaries
5.9
A wide array of stakeholders have been actively involved in the development of this
proposal. This process started during the formulation of the RSDS in 2003-2004 and the
design of the two corresponding IDB-funded programs. A comprehensive consultation
process was performed involving approximately 50 workshops and meetings at the
community, basin and national levels, to identify the main social actors, the most relevant
production and service organizations, the most representative agencies, and their
respective agendas and development priorities. This process was continued in 2005-2006
during the PDF-B phase under the guidance of an Advisory Group composed of the main
64 The infrastructure investments to be funded by the IDB-financed programs will be governed by their respective Manuals,
which include regulations regarding environmental impact assessment (EIA) and supervision.
65 Including headwater protection.
66 The funding for the majority of the activities mentioned in this paragraph have been internalized in the components.
However, the budget for the Executing Unit includes resources for the implementation of the replication strategy.
67 In particular Montecristo Trinational Protected Area, El Corazón Binational Protected Area, both GEF projects, as well as
the transboundary Lempa (Guatemala, El Salvador, Honduras) and San Juan River (Nicaragua, Costa Rica) basins.
68 In particular those promoted by GEF, CCAD, IUCN, CATHALAC, such as IW/LEARN, the IMDS/PPP, Global
Transboundary Protected Areas Network of World Commission Protected Areas/IUCN, the GWP and IWRN-OAS.
69 Including inviting researchers, students to work on topics related to the Project, encourage participation of stakeholders as
trainers in their activities, involve them in the implementation of Project monitoring and dissemination of results.
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stakeholder representatives70, in order to agree on the specific activities to be included in
the Project and the responsibilities and roles of the actors. As described in Section IV, the
Project design includes measures at two levels to ensure strong stakeholder participation
in Project execution. At the Basin level, the Binational Commission will provide an
opportunity for public, private and civil society actors to agree on matter regarding the
development of the Project. At the sub-basin levels, committees will enable local
stakeholder participation in the definition and prioritization of problems, in the planning
of activities and in the social monitoring of its execution.
E. Risks
5.10 The success of the Project in achieving its global objectives faces four main risks: (i) the
Project execution arrangements, involving a multiplicity of actors in the two countries,
are not put in place in a timely manner and do not function efficiently; (ii) the
coordination with the co-financing programs does not materialize in a timely and
systematic manner; (iii) the possibility that the stakeholders at different levels reduce
their interest and commitment to stay involved in the management of the Basin due,
among others, to a perception of limited benefits and opportunities for influencing
decision-making processes, and changes in the priority given by the authorities towards
the sustainable development of the Basin; and (iv) the harmonization of legal, policy and
regulatory frameworks are not achieved because the required agreements are not reached
among the pertinent parties and/or the decision making process is unexpectedly
extensive. To mitigate these risks, the following actions will be taken: (i) the creation of
the Binational Commission for the Basin and the Executing Unit, as well as approval of
the Project Operating Regulations, will be conditions prior to Project approval, and the
Bank will ensure close supervision during execution; (ii) effective coordination
mechanisms with the co-financing programs will be put in place (including, among
others, joint planning meetings, sharing of reports, promoting the harmonization of
methods); (iii) adaptive management procedures will be put in place and applied
throughout the lifetime of the Project, including, among others, effective feed-back
mechanisms, continuous interaction with the beneficiaries, public disclosure of project
performance and results, ensuring sufficient resources for stakeholder empowerment; and
(iv) technical support will be provided for accompanying the referred harmonization
processes.
70 MEF, MIDEPLAN, ANAM, MINAE, other national- regional- and local authorities, Indigenous Governments and
communities, productive sector associations, women's organizations, civil society, and representatives of other projects.