PART 2: Group Exercise

Sustainability and Replicability of the Full Project

Background Documentation

CASE A

Project Title: Environmental Protection and Sustainable Development of the Guarani Aquifer System

1. Sustainability:

Sustainability of the project will be facilitated by involving stakeholders in the project activities from the beginning. As previously mentioned, the demand for this project originated in the countries. By building human capacities and strengthening institutions, especially within the framework of the MERCOSUR and further sensitizing stakeholders, including those within civil society, it is expected that the collaborative framework built up by the project will be sustainable after the end of the project. Certain costs of the project, such as maintaining the information system, are of a recurrent nature and would require continuing financing by the governments and other stakeholders after project completion. These costs, including the costs of human resources and institutions, will have to be borne by the countries within the Guarani Aquifer System region.

As articulated at the GEF first Biannual Conference on International Waters, the preparation of the Strategic Action Program, required by the GEF, constitutes the first phase of a project involving international (transboundary) waterbodies. It also implies that, in order to provide the project (and the process of better managing transboundary waters) with the necessary sustainability, a second phase needs be contemplated during which the Strategic Action Program would be implemented. As the Strategic Action Program is the principal output of this project, the need for follow-up will be taken into account by including planning for the second, implementation phase of the project into the last year of the current project. In the case of the Guarani Aquifer System, a second phase would imply investments in the protection of recharge areas, in the prevention and mitigation of point-source pollution, and in measures to reduce overdrafting of the Guarani Aquifer System in specific localities, as well as development of activities related to the thermal characteristics of its waters. Financing of the second phase might imply country resources, GEF, World Bank, and/or other multi- or bilateral funding.

2. Replicability:

An international legal framework for the management of tranboundary groundwater resources does not exist. On the other hand, transboundary groundwater issues do need to be address because as initiatives are often proposed and implemented in regions subject to scarcity and competition (e.g. North Africa and the Middle East). In the case of the Guarani Aquifer, the Bank/GEF could make a contribution by helping to shape and institutional framework regarding transboundary groundwater which could serve as a replicable model to other countries and regions. In addition, the experience derived from this project could contribute to GEF and the Bank thinking with regard to transboundary groundwater issues and to the development of consistent policy approaches.

For this purpose, the project monitoring and evaluation component will be geared towards documenting both processes and outcomes of the project, and the dissemination of reports and participation efforts related to transboundary groundwater in other regions will be encouraged.

Source: GEF Project Brief. IW LEARN Resource Center; Knowledge Products; GEF Related Documents: GEF Project Brief, page 34 and PDF-B pags 12-13. (www.iwlearn.net/docs/gef.php#9)

CASE B

Project Title: The Benguela Current Large Marine Ecosystem (BCLME) Programme

Risks and Sustainability

Commitment

54. The long term success of regional scale marine ecosystem management programs, such as the one proposed here depend, inter alia, on the political willingness of the participating countries to cooperate, their willingness to continue project programs and approaches after the life of the GEF intervention, and the extent to which activities successfully engage system users of the resources that are the subject of intervention. For the long term sustainability of the BCLME Program it will be necessary for governments to see clearly, by year five, that the on-going benefits which they will derive from the Benguela Current Commission (BCC), and their own further investment in the Program, will be far greater than the costs which would accrue to them if these mechanisms were not in place.

55. In relation to political willingness, the level of project risk is seen as low in Namibia and South Africa and moderate in Angola. Namibia, where fisheries account for ten percent of GDP, has shown a very high degree of technical and political level commitment to the project, and has indicated its strong willingness to continue. South Africa has shown a strong level of interministerial involvement in the PDF-B and, as with Namibia, the level of this strong interministerial commitment is likely to continue in the future. It might well have been expected that civil strife in Angola would have resulted in an uneven commitment of that country to this project. This has not been the case. Interministerial involvement on the part of Angola has characterized its presence at every major meeting of the BCLME, and the fact that two key Ministers, including the Minister of Petroleum, have signed the SAP is indication that the Government of Angola, despite the ongoing civil strife, is committed to the full project. There is a growing realization on the part of the countries that environmental sustainability is inextricably linked to food production, tourism, sanitation, population movements, and thus regional stability. They recognize that their ability to craft an integrated approach to the BCLME is crucial to that realization.

Sustainability

56. The risk of this GEF-initiated program and activities related to it, ending after the life of the project are also seen as low. Country completion of the TDA, a jointly undertaken, interministerial exercise characterized by strong cooperation and openness, led to the creation of the SAP. The SAP itself is a document containing a level of country commitment, particularly through the self-sustaining mechanism of the Benguela Current Commission (BCC), that is thorough in its programmatic approach, clear in its objectives, and specific in relation to the country commitment to sustain important BCLME initiatives after the life of the GEF intervention. The countries will, singly and jointly, continue aggressive attempts to solicit additional donor support during the life of the GEF project and beyond through efforts coordinated by the BCC.

57. It is recognized that negotiations necessary to create the permanent Benguela Current Commission will take some time, perhaps as long as the project itself. Recognizing this, the countries have pledged themselves to immediately create the Interim Benguela Current Commission (IBCC) which will have specified functions and responsibilities. The countries will seek to adopt, through their appropriate national mechanisms, country specific policy/institutional/legal reforms necessary to implement the agreed upon recommendations of the IBCC. The IBCC will be comprised of three representatives from each of the participating countries. Terms of office shall be for six years, thus actually extending beyond the life of the GEF intervention. The IBCC will also have non-voting representation from SEAFO, UNDP, SADC, and the PCU Secretariat. As previously mentioned, other entities such as SEAFO are comprised of members that do not directly abut the BCLME, and thus the countries are interested in establishing a separate entity comprised of the three nations that do directly border the resource.

The World Bank shall be represented on the IBCC for the duration of the project. Specialists and representatives of other stakeholders and regional and international organizations will be invited to join the IBCC from time to time as appropriate. The IBCC shall be supported by five Advisory Groups on fisheries and other living marine resources, environmental variability and ecosystem health, marine pollution, legal and maritime affairs, and information and data exchange. The more specific functions of the Advisory Groups are described in the text of the SAP (see project brief, optional Annex I).

58. Sustainability will also be enhanced by a progressive transfer of project leadership, overall project management and output production directly to the country formed IBCC and, later, the BCC. The IBCC and eventually the BCC will assume the leadership role for the project as those institutions are formed and mature. Specifically, toward the end of year three of the project the PSC will have the opportunity to name a new CTA for the remaining two years of the project. The PSC could at that time, should it so desire, assure progressive transfer of project responsibility to the regional level by acting to hire a regionally-based CTA. Assuming adequate regional capacity has been developed, in year five overall project management will be absorbed into the IBCC or, should negotiations for the formation of the BCC be concluded, that institution, which would have legal standing, would assume project responsibility. The existing PCU would at that time become the Commission core Secretariat, with additional staff resources being provided by the countries themselves as deemed necessary by the Commission and the countries. Last, sustainability will be enhanced through UNDP discussions with the participating countries on the incorporation of project related capacity building assistance into UNDP regular programs.

Financial Sustainability

59. Financial sustainability is enhanced by the country commitment to sustain the Benguela Current Commission beyond the life of the GEF intervention, a continuation and building upon the already substantial level of co-finance for the project (approximately 165% of the GEF contribution), and the strong country and international donor support for the work of BENEFIT, which will serve as the science “arm” of the BCLME project, consistent with the scope of BENEFIT. The SAP, signed by seven Ministers of the participating countries, is explicit in stating that “Member states agree to commit themselves to continuing the BCLME Programme beyond the GEF intervention, and will endeavour to (a) adopt appropriate legislation, (b) implement economic instruments and (c) establish a permanent Benguela Current Commission with a supporting Secretariat. A financial plan that will make provision for future sustainable funding will be prepared, including a study on the feasibility of establishing an Environmental Fund.” The current level of support available to BENEFIT, and the donor and private sector level of support to the project is secure and projected to increase. This will be enhanced by the inclusion of Output 5 in this proposal, an Output expressly targeted to plan and implement donor conferencing to increase the current level of co-finance available to the project and to secure funding that would transcend the life of the direct GEF involvement. In addition, the countries will undertake a feasibility study to determine options to assure continued, self-finance of key program elements including the possibility of instituting fish landing levys to fund such ongoing costs as those associated with the Secretariat of the IBCC and the BCC.

Indicators (Extracted from the projects’s Logframe)

Output 2

Long-term objective: Effect the sustainable management and utilization of the resources of the BCLME

Objectively Verifiable Indicators:

• Issuance of annual state-of-the- ecosystem reports.
• Specific recommendations and agreements on harvesting levels of specific species.
• Improved forecasting techniques with resulting positive environmental, economic and social benefits for the participating countries.
• Creation of regional approaches to mining issues and to activities related to oil exploration and drilling, including the harmonization of approaches.
• Cooperatively developed socio- economic assessment of potential for, and feasibility of expanded mariculture.
• Formulation of harmonized approaches to mariculture.
• Formulation of regionally-based methodologies for the conduct of environmental impact studies.
• A regional approach to post-mining activities in the waters of the BCLME. Measures to achieve protection of vulnerable species.
• A completed assessment of non- harvested species and their role in the ecosystem

Source: UNDP, Global Environment Facility. Integrated Management of Benguela Current Large Marine Ecosystem (BCLM E). Project Document, September 2001, page 18-20; and Annex C. Logical Framework (Logframe), page 48.

At: www.bclme.org/resources/docs/projdoc.pdf

CASE C

Project title: Addressing Transboundary Environmental Issues in the Caspian Environment Programme

Sustainability

The explicit commitment made by each of the five Caspian littoral states and actions they have already undertaken, are the best indication of the sound foundation for this Programme. Implementation of the CEP is one step toward guaranteeing that the activities and systems established by the Programme will endure beyond the life of it.

In 1993, the five littoral states founded the Organization for the Cooperation of the Caspian Coastal Neighboring Countries. Environmental protection and wise use of resources were among the areas identified for cooperation. Difficulties regarding the Caspian's legal status and the extent of national sovereign territories delayed progress but there is a consensus that this issue could be set aside for the time being in order to achieve progress on those aspects which are not contentious. Some concern has been expressed regarding the prudence of the international community getting involved in the problems of the Caspian environment before the Caspian riparian countries have reached agreement on the management and use of the region’s vast oil resources. Other GEF projects (e.g. East Asian Seas) have enjoyed success in making rapid, substantive progress in addressing multi-country, transboundary marine environmental issues even in the absence of multi-national agreements on hydrocarbon resource management. This project was submitted with the expectation that multi-country collaborative projects

such as the one proposed could in fact help facilitate a dialogue to reach agreement on larger and more divisive issues.

At Almaty in May 1994, the littoral states adopted the Declaration on Environmental Cooperation in the Caspian, through which they affirmed their desire to cooperate constructively in environmental management and their commitment to cooperate fully in the preparation and implementation of Programmes of joint activities for the protection of the Caspian environment, with the financial and technical assistance of the international community.

In response, UNDP, UNEP and The World Bank have indicated to the Governments of the littoral states their willingness to assist them in preparing a comprehensive, integrated environmental management Programme for the Caspian. The overall goal of the Caspian Environment Programme will be the environmentally sustainable development and management of the Caspian region, including living resources and water quality, so as to obtain the greatest possible benefits for the human populations of the region, while protecting human health, ecological integrity, and the region's sustainability for future generations.

At the request of the littoral states, UNDP, UNEP and The World Bank (partly with the support of a PDF Block A), a preliminary concept paper was presented at a meeting of the littoral states in Tehran in April 1995, describing the main steps needed for establishing a regional environmental management plan for the Caspian.

A joint statement by the Caspian littoral states in April, 1995, reiterated their concern regarding the deterioration of the Caspian environment, renewed their commitment to work together on this issue, and renewed their invitation to the UN system to support regional and national Programmes for the protection and sustainable management of the Caspian.

As a further demonstration of the national commitment, the first meeting of the Interim Steering Committee of CEP, held in Ramsar (Iran) in May 1998, provided agreement on the following:

• The countries adopted the draft CEP Project Brief as the technical basis for the implementation of the CEP, which combines the contributions of EU/TACIS, GEF, The World Bank, and other sponsors.

• The countries adopted the structure proposed for governance, coordination and national

implementation for the CEP (Annex II). In particular, the meeting noted the need for strong intersectoral and inter-donor coordination.

• The countries adopted the Terms of Reference and composition for the Steering Committee, the Intersectoral Coordinating Function, and the Caspian Regional Thematic Centres (Annexes IIIIV).

• The countries agreed that the Steering Committee should determine its own procedures and modalities, with particular attention to involving the private sector and the NGO community. The Steering Committee will investigate the modality of a Trust Fund to assist with sustainability of the CEP.

• The countries requested UNDP work with the countries and donors to develop detailed rules and procedures for the Steering Committee for their consideration.

• The countries accepted the Framework for the Transboundary Diagnostic Analysis as agreed at the TDA Experts meeting.

• The countries agreed upon the locations of the PCU and Caspian Regional Thematic Centres.

The countries ownership of the project is also shown by the endorsement of the GEF Project Brief. All countries have committed significant financial resources in support of the project, including in-kind contributions (e.g., office space for hosting the Caspian Regional Thematic centres, Intersectoral coordination secretariats, salaries for their staff members). The governments will also provide necessary 17 scientific expertise to the CEP from the national organizations, at-sea facilities for data collection, and meeting space as required. The countries have requested that the CEP achieve a fundamental level of activity in each country and on a regional basis, rather than merely an identification of the overall problems. The countries expect that the results and recommendations of the SAP and TDA process will be translated into real actions and responses on both a national and international basis. This is reflected in those objectives of the project which address programme coordination, intersectoral coordination and involvement in the SAP as well as SAP/NCAP formulation and endorsement (see Component I and Component V).

a) Private Sector Commitment

The private sector was closely involved in the CEP prior to its inception. The oil and gas sector assisted in early environmental activities in the region throughout the 1990s. The May, 1995 joint UNDP, UNEP and The World Bank mission to the Caspian region met with representatives from the private sector.

Since that time, the UNDP and The World Bank have kept in constant contact with the oil and gas sector, including frequent briefings, and formal presentations at large industry gatherings, invited talks with various environmental subcommittees within the Caspian oil and gas industry, etc. Since the oil reserves are the most significant of the past few decades, oil and gas exploration and exploitation present potential environmental concerns. The participation of the industry is essential to the success of the CEP.

Though no single industry group speaks on behalf of the entire Caspian oil and gas sector, the UNDP and The World Bank have met with industry environmental consortia within Azerbaijan, Iran, Kazakhstan, and Turkmenistan. Industry participation is expected to include cash contributions, data sharing, training in specific areas of competence, participation in various objectives and activities of the CEP/GEF project, and other areas. The GEF/UNDP has begun discussions with the oil and gas industry regarding the feasibility of establishing an Environment Fund to provide sustainability of the CEP following completion of early phases of international agency activities.

In addition to the oil and gas sector, other major industries include the caviar industry and the marine transportation industry. In preliminary consultations with the caviar industry, they indicated their willingness to participate in the CEP activities. To date, the CEP has not approached the marine transport industry to solicit their participation, other than through discussions with the oil and gas sector which will be the major industry involved in marine transport. The PCU and CEP will initiate further discussions as the GEF project starts.

The degree of private sector activity in the Caspian region distinguishes the CEP from other regional programmes that have faced significant financial challenges as they attempted to evolve to sustainability (e.g., the BSEP). The CEP can take advantage of private sector revenue streams to assist in operating the CEP on a sustainable basis. In order to fully exploit this advantage, specific measures will be taken under Component I, Objective C, to develop an effective, two-way coordination between the CEP and the private sector.

b) Financial Sustainability

The comprehensive context that will be created by this Programme is expected to attract bilateral and other sponsors of discrete regional activities. Support to The World Bank has already been received in the form of a grant from the Japanese Government (PHRD) and further support has been promised from a number of other sources. The project is designed to identify and stimulate investments equitably for all Caspian littoral states, through feasibility studies and the Priority Investment Portfolio. The project will also evaluate the use of various financial instruments as mechanisms to generate revenue to sustain, inter alia, the regional coordination mechanisms developed during the project. The CEP Steering Committee has already begun investigation of an Environmental Fund, with UNDP assistance. Financial activities and modalities are being explored now. The Private Sector is expected to contribute to financial sustainability. The oil and gas industry could play a significant role in assuring sustainability of the CEP. Discussions have already begun with the private sector regarding their cash and in-kind contributions to the CEP, including participation in an Environmental Fund. In addition, the Framework Convention for the Protection and Sustainable Management of the Caspian Environment and its Resources facilitated by UNEP, is expected to incorporate concrete mechanisms for financial sustainability, upon adoption.

Source: UNDP Project Document – Addressing Transboundary Issues in the Caspian Environment Proramme, 1999, pp. 15-18. In : www.iwlearn.net/docs/csep/csep01e.pdf

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