FINAL VERSION Report No. 11813-DO DOMINlCAN REPUBLIC . ENVIRONMENTAL ISSUES PAPER . July 13, 1"3 Latin America and the Caribbean Regional Omce Department m Country Operations Division 1 IFII.i cofvl CURRENCY EOUIVALEN]'S ., '"tl. .Currency Unit - Peso (RDS) USSI - RDS 12.5 (April IS, 1993) USS! - RD$ 8.53 (Annual average, 1m) USSI - RD$ 6.34 (Annual average, 1989) UNITS OF WEIGHTS AND MEASlJRF'S Mctrjc Bdtisb/US EquiyaJenc 1 meta (m) - 3.28 feet (ft) 1 ti10metcr .- 0.62 mile (mi) 2.47 acres 1 hectare 1 square idiometa' 1 Jdlopam (bn' - . - - 0.3681 square mile 2.20 pounds (lb) ltoD - 2,205 pounds (Ib) . 1 cubic meter (M') - 264 U.S. pIIoas (pl.) ( \ 1'biI report WIt pnpand by Taizo YIDIIIdIl (CoDsulllDt. LA3Cl). who Wldertook • missiOD to Ihe J')onriQicam .' ~ Republic ill february 1993. E1teuive com..... ad iDputs . . provided from M...... lNmes. Geoqe LecIec. Mary. Wtbb (LA11!N). Ewald Goetz, DIDieI Moreau. Robert SimsOlo (LA3AO). Marcelo Osorio (LAlTF). u4 Luis Ramirez (LA3Cl). _d Mldeliao DoVu (LA3Cl) provided usefUl editorial usiSllac::e. Mr. DuieI Morrow (I.-d Ecoeomid. LA3Cl) supervited the whole process or Ibe tepOl't. MI. ADtoaieia Rodrt'pez ...... iD tIaa proclucticID of abe report. 1be IssiAlee provided by Ihe Japueee Trust Fuad. whidt firaaDced the CODIUltaD& JeI\Iice, is patefUlly acmowledpl. -. ACRONYMS ~ .,..,. CAASD Water Supply and Sewerage Corporation of Santo Domingo (Corporaci6n para el Acueducto y AlcantariJIado de Santo Domingo) COE Dominican Power Corporation (Corporacl6n Dominicana de EJectricidad) CEA State Sup CouncU (Consejo Estatal del Azucar) CEDOPEX DomiDlcuExport Promotion Center (Centro Dominicano de Promoci6n detu Exportaclones) ClB1MA CCIlter for Research in Marine Biology of the Autonomous University of Santo DominCO CITES ConventioD on International Trade in Endangered Species CO Carbon monoxide COENER NatIonal Eneqy ~ion (Comisi6n Nacional de Polftica Enera~ica) CONATEF NatIonal Tec:lmlcal Forestry Commission (ComiskSn Nacional T~ca Forestal) CORPHOTEL Hotel Promotion and Tourism Development Corporation CORAASAN Water Supply and Sewerqe CorpontJon of Santiago (Corporaci6n para el Acueducto y Alcantarillado de SaDtlaao) DOP General Directorate of Forests (Dincci6n General Forestal) DGPe General Director.. of Price Coauol (DlrecclcSn General de Control de Precios) DNP .Diz'ec:tcme of NatioDII Parts (DIrecclcSD Nacional de Parques) DRPISEA Departmeat of -FISheries Resources of Ibe Secretariat of Apiculture DVSISEA Wild Ute Department of the Secretariat of Agriculture EMLURB Empresa de Limpieza Urbana FAO Food and ApIcuItura1 0rpDizati0n FEDOMASEC Federation of Dominlcu EcoJopts FJRENA ~aturaI Resource Iavestment Fund Projec;t (USAID) FONDPREI National Preiavestment Fund FORESTA DominiCan Porest Service FTZ Free Trade Zone GTZ German TecbnlcaJ Assistance Aaency lAD OominiCID ~ Institute Onstituto Agrario Dominlcano) JOB Inter-American Development Bank IMP International Monetary Fund INAPA National Drinking Water and Sewarage Institute (lnstituto Nacional de Agua Potable y AlcantarUlado> ·INORHI National Institute for Hydraulic Resources (lnstituto Nacional de Recursos I HidradUcOs) . INFRAnJR. Fund for Tourism Infrastructure INVl National Housing Institution ISA Superior Institute of Agriculture (Instituto Superior Agricultura) JAAC Association of Agricultural Products JICA 1apan International Cooperation Agency LPG Liquified petroleum gas MOD Dominican Navy MNHN National Museum of Natural History / ~. ;;. NCFZ National Free Zone Council (Consejo Nacional de Zonas Francas de ':, Exportaci6n) NEe National EcoIolY Commission NGO Noa-aoverameatal orcanization NOx Nitro,. oxides . OAS OrpnIntioD of Americaa States OlRSA IDterDItIoDII ae,loDII OrJmlzltioD for Alficultural Health ONAPLAN Natloaal PIaaDinI Office (Oftclna NacionaJ de Planificacidn) ONAPRES Nllioaal Bqet Office (Oficiaa NacionaJ de Presupuesto) OPUVJSA Puerto Viejo Operator PAHO PIa Americaa Health OrpDlzatlon PROGRESSIO Fouadatlon for Human Bettermeat (pundacidn para eI MejoramJemo HUIIIIDO) PRONAnntA J.DtearIted Pro-NItUre Fund (Foado Integrado ProNauaraieza) PVO PrIvIte Voluateer 0rpDizati0D . REFIDOMSA DoIDiDlcID Republic Petroleum Retiaery SEFA Secretariat of AnDed forces SESPAS StICI"IIDr'IIt of Haith and Social Assistance (Secretada de Estado de Salud y AslsteDcia Social) SBCTUR Secrecarilt of Tourism (Secntara do Estado de Turismo) me SecntIdIt of Commerce iDd IDdUStry (Secretarfa de Estado de . laduscrla '1 Comerclo) . SEOPC de Secretarilt of Public Worts (SecrctII'fa Estado de Obras PIlblfcas) SOl Sulk oxides SURENA SubsecreCIrIIt of NIIar'II Resources of -the Secretariat of AldcuJture (SubsecretarIa de Estado de . . . . . . NlbII'Iles) UNCED UDited Nidoas Corafereace for Eavironment and Developmeat UNOP UDited NIdoDs DeveIopaaeat ProJl'llDllll USAJD UDited States A,ency for IDternItioIlll Development u.s. EPA UDited Statel EnvIroameDtal Protection A,eney WHO World Health Orpnization DOMINICAN REPUBLIC ENYJRONMENUL JSStlFS PAPER Contents Page No. EXECUTIVE SUMMARY . . . .'. . . . . . . . . . . . . . . . .. . .. . . . . . . . . . . . . .i L INTRODUCTION . . . .. .. · . .. . . · ... • • . .. . . • • · . . . . . . 1 · . . • • .. · ... . .. .. . . .·. . .• • · . . · ... . . 1 " A. Context •••••• .. .. ... .... .. . .... 1 B. Selection of Key Envimnmental Issues C. population • • • • • • • • • • • • • • • • • • • • • • • •• ...... ·•.•.•.. • D. Overview of Environmental Management to Date . . . . .. . . . . . . . . . .. . 3 • ••••• 2, D. DEJiORIrSTAnON • • • • • • • • • • • • • • • • • • • · . .. . • •••••••• 5 A. Mapitudo of Deforestation • · ... · . . . · .. . . • •••••••• 5 B. Causes of Deforestation · .. .. • • • • • ·. . . ·.·.. · . . . . ·. .. . 10 .. . . . . 7 C. Costs of Deforestation • • • • • • • D. Environmental Manaaement for Deforestation •••••• · .. · . . ·.•.•••••••• 11 B. Relevant Oovemment Economic Pollcy ... • • • ·. ·. . · . • •••••••• 14 P. Topics for Further Assessment • • • • • .. .. • • • • • • • • • ·.. · ... .. .... 18 DL tJRBAN" ~O~ •••••••••••••• · . . · •••••••••••••• ~21 A. Issues. Magaitudes mel causeS ..... . . . . . . . · •.••.•.••.••••• 21 B. Costs of Urban Environment Dep'adation •••• · . . • ••••••••••.••••• 24- C. Urban Bnvironmeot Nanaaement .......... . • • • • • • • • • • • • • • •• 25 D. Relevant Government Economic Pollcy ... · . . • ••••••••••••••• 28 So Topics for Further Assessment • .. • • • • .. • · . . • •••••••••••••• 29 IV. ENVIRONMENTAL IMPACTS OF TOtlRISM AND FREE TRADE ZONE DEVEIDPl\I:EN1' ••••••. • • • • • • • • • • • • • • • • • • • • • • • • •32 A. Issues. Magnitudes &lid Ca.uses ••••••••••••••••••••••••••••• 32- B. Costs of Bnvironmeotal Impacts of Tourism and FTZ Development • • • 3S c. Environment Manqement in Tourism and PTZ Development • • • • • • • •• 3S D. Relevant Government Economic Polley ••• • • • • • • • • 39 E. Topics for Further Assessment • • • • • • • • • • • • • • • • • ••• ... 39 f v. POTENTIAL ENVIRONMENTAL ISSUFS AND INFORMATION GAPS •• 43 A. Coastal Marine :Ecosystem and Fishery Resources • • • • • • • • • • • • • • • • • • 43 B. Acrotoxics . • • • • ••.•• . ••• .45 C. Industrial Pollution ... .. .. . •••• 46 D. Transport Air Pollution •••• ... .46 B. Minina Pollution . . . . . .. ••••• 47 P. l..ar&e Scale Projects . .. ..... ...... 47 G. Importation of Hazardous Wastes .48 H. Information Gaps • . • • • . • • • • • .. •• 48 "'. Contents (cont.) VI. 01BEk IMPOR.TANT INSTITUTIONS IN ENVIRONMENTAL MANAGDtEN1' •••••••••••••••• .• • • • • • • • • • • • • • • • • • 49 VB. WORW BANK ROLE ...................................52 A. Bank's Invol'Yelllellt in the Dominican Republic to Date •••.••••••••••• 52 B. Possible Role for tho World Bank in Environmental Management •••••••• S2 ANNEXES Annex. 1: BibUOIfBIthy • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • .56 • AMex 2: 1Jst of Conventions and Treaties for Environmental ConserYatIora ......................................9 Annex 3: 1Jst of Government Institutions for Environmental ~t •••••••••••••••••••••••••••••••••••••• 6% Annex 4: The Government'. Enviroftmen1al Strategy in UNCED Country ReJJIort •• • • • • • .'. • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • .64 ADDex 5: .Aplaa1b1rall-aracllssues • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • .66- Annex 6: Se1ectecI Current MlJor Lepllnstruments Affecting Forestry ....'... • • • • • . • • • • • • • • • • • • • • • • • • • • • • • • • • • .68 .A1uIeE 7: Principallftsti.bltic:ns Affecdn& Forestry ••••••••••••••••••.••••• 69 ADnex 8: Onaoma 00vernmeIlt Program and Intemational Coopezation for Deforestation ••• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 7 J Armex 9: Estimated Costs of Afforestation and Watershed NaJaaa:emerat •••••••••••••••••••••••••••••••••••••• 74 ADDex 10: Institutions Responsible for Potable Water, Sewerqe and -. SoUd Wute m.posaI •••••••••••• • • • • • • • • • • • • • • • • • • • • • 75 ADnex 11: Government Program and International Cooperation for Urban Environment (Potable Wafa' Supply, Sewap and Saniaary Service) ••••••••••••• 'T1 Annex 12: List of Free Trade Zone ladustrial Parks and Industries ••••••••••••• 18 Annex 13: Major NOOs • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • .8() Annex 14: Overview of External Assistance and Coordination •••.•••••••••••• 83 " Annex 15: 1be Bank's Relevant Experience in Lending Programs for the Dominican Rq:»Ublic • • • • • • • • •.• • '. • • • • • • • • • • • • • • • • • • • • • . " MAP: IBRD24748 DOMlNICAN REPUBLIC ENVIRONMENTAL ISSUES PAPER EXECUTIVE SUMMARY f .- 1. Given the relatively limited operational proaram in the Dominican Republic" tile Bank has doae little work on environmental issues in that COWltry. This Environmental Issues Paper (EIP) is intended to expand our knowledge of the country's most pressing environmental issues, its insIitutional and lepl framework for environmental management and the conent policies and pmpams of the Government and external aamcies: This paper is based on a review or available written tepOrt.S and a brief mission to the country. ThO EIP provides a basis for desipina a Bank strategy to address enVironmental issues through its lending operations &lid economic and sector wort. It is not intended to provide poHcy advice to the Government of the Dommican Republic but to identify issues requiring further analysis. 2. 1bc Dominican Republic is a small (48.442 kln2 in area), densely populated country . situated fa the fiISlem two-thirds of the island of Hispaniola in the Caribbean Sea. The couotry's varied topopphy and climate accommodate diverse ecosystems and the richest biodiversity in the Caribbean region, but its capacity as an -environmental sink- is very limited. The countJ:y's GNP per capita was US$946 in 1991. Its economy has traditionaDy relied on export-ori,nteci seeton. particularly apiculture and mining. More recently, tourism and free trade zone developments have come to play larger roles in the economy. . . 3. 1he populatiC!ft of the Dominican Republic in '1992 was 7.47 million. Althoup the current overall population growth rate is 2 percent per annum with a decUnilll tIend thanks to family pJanrdna. the UIban population has been arowina at about 3 perceIlt, aenaatinI enormous pzessure on the urban in~ and pubHc services. "I1le naral population was arowiDl at OII1y 0.3 percent in 1992, but this ~ continues to exert pressure on such ecolo&ica11y fraaiIe areas as mountains and coastal zones. The country has been suffering from increasin& inequity, and the standards of livina of the poor have been deteriorating. Absolute poverty is Jaqely a rural phenomenon, but the majority of the poor reside in the major urban areas. This increases environmental cJearadation, which in tum lowers the living conditions of the poor. 4. The country's history of environmental protection began in 1884 when tree cutting f was regulated by decree. Howevert at present the legal and institutional framework to address environmental issues is very weat~ There is no single environmenta1law, but there arc many contradictory replations. There is no one agency in charge of overall environmental ~. Numerous agencies have responsibility for natural resources, r=altiDg in overlapping TCSpOnSl"bilities and conflicts. 'Ibe country's distorted economic policies and in previous years weak institutions have misguided natural resource manaaement, leading to various -green- and • brown- environmental problems. Deforestation, degradation of the urban environment and the environmental impacts of tourism and free trade zone development are considered to be key issues because of the size of the population affected, the extent and irreversibility of environmental damage and the linkage to key economic sectors and other environmental issues. ii Key Enylronmentallssues - S. DefOrestatIRD. Deforestation is the most important cause of problems afTecting - ~tura1 tesOUI'CeS, especially water and soils, in the Dominican Republic. It results in substantW costs: loss of topsoil; increased flooding; accelerated sedimentation of inigation systems and _ . hydropower reservoirs; impaired water quality; reduced aquifer recharge; and disturbance of coastal marine ecosystems. furthermore, deforestation causes the irreversible reduction of " biodiversity. which is a high priority conservation issue in the Caribbean region. Although daIa are inconsistent, deforestation is clearly serious. In 1981, FAO estimated that 19.6S of the country (about 950,000 hal was coven:d by some form of forest, but that only 5" (242,000 ha). consistinl of broad leaf trees and conifers, remained in undisturbed forests. Most of the land. suitecl to forestry in the mountains is being inappropriately used for grazing and agricultural activities. The averaae deforestation rate was estimated at 20,000 ha per year between 1962 and . 1980, and 25,000 ha per year in 1989. Forestry re5OUJ'teS are likely to be completely e1iminatccl within 10 to 20 yean unless serious conservation effo~ are made. 6. In the past. clearing of land for cattle ranching was the main cause of deforesCation. Its importance today is uncertain. The main causes of deforestation at present are: charcoal production (esdmated at 30-35 percent of the area deforested in 1989); slash and bum qriculbire by subsistence fann.ers (SS-60 percent); aDd forest fires (10 ~t). "Ibe Dominican RepubUc's exteDsive Datioaal park and protected area system. which covers about 11 ~t of the counlry. has not been effective in protectilll the forests mainly because of the weakness of the apIlq' nsponsible for them (National Parks Directorate • DNP). Government policies encouraaecI forest cJeariJI& by providing credits and subsidies for .,riculture and cattle nncbiq development. altboIIgh abe CUJ'I'eIlt status of these policies is not clear. 7. A Jarae percentile of potentially productive land is lying fallow, despite its ~. In past ,am a series of inconsistent policJes, combined with deteriorating internaticma1 market : concIitions, have callsed producer prices for a&ricu1tura1 products to fall. thus depn:ssi.na output.. In additioa. the ~ land tenure system and large Government holdinlS have apt Jarae areas of land suited to CIIltivation out of production. Thus, subsistence farmers are pushed onto marginallaDds. In. mOUDtainous areas, these subsistence farmers practice slash-and-bum . agriculture, defOresting ccolOJical1y fraaile areas ill suited to farming. Others of the mal poor migrate to urban areas, exacerbatinC environmental degradation in the ciues. 8. Government regulation of tree cutting and transport have eliminated property rights to trees and thus incentives for planting trees. The forests belong to the State but are DOt manapd. adequately. This creates open access and encouraces over-exploitation of zesoUfCeS by subsislence 1 farmers and illegal operators., Major dam and qation projects have not included reforestatioA . components to protect affected watersheds,' despite their relatively low cost.' 9. Charcoal is a major source of eDelJY for urban and rural households, especially among the poor. Legal and illegal tree cutting for charcoal production exacerbates deCorestation oC the dry forests near urban areas. LPG and kerosene, both of which have lower economic costs than charcoal, would be the logical alternatives to charcoal. But the high costs of stoves and cyUrulers, resulting from the Government's protection of the domestic producers. makes the cost or switching from charcoal to LPG prohibitive. The Government's policy of setting lower prices for LPG for households than industries acts as a disincentive for distributors to market LPG for household usc. iii 10. Ongoing policy reforms in the agriculture sector are expected to result in market- based prices which should stimulate agricultural production. The status of the reforms is not clear. however, requiring close monitoring. The impact of these policies on deforestation will depend OIl various factors such as land issues. technology and the farmers' incentives. It is important to identify supplemental policies and interventions to generate environmental benef'ltS from the policy 1'eforms and to prevent adverse consequences. 11. IlrbaD Ipylrmppcpt. Rapid urbanization, caused by massive milration (rom the rural areas and rapid natural powtb in 1980s. overwhelmed the ability of the Government II1d municipalities to provide adequate infrastructure and public services. Poor quality water supply, serious water pollution, ineffective waste water treatment and uacoUected salid wastes are the major causes of the Dominican Republic's declininl health standards.' These environmental problems are largely the result of the Government's inability to provide essential services. The reasons for this failure are: (a) poor cost recovery; (b) inadequate maintenance of infrastructure; and (c) weak and overly centralized institutions which have. made unwise decisions on investmelt priorities and choice of tecbnotoay. The Government's shortcominp are exacerbated by the public's Jack of understanding of the impact of their actions on the environment. 12. 'kdnu"'..... ImIJld or Ipp"" I.d Ene Tnde 101' Dncl..... TOUIism and free bade zones have become the llU\ior export sectors in the Dominican Republic. Development of these sec~ coukl be an effective way to reduce cIemopaphic) pressure on the major urbaD areas because these sectors attract wodcen who want to take adva.abae of aew -.... employmeDt opportunities. But the n:sultiaa popuJation aeutemeats, with minor exceptiou, Iac:t such basic infrastructure and services as potable water, sanitation and solid waste collection, . creatinl problems similar to those of urban squatter settlements. Unplanned popuJatiQa seItIemcr&ts in the tourist areas have serious neptive impacts on coastal ecosystems. This impact tJuateas the very teSOUI'CCS that attract tourists and could offset the real pins tourism could pnera.te. In . addition, there is some evidence that free trade zone operations are causina water poUutioD in otIIer areas of the country. Government subsidies for new investments and unfilled promises to proWJe. infrastructure, the Jack of a policy and plannilla framework and the Jack of an OIl'YiroDmeata1 reJulatory framework have exaceabated these problems. The subsidies are beiaa aboUshecl, but additional ·poUUtel' pays· mechanisms need to be introduced. Such measures would pass on tire . costs of infrastructure to tourists and the industries operating in the free trade zones. Potential EnyJroDDlmtaJ 19ues agd InfongatloD Gam 13. Several other environmental problems in the Dominican Republic are attracting f growing attention: degradation of coastal marine ecosystem and fishery resources; aaro-toxics; industrial pbllution and workplace environment; transport air pollution; miniDl poUution; larJe scale dam constl'Uction; and importation of hazardous wastes. The relative importance of these problems is hard to assess because of the lack of reliable Information, environmental standards and coordination among the various institutions responsible for environmental matters. The danger is that problems may not be noticed until they become serious environmental threats involving irrevcrst"ble changes and/or loss of human lives. Given the co~ntry's limited financial and administrative resources, preventive actions would be advisable to avoid more expensive curative actions. Monitoring of these potential environmental problems is crucial for such efforts. 1 WatM borne disease.s are the priDW)' cause of morbidity for the whole population (202 cases per 10,000 inhabitants and 58 perceat of all diseases in 1992). 21.6 percent of the deaths of infants under orle),ear old lIlcl15.9 percent of the deaths of children between one aDd four years old in 1991. iv Xo.vJq 'or lurtber Assmgacut 14. PormuJation,of an environmental strategy is beyond the scope of this paper. But iR . developing a straCC&y \I attention should be focused on three key environmental issues: I deforestation; dqradation of the urbaA environment and the impact of tourism and free trade I0Il{: - developments on the environment. These issues should be addressed by assessing the problems of • population pressures, economic and sectoral policy frameworks, and institutional weabesses. Resolvinl these issues would conserve soU and water resources, protect biodiversity, improve the Jiviq standards of both urban and rural poor and contribute to the sustainability of tourism ancl free trade zone development. Topics for further assessment as elements of an environmental sbateJy are listed in Table I (see following page). 6 EoaIbIe Bole ror the World Ba. ID EnyInmmcnta. Maoalcmcat _' .. - 15. To date. the Bank's overall involvement in the Dominican Republic has been ,: limited. Purthermore, because of weak institutional capacity ~ it is unn:alistic to expect to 1actIe environmental issues effectively on a broad front in the near term. Nevertheless, the BaaIc could contribute to the improvement 'Of the country's eavironment by addIessi.na the b:y eavlronmeaca1 issues throIIp: policy dialogue supportina better economic lDIIIIIemeDt and atructaral dIanps, iDcIudin& institudonal reforms and cIeveIopment of a National Environmental Actioa Plan (NEAP); and (b) its leradina proaram and economic and sector work, including project components that would lae:rate environmental benefits and address underiyina structwal issues. Specific ways In wllicb the BanJc might inCJaSe its involvement in environmental issues in the Dominican. R.epubDc are discussed below. . 16. Better &PDPPh; MU...... To improve economic management, abe BanJc should support ongoing policy Rforrns in macroeconomic manaaement and in the apiculture, fon:stIy, eneIJY, UIbau, tourism and free trade zone sectors. The Bank should continue policy . dialope about mechanisms to internalize environmental costs. Among the potential topics included In Table 1, the key topics would be: establishment of property rights to trees and faDds. and conversion of household energy to LPG from charcoal for the deforestation issue; establishment of sustainable infrastructure in the urban areas; and introduction of a ·polluter pays· principle In tourism and free trade zone developments. 17. lnstJtgdqpaJ Reforms. The Dominican Republic should build an institutional and lep1 framework that would encoul'lle coherent environmental management and rational decision- . making processes at all levels. The Bank should support these efforts through its dialoaue on /" public sector ~orm. A possible approach might include the creation of single environmental '. oversiaht lIency and environmental law. Environmental manaaement could be decentraJiuct ancl ",' -,the municipalities strengthened to handle urban environmental management. A rcplatory 1ramework should be established to enable the private sector to participate in provision of infrastructure and utility services in the urb~, tourism and free trade zone sectors. These arrangements should internalize environmental costs and pass these costs on to the polluters. In the Dominican context, however, the viability of such broad reforms is questionable in the short run. For a transition period, more practical alternatives relying on existing institutions should be v Table 1. Topics ror Further Assessment Dct°"'''tJp, .- . .- - (II) Monilarina qricutwnl poliq 1'010.... incluc:lill. &he etrocu on rclaUve apicultutal pricca. I'CIOIII'CC .lIocac.ioa. the .... of lIIlunJl'CIOUI'CCI and del'oratalioft. (e) 1mplcmenIiaa polidea and ....UNI U palt or apic&al&ural policr rel'orma to pncn.tc cmiroaraontalllcneGlt b7 aIIIwiatin. population preuuro oa Ihe CIlvironment. _Iudin,: (i) inIroducinl waIenW coftlCtY&tion m....",.. aimed at .ubaialeacc Cannon in cc:oloaicaDy haDe ....~ ucI (ti) iftIcnIilyinl Ute or ftXiItiq productiv. apioulturallanda ud creedal employmeat oppottucdica ta alalO" popuJadoft wkhin die productive lowlands. (eI) Lilnkinl opea acceu to .........., . . by . . .. . . , pl'QJICIt)' n.- to ..... _ ro..t ...... _.iona lor private tldDr opetatioIa ill publio ..... ..., deocnInaJizcd public lind ............. ., _nitia or local IOY-. (e) ~reaulalor)t ......... UId in\'e8lmclDtl on the Niliocal Pub and paoCccted .................. ta pRIlec:t. 1hc Ulural to... and biodiwnity. (0 Coavcdin&Iaou.... .......,. aourecehca~to LPG by e&miutina protcctionoC. . . .ioproduoenlor. . . and oylinderl; CIIiminItliaa diItoJtiaaa ia LPG pricin. and marbIin. 1'ClItric:docIa; aad ~ oIba' aecae'I'J _ _ to pI'OI'IIOtc LPG ... IaooIpoJatiDa reIoreItItion .. )up lea. in~ ill dama .... irripaioa wort. to _ fa) . .........edI• ., ~ ror.c., tIdDr po&q ....... that ....... reatrictivo ......... OD ...... ud ......1iah lppIop'" .tU'lilioilI ud ........... to ~ privu. tIdDr DJIIIIIlioa ill public forcIIr.r ...... llrIal lp'lnmmnt,l p.gdttipp Batlblilbin, .uatainIb. inlrutnlccure by: (i) iIdroclucinaiutitutiolUlJ ............. _ acitJ 1eYcI ..........YironmcntaIIt:r1IIcV(darou&b a~ PJ'DCCM invoJVlnI 00l'IIIIaIIIIit. the private IICCIOr, municipaliticllftdlho CCftUal JOvemrncat) to euure that inveatmc:ftl priori&iea are act; • (ii) improvinl COlt I'OCO'VerJ' by CUbliahin. waIet prieiq poJicia that are buod OD C(IIIIIIitiea used..... cbarPn. Cor prbap collection ud proviaioa or lIIUliiatioa: M Idoptinl appropriate approacbel and tccbnololY. n::lyinl on IIbor-imcns1ve mcdlodl wilh partk:ipatioa of communitiea and NOOa. (b) Slre:DJlbelinl muoicipalilia and local aovemmenl.l to cate over maJl&Jflmcnt or inf'rutntcl.un:. (e) Aneuinl &he land usc maJl&lCI1Icnt, includin, the statlll or ctim:nt lind \lie controls, IUbu Iud owaentip. t.idi'a& udmarbt. (d) IDveatinc in mectin, buic ftocda. including provwon oC clean potable Wlter and buic anitItion for Iht poor. ud construction ot Jandrtlls. vi Table 1. Topics 'or FurdIer Assessrn=t (eoDtimaed) (e) Acfdrcalin, the populaioa prcalUro in &he major urban centcn by rcdllcin. urban biu ud b)' crcMin& eaaploJlllClill. opport.uaida in l,riculWre. IoUriIm and froo tta4c zona. - Top",_ """"nl ea) ItodetiDina die rDleI of central and IoalpYenunenII and the priyI&C leCtor ill J'I'OvidiAc iAIiuInIcCu....... ....niaea .r IouriIm devolopmtlllla and their UIOCiatcd worton. (b) I!IcabIilhinI eflieieac pricin, of (acton tor IDuriam deYcIopmcnl ud operations iRcIudiAc water• ....,.,Iud...... (e) ad awirDMlenlall'ClOUftlCI. Bltabli.lbinll -poIJuIer pap- lMOhaaiam. which would .... 011 10 lOuriltllb. colla of IoII'UtNCtIIn doveIopmca& and UIIOc:. . . . worker 1CIJaacaIa. and of CftYboIllhCldaI dana•• .r IOUdIal (d) Bllabliahi.nc • lOuriIm dcYeIopmcnt IIttIdeI)' &0 maJimize Iooa-cccm net bcndi&a to t.he c:ouaII7 b)' profilability of &he aoc:IOr ud colUcrvalio. of the CIIaViroaIMaL "'izi'nc Ce) ~. CIUI'Jin. capacky 10 COIIICI'YO IOuriIm I'CIIOUJ'OCI ia • IOUriml planninl .... JIOIic:1 .......It. (0 ""1iIbirc pubUo ud priv... pauncnbip &0 ~ t.ouriIIa IaOURlCa (e.l. prMro IIdOr iaiIiIi1wa lit ....... pollUlion 60ra IoUriam operaIioe.). • . . . . . ecot.ouriam 10 IiDuoo &be H8doaaJ Put ud JII'OIeI*II ...... ~. '"'''''' Znc Un.,.,' . . . . . . . . rD_ of'" oen&rallllld IocalIfMll'lllllCldl and die pinto ICIClIor to provicIe in~ aad ....... (a) ...... trade _ _ ad dao auociatod 'WOItcrI_. (b) ........... "poIIutw pa,.- 1IlCIC'III...... by 00IIlbiaIaa ~ repIatioD . . priwt.o ~ ..... pftWiIioa 01 ia~ ud eavir\i...........u ....... (0) . .......1 . . enviraonlealll rquJ.to., filmlWOrt ud raoaiIotirIa racchaniun ltr the aector. (cI) ~I priwI.e ..... iadWIIriaI puk c:IcveIopmaII &lid opt:II'atioft and explore • .......... . ID prow.... ~ .... poU&doca contrd .... lOr woaten° 1CIIIera1lQll. (cO MoaitDrinl onaoin, poJky nCorma eJinIiaalia,lnceotiYea and .ubeidiea I'or new he Indo .,_ cIoYcIopRw 5" (I) PriciDa facton for Iroe tnde t.Ofte doYOIopmecIla ad opcntionI cIIicicntI),. i.ncludina WIler. cacqy and ..... (J) I!Icabliahin&. pJannina plOCCIII indudina 1oaIio... I'CIIOUI'CICa required (e.l. WIler, dectricity) and . . of iDduItriat pub 10 a.blo COIl-cffectiYe pnma_ of iahllructuro lor induIlrieI &ftd tbao workcn' 1dliesnaIb. (b) Ellablilhina. rent policylbat wiD rell_ ruB OIlOlIOmic OOIU ill !he public Cree tnde zone and ,,_ • IUltaWto 1 . . . .W bue to cury out Ibe cnvironmc:alal taP. Ca) I'.IlabliIhinI inItitutional &rlUllCIIICISlI to _ invClltmcnl prioritica atlhc national and ICdOIaI lINe... (b) Ii!Ilablilhiftl inltitutional ar&aIIIcmentI for CISlvirDnment.aJ reaulatioll at the mWonal and MCtD"'Ie¥cIa. iIIcIudiDc J"nDI,l";oD 01 CISlvironrac.a&a1 ataIIdarda. and Itrcn,athcniAc CISlforccmcnl and rcaeuch capabiWa. vii identified. The Earth Summit Commission has already been set up to coordinate relevant agencies aDd NOOs. The Integrated Fund for Pro-NatUre (pRONATURA) has been created to channel resources for conservation projects. The Ecological Technical Commission, which is policinl water pollution, is in place. The Environmental Department in ONAPLAN was expanded to establish environmental standan:Is. Further assessment would be needed to improve these anaDgemems and to integrate them into a coherent environmental management system. 18. EormgJatlQD or National Eaylrompental bdlOD pta. «NEbPl. Both policy and institutional reforms are critical to sustainable environ meatal manaaemeat in the Domillican Republic. But these reforms might not be achievable in time to solve pressinl environmenlal problems.. The National Environmental Action Plan (NBAP). which identiftes concrete inveslmeot propaml aDd priorities as well as institutional reforms, would provide short-term solutions and would help determine a long-term environmeatal strateaY. NEAP would also help the Bank to ,• identify possible areas for further involvement. UNDP is preparing a technical assistance project to formulate a national eavironmental strategy: The Bank ~ou1d keep itself informed about this work and. if necessary, discuss with the Government and UNDP possible areas for cooperation in this effort to ensure that the strategy would satisfy the Bank's requixements for a NEAP. l.eDdIna Promm and Sedor 'Won 19. The recent country assistance stl1.telY paper for the Dominican Republic identifies the priority sectors for the Bank's involvemeat in response to requests from the Govemment. These are apiculture, power and the'social sectors, including health and educati~. Environmental issues should be addressed within this stmtelY framework. The Government's desire.for Bank iDvolYOlDellt in the proposed Jrrigatloa and Watersbed Muapmaat Project should create a better opportuaity for the Bank to address defotestadon. This project aDd proposed Bank apiculture . sector 'WOrk would provide a sound basis for the Bank to b~ its invo1vemenL The ~ Govemmeal has not invited Bank involvement in UIbaD developmcat issues or pJarmina ror the tourism sector. In this context, the envitonmental issues should be addressed as discussed below.. 20. AarJculture and Dclonstatlop Jaws. Among 'YaJious enviroamental issues, . defoJestation is causinl·the most serious irreversible ctamace to the country's resource ~ By addressing deforestation, water, soil on- and off-shore biodiversity could ,be conserved in tho most effective way, and the livinl condition of the rural population could be improved. 21. In view of the Dominican Republic's institutional limitations, the Bank should take a project-specific approach to aenerate short-term environmental benefits and 10 triaer necasary 1 structural changes. This approach would lead to the Identification of measures that would supplement onaoina aaricu1ture policy reforms, thereby ensuring environmental benefits and/or minimWna the chance of unfavorable environmental consequences deriving from the reforms. The Bank's sector work and lending proaram should identify and support measures in this area, which may include: (i) Watershed conservation: Pilot projects should be established 10 introduce soU conservation practices and reforestation in critical watersheds. The objectives would be to reduce farming in fragile hilly areas better suited to forestry and to increase productivity in marginal lands through small·scale irrigation and the introduction of land use or tenure arrangements. These projects should be executed by local NGOs with clearly defined lines 9f administration that minimize dealings with Government bureaucracy, particularly where transfet:, of financial resources is concerned. viii (ii) Intensification of use of productive a&riculturaJ las and crcatjgo of em,pIoyment QIlPOIlUnities: Use of productive lands should be intensified and employment opportunities should be increased to reduce demographic pressure on ecolopcally·· fragile lands. The Bank·s agriculture sector work should explore measares such a's introduction of secured land tenure, investment in basic infrastructure, rehabilitatian· of lands, the promotion of labor-intensive crops and provision of extension services • and agricultural credit. 22. Em Trade Zoac Dcye'OJIDent. Technical assistance under the Industrial Flee Zone Project, to be completed in 1994, includes studies to develop a long-range plan for the development of industrial free zones based on a realistic assessment of the absorptive capacity for such zones in the country. The stlldies include a review of the perfonnance of the private and public industrial free zones, rental policies of public zones and the level of :rents necessary to c.over the full economic cost of investmellts; and measures needed to improve the quality of pJannin, information to luide investors in moosinl the location of Free Zones and, as a secoadary beaefk. . help in pIunina complementary public investments. These efforts could be positive stepS to internalize CIlWonmental costs. In older to generate environmental benefits along with these efforts, possible topics for further consideration would be establishmCllt of an environmental n:guJatory framework and arrangements to provide infrastNcture and basic public saviccs to workers' settlements. 23. Ponr Sector. Air pollution is l10t a serious environmencal threat in the Dominic:aD RepubUc because of the country's favorable air circulation and relatively Jow ccncentration of iDdustries. NevertheJess, local concentration of fine particulate matter and persiSlent exposure of the popuJatioa to it could cause serious health hazards. PubUc concern about stationary poUutiOll sources, particularly CDB's power plants, bas been" arowinI. The Bank's proposed power pIOject should seek to avoid local CODCeDtration of ponution, laking into account location of the plants and air cIrculadoa conditions. The project should establish III environmeutalleJuiatory f'ramewort for the power sector and develop a mechanism to monitor poUution. This could be achieved by c:oordinat;in. with institutions such as ONAPLAN·s Environmental Department and the Bcologic:al Technical Commission. "The project's procurement procedures should ensure that equipment procwed by the private sector meets enviJonmencal standards. The proposed project would create environmental beI1efits by addressing frequent and prolonged power shortqcs-a by cause of potable water pollution. . 24. Social Seeton. Bnvironmental assessments are not required for social sector projects. But public understanding is a critical factor in better environmental manaaement in &he Dominican Republic. Minimum information on health and environmeut (eg. qrotoxics, water 1 pollution and sanitation) should be included in education programs. Because of the strong JiI1kace between health and environmental degradation, improving access to clean potable water and by providing basic sanitary services could be an important part of health programs. The Banlc should heJp the Government to develop environmental components in projects in the health sector. I. INTRODUCTION A. i:ontext • 1.1 The Dominican Republic is a small, densely populated subtropical country situated in the eastern two-thllds of the island of Hispaniola in the Caribbean Sea. The territory covers 48,442 Jan' area. Its population was 7.47 million in 1992 and its GNP per capita was USS 946 in 1991. The country has the hiahest mountain in the Caribbean with aD altitude of 3,175 ID. It has extensive areas with a slope of 25 percent or peater, suited only for forest and conservation-related use. Because of its diverse topopaphic conditions, the country is lifted with diverse micro climates and ecosystems. However its capacity as an -environmental smt- is very limited. The country has favorable conditions for apicu1tunl development, especially supr, coffee. cocoa, tobacco, beef, fruits and veaetables, ancl is rich in mineral resources such as DicbI and lolel. Its excellent beaches and climate have made possible a boomina tourist iDdustry, CODCelItrated on northern and south-eastern coasts. Industrial flee trade zones- primarily for Uaht manuf'acturin&-have developed in 28 industrial parks around the country to benefit from the abundant local labor supply. B. Se)ectl0D 01 KU BaylrollDlCldallssua 1.2 As the Dominican RepubUc capaclty as an -eavimnmental sink- is limited . because of its amaIl telritory IftcI dense population, the couiItry has a broad amp of areca IIICl brown envimIlmental pob1ems. These pra,lems include: def'onsIation; soil erosioa Mel watershed depIdation; water poUutioa; c:outaI Z9ftO depadatioa; biocliversity exdncIion; ~. incursIoaI into IIItioaaI parks and protected lIeU: pesticide contamination: urban enviIoDmeat cIepIdation; potential industrial pollution; .....mcect population seuleme:nts associaIOd with ... tourist and free trade ZOllO developments; and direct environmental impact of CODSIrUCtion and opentlon in these seeton. Some of ~ issues are cJosely linked, forrninl complex inter- sectoral problems. Many of the issues are closely IeIated to population arowth, urban and rural poverty issues and ~ export sectors. Hence, mismana&ement of natural JeSOUl'CeS miabt lCriously damap the country's economic development. 1.3 Dominican Republic, would be to quantify the costs and benefits of possible remedies for I 'The ideal approach to identifyina the most important environmental issues in the· . r various types of environmental depadation. This approach is not possible at present because of the serious Jack of information. Therefore, it will be necessary to rely on qualitative assessments which tale into account the foDowing criteria: (a) the size of the population affected; (b) the approximate magnitude of environmencal damaae and the benefits (DOt necessarily in economic terms) of remedial actions; (c) the irreversibility of damap; (d) the •. operational feasibility and cost of remedial action; and (e) the 1inkaaes to key economic sectDtS aDd to other environmental issues. 1.4 In line with these criteria, three issues have been selected as key environmental problems in the Dominican Republic: deforestation; urban environ~ ~QJl., including .: ~hC. wal!r ~U~llt ~.~~~~ trea.~entl and ~lid' ~tc-diSJ?Osal; and the environmenta! .-~~ ir:n~ of tou~m and Free Trade Zone. (FI'Z) developments. .. - •.-" . .' . 2 c. PopulatioQ , 1.5 Because of the counb'y's small territory and limited natural resources, population JIOwth, and the spatial distribution and wclCare status of the population have played decisive ; roles in the country's CllvUonmenlal problems. In particular, population IfOwtb underlies the key environmental issues-deforestaticm, urban development depadation and the eavin.xamenta1 impacts of tourism and FI'Z development. 1.6 Accordilla to the 1981 census. the country's total population was '.6 minion. In 1992. the population reached 7.47 million, of which about 395 are less than 15 years old. PlOm 1950 to 1991, the mecIiIllaac of the population increased sUghdy from 11 to 20 years old. Life expectancy was estimated at 67.5 for 1990-95. Although the overall mortality rate is· avenae for Latin American COWltl'ies, the iDfant mortality rate was 67 per thousand illfants in 1990. the second only to Haiti (95 per thousand infants) iD the Caribbean reiioL Tbc ferdlity rate was estimated at 3.34 children per female and was clecJinina tIJan.b to family p1aonina (1993). The population IIOWth sate declined in 1992 to 2.055 from 2.44" in 1985,1DCl is projected at 1.7" for the 1995-2000. In the last two decades. rapid internal mipadoa tnIIsfOl1l'lCd the population from an essentially runl to maiDly urban one (pua. 3.2). The wbaD population was 40" (1.6 million) of the total in uno. but incIeased to 60" (4.4 million) in 1991. 'Ibis urban popaIatiOD is estimated to pow to 17" (about 8.5 million) of abe total bY' the year 2020 (Cobb, USAID, 1991). 1bcse populations arc conceatrated in the nation·s capital, Santo DominIO. and the nuUor cities of Santiaao, La Romana and San Pedro de Macoris. ,eneratiIIl enOl'lDOUS JPSIUIeS Oft soclaJ services and urban inftastructure. ne pp between tbis rapidly arowinI popuJadon 'in the urban areas and the country-, ablIity to provide seMcea has msulted in urbaa enviJoamefttai cIepadatioa. In the nual ueu, IltbouP the popuJation ,powda is small, popuIaIiaas Iivinl in ecoloaical1y tia&ilc areas such as mountains aad coastal ZCIOCS continuo to put pasuze 011 the environment. 1.7 Poterty. Ia the JUral areas, the poor rely Oft Datural raourccs for income and aubsisteoce (fGOd, energy, and drintinc water). In the urban areas, the poor resiclinl in the crowded squatter settlements are vulnerable to the cnvinmmcntal depadation, Iackina such pubUc servicea u potable water, sanitatioa and solid waste disposal. 11ac limited access of die poor 10 6Dancia1 JeSOUn:eS, their short time horizon and limited knowled,e and tecbnotou taId to reduce incentives and ability to CODseJVe the CIlvironment. 1.8 Because of the lack of timely and reliabJe data, the precise cxtaat of poverty ill the country is difficult to assess. Nevertheless, recent analyses indicate that poverty lias increased over the last 15 years. In 1976, about one-fourth of the population was de,sifted as poor; in 1989, that proportion bad increased to 59" (4.6 million people) 37" of whom lived in . extreme poverty, unable to meet basic nutritional needs. Most of the nation's poor reside in ~or urban areas, particularly Santo Domingo. Absolute poverty, however, remains lar&cly a rural phenomenon, as confirmed by continuing wide disparities in key social iDdicators between rural and urban areas. The nual population remains at highest risk of premature death, malnutrition and illiteracy (1992). On the other hand, in their numbers the urban poor require more attention than before because the rapid increase is accelerating problems related to water pollution, deficient sanitary servicc and solid waste disposal. Conversely, it is the urban poor who are most vulnerable to the adverse effects of degradation of the urban environment. The relative importance of the run! and urban poor in poverty alleviation efforts and environmental management would require further assessment. 3 D. Oymlel! of Eating• •' ManapmenJ to Date 1.9 BIsts:ta of £pyJrompepta, Mapaummt. Innumerable Jaws and decrees have been issued to tqUIate and conserve the environment since 1884, when cutting of trees was regulated by decree (para 2.26). ne Dominican RepubUc has participated in 16 international conventions to protect the environment. be&innin, with the Convention for Protection of P1ora,. Fauna and Scenic Beauty of American Countries in 1940 (Annex 2). Purther. since his retum to power in Aupst 1986, President Ba1aguer bas frequently declared that protection of the environment is one of his priorities. 1.10 OJemew of Ipstltutlogall.d I.,' F'J:amcwgrk. There is no overridin, environmental law or smale aaency mponsible for environmental management. There are numerous Jaws and apncies related to enviroIlmeotal mar:aaaement. Annex 3 IisIs 26 lovernment institutions involved in envIroDmental ~t. 1bese aaeRCies Ieporredly lack suflicieDt financial aad human resources to enfcm:e the laws ancl reaulations. Techaical redundancy and conflict &mOII1 the aaencies are rampaIIt. wasting scarce administrative resources. Verr inconsistent enforcement of the laws and regulations makes it difficult to mow which law and lJeDCY are really in control. ~ . 1.11 "Ibis institutional fia&meatation and redundancy may be the outCome of the GoverftmeIlt's Jdahly centralized and cIiscretionary decisioD maJdnl process. The President a110cates SO" of the budget directly throuah tile -PresideDt', fund-. and the presidential office CODuols the other SOS of the budpt. It is widely zecopized that. under this bucf&et a1locatioD process. DO coherent long-term policy or pJanainc process exists. The President has been teSpOIIdiaa to emergiD, enviroDmeIltal issues by CRatina additional sets of institutions and Ja'!S ratbe.r 1ba1I by c.ahand.al or restnJcturin, ex.istin& institutions. ~ 1.12 In contrast to the Government's widely recopized institutional failures, the Domigican Republic bu a lon, tradition of very active Noo Governmental Orpnizations (NOOS) and Pri\'8te Volunteer Orpnizadons (PV0s) in the areas of social development and •• environmental conservation issues related to the rural and urban poor (Annex 13). In addition, the Dominican Republic's private sector is suffici~tly capable 10 produce aoods and services if the market properly works• . 1.13 OADina Goymugent eUorts. 1be United Nations Conference for Envinxunent and Development (UNCED) created momentum for environmental maIIaIement in the Dominican Republic. The UNCED country report was the Government's first attempt to intepate eavironmental manacement efforts. ne report lIal1led the fonowing environmental problems as priority issues: deforestation; unrquIated industrial pollution and its possible negative effects on tourism development; declining quality of Jife and social services, iIlcludini education and health aspects. These issues rouahly correspond to the key en'ViJonmental issues named ill this paper. In the UNCED country report. the Government pnerally endorsed sustaiDable development as a concept and presented a wen thought out envi.roramental strate&Y, addressing: (a) land use and spatial policy; (b) sustainable environment and production transformatioo; (c) financing of environmental programs and projects; (d) science and technolOlY for sustainable development; (e) institutional development; and (f) human resource development (Annex 4). With technical and financial support from the international donors, the Government had been preparing various plans including: the Tropical Forestry Action Plan; the. " 4 National Tourism Development Plan; the National Water Resource Plan; the National Healtll . Plan; and the National Potable Water and Waste Water Plan. But a coherent investment program which establishes priorities amona these pJans is lacking, and implementation aspects are vague. 1.14 After the UNCED confetence in 1992, the Government expanded die ONAPLAN's EnvinmmentaiDepartment to define national environmental policy and to formulate various plans. including: the Tcnitor)' Master Plan, Sourer. PontI&I7 Ac:&ioA Plan for Dominieal'l Rqll,bUc: (1991) 6 2.2 Althoulh mapitude of deforestation and forestry type have not been assessed ~ recently, it is believed that dry wood forests, located in billy areas alonl the southern cost. suffer from the most serious deforestation because of tree cuttinl for charcoal production aad ~ inteAsive JlUinI. Because of the proximity of these forests to ~or urban areas, the dry forests t.eDd to be overexploited, despite the low rate of natural reaeneration. Some DoaainicaDs and intemational donors believe that a desertification process is already beJinninI in these areas. Wet forests In the northwestern put of the country are sufferinl from the expansion of pastures, aad wet forests in the mouatains are affected by slash and bum qricWture. JUab land conifers within aadona1 parts boundaries arc proteeted reladveJy well by their inacx:esSl"bility. 1be averqo .... of deforestation was estimated at 20,000 ha per yar between 1962 aDd 1980, and 2S,OOO ha per year in 1989. In 1990. Ndson projected that forest resoun::es were likely to be completely eliminated within 10 to 20 years at this deforestation Jato unless a serious effort was made to reverse the trend. 2.3 There arc serious data problems. No systematic assessment of defontlCllion lias been made since PAO's assessmen.t in 1981. The vuious assessments made before 1981 are incompatible, lJecause of different technical methods used. Periodic monitorinl of deforestatioat and forest inventories usin& consistent methodoloJy arc CJ'UCial to forrnu1atin& effective measures for deforestation. 2.4 BlqdJDI'I,. Depadation of natural f'orests suuests a reduction ofbiodlvasity.. The Dominican Republic is COIlSideIed to be tho hi,1Iest priority country for biodiversity CODSOrVatioa in the Caribbean. The Caribbean islands harbor COI1Siderab1e diversity or plants. birds and iJIvertebrates. 1he number or endemic species is very hip because tho islands . . isolated. HbpmioJa isJuad is c:oasicIeRd as the priority ua. for CODSOrVatioa or biodiversity • because of its size and its diverse IOpO&npby and micIoclimates. Tho isIaftd contains 5,000 . hJ&her pIaftt apecies. ofwbicll 1,800 species are endemic, aDd 233 bird species. of wIIida 23 lie endemic (Ledec 1989). In Haid, w:ryUUle of the oriaJna1 native forest now remaiDs" suaestiDl that protection of the remaiDin& natural forests in the Dominican Republic would be the last resort for protcctina enc:Iemic species. 7 B. Causa of DeforestatloQ . . ' 2.5 MJUor causes of deforestation are considered to be: (a) fOJeSt c1earinl for development of qriculturallaDd for cash crops and beef production for _port; (b) dash and bum apiculture by subsistence farmers; (c) tree cutting for cha.tcoal Production; and (d) forest fires. which, in many cases, were caused by slash and bum agriculture practices. A precise assessment of the relative importance of these causes is not available. In 1989, the National Tecbn1cal Forestry Commission (CONATEF) estimated that 25,000 ba had been deforested (10,000 ha of dry forest and 15,000 ha mixed), of which 55-60" was due to slasb-ancl-bum qricultute, 30-3S" to charcoal production ancII0" to fire. This may be seriously underestimated, because IS early IS 1986, the National Energy Commission (COSNER.) implied that the equivalent of 100,000 ha of f~ were lost annually to charcoal product101l alone. l.6 Since commaciaJ use of rorest is iUepl. there are DO reliable records of commercia11oging activities. It is bard to assess 10Jllnl's contribution to defozesti.tiOll.. Ac:cordina to PAO, the main market for Jocally produced lumber is fumiture makina- PmdUdloD is carried out ia two types of enterprises: medium-size factories equipped witll Je1ative1y advanced technoJoay; and small shops mostly located in rural areas. It Is eatimatacI tbat 13,000 tW of round wood, mainly coming from mep1 cuts in native foiests, are UIdecl unually (pAO 1992). 2.7 Althouab the mecba1Iism underJ;yInJ deforestation Is complex, ref1ectiD& OovemJllellt policies in the apiculture and emqy seeton, a key problem is the lack of clearly defined pmperty riahts to land and u.s. TIle uncertainty of land tenure and the 1arp pn:JpOItiaIl of the fONSt lands. wIaIcb are considered pubUc lands but not effectively enf'0ICed IS sacb, ha:Ye resulted in the tJeatment of most forest lands as open-access resources with all adverse CDDSCqUences. The Dominican RepubUc has an extensive National Part and protected area system (covering 5,689 art 11 It of the territory). This has not effectively protected the . foJests. As of 1993, both according to the Directorate of National Parks (DNP), a mtJor part of the temainin& forests (both broad leaf and conifer) is protected within the National Park boundaries, mainly thanks to their InaCcessibility. In more accessible national park such as Los Haiti_ Dational park, conflicts with settlers continue. 2.8 EonS elea..... tor Cattle Rapc;hIOI. Although its current magnitude is not t· dear, historically, forest clearing for cattle ranching has been one of the INVor colltnDUton to deforestation. This is evidenced by the fact that a large portion of deforested areas and altered forests is used for grazing. Increasina markets for beef and beef products, both locally and in the US during 1980s, encouraged the conversion of forest lands to pasture. In response to booming markets, many Dominican producers expanded their beef production by increasing pastures through defo~tion rather than by using feedlots and supplementary feedina propuns. For example. Russell (1988) found that land cleared for pasture accounted for 78" .. ' .. of the forests cleared between 1972 and 1986 in the western half of the Dominican Republic. 'The Government directly supported this expansion by passing Jaws encouraging cattle ranchinc and agricultural development ill forest lands (para. 2.28). The current status of these Jaws is not clear. 8 2.9 J)c[oreatal'og by SIasJa lad Bgm Acrkpltpm. Wet forests in mounlain areas . are adversely affected by slash and bum llriculture. The number of' peasant families enpainl in slash and bum apiculture in the mountains was estimated at around 220,000 (1IOUIId 1 - million people) ill 1981. nus population is becoming an increasingly important factor In the countJyts environmental problems because of the increasing relative importance for deforestation, soU erosion and forestry fiR. 2.10 The mJority of this population are descendants of migrants who settled the mowatains less than three generations 110, pushed out of the lowlands by delllOp'lpby and land acardty. The country'. atewecI lind clistribudon and UIldervdlizadon of productive low lands (Annex 5) pve this miamtion further impetus. These farmers are not equipped with adequate . tedmo1o&y to farm traple areas. Lack of clearly defined property rights to these lands creates a disincendve for sustainable apicu1tura1 operation. In particulart property nahts to trees were eliminated by the Jaw reauJatinI tree cutting. zesultina in a disincentive to plmt trees. Moreover. the lack of education, extremely weak extension services and inadeIcpte czedit system preYeDt the inlrOductioD of rational fann manaaement that cou1cI promote measures to protect the enviJoAment. A Dumber of re,ports indlcate abe need to provide dele to land to fiIci1i.... the disbibudOD of credit m:I application of land-use zoning. A cadastnl aurvey, a prerequisite for sucIa an initiative, wu IIarted in 1970 with fundiD& from the Int.er-Amedc:aR .DeveJopmeat Bank (lDB). but it is repoitedJy ou~. 2.11 Charmal Pr'Oduel'. gel 11ft Wood CoIIcctIoD. The dry forests, which are located JA the low lands and b.D1y areas lion, the southern coast and the lOw JIIOIUIiIlins in the northwest ucI am easily accessible to the -vor cities, are being cut down for chaIcaal pnxtuctioa. Exteadecl lIeU have already been clear-cut for this purposo. JacreuiD& demand for chaIcaal mainly from low-income urbaa households, combined with inefficient cbarcoa1 producdGn poceu. has pmmpted Iep1 and iDepl tRe c:uttma. The nationwide D8tUral powth of wood nsourcea appmximatea 10 miIIioD rr/year.. well above consumption of about " mDJioa ulJyeu (about one-half of it for charcoal production). However, most forests ue neither 1epl1y available DOl' suitable for producina fue1wood as their maiD objective. Unautborbed and laIply unrecorded wood cuttinl and charcoal anufacturinc have reached serious dimeasioas ia the dry 'WOOdlands where Datural arowth conditions are inferior. Tree felling in Ihe dry . woodlands totals about 1.2 million m' lye:u. twice the level which can be produced OIl a sustainable base. 2.12 . Charcoal is consumed by 80S of households-mainly low-income urban households-for cookina. 1 U»G and kerosene. with lower economic prices than charcoal. are considered to be viable alternatives to charcoal for low-income urban households; however. the high capital cost of LPG stoves and cylinders, and the distributors t disincentive for marketiag to • Oat, dIucoIl ud firewood. IUpr CIDe hIp_ aa4 b)'CIropower aN cIoswdicall, produced fItI1IIItI1 at prund. altoaetber npn IID'tiD, 32" of total - - I f aappIia ill 1'''. Other eGetJ7 IIOWCe8 - peb'D1eum . . 001II - .,. all to,... imported. PIocIuctioa of fiaelwood bas Jarael, followed tile population ,rowth aDd iIlcreasecl pet-Clpila coasumptioD. CbIn:oIIad firewood ICCOUDt for 56" of dolDC8tic CI1eI'J)' production and 185 of overall eDerJ)' IUppl,. EDqy c:orummpti011 in households, estimated at 0.61 m.i1liOll ton oil equivalent Us 1988•. 25 5 0( eaeru cad...... compriJo firewood (34">, charcoal (2S"). electricity (1'''), LPG (115) aod kerosene (55). Low-iDeo. . rural COJUI'men maialy rel, on firewood for cooldna aod on keroscoe for li,btin" whereas urbaa consumers . . lDOItly cbarcoaI for cookiDa ud electricity for liahtUsa. Hisber iDeome urban consumers tend to \ISO LPG for cootiDa _ electricity for appliances ill Idditi011 to liabtiJla (ESMAP 1991). 9 households hamper substitution of LPG for charcoal in the low-income households (paras. 2.S0 -2.52). ,- . 2.13 Inefficient cbarcoa1 production processes are worsening the magnitude of deforestation. Cbatcoal production is c:anied out mainly in earth-mound kilns whose conversioa. efficieacy typica11y is below 23". Low-cost kiln improvement could increase the charcoal producdora ef'ficiency to 3()"35". 2.14 In rural areas. domestic firewood is obtained locally through family labor. mainly as dead wood. The bulk or firewood is sold only within the vi.lJ.qo neighborhood. As IWIl populations tend to use die natural and sustainable powth of the existing tree stock, little deforestation results from firewood collection (ESMAP 1991). 2.15 Forest flres. rue control is a serious problem between December and April. The country·s dry southwest and northwest regions lie most vulnerable. In 1989,26 forest files were reported, many of which were caused by slash and bum agriculture. Detection and reporting of fires is very difficult because of the lack of communications and because cbarcoal pIOduction and sJash-and-bum apiculture make fires a natural part of the landscape. In 1983. a. forest fire in the Cordillera Central near the city of Constanza burned across 25-30 kni of dry pine IDd brush, heavily dama&in& about SO.,-oftlle affected area's soil and trees. Both tho Armed PoRes and the DomiDican Forest Service (f'OltESTA) worked to control the file, a1Ihough neither bad adequate equipment. 1be JOWIl'IlIIIf:Dt ,has subsequaady souaht intematimaJ assistance 10 train and equip the national fire fighting service. 2.15 Natlppal Park apd Prot_cd Arg·Ma......t. 1be National Park DiIecIcaIe (DNP) adminis1ers the extensive aadona1 parts and protected areas (13 national pub. __ scientific reserves. and Ofte panoramic biehway. toaether coveriDJ5,689 bn' (11.75"> of the national territory). The national pub and protected areas have not effectively protected the Dation's fqrests and biodiversity because or: lack of finaIIcial and human teSOUl'CeS to fonnulate ind to implement management plans; inadequate definition or boundaries (parb occasiona11y include human settlements and apicultura1lands)i and exploitation by inept cbarcoal makers, migratory fanners and government apncies. As of 1993, DNP abandoned an attempt to formulate medium-term rnanaaement plans. Instead, DNP tries to define aDDual opemtina pJaDS for selected aational parks within available resources. This effort may be practical, but its effectiveness and· continuity need to be closely monitored. Even thoup financial resources have incteased thanks to external aid and eco-tourism (Annex 7), resources &Ie still insufficient. DNP is also responsible for managing city parks and monuments ff (historical ueas) which n:quires substantial resources and a different type of expertise, further constrainin& DNP's ability to manage the national parks and protected areas. 2.17 The remaining undi~ forests (5" of the country's area) are located in the naticma1 parks. Pzotection of these natural forests is becoming increasingly important SO that Dative trees may reproduce. Reforestation or afforestation by native trees is the preferable, avoidina any unanticipated ecological consequences of introducing new species. As of 1993, according to the General Directorate of Forests (DGp). sufficient seeds of native trees from the national park are available for reforestation; however, there is no clear arrangement between DGF and DNP regarding reproduction and use of the seeds. 10 2.18 JlecUac at Cgffec IDduddes. Coffee traditionally has been one of tile country'" major export crops and sources of income, especially for the small fanners in the mountains. 'Ibis crop also generates substantial environmental benefits. Coffee is a ·forestry- crop that does Dot need soil preparation or plowing, provides permanent soil cover and is cultivated mainly on hiah altitude, high rainfall mountain slopes, wbere the soil erosion risk is peatest (AnneX IS, (c». Coffee procIuction is coUapsing because of low international prices, and the impact of the coffee rust, a recendy introduced fungus for which short-term measures (cbemica1s) are too costly, and Jona term measures (resistant varieties) require lon&-term, wdI- desiped iDterventions. Environmental benefits associated with coffee ,rowinl lie beina1ost. 1be decline of the coffee industry is considered to be an important factor in rural poverty in the - Dominican Republic. '. 2.19 Deforestation is believed to be the auQor cause of soil erosion, extinction of biodivasity, satimeatation. water run-off and increasin& wlnerabWty to such aatural disaslal u floodlnl, Javnicanes and JaDd slides, Ieneratina qUUltifiable and unquantifiable costs 10 the COUDtry. Delaestadon is posina serious threats to resources, which are becominl fuDclamental constIaints to dae development ofaariculture, urban sector, tiee trade zone industries and touri.sm. 2.20 SoD ,."... and SecQmcntatIsm. One source sugests that the e&OSioD rate fiam deforested Iud is 50 times pealer thaD tbat of forested areas. Studies in seven partially deforested watersheds show a loa of lOp soil of 0.6-3.4 cm/year (100-500 toasfha..year), ID averap of 250 toaslha-year, considered serious soil erosion. 2.21 The on-farm cost of soU erosion is the decrease of crop yield, althouah it is difficult to quantify this Idationsbip. A recent study of the Ocoa river watershed willi a slope of 30" indicates that the yield of beaDs fell by 0.26 tgIha. for each ton of soil loss. while yields of pipon peas fen by 2.1 qIha for each ton of soil Joss. Economic analysis of mums to iDvestmalt in soil conservation measures such u diversion ditches and Jive barriers revealed that the bltcmaJ tate of return of 17S would not be sufficiently attractive flOm the farmer's perspective Jiven constraints on access to credit (Hernandez 1992). 2.22 . Off-farm quantifiable costs of soil erosion are increased cost of maintainfn, irription Systems and shortened economic life of bydropower reservoin due to sedimentation. ne incremental cost of maintaining irrigation systems caused by increased sedimentation bas been estimated at US$2 million annually, out of total operating and maintenance costs of USS3.4 miUion. For the five principal dams in tile country, average life bas been reduced to 20 . -. years, versus a design life of 50:years. by unanticipated sedimentation. A program to ex.teDd the useful life of the Valdesia Dam through bydraulic pumping of sediment was initiated in 1988 at a cost of USS4.S million in the flnt year. A similar program is planned for the Tavera dam. In the absence of rebabUitation measures, the cost of capacity losses of hydropower plants could reach USS 130 million over the lifetime of the plants (abol1t over 30 years at 1989 present value) (Nelson 1990). 11 2.23 EQ'eds OD Water Bl§9llrses. Increased turbidity due to sedimentation caused by def'oresta1ion will increase tho costs of t:reatin, water ror supply to urban areas. Morc importantly, deforestation poses serious threats to the country's water resources by affectin, die _" recharge of aquifers and the flow rqimes of riven. It is estimated that over the past to-1S years the recharge of aquifers declined by SO~ in the southwest repon. Flow records from die Yaque del Norte and Mijo riven between 1964 and 1984 showed a 25 ~ reduction in flow after comctiou for rainfall. lbe reduced availability of surface water would require tbat lround water resources be tapped. at a substantial increase in the production cost of water. Further depadatiou of aquifers may result in serious water shortages. 2.24 J.ms of 0 ...... ,ad OU&. IlodIyenltx. Tlle defozestation of native forests ctircctly causes exdactioD ofbiodivenity, includinl numerous endemic species whose protection is considered a key priority in the. Caribbean region. WatJfl run-off and sedilDllltatiarl caused by deforestation also damaae manaroves, coral reefs and coastal fislaeries. affectiDa tile coastal ZOIlC ecosystem (para. S.S). These are important tourism resources. The dwlps are iJreversible, resuiUn, in not only loss of non-monetary value but also foreaoae income fran the tourism and rlShery sectors. 2.25 'arm"" vplacnblllty to Ji1oods. Deforestation and subsequent erosIoa increase the potential for serious floodJna. a major natunl hazard in the Dominican Republic causes exteDSive dama.p and loss Of life almost every year. River banks become erocIecl as dIey DO loDpr have the reiDforcement of tree roots. As a result, the rivers flood re1aIively frequeady elwin, the rainy season Oune to October). In low-lyin, areas, theze is a constant risk offloodin,. D. 1e""I. Muamnent ror De1ol1!lhdlla . 2.26 Leal and tgSltutlogal FumewArk. Silice 1984. more than 1261ep1 instruments have been issued to protect and reaulate the country's forest and biolOJical • resources (Annex 6). The major characteristics of current laws aDd policies are die overwhelminl use of regulatory instruments which have eliminated ·property rights to trees- by banniD& forest industries and by regulating bee cutting and transport. These ponda have also tended '10 eliminate incentives to plant trees and make sustainable use of forests. Combined. with unclear property rights to fORSt lands, the policies bave created strong incentives for Dle,al cutting of trees. 2.27 1be l1U\ior laws are the foUowin,. Law No. S8S6. of 1962. for conservation or forest and fruit trees. created the General Directorate of Forests (DGF) under the Secretariat for Apiculture (SEA), and defined its role in national forest management. This law reau1ates the conservation, restoration. promotion and utilization of forests, and the transport and utilization of forest products. Law No. 206 in 1967 transferred DGF to the Secretariat for Armed Forces (SEPA). inviting military involvement in the forestry sector. Law No. 211 in 1967. attemptin, to halt tho rapid deforestation of the country's pine forests, closed all operating sawmills, prohibited the harvest of trees and placed a tax on imported wood. This law practically eliminated .property rights to trees.· Although promulgated to halt deforestation, the law eliminated all incentives for private laqd owners to plant trees. 12 2.28 The Government also eRCOuraaed deforestation by issuing laws eneouraafnc cattle:: rancllin, and aancultural development in forested lands. For example. Laws 292 and 360 ill 1972 sold up to 2,000 areas (125.8 ha) of public lands to those who occupied them, pnMded that the land was being used for cattle ranching. Consequently these laws created the public ;. perceptlon that cattle rancbina by dearin, forest is a leJitimate way to acquire public Janel. Law 532 in 1m, for the pIOmotion of aanculture and livestock, created fiscal and credit • iacentives and price intervendon JneCbanisms to benefit agricultural and cattle I'8IlChiIla activities. These laws an: considered to have contributed to deforestation, but the curreat status of these laws is unclear. 2.29 In 1982, Law 70S created tile National Technical Forestry Commission ... (CONATEF) to develop national forest policies and oversee the development of the forestzy sector, requiril'lg the Government to develop a plan to manage the nation's forests. It closed all sawmUls, but allowed the private sector to harvest trees for other pwposes provided that the. harvest was put of a forest rnanaaement plan that hail been approved by CONATEP. Presidential decIee No. 2S In 1987 required CONATEP to desipate commen:ial firewood arad charcoal zones to balt the rapic:I destnlction of the country's dry forest. 1'be subsequent demarcation restricts the pIOductlora of charc:oal to areas where the forest Is already 10 depadecf that it C8ftIlOt be protected. The decree has bad little impact on Wep1 production outside those areas or on trafftcHng of chan:od. 2.30 Law 290 of 1985, amendecI and approved by the Congress In 1988, estahlislwd specific incentives for forestry investment. The incentives consist of laX exemption scbeIDes aimed at stimulating the development of commercial forest and fuelwood pbratatiODs IDCI zeducin& pressure 011 the remaining natunJ forests.. Although this law included incentives fir refomtation, bureaucratic: procedures for approval of harvestirag trees and transportlraa tree products ud confUctiDa laws and the coercion used in applying the repJation have creaIed disincentives that discouraae natural repneration in order to avoid l1Iy posstDle difficu1des. Questioras remain reprdlng the effectiveness of the Law, because property rights to lands and trees were Dot addressed and mepl operators and subsistence farmers do not pay SUes. As or 1993. except for 111 income tax exemption scheme, all other incentives are bein& e1inUDltecl in comection as part of the country's propam with IMP. 2.31 As a part of institutional refonns proposed by the Forestry Action Plan (Anna 8), the New Forestry Code is being discussed in the Congress. The code would cn:ate a new authority and incentives for private sector participation ira reforestation and afforestation. . But no COI'lcrete action bas been initiated. Momentum 01'1 this effort seems to be diminishing_ 2.32 Kex A_des in FQaSta Sedor. Many public sector institutions are UDdertalcirag overlapping, conflicting and competing activities in the forestry sector (Anraex 7). CONATEPt DGF and DNP ate die key sector institutions. In general, these institutions suffer frona hip staff turnover, technical and administrative weakness and lack of budgetary resources. Prom 1983 to 1987. official funding for these agencies amounted to only 0.3 pen::cnt of the Government's total budget. 2.33 The allocation of responsibilities and resources among the various agencies should be sorted out. The National Institute for Hydraulic Resources (INDRHI) receives funds to build and manage mUlions of dollars worth of dams and irrigation canals but rarely incorporates measures to protect the adjacent watersheds, although the costs of planting trees are negligible 13 compared to investment costs. SEA's Sub-secretary for Natural Resources (SURBNA) and the DGP are responsible for soil conservation and reforestation programs but receive no additional funds for these tasks. 2.34 It is reported that public sector agencies are the worst offenders of forestry legislation. 1be Dominican Agrarian Institute (lAD) has promoted aariculture colonization activities within national park boundaries through credit and special marketing programs. The DOP itself has authorized the cuttina of trees inside the national parks for production of beams, posts and railroad cross-ties. Presidential Decree No. 176ln 1988 zequired the Secretariat of State for Armed Forces (SEPA) to tate whatever measures are necessary for effective and strict. protection of parks. In the Los Haltises National Patt,this decree suspended all acrarian settlements planned or beinl implemented by lAD on Jarads belonging to state Supr Council (SEA) adjoininl the park, and suspended DOP authorization to cut trees in the park. It instructed SEA, lAD, the Agricultural Bank and the Price Stabilization Institute to abstain from CDCOUl'IIiIII farmers to phult itops within park boundaries, while allowing crops aln::ady planted to be harvested. 1be decree ordered the eviction of an estimated 3.000 farmers residiDa in tile park as soon as the crops wen harvested (tJSAID 1988). 2.35 WOO ActIJIdcs Ig Atrorestatloa gd Watcnhcd ManUlQllpI. The poundatioft for Human Betterment (PROGRBSSlO), the Development Association of SUa J0s6 de Ocoa, Plan Siena and the universities (ISA and UNPHU) have beeD enppd in Jef'orestad... Althouah their efforts have been noble, they haw had minimal impact ell covemmeat JePs1ation and sJ~ deforestation. Their combined reforestation efforts total less thaD .5" of the forests dcand each year for apicu1tute and for charcoal production. T1Ie Deve10pmeAt Institute of the Southwest is developina a plan to manaae the dry forest zone. The Developmeat Institute of the Northwest is reforesting the watersheds of the Masacre. (near Dagab6a and Loma de Cabrera) and Chaucuey river (near Monte Cristi). 2..36 Goympcpt ProaDIIDI Ind Igtematicmal Coogentlog. The various onaoin, pqrams reflect (Annex 8) the Government's priorities and the international donors' incr:easinC concan. 'l1le programs use three major approaches: (a) Efforts to address structural issues in the forestry sector, including institutional Ieform and the creati~ of economic incentives for private sector participation in reforestation and afforestation, as exemplified by the Forestry Code, which now is a part of the new Tropical Porestry Action Plani (b) Community-based watershed management projects, which provide incentiwes for subsistence farmers to conserve the environment and, at the same time, increase productivity, an approach used by NOOs and several donors; and (c) Protected areas where activities are restricted for a conservation purpose. 1.37 After the new Tropical Forestry Action Plan was defined in 1991 t government agencies and donors confinned the difficulty of solving institutional and policy framework problems by addressing the Government in a direct manner. Experience shows that solutions may require major changes in policy t institutions and the legal framework, which would l?e a cumbersome and lengthy process. The changes could affect the interests of government agencies. which might cause the agencies to withhold their support, and make the timely 14 deUvery of Prolrams extremely difficult. On the other hand, small-scale.. community-based projects such as small-scale irription and watershed management may work: out, provided ~ capable local NOOs are directly involved, and that the projects gain the strong support of the President to minimize bureaucratic obstacles and to defend against interventions by conftictin,. - government aamcica. Despite the Government's expressed priority, very limited I'eSOUzces are available for lCforestation and watershed management. 2.38 Mananmnt of BlodIunity. The Government expressed its interest in protecting biodiversity as early as 1931 by issuina a law to protect wildlife. Since then, numerous laws, decrees and aaencies have been created. But the absence of a system to coordinate protection and development pqrams and to resolve interagency conflicts, combinecl with the aaendes' weak institutional capacity, resulted in devastation of natural habitat. 2:39 Lack of information is on~ of the most serious obstacles to efforts to proccct biodiversity. Many of the institutions involved ale not coopem.tin&. and they are not applyin, compabole mcthodoloey in their studies. Umited efforts are beina made to study a.nd coascrve some of the native flora and !auna, mostly by NOOs. The notable exceptions have been enfon:ement by the Wild Life Department of the Secretariat for Apiculture (DVSlSEA) of tile crrss covenant which controls the export of protected species. and efforts by the National Part Ranger to control hunting within national park bouadaries. DNP, with assistance from the German Teclmical Assistance Apncy (GTZ), is attemptin, to identify new areas which shouJ4 be protected. 'Ibe lardtn Botinico ~ deve10pina a catalogue of the flora of the Dominican RepubUc and Haid. UNDP is currently preparing a three-year USS3 mUUon technical assistance pilot project to protect biodiversity. E. RctmDt Goyengncgt Ec.onomlc Policy 2.40 Deforestation in the Dominican Republic has been greatly affected by the Oovemment s perverse economic policies in the qriculbire and energy sectors. Pondes ttyina 9 10 create economic incendves for private sector participation in reforestation have not been working, because these policies really do not address the question of incentives to subsistence fanners and illegal operators and property rights aspects of forest lands and trees. Furthermore. the conflictin& and restrictive reaulations related to tRe harvesdng and transporting neutralized their effectiveness. Efforts to address various distortions in agricultural sector are ongoing although their status and effects are not clear. These efforts are expected to stimulate " apicullUrJll production by bringing market-oriented relative prices. These would have impact en the use of productive agricultural land; agricultural operations in ecologically fra&iJe land, choice of technology and on employment conditions in rural areas, of all which have been the important facton affecting deforestation. Policy reforms in the agriCUltural sector would therefore have a considerable impact on deforestation, although its direction is not clear. Assessing and addressing other factors which would determine the direction would be ClUCial to aenerate environmental benefits. 2.41 Subsidized AariCUJturaJ ExpaDSIQD into Forests. A high percentage of the deforested land suited to forestry is being devoted to agricultural production (para. 2.1). A series of government interventions encouraged expansion of cash crop production. Some of tl1em have directly contributed to defo~sta.tion: providing subsidized credit for agriCUltural and IS cattle ranching development in the forests; and giving tiUe to cleaed forest land for cattle nmching (para. 2.28). Many of these interventioas were motivated by lobbying to benefit producers who were pognphically concentrated aDd thw had lar&e political influence. Because of low labor intensity of these sectors (especially cattle nnchial), this production expansion did _. DOt lenente job opportunities for the rmal popaIation. 2.42 Qompmept IptemptIgp epd Decl"_ AmcultuaJ OItpgfs. The Government levied export taxes ranBinI from 1.0" to over 17" of total export value dUl'inl the 1966-85, on maDy ClOpS to raise Govemment reverwe. Another set of government policies favcm:d the urban population, imposin& price controls on food stuffi, and implicidy subsidizi. imported food throuab multiple excbanp rates and discriminatory import tariff's. Althouah stories are different depending on crops, the Dominican producers of the -VOl crops .. -supr and coffee-aU suffered &om disincentives to production due to declinin& relative producer prices. 'These disincentives contributed to the declining in agriculture's share of to1al exports from 76" to 55. during the period. 2.43 Resources 'WeIe shifted from the apicu1tural sector to the import substitutiDa industries in the wban areas. Until the free trade zones emeraed, the structure of tadff protcctioa and income tax exemptions reinforced import substitution. providing stron& incentives to invest in the Industrial sector for the domestic market and fewer incentives to invest in expart-orientecllndustries. includiDa the apicu1tura1 sectors. 2.44 AJtoptber these pernment intaventions, combined with internationallllllltd. c:oadi.tions (e.I., coDapso of supr prices), reaulted the a decJiDe of outputs. whicIa would explain why • Jup exteDt of producIive lands are UDutili%ed despite scarcity of Iud in tile COUDtry. Other facIors in the dec1iDe in qricultlll8l outputs lie related to the 1aDcIs. The COUDb'y" inadequate Janel tenure system and, Jarae holdinp by pubUc entities IDCI few private owners resulted in • skewed distribution of the productive qricuIturallowluds. Oatyabout jO" of aU farm JaIId is pdvately held under officially or de facto private titles.. Much of this . . . is in the -&thY and cum~ process of subdivision. Accordlna to a 1980 survey of nuallabor, only 32" of the mal workers owned Jand, while 68" were landless worbn working under various forms of employment: .share-croppina, renting, day laborer on state land or private farm, employee, collective· farm worker and worker OD panted land (AnDex S). Given the large proportion of landless rural workers, the declining agricultural outputs libly caused with foregone employment opportunity in the productive rural lands, drMDg land1ess people towards environmentally fracile mountain an::as and the urban 81e1S. In 1970. the agricultural sector employed 45.4" of the economically active population, declining to 35" in 1987 and 23" in 1989. Some of the population driven from the productive apicu1tural lands settled OD such ecologically f'n&i1e lands as steep mountain slopes and have been enlaging in slash and bum agriculture, contnDutinl directly to the deforestation and watershed degradation. Others migrated to the urban areas and overwhelmed the municipalities by creating squatter settlements and agravating urban environmental problems. 2 Price CODUoI. established duria. World War II wen maiDtaiDed after 1945. ID 1963. the DirecCOtUe GeaenII or Price CoatroJ (DOPC) 'inS established within &be Ministry of Commerce ad Industry. This .pac)' was pvea leaa! .oods autllority to fix prices OD apicultural desipatecl as ucessitiea ID4 was also JiVeD authority to proaecIte .-nora ud 'Whoa_lIS who violated price ceiliD.s. In 1986,lbe DOpe set ceiling prices OIl a wiele variety of food products: suaar. rice. 'Wheat &ad COni. flOilr. soybean oil. aoodlea, bread, milk. chicken, east &ad cbocolate.1t also ... maximum. wboleule mel retail prices for salt. soap. toothpaste, LPG Sas. kerosene. CCmeD.t, &ad nails. 16 2.45 ImpilratioD or Polk! Bero"", ID tile A,moltonl Sedor. The recent improvements in exchange rate manaaement. the elimination of some price contJols and the elimination 01 export taxes are important steps in the naht direction. Several studies indicale that removin, distortiOfts and creating market-oriented relative prices would tend to raise . producer prices in the Dominican case and thereby stimulate acncultural production. However. . abe speed of the reforms has been slow and the Government's effort does not seem profound ..' The scatus and effect of these enaoing poHcy reforms is not clear. requirin, ful1hcr investigation. 2.46 Policies in effect until recently resulted apparently in a depressed acriculture sector, unutilized productive apiculturallancls. continuing population pressure ill ecolopcany ftqUe IaacIs and continuina deforestation. Those distortional policies were harmful not ooIy from the ecoIIOmic view, but also from an environmental view point.. Reforminl distortions is .. economically desirable. nil may also create a window of opportunity for better eavi.ronmeftUll manaaement. if these reforms alleviate population pressure in eco1ogically fracUe areas. However, thb would not happen automatically only by removing distortions. because other various factors, such as land issues. technology and incentives are involved. These factors Deed 10 be addressed. 2.47 1bere is a danger that favorable producer prices could encourage subsislence farmers to intensify tbeir slash and bum apicultunll practices in die DlOWltaias, COAtributin, to further deforestation.. ID the prcductive agricultural lands, production could be increased by mecbaniudoa. withoI.at creatin& job opportunities and thus failiraa to reduce popuIatioa pressure ja ecoJoaically fraajle areas. If ~ is dono with short-term, profit-takin, motivation, soil aa4 water teICIIIrCeS could be over-exploital. On the other hand. the sUmuJatCd apicullUtll product1an _y intensify use of qricultural lands and creato employment opportuDitles III tJat productive lands could absorb population from eco1OJicaUy fraajle areas and alleviate defores'ati.. 1his would require: introduction of labor-intensive crops; secured Jaad _an: avaiJabiJit.y of information and adequate technology; and improvement of basic iIltiastrudure. FavorabJo pIOducer prices for ClOpS will make c:onservation measures in watershed areas more attractive 10 subsistence farmers by pushing up the rate of return of such investments (para 2.21). 1berefOre. additional poHcies and technic:al measures to lenerate envil'Ollmeatal benefits attdJor a\'Did unfavorable consequences of' onloing policy refonns arc becomin, crucial. Identification of such measures would need further assessment. 2.48 lDcegtJ!es [or Priyate &mar luusbpeDt ID FotQta. As discussed before. law 290 of 1985 introduced incentives for private sector investment in forestry: (a) tax eumption fqr a forestry enterprise for its capital increase; (b) exemption from natioul and municipal Ucensinl taxes for the sale of forestry products encouraged by this law; (c) 100 percent tax exemptions on the items and materials needed for forestry operations and DOt available from domestic manufacturers such as, seed. equipment for pJantinl. felJinJ, Prunin& and milling. any other materials needed and approved by CONATEP and endorsed by the President; (d) 100 pen:ent exemption on all rural real estate property taxes either presently in force or to be enacted; and (e) 100 percent deduction of total net income in each fiscal yt:tM J For eumple. Price StabilizatiOlllDstitute (lNBSPRES) effectivel), eDc:Iecl direct control of prices for buic foocI ShIff ill favor of the COD.IIl.IDa' aeveral )'tall aco. INESPllBS does, bowever. CODtinue to purchase local and iIIIportecI products for local co.a.sumptioa. principally milk. bolDs, rice, _ edible oUs. Its admiDistrative decwoas 011 bow IDUCb to import ill onIer to offset deficits in local productioD ud the prices to be cbar,ed continue 10 iDflueace fana I . prices for these products (USAID. 1990). 17 provided it is reinvested in forestry or agro-forestl'y ventures. These fiscal incentives were initially expected to stimulate the development of commercial forests and fuclwood plantations and reduce pressure on the country's remaining natural forests. However, it is not clear whether this law was really enforced and what outcome was achieved. Notoriously weak tax administlation and fiscal incentives in numerous other sectors may fail to create sufficient momentum to shift investments to the forestry sector. Unclear property rights to lands and trees and n:strictiora of forestry activities would divert the private sector from investing in the forestry sector, and these may encouraae inepl operations. The incentives provided by the Law 290 are bei.na eliminated, except the income tax exemptiora scheme, as a consequence of recent fiscal tilhteninl. The similar fiscal incentives proposed by the New Porestry Code, which is under prvcess of review in the Conpess, would likely be reconsidered • . 2.49 Ji1nwpod ,nd c;barmal melne. Prices of ruewood and charcoal are key f'ac1ors in detem.inial demand for fuelwood IIld ,thus the mapitude of the def'orestation. These prices are mutet-determined. However, prices do not reflect the cost of replaDtina trees (estimated at JU)$ 23OImet:ric ton of wood equivalent). as wood is collected free of cbarge, no PJ9PCf stwnpap fee is levied and no attempt is made to n:coup the cost of rep1antinglJeeS or of altcmative Janel use. leal resource costs are excluded from these prices because of the lack of property riahts to fCHest lands and/or the Jack of proper concession amngemeats in public lands. 11Iis is especially serious in ~ case of cbanloal whose resoun:e costs are hIP because of substantial fue1woocl requirements per unit J)R?duced. Plices of fuelwood and c:han:oal paid. by urban residential consumers were estimated at RDSI (USSO.16 In 1989 value) and RD$1 (US$O.32) per q respectively m1989 (ESNAP 1991). 2.50 LPG , •• kerwgo misN. Altbouah the econodIic cost of LPG and terosene is lower than that of cIIan:oaJ, cbarcaal remains the uuvor eftCIJY source for low-iDcome urban COIISWDCIS because of distorted eneqy prices, the high cost of initial investments in cylinders .; aacJ stoves Ie1ative to income level and limited marketinJ. In 1989, the economic cost of cooIdaa with charcoal including fuel and equi.pmel\t, was estimated at RDS 4.Slday (USSO.71/day), compmd to RDS 1/day (USSO.I61day) for LPG and RDS O.7Iday (USSO.ll/day) for kerosene (ESMAP 1991). 2.51 Accordina to COSNER, in 1993, the Government has two prices for lj)(J: RDS 1361pllori (USSI0.881gallora in 1993 value) for households andRD$ 4S8Ipllora (USS J6.641p1lon) for industry to help convert households from charcoal to LPG. 80ft of LPG consumed in the Dominican Republic is imported by the two entities-the Dominican Republic PeImIewD Refinery (R.BPIDOMSA) and the Puerto Viejo Operator (OPUVISA)-while 20 " is produced ", REPJDOMSA from imported petroleum. There are seven distributon of IPG. Bach distributor is assiped SO" of its LPG at the price for domestic use and 20" at the price "!' • for Industrial usc, so that distributors will not lose profit by sellin. UG to households at the lower price. 'Ibis pricing policy results in subsidies for the CUJ1'eIlt household users, mainly JUah-income households, and lenexates disincentives for the LPG distributors to expand the market to low income households. 2.52 Protection of inefficient domestic LPG cylinder and stove producers, aIthoulh its magnitude is not clear, resulted in a high domestic price for cylinders and stoves. The distributors' preference for larger cylinders for better profitability resulted in limited availability of smaller and cheaper cylinders, worsening the situation. According to COSNER, the least expensive stove costs RD$ 300 (U8$24), and the smallest cylinder (25 lb) costs RDS 300 18 (USS24). compared to the minimum monthly WIle of RDS 780 (USS62.4). In reality, due to the producers' preference for bqer cyUnders. the most available is a 100 lb cylinder costing RDS 1000 (US$80), result1nl in the combined price of stove and cylinder of RDS 1.300 (USSI04), which the low-inccme house holds cannot afford. F. IgIq ror Further Ampmcgt 2.53 As discussed before, major causes of deforestation-forestry dearift, for cauJe JUlCbina. slash and bum qriculture and tree cuttil'll for charcbal pmduction- have beea doseIy related to distorted GovcnJDent poUcia and to the continuinl demoaraphic pressure of the poor . on the ecoloaically fn&Ue lands. Furthermore. ,ovemment restrictions and lack of property Jiahts to Irees and lands In forest areas wiped out incentives for sustainable utilization of thao mources by subsisleDce farmers. These are the ~or obSlaCles to afforestation by the pdw.te. sector. Massive IavestmeDts in afforestation could be met 0Ill1 with private sector', . pardcipatioD. aivea the severe fmaacial and institutioDal c:onstmints faciDl the DomiDicaa Republic (A.Daex 9). Ualess these fimdameatal factors are effectively addressed, affoIesIatioD efforts could be easily offset by i11epI C'Uttiq and a1ash and bum aariculun. In this context. the f'oJlowJDa topics and hypotheses should be investipted in order to fonnu1ate SIralqies ad JemeClies to abate deforestation: . Ca) ElimipadoD of policies that directly encourap forest elClljol: EU~ of an1 JelII8inina subsidies for expansion of qricultural devetopmeat aad cattle rancIai.Da would avoid further eIlCI08Cbment into the forestI:4 lands. Further usessmeat of the current status is required. . (b) MODi_oe qf the qric;ultuql policy reforms: Ongoinl polley refonDs 10 reduc:a distortions in the apiculture sector should be dosely monitored. Tbe status of the reforms, the effects on the terms of trade on apiculture and OR n:sourco allocation both within and outside the sector and implications for natural resoua::e use and deforestation need to be assessed. (c) Sup,plementaJ policies and measures: Policy reforms that win eliminate distortions are not enoup to reduce deforestation. Factors in the process of deforestatioo such as unutilized productive low lands. stagnation of employment opportunities. population pressure on the forestry lands. and incentives to fanners need to be addressed. The effect of the policy reforms on deforestation would depend on these various factors (paras. 2.45 - 2.47). Additional measures and investments are crucially needed. to generate environmental benefits and avoid any unfavorable consequences from the oogoing policy reforms. The foUowin, '" measures would need further consideration: (i) Yiatmbed conservation by subsisten~ f'arme:rs: successful pilot projects such u USAID's FlRENA (Annex 8) should be repeated to introduce soU conservation practices and reforestation in critical watersheds in nUtively productive areas which could absorb subsistence farmers cum:ntly operating in the more fragile lands. Such a project should be execurecl by the local NOOs with clearly defmed lines of administration coordinated by 19 the presidential office to avoid bureaucratic difficulties especially for .- - transfer of financial resources to the project. and; (ai) Intensified UIG of Productiye gricullUrallands and emplQ)'IDCI]t c;n;adpn: AJric:ultural production stimulus should be combined with measures to ptOmote more intensive use of productive lands and to increase employment opportunities in these areas. A more productive aaricu1ture sector, aeneratina more employment would lessen the pressure of the poor on ecolopcally fraaile lands and slow down miaration to urban areas. Such measures could include: secured land tenure; investments in basic infrastlucture; rehabiUtatioa of 1aDds; apicu1tural credit; research and extension to promote labor intensive crops; and reform or privatiution of CEA. Selection and design of such measures would require further assessmcnL (d) J.,imitina qpep access to tn:cs and (orcsto' lands: Restrictions on trees aDd state ownership of all forests without proper manaaement lecl to open acceis, eDC01II'8pCI UJepI tree cuttlna and discouraaed plantina of trees and conservadon. Measures to limit open ~ss ,should be introduced includin&: property riJhts to trees and lands; concessions for private sector operation in public lands; and. deceatraJizeci land JIWI8ICIIICIlL For conservatioa of ecoIo&ically fraaile but se1atively pnxIuctive land, secured property riahts to trees and the Janel aro fundamental to induce subsistenco farmers operate in a sustainable way. Clearly defined usufruct ripts ud concessions, combined with adequate stumpaae fees, and iDclu.sion of resource costs in pric1n1 would be necessary for sustainable cban::oIl pocIucti.oIl. Forests manqeel by local communities and delcptioa of JeSpODSibility for manaaemcnt of pubUc lands to local aovcmments are possible optioDs. Productivity of land, land use and curreRt usaac would be factors in sclectinl appropriate measures. Dcsian of these wasurea would require further . -investigation. (e) National Parks and Protected Area Manuement: National parks and protected areas are the most effeCtive vehicles to protect native forests and biodiversity by reguJatory measures. Only in those national park and protected areas, should the Government practice restrictive measures. accordq to a coherent protection poBey. Despite DNP's institutional weakness, the national park system is becoming increasin&ly important to protecting the remaining natural forests and biodiversity. as the remaining natural forests are located in the national parks. Protection of natural forest is important as a means of protecting biodiversity. and beCause of the need for native tree seeds for reforestation. As critical environmental benefits can be generated but the private sector might not be interested. intavention by re,ulatory measures and public investments can be justified. Continuity and effectiveness of the annual operating plans recently adopted by DNP for selected national parks will need close monitoring. The operating plans may be suitable for responding to day-to-day problems within a selected park, but do not address national conservation issues related to the national park system as a whole. For this purpose, a protection plan covering the entire national park system would be needed. Assessment of the spatial distribution of the· remaining natural forest and the cunent status of national parks 20 and protected areas, includin, the extent of damaae already done, popuJalion , settlements and Jand development. would be useful to formulate a protection pIan for these areas. Where appropriate. boundaries should be redermed to protect. the remainin, natunl forest more effectively. Priorities, as well as deane and means" of protection, need to be established. Zonin, with different levels of protection. (e.g., strictly protected area, buffer zone and ZODe for service facilities ard private sector concessionaires) would be more pJ'aCtical than tryinl to protect everythinl. Institutional reform and stren,therUna in this area may be feasible because jurisdiction is relatively well defined. DNP's manqement efforts could be coordinated with or delepted to universities, the National Museum, the Botanical Garden and NGOs to complemeAt DNP's'limited institutional capacity.. DNP's current responsibility for manaaina city parks and hiscorical monUlllCllts . could be transfenecl to the mumcipa1iti~, enabJifta DNP to concentrate on protectina natunl areas. J3c0..tourism should be developed to provide sustainable . .financial mechanism tor national part and protected area manaaemenL (f) Cgnyertio. HoulCboJd Jner.u Squm; fmm CharppaI to LPG: 1be hiP cost of cyUnders and stoves is the IIII\iOr barrier to COIlvertilla low-income bousehoJds to usina LPG u their primary IOIIIat of eDerI),. Policy measures which eIimIaate restrictioDs and discrimin.atory tariffs ou hnported LPG cylinc:fets and stoves should be c:onside:rate. Mecbanfsm,s to help Iow..income household consumers purchase cylinders and stoves should also be considend. Efficlent prlciDa or charcoal and LPG. should be introduced. Chuc:oaI priein, whicb would Rf1ec:t the cost of R:plaDtirla tn:es Deeds further invcstiption. CuneDt duil pridDa or LPG (a lower price for household and a hip price for iDdwtry) needs to . . cuefuUy asessed. Available information supports tbat dual pricjna creates disincentives to distributors to _pand sales to households, and that IJecause _ cummt averaae price of LPG in the COWltry is estimated to be lower thaD charcoal, subsidized prices for hoo~olds do DOt make sense. T1&e price shoatcf reflect the international price of LPG. If the international price is hiaha- than. the charcoal price, iDtervcntions that would discourage use of cJwcoal without substantial distortion should be considered. (J) Water [CSOUn:;e and reforestation: Reforestation as a mean of preserving of water resoun:es requires more attendon. This could be done as a part of investments in dams and irription systems by modifyin, investment programs of JNDRHI and establishin, proper iDstitutional anangements for the project watersheds. 1bis would not cause a large increase in investment costs, as costs of planting trees arc relatively low when compared to irription chanuels and dams. (h) Pdutc Sectm: Afforesbtion and Forestry Sector PolicY Reform: The proposed forestry code is a landmark in policy aDd institutional reform in its mtention to encourage private sector participation in afforestation. Implementation of' the code would need to be closely monitored. In order to create an environment tlJat would encourage private sector participation in aero-forestry and enet'IY-forestry, the following topics would require further assessment: property rights to land and trees; elimination of conflicting restrictive regulations; land registration system; and clear arrangements for use of public lands such as concessions and 21 stumpage fees to promote economic incentives for sustainabJe operation of the forests. m. URBAN ENVIIlONMENT A. Issua. M.pltutla aDd Causes 3.1 Declinina bealth staDcIards in the couatry. especially those of the poor, have been compounded by: insufficient or inadequate potabJe water supply and water pollution; ineffective waste water treatmeDt; and uacoUected solid waste. Althouah the rural areas also suffer from inadequate water and sanitation, the popuJation are more adversely affected by poor eavironmental quality in the urban areas, wheIe the'rapid urban growth bas overwhelmed tile Government's and the municipalities' fimited financial and administrative resoun:es ItDd surpassed their capabilities to provide adequate inftastructure. 3.2 Durina the 1960s and 197Qs, matJor cities such as Santo Domingo aftd Santiap &JeW at about 6.0-6.'" annually. The saUer towas and cities crew at from 4" to 6., III the 198Os, the urban powth D.te is estimated at about 4.3 •• the rural powth lite at less than 1" aDd Mdoaal nte at slightly CJ'W:I' 3". This is well above the averqe mbaaiution late in middle-income countries. Por 1990-95, the populacion powth rate of the urban II'I8S is expected 10 remain hiP (projected at 3" for the period), while the rural and COUIItry-wide powth Dtea are estimated at 0.3" and 2. respectlvely. TIle country's overall JDPUIaIion deasity of 154.2 perIOIIIIJan2 is DOt especiaJIy biP for the Caribbeaa repon. 1IoweYer, ill 1992, 33.6" of the population was concentrated ia omy 3" of the territory. nsuldD& in a ... popuJadoa deasity of 1.727 personsIJan2 in these areas. For the squatter settlements in these m&\ior urban centers, the averap popu1atioD cleasity was estimated at 28, m penonsIIan2 in 1984. which would recjuim special attention to infrastructure and basic public services. Two- tbirds of the urban population five in substandard housing in squatter or partially formalizecl areas. 'Ibis large population or urban poor will become an increasingly important focus of environmental issues in the Dominican Republic. because its consumption patterns (e.•• , bigh CODSUmptioa of cI1arcoa1, small ability and wiWnpess to pay for sanitation, etc.) oftea precipitate environmental problems, and because their settlements are located at tho ed,,, or hi&hly polluted rivers, where there is no safe water supplyt and in areas access for solid waste collection is difficult. - ". . " 3.3 Potable Water SlQUdyand PoUutIQD. Deficient water supply water and pollution are serious problems. Access to potable water has been well below reaional a~ \} l1ae National Institute of Drinking Water and Sewerage (lNAPA) estimated that only 505 of all urbaD residents (excluding Santo Domingo and Santiago) and 14" of the rural population bad access to domestic water connections in 1989; and another 27" of the urban and 2S S of the zural population had relatively easy access to piped water. In 1991, these figures remained unchanged. For 1992. the Water Supply and Sewerage Corporation of Santo Domingo (CAASD) claims that 100 " of the residents in Santo Domingo had access to potable water (80" COMecteci to piped water and 20" with easy access to potable water). These figures may significantly overestimate actual coverage, however, given that outside Santo Domingo, an estimatecJ 67" of COMections were not in service in 1989. Supply is frequently interrupted as a. 22 result of frequent power outages and because of extremely inadequate system maintenance. Moreover. system losses through uncontrolled leaks are estimated at about 45 S of water production. 3.4 The Government considers contamination of potable water in urban areas CO be a priority problem. The source of urban supplies is surface water from intakes located above the cities. Quality is considered satisfactory. but the water becomes polluted durin, distn'bution. Frequent and prolonged power outaps reduce pressure in the distribution system, pennittiD. iDfUtration and contamination. Residents in squatter settlements and low..income areas abtainecl ~.:,. water cJandestiDely by breakinl water pipes and by SPininl water on the around, where it is .~;- coataminated by polluted soD and uncollected soUd wastes. The Secretariat for Health anel Social Assistance (SESPAS) estimates that almost two-fifths of all piped water is heavUy contaminated. Recent INAPA reports indicate that much of the nation's water supply is _fit for human consumption ~ot meedni any CJuaUty standards set by WHOIPAHO. 3.5 Although water supply is already a problem in Santo Domingo, the sftuatioo could become critical in the near future. Based on estimates of population crowtb, Per capila deIIIand and supply sources, daily demand for the year 2000 is estimated at 14.67 m'/RCODd. Undec normal rainfall and electric power CODditions, all currently available IOUJCeI could supply 001, 12.49 ~/fI!:I:OtId resulting In deficit of about 2.18 m'/second. Under drouaht conditions. the ....y dtops to 8.59 ~/1IJCOftd for a deficit of 6.08 ~/r«:Oftd. CAASD estimates the SIIlto JlomInao deficit, adusive of water losses, to be 8.0 ~/.:ond. by the year 2000. This projected clelicit would be met by lbiftina from surface water to poundwater. U$AJD arpes that unrestrained withdn.wals from aquifers underlying the DUdor. wban areas, eacowapd by abe uareIiIble and deficient water supply, mduce the byclros1atic pressure of water tlowin, towud tho . . permittina the inflow of salt water. Moreover, unreplated disposal tlllllilaly and bidDlbial wastes is contaminatinJ the aquifers. Even unpolluted poaacIwater contaiDs hIP levels of dissolved salts (mainly calcium and magnesium). In onIet to achieve acceptable Jlardnesa (less than 150 ppm), the cost of 'Water treatment would have to be increased. As DOled above. there is also evkIenc:e that the aquifers WIder the major urban areas are already poButed. and will undoubtedly become more so. 3.6 Sapltatjog Conaa. Sanitation coverage is low by Latin American standards. Water pollution by human excreta is the most imponant cause of waterborne diseases (pans. 3.15-3.16). 'The Govemmmt's emphasis on expensive sewerage system in Santo Dominao IIId its ignorance of affordable sanitation systems, have aggravated this problem. 3.7 SESPAS estimates that in 1991, only an estimated 21" of the wban population .. .. '". '. , was conneCted to a sewage system; another 50" used poorly maintained latrines and septic tanks, and the remaininJ 29" had IlOexcreta disposal facilities. In the rural areas, only 2. i was c:onnected to a sewage system, just 27" of the households had latrines or septic links aDd the mnaiDina 71" bad no sanitatiOIl facilities. In total, 47" (3.2 million) of the population cove:red by the SESPAS' statistics had no sanitation facilities, of which 1.2 million were in the wban areas and 2 million in the run! areas. The segment of urban population without sanitary services is gowing rapidly. 3.8 CAASD estimated that in 1992, 30" of the population of Santo Domingo was connected to a sewage system. Having achieved the target for potable water supply, CAASD's priority is being shifted to investments in sewage systems in the Santo Domingo area. 23 However. the conventional sewage systems installed in urban BRaS are believed to be mainly ineffective. FOf example. Santo DominIO'S sewage system, consisting of four treatment plants and five PUmpinl stations, serves only two-rlfths of the area of the city. Almost 90" of the coUection system is only 8 incbes in diameter and only 7 kin of the 615 Jan system is above 24 inches diameter. Because of these small pipe diameters, the lack of protection from garbage dumped into the system and the WlCOlltroUed discbarce of industrial wastes into tile system, the ability of the system is significantly reduced. Most sewaae is discharpc:l untreated and spills direcdy into the ocean or indirectly tIuoulh the lower reaches of the Isabel and Ozama Rivers.. 3.9 Vrhag Solid Wutc. One of the most obvious problems facing the Dominican Republic's cities is solid waste manapmeot. Tbe Government bas DOt estabUshect priorities for this issue even though about 60" of municipal budptS is spent on soUd waste coUecdon and disposal. For example in Santo DominlO, althoup RD$234 million was allocated to solid waste disposal in 1992, only 900 tonsIday, qf 45" of prbage produced daily (2,000 tons/day). were coUected.' The mma.inin& dally wastes are left to rot in the streets, on empty lots, alon, the river banks and on improvised sites, and an undetermined proportion is dumped into the two rivers and the sea. UncoUected human excreta, especially in squatter settlements, is . contamiDatina poIable water and drawine vecton such as rats, fUes and cockroacbes. The uncoD.eclelS lOUd wastes also cause serious drainage problems. In low-income nei&hborhoods. muralcipll zefuse clop drains. Where open cbains contain human suDaae, there is increased. poteDtia1 for di__• 1be reIIabilitation and maintenance of Santo Domin,o~s 4,000 kill dIainap system are beyond the city's &nancial capability. The cost of such iDvestmeats is estimated at RDS615 mnnon (U$549 miUion equivalent), far exceedina the city's total budget for 1992 (RD$390 million Of USS31 mnnon equivalent)... . 3.10 The Dominican Municipal Association estimated that for urban areas in 1990. illstal1ed capacity for prbaae disposal could hancIle only about two-thirds of the daily • procIucdora. Estimates indicate that In Santo Dominao, about 200 compaction trucb lie needed• Cumrady fewer than SO trucks are operatin& within the municipal system. When private companies and other apncles are Included, about 110 trucks are available. A 1991 USAID study summa:rized the main problems associated with solid waste management as foUows: lack of Govemmeat priority; inadequate cost recovery; poor equipment maintenance; low salaries for workers; and poor lIIID8IeJncnt of the overall opezation. In particular, coUection itself is a major problem. 3.11 Current soUd waste collection relies on conventional techniques, liminl at house- to-bouse conection by compaction trucks. This makes operations extremely expensive and impossible in many neighborhoods. especially squatter settlements, where roads are impassable. To solve the collection problem, various municipalities are investigaUnl using push carts and drop-off centen fOf the low-income residential areas. Private sector participation has also .. Sato DomiD,o'. popalatioD ill 1990 produced IIIl estimated 1,230 tau of IOlid WIlle per . , 01' dOlO to ODe hI1f millioa toDs per year. 'Ibis fipn was updated for 1992 to 2,000 toasIday 0; 0.73 1DiUioDI)'tIU. p•• eDtia, .. dnmacic iDcrase. The maiD producers I.ftI households (65"). public martets (10"). COllllDOfC8 (6"). aDd .,..u - prdeas (6"). AI of 1990, hi,Jl..iacomo households (over R.DSlOOOlmoatb iDeome) produce IlIOn WIlda per penoa. (0.92 k,/day-petSOll) but I.ftI t:lumerica1ly less frequent ad reside in low deDsity residelltial area with relatively more. ftequeat collection IOMce. 1De poorest troup (below RD$300/lDOllth iDcome) ,eaerate less waste I*' perIOD ( 0.46 k,/cIay-perlOll), oo.Iy oao-balf of the W.h-income bouseholds. However. tho ,teat size of the poorest JrOups nsulta in paaeratiD, 6 times the solid waste of the bigb income ,roup. OIl averale the waste contaiDa 80" orgaaic malte~ ad 12" paper (Cobb. USAID 1991). 24 begun. The municipality of Santo Domingo bas signed a contract with EMLURB. a private soUd waste collection company which collected 280 tonsIday, or 145 of the total prbap produ~ daily in 1992. The company receives RDSll milUonImonth from tile mullidpality for: ibis contract. The esdmated unit cost of this urangement is RD$ 1,291/ton, versus aD overall. . unit COil of RDS 712lton. This is probably because of the company's capital intensive. approach. A more detailed analysis of this perfonnance is ~ted. 3.12 Landfill and transportation are additional bottlenecks. Guaricano, San Isidro ancf, until recently, Cacino have been the city's active landfills; they are located 6 kin, 22 Ian and 8 Jan respectively away from the city. Cadno and San Isidro are difficult to reach because roads are inadequately maintained. and unpaved. All three landfills have drainage problems. Several other sites have been opened, but were closed because of public complaints. There are no leachate controls and 110 coverings for reCUse are provided. 3.13 Some recycling occurs. During prbaie collection, the workers recover paper. cardboard and cans to be sold for their personal profit to supplement their low waps.. 11Iis pnctice considerably reduces the volume of'solid waste under&oin, fiDaJ disposal. but it dnmaticIlIy mcluces the efIiciency and coveraae of the collection service. Vehicle procIUdivity bas been estimated at about 2.0 kmIhr. Large Dumbers of families (150 at one site) make a livina ftom col1ectiDc mfUse such as bottles _ cardboard from landfills. This popuJation is exposed to saioua health risks due to the unsanitary conditions. But if this pncIice were adequately supported tbroup NGOs or PVOs. it could become productive throu&h the CIatioa. of microenterprises. 3.14 UrJaaD ScttIemtmt Ig FnaUl Area,. Squatter settlements have arowa rapidly alone with run! miJnation. especially in Santo Domingo. 1bey are usually located in daDaemus, undesirable zones such as ravines and low-Jyil1g·river banks. In addidon to lack or basic infrastructure discussed above, these areas are ex.uemeJy vulnerable to natwaI bazards such as bUJric:aDes. Howes are poorly constNCted 011 unsafe margiDal IfOUnd, such as tile banks of the Ozama RiVer in Santo Domingo. Ia the ev~t of a disastrous stonn or earthquate. the poorly consuuctcd houseS would probably IdJl more people than heavy winds or serious earthquabs. CUmntly. these overcrowded settlements must be evacuated when hunicanes threaten, because of possible flooding and Jandslides. The Dominican Civil Defense has effectively carried out this task. But basic causes of the problem need to be addressed. Reduction or relocation of these squatter populations would entail providing safer land and housing and increasing employment opportunities in rural areas or elsewhere (USAlD 1984). B. tosts pr UrbaD lPyIromnent DeJradatlOD 3. IS Although no cost of health degradation in the Dominican Republic has been quantified, its magnitude is widely acknowledged. limited access to potable water and sanitation and serious water pollution preseDt major public health hazards. along with malnutrition and maternal mortality. Water-borne and related diseases are principal causes of morbidity in all age groups. During the 1980s average health standards deteriorated considerably. The incidence of water-borne diseases, especially gastroenteritis, typhoid and paratyphoid, has increased. Reported cases of gastroenteritis alone, which mainly affects 25 children, tripled between the mid-1970s and the mid-1980s, and typhoid and paratyphoid rose by 100". The increases seem to parallel rapid urbanization. . :0 • 3.16 SESPAS statistics indicate that water-borne diseases (especially gastroeDteritis and climhea) arc important causes of morbidity for all people of all ages: 149,768 cases (202.2 cases per 10,000 population and 58" of all diseases in 1992). They are the number one cause • of death in infants and young children in 1991: 736 deaths of infants younger than one year (32.5 cases per 10,000 infants, and 21.611 of total infant death); and 20S deaths of children between one and four year old (2.5 deaths per 10,000 ctdlclren, and 15.9 " of total death of infants). Compand to data for 1989,' the relative importance of water borne diseases is stUl incIeasiD&, althouah in absolute terms there bas been some improvement. 1be economic costs of morbidity from these water-borne diseases would be valued as the foreaone productivity of the popuIad.on and tho cost of medical treatment. The economic costs of mortality of younl chIIc:IRII ale cIifficu1t to assess. But as a bottom-line indicative value, an estimate of the costs or preventive aDd curative medical care couid be used. 3.17 Other costs caused by water problems have reportedly increased: time spent for obtaininl water by households (particularly women) and adverse effect on the tourism industry (foIe&one iDcome from tourism and future possible constraint for tourism development). None of Ibe.sc effects have been quantified. c. Urban Enylnmmcgt Ma. . . . .t .. 3.18 Water SgUglY I,d bUl,e. Numerous Jaws and Institutions related to water supplyud sewcraae have beca C1'e8fed. Institutions arc characterized by extremely poor cost JeCOVeI')', Jack of coordination repn1ina water resource manacement and distributioa. duplication or technical functions and waste of scart:c human and financial resources. 'Ibis institutioDal arrangement mates it difficult to establish resource allocation priorities and adopt appropdate technology. As a consequence, service coverage is deficient, and where there arc services, iDf'ns1ructure and services arc not sustainable. The major institutions in this area are: Secretariat of State of PubUe Health (SBSPAS); National Institute for Hydraulic Resources (INDRHl); National Institute for Potable Water and Sewers (INAPA); Water Supply and Sewerqe ,Corporation of Santo Domingo (CAASD) aDd Water Supply and Scwaaao Corporation of Santiago (CORAASAN). Annex 10 summarizes these institutions and laws. Other institutions were created to respond to specific demands that emerged from time to time: -- SEOPC, which provides water supply to part of Santo Domin,o and to a tourist resort in Sousa; } UAPODAN, which builds water supply infrastructure and pit latrines in mral cotnmunmes; and - "" ~ AccordiD,lO Cobb. ill 1989, morbidity ror aU populatioa wu estimated at 169.854 cues (242.2 easel pet 10.000 popalatioa).,uad death alDODl iDfmts ud youe, or or cbildrea: 892 deaths (14.2 _) out 6.271 total deaths iafiDt UDder 1 )'eat old iD 1982; 1.091 deatbs (1'''> out of 6,411 totl! deaths of childrm wader lINeD years old ia 1986. (Cobb 'basecl 011 SESPAS c1ata). theso fipres U6 based on iIlfIDt deaths lCtually re,istered. The real iIlfaat deaths are or coasic1en4 to be IIIbsfaDtiaJly biaher dsaa reJisterecl Dumber. For 1982, actual Dumber iDf'ant deaIbs ia utiD'l'led to be double. implyiag that actual maptude of the water-bam. diseases could be larger chill those fipres pnseated here. 26 the OfieiDa Coordinadora Fisc:,tizadora de las Obras del Estado, a unit of the President's ofti~ - which builds water supply infrastructure and sewerage throughout the country as part of the President's public housinl program. Numerous Government aaencies are involved in water . _I. resourc:e manaaement: SEA; SURENA; SESPAS; DGF: DNP; SECTUR (Secretariat of Sta1e . for Tourism); and NEe. 3.19 Solid WISt. SoUd waste disposal was left to the municipalities althouah responsibility for other services rest with centrallovemment agencies. IronIcaUy, de Government's ianorance of this issue RSUlted in relatively simple institutional amnpmeats for solid waste disposal. However, the municipalities' JaCk of financial and administrative teSOUICeS and technical capabilities are nuVor constralnts to effective operations. Other institutions involved in solid waste collection are: the private sector-Empresa de Umpieza Urbana (EMLURB). Senator lacinto Peynado's Office (SIPO), the Presidency's Civic Plan, aDd iAdependellt contractors and ncyding compa.nies. These institutions have emeraed u a nsult of the present crisis in the solid waste management system. . 3.20 The activities of these agencies am COOJdinatecI throuah the Natioaal Jud&et Office (ONAPRBS), and major projects ale cleared tIuoulb the National PIaDnIna Offtce (ONAPLAN). Alencies subanit periodic statistkalleports to the National Office of Statistics (ONE). AU of the above offices report to the Technical Secretariat of the Presidency. AlthouJh many pubHc officials have demonstrated concern for environment, bweaucratic procedures involviD. numerous UftC90Idinated apncies have made rational dcdsion matiD, extremely cUfficult. Private leCtOr participation in providing water supply, waste ,water tzeatment,• did waste coJlection and recyclin& (pua. 3.13) may be a feasible opdoa. However. Jack of environmeotai standards and a regulatory fI'amCwork, and n:stricdoDs imposed by the e:dstin& laws, hamper private sector participatioll ia these areas. Purther atseSSmeAt of the potential tor private sector participation and the lepJ requirements would be Deeded. 3.21 Prpcea .fU",",p BaDnIna. Urban.plannin, could be an effective taol to II1IIIIp UIban expansion. enabUna cost-effective proviaioo of infrastructure aild public services for the &rOwin, UJban population. In 1963, the lawobUIated cities with popnJatioas Jaraer tbaa .so,OOO to formulate urban plans. 'ne law also czeated the Urban Planninc Office in the J...ea&ue of Municipalities to provide technical assistance and resources to cities other than SaIto DominJo and Sandqo. In 1m, ONAPLAN attempted to formulate policy ,uidelines for medium- and long-term actions. These instruments were not successful, however, because the centmlizal approach did not help tile cities to identify actions to solve specific problems. acconSina to Dominican profession.als, there appears to be Uttle Plannin& for the future expansion of the cities. Where there has been ptannina. there has been little monitorinJ or enforcement of rqulatory colltrols on development. • Reportedly there was aD iDteRSt &mOIla lcey industrial &Del professioaal IfOUps ia Suto DoadaJO to form • volU1aIll)' usocillioa of tho maiD iDclustrial aDd mWlicipal discharaea in ceatra1 Saolo DomiDlO. htber dwa buikl iDdividuaJ beahDeat (lCilities. which is DOW required by law (or e.ch discbar&ia. industry J the associatioD would build • COIDDlOD facility financed with WIer discbarao fees essessed IeCOrdiaa to each industry's eftIueaL DepeadiDa OIl tba parties involved. this would be private or possibly a joim pubJic-private venture. with also IOIDO PVO participalioll (Cobb. USAID 1991). 27 3.22 Land Ua ManaIf!QlCld. Inappropriate land use, as represented by squatter settlements lAd conflicts" amon, various sectors in the country, are causing various errvironmemal problems that need to be addressed. However, there is DO information on urban ·. , land use manaae11lent, ownership and JancI markets in the Dominican Republic. CleDerally, UJban !aDds are considered to beJou. to the State. The dominant view reprdil'll aaricultural lands. across aU political party lines, has been that those who till the IaAd do not need and shoIIlcIlIOt have any ri,hts in state land beyond the riaht to continue to worle it at the pleasure of the political appointees who run the state agencies. ne same philosophy is applied to urban land. Thousands of city dwellers live in state-owned apartments at low rents or no rents, OD a patmna&e basis. They are unable to buy the apartments, have little security of continued possession and, as a result, underinvest in maintenance and improvements. Land and real estate appear to bo traded in abe market, but it is not clear that the market really transfers land titles Jecidmately. 3.23 HOOts AdIyItIM. In response to the Jack of Government enviroameotd action and the Iac1t of coordiDation in 1000-term investment pro,IIJDS, a number of private poups have. been formed to raise pubBe awareness. no Urban Porum (poro Utbaao)'bas be1cI several amall conf'aeaces to brina toaether pubBe officials and concerned individuals to discuss suda basic problems as water supply and waste disposal, bousina and urban settlemeuts for tbe low income mipants from rural areas. Gnci 1"_ Eroinm agel ''''"'''tiona' CcpopcratIoa.. 3.24 Potable water supply and water poUution have been a major c:oncem of the 00vemmeIlt. 1be Govenament and various iDtematioaal donors have attempted to deal with . these issues, but no coheIent action or investment plan bas been estabUshed. Expenditure ... water infrastructure has been Jargely concentrated on increasing production through major projects rather than on reclucin, water losses throuah adequate maintenance and n:pair. CAASD is PUttinc priority on constructinl expeasive conventional sewace systems for Santo Dominao after achievin, 80S access to piped potable water, while access to potable water supply tbrouJbout the COUDtry is still deficient, and whlle the Government has suspended a proaraJll to provide basic sanitary services for the Nn1 and urban poor populatioa si.Dce 1986. Larp projects supported by international donon typically experience prolonpd delays due principally to the Government's failure to provide counterpart funds as well as to the weak implementation capacity of sector institutions. As for the solid waste issue, the Government has not established priorities or a specific program. Annex 11 lists several plans related to potable water SUpply and pollution presented by UNCED including: the National Water Resource Plan; the National Health Plan; and the National Drinkinl Water and Waste watt:r Plan. 3.25 ne NO Water Code- A new Water Code bas been submitted for Conlressional approval as of 1993. It outlines fundamental chanles in institutional arrangements, the legal framework and technical aspects for sustainable water resource - , utilization, including urban water use. In this Code, household water use is liven first priority. , It is widely kDOWD that conflictiDalanci use amon, urban. tourism. iadustrial. power pllllt IIlcf aaricultumlae is commoD. remltia, in loss of productivities in those sectors (UNCED). The Territorial Order Plao. boial& oJ,bonted by ONAPLAN is tryiD, to address this issue. 28 INDRHI would grant concessions for urban water supply to the public sector entities (national, . provincial and municipal entities). The code would require metering of water used and payrneat of tariff's, which the Presidential Office would determine annually, talcing into account investment and operation costs. 1bere is no explicit definition of the water pricinl policy. however. The authorities expect that the new Water Code would establish a more efficient pricing mecbanWn for water that would reflect the amount used in urban areas as well as in the apiculture sector, and thereby create incentives for consenadon. D. BeleyaN Gmmmgmt EconODJic Nicy. 3.26 The low level 0( per capita. income and the severe global resource canstraints dIat .bave pteVIi1ecI since the early 1980s created difficulties for environmental manaaemeaL Rapid udNmizatiOll, resuldna from rapid population powtb and mipation from rural to urban areas, overtook the Govemment'. and the municipalities' ability to provide adequate inf'rastzuctule and pubUc.teMces. Oovernment policies in the apiculture and urban seeton tended to peaa'i. tile rural sector and pmtecl the interests of the urban sector. Excessively rapid mipatim from. nnllO UIbaa areas seemecllO panallel the urban bias. In ,eneral, Ulbanization is a phenomenon in the economic development of the most of countries. But in the DomInican case. c:azeful assessment would be needed to look at links between urbanization and ecDIlO1I1ic 4eveIopmcnL Dominican urbanization may have been accelerated by distorted Oovemment policies rather than by producti'1ty growth in the urban areas. Pricing policies at both tho macro and sector levels were distorted, failina to aenerate incentives for conservatiOil. AaotIIer" di1ficulty is that the nuQor part of the population perceives pubUc services as Jifts. Expendi1:uJe policies were based on inappropriate priorities, biased toward investments in capacity increase. 1bis Jadted in poor services covezage and Jack of sustainabUity. Centralized and fnamented IasdtutionaJ arrangements contn"butecl to these outcomes. 3.27 Water Prjdpa gd Cost Beqam:y. It is.Ieported that no institution n:covers maintenance and investment Costs, although Law 5994 of 1962 pve !NAPA authority to establish tariffs that would lenera1te sufficient income to finance potable water supply and sewerap. Tariffs charged by INAPA and CAASD are solely on the basis of the types and s£zes of Jaousebolds and industries, a pnctice which discourages conservation. Moreover, 45- of water is being lost through leaks, and 30" of the remainder is believed to be lost to U1cp1 connections, including simply taking water from breaks in the pipes. The nugor part of the population JeCeiving water legally perceives that water is a lift. The result is extremely poor cost recovery. Only hotels and industries are paying for water, bringinglNAPA's cost recovery to 9" (RDS90,OOO/month) of its maintenance cost (RDSt.1 Wmonth) in 1992, and vittually no recovery of the total cost including investments (RD$34.8 Mlmonth). Because hotels and industries are concentrated in Santo Domingo, CAASD has better cost recovery: . J RD$6.5 Mlmonth, 33" of operating cost estimated at RDS 20 Mlmonth and 8" 0( total cost esaimated at RDS82.3 Mlmonth. 3.28 Sold Waste Collection Chame. Cost recovery for solid waste collection is extremely poor: 7" (RDS14 M/year) of operational cost W33 recovered in Santo Domingo in 1992. Only hotels are paying for garbage conection. As with water, residents do not pay. Althougb precise information is not available, unit costs of garbage collection are estimated at RD$ 621 - 712/10n in 1992. Assuming that a low-income family produces 81 kg solid waste a 29 month, for full cost recovery the monthly payment should be RDSS()"S7. corresponding to over 6~ of the minimum $31ary. This would sugest that the current service would not be affordable · . to low-income famUies. A lower cost approach for low-income families should be established. 3.29 , Munki.1 Flgagclal. Law 140 states that the Government should a11~ 20" of mtional revenue from income taxes to the municipalities. according to the size of each municipalit;y's population. In addition, Santo Domiqo is raisinl funds from cbltJes, local taxes and debts. However, the notoriously weak tax administration, and tax exemption schemes, including property tax for various sectors, suggest that the basis of municipal financinc is very weak. Santo Domin&o's municipal budget was estimated at only around RDS390 M (USS31 mUllon) for 1992. As noted before. 60" of the budlet is allocated for solid wute collection, leaving no resources for the other relevant problems such as drainap and squatter settlements. 3.30 tJrhaD Bias agd tJae r.oot. As discussed In the chapter on defaresuulon. clemopaphic pressures on urban ueas paralleled decUnin& aaricultural output. a resq}t of di.st.orted Government poUcies ill the qriculture sector and deteriorating international market conditions. Furthermore, tho Oovemment created urban bias by price controls on foodstuffs and otbel' commodities, a subsidy for imported food aDd a subsidy for import substitution enteIpriMs ill the urban areas. 1bese policies distorted resource allocation for the rural and urban aueas. and may have eneourqed further migration from rural to urban 'areas. Onaoing polley reforms reducina urban bias, including elimination of price controls on foods and cxchaqe ute poliey reform, are necessary to allocate resources efficiently betweal rural and urban areas.. 1bese reforms may also slow the excessively rapid migration from nml to the urban IRIS. Nevertheless. In the sholt-1\Ift these poUey reforms may hurt the poor who aln:ady nside ill tile urban areas. 'l1Ie impact of policy reforms on the urban poor should be as_~. Because abo urban poor mate up a Jaqe part of the population, and because they themselves are causes uxI 'Victims of urban depadation, it is importallt 10 identify supplemental measures to avoid further deterioration not only from the poverty point of view but also for enviroDmental zeasons. "111ese measures would include provision of a social safety net for this population, clean po1able water and basic sanitary services. In connection with poverty alleviation efforts. these supplemental policies and interventions need funher investiption. E. lORts (or Further Agessn1ent 3.31 . Solvina problems in the area of urban mvironmcntai dearadations would pneratc significant benefits by improving public health, thereby enhancing overall productivity. UJbanization itself is not a problem but, given the country's weak urban management capabUity.. the rapid pace of urban growth has had devastating effects on the urban environment. The , - ovenvbelming population pressure on the urban areas, caused mainly by continuing migration ,', from rural areas, needs to be addressed. The Government's serious fmancial and administra.ti~ constraints are well known. The most critical issue, however, is the country's lack of orientation towards sustainable infrastructure and services. implying that additional available resources would likely be wasted. Sustainability of infrastructure and se.rvices should be established as a precondition for external donors' involvement in investments. Efforts should include substantial polley and institutional refonns, which would require a more detailed assessmenL The municipalities and local governments would need to be strengthened to take 011 30 their crucial role in these efforts. At the same time. critical investments. which could generate benefits even before substantial policy and institutional changes. should be identified. In this : . context. the foUowing topics and hypotheses would be worth further investigation in. order to formulate a strategy to improve the urban environment: '. (a) Sustainability of infljlStrUctUI'C is what the Dominican Republic reaDy needs. Various institutional and policy reforms. and changes in behavior would be required to achieve this goal: (i) Proper institutional arrangements and city-level urban environmental . strategies would be needed. so that appropriate priorities in expenditures and investment Could be established and an adequate approach and technology for infrastructure could be adopted. A coherent but decentn.Uzed decision mating mechanism needs to be established. Sucfa. an arra.rtgement may be a formulation of the city-level wban environmenlll stnte&Y and action pJan, and its execution tIJrou&Ia • participatory process involving the local communities, NOOs, the private sector, municipalities and ccntralgovemment agencies (eg. ST. ONAPLAN. eMSD, INAPAS, SPSPAS) to set up appropriate priorities' in expenditure and to enable more deceDtraIized provision of infrastructure and services. (ii) Water should be priced to reflect amounts consumed and ~ for garbaae collection and sanitary service. ~uld be introduced •• (Iii) Lack of public understandiDl, poses serious constraints to improvemcIlt.. and needs to be addressed. Topics in this area worth explorina would include coanmwiity..Jeve1 projects to improve infrastructure and sanitary services, and public educational programs. especially for women. who ale responsib~e for household water and sanitation issues. (iv) Institutional and policy requirements for private SCCCQr partidpation ill provision of infrastnlcture and services within a proper reaulatory framework, should be investigated. (v) Adequate and affordable technology is critical to sustainable infrastructure . in the Dominican R.epublic. The Government has been pursuina capital investments in water supply and in conventional sewerage. These investments should be carefully reviewed. looking at their sustainabiJity fa the Dominican context,' The maintenance of existing capacity. reducinC the loss of water supply and reducing water pollution would be anme cost- I T'IIo I'IICenl WASH npol'l. addn::uia, water auppl, and aanilaSlon reaoUI'CCI I\CICICICcl by the Dorninicaa Rcpublir: ad OIlIer Caribbc:u oounIrIea identified the inveatmcnla needed in Ibo Dominican Republic to n.Ue V4ter and .."it.tioa CIOYerap toaa 1919 Jew.. .., lt9Starpta. Por uair.uion coveraJCto iDcrcuo from 60 to 7."" about USSl29 million (1989 vaIuo)WDUldI» aoocIed. 1'bo cumat 00IIUIliIIcd bud,eca Ir'C only about USSlOO.OOO repn:aentin, .. 99~ ahortiaU (Ihoup the real availablo I'CIOIII'CCI are IIOt. c:Jc:at bec..... o! usual dilcrepulcy bctwccn budlet and expenditures duo 10 .ubstantiaJ aUocation of the Pnaidcnt". Auld outaide bad,• • hmcwozk). For WId.et IlIpply covera,o to increuo rrom 63" I/,) 74". tund. needed are about VSS142 milIioa. Ptaada coramiued ....., about VSS1?4 million with 88" lhortf'aU. The water and sanitation coverage lar,ces for I99S have budca sbotUaUa 01 about USS2S2 million. 93" of USS271 million l'I:'luired. 31 effective than production expansion. Industrial wastewater could be treated by the private sector with appropriate cooperation from the Government. Sanitation, especially for the poor, should be provided throup the use of affordable technology, such as pit latrines and . ., compostial toilets. For waste disposal, labor intensive approaches relyinJ on push cans and drop-off centers, to which compaction trucks have access, should be expanded. Recyclina could be combined with this approach to make solid waste collection more profitable to the private sector and to reduce the need for landfalls. (b) Stnm&tbepin. puaDlQpalitjol aod JgcaJ wemments would be required for decentralized manaaement of infrastructure to USUle sustainability. More resources and authority should be delepted to the municipalities and local loverameDts. Further assessment would be needed to identify how the municipalities and loca1lovt:mmeftts could be strengthened. ec) J amd use I11IDI&eJDCOt is a cnacia1 to alleviatinl urban environmental problems by: enablina cost-effective provision of infrastructure and pubUc services; minimizing conRictinaland use; and preventina the exposure of the population to various man-made and ...,.,. environmental hazards,! Information reprdlD, CUtreIlt )and-use l'I18l18Iemeftt in ~ Dominican Republic is !actina. The status of )and-use control as well as urban land ownership, titling and market would aeocI further investigation. (d) Jnyestmcots in bujc needs should be identified. Given the current institutional and polley framework, ~ere are some areas which would lenerate substaatial environmenW beaeftts justifyilll public and international donors' intervendoD. iDcIudin&: . (i) Provision of clean potable water and basic sanitary services 10 the poor. Given the severe public budptary and institutional difficulties faciD& die Dominican Republic and the urban poor's limited ability 10 pay. a well- maintained conYeDti.ona1 sewaaae system may not be realistic because of the bJgb cost of construction. and administrative resources required for opemtion and maintenance. Low-cost altematives with appropriate tec:1moJ.oay should be pursued." Cu) landfill construction. In response to the present crisis in Santo Domingo. .- recent studies have recommended that the municipal dump at Guaricano be converted into a sanitary. landfill, that a new sanitary landfill be . constnlcted in the eastern part of the city to replace the Cancino dump ud that a new sanitary landfill be constructed in the western part of the city. The improvement of landfill practices in the Dominican Republic woulc1 require large amount of capital. Several reports sUDest that the ... • AJthoup DO precise assessmeDt bas been made, USAIO (1991) araues that investment ofUSS100 for each of 300,000 households. which live in squatter settlement alOD, tho Ozama riVet, for a package of individual or colDlD'llDity aoilet, ucesa to driakiD, water, aod participation in solid waste removal. would be paid back wirhin teD. years by the aviD,. DD &reatmeDl of sick childrea atone. 32 construction of sanitary landfills with methane ret:OVerY may be a plausible solution and should be investigated. IO " • '(e) Pmmlation prepAre in the maior urban een tm needs to be addressed. With .,. current rapid m.ip'ation from the rural areas to the major urban areas and the resullinl powth in urban poverty and squatter settlements, any attempts to improve the ulban environment would be easily overwhelmed. Direct attempts to limit miaralion have proved to be ineffective in many countries. But in the Dominican Republic, there appears to be some potential to address this issue. even though these may not be decisive. These would include: efficient resource allocation betweeB nual and 1IIban areas' by reducing wban bias (para. 3.30); aDcf creation of employment opportunities elsewhere in the country-in the apiculture . sector, in tourism and in free trade zone developments. The former would require that onaoina policy reforms and their effects on the urban poor be assessed. no Jatter would SUUest the need to invest in the local medium and small cities to service workers populations. AU of these topics require further' investipdon. IV. ENVIRONMENTAL IMPACI'S OF T01J1USM AND FREE "l"JU.DE ZONE DEVELOPMENT A. Issues. MaaHudrs Ind Causes 4.1 Tourism and fRO trade zones (FI'Z) have become major exJM)lt:iDa eclDrs fa tho DoIOinicaD Republic, proviCtina foreip exchan&e and employment. no tourism sector pnen.ted &rOSS loman excllaDae eamiIlgs estimated at US$900 million in 1990. ud the FIZ sector aeaeated USSI40 million in 1988. The areas SIIJTOUnding the tourism and PI'Z deveIopmeDts, which are piIerally apart from the urban areas, absorb substantial popuIadoas or • wor1ren aod their families. aeneri.ting important impacts on the country's migratioa Iftd iJDaI development patterns. 1be combined numbers of workers and populations of these sectors were estimated for 1990 at about 186,000 workers. and 0.9 mlllion associated population, equivale:at to 13 S of the total population (1.1 million). For the year 2000, the number of worten is estimated at 530,000, and with an associated population of 1.9 million dependents (225 of the • prQjected total population of 8.6 million)lI. These population settlements would substantially • o.piIc IIiP inidaI inveatmcnl, km& term recover)' CIA mate the operation RIt-auflicicnt. Such .. inYelllnClll .". GUiIdc:I.tIo ....,.Iow was _ _ted at US$ ,., mWion. but tho DCCCIIU)' improvemcatl have not s&arIcd due 10 a lack or McII. Also..... p**W .... Jow techDoloD oompotifta for mcthano recovcrylhould abo be explored• .. Cobb _.1Ied that. In Ibo towisJlllCClOr. 5',000 jaba were orcalcld in 1990. wiIh whlcb 274.000 JIOIIIIltIioa(3.,. of'" DIIioD'. tataI) were ulIOOilted, and that, for year of 2000. workers will be 70.~199.000. with ulOCiItecf popuIIItioa 01343.0Q0... fIJ77,ooo (4,..11" ofprojec:t.ed lOtI! populatio" or 1.6 milIio,,). Accord"'l &0 &be Free Trade Zone Council. In 1_, .... PTZa- 331 fIII&crpriMI . .erased 130.000 job•• wiIh 650,000 uaocial.ed population. about '" or &be nation', tDUl. fa 1992, .... PTZa- 386 CIIIea'priIeIanpJo)'Cld 141.000, wiIh 70.5,000 alloc.illedpopulatioa, about to" or&be natio,,'11Ota1 populldioa. Cobb project.ocl tbat, aIet oompJctioa of additional FTZa under corutruct.ioa or planned, total FTZa worten and ulOCiIIcd populldoD would be 117.000 and 915.000 re:apecIivoly. Ir it ia Ulumcd CONervatively Lhat thole tourism and fTZ dcvelopmeftU would occur for the ,.ear or 2000. then combined UIOCiatcd population of !hac acc:ton would range Crom 1.3 mil1ioIllo 1.9 mil&Dft. 15. .21" of projeclod popuIa&io!, for tho year 1000. 33 alleviate population pressure on the major cities where demographic pressure has already caused serious environmental deJlBdation. However, given the ament lack of infnstructurc and the . Jack of control over where settlements are located, these populations would have substantial environmental impacts. The Uving conditions among these populations would raise serious environmental concern. 4.2 These population settlements, with minor exceptions, are not provided basic infrastructure and services, such as pocable water, sanitary services, and solid waste disposal. CJeatirc similar problems as the urban environment cfe&radation discussed before. A worse factor here may be that there is no aaency responsible· for population settlements outside the municipalities. In addition, due to the lack of an adequate lovernment policy and Plannina framework: and the Jack of infrastructure the tourism and FI'Z developments are be&inning to lenerate envi:roomental threats in various forms, including the impact of construction, and poUution from operations, which would undermine the net pin from the development of these seeton. This would reduce future development potCn~ for the tourism development. as its most impodant resource is the environment • 4.3 Po_dog Settlement around Tou.... md Fate Tn. Zone Dcy.IQpmegt. Althoup tourism development and free trade zones are providinl jobs for workers who might otherwise be unemployed, the resultina ho\Qinl and Uvin& conditicms around the zones are aimiJat 10 thoae in squatter settlements, lackinl paved roads, eJectricity, piped water. public tlUsport, pJbap conection, sewers and fire protection services. For example, in Puerto Plata the IUP.Ply of housinJ and public aervices was soon overwhelmed by the a.pld ~ux of population aeeJdnJ tourism-JeIatecI Jobs. Much of future population powth wm be drawn to fraaile caastal areas, bec:ause tbe Dominican Republic's powth ii so clepeDdent on tourism. 1bis mipdioA porteDds intensilyinl conflict between urban population centers and the eaviroftmeDL As to free trade zone developments, except for government bousinl projects plaMec:I for the fR:e ZOne workers at Santiaso, there is no coordinated aovemment proaram to provide housinl and basic services. Availability of potable water, which was completely ignored in this develoPment process, is becoming an important issue. 4.4 CwtaJ ZoIc Protedicm and Toudsm I)eycJogmcgt. Tourism bas developed in numerous locations along much of the coastal zone, especially where tourism development zones have been declared. 1lae south coast east of Santo DominIO and the north coast. includinl Puerto Plata, are already developed. The Sabana Peninsula is becominl developed. The northeast and east coast f'rom Sabana de 1a Mar to Cabo Engdo, extendinl southward to Playa Juanillo, the southwestern coasts from Barahona to Oviedo and the east area of Luperon to Punta Rucia are potential tourism development areas. 4.5 The number of hotel rooms has been steadily increasing, from 1,3OS in 1970 ID 5,400 in 1980 and 27,600 in 1990. It is expected that there wUl be 30,000 by 1995, traDsfonning the country into the largest tou.rfst destination in the Caribbean islands. 1bo number of tourists grew from about 90,000 in 1970 to 1.4 million in 1989, a 16" annual growth. It is estimated that each tourist consumes nearly five times the resources that a citizen consumes. In a country with a population of 7.1 million these tourists would have a si&nificant impact on natural resources through their consumption. In addition to the population settlement issue. potential problems of this sector fall into three main categories (Webb, USAID 1991): 34 (a) "poJlutioo figm tourism qperadpn: The Jargest pollutant is sewage from beach front hotels and ancillary development. Other pollutants are storm water l'Wloft, dumpina of solid wastes, and oil and fuel from mariJ1as and boats. Throulh ovcr-en.riehment of water and toxins, the pollutants affect reef's and marine arass beds. Although pollution of water near the shore resulting from tourism development is difficult to distinguish from pollution generated by other sources. the coastal botels are belieyed to be contributiDI to an already serious situatioa. Solid waste disposal is also I problem. While hotels witbin municipalities ale paying for and receivinl solid waste collection services, there is no mechanism for prbaae co1lection outside the municipalities. lleportcdJy this larbaae is left. In the coastal zone and attracts scavengers. (b) Pmimumeutal ilDJl'S' Of astruc;tioo: Construction of tourist resorts. marinas and associated infrast:ructure, causes irrev~siblo chan,es in coastal zone ecosystems. On the nordl ihote, dune communities and wet-1aDds In the immediate area SW'I'OWldilll each tourism complex were altered. Associated roads and nearby commercJal developments contributed· further to the ·destluction of dune and back dune vecetation. " (e) lNmzd dtpand for !!!!!1!!ftm: ReportedlY. tourist demand for wafer Is already competina with the local demaIId.Coordinationofresourceallocation.1UIIOlD& authorities is nonexistent. Tourists' demand for curio items like coral and . . sheDs, and for desirable marine orpnisms such as lobster, conch and the Jaraer ff!Ief fish, encouraac overfishing with usociated secondary impacts, ipdudiDa tba complete collapse of some reef communities. One-day trips orpDized by tour piela invite intrusions of tourists, who leave solid wastes inside the park, iDtp the secluded beaches of PaIque Nacional del BIle. Uauestlained naeatiODists. III combination with dn:dPI, fishing and sewage. have caused declines in tho net' communities at Boca Chica. 4.6 'Ibe above problems wiD result in loss of bio-diversity t degradation of fishery • JeSOUrCeS, loss of invaluable scenery and depadation of tourism resources. 1be mapitude or this coastal zone degradation is hard to quantify. A major concern here, however, is that there is no mechanism to control this environmental de,radation. Lack of adequate infrastructure for these tourism developments and their associated populations aggravates this situation. 4.7 Pollution frpm Free Ira. Zone lpcIusta. 1bc FI'Z industries arc CClIten:d OIl • the labor-intensive export assembly process, utilizing the Dominican Republic's comparative advaDtaae "in cheap labor. Traditionally the textiles were· the m~or industry of FI'Zs. Hi&het- . technolol)' industries such as pharmaceuticals and electronics are the current trend. FrZ industries are environmentally less threatening than most industries. Since the country has very limited environmental sink, however, lack of adequate infrastructure such as industrial waste water beatment systems and of an environmental regulatory framework could cause serious environmental threats. Government officials recognize that the textile and leather goods industries, utilizing dyes and large quantities of water, are major polluters of water resources. 'These are the most dominant industries in the FfZ-there are 251 textile companies. (69S of the total number of enterprises in FrZ followed by the shoe and leather goOds industry numberinl29 companies (8% of the total) as of 1993 (Annex 12). At Santiago's free zone, waste water from the textile companies with high chemical concentrations reportedly drains into 3S public streets andlor into the Jaque del Norte river without treatment. Although the free zone and textile authorities deny the charges, private sector professionals and officials of the water and sewage management agency in Santiago support the allegations (Cobb, USAID 1991). B. Costs of EaYlroPmentaJ fmDacts of TQurbm and rrz DmIopncnt 4.8 The major cost would be the health costs for the associated population and foreaone productivity of the workers due to lack of adequate infrastructure includia. potable water supply. sanitation aDd so1id waste disposal. This problem is identical to the health gradation problems discussed in the chapter on urban environment. "Ibe contribution of these sectDII to bealth problems overall is difficult to assess, because of the lack of detailed demopaphic data and accurate health statistics. But the estimated si2e of the population involved fa tourism IIId FI'Z developme.nts (13" of the total popuJation in 1990, para. 4.1), sugests the potential mapitude of the problem. Considering that these populations are employecl and would have pater wilJinpess and ability to pay for better services in comparison with the urban poor population (the auVority of this seement is believed to be uoemployed), solvina problems for these sectors should be more achievable. 4.9 The coastal ZODe system is sufferi.nJ irreversible damaps from tourism development. In the rush to develqJ tourist resorts. the very resources whlcb att1acl tourists are neatected. BOt protected and lost. Once pe, reefs, beaches, aDd coasIal habitats are DOt easDy tepIaced. Althouab assessment of the damaae is difficult, ctepadation of cbasta1 zoae Iystems, wbIch are the most Important tourism resources •. would Hmit the future poterldal of tourism developnent. 4.10 Althoup its·mapitudcis unknown. uncontrolled water pollution from FIZs may be a maior ea'\'ironmental threat, contributiaa to potable water pollution pmblems. Should other water resources (e.1- pound water) be exploited, the cost of water treatment waulc:I incJease substantially because of the hiaber cost of trea1in. the dlssolved salts in pouDdwater. Over- exploilalion of JfOundwater by the tourist facilities in the coastal zone may be c:ausinl saltwater to now into the aquifer. c. Environment MIDI_eat In Tourism and FfZ Deyclgpnept 4.11 Leal and lastlttUlAgal AlDlJIIIIICPta for Tourism DeyeJopPlllt. Since 1968, tourism development has been a biah priority for the Government. The Government defines tourism development zones and investment incentives. Infrastructure is supposed to be financed or prepared by the Government; however. in reality. the Government relies heavily on external funds and assistance. Reportedly t the Government is fallin, to deliver infrastructure and utility . , services. The policy and planning process for tourism development is ambipous. - '. Environmental assessment of construction projects is missing from current legal and institutioaaI arrangement. The Puerto Plata tourist zone was developed. with Bank support, as a planned zone. The Government provided the necessary infrastructure to establish a tourist center. Since thell. this process bas been abandoned. Each hotel operator constructs individual waste water treatment and power generation facUities.. The only exception is the Don Juan resort 36 development in Boca Chica. where hotel operators fonned a voluntary association to construct infrastructure to be shared by the hotels. 4.12 In 1971, Law 103 declared two priority zones for development (Puerto Plata area - and the zone between La Caleta and the Rio Hi&uamo). In 1971. Law 153 created various investment incentives to promote tourism. The Government paid for all infrastructure and investors were exempt from aU taxes for ten years after construction. Most investments were financed in pesos while income was denominated in dolJan. As a consequence of inflation this was believed to have provided additional substantial windfall pins to investors. In 1980, Law 153 was modified to desipate seven priority development a:reas. inc1udinl six borderin& COIsIal zones (l..upenm-Cabrera, Santo Doll1inco-La Rornana. Macao-Punta Cafta, Samara·Las Terreras. Banhona-EnriquiUo and Monte Crisd.-PepiUo Salcedo). Law 153 also cIeftnes the tourisJn development pmcess u foUows: (a) tourism projects must be preliminarily approved by the local orpnization in charae of towa and mWlicipal PIannina; and (b) eraforceInent of this law is the prime raponsibiUt)' of the Tourist Development Board, plus seven odIer apncies inc1udi.nc the Office of the Technical Secretary of tile Plesi.dency. IDc:eDtives for investment, were abolished in 1993, except tax dedlictibUity of expenditures for furniture aDd equipment. 4.13 The sector', Institutional framework comprises the Secretariat of Tourism, die Hotel Promotion and Tourism Development Corporation (CORPHOTEL). and the Tourism Council aDd tile Fund for Tourism Infrastructure (INFRATUR). The Secletariat of Tourisna propoteI policy. manaaes pzomodon activities. controls incentives and oversees aaenciel . auppJyiDc tourism-J'eIated services. It also manaces a boaId of claims from tourists. CORPHO'I'EL is a decentn.U2ecl institutiOn which OMlS fourteen hotels. 1'here is DO policy ud pJanniDl ftamework and DO replatory framework; other than the ambiauously defined tourism development zone. 4.14 , _ , ad Ipstltutlqaal Amp...... feu: Free Tndt Zqne DmIoJmnt,. Manapmeat in this sector is hiahly centralized. Devdopment of a new FTZ nquila tile President·. ratification.' But there is no explicit plannina framework and no envinlclmeQtaI rep1atoIy framework. Even though it is considered that this sector is operated beaa' dan other iDdustriea in the country. and that the US companies in FI'Z are imposin, envilonmenlll standards compatible to US EPA standards, the country would need to establish institutionaUud envil'Onmental controls to cover an companies operatinl in FrZs. 4. IS The National Pree Zone Council (NCFZ), estabUshed by Decree 895 in 1983, operates under the auspices of the Secretariat for 1rK1ustry and Commerce (SEIC). nc NCPZ. is the centnl regulatory agency responsible for formulating and implementing policy for approvinl all applications for FI'Z and enterprises operatina within the zones and for -monitorinc the 0vem1l program. In addition, at least four agencies are involved in the FI'Z: the Sec:reIariat of Industry and Commerce. responsible for the regulation of industries; tho Sec:relariat of Aariculture (SBA) and the National Institute of Water Resources (INDRHl), responss"ble for water resources; and the National Housing Institution (lNVl), responsible for improvinl squatter settlements. Each industrial park is responsible for ptannin, infrastructure includin, roads, water supply and prbage collection. Although NCPZ licenses the Fl"Zs. and the President ratifaes them by decree, there are no current or contemplated environmental JelUlations governing the location or operations of the zones. With certain minor exceptionr, free zones may be located anywhere in the country. As of 1993, there are 28 Free Trade 2'.one with 386 enterprises (Annex 12), of which 14 zones are operated by the private sector and 14 37 zones by public entities (two zones by the Azua Council and 12 zones by the Free Trade Zone CoJporation). 4.16 In 1988111 inter-agency committee was set up to develop a natiooaJ plan for FIZ c:leve1opment and thereby address another area of needed reform: the ad hoc zone approval process based on Presidential decree. The committee consists of representatives of the Ministry of Finance, the National Council of Pree Tnde Zones. the Industrial Finance Corporation, the Centraillant, Customs, CBDOPEX and the Investment Promotion Council. While several good ideas and a reaioaal plan have been discussed. ~ specific actions have yet been taken. 4.17 '1be reaulatloos differ fo~ the financinl of FTZs and the firms witllin tile zones. The Central Bank's IRvestmeIlt Fund Department (FIDE) approves financilla for private %ODeS. establishes the rate. selects intermediary banks II1d ammles disbursement. There must be a. minimum of 51" of local capital and a feasibility study acc:ompanyinl each appJication. FananciDa is available for infrastructure development and construction of shells aDd administrative offices. As of 1988. however, only ROM milPon. (US$637,OOO) was available for each PI'Z, with under USS800,OOO available for zones in very underdevelopecl areas. The FI'Z has tea years, after a four-year pace period, to pay back the Ioua; in the underdeveloped reaions, tile zones have IS years after 7 years' pace. Interest rates, VU)'in1 from 14" to 17", weze subsidized even neptive given. inflation rate of 58" in 1988. Unti11991, the Pne Trade ZaDe Corporation was JeCeiviDl RDS4 million pel' montb fiom the Governmea.t to operate 12 pabIic FI'Zs. The Government also subsidized tho construction of public flee ZOIIeS.. by pruvldiDa pants and/or inlefeSt·fIee Joans, constIUCtion materials at subsidized.prices, and pvenuaent-owned Jaad without dIarp. 1110 absence of cost ~, due to subsidized reats and ocher opetaIionaI iaefJic:ienciel. bas restricted cash flow and aDade it difficult for pubUc zones to maintain their fadlides. In contrast, private zones, which charge economic nnts. provide beaer services and are thus able to attract hish-quality investors. 4.18 Gua'nnm I'nwgm apd Jgtcraatl. . . CooMatioa for T...... Dey"",. Tourism, which the Government ccmsiden a priority sector, .... aIIRCted aha attentiOll of international donors. The UNCED country report expressed CODCerD about conservinllhe environment for tourism development. Efforts in tourism sector are as follows: 1)e National Tourism Deye1cmrnent Plan. This plan. developed by the Secretariat of Tourism and ONAPLAN, includes analysis, evaluation of tourism RSOUl'CCS and a development stratecy through the end of 1995. ne plan identified such problems in tourism development as potable water quality. energy supply, solid waste disposal, waste water treatment and other sanitation issues. (b) rnB Assistance. IDB has a US$9S million tourism development project for tile 1991-97, which focuses on improvement of existing capacity includia&: (i) expanding programs to train qualified petSOMei for hotels and restaurants; (ii) strengthening the Ministry of Tourism to formulate policies and to carry out promotion activities; (Iii) improvinl the statistical and information system of the sector; (iv) paying more attention to enforcement of tourism policies as well as relevant policies in other sectors; and (v) helpinl the countly to either establish. clear policies regarding privatization of utility services, or luatantee a reliable supply. Although this project does not have an explicit environmental dimension p its focus on maximizing utilization of existing investments and attention to '.' _-- ........ 38 possible provision of utility services by the private sector are favorable to environmental concerns. -. (c) VSAm Auistanc;c. A 1981 USAID survey identified tluee key problems associated with tourism development and coastal zones: (i) potential for serious inf'rastructuft: and related ccoloafcal problems due 10 the density of devetopment approved lor the coastal zone; (d) lack of a comprehensive coastal resource inventor)' as a basis for detennininl ecoJOJical impacts; and (ui) Jack of III effective planDina. Jicerasina and administrative review process to analyze waste disposal needs, physical constrains 10 devetopment and basic infrastructure requkements. In 1991, a series of discussions with the lovenmcnt. mB and USAID experts revealed that the deficiencies of the plannina pnJCeSS wem beiDa addressed. Witbill the coastal zones, 38 areas of critical enviroftlDCl1tal sipiticance are beiDa studied" Spatial master plans are reportedl)' beina pzocIucecl for the spociftc by coastal areas to be developed. However, a discussion Oft environmental assesSmeIlt process for construction was inconclusive. Also it was observecl Ihat an assessment of the carryin& capacity for each . . was completely missin,. 4.19 ""'d'I_,d SSO,OOO. The operators orpnize one-day excursions to national parts. In 1992, 55.000 people visited the national parks, implyinl an effective user charp of RDSSS (OS$4.3) per visitor. 1'his fixed price contract arranpment would create an incentive for operators to over- etploit by increas1Jla the Iluinber of tourists. Furthermore, the tourists and operators leave substantial solid wastes in the national parks. A better Pricin& artanlem.enl should be mquired to iacrease the. net pin from, eQOtOurism whUe avoiding over-exp1oitation. E. I2RirI (or Further McrMmmI 4.24 Solving problems in the tourism and FI'Z sectors is crucial because of the economic importance of these sectors and the significant size of the population involved. Tourism development in particular reUes heavily on the country's natural resources. In the long term, more profitable tourism development should stimulate better environmental muagement.. In addition. development of these sectors would be the most powerful means of reduciJl& the demopphic pressure on the major urban areas. where the rapid migration from the rural areas and natural growth are already causing serious urban environmental de&radation (paras.. 3.1- 3.2). 4.25 . The common features of the problems of tourism and the FI'Z development appear to be over-exploitation of environmental resources, motivated by undervalued environmental resources and scarce capital for infrastructure investment, both of which were magnified by Government policies. Capital for infrastructure was scarce because of the Government's role in providing infrastructure, and because of lack of an arrangement which. 40 allows the private sector 10 provide infrastructure and utility services for profit. Government -' . subsidies in both sectors, the lack of a clear polley and planning framework, inadequate financial and administrative resources for proviSion of infrasttucture, and lack of a clear regulatory framework for environmental protection and assessment, together externalize environmental costs from the development of these sectors and from the private sector's business decision makin, process. As a result, the private sector maximizes profits by c::onsumi.n& II'lOI'e environmental resources and by exploiting free..ridcr opportunities. This structUJe would require further assessment for designing ·polluter pays· mechanisms in order to internalize environmental costs in the development process. The following topics would be worth further investigation in order to formulate a strategy to improve the environmental effects of these JeCton: (I) Anaopmcnt for aurdsism Of infrastructure and public scnices for the sectors and associated worIcers' Jettlements ~ needed. Roles of the ceratral ancIlocal aovcmments and the private sector involvement in provicIing iftfrastruc:tur and uliJity .-vices should be redefined. The Oovemment should concentrate OIl policyt planninl and reauJatory aspects, inc1udin, environmental standards and assessment. Iofrastlucture for tourism facilities and FrZ industrial pub and associated worIcers' settlemeftts (water supply, sanitation treatment and soUd wast.e cdlection) could be provided by the private sector in coonIination with 1oca1 or municipalloVernments. The magnitude and powth of population associated with the sectors suuest the acute 'necessity of streIlgtheniDJ local communities and lJ'Iunicipalities, and/or of c:reatina new communi1iea, 10 that adequa1e services can be delivered ,to these ·populations. (b) Efflccicnt prieinl of RAn for tourism dmlo.pmenu ad OJ1CIiltiQDS includinc water, energy, land, labor ud environmental resources would be neces.'Y to pzevent overuse and depletion of these resources. Currently. water picil1& does not reflect the amount used. It appears that ther1: is no mechanism to reflect the value of environmental resources in the country (coastal zone ecosystem, scenic beauty, etc.). A well functioning land market could reflect these values, but does not seem to be in place in the countJy. Workers settlements do not have infrastructure and public services, generating the costs to these populations and causing coastal zone degnda.ti.on. These costs are ignored in tourism development. This issue needs to be assessed further. (c) A ·polluter paxs· mecbaDism which would pass the costs of infrastructure investments on to the tourists should be identified. For example, such a mechanism could require that private sector developers prepare lands and infrastructure for tourism facilities and workers' settlements. according to a master plan approved by the Govemment. The developer would sen the land or the development rights to hotel operators and transfer the infrastructure to the local government or an agency (public or private) responsible for the maintenance of the zone. The hotel operators would construct hotels and facilities and would pass the costs of infrastructure to the tourists, who would be willing to pay more for better service and environment 41 (d) louriun deyelggment stratclY should be established to maximize long-term net benefits to the country by optimizing profitability of the sector and conservation of the environment. no tourism operators' business strategy seems to pursue mass marketina with a thin profit lI18I'Iin, aiming at the low-end market. nus may lead to over-exploitation of environmental resources, especially when pricina of natural resources is distorted and access to these resources is free. Since the Dominican Republic is the cheapest tourist destination in the Caribbean region, there may be a potc:I1tial for change toward a tourism development strateay aimed at biper value-added with fewer tourists. This strate&y would result in smaller loads on environment per unit of financlal pin from the sectpr. (e) Guided deyelqgmens ac;Cordjol 10 c;aralni c;rpc;ity to conserve tourism resources may Deed to be considered. At the local level, canying capacity could be relatively well defifted CO help decide Oft the scale and density of tourism developments. Carryina capacity would be worth further investiptiOil as a measure to avoid irreversible depletion of touI:ism resources and to assure SUSlailable development of the sector. Eavironmental resources such as c:oasta1 zone ecosystems and water are important resources for tourism development. As these resources tead CO be public aoods with free .access, overuse is likely to GCCUI'. Cbanaes in the coasta1 zone ecosystems ale almost lJrevenible. Some form of inteI'Veation CO conserve . . RIOUrCeS and pided deve10pmeat would be required. Carryina capacity would be detenninecl dependina 011 an inventory of tourism n:sources, Including potable water, land, and ~ or treabDalt capacity of pollution caused by the tourism development. This would sugcst that the canyina capacity Is not fixed, but would vary Ctepeaxlina on InveitmeDts to abate enviromnental c:Iamaps. The more is invested in measures to preveIlt • poDutioa, the Jarpr is the carryina capacity. The usefulness of the concept of. .. canyial capacity In terms of the number of tourists is debatable. Alternatively• the number of hotel rooms could be assessed In the P1annin& framework. (t) Public; and private pvtnenbjp would be crucial for sustainable tourism development. In the Dominican context, Government initiatives based 011 IeJUlatory instruments or investments may not be feasible, espedaDy in the near- term. 11Ie tourism industry should have an incentive CO protect resources. l1IIIestina that a private association miaht reau1ate instead of the lovemmenL Such an example would be the Don Juan resort deve10pmetlt at Boca Chica (para.. 4.11), which should be studied further for a possible expansion to the national level. The principal challenges would be the identification of a lead orpDizatiOA and the abatement of the free..rider mentality. f&otourism would be a feasible means of rmancing conservation of national parks, provided that better pricing and contractual arrangements with cme-day trip operators are established to guard apiast over-exploitation. Substantial resources for conservation of the parks could be raised, although these funds would not be enough for nationwide environmental protection. 42 TgIq Ia FrZ Dmloppmt IDd Enylmgmcgt. (h) A ·pollyter RID· mechaoillD should be estabUshed. In the FI'Zs, where the main source of poUution is the textile and leather goods industries. the provisiOll': or infrastructure to areat waste water would be a priority issue. Ia this context, the ·poButer pays· mechanism should pus the costs of the infrastructure to abate water pollution OQ to the industries throuah rent. Tbis would requiR: an accountable environmental replatory framework; a monitorial system; and pdvate sector pal1icipatlon in the provisiol1 of infrastructure and environmeotal services. Desip of this mechanism requires further assessmeraL Other approaches for the ·poIluter pays. principle, such as taxation pollution cbarps. ad eftluent ripu would be racrvcd for future consideration, aiven the characterlstics of the current FI'Z iDcIustries (low intensity and less poUutine Jiaht industries) and the GoVOl1lmenl'S limited ~ve capacity. (i) P.nyjmnQlCD1ll mawOI)' framework and mqaitoriOl1)'stcm would be pre- requisites for private sector participation in the provision of infrastructure IIICf environmental aervlces. Tbis would reqllile that the environmeat JI1UlIPIIIenl capabWties of the central and local pwemmeats, includiD& ICtdDJ eaviroameDtal RpIations and standards, and assessment and monitorinc. be·~. J3raviJ0nmcntal Issessment and· mOnitorin& may require the pariidpatioa of NGOs.. (j) private wtgr dcycIgameqt and operation Of jndutrial parR may be.1UI effective approach to providiq infIastructure for industries and worbn' settlements. aacl to pusina these costs on to the industries, provided that there is lUI appropriate reautatory and pJanniq framework. The private sector currendy opentes 14 . industrial pub, whose operatinl conditions are reportedly better than die publicly nm pub. Further, a mecbaDlsm 10 provide infrastructure for poD. . controlud for tbe workers' settlements should be explored• . (k) 00"1 polic,y reforms eJimjoatiol inccndyc;s and subsidiGs for construction or new free tmde zones should be supported 10 discourqe uneconomic investments ad their associated eawimnmental impacts (ea. workel"S' settlements, use of water and JaIlds, and pollution reJat.ecI to the operations).. The SlatUs of these policy reforms needs to be monitored. (1) Efficient pOdoe of factcm for m deyelo,pments and operations needs to be established. Pricing mechanisms of water; energy and land would need to be improved to avoid overuse of these resources ud conflicts with other sectors. (m) A Planoinl prpq;!S' including a spatial plan asSC!'3slng location, resources required (eg. water. electricity) and number of industrial parks, would be essential for cost-effective provision of infrastructure for industries and the associated populations. This would prevent conflicts among various sectors over land use. The types and effectiveness of such controls in the Dominican context would Deed more assessment. 43 (n) Beot policy to dect fsaU economic costs in She public FIZ should be established to improve cost recovery. Prom an environmental view point, the rent should teflect the costs of infrastructure to abate pollution and tho COlts of infrastructure and public services for the workers' settlements. A sustainable govemmeot .. . - rmancial base should be established to carry out the environment-related tasks in this sector, based to adequate charges to the ~ndustrial parks. v. POTENTIAL ENVIRONMENTAL ISSUFS AND INFORMATION GAPS 5.1 There are other environmental problems in the Dominican Repu.bUc which appear less pressin& but are nevertheless attracting public attention and may require action. In the Dominican RepubUc, where there are serious information laps, as well as lack of Ie,ulations, monitoriaa systems and public awareness, it is quite possible that a seemiDaly modest problem. cou1c:I become a arave environmental problem. Given the country's scarce financial and administrative resources, preventive actions would be advisable in order' to avoid the aeed for much more eqJCDSive curative measures and ineveni.ble environmental damp. Monitoria, of these poteDtial environmental problems is crucial to ideIltifyinl sueb pmventive actions.. nus chaplet briefly reviews these poteDtial t:nvironDlelltal issues and the gaps in informalion about them. .5.2 J1s1aea ......,..", The country's fishery resources are beina over-exploited. Marine plant and animal popaJations are beina depJeted by the use of compressors for extended underwater 6sbina and the coJ1ection of coral and sJaellfisb in response to tourism demand. Approximately 7.800 smaU fishermen are operatinl fro~ 72 commercial fishina ports a1oD& the country's 1,437 km of shore1i.ne. In 1988. the estimated total annual catch wu about 19,000 metric tons, versus an estimated sustainable yield of 10,454 metric tons. Department of' FISheries personnel confirmed that tho size of fish was gettiDg smaller (USAlD 1988 and Webb, USAlD 1991). Extinction of the manarovo system. increasinl water run-off into the sea due to cIetorestation and coastal zone developments, and poUution from untreated waste water are CODSidered to be the cause dc,radation of the coastal marine ecosystem• . . 5.3 MalJll'Qye. The northern coast has more dian 18,000 ha of manJ1'OVe, of which the largest concenttations are found at Monte Cristi and Bahia de Samana. The east and southeast shore have a total of 1,308 hat most of which are within tho Del Este National Park. 1bere are I total of 647 ha on tho south coastt and 2,471 ha in the laragua National Park. Althoup ~ mangrove forests on the north coast are relatively intact. tourism development, .- population settlement, rice arowina and salt production are the source of increasinl development -. - pressure. The mangrove forests of tho south coast have been mostly destroyed, and those that remain are under considerable pressure• .5.4 WetI8Dds: Information on wetlands in the Dominican Republic is very limited. In 1980, it was reported that the country possessed 270 lakes t lagoons and ponds ranging in size from 0.01 to 25.7S km1 • However, many of these have disappeared for various reasons: 44 drainqe .of wetlands for llriculture and pasture land, extraction of sand and saIt exploilalion a~ . saline lagoons. The remaining wetlands are under threat from a variety of sources, lncludin, drainage for qriculture and pasture land, felling and burning of mangroves and other vegetation, and excessive fishinlt particularly in wetlands near population settlements. ,.S Qa=Shorc • auaore Fmimn'DMill D.MncJatlon. On-shore environmental problems, such as deforestation, soU erosion, variable water JUD-ofl and disclaarJe of untreated waste water from nual and urban activities, seriously clamage coastal and off-shore ecosystems. USAID 1l'IUe5 that the most important problem In the Dominican coastal zone is the alteratioa. of the timing and volume of fresh water inflows 10 near·sl1ore waters due to water I'UII-Off caused by deforestation and various activities in the rural and urban watersheds (e. g., qricultural. urban and tourism developments). Modification of inflows causes rapid fluctuations in salinity and disrupts the saltwatcr-fteshwater interface. With reduced flows, hiJber aaJinity waters mipate Waad from ~ or estuaries damaging coastal ecosystems and Iquifen. With iDcreased flows, marine orpnisms that are adapted to maher saIiIIit1 waters mip'ate seaward or become atiact. Species COI1lp)Sidon is seriously impacted, productivity is lowenId, and the Del result in human terms is tbe decJiae of nearshore ftsheries. AIteIadoa of tile freshwater iDfIows also acts in s,neray to exacerbate the inftow of sediments and poBU1antS (the former Is due to deforeatadon U1d JOil erosiCl1t ad the latter to cHscharge of UIIIIeaIed waste water from the urban and touristcenten). Higher volumes of flow dudn. rainy sea.toIIS JeSUIt in hlaber water veloclties and areater erosion aDd sedimenlation. Lower flow volumes durinl dry seasons lead to a concentration of poUlI1Ints. Posslble remedies for these problems ale better water resource lIIIlIICement (01. waterabed conservation) and constructioat of wetJaads Cor the capture 01 stoma water nan off and waste ~ recycling (Webb, USAID 1991). 5.6 MarIne PrQtccIcd Area. Banco de ]a Plata, one of the scientific reserves, loca1ed 011 the north shore of the country with an area of 230 iJn2, is known as a breediDa plaCe for u es1imatecI 2.500-3,000 wIIales, conespondial to 80" of the totaIlDPuIat1on of wba1es in the NOI1b Atlantic Sea, Nuarac:.rous species of fish and turtle are also foual then. This zeserve. was created by the Decree 319 in 1986. Currendy, the Environmental Depa.rtment of . ONAPLAN is trying 10 formulate a conservation plan for this teSerVe (para. 1.14). S.7 The marine coast of lDs Haitises Nadonal Parle, which receives nlltrient..rich oulflows from the Bam.cote and Yuna rivers, possesses ideal nursery conditions to sustain latp populations of hi&hly valuable commercial species, like shrimp. oysters. muUet, sabaJo and scad . sanlines. These waters are consiclend one of the most important marine l1urseries in the Caribbean. 1D 1979, the Marine Biology and Limnology Department of MNHN and USAID J'eCOmmended that DNP extend the park's limit to include these waters. S.8 BeJmnt Imtltutlogs. Several insdtutions are involved in this area: Dominicu Navy (MOD) .. management of ocean fisheries; Department of FISheries Resources of SEA (DIP/SEA) - fishing matters; Center for R.esearcb in Marine BiolOCY of the Autonomous University of Santo Domingo (CIBIMA); National Museum of Natural History (MNHN); and Dominican Foundation for the Restarch and Conservation of Marine R.esources (MAMMA). However. there is no specific assessment or policy regarding overfishing and conservation of marine ecosystems. . 45 B. Alrotolk;s 5.9 Many reports point to Ilro-cbemica1s as serious pollutants of water and soil tcSOUrCeS and apicultural products, althougb no systematic assessment bas ever been made. A 1992 survey of apotoxics in the Constanza region estimates that the population in the recioD. cou1cI be affected by apo-chemicaJs, at a rate of 151 cases per 1,000 population, with symptoms such as severe headache, fatipe, drowsiness, nausea, and excessive sweatinJ. Five serious aaro-toxic cases in children have been repom;cs in the Constanza region, iDcludinc clamaae of the fteUIOosystem. In 1988, the United States Pood' and Drua Adminiscradon (FDA) probibited imports of some vegetabJes Produced in ConsIanza due to pesticide contamiDaticxa, COSIina USS2.s miWora to the producers. The Association of AJricuItura1 Producers (JAAC) estimates that exports affected by this restriction may iDcrease in the near future to USSIO-20 million 811Dually. JMC is deve1opin& extension services and a laboratory in order to help its members to address this problem. The weakness of the Secr:etaziat for Apiculture prevents the extenslon of slmIlar services to the ~ority of farmers who are not members of lMC. 5.10 Mechaaisms of toxic poisoning may include: pollution of veaelables; water poUution; band1ing IDCI incidental contacts; and misuso of apo-chemical containers. lIowever'. there liDO data available on the contamination of soil, water and apicWtuIal products clue to pesticides. Simple lack of pubUc awareness agravata the process. CoIdainen torJa.Iy .... for apo-cIIemicals are frequendy used as hoQehoIds' potable water container. I, is nporIed that apo-cbemIca1J poIuDited in the country of oriain are widely used. Heavy use of pesticides Is coasidered to be a conseq.-ce of monocultlUe of cash ~ motivated by sbart term pro&. even thou&h the country enjoys favorable condidcns for multiculbUe. Overuse of III apo- chemicals is mainly caused by users' lack of JaaowJeclp. Historically, the Goveramertt'. exchange rate policy bu created an implicit subsidy for imported pesticides, wldcb eIlCOUIIIed overuse. Purther information regarding type of chemicals used and ClOpS affected would be mquirecl to formulate measures to abate apocbemica1 contamination. S.l1 restk:lde PrkiOI. Until 1982, the offICial exchange rate for the Import of pesticides was fixed at 1 Dominican Peso for 1 US dollar, despite devaluation of Dominican Peso. In 1982, when the Government decided that pesticide import cost should be based on the parallel exchange rate (then approximately 1.6 Dominican Republic pesos for 1 US dollar) there. was a subsidy on the price of pesticides amounting to about 60". Furthermore, there were no import. duties on pesticides. The low price of pesticide encouraged their utilization in spite of local cff'o~ to wort with the safer integrated pest management (USAID 1991). 5.12 Since 1968. SEA. had reaulated the use of pesticides. In 1988, a new reguladon was introduced in Une with the n:pIations of the member countries of the International ReaiODal Organization for Apicultural Health (OIRSA). This reauJation was intended to coatrol indiscriminate usc of pesticides. However, it has not been enforced because of the Jack of administrative capability in SEA's Department of Plant Disease (UNCED 1991). 1be Government bas no poliey or action plan for this issue. Building enforcement, research and extension capability is crucial in this area. 46 c. ladustdal PdgllOp 5.13 Industrial pollution is not believed to be a widespn:ad problem in the Dominican Republic. Occupadonal health ud safety has not been an important subject because of the low level of industrial deve1opnOllt. However, it is aenerally considered that industrial contamination has become wone, and employment-related environmental issues are elUeqinl alOlll with the country's empbuis in Pree Trade Zone developments. Lack of a reaulalory framework aad monitorial systems make any assessment of industrial pollution difficult. 5.14 Workplace Eaylrpnmcbt. In 1992, 830 cases of lead poisoninl amon, industrial workers and their families wero reported nationwide. However, the soun::e of po1soninc is Dot dear. Another 130 workers became ill ftom exposure to dIemIcal substances. These could be combined outcomes of employment conditions and industrial pollution. ~ cause of these problems has not been pinpointed. R.eplation 806, which protects employee 1IealtJl, is not eaforced. S.l' .-1Ie IgIydrIaI PpUptIgp. Air pollution from the DomiDican Power CorpoIadoa's (CDS) thermal power plants (Sea, NQx, CO aad particulate matter) is ~ aIteIltion. 'Ibis poIlotion may cause morbidityu:ur n:spinatory diseases in the IUI1'OUDdiDc popuJadora, althouJh no cases laave been reported. Air pollution caused by the MeIaIdom steel company and air and water pollution caused by other private industries in Santo Domiaao area are DOtabJe problems. Condderina favorable air circuJation of the islaDd, air pollution woulcl JIOtIJe a cridcal issue. But uncIaecbd water pollutioll from the Industries aad dischlqe of industrial JIazards into the sewaae system, which ruins expensive infrasbucture, may aeecI • urpat atteIltioD. 5.16 11ae Government recently czeated tho Ecolopca1 Technical Commission uncIer »oP to np1ate indUSlrial and agricultural water poll,"ioo. The Coagress is considerina a 1988 draft of a Jaw 10 remove maJor industries from the cities. It is not clear whether the Jaw • proposes any zoning concept for industries or regulatory measures reprdina industrial poUuliorl and envJroomental standards. D. TraDSJ)9l't Air PpJIuticm 5.17 'There is no regulation or monitoring system for air pollution caused by transport vchicles. No government aaency is responsible for transport air pollution. Although no data are available. automobDe transport is believed to be the single main source of emissions of: SOx, NOx. CO, lead and particulate matter. Currently, the major ~uses of transport air poUPtiOIl in the country are inefficient traffic management; poorly maintained auto vehicle fleet; and high content of lead in gasoline. Although air pollution should not be a major issue thanks to the favorable air circulation, street level air quality is notably poor. High concentrations of particulate matter could cause respiratory diseases and premature death. It was reported that lead was found in children's blood. which would lower IQs of children and cause high blood pressure in adults. 47 .s.18 The gasoline price was recently raised to above the intcmationallevels, discouraainl consumption. Other measures to reduce pollution further milht include: better trafiIC inanagement; gasoline reformulation; paving roads; and technical and investment measures for the vehicle fleet such as introduction of emission standards, and an inspection plOaram and renovation of the fleet. Improved traffic manaaement would decrease excess ccmsumptioD of psoUne and thus pollution at the least cost. Reduction of lead content ill pd_ is recommended In several reports. However, its cost effectiveness and feasibility In the DomiDlcaD context are vnknowll, requirinl further study to assess the extent of the problem and costs of nionnulatinl fuels, includill& imponation. In general, paviDa roads is 1ft effective way to reduce wiDd-bome dust ad fuel COASUmption (thereby emissions) pet Jan uaveled, which may warrant further assessment. Other tecbnical and investment measures to Jeduco emissions pet Jan traveled, such as emissions standards, inspection proarams ud reftO'VIJion of !be vehicle fleet, would require substantial financial and administtative resources. The cost effcctive:ness of such measures in terms of' overall improvement in the country's environment would need to be carefuUy assessed since air pollution is not a critical environmental problem in the country. E. ...... PoUgdOD . .5.1' ne mInin.is ODe of the importaat economic seeton ill the Dorninicaa Republic.. pneratina 3.6S of GOP and foreip exchaap amounliDJ to 11SS306.7. (about is'' of total ex:pm) In 1990. DespIte Its importance in the economy II'Id possible environmental impacts. die Oovenunerlt bas been Ielyina on ad hoc enviroamental ma.napmeat in tid. sector. AI earll as in 1961, PresideDt BaJaauer promulpted the MiDina Law (No.l46), which referred to emroameatal obliptions of entelprises in ann1in& concessions. However, no concrete eaviroamental assessmerat process has been defined. No apocy is nsponsible for sector environmcatal issues.. Reforestation or open-pit miDin& Jites is required, but few sites ate in compJiance. 1be Government has made some ad hoc efforts. In 1988, it neJOdated a contract with the Palcoabridae ferronickel'operation which includes COIlClitions related to refcxestafion. 11le Oove:mment was aplDrina production process options for lold rninirla by Rosario Dominicaaa in order to minimizo the danger of COIttam.ination from sulfuric acid (Nelson 1990).. Legal aDd D1ep1 exploitation of sand and gravel for construction materials from rivers, beaches and dunes bas become a notable environmental problem, althoulh no specifIC aOVerDment action has beeD tepOrted (Webb, USAID 1991) • .. .\. F. Lara Scale Pmlects 5.20 In 1992, INDRHI constructed two large-scale darns for power generation on the. . - !..: Nizao River. The new dams supplemented two other dams within a stretch of 130 Jan. 'I1ds COftct.'.l1tration of large dams is reportedly causing serious environmental damaJe, including deforestation and soil erosion. As of 1993, FAO was preparing a project to reverse the environmental damages iii the Nizao river watershed (Annex 8). A flCA expert has been advising INDRHl to conduct an environmental assessment of the dam constIUction and carry out a reforestation program as part of the investment. 48 G. ImpqrtaUQQ or Uagrdovs wastes S.21 Introduction of solid wastes and residues endangering health of the popuIadoa ud . environment was prohibited by Law 218 in 1984. The law was motivated by public debate concemiI1, the Government', apeement to use land in the southern resion as a dumpiDa site ror urban and industrial solid wastes by a U.S. company. Since then, although no incicIeats have beea reported, this bas become a very sensitive issue. Law 218 also prohibits importation of pestlclda and medications wb1ch are prohibited or severely restricted in their countries or ori∈ however, it is paeraIly believed that these materials are being imported. Information at how these substances are being imported and inspected at customs is not available. R. 19rom.tlcig Ga.. 5.22 As discussed above. lack of information is one of the major obstacles to eav:iroDme:ntal manaaement in the Dominican Republic. 11le danger is that, because or dis aaious information pp, potential enviromncntal problems are not noticed until Ibey bccolDC serious tIueats involvin, irreversible chanp. This situation mabs any preventive action difficult. ancI curative actions usually require I1lOIe financial and admJnistIative resources. wfaich the DomiDicaD Republic may DOt be able to affonl. Lack of pubHc underslancliaa. moaitodD& system" enviJoDmental standards, coordinadoa of effons based on a compatible technical staDdald ad Jact of continuity of the aoveimmenlal iDstitutions due to hiah staff tumover are the lDIJor causes of these iIlrormatIon lIPS• .5.23 Information reprdin, the mapitude and causes of these potential issues is crudal to icteDtifyia, nmedie$ and eStablishin, priorities. 1be information required should include III iDventory of coastal zone ecosystems, IaDd use and the health impacts of pollution as follows:. SBSPAS' health statistics show azelatively bigh incidence of possa"bly related diseases to environmental problems such as toxicity and. respiratory and water.. borne diseases. Mappinj to show the location of these health problems would. help to link the Wnessesto environmental problems. There are no health statistics for the poor living in lIW'Iinal urban and rural areas. This aspect can be strengthened by supporting SESPAS' Environmental DepartmenL (b) Statistics on the occupational health of workers are needed to assess the industrial environment. In connection with enforcement of Regulation 806, relevant agencies such as SESPAS, SEre, and NCFZ need to cooperate to collect information. (c) Land use information is crucial to identifying links between environmental depadation and buman activities. This would include: population settlement, industrial use, tourism development, agricultural use, mining operations, 1ar&e- scale public works and forests. Land use information could be established telatively easily by a survey based on aerial photographs and a land use classification. Information on land ownership would be necessary to assess 49 interventions to abate environmental degradation. Most land, except agricultural lands with private titles, belongs to the State and public agencies, although the real status of occupation and use of lands is not clear. To provide this information, the cadastral survey needs to be updated. (d) Jnventories of coastal zone ecosystems including fauna and flora, wetlands and manpove forests and land use fUlc1udin, population settlements and IlriculturaJ. industrial and tourism developlnents) are needed to usess the magnitude of dep'adation. A marine :resource inventory and an assessment of the maanitude of fishery are needed to formulate sustainable fishing and to conserve marine biodiversity. A survey of Banco de PIata.(para. 5.6), for which ONAPLAN is preparing a conservation plan, would be the first priority. (e) 'lbe issue of aarotoxics requires uraent attention. Information reprdin, the composition of chemical substances causinj soU, water and crop contanainatioD is needed to formulate a solution. Information on import procedures and customs inspection is needed to control importation of prohibited chemicals. (f) Air poDudon, iDcludina the street level concentration and the composition of transport air poUutioa, and any local concentrations of industrial air paD.ution. needs to be monitored. In order to estimate amounts of emissiOns and impacts on popaJatlon. information on emission fictors of the vehicle fleet and a fleet inventory. emIssic?n facton of stadonary emission sources and their spatial distribution. are needed. 11aese tasks could be done by 'the Bnviron~taI Tecbak:al Commissioa, COSNER and J.EPIDOMSA. Currently theIe is ~ insIitlltion wortiq In these mas. A repJatory framework and distribution of. RSpOGSibilif,ies need to be defined. VI. OTHER IMPORTANT JNSn1VI10NS IN ENVIRONMENTAL MANAGEMENT 6.1 Oiven the Dominican Republic's centralized government structure, lack of au oversight agency responsible for environmental IIUUUlJemerlt, and the numerous uncoordinated and pRera1ly ineffective aaencies, qencies under the presidential office would probably be the most effectiw institutions to improve environmental ma.nagement and would be the most important CQUftteIp8.rtS for international donor assistaDce. There are also mechanisms inside and outside the Government, such as the Bcological Technical Commission, the Intecrated Fund for Nature (pJ.ONATt1R.A) and Noos. Traditionally strong ·NOO activities would suggest load potential for N(i().a.ccuted environmental projects. The capabilities of the Dominican Republic's universities appear to be limited in terms of resources for research and ex.pertise covered. but these institutions could be important research and technical cores in environmerual management. Continuity in their research efforts would be an important asset. ... .. ' 6.2 Aamdes B.esPQDSIbIe (or Resource AllocatioD aDd Inxestment Decisions.. Several agencies under the presidential office influence budget allocation and decision making on investment programs and projects, which could subsequently affect the country's environmental management. These agencies are: the Office of the Technical Secretary of the President (TSP); the National Planning Office (ONAPLAN); the National Budget Officc so (ONAPRES); the National Preinvestment Fund (FONDPREI); and the Oficina Fisca.Iizadora de . las Obras del Estado. . (a> DIe om" or the TccJanlca' Semtaa of the PrrsIdency asp!. The President's office allocates about SO" of the national budaet and has influence on . the almost all major projects. TSP, which includes ONAPLAN and ONAPRES appears to have most of the responsibility Cor final budaet recommendation. 1bis office is also responsible for a:tema1 aid coordination (Annex 14). In 1991, USAlD wu considerina consultina with TSP on ways to include the environmental plannina and evaluation function within the overall national budaet allocation prOcess and to create a special environmental unit within TSP. (b) 'DlI Natlogal Pla,n'. 0fIJcc (aNAPLAN'). ONA-PLAN prepares a tJuee..year rolliD, pubUc investment proP.IJD for the country. However, in tile past it bas performed only a Hmited evaluation aDd prioritization function. The office makes PRied recommendations to TSP. but its technical capabilities are limited because of tho shortaae of qualified staff and other resoura:J. Thero were seven operatin& units within ONAPLAN includinl an EIrvironmental Divisioa, which covend nJloaal aDd enviroamental issues. In 1m, this Division was converted into tho Environmental Department consistina of NatuiaI Resoun:e Di\'lsion, Environmental Protection Division and Environmental Relations Divisioo. ne deputmeDt now bas ~2 professional envIroDment-Rlated positions iDdudiaa: environmental pJanninI, natural I'eSOUICO manacement, ecosystem con.-valion, envlronrnenlal quality, urban environment, institutional manaaemaat, 8Ild environmental education ancIleaislat;on. The c:le:partment is to propose to the Director of ONAPLAN eoviJomnelltai inidatives, prosnJDS and pmjects incIudilf, c:oordInadon with other ,ovenner&t. agencies, tbc private sector ud international donors. As preliminary priorities, tho Department is uyina to formulate a DatioDa1 environmental poJicy and various plans including: TerrifOrJ -Master Plan; Ozama River Clean Up Plan; Banco de Ia Plata Manapment Plan; and the Environmental Protcctlon Standards. Althouah this effort is encoun&inJ. there aD some aspectS, which may require further assessment - the current focus on specifIC plans, tho excessively heavy workload relative to the human resources available. and possible dupUcation of responsibilities with the other institutions (ea. environmental standards, which the Ecoloaical Technical Commission is also trying to establish, unclear distribudon of responsibility for Banco de 1a Plata. manaaemcnt plan with DNP, and unclear relations with the Earth Suaunit Commission regarding the national environmental strategy formulation). The cballenge would be to implement the plan and policies being fonnulated by the Department. As ONAPLAN is not an enforcement aaene)'. coordination with enCorcement institutions and their capabilities, which are in aeneJal very weak, would remain the key factors. Purther institutional assessment is needed in this regard. (c) De Nat'onallD"t om" {ONAPRESl. TSP's ONAPRES prepares budgets mainly based on program requests from the line ministries. There is little indication of a process for setting priorities and for coordinating the activities or the line ministries and ONAPRES. 51 (d) TIle Mati".. PnlpYCSt1ptpt Fuad fFONDPBED. The National PR:iDvestment Fund (FONDPREI) was orilinally created to prepare preinvestment studies. After recent dras1ic reduction in the fUnd, FONDREl concentrates on monitorin, projects financed with external funds. It is reported that the Government is ftlquesting donors to provide technical assi~ to prepare preinvestment studies. (e) OM- f1gllpdora de 1M QIas del &tado. This office manaps the 1401 Pwld (known u the PresideDt's Fund), throuch which the President allocates almost one half of the ordinary revenues of the national Government, mainly for investments in the country's public works, includin, water supply and other urban infrastructure. 'Ibis office bas a major influence on the country's environmental issues related to the infrastructure. 6.3 De 101"" TcrJepkal QpmIssIqp. Among the numerous government apncies related to environmental manapment, the Ecological Technical Commission may be ODe of the by enforcement aaencies. The commission was created by Decree 226190 in 1990 to poUce poUutioD of water resources caused by solid wastes, apo-chemicals, and industdal poUution. The conuriission employs 18 technical experts IIld 12 reponal inspectors, formin& dlo latpst IfOUP in this area. Althouah tberc Is no repIatory framework, or syatemadc monitoring system. the commission is functioning u an environmental poUce force. ID 1992, the commission raised around RDS20 million (USS1.6 miJlion equivalent) from fines 011 polluting industries, versus a budget allocation of about IDS3.8 mUlion a year (US$ 300,000 equivalent). no commission intends to introduce environmental standards equivalent to those of !he u.s. Environmental Protection A,ency (EPA) by c:oopetatinl with Costa Rica. IDstitutioDal arranpments between this commission and ONAPLAN's eavironmental deputmeAt, both of which have similar objectives, need to-be properly defined. 6.4 De Iptarated Pro JSatun FuM lPBONA11JRAl and tJu: DeM-(gr-MIIgn SWIll. The Jntepatecl Pro N~ Fund (PRONATUIA) was founded as a private aoaprofi1 orpnizatioo in 1990. PRONATURA channels funds to the NGOs aad govemment-eatities under for DaluIal resource develOpment and conservation projects, and for biodiversity aid protected area con.vation. About RD$8.4 milUC)ft wercclisbursed in 199Q..92 for seven projects, including resources obtained by the debt-for-nature swap scheme. In 1990. Puerto Rico Conservation Trust Fund purchased debt amounting to USS582,OOO, and donated it to the Dominican Republic. 1be Central Bank conVerted this fund to RDS3.7 million CUSS 444,000 in 1990 value) for PItONATUIlA to channel to thn:e projects executed by NOOs, and another executed by DNP. Currendy no additional debt-for-nature swap scheme Is planned. Accon:lin& to the authorities, this is because of the Central Bank's policy on the swap scheme. As the -Central Bank converts only up to 2S ~ of face value of the debt to the Dominican peso, the donor would lose if the debt market value is more than 25" of the face value, discouragin, potential donors' involvement in this amngement. 6.5 NGQs and pyas. A number of studies have concluded that external assistance could be targeted to NGOs and PVOs as executing lIenaes for environmental projects and environmental monitoring. The NOOs and PVOs involved in environmental management are divided into two groups: (a> community-based grassroots organizations with a community development or socioeconomic orientation, including provision of potable' water supply or irrigation. reforestation, forestry development, watershed protection and substitution of 52 agroforcstry for slasb-and-bum agriculture (the Foundation for Human Improvement, FlOrala.- _ Inc. &lid Plan Sierra, Inc.); and (b) professional groups with a biological c:onservation which " promote ecolopc:ally sound development and park protection (Federation of DominicaR Ecolo&fst Associations, Integrated Pro Nature Fund, the Foundation for Science and Art, Inc. ; and the Foundation for Research and Conservation of Marine Resources. International donors ave aareed that selection of appropriate NOOs as executing bodies is a key to success ill a commUl'lity-based project. ONAPLAN intends to formulate a directory of HOOs to facilitate provision of international assistance throuJh NOOs. Annex 13 summarizes major NOOs In the Dominican Republic. 6.6 Uglymltlcs. Superior Institute of Agriculture (lSA) is a private agricultural upivenity with a scientifically well-manaaed ecological reserve of a 1,000 ha dry forest farm in . Mao dedicated to forestry research. Pedro Herniquez Ureila National University (UNPHU) possesses an experimental. farm at Nigua where it has conducted research on U;uranp. Tbe lanD lDcIudes a coastal marine reserve. Four other "universities offer courses in lareauy, DabInl resoun:es udlor fisheries manaaement and conservation. The TeclmoloaY Institute of the Pastern Cibao. the Santfaao University olTechnoIOIYt the Central University oftbe East lid .the Catholic University offer courses In foRStry t DltUtal resource and/or fisheries II1U8pIIIeIlt and coaservation. No university offers courses related to industrial poUution and urban pannin, aDd IIIIJUtFIIIeIlt, Umitin, expertise In these IRU. YD. WORLD BANK ROLE A. Bank's IDY,Iyagent In the Dgmlglqn Republic tg nue ,. t The " ' , involvement In the Dombdcan Republic has been limited. A R1ative1y small number of projects have beeR approved, some of which suffer tioaI institudoaaI dlfBculties in adcIltion to the Jack of an adequate macroeconomic framework. Althouab die Bank bas not financed Illy. environmental projects in the Dominic:an Republic, many of its projects are relevant to the environmenlll issaea discussed in this paper: Puerto Plata Tourism Development; KJZIO Iniption; Cocoa and Coffee Development; Sites and Services; Itabo Coal TeraUnal and Power Engineering; Power Sector Rehabilitation and Distribution; nird Road Reconstruction; and Industrial Free Zone Development. nesc projects have not bad nepti.ve effects on tbe environment (Annex 1'). Nevertheless, the country must take a more syst.ematic appmach to addressing environmental issues in sector operations.. Be PpssI"bJe BgJe for the World Bapk In EnYironmental ManaDQJCDt 7.2 Given the ongoing economic policy reforms in the eountry it is becomin, incIeasinlly important to ensure that policy refonns do not adversely affect the environment. The Bank could contribute to the improvement of the country's environment by addressing sueh key environmental issues as deforestation, urban environment degradation, and environmental impacts of tourism and free ttade zone developments through: policy dialogue supporting better economic management and structural changes, lncluding institutional reforms and 53 development of a National Environmental Action Plan (NEAP); and (b) its lending proaram and .' . sector work. including project components that would generate environmental benefits and address the underlying structural issues. The Bank's policy dialogue, economic and sector work .~ . and lending proaram would be vehicles for these effons. The following are specific ways in which the Bank might increase its involvement in environmental issues in the Dominican Republic. . • EoIkJ DIal.... 7.3 Better Econpmlc Ma.,..,. To improve economic manaaement, the Bank should support ongoing policy reforms in macro economic management and in the qricultule, forestry, eftCIJy, urban. tourism, and free trade zone sector. The Bank should continue policy dialope about mechanisms to internalize environmental c;osts. Among the potential topics discussed before (paras. 2.S3, 3.31, 4.24 and 4.25), the key topics would be: establishment of pmpe:rty ri&bts to tress and lands, and conversion of household energy to LPG from cbarcoal for the deforestation issue; establishment of sustainable infrastructure in the urban ueas; aDd introduction of a ·polluter pays· principle in tourism and free trade zone developments. 7.4 JgstItptIgpaJ Rerol!lW~ Tbe Dominican RepubUc should build aD institutional ancI1ep1 framework tIIat would encouraae coherent environmental mana&ement and ratioaal dec.isico maJdD& processes at all levels. 'Ibe Bank should provide support for these efforts thmuP its c:IiaJo&ue on pubUc sector reform. A possible solution miahl includo the cn:ati.on of a slAJle environmental oversIaht aaency and environmental law• EIlvironlllental ~t could be cIeceatrali2:ed and the municipalities streft&thened to handle urban cnYiromDental ~t. A replatoIy framework should be established to enable the pivaae sector 10 : .. participate Ia provision of inf'rastructure and utility services III 1he urban, 10Wism and FTZ : - sectors. Tbeae arrangements would internalize envirorunental costs and pass these COltS on to the polluters. In the Dominican context, however. viability of such broad reforms is questionable in tho short NIL For a transition period, more pnctical alternatives should be identified. The Earth Summit Commission has already beeD set up to coordinate the efforts of aovClUmeut lIencies and NQOs. PRONATURA has beeD C!Cated to channel resources for conservation projects. The Bco1oaical Technical Commission. whieb is policing water ponutiOll, is in pJac:c. ne Environmental Department in ONAPLAN was expanded to establish enviloameataJ standards. Further assessment would be needed to improve these arranaements and to integlale them into a coherent environmental management system. .. 7.S FpnpuJatlOD or. NatlonallnylrmvneptaJ ActIoD PItA ' framework. The Government's desire for Bank involvement in the proposed Iniption and Watershed Management Project should create a better opportunity for the Bank to address deforestation compared to other environmental issues. The Bank's proposed agriculture sector work, along with this project, would provide a sound basis for the Bank to broaden its involvemeraL Tbe Oovemment has not invited Bank involvement in urban development issues or plannin. for the tourism sector. In this context, the environmental issues should be addressed as discussed below. 7.1 AIdAJtm:t and JWQJ1S'lIlIoD ltsgcs. Amon, the various enviroDmeataJ issues. deforestation is causing the most serious irreversible damage to the country's resoun:e base. By addressin& deforestation, conservation of water and soil-cruclal factors for the country's sustainable deve1opment-caD be carried out in the most effective way, on-shore and off-shore biodiversity can be conserved and the living conditions of the rural population CID be improved. 1.8 ID view of the Dominican Republic's institutionallimitadons, the But shoukl lake a project-specific approach to generating short-term environmental benefits and to trigeriD, necessary structunl cbanacs. This approach would lead to the ideatificalion of measures that would supplement onaoing agriculture policy reforms, thereby ensuriIIa environmental benefits and minimizing the cbaIlce of unfavorable enviroDmeatal consequences deriviD. from the n:forms. 'Ibc Bank's sector work IJId lendin, pro,ram should IcIentify and. support such measures in this area, which may include: .(a) Watershed cmsemtioo: Pilot projects should be established 10 introduce soD conservation practices and reforestation in critical watersheds. 11te objectives woul~ be to reduce farming in fragUe hilly mas better suited to forestry and incn:ase productivity in marginal lands throop small-scale irdption and the introduction of land use or tenure arranlements. 1bcse projects should be executed by local NOOs with clearly defined tines of administration that minimize dcalinJs with the lovemment burea.ucracy, particularly where transfer of financial J'CSOutt:eS is concerned. (b) Intensified of use of pmductiye alricultyRllan, The World Bank, Washington D.C., 1989 United Nations Conference on Environment and Development (1m: Rio de laneiJO, Brazil), Regdbtjca Dominican•• Informe NaejonaJ: Confer;ncia IObJe Medio Ambiento y Dcerrn11o. Brazil '92. Santo Domingo, 1991 1. G. Campillo P&ez, EyglPci6n de II I,eJislaci6n Dominicana sabre el Um de los BccuDOS Naturales y Prgtec;d6n del NeAio Ambien\G, Fundaci6n Ciencia y Alte Inc., Santo DominlO, D.N. 1991 Braiies, It. , IDmtutionaI and Lcp! Aspects of the Eoyironment in Latin America. Incl udin l tbc Panjciption of Non GQmnmeutaJ OtIanizations in Environmental Manamnent, IDB, Washington D.C., 1991 LA3Cl, Dominican Rewblic U,pdatiol Economic Memorandum: The ~hallenle of $ustainabUjty. The World Bank, Washington D.C., 1992 Dominican Republic, Fore~ttY Action Plan fQr Dominican Rc;public, Santo Domingo, 1991 57 Donmucan Republic, Plan de Accl6n Forestal ])opisal para Re,pt1bUca Dominican.. Pro.nctQ de QSdilo Porestal, Santo Domingo, D.N. December 1991 Jose Rente Nascimento, JCcy ForesttY folia' Issues in the pominjcau Republic, The World Bank, Washington, D.C., December 1991 USAJD, Franklin A. Reynoso et ale DaG Dominican Rs;public, BjotoaisaJ Djxmit)' Anmmcnt. WaslUnaton, D.C., December 1988 ow. USAID, Maryla Webb et al. Intenm Sun;y of Rural and Urban Actiyjries Impaetio, Water and Resourg;a, Washinpm. D.C.• January 1991 USAJD, Office of Housing and Urban Programs, Cobb. et ale Dominic;au Republic Urban BoyjrpnJDCDtaJ Stra'eaiq, Washington, D.C., January 1991 ESMAP, l'l1G Domjnjc;m RcpubliG tuua and ource: The World Bank, Dominican Republic AJgncultural Sector y, Vol. 11. StU(J1 l!:i~o (adjusted by author). 67 According to a 1980 survey or rural labor, ol11y 321, or the rural workers owned lands,; - while 68" were working under a variety of forms of employment such as: share-cropper, renter, out-grower, day laborer on state land or private farm, employee, collective farm worker, and worker on elUted Jand. Between 1971 and 1981, inequity in land distribution was increased. In 1971, 69$ or the farms were under S ha and occupied 14 S of the Iud; in 1981, 82" of the holdlnp bad Jess than S ha aDd occupied only 12" of all farm land; larger farms having more than 200 ha Jeprescnt 0.3" of alllarms, but controled 36" or the land. ne number or small holcUncs increaed by 34", reswtinc in a reduction of the averaae size in this catecOlY from I.S ha to 1 b. About balf or these farms . Law No. 67 in 1974 created the DNP under the office of the Administrative Secretary of the President to manage the country's National Parks with four sections: park management; environmental education; environmental research; administration. and legal counsel. This autonomous institution is responsible for developing, managin&. regulating and protecting a system of ~reationa1, historical. natural and indigenous area. to 70 preserve and perpetuate the country's naturalud human herita,ce. Recreational areas include i • national recreational parks. zooJ.oaical pnIeAs, aquariums aDd panoramic hi&hways. Historical areas indudo nationalll1Olluments. botanicallanlens and natural scientific reserves.. no DNP abo IIWIIpS many city moauments mel parks. and apeads considerable resoun:es in tbeir maintenance. Its 1988 budpt wu RDS2,408.498 (about US$385,OOO equivalerat), of wbich 70" weRt for salaries with RUle remainin& for ICtUal management. The DNP'. Head Office stair consists of 7 professionals (1 qricukural ea&fneet. 1 BA in environmental educatioa, 4 Bu Ia bioJoay Iftd 1 qronomist). Tbe aati.onaI puts IIId scientific re.seI ves, with exception Parque Nacional de Monte Cristi, are administered by 5 apicultural teclmiciaas. Tbere is a Deed of trainin& in wi1d1ife 11'IIIIIpIDeAt, park manaaement, and ecoloay (USAID 1988). For 1992, available fiDaDcial resources for DNP toIaIed RDIII million (U5$O.88 million equivaleat) lDcJadiD&: the budpt allocatioa (about RD$6 million); income from the eco-tourism operation (RDS3 million); specific project fwadia& from PRONATURA, Nature Conservancy. and WWP (RDS2 million). noup financial aspects are improved, the DNP still needs external funclinC for ICtual manaaement activities of the national parks. Principa1 Institutions Aff.ctlng,Fo~.str.r ItIS11'I'U'I1oN N4IQR .JI.IIIIONSJlDJ'J'II!S .AS JU!1.ATID "1'0 JIOI\I!SDY 1)Gf a...... wa. .... ......., .... Sllt.bul laIH'l" ................ or ... ,.,."" ~ up &0 Ita (WIlla COMATEF........,.11 ............. OIl. r ......... , ...... rar . . . . .1 . . . . . or .... 1fG F.-1.IIII'. c.n.u,. 1II . .'1IcIIdc = • Fr.' or ..... . . . . . . . . . . ,.... . . . . . . I . • •t; . . . ..,.orror. ...... ....., .................: ... or .... ,.... ....l1li; lie. IUItEHA. CIwId .. INS .. JIM' orIllA. 1& W......., die It "'2~""'''' 10 ... . . . . . , _ _• ........ ,..'D....,fIl ......... DO... or ....... "...OI'_pl _ _.., • .,a.a._ 'I1tI o.,.n-aor......, ........... - ........ _ ... ~. .......... or&lle .....". ................. "De ....... 011 . . . . . . . . . . . . . . . . . . . . . . . , ~ (tJVS) Ill., =..... 'or ,t. proleClloll. ..IIII.S. . . . . . . . . . . . . or ..... ad .......... olwUdllt............. _ . . . . ., PftIPOIIIIa r. 01 COftICI"4lIoft II_ . . lal.. will .. ld1DIafllcnd ..., DPH alld DOl'. c:rudoa or ... tile . DtfP o.,ed'" 1"" Ul&1>IrecaoaIe Ia. '.,nidlftC)' or ,lie PnIdcIaaI.•• orne. _ napoasftllHIJ for UI& AdIDift1l&rl_ or N.....' ParD wkta .... DOP, DVS u. CONA.'DF 0 .... In lf82 .. an . . . . ,.•JIIICr ,. UI& Ptaafdent In rorat JICIIic1...... Ia It....... .,.. .:panded tbroup a . . . ._ whIr:b COIIIWIn DOF Iu . . . . . . . . . . (alllMNP 1& aIIo -.'Ioa r., or ao =•• IIUh_ ia CINWIl" iDcIudc l'oraaIIlalC natIouI ror- poIIcIc ...... dac,........,... lull and dcwIIopa.ftl or ......., .... 1'IICMIr&a; coord..... eM ..,.. ..... pulIIIc .... private ror. ....__ ,......"' ......._ pnIjccrL 1NDRHl 0.1Cd III 2MS, ... a-w.. 1a _lair naJlOClllble Cor._ use Cor cIeark:iIy IIId Inip\loa. h .110 ............ or .....lail&eria& die . . .1Id JII'O'lC&ioa or _tenbeds. lac:haIIia& eatin:I. . .111 aDd It"OlSoft CiOMftIL • a>2 CNllIId in 1"' &0 provide Car 1IIc praclUClIon. n ....Ia'lOil IItd dlluiWdoa of tIIcIrIcaI-.r. D_IO bcPJ ........... probI- or !be ~ ftNI'¥ObI.k .... MIIt& ......... • lI3W IUDlpmcIll ac:dvIlk&. lAD Created ill 1"", It is napolllllJlc for the P'Cl"ftIDCSlt 'Il'I.rian rcCOC'1I propaa. Cunau aprfaa JeplaliOll coruidas dctore.lalioft IS I "i~l· ifldispau\:llt cor Uae nc:ophIoa 01 Iud pcIIIMISioa riJIIIL DtlOfICallon 1ft ,lie carty • caD b& t:qIIaiaed .. a 00ftI&IIlI1'• • or tile MIl CO public aDd Tnajldo'lIaD41 to oblliJl pauaslon ri&lI&1. . '. AO~BANJC Mam responsible rot the pnMaloa or Illbsidll.e.d credit ror crop aad liwltock pt'OdllClIoa rqardlCSl or bfteS capability, • l)onnnjcu.ltij)ubUc tJrpclatiDa EcODomic Memoramlum. tho World Bale. 1992. 71 Amaexl DOMINICAN REPUBLIC ENVJBONMENTAL ISSUE'S PAPER 0_*1 Goyergmmt Promua and Intcmatlgaal CoopntlOD for Defon:statloa ]be Nn Tmdcal rCU"flby Act'. 'PlaD. ne New Tropical Porest Action Plan (PAPl') with financialaad technical assistance hm UNDP and FAO, which would be implemented for 25 yean with the successive five yar pJanninl cycle, CODSlsts of four priority areas: reforestadon; forestry ana.naaement: protection of natural forest; integral watershed management. Dc New !I_D' Code_ "Ibe New porestry Code was prepared as policY and institutional reform identified in the PAPI' and has been under the process of leaislation. This ~ will: (a> estabUsh the New National Forestry Copo~n (CONAREP) as legal and financial state entity and the Forestry Trust Pund as a ftnaDcial ann for the forestry manaaement under the Technical Secretariat of the President Office; (b) transfer the authority of forestry manaaement from the DOF to this new Forestry CoIporation except in the national border zone; (c) enable private sector's pnxluctive forest operation under a "Ntlement pJan to be developed by the operator and to be acceptecI by the Ccxpon.tion; (d) create iacentives for private sector's investments in the afforestation and pJOCluctive forest indudiDa various tax exemption schemes in the forestry suitable lands; and (e) develop the file fiahdnl capability in· the Corporation. Althoup tIIis institutional reform oouId be a JancI-mark effort, transfonninl the authority of forestJy manapmeIlt from the military (OOF) to a civiliaD apncy. the proposed enormous tasks centralizecI to the Corporation. and the lack of concrete financlnc and staffinl scheme may cast a doubt in its enforceability, which would be a key element of this rather leIuJatory oriented Jd'orm. For example. in order for those already operatinl Wep11y in the forest 10 be converted to Jepl operators in the Forestry Sui1able Land, the costs of lepl operations should be substantial lower than mepl operations after 1akin& into account financial incentives and incremental costs for lepl operation includin&: acquisition of qualifICation of forestry suitable land; fonnuladon of ma.nagement plan; and required time for the approval process for harvestin& and transporting the fores1ry products. For il1ep1 operators obviously payin& DO taxes currently. the financial iIlcentive provided by the Code would not wort, implying that effectiveness of the Code would hcawy rely on policing. Pmailinl iUepI operations of forestry (0.1_ i11epJ charcoal producers) may imply the difficulty of such policing and enforcem~t even by the OOF with lnilitary participation. Economic measures, which would create incentives for sustainable opemtion by the private sector and subsistence f'armers in public lands includin&: land titling of forestry laDcfs; ,., clearly defined ownership of trees in private lands; adequate stumpaae fee; and clearly defmed concessionaire arrangement could Jessen the burden of enforcement and would be more effective. Jnter-Americ;an DevelQmDmt DaDk ODB). IDB is engaging in the reforestation and forestry management projects to be executed by SEA, of which project cost amounts to US$ 90 millioD during 1991 and 1997. aiming at vigorous reforestation program. Also lOB has several agriculture development projects focussing on helping to improve the necessary basic 72 ADD... infrastructures including irrigation system to increase production, which would contribute to tIu: - intensification of the usc of productive agricultural lands. USAm', MAlENA and FIRENt\ ,ma. USAID efforts in watershed management are noteworthy. ne Management of Natural Resources Project (MAlENA) in 1981 aimed at two ~or ,oaIs: (1) the winstitutional strengthenin,- of the State Agriculture Secretary (SEA) and particularly the Sub-sccretariat of Natural Resources (SURENA); (2) the promotion of soil conservation amonl hillside f'umcrs in the watershed of Ocoa -River and Padre Las Casas. where soil erosion was estimated at SC11 tonslbalyear. This project, amountina to USSII million was executed by SEA, througb SURENA with participation of the Agricultural BanIc.. the National Institute of Water Resources ~RHl), and the State Secretariat of Public Wotb . and with community participation tbrouah the Watershed Development Committee (CDC) induding the catholic Church. the Association for the Development of San 1056 de Occ:a (Junta) and women farmer organizations. - 1bc MARENA project ended up with mixed results. Althoup the fund for the institudoaal strenafheain& component was disbursed, no clear outcome was observed. The project provided credits to die farmers for soi) conservation measures: ctiversioa ditcIIes, live baIriers. Adoption rate of such measures by the fanners were inidally hiah: ill 1985, 90S of the f'armers pracdced soil conservatiOn on their plots and five years after the project, in 1991, .535 of ~ farmers tbat had adopted soil conservadon practices still employed thi:Ie practices 1bose credits, however. were used for other purposes by the farmers, because the ICCeSS to the credit was consldered as primary loat IDd 1IIe adoption of aoiJ c:onseJVation was perceived u a. measure to obtain credit. Also Jarp portion of fund was reporU!dIy captwed ill Santo Domingo, 1eavina macer ad delayed field level disbursements to tho project. ThIs fUnd by- pused Junta teepiDa this NGO out from the project. A new Project Director createcI further problems alienated members of aU participating groups, includin, USAID project manIIers. YJnaI1y in 1988, USAlD decided to replaco this project with a separate redesiped . foUow-on project: the Natural Resource IDvestment Fund Project (PIRENA) which was to be executed by tho Junia in common agreement with SEA. in the same area with addition of tho Nizao River watershed. FIRBNA promotes soil conservation practices in places wbero there arc water resources and lands appropriate for irrigation, which enables farmers to grow hi&h-value vcaetable crops. In order to qualify for financin, for irrigation and conservation projects. owners of mphle lands must contribute between a third to a half of their lands to tho voluntary agrarian reform. Conversely. landless farmers and hillside farmers who benefit from the voluntary agrarian reform must participate in reforestation prolJ'8llls in the upper watershed. Participatin, farmers could borrow funds for the construction of irription works at nominal rate of 225 (compared to the 32" for loans from the A&ricultural Bank). Panners also had access to credit for production of the recommended crops at a rate of 1196, and received food-for-work in the fmt crop cycle. 73 Aanexl Based on the recognition that Dominican farmers had no reason for believina in dae ~ efficacy of the new soil conservation measures proposed by project technicians, and that soil conservation by itself was generally unable to create or sustain threshold levels of increments, FIRENA made access to gravity driven hillside irrigation contingent on a farmer's adoption of hiUside soll conservation practices on the irrip.ted plots. Once irrigation entered the local faminl systeIn, with radically improved productivity of the land and increased benefit from soil ccmservatioD. the farmers maintained soU conservation spontaneously, even when project monitorial became lax. Another iDnovation of PIRENA was a creative administrative arrangement. Although the director of FIRENA and many of the project technicians are employees of the SEA, which continues to pay their salaries, the project agteCmerlt places their day to day operations under the authority of the localIunta. The project funds come from USAIDts P1.480 funds, which are lenerated by the local ale of surplus fooel. This money is passed to the Controlarfa General de laRepl1blica Dominicana and is under the budleta.ry authority of the Technical Secretary of President Office (ST). The ST authorizes the ControJarfa to write cbects for the project. By-passing SEA, the funds are cIwme1cd directly to the Iunta controlled FlRENA office in San J0s6 de Ocoa•. This financial flow arrangement ancI lines of authority permit State employees to carry out major technical and ruanaprialmles without permitting Santo Domingo based ministry offices to delay or divert the flow of funds to the field prqject operation (Hemdndez, and Munay 1922). Epqd "'" AakuJturaI fbpglptlOD (FAO). PAO's proper resources avaitable for the DomiaicaD Republic are about USS1.S million a year enabling about three technical assistance pojects. As of 1993, the Chan:oal Study with CONATEP isongoinl. which investiptes: chaIcoal consumption in 1992; flow of charcoal transport; charcoal production capacity; ud balance of the consumption and production. Also FAO is preparing the Nizao VaJley Watershed project to restore the environmental damaae caused by the two larJe scale dam constructions in 1992. lAO NIp, Blur Watershed Intearated Refomtatl'D and ConseryatloQ PrQJa. Since 1992, FAO was preparing a project with four year duration and project cost amountinl to USS 8.7 million. The project will be executed by INDRHI with participation of DOP, SEA. and ADBSJO. The objectives of the project are: (a> reduction of soil erosion (estimated at 1254 tonslhalyear at bared land and 121 tonslhalyear at cultivated land) in the Nizao River watershed to protect nguey, and Aguacate dams by reforestation, agroforestation and construction of floods control works with local community participation; (b) improvement of agricultural productivity, creation of employments, formulation of communal organizations and improvements of basic services; and (c) protection of the remaining forests by establishing communal forests for sustainable resource utilization. Jagaq Igtcnatiogl CooperatioQ Alima weAl . 1apanese government had been discussing .. - with the lovemment about Nema valley project to be executed by INDRHI at total project cost of USSSO million for rehabilitation of salinated soil. A nCA ts expert sent to lNDRHI has been advising INDRHI to incorporate reforestation in the investments of dam constructions. 74 Aanex' DOMINICAN RRQBLIC ENYJRQNMEN'fAL JSSUFS PAPER FstJmated Costs or AttorestaioD and Watershed ManaftlDent &thpated Costs of AUorestatlgg aDd Watershed ManaftlDeat. The cost of protection forest in critical watershed bas been estimated at 0.35 million/ha, requiring an investment of USS30 miDion. ne number of peasant families engaaing in slash and bum agriculture is estimated at around 220,000 family. In order to stabilize these families, an investment of around USSI billion is required to convert about O.S million ha to sustainable agro/forestry systems over a 1()"20 year period on the basis of a US~,()()()"9,OOO investment per family as estimated by Plan Sierra. It is also estimated that around 0.25 million ha of energy forestation, with an investment of USS60 mOUon. would meet the projected deficit in fuelwood. In on:Ie! to supply die domestic demand for lumber substituting for cuneot imports (USS30 million annually), about 0.1 million ha should be planted over a 20 year period with a cost of USS 20 million. A compNbensive reforestation program and convenion to agro-f~ to be implemented over a 20 ya.r period would represent annual investment of USSSO mBlion in 50,00,() ha. Aside from this, it is considered that an additional one million ha should be reforested throuah plantation or JUI1ural reaeneratiOll for watershed protection and/or for production of wood products for ... expor PIa1ltation of this magnitude would require around US$2S0 JnilIioo. 1'1I0se programs would imply a sIwp departure from the current achievement: the recent rate of replanting is about SOO ba per year, and 10,000 ha have been planted as of 1989. There are diverainl opinions as to the extent of iJTevcrsible damaae which would preclude the reforestation opti~. and on how much watershed protection, fuelwood and lumber could be obtained by natural • zeaeaeratlon of degraded areas and sustained yield management of the remaininl forests.. In view of massive financial and administrative requirements of reforestation and conversion to apo-forestry, the option for natural regeneration needs further evaluation (Nelson .1990). . - 75 ADaex 10 • DOMINlCAN BEPllJLJC EfiYIRONMENTAL ISSUES PAPER 19stllgtlogs Bcqpogslble rOt Pptable Water. Senn. and SoUd Wate _ , Water IIQtIIIx aid !!lite water IrMtmegt. The Major institutions are: SecIeCary of Slate of PubIc Health (SBSPAS); Nationallnstitute for HydrauHc Resources (lNDRHI); National Institute for Potable Water and Sewers (lNAPA); Aquecluct and Scwer Corporation of Santo Domingo (CAASD) and Aqueduct IDd Sewer Corporation of Santiago (CORAASAN). Sccrctaa gf State of PgbUc Health (SfSpASl. ne first modem Dominican Jesislation reauladna potable water supplies was the Public Health Code, Law 4471 of 1956, whlcJa p.ve the SBSPAS control over potable water supplies and responsibility to determine the po1abUity stamIaIds. Any pubUc and private work related to water supply or waste disposal bad to have prior appnwal of SPSPAS. NetJswI'"",gte ror Uydraullc RIIQIII'CII IINDBBD. INDRHI wu created by the Law 6 or 1965. JNDJUI[ wu cbarpd 10 orpnize and repJate the exploitation of water supplies in cooperation with the Corporation of Industrial Promotion, the Dominican EIectrlcal CoJpondon. aad INAPA. Nat-'1962. Its primary mspoDsa"bilidesdare: formulatiOil of pllDs for was CRated .5994 of 'N'1tgtc for Nahlc Water . Smen IINAPA1. )NAPA suppIJ water by Law system an4 for the disposal of Hquid wastes Ia both rural and urban areas and execution of tbeIe pIaDS; aa4 establisbment of 1ariffs to finaDce potable supply and leW8Ie works. Also law 895' of 1963 p.ve JNAPA. responsibility for the NfOJeStation of watersheds to protect potable water nsource.. Agucc1gct I n Sewer Cot:goratIog or Santo DpmIpao (CAASDl and Aguedua ud Sarer CoQ1Ol'ltioP 01 SaptiaI9