Document of The World Bank Report No: ICR00001093 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-72070) ON A LOAN IN THE AMOUNT OF US$21.3 MILLION TO THE UNITED MEXICAN STATES FOR THE SECOND COMMUNITY FORESTRY PROJECT June 24, 2009 Sustainable Development Department Colombia and Mexico Country Management Unit Latin America and Caribbean Region CURRENCY EQUIVALENTS (Exchange Rate Effective July 11, 2008) Currency Unit = Peso 1.00 = US$0.097 US$ 1.00 = Pesos 10.307 FISCAL YEAR January 1 ­ December 31 ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy CDI Comisión Nacional para el Desarrollo de los Pueblos Indígenas (National Commission for the Development of Indigenous Communities) CELADE El Centro Latinoamericano y Caribeño de Demografía (Latin American Demographic Centre) CFP I Proyecto de Conservaci6n y Manejo Sustentable de los Recursos Forestales en México (First Community Forestry Project) CFP II Proyecto de Conservaci6n y Manejo Sustentable de los Recursos Forestales en México (Second Community Forestry Project) COINBIO Proyecto de Conservación de la Biodiversidad en Comunidades Indigenas( Indigenous and Community Biodiversity Conservation Project) CONABIO Comisión Nacional para el Conocimiento y Uso de la Biodiversidad (National Comission for Information and Use of Biodiversity) CONAF Consejo Nacional Forestal (National Forestry Advisory Group) CONAFOR Comisión Nacional Forestal (National Forestry Commission) CONANP Comisión Nacional de Areas Naturales Protegidas (National Council for Natural Protected Areas) EA Executing Agency EFC Empresa Forestal Comunitaria (Community Forestry Enterprise) Ejido Land reform block created in the 1930-1960 land reform FIRA Fideicomisos Instituidos en Relación con la Agricultura en el Banco de México (Agricultural Trust Funds of the Bank of Mexico) FONAES Fondo Nacional de Apoyo a las Empresas de Solidaridad (National Fund for the Support of Commercial Enterprises) FSC Forest Stewardship Council GEF Global Environment Facility GIS Geographic Information System GoM Government of Mexico IBRD International Bank for Reconstruction and Development INI Instituto Nacional Indigenista (National Institute of Indigenous Peoples) NAFIN Nacional Financiera (National Financial Agency) NGO Non-Governmental Organization NTFP Non-Timber Forest Product OTC Ordenamiento Territorial Comunitaria (Community Land-Use Zoning Plan) PIU Project Implementation Unit PRODEFOR Programa de Desarrollo Forestal (Forestry Development Program) PRODERS Programa de Desarrollo Regional Sustentable, implemented by SEMARNAP (Regional Sustainable Development Program) PROFEPA Procuradaría Federal de Protección del Ambiente (Federal Office of PSA Environmental Protection) Programa de Servicios Ambientales (Payment for Environmental Services Program) SAGARPA Secretaría de Agricultura, Ganadería, Desarrollo Rural, Pesca y Alimentación (Ministry of Agriculture, Livestock and Rural Development) SEMARNAT Secretaria de Medio Ambiente y Recursos Naturales (Secretary of Environment and Natural Resources) (2001 to date) SHCP Secretaria de Hacienda y Credito Público (Ministry of Finance) SNIF Sistema Nacional de Información Forestal (National Forestry Information System) SOE Statement of Expenditures Vice President: Pamela Cox Country Director: Axel van Trotsenburg Sector Manager: Ethel Sennhauser Project Team Leader: Robert R. Davis ICR Team Leader: Jeannette Ramirez ICR Author: Francis Fragano MEXICO Second Community Forestry Project CONTENTS Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph 1. Project Context, Development Objectives and Design............................................... 1 2. Key Factors Affecting Implementation and Outcomes .............................................. 6 3. Assessment of Outcomes .......................................................................................... 16 4. Assessment of Risk to Development Outcome......................................................... 27 5. Assessment of Bank and Borrower Performance ..................................................... 28 6. Lessons Learned........................................................................................................ 30 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners........... 32 Annex 1. Project Costs and Financing.......................................................................... 33 Annex 2. Outputs by Component.................................................................................. 34 Annex 3. Economic and Financial Analysis ................................................................. 38 Annex 4. Bank Lending and Implementation Support/Supervision Processes............. 42 Annex 5. Beneficiary Survey Results ........................................................................... 44 Annex 6. Stakeholder Workshop Report and Results................................................... 47 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR ..................... 48 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ....................... 52 Annex 9. List of Supporting Documents ...................................................................... 53 Annex 10. Sample of Subprojects................................................................................. 54 MAP A. Basic Information Community Forestry II Country: Mexico Project Name: (PROCYMAF II) Project ID: P035751 L/C/TF Number(s): IBRD-72070 ICR Date: 06/30/2009 ICR Type: Core ICR SEC.HACIENDA Y Lending Instrument: SIL Borrower: CRÉDITO PÚBLICO Original Total USD 21.3M Disbursed Amount: USD 21.3M Commitment: Environmental Category: B Implementing Agencies: Comision Nacional Forestal (CONAFOR) Cofinanciers and Other External Partners: B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 02/21/2003 Effectiveness: 07/15/2004 Appraisal: 03/03/2003 Restructuring(s): Approval: 12/09/2003 Mid-term Review: 09/18/2006 10/02/2006 Closing: 06/30/2008 12/31/2008 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Satisfactory Risk to Development Outcome: Moderate Bank Performance: Satisfactory Borrower Performance: Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Satisfactory Government: Satisfactory Implementing Quality of Supervision: Satisfactory Satisfactory Agency/Agencies: Overall Bank Overall Borrower Satisfactory Satisfactory Performance: Performance: C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating Performance (if any) Potential Problem Project No Quality at Entry None i at any time (Yes/No): (QEA): Problem Project at any Quality of Yes None time (Yes/No): Supervision (QSA): DO rating before Satisfactory Closing/Inactive status: D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Forestry 60 60 Other social services 17 17 Sub-national government administration 23 23 Theme Code (as % of total Bank financing) Indigenous peoples 25 25 Land administration and management 13 13 Other environment and natural resources management 24 24 Other rural development 25 25 Participation and civic engagement 13 13 E. Bank Staff Positions At ICR At Approval Vice President: Pamela Cox David de Ferranti Country Director: Axel van Trotsenburg Isabel M. Guerrero Sector Manager: Ethel Sennhauser Mark E. Cackler Project Team Leader: Robert Ragland Davis Daniel R. Gross ICR Team Leader: Jeannette Ramirez ICR Primary Author: Francis V. Fragano F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The objective of PROCYMAF II is to asist indigenous communities and ejidos that own forests in priority regions of Durango, Guerrero, Jalisco, Michoacan, Oaxaca and Quintana Roo to improve the management and conservation of their forest resources and to generate alternative sources of income in a sustainable manner. Revised Project Development Objectives (as approved by original approving authority) ii (a) PDO Indicator(s) Original Target Formally Actual Value Values (from Revised Achieved at Indicator Baseline Value approval Target Completion or documents) Values Target Years 20 percent increase in net value of forest goods and services, Indicator 1 : produced by assisted communities and ejidos. 20 percent 36 percent increase increase in net in net value of value of forest Value forest goods and No net increase w/o goods and quantitative or services, produced project services, produced Qualitative) by assisted by assisted communities and communities and ejidos. ejidos. Date achieved 07/15/2004 06/30/2008 12/31/2008 Comments (incl. % 100% (outcome exceeds target by 50%) achievement) 30 percent increase in jobs available in assisted communities vs. Indicator 2 : control. 30 percent 27.2 percent increase in jobs Value increase in jobs No net increase w/o available in quantitative or available in assisted project assisted Qualitative) communities vs. communities vs. control. control. Date achieved 07/15/2004 06/30/2008 12/31/2008 Comments (incl. % 91% of target achievement) Indicator 3 : Significant increase in social capital in assisted communities Value no increase in social quantitative or 0 100% capital Qualitative) Date achieved 07/15/2004 07/15/2004 12/31/2008 Social capital strengthened via 243 participatory planning exercises, 353 Comments community bylaws for regulating forest/land use, 241 participatory RRAs, (incl. % training of 3,123 community members, 225 inter-community seminars and achievement) updating 203 forest/conservation plans iii (b) Intermediate Outcome Indicator(s) Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised approval Completion or Target Values documents) Target Years Indicator 1 : Input Indicator: 150 participatory planning exercises completed Value 150 participatory 243 participatory (quantitative All incremental. planning exercises planning exercises or Qualitative) completed completed Date achieved 07/15/2004 06/30/2008 12/31/2008 Comments (incl. % 161% achievement) Indicator 2 : Input Indicator: 48 community statutes drafted Value 48 community 353 community (quantitative All incremental. statutes drafted statutes drafted or Qualitative) Date achieved 07/15/2004 06/30/2008 12/31/2008 Comments (incl. % 735% achievement) Input Indicator: 160 communities that have completed or updated improved Indicator 3 : forest management and conservation plans. 160 communities that have 203 communities Value completed or that have completed (quantitative All incremental. updated improved or updated or Qualitative) forest management improved forest and conservation plans. Date achieved 07/15/2004 06/30/2008 12/31/2008 Comments (incl. % 127% achievement) Indicator 4 : Input Indicator: 9 payment for environmental services schemes in place. 12 pilot projects 51 payment for Value for payment for environmental (quantitative All incremental environmental services schemes in or Qualitative) services launched. place Date achieved 07/15/2004 06/30/2008 12/31/2008 Comments (incl. % 425% achievement) Indicator 5 : Input Indicator: 25 regional participatory committees launched or strengthened. Value 25 regional 30 regional (quantitative All incremental participatory participatory or Qualitative) committees committees iv launched or launched or strengthened strengthened Date achieved 07/15/2004 06/30/2008 12/31/2008 Comments (incl. % 120% achievement) Indicator 6 : Input Indicator: 6 State-level coordination subunits in place and functioning. 6 State-level 6 State-level Value coordination coordination (quantitative 3 Units subunits in place subunits in place or Qualitative) and functioning. and functioning. Date achieved 07/15/2004 06/30/2008 12/31/2008 Comments (incl. % 100% achievement) Indicator 7 : Input Indicator: 48 inter- and intra-community seminars held. Value (quantitative All incremental 48 seminars held. 225 seminars held or Qualitative) Date achieved 07/15/2004 06/30/2008 12/31/2008 Comments (incl. % 69% achievement) Input Indicator: 130 community forestry enterprises successfully launched or Indicator 8 : strengthened. 130 community 179 community Value forestry enterprises forestry enterprises (quantitative All incremental successfully successfully or Qualitative) launched or launched or strengthened. strengthened. Date achieved 07/15/2004 06/30/2008 12/31/2008 Comments (incl. % 138% achievement) Indicator 9 : Input Indicator: 118 zoning plans completed. Value 118 zoning plans 274 zoning plans (quantitative All incremental. completed. completed or Qualitative) Date achieved 07/15/2004 06/30/2008 12/31/2008 Comments (incl. % 232% achievement) Indicator 10 : Input indicator: 80 feasibility studies completed Value 80 feasibility 176 feasibility (quantitative All incremental. studies completed. studies completed or Qualitative) Date achieved 07/15/2004 06/30/2008 12/31/2008 Comments 220% v (incl. % achievement) Indicator 11 : Input Indicator: 150 professionals trained and added to the Roster. 150 professionals 448 professionals Value trained and added trained and added (quantitative All incremental to the to the PROCYMAF or Qualitative) PROCYMAF II II Roster Roster. Date achieved 07/15/2004 06/30/2008 12/31/2008 Comments (incl. % 299% achievement) Indicator 12 : Input Indicator: 240 professionals completing advanced training. Value 240 professionals 255 professionals (quantitative All incremental. completing receiving advanced or Qualitative) advanced training. training. Date achieved 07/15/2004 06/30/2008 12/31/2008 Comments (incl. % 106% achievement) Indicator 13 : Input Indicator: US$2.3 million invested in non-timber forest products. US$2.3 million Value US$5.62 million invested in non- (quantitative All incremental. invested in non- timber forest or Qualitative) timber forest products. Date achieved 07/15/2004 06/30/2008 12/31/2008 Comments (incl. % 244% achievement) Indicator 14 : Input Indicator: 25 associations successfully launched or strengthened. 25 associations 41 associations Value successfully successfully (quantitative All incremental. launched or launched or or Qualitative) strengthened. strengthened Date achieved 07/15/2004 06/30/2008 12/31/2008 Comments (incl. % 164% achievement) Output Indicator: 80 community statues adopted by community or ejido Indicator 15 : assembly. 80 community 353 community Value statues adopted by statutes adopted by (quantitative All incremental. community or community or ejido or Qualitative) ejido assembly. assembly Date achieved 07/15/2004 06/30/2008 12/31/2008 Comments (incl. % 735% achievement) vi Output Indicator: 75,000 ha receiving independent, performance-based Indicator 16 : certification. 75,000 ha 90,920 ha receiving Value receiving independent, (quantitative All incremental. independent, performance-based or Qualitative) performance-based certification certification. Date achieved 07/15/2004 06/30/2008 12/31/2008 Comments (incl. % 120% achievement) Indicator 17 : Output Indicator: 12 pilot projects for environmental services launched. 12 payment for Value 51 payment for environmental (quantitative All incremental. environmental services schemes or Qualitative) services launched in place. Date achieved 07/15/2004 06/30/2008 12/31/2008 Comments (incl. % 425% achievement) Output Indicator: 12 associations and 65 community enterprises functioning Indicator 18 : three or more years after launch. 8 associations, 39 12 associations community and 65 community Value enterprises enterprises (quantitative All incremental. functioning three or functioning three or Qualitative) more years or more years after (excluding 2008 launch. and 2009) Date achieved 07/15/2004 06/30/2008 12/31/2008 Comments Percentage not conclusive. 61 enterprises and 39 associations operating at close (incl. % of project, but prior to 3-year evaluation point. achievement) Indicator 19 : Output Indicator: 800,000 ha of forest area under improved management. 800,000 ha of 913,000 ha. of Value forest area under forest area under (quantitative All incremental improved improved or Qualitative) management. management Date achieved 07/15/2004 06/30/2008 12/31/2008 Comments (incl. % 104% achievement) Indicator 20 : Output Indicator: 350,000 ha of ejido forest lands under zoning plans. 350,000 ha of Value 1,783,574 ha of ejido forest lands (quantitative All incremental ejido forest lands under zoning or Qualitative) under zoning plans plans. Date achieved 07/15/2004 06/30/2008 12/31/2008 vii Comments (incl. % 509% achievement) G. Ratings of Project Performance in ISRs Actual Date ISR No. DO IP Disbursements Archived (USD millions) 1 06/18/2004 Unsatisfactory Unsatisfactory 0.00 2 06/29/2004 Unsatisfactory Satisfactory 0.00 3 06/30/2004 Satisfactory Satisfactory 0.00 4 12/20/2004 Satisfactory Satisfactory 0.21 5 05/13/2005 Highly Satisfactory Satisfactory 1.40 6 12/28/2005 Satisfactory Satisfactory 3.73 Moderately 7 06/30/2006 Satisfactory 7.50 Unsatisfactory 8 10/27/2006 Moderately Satisfactory Satisfactory 8.43 9 10/31/2006 Moderately Satisfactory Satisfactory 8.43 10 05/18/2007 Moderately Satisfactory Satisfactory 8.43 11 12/20/2007 Satisfactory Satisfactory 13.85 12 06/11/2008 Satisfactory Satisfactory 15.82 13 11/30/2008 Satisfactory Satisfactory 17.96 H. Restructuring (if any) Not Applicable viii I. Disbursement Profile ix 1. Project Context, Development Objectives and Design Sector Background Mexico ranks eleventh worldwide in forest cover, with more than 65.6 million ha of forests ­ about a third of which are considered commercially viable. Despite this vast resource, only 9 million ha are managed for production, and the country is a net importer of wood products. Moreover, 55 percent of the 13 million inhabitants living in the forests suffer from extreme poverty. About 10,000 indigenous communities and ejidos1 own around 65 percent of the country's forests. Yet most lack the capacity needed to manage their forests sustainably and thereby generate badly needed employment, ensure the protection of biodiversity and watersheds, and combat climate change by reducing deforestation and degradation. The country's forests are grouped into two major formations; about half are found in the rugged temperate pine and oak forests in the mountain ranges in the east and west, with the remaining half in the lowland tropical forests of the Atlantic and Pacific. With its wide range of ecosystems, species richness is expectedly high and the country ranks fourth worldwide in terms of its overall biological diversity. Officially around 300 thousand people are employed in the forest sector, but in reality the number is probably much higher including informal employment. Forestry activities account for only 1.8 percent of GDP and the country imports most of its wood products (including paper) from the United States, Chile and Uruguay2. Official rates of deforestation for Mexico in 2008 were moderately high; at about 330 thousand ha annually (or about 0.5 percent). The major drivers for deforestation are forest conversion to agriculture and pasture in the lowland areas; though deforestation is found in the uplands as well. Although deforestation and land-use change is illegal, the government has yet to find the means to control it. Forest degradation is also high; estimated at approximately 457 thousand ha annually (0.7 percent). Causes of degradation include over logging, illegal logging, high grading, bad management, forest grazing, pests, fires and other human impacts. Government's Actions. Prior to the 1992 Forestry Law, all of Mexico's forests were managed as concessions, without regard to actual land ownership. Concessions were granted by the government and managed by private firms. Indigenous communities and ejidos had no rights to manage their own forests, harvest timber or generate revenue from forestry activities. This situation discouraged good forest management by both concessionaires and the communities; and encouraged over-exploitation by the former and illegal logging by the latter. Due to long rotation periods in some forest ecosystems (70 years or more), significant areas of forest are still under stocked due to past over cutting and other abusive practices ­ and it will take many decades more for them to recover fully. 1 Communities and ejidos are land holdings with either indigenous or non-indigenous members who have rights, stipulated in law, to communal resources under which an individual family has a right to an individual plot of land allocated formally by the community as well as access to communally owned lands (often forest lands, pastures and waterways). 1 1.1 Context at Appraisal At the time of appraisal, the first Community Forestry Project (CFP I) was in its final stage of implementation. The CFP I had been successful in increasing the capacity of communities/ejidos to make sound decisions and to raise living standards through improved forest management. Moreover, the project helped forest owners, producers and policymakers create a shared vision for poverty reduction in rural areas through sustainable forest management. Nevertheless, deforestation and forest degradation in areas untouched by the CFP I were extremely high, with estimates of national forest loss ranging from 250,000 ha to 1.5 million ha annually ­ mostly due to their conversion to cropland or pastures. The total cost of natural resource and environmental depletion was estimated at about 10 percent of GDP. Assuming a constant rate of deforestation, half of Mexico's forests could disappear within 42 years. Indigenous people from communities are among Mexico's poorest people. At the time of appraisal, a CELADE report showed that 81 percent of indigenous people in Mexico live below the poverty line, versus 18 percent of the non-indigenous population. Many comuneros and ejidatarios are subsistence farmers, planting maize, beans, chili's and other crops on hillsides. While most of Mexico's forests (65%) are owned by indigenous communities and ejidos, most still lack the organizational and technical capacity to manage them sustainably in order to generate revenues. Consequently, rural areas suffer disproportionately high rates of migration to urban areas and to other countries. Until 2000, most regulatory issues pertaining to forestry in Mexico were handled by SEMARNAT, and its enforcement arm, PROFEPA. In April 2001, the GoM created the National Forestry Commission (CONAFOR) with a broad mandate to promote sustainable production of forests and conservation of forest resources based on a Strategic Forestry Program with a 25-year horizon. CONAFOR's charter mandated it to: (a) stimulate the organization of forest producers and assist them in the formation of associations and (b) promote production forestry to generate employment in forested communities. The creation of CONAFOR was a strategic move by the government aimed at reversing the trend of natural resource depletion and to turn a national liability into a productive asset. SEMARNAT and PROFEPA remained responsible for enforcement of environmental legislation and the National Biodiversity Council (CONABIO) was responsible for assuring conservation and sustainable use of biodiversity. In December 2002, Congress approved a forestry law, which provided a framework for long-term planning efforts in the sector, primarily by strengthening and decentralizing institutions charged with protecting and managing forests. Rationale for Bank Assistance. The first IBRD effort, the US$15 million Community Forestry Project, 1997 to 2003 (P007700) proved highly successful in developing and piloting new approaches to community forestry in the states of Oaxaca, Guerrero and Michoacán, and was considered a good candidate for scaling up. A larger community forestry project was also consistent with the 2002 Mexico County Assistance Strategy (CAS). The CAS focused on balancing growth and poverty reduction with environmental protection, stressing the country's needs to strengthen natural resource conservation and management both to preserve environmental quality and to provide a more stable source of income for forest owners. The adoption of the World Bank Forest Policy (OP/BP 4.36) in November 2002 provided a sound basis for proactive engagement with client countries to address forest management, conservation and sustainable development. The policy encourages the incorporation of forest issues in the CAS 2 and addresses the cross-sector impacts on forests as well as providing guidance for lending for forestry and conservation projects. It also encourages community forestry for addressing social and poverty issues and the use of certification as a means of assuring environmental quality. 1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) The objective of Second Community Forestry Project (CFP II) is to assist indigenous communities and ejidos that own forests in priority regions of Durango, Guerrero, Jalisco, Michoacán, Oaxaca and Quintana Roo to improve the management and conservation of their forest resources and to generate alternative sources of income in a sustainable manner. The project's specific objectives were: (i) to strengthen community institutions by means of the consolidation of social capital and management capacity to improve the benefits flowing from use of forest resources; (ii) to strengthen technical and administrative capacity of ejidos and communities for the development of local and regional productive processes; (iii) to identify and develop investment alternatives and productive diversification for communities and ejidos, and to promote local and regional arrangements to facilitate access by these communities to schemes for payment for environmental services. The project's key performance indicators for outputs and outcomes were included in the PAD, as follows: (i) 20 percent increase in the value of forest goods and services, produced by assisted communities and ejidos; (iii) 30 percent increase in jobs available in assisted communities vs. control; (iii) Significant increase in social capital in assisted communities; (iv) 80 community statutes adopted by community or ejido assembly; (v) 75,000 ha receiving independent, performance-based certification; (vi) 9 payment for environmental services schemes in place; (vii) 12 associations and 65 community enterprises functioning three or more years after launch; (viii) 800,000 ha of forest area under improved management; and (ix) 350,000 ha under zoning plans. 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification The PDO remained relevant throughout the project's tenure and did not change. There were no changes in indicators. 1.4 Main Beneficiaries The primary target group of the project comprised poor indigenous and non-indigenous people from communities and ejidos (comuneros and ejidatarios) in forested areas in the states of Durango, Guerrero, Jalisco, Michoacán, Oaxaca, and Quintana Roo. The areas were selected on a basis of the presence of high value standing forest resources owned by indigenous communities or ejidos. CFP I assisted approximately 300 communities and ejidos in the states of Guerrero, Michoacán and Oaxaca. At the time of the appraisal, it was expected that the second project would assist an additional 200 communities and ejidos on a demand-driven basis, and continue assistance to some of the 300 original communities. Private technical professionals and service provider firms also benefitted from the program. They received scholarships and grants to participate in a "Continuing Education Program" to update and/or diversify their skills, thereby enhancing the range of technical services available to assist communities and ejidos. 3 CONAFOR benefitted from the project through strengthening the government's approach to rural development, forest management, and environmental stewardship. Field personnel from the project staff (promotores) worked directly with the communities and ejidos, to help build capacity and guide community forestry development activities. They also helped to coordinate activities between the project and other CONAFOR field programs, such as PRODEPLAN and ProArbol. 1.5 Original Components (as approved) The project had five components: (i) Social Capital Strengthening; (ii) Forest Resources Management Technical Strengthening; (iii) Diversification and Investment; (iv) Institutional Strengthening; and (v) Project Management. Total project costs at appraisal amounted to US$28.9 million (US$21.30 million IBRD and US$7.60 million GoM). Component A. Social Capital Strengthening (US$4.80 million; 16.6% of total project cost) The general objective of this component was to strengthen the capacity of communities and ejido to take decisions, particularly regarding natural resource management. It included: (a) forming and strengthening Regional Participatory Committees or other regional participatory fora and providing support for their meetings; (b) conducting Rapid Rural Appraisal exercises in which specialized consultants hold workshops in communities and ejidos to help them to become aware of their main problems and to set priorities; (c) inter-community seminars which are designed to assist communities of different levels of development to define common goals and share their experience in achieving them; (d) development of community regulations in which specialized consultants assist communities in drafting by-laws for community governance; (e) and supervisory activities by project staff. Component B. Forest Resources Management Technical Strengthening (US$12.39 million; 42.9 % of the total project cost) The objective of this component was to assist the ejidos and communities to improve the forest management practices by providing tools as well as to create an enabling setting for them to derive economic benefit from forestry activities through training and studies. Under subcomponent 1 of component B, the project would respond to community demands to: (a) contract specific studies to identify alternative resources for the diversification of production and assist communities and ejidos in decision making; (b) provide specialized consulting services to carry out land-use zoning in accordance with community goals and available resources; (c) conduct studies and make recommendations for the strengthening of community enterprises; (d) provide studies and recommendations for the development of inter-community associations; (e) contract feasibility studies for non-timber forest products; (f) specialized courses for human capital development including courses on identification and management of conflict; and (g) offer courses to train community/ejido forest technicians. Under subcomponent 2, the project would strengthen and diversify the supply of professional services through courses. Under sub- component (3) of this component, forest management manuals would be produced for each participating state covered by the project. Under subcomponent (4) of this component, the project would support specialized technical assistance teams to support communities. Component C. Diversification and Investment (US$3.60 million; 12.5 % of the total project cost) The objective of this component was to promote diversification of the income sources of the community and ejido beneficiaries. Under subcomponent 1, the project would: (a) support the diagnosis and analysis of potential investments, and (b) invest in subprojects in ejidos and communities. Under sub-component 2, the project would carry out studies and design payments for environmental services schemes. The project supported feasibility studies in light of the subsequent investments in viable subprojects; however, the finance allocation of the component 4 was relatively small as CFP II was not intended to be a major source of investment finance as other sources were available for this purpose. Any financing for actual investments made under the project would be complementary to financing from other sources including: (a) other government programs such as PRODEFOR, (b) community funds, (c) private donations. Component D. Institutional Strengthening (US$2.70 million; 9.3 % of the total project cost) The objective of component D was to provide support for a project subunit coordination team in each participating state and for basic goods and services for the implementation of the project including vehicles (not financed by the loan), information technology for the subunits in the states, training and support baseline studies of environment and social relations that will provide a basis for monitoring and evaluation of project advances. It would also finance strategic studies in each of the participating states proposed by CONAFOR and approved by the Bank. Component E. Project Management (US$3.10 million; 10.7 % of the total project cost) The objective of this component was to provide support for central project implementation unit and annual financial audits. 1.6 Revised Components Not applicable (no revisions) 1.7 Other significant changes During the execution of this Project, one amendment, two reallocations and one extension were granted as follows: Amendment and Reallocation: At the request of the borrower, the Loan Agreement was amended on October 25, 2007. The amendment included the following changes: Increase the disbursement percentage in accordance with country financing parameters from 83% to 100% under all disbursement categories; Include an investment category for "operating costs" in order to include operating costs required for the Project; Reallocate loan proceeds as follows: of the US$2.0 million from Category 2 (Consultant Services) US$1.5 million distributed to Category 3 (Training, Workshops and Regional Committees) and US$0.5 million to Category 9 (Operating Costs). Transfer US$1.5 million from Category 8 (Unallocated) to Category 5 (Investments Subprojects) and US$0.5 million to category 9 (Operating Costs). Amend the project agreement schedule, Section 1, Part B.2 to say that goods and works for investment subprojects estimated to cost less than US$100,000 equivalent may be procured in accordance with commercial practices of the community and ejido, acceptable to the Bank and described in the Operational Manual. Project extensions: The project had one extension for six months, to December 31, 2008, in order to complete the original project objectives. Reallocation: A request from the borrower to reallocate funds among disbursement categories was approved in October 2008 to increase funds available for technical assistance, training, and community subprojects. Proceeds from categories 1, 2, 3, and 9 were transferred to categories 4 and 5 in the amount of US$1.7 million. The transfer was logical, as more funds were needed to 5 support increasing numbers of communities and ejidos that were now ready to undertake more complex investment subprojects. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry Project Preparation. The project was well conceived and had a sound technical design that targeted the issues and was based in part on the experiences and lessons learned during the implementation of the first IBRD Community Forestry Project (US$15 million), as well as those highlighted in the Bank's forest sector review of 1995. Project preparation was supported by a PHRD grant (US$372,000) and CONAFOR conducted a social evaluation and produced a Development Plan for Indigenous Peoples, which included the requisite consultations. The project expanded the geographic coverage over the first project to include the states of Jalisco, Durango and Quintana Roo (as well as Oaxaca, Guerrero, and Michoacán). The primary target group of the project was poor indigenous and non-indigenous people from communities and ejidos (comuneros and ejidatarios) in forested areas in the states. The areas were selected on the basis of the presence of high-value standing forest resources owned by indigenous communities or ejidos. At the time of the appraisal, it was expected that this project would assist 200 communities and ejidos on a demand-driven basis, and continue assistance to some of the 300 original communities from the first project. The Bank preparation team was composed of forestry, environmental, social, and economic experts, as well as procurement and financial management specialists. The FAO CP played an important role in providing technical experts to work side-by-side with national counterparts in project formulation. Project Design. The underlying premise of the project's approach was to empower indigenous communities and ejidos to plan, organize and implement forestry and related activities, while respecting traditional forms of governance and community management. Other design elements supported this principle. For example, technical and organizational support helped to build capacities at the community level and to strengthen self reliance. Technical service providers reported directly to communities, rather than to the PIUs, to ensure ownership of activities. Communities were required to co-finance technical assistance and investments. Moreover, all major decisions regarding project activities had to be ratified by community assemblies and validated at the regional level. The project sponsored regional inter-community fora to help communities create alliances needed for cooperative efforts. Regional fora promoted community engagement with state and federal governments, for the identification of needs and priority setting for assistance programs. At the regional level the project created permanent venues in all six states (Regional Participatory Committees) for the identification of community needs and concerns, to solicit support, and to obtain more information about the project. The committees included key stakeholders (community/ejido leaders and comuneros) technical service specialists, NGOs and CONAFOR staff and project personnel, SEMARNAT and others. Other program personnel, such as those from COINBIO participated also. The events were organized with the support of the promoters of the project, who distributed invitations to the meetings. (During the meetings promoters were also assigned to work with specific communities.) 6 A call for proposals (RFP) was published in state newspapers and internet to invite communities/ejidos to present technical proposals for project funding. Dissemination of the RFPs was also carried out through the regional fora and local radio, sometimes in the native dialect. Participating communities (sometimes with help from the TSPs) prepared proposals for technical assistance activities or productive investment subprojects. At the end of the call for proposals, the state PIUs carried out a validation process of each proposal in the Regional Participatory Committees. The social validation included (i) a review of the activity's potential contribution to the economic and social development of the country (ii) its contribution to resolve and avoid conflict within or among communities and (iii) its environmental sustainability. The proposals were then submitted to a technical committee of CONAFOR staff specialized in environmental, social and economic concerns for evaluation and eligibility for funding through the project. SEMARNAT reviewed project proposals to screen them for adverse environmental impacts. The final approval of the proposals was made by a Committee composed of the Regional Manager of CONAFOR, and representatives from the PIU, SEMARNAT, the state government and the beneficiaries of the Program designated by the Regional Participatory Committees. The results were published by the State Approval Committee in state newspapers, and posted on CONAFORs webpage and in the regional venues. At the community level (as a result of the regional fora) project promoters received invitations to participate in community assemblies. There, they provided detailed project information to the entire community about the project. This direct dialogue with the communities helped to develop trust and to ensure that the all members of the community had the opportunity to voice concerns or learn about the project directly. When communities decided to participate in the project, the community representative would sign a framework agreement (convenio de concertación) with CONAFOR, which was conditional on its approval by the community assembly. Community assemblies also were required to approve project proposals for their communities. Documentation certifying approval by the community comprised an important part of the proposal package. The design specified that during the execution of projects, communities would participate directly, usually with the guidance of a technical service provider of their choice, and with ongoing overall supervision of the state PIU promoters. This approach helped to ensure the ownership of the project activities by the communities and enhance their capacity for making decisions at the community level. Communities in their early stages of development were eligible for direct assistance to help them become more organized, so that they could eventually take on more complex activities and investments. Community-to-community outreach was also included in the design, and helped to demonstrate best practices and disseminate lessons learned directly by other project beneficiaries. Beneficiary co-financing was required. However, the project design allowed for the less developed communities to provide lower amounts of co-financing for technical assistance activities (below). Subproject co-financing was set at 50% (1:1) for all community types. 7 Community types, definitions and counterpart-financing requirements Type of Definition of Type Community Counterpart Community Required for TA I Owners of commercially viable forest stocks but lacking 10 percent authorized FMPs. I Owners of forest stocks practicing forestry through 20 percent concessions to third parties without participating in management. III Owners of forest stocks with authorized FMPs involved in one 25 percent or more phases of forest management. IV Owners of forest resources who add value to forest products 30 percent and market them directly. Technical Service Providers (TSPs) were both beneficiaries and part of the project implementation design. These private technical consultants (individuals, firms and NGOs) benefitted from the project by receiving training and certification, which enabled them to become more effective in working with indigenous people and in community forestry. Once the TSPs had successfully passed the training, they were included on a roster of qualified service providers available for eligible project activities. Annual recertification was required and TSPs could be dropped from the roster if they did not re-certify or performed poorly. This TSP roster was made available to the communities and ejidos to choose the person or firm most qualified based on their specific needs for a project activity. The communities sought TSP assistance for drafting community bylaws, conducting participatory rural appraisals, land-use zoning plans, NTFP studies, forestry plans, agriculture, finance and administration, industrial security, sociology, marketing etc. Service providers were also trained to recognize, assess and resolve community conflicts. TSPs reported directly to the communities with whom they worked, while the administration of the contract was with the PIU in CONAFOR. The authorization of payments to TSPs was made by the communities to CONAFOR, once they were satisfied with the delivery of the final product or service. The project design designated CONAFOR as the primary executing agency, for which a separate "Project Agreement" was formalized between the Bank and CONAFOR. The project was largely decentralized with a PIU established in each of the six target states, along with a small administrative and technical unit in CONAFOR's headquarters. The state PIUs conducted the day-to-day activities with the communities and with CONAFOR's regional offices. Promoters assigned to the PIUs worked extensively in the field to initiate and maintain a physical presence on site with the communities. Experienced professional foresters and natural resource professionals were contracted as state coordinators, who provided the overall leadership and vision for the PIU management. The state coordinators also engaged with state forestry/environment programs, SEMARNAT and other CONAFOR programs, to ensure a coherent approach to assisting the beneficiary communities. Coordination with other projects. The project was partially blended to the IBRD GEF Indigenous and Community Biodiversity Conservation Project (COINBIO), which had the development objective "... to achieve more effective biodiversity conservation in the states of Oaxaca, Michoacán, and Guerrero by strengthening the capacity of indigenous and ejido communities to manage and protect their biological and cultural resources based on traditional values and practices". The two projects coordinated activities to ensure coherency in their approach to communities and to prevent the duplication of efforts. State project personnel from the IBRD project participated in the review of proposals for COINBIO and exchanged information 8 routinely. As a result of CONAFOR's increased interest in community forestry, it adopted the COINBIO activities after closure. The project also coordinated with the Mesoamerican Biological Corridor project, which was active in Quintana Roo. Risk Assessment. The risks identified during the preparation were i) expanding the marginalization of groups in certain communities; (ii) deepening of existing inter-and intra- community conflicts; (iii) marginalization of the younger population in indigenous ejidos; (iv) creation or deepening of conflicts in ejidos and communities based on administrative problems; (v) forestry technical service providers will deliver low quality technical assistance and training in the forestry management plans. To mitigate the first risk the population of all the agrarian communities were informed about the project activities. The second risk was mitigated by establishing conflict resolution venues promoted within the agrarian groups. On a very selective basis, the project also encouraged land and boundary surveys to delineate community land holdings to help alleviate inter-community conflicts. To mitigate the third risk, conflict resolution fora were promoted within the agrarian communities. The fourth risk was mitigated by technical assistance and capacity building activities for management and accounting issues and transparency and accountability practices within the agrarian groups. That risk was mitigated through coordinated efforts with PRODEFOR to jointly raise quality standards and mechanisms for monitoring and evaluation of the work carried out by forestry technical service providers (with PRODEFOR and CFP II resources) and within the Regional Technical Committees. Borrower Commitment. Borrower commitment was demonstrated through the successful implementation of the first Community Forestry Project (1997-2003) and Mexico's National Forestry Strategy which incorporated the participatory approach of the first community forestry project. In 2001, the government elevated the role of forestry by establishing the autonomous agency CONAFOR (The Comision Nacional Forestal to manage and oversee the country's forestry sector. In recognition of the growing importance of community forestry, CONAFOR established the "community forestry" unit in 2006, which now provides a permanent institutional platform for addressing the issue. 2.2 Implementation The loan agreement was signed on December 9, 2003, and the project became effective on July 15, 2004. The project was allocated MX$35 million at signing, and in September 2004 received an additional MX$35 million. During the initial six months, the project prepared an operational manual, which was approved in July 2004. Prior to the Bank's approval of the operational manual, which was a condition of effectiveness, the project was rated unsatisfactory for development objectives3. Once the manual was approved, both the development objectives and implementation progress were upgraded to satisfactory. Even though the project had not been effective for about 6 months, in the meantime CONAFOR had done a good job in identifying qualified project staff for the state PIUs, which facilitated rapid implementation thereafter. Following effectiveness, implementation progress began to accelerate through its peak in May 2005, when it was rated highly satisfactory. Paradoxically, later that same year, project support 3 IP was considered unsatisfactory until an advanced draft of the operational manual was delivered in June 2004, when it was upgraded to moderately satisfactory. Once the manual was approved the following month, IP was then upgraded to satisfactory. 9 within CONAFOR softened with the new authorities and implementation slowed as a result of the PIU's relocation to CONAFOR's headquarters in Guadalajara. While the move was necessary to ensure the project maintained close ties with CONAFOR, it was disruptive and some of the staff left the project. Around the same time, the project's budget was reduced and there was a downturn in performance as a sizable disbursement lag began to accumulate. Later in the year, the Project Coordinator resigned and in June 2006, IP was downgraded to moderately unsatisfactory. In discussions between the Bank Team and the new authorities, it became clear that CONAFOR wanted to mainstream the project into its main field program, PRODEPLAN, and enforce operational procedures consistent with CONAFOR's other programs. As this would most likely have compromised the project's community-driven approach to forestry, the Bank team did not agree with the proposal. Moreover, the strong demand for the project by communities and ejidos made CONAFOR reluctant to impose changes to one of its most popular programs. During this period, the Bank team continued with its routine supervisions and played an important role in advocating the project's participatory approach with the CONAFOR authorities. The overall lackluster project performance persisted through early 2007, until a more interested and sympathetic management entered CONAFOR with the new president's administration. Thereafter, performance began to steadily improve. The new authorities took a special interest in the project and the community approach and maintained the operational procedures agreed to in the operational manual. They were also quick to follow up on the preliminary MTR recommendation to authorize additional promoters for each of the state's PIUs, needed to increase the project's outreach to the communities. Later in 2007, CONAFOR requested an amendment to the loan agreement to boost implementation, which included inter alia an increase in the IBRD disbursement percentage to 100% and increasing the ceiling for prior review of investment subprojects to US$100,000 (see section 1.7 for details). Following the approval of the amendment, there was a dramatic uptick in both performance and disbursements. A single 6-month extension gave the project the small amount of additional time it needed to make up for earlier delays and by closure on December 31, 2008, the full amount of the loan was expended. Personnel Changes ­ There were three coordinators during the project's tenure. The resignation of an experienced project coordinator (forester) in 2005 was a particular setback to the program, as was his replacement, who lacked forestry credentials and community development experience. However, in 2007, another highly qualified coordinator (and forester) was recruited, and proved instrumental in bringing the project through to successful closure. There were other changes in personnel at the technical and state levels. However, these did not materially affect the project implementation. MTR. The project Mid-Term Review (MTR) was initiated in 2006. However, due to delays in the contracting of the external evaluators for social, environmental and economic themes, and delivery of their reports, it was not concluded until April 2007. The main findings of the exercise were that the project had made substantial progress against the target indicators, showed it was on track for a successful closure, and validated the overall participatory community-driven approach. Important recommendations included and acted upon by the project were inter alia: increasing the number of promoters in the state PIUs to enhance project outreach; increasing the threshold for prior review of subprojects to US$100,000; improve TSP diversity to include more administrative themes; monitoring the evolution of the TSP approach to ensure it did not create dependencies; updating the typology classification; and preparing for a third phase of the project. 10 Risk Status. During 2005, as implementation began to flag, the project was considered at risk, due to the substantial disbursement lag (42%). The team urged CONAFOR to process outstanding replenishment requests to cover ongoing project activities. However, little progress was made until the change of administrations in early 2007. Shortly thereafter, implementation began to improve as did disbursements. An amendment to the LA that same year was instrumental in correcting both implementation and disbursement issues (see section 1.7). 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization M&E design ­ The project design included performance and impact indicators to monitor the Project's objectives. During the implementation, no indicators were changed. Most of the indicators were simple and straightforward, with the exception of the indicator to measure "12 associations and 65 community enterprises functioning three or more years after launch." Because the operation was executed over four and a half years, only those enterprises and associations created in the first 18 months of the project qualified for reporting, while in reality many more were created over the following 3 years of the project. Though in retrospect targets for indicators may appear conservative, they were, in fact, based on lessons learned and the performance of the first Community Forestry Project to ensure they were realistic and achievable. M&E Implementation ­ In general, the PIU took measurements during the entire project cycle and updated the table of performance indicators annually, with the exception of 2005. During the field visits and supervision missions, physical inspection was carried out by the Bank team to verify progress. Data for indicator measurements are considered good. The Bank requirements for project monitoring stimulated CONAFOR to develop a more comprehensive and robust database monitoring and reporting system for the Community Forestry Directorate and project. By project closure, they had developed a comprehensive information system (SISCO) with intranet connections to the state PIUs for data transfer and use and VPN connections for the proposed six states for a next phase. SISCO is now linked to INEGI (the National institute of Statistics) and the National Agrarian Registry for cross referencing project information with other national and local statistics. The INEGI data is available for 180,000 locales and 32 states. The National Agrarian Registry contains the latest agricultural census data for 30,000 different properties. SISCO contains listings for 31 indigenous ethnic groups, 60 financial institutions, and approximately 1,600 registered consultants. Project data includes a registration module for all project-financed proposals, co-financing information from states, information on project proponents, evaluations of project proposals, outputs, and other information. The database was developed in Foxbase and is able to download documents to Word and Excel, as well as print documents in official formats. Information can be sorted and classed for various analyses and are being used for the design of new programs, as well as the final evaluation. 2.4 Safeguard and Fiduciary Compliance Procurement. During the execution of the project four ex-post reviews were conducted by the LC1 procurement team, that covered all the entire life of the project; the first one in May 2006 covered the procurement plan 2005, the second one in November 2006 covered the contracts in the procurement plan for 2006, the third one carried out in January 2008 included the procurement transactions in the procurement plan for 2007 and the last one in October- 11 November 2008 covered the contracts in the final procurement plan. Three of the ex-post reviews included field visits to the subprojects in the participating States (Jalisco, Oaxaca and Michoacán). The conclusion of the ex-post reviews was always satisfactory and confirmed that the Coordination Unit for the Project and CONAFOR applied methods and procedures consistent with the legal documents and the procurement Guidelines. The Project had no cases of misprocurement. Financial Management. Two FM supervision missions were carried out in 2008 and one in 2009. Based on the mission findings it was concluded that CONAFOR complied with the Bank's FM requirements and provided adequate implementation support and oversight, contributing to the overall satisfactory financial management of the project. The Bank determined that FM arrangements were adequate to provide reasonable assurance that the grant proceeds were being used for the intended purposes. NAFIN, as financial agent, maintained records and accounts adequate to reflect the project's operations and financial condition (this included records and separate accounts for the Bank- financed projects under implementation). Internal control arrangements for the project fulfilled Bank requirements. The project was audited by an external private firm on an annual basis. Neither the auditors nor the Bank identified any major FM-related issues. The Bank FM team reviewed and commented on the Bank loan audit reports each year. Throughout the whole life of the project, CONAFOR prepared and submitted quarterly Financial Monitoring Reports (FMR) which were considered acceptable for the Bank. The main FM-related weaknesses identified were delays in the process of preparation and submission to the Bank of the Financial Monitoring Reports (FMRs), as well as delays in clarifying Bank's observations. Safeguards. Safeguard issues were rated satisfactory throughout project implementation. The Bank team included an experienced team of foresters, biologists, sociologists and anthropologists trained in Bank safeguards that contributed to the project's good compliance with Bank policies. Environmental Evaluation (OP 4.01, BP 4.01, GP 4.01). The project was classified as a Category B and its impacts considered positive, given its focus on expanding and improving environmentally- and socially-sustainable forest management and best management practices for other natural resource activities. Investments under the subprojects category focused on the development of community forestry through the regulated and sustainable use of timber and non-timber forest products. Investments involving the transformation of forests required official permits from SEMARNAT to ensure compliance with environmental standards. Through its participation in state committees, SEMARNAT screened proposals, identifying those too risky for implementation, needing environmental evaluations, or requiring mitigation measures. The project also complied with restrictions prohibiting activities in Natural or Protected Areas which were identified and mapped in the preparation-stage EA. Other investments, such as participatory planning, the strengthening of technical and organization capacities, the preparation of technical and economic feasibility studies and development of management plans were employed to help communities build the capacity needed to manage their resources in the long-term. Other instruments mainstreamed into community projects included the registration of wildlife management areas and setting limits for extraction of non-timber products. 12 Industrial operations improved environmental health, safety and labor standards by obtaining permits and training for the use, management, storage, and disposal of industrial chemicals. The World Bank supervision team included forestry and environmental specialists to supervise the screening of activities and compliance with the conditions established by the environmental authority, SEMARNAT. The team participated regularly in field visits and confirmed with other stakeholders and the beneficiaries that the environmental safeguards were being fulfilled. The experience in the application of the environmental safeguards was positive. Emphasis by the project in strengthening human and social capital in the ejidos and communities improved their capacity to evaluate, plan, manage and conserve the environmental resources within their domain. Additional environmental benefits were accrued through the restoration of degraded lands with native species and expanding biodiversity conservation, though community reserves, protection of riparian corridors, springs, and areas designated for ecotourism. Natural Habitas (OP 4.04, BP 4.04, GP 4.04). The protection of natural habitats was an important aspect of the project. The project design included a sector study that identified the main gaps for project interventions needed to ensure sustainable management of the native forests by country by ejidos and communities. Through the project, over 760 thousand hectares of new conservation areas were designated through the zoning plans as either community conservation areas or wildlife preserves. Beneficiaries were trained to become better stewards for the conservation and sustainable management of natural habitats as well. Finally, the project facilitated and catalyzed the protection of about 50 thousand hectares of natural areas through payments for environmental services schemes. Forestry (OP 4.36, GP 4.36). The project focused on improving forest management practices, diversification of forest use (including NTFPs), restoration of degraded lands with native species, and community conservation with indigenous communities and ejidos. During the execution of the project, best practice guides were developed for forest management practices, land-use zoning, protection of riparian areas, forest harvesting and roads. World Bank forestry specialists participated in the supervision missions and field visits to verify compliance with the forest policy. The project helped the beneficiaries achieve high standards in their forest management practices through: (i) building technical and organizational capacities; (ii) strengthening of community institutions, including the preparation or updating of the community regulation and bylaws that regulate natural resource use; (iii) the training of technical community members in land-use planning, forest and natural resource management, and (iv) by incorporating best practices into their forestry operations needed to meet certification requirements. The impact of these activities is reflected in the high number of approved forest management programs by the environmental authority (SEMARNAT), the 913,000 ha under improved management and the certification of over 90,920 ha under sustainable forest management by independent entities (Forest Stewardship Council). Indigenous Peoples (OD 4.20). The CFP II was conceived as an indigenous people's project given the high level of representation that these communities have in the target states. It was specifically designed to have a positive effect on indigenous peoples and indigenous communities. A sociologist or anthropologist from the Bank participated in the majority of missions and field visits to monitor compliance and provide guidance to the local team. 13 The basic strategy of the Project was to directly involve indigenous peoples in the management of their forest resources based on the principle of informed decision making. During preparation, consultations were carried out as a part of the social evaluation in compliance with OP 4.10. One of the principal aspects that resulted from the social evaluation was to identify the main socio- cultural and socio-economic characteristics of the indigenous peoples including levels of organization, typology of the communities, traditional knowledge regarding biodiversity conservation, and land tenure to ensure both cultural and environmental sustainability. The principal of free prior informed consultation was one of the principal factors included in the project as prerequisite for any financed activity. Socio-cultural values: The Project respected and included social-cultural values and traditional organizational practices of the ejidos and communities in the design of the Project, consequently strengthening its social capital and possibilities of success. The project has also worked to ensure that sacred places were protected, which frequently correlate with areas of high biodiversity, springs and other environmental services. 2.5 Post-completion Operation/Next Phase CFP II and the Mexican model of community forestry has been studied and emulated worldwide. The country is second only to Papua New Guinea in total area of forests under community management. In addition, Mexico has the highest levels of community certified forests and forests under improved management worldwide, providing a basis for their environmentally- and socially-sustainable forest utilization. The successful community-driven approach employed by the project is already being scaled up by CONAFOR to include six new states, as well as the six covered by the project. Discussions are ongoing at the time of the ICR between the Bank and the Government relative to possible assistance from the Bank in the new activities along with help in integrating them into an overall framework for addressing climate change mitigation and adaptation. A new challenge to be considered in a next investment would also be to increase the engagement and cooperation with other governmental organizations such as CONABIO, SAGARPA, CDI and SEMARNAT. Sustainability of the project activities is a function of institutional, economic, environmental, and social factors: Institutional. At closure, the project's activities were fully incorporated into CONAFOR's Directorate of Community Forestry (La Gerencia de Silvicultura Comunitaria), created in 2006, which received an allocation of MX$128.4 million from CONAFOR in 2009 for support to 1,380 proposals from 792 agrarian communities in the 6 project states and 6 additional ones, thereby scaling up community forestry efforts to 70% of all forested areas of the country. Beneficiary state governments allocated an additional MX$11.6 million while communities provided MX$201 million for sustainable forestry activities. CONAFOR also established the goals for the 2009 ­ 2012 period which include: 1000 rural communities in the process of developing their natural resources in sustainable ways, 3 million ha with community resource plans (OTCs), 350 special events to encourage inter- and intra-community resource use, 450 community regulations and bylaws approved, and 60 community technicians trained and responding to community forestry and natural resource needs. Economic. With 65% of the country's 21 million ha of productive forests located in community and ejido holdings and a strong domestic demand for wood products, the sector holds important opportunities for community forestry enterprises (EFCs). Nevertheless, imported wood products 14 from the U.S., Chile and Uruguay out-compete domestic wood sources in many areas of the country and in 2008 Mexico was a net importer of wood products. In order to regain market share, community enterprises have to become much more efficient and business oriented. The project provided the tools and training to many communities, which will help them increase efficiency. Project support helped communities and ejidos form cooperative arrangements. As a result, many are now working in joint ventures, which are helping to increase production volumes, distribute risks, and generate economies of scale. Since 2006, the Mexican government now requires the procurement of wood products only from certified sustainably managed domestic forests. This type of market incentive by the government provides an excellent though limited opportunity for encouraging sustainable forest management. Initiatives such as payments for environmental services, watershed protection, and carbon sequestration piloted by the project demonstrate how communities can generate income without capital, by simply maintaining and protecting the forest. For communities just beginning to enter the sector, such capital can be critical to help start or catalyze more substantive investments. Future efforts, such as payments for reductions in deforestation and [forest] degradation (REDD), will find an ideal terrain for testing and implementing the system in Mexico's forested ejidos and communities using the project's participatory and community-driven approach. Environmental. Environmental sustainability through the project's community forestry focus has been achieved through improved forest management over 913,000 ha where biodiversity is maintained in ecosystems of global importance. In addition, over 760 thousand hectares of new conservation areas were designated through zoning plans as either community conservation areas or wildlife preserves. The ecosystems targeted by the project are highly diverse, some of which include the largest number of pine species in the world and almost 130 species of oak.4 Highly threatened dry ecosystems and tropical areas were also conserved (a process strengthened by the GEF Indigenous and Community Biodiversity Conservation Project, TF 24372) and, in the case of the former, inadequately protected by the national system. Moreover, recent studies have shown that well-managed community forests have better protection levels and lower deforestation rates than poorly managed areas under protection by the national systems.5 Half of the certified community forests in the world are found in Mexico, which also has the second highest forest area under community ownership. Environmental sustainability is enhanced by the formal inclusion of protected areas in the community and ejido by-laws and zoning plans. As a result of recent changes in Mexican law, some communities have now formally registered conservation areas through CONABIO. Stronger links to the national system and better incentives for establishing community-protected areas hold potential for consolidating environmental gains. Social. The strengthening of social capital was a cornerstone of the project and helped ejidos and communities to improve their governance, foment community participation, reduce conflicts, mitigate emigration, and increase income through improved forest management and the generation of revenue. The resulting improvements in organization, planning, and economic 4 Bray, D.B. and Merino-Perez, L. 2002. Community Forests of Mexico. Achievements and Challenges. Consejo Civil Mexicano para Silvicultura Sustentable, Ford Foundation. 5 Bray, D.B., et al. 2008. Tropical Deforestation, Community Forests, and Protected Areas in the Maya Forest. Ecology and Society. V13(2). Accessed at http://www.ecologyandsociety.org/vol13/iss2/art56/ 15 conditions proved to be catalytic and are enabling beneficiary communities to take advantage of other government and NGO development programs. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation The development objective of the CFP II project was to assist indigenous communities and ejidos that own forests in priority regions of Durango, Guerrero, Jalisco, Michoacan, Oaxaca and Quintana Roo to improve the management and conservation of their forest resources and to generate alternative sources of income in a sustainable manner. The project objectives, outcomes and activities were fully completed and continue to have a high degree of relevance to the country and development priorities, as reflected in the current (2008) CAS, which emphasizes environmental sustainability and promoting social inclusion, and strengthening institutions. In 2009, the project approach was scaled up by CONAFOR to include 6 new states, total 12, indicating its growing relevance and high priority accorded to it by the government (see section 2.5 for details). These activities will be executed by the CONAFOR's Community Forestry Directorate (la Gerencia de Silvicultura Communitaria) using the same approach as the project. In addition, based on the strengths and successes of the project approach, CONAFOR has mainstreamed the community-forestry approach into ProArbol, its main instrument for overall forestry development. ProArbol activities now include community forestry technician training, community- to-community training and capacity building seminars, community land-use planning, the development and strengthening of community by-laws and participatory rural appraisals. Outside of the 12 states, Community Forestry personnel are providing training and guidance to ProArbol and other CONAFOR staff on best-practices for adopting the project's community and participatory approach to forestry development. In this way, the community-forestry approach is gradually being mainstreamed and replicated throughout the forested areas of the country. 3.2 Achievement of Project Development Objectives The project was based on socially- and culturally-appropriate means of technology transfer, organization and decision making through traditional community processes and empowerment. A "coaching" approach was employed to ensure that communities were assisted through the many steps required to help them develop the capacity to manage their forests and wood industries independently, at their own pace and in their own way. The project area had 1.1 million inhabitants distributed in over 1000 agrarian communities (nucleos agrarios). Around 50 percent of the beneficiaries came from indigenous groups including the Zapoteco, Maya, Purepecha, Mixteco, Chatmo, Nahua, Tlapmeco, Mixe, Triqui, Chinanteco and Chontal peoples. Community planning tools mainstreamed through the project help beneficiaries develop a broader vision for their own future. Consensus building and the participation of community members in decision-making to increase social capital helped to ensure the sustainability of the project's actions. Significant impacts in the target area and for beneficiaries include: · an estimated 6,204 people that did not migrate from the project states 16 · an increase in employment in the forest sector by 27.2% between 2004 and 2008 · a 36% increase in net value of forest goods and services · 353 regulations and bylaws adopted · 90,920 ha of forests certified as sustainably managed by independent parties · 51 payment for environmental services schemes in place · 41 associations and 179 community forestry enterprises strengthened · 913,000 ha of forest area under improved forms of management · 1,783,574 ha under 274 community zoning plans (OTCs) The PDO was fully achieved through the completion of three specific objectives, as follows: Specific Objective 1: To strengthen community institutions by means of the consolidation of social capital and management capacity to improve the benefits flowing from use of forest resources The "social capital"6 of community and ejido institutions was strengthened through investments to help them become better organized, to establish a platform of community bylaws and norms for regulating forest and land use, and to build capacity for making informed decisions concerning their welfare and resources. The project design required communities to approve investments by their governing bodies, which helped to create an environment of participation, transparency and ownership. The design also empowered communities to choose their own technical assistance providers from a list of certified providers, who reported directly to them (not the PIUs). The project correctly targeted assistance on social themes. A total of 1072 or 62% of all of the 2776 community investments were made in lesser developed communities (Type I and Type II). Of which, 48% of the activities in Type I and 41% in Type II communities focused on strengthening their capacity for carrying out more complex productive activities in the sector. These activities included assistance in developing bylaws and regulations, community land management, participatory rural evaluations and community-to-community seminars. The more advanced communities (Types III and IV) also benefitted from activities to strengthen community institutions. However, needing less support, only 15% and 25%, respectively, of their combined 1056 project-financed activities focused on institution building themes. 6 "The set of norms, networks, and organizations through which people gain access to power and resources, and through which decision making and policy formulation occur" (World Bank, 2003) 17 Through the efforts of the project, 353 community regulations and bylaws were designed and promulgated (735% of target) to support sustainable resource management. The bylaws formalized such products and agreements as the zoning and management plans, enabling communities to ensure compliance with their tenets. Thirty regional participatory committees were formed (120% of target) which now provide permanent fora for all six states for the identification of community needs and concerns. Committees include key stakeholders from the communities, technical service specialists, NGOs, CONAFOR staff, project personnel, SEMARNAT and others. Some 179 community forestry enterprises (EFCs) and 41 associations were created or strengthened (138% and 164% of targets, respectively). The community forestry enterprises represent the nexus between the community and the business world. Through their creation and strengthening, the project helped to mainstream communities into the national economy, while maintaining and respecting their traditional cultural forms of management. As some EFCs developed into successful businesses, they have begun to reevaluate their management policies and, with the community assembly's consent, adopt more business-like management systems to ensure their growth and sustainability ­ gradually eliminating traditional approaches. However, the struggle is ongoing to find the balance between good business practices and traditional expectations in most of the communities. Participatory community planning furthered the building of communities' social capital. This was accomplished through 241 participatory rural evaluations, or rapid rural appraisals, (161% of target) through which communities worked alongside qualified technical advisors to evaluate and map land cover and use within their communities. The baseline information generated through this stock-taking exercise helped communities become aware of their own resource situation and visualize areas for improvements, thereby setting the stage for future investments. The project funded 225 community-to-community seminars (469% of target), whereby the more advanced communities demonstrated by example, new ways of improved resource management to those in earlier stages of improving their capacity. Such seminars included visits between communities to show first- hand the results of a particular community's efforts. Inter-community seminars also supported groups of communities and ejidos to define common goals and ways of working together -- fundamental when resources or capacities are insufficient in individual communities and collective efforts are needed. 18 At project closure, 915 community or ejido members had participated in community- to- community seminars and 3,968 in the regional seminars. Some 93% of the beneficiaries in the communities and ejidos reported that the social situation in their community had improved as a result of the project. During the final evaluation, community (and ejido) beneficiaries ranked the project highly favorably (8 on a scale of 9) and felt that the project should continue unchanged. Specific Objective 2: To strengthen technical and administrative capacity of ejidos and communities for the development of local and regional productive processes The highest amount of project financing was dedicated to Objective 2, which focused on strengthening the technical and administrative capacity of beneficiary communities and ejidos, and for co-financing of preparatory activities needed for specific sector investments. Studies were carried out to explore ways to strengthen community enterprises and intra-community efforts, as well as to assess the feasibility of investments, including those for non-timber forest products. Training was conducted to upgrade and diversify the skills of private-sector professionals and community technicians to better serve community and indigenous needs. In general, efforts to support Objective 2 built on achievements in Objective 1 which prepared communities and ejidos to organize and make informed decisions for the detailed planning needed to take on investments for forestry, conservation and sustainable natural resource management. The approach was demand-driven and proposals for project financing required formal endorsement by community assemblies before they could be considered for financing. Some 448 professionals and technical service providers were trained and incorporated (299% of target) into CONAFOR's list of certified service providers. A total of 752 specialized courses for human capital development were conducted, including courses on identification and management of conflicts and to train community/ejido forest technicians. At project closure, 3,123 beneficiaries had participated in training courses. The project conducted 176 technical feasibility and community organization studies (220% of target). Five forestry best-practice manuals were produced for the participating states for community zoning plans (OTC's), forest management practices, protection of riparian areas, forest harvesting and forest roads. The development of Community Zoning Plans (OTC)7 was one of the first steps in helping communities translate their visions for development into a practical planning tool, usually in the form of a written document and map. OTCs draw heavily on the baseline resource information generated in the participatory evaluations (Objective 1). Some 65% of all OTCs carried out by the project were with Type I and Type II communities, where they were frequently needed most. During the elaboration of OTCs, communities work side-by-side with qualified technical advisers (TSPs) to decide how to organize their land use and best manage their resources. Typically OTCs delineate community holdings for forest management, non-timber forest products, protection and conservation, agriculture, and settlements, among others. 7 Community Zoning Plans: Known as Ordenamientos Territoriales Comunitarios in Spanish, have been defined by CONAFOR as..."a planning tool that determines the land use in ejidos and communities in the short, medium, and long-term. Its general objectives are to guide productive activities in communal forested areas, drive production toward sustainable use of natural resources and support conservation and protection activities..." (CONAFOR 2007). The plans are prepared in a participatory way and seek balance between productive aspects, natural resource use and conservation, while linking the process to strengthening internal community organization and bylaws. 19 To finalize the process, OTCs are voted on by assemblies and once approved become part of their bylaws. This ensures that the community as a whole agrees with the plans, and provides a formal means for the governing bodies to regulate land use. Several iterations of the OTCs are sometimes produced until the communities reach an internal agreement on their content. Some 274 zoning plans (OTCs) were prepared under the project (232% of target) covering over 1.7 million hectares, with an investment of MX$32.8 million. This is four times the number of OTCs supported under CFP I which financed 63 OTC's over 536 thousand ha. The combined total of OTCs from the two projects covers 26% of all the forested communities and ejidos in the six target states. Over 760 thousand hectares of new conservation areas were designated through the CFP II zoning plans as either community conservation areas or wildlife preserves. Many communities now utilize the zoning information generated by the OTCs to coordinate efforts with other government and non-governmental programs. Because the project's OTCs have become recognized as effective planning instruments for the sector, other organizations have the confidence that their investments will be properly directed and well used by the recipient communities that have them. (In Oaxaca alone, OTCs helped communities to access over MX$46 million in payments for environmental services in 23 communities.) Based on the success of the project's OTC exercises, in 2007 it was replicated and scaled up by the largest GoM forestry program, ProArbol. In the last two years of the project, ProArbol invested MX$63.8 million in the preparation of an additional 451 zoning plans, for another 2.64 million ha covered by community-approved plans. Once agreements and plans were formalized through approved OTCs, communities and ejidos could begin planning for specific investments. This was frequently accomplished through the development of forest management and conservation plans. Forest management plans consolidate the community vision for forest use by delineating harvest areas, identifying species to be harvested, volumes to be extracted and annual allowances for cutting, regeneration schemes, mitigation measures, conservation areas and restricted species. Plans for protection and conservation areas identified the areas and conservation/protection objectives (eg. biodiversity or watersheds) and associated management strategies. Forest management plans had to be approved in the assemblies and by SEMARNAT, as the environmental authority, before they could be implemented. Conservation plans had to be approved by assemblies and were optionally certified by CONABIO, as government-recognized community protected areas. Under the project, 203 forest management and conservation plans (127% of target) were developed or updated, through which approximately 270 thousand hectares were brought under improved management. About 84% of all forest management plans were developed in Type III and IV communities, where capacities were stronger, and communities ready to carry out more complex investment subprojects, such as forest management or forest-industry applications. 20 By encouraging cooperation between communities and ejidos to work together, the project helped beneficiaries to address common sector problems requiring broader efforts, such as fire suppression and pest management, or to pool resources needed to increase their efficiency and competiveness. The project successfully launched or strengthened 41 such associations (Asociaciones Regionales de Silvicultores) (164% of target), some of which were working in cooperative efforts to improve sales volumes, competitiveness and marketing of forestry products and services. In Oaxaca alone, 24 associations including 378 communities were supported. To promote environmental sustainability in productive areas, the project helped communities diversify forest production and mainstream conservation into their productive activities by financing 176 feasibility studies for non-timber forest products. Among the non-timber products promoted were pine-resin, royal palm, medicinal plants, oregano, mezcal, and gum. Wildlife management projects included white-tailed deer and wild turkey management areas, and the rearing of honey-bees and iguanas. Many of the ecotourism subprojects were closely tied to sustainable management and establishment of community conservation areas. Conservation and Wildlife Management Areas Supported State Area Oaxaca 246,156 Guerrero 160,361 Michoacan 17,011 Quintana Roo 277,930 Durango 62,451 Jalisco ND TOTAL 763,909 Over 0.5 million hectares of forests are now certified as sustainably managed in Mexico, with over 90 thousand certified through the current project (120% of target) by independent auditors. Certified forest management operations meet the highest criteria of economic, social and 21 environmental standards. Because certification requires that workers and communities are properly compensated, it is especially compatible with the community forestry approach. Nevertheless, costs can be high to reach the certification standard, and frequently it's a process that takes many years to achieve. Specific Objective 3: to identify and develop investment alternatives and productive diversification for communities and ejidos, and to promote local and regional arrangements to facilitate access by these communities to schemes for payment for environmental services. Communities and ejidos that successfully organized themselves to plan and execute more complex activities were eligible to submit proposals for investment activities for project co- financing, or through alternative sources (eg. PRODEPLAN, PROARBOL, PSA, Alianza para el Campo, FIRA, FONAES, etc.). The project helped to mobilize MX$474 million from these government programs to support the project objectives, MX$11.6 million from state governments and MX$201 million from communities and ejidos themselves. In general, subproject financing was modest, designed to be catalytic and promote the diversification of income-generating activities in the communities and ejidos. Subproject proposal screening criteria included (i) the activity's potential contribution to the economic and social development of the country; (ii) its contribution to resolve and avoid conflict within or among communities; and (iii) its environmental sustainability. Eligible subprojects included the co-financing of value-added production facilities, such as sawmills, kilns, and furniture manufacture equipment; ecotourism facilities; non-timber forest products processing equipment; and assistance for taking advantage of payment for environmental services schemes (i.e. water-purification and bottling equipment). Frequently communities contracted technical service providers to help them with the design, debugging and startup of the subprojects, as well as to train community members to operate the new machinery. A total of MX$75 million was invested in 198 investment subprojects and the identification and analysis of 122 potential investments for non-timber forestry products. US$5.62 million (244% of target) was invested in NTFP subprojects. 22 S I S T P S D T I F V I W M R C F W M A G S T C W I I I P I O F N T N W I I I P M S F C T C W M A I N I W Broad efforts were made through the project to promote the involvement of ejidos and communities in regional payment for environmental services programs. During the project's tenure, 206 communities and ejidos received an estimated MX$395 million covering payments for protection or sustainable management of 299,255 hectares of forests. Payments were distributed to communities and ejidos for providing services, such as conserving biodiversity in priority areas, carbon sequestration, and maintaining and protected watersheds. About 30% of the PES subprojects implemented by the PES program (below) were the direct result of the OTC activities carried-out by the CFP II project which identified appropriate areas for implementing the schemes and targeting the interventions. Payment for Environmental Services Program Type Number of Projects Amount ($MX) Hectares Biodiversity 23 11.8 million 48,956 Carbon Sequestration 14 3.7 million 18,866 Other PES* 211 366.4 million 229,494 *water, conservation, agroforestry Estimated direct and indirect employment generated from the subprojects is estimated at 2,549 and 6,839 persons, respectively. Improvements were made to administration and organization of 48% of the community forestry enterprises and 49% improved their manufacturing operations. These investments by the project led to an increase in profits of 34%, increased sales of 39% and growth in manufacturing capacity of 33%. 23 With an average IRR of 20.16% for the forestry subprojects and 22.06% for NTFPs, the IRR values show that productive subprojects are clearly attractive from a financial perspective (see sec. 3.3 on Efficiency for details). 3.3 Efficiency No economic analysis for the project as a whole was conducted during project preparation. At project closure, however, it was deemed useful to capture an overall economic indicator through an Internal Rate of Return (IRR) to reflect the general impact of the project: the IRR for the overall project amounts to 19.63%. The three main categories of project-generated benefits were considered for the economic analysis: (i) the benefits from community based forest protection / conservation; (ii) the benefits from forest management; (iii) the benefits from the productive subprojects. Productive subprojects CFP II financed 198 demand driven productive subprojects for a total amount of US$6.9 million (IBRD) (around 33% of total project cost). Community counterpart contributions for productive subproject implementation were 50% of the total cost (1:1). The financial analysis of the productive subprojects used the results obtained through the field work conducted by the "Universidad Autónoma Chapingo ­ (UACH) in late 2008 for the final external evaluation. Project recorded data from 2004 to 2008 were also used and, in particular, the calculations made for subprojects proposals which included a financial analysis to justify the investments. The sample on which financial calculations were made from data collected for 22 financed demand-driven productive subprojects (11% sampling intensity). To compare the results with the calculations ex ante made in the PAD, the study divided the productive subprojects in two categories: (i) Community Forest Production such as improved saw mills or kilns and (ii) Non- timber Forest Products (NTFPs) such as resin extraction, spring water bottling and ecotourism projects. The sample had 15 subprojects labeled "Community Forest Production" and 7 subprojects labeled NTFPs. The results are as follows: Results of financial analysis on demand driven productive subprojects Financial Indicator Community Forest Non-timber Forest Products Production Projects Projects Net Present Value (US$) 4,784,593 3,804,301 Internal Rate of Return (%) 20.16 22.06 Cost/Benefit Ratio 1.78 1.73 Accounting Rate of Return (%) 29.26 23.78 Return on Investment (year) 9 7 With an average of 20.16% for the Community Forest Production projects and 22.06% for NTFPs, the IRR values obtained show that productive subprojects are clearly attractive from the financial point of view (rates to be compared with a cost of capital around 12%). These values do not depart substantially from the results obtain at the appraisal stage as they appear in the PAD. 24 Community Zoning Plans Community Zoning Plans (Ordenamientos Territoriales Comunitarios) were carried out extensively during CFP II implementation. OTCs helped the communities and ejidos identify and implement, in a participatory way, some of the project's principal activities: forest conservation, forest management and productive subprojects. CFP II financed 274 Community Zoning Planning exercises, for the same number of ejidos or communities, on an area of 1,783,574 hectares for a total cost of US$2.45 million. As a result of the Community Zoning Planning exercises, a significant share (17.25%) of the ejidos or communities assisted by CFP II have obtained additional financing such as 26 projects for biodiversity (US$883,000), 16 projects for carbon capture (US$277,000) as well as payments for environmental services. Employment and incremental benefits The total population of the ejidos and communities under CFP II coverage was estimated at 1,174,680 people of whom 48% are of indigenous origin. Over the project implementation period (2004 -2008), 1005 ejidos or communities benefited from the project. Estimated direct and indirect employment generated from the subprojects is estimated at 2,549 and 6,839 persons respectively. The community forestry enterprises backed by CFP II employed around 159,930 people. The increase of jobs generated by the project within the community was estimated8 at 27.2% which is marginally below the target of 30% set in the PAD. From the survey made by the Universidad Autónoma Chapingo ­ (UACH), the increase in net value of forest goods and services has been evaluated at 36%9 compared to the 20% project at the time of appraisal in the PAD10. 3.4 Justification of Overall Outcome Rating Rating: Satisfactory The Second Community Forestry Project was successful on many levels. From a quantitative standpoint it exceeded nearly all of its targets at outcome and output levels, as well as rates of returns for investment subprojects. However, its primary impact has been in scaling up and mainstreaming the model for sustainable forestry based on building social capital in ejidos and communities in key forested areas. The three pillars of sustainable forestry were strongly advanced through the project (i.e. social, environmental, and economic values.) At the social level, CONAFOR was able to successfully engage communities through a process of empowerment and participation that helped them to decide and evaluate for themselves the results of new approaches to forest and enterprise management. Community development issues were integrated into a system of internal management and consultation, decision-making and planning. All of which contribute to the development of social capital needed to improve the use of natural resources. 8 Universidad Autónoma Chapingo ­ (UACH): Evaluación externa del PROCYMAF II, marzo 2009, p.64-65. The sample on which calculations were made is of 67 communities distributed over the six states of Durango, Guerrero, Jalisco, Michoacán, Oaxaca y Quintana Roo. 9 Universidad Autónoma Chapingo ­ (UACH): Evaluación externa del PROCYMAF II, marzo 2009, p.51. 10 PROCYMAF II ­ PAD ­ October 25, 2003 - Annex 1: Project Design Summary p.26 25 The outcomes and output levels were higher than planned at the outset due in part to the catalytic effect of community-to-community capacity building which "spread the word", lessons learned and opportunities for support available for community organization and sustainable forestry. "PROCYMAF", the Spanish acronym for the project, became widely known and program sought out by the communities. Despite the closure of the project, the name "PROCYMAF" continues to be used as a reference to the community forestry program. The process of supporting communities was innovative and advanced a virtuous cycle of increased services available to growing numbers of sustainably managed forestry efforts. These, in turn, are generating more raw materials for industry needed to enhance growth in the sector and bring employment to rural communities. The economic analysis supports this supposition as demonstrated through the positive rates of return on the productive investments, as well as important inroads in supporting community enterprises and even multi-community partnerships with certified production. From an environmental sustainability perspective, the project effectively increased the protection of areas of natural habitat by bringing almost 3 million hectares under sustainable management plans or strict conservation. These efforts maintain coverage in key forest ecosystems such as the Sierra Juarez and Sierra Madre Ecoregions considered of global importance by conservation organizations and conservation priority-setting exercises such as the World Bank-World Wildlife Fund Conservation of the Terrestrial Ecoregions of Latin America and the Caribbean (1995). Conservation areas under the stewardship of the ejidos and communities provide good protection to natural habitats, as they are formally recognized by the community assemblies and protected by the enforcement arms of the communities. Communities also provide permanent patrols, conservation and forest-management groups, and fire brigades to protect their resources. 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development Social Development. Forestry management in Mexico continues to be a male-dominated enterprise based on overall low-levels of involvement of women in forestry activities (including industry) and especially the decision-making ejido/community management bodies. The project evaluation noted some progress in increasing employment for women in the forest enterprises, the production of non-timber forest products, and the provision of products and services for ecotourism. More efforts however must be directed at expanding opportunities for young people, women, and residents of communities and ejidos with no formal rights (avecindados) through future projects in Mexico. Overall the project did an outstanding job of addressing social development aspects of rural development in the indigenous communities and ejidos. The total population of the ejidos and communities under CFP II project included 1,174,680 people11 of which 48% are of indigenous origin: Maya (15%), Purepecha (15%), Zapoteco (15%), Nahuatla (10%), Mixteco (8%), Amuzgo (5%), Chinanteco (5%), Tlapaneco (3%), Mazateco (3%), Mixe(2%), Mazahua (2%), Cuicateo (2%), Mazahu, Chontal, Triqui. From the civil-society perspective, the increase in social capital 11 Source of information of this section ­ unless otherwise stated - is the External Evaluación 2004-2008 of PROCYMAF II , done by the "Universidad Autónoma Chapingo). 26 helps to ensure that advances are now formalized in community bylaws and in the increased capacity of the beneficiaries to manage their own forests and resources. Notwithstanding, the participation of the indigenous communities of the Huicholes y Tepehuanos of Jalisco and Durangowas below expectations. These groups proved reluctant to engage in project activities and resisted outside influences. Special efforts need to be incorporated into a next phase of the program design to address these shortcomings and to forestall any marginalization of the communities. (b) Institutional Change/Strengthening The Directorate of Community Forestry (La Gerencia de Silvicultura Comunitaria) was formed in 2006 and provides a permanent institutional home for community forestry in CONAFOR. Shortly after closure, in 2009, the project's activities were fully incorporated into the Directorate, which received an allocation of MX$128.4 million from CONAFOR for continuing its work in community forestry using the project model. In addition, CONAFOR has now mainstreamed the community-forestry approach into ProArbol, its main instrument for overall forestry development. In 2009, ProArbol activities include community forestry technician training, community- to-community training and capacity building seminars, community land-use planning, the development and strengthening of community by-laws and participatory rural appraisals. Beneficiary state governments now provide substantial support to community forestry and in 2009 allocated an MX$11.6 million to support them. (c) Other Unintended Outcomes and Impacts (positive or negative) Based on the success of the project's OTC exercises, in 2007 the OTC approach was replicated and scaled up by the largest GoM forestry program, ProArbol. In the final two years of the project, ProArbol invested MX$63.8 million in the preparation of an additional 451 zoning plans covering an additional 2.64 million ha with community-approved plans. In 2006, CONAFOR through the Programa para el Fortalecimiento de la Autogestion Silvicola (PROFAS) assisted the Regional Participatory Committees by providing them with a legal foundation, regulations for their functioning and the physical space for the meetings. 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops 4. Assessment of Risk to Development Outcome Rating: Moderate The project enjoys support for community forestry efforts through civil-society, the private sector, and national/state governments to ensure the development outcomes are maintained and potentially expand in the future. From the civil-society perspective, the sustainability of the outcomes at the community level are strengthened by the new community bylaws and statutes. The investments in the six target states has helped stimulate a demand from other forested states along with corresponding increases in government allocations to support the program's expansion. CONAFOR allocated MX$128.4 million to support the 2009 community forestry program which is targeted to fund 1,380 proposals from 792 agrarian communities in 12 states. 27 The state governments also provide support for the expansion (MX$11.6 million in 2009). While gains have been substantial and positive, risks are rated as moderate, as the forest sector as a whole has not yet fully embraced the community model and externalities from the global financial crisis have impacted the forestry sector in all countries, prompting a slowdown in demands for fiber and timber for construction. 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Satisfactory The Bank's performance in identifying, preparing and appraising the operation was satisfactory and the resulting project was highly pertinent to both Bank and country priorities. The Bank conducted an appropriated diagnosis of community-managed forestry issues, challenges and alternatives to confronting them, highlighting the need for a highly participative process, fundamental for a country with about 10,000 indigenous communities and ejidos who own around 65% of the country's forests. The Bank focused its efforts on developing and employing effective approaches for community forestry development with indigenous peoples in six highly forested states, helping to reorganize hundreds of rural communities, promoting and advancing certified sustainable forest management and sustainable land-use planning, creating a cadre of trained private sector professionals to work in community forestry and implementing a common- sense system for advancing community forestry according to their own capacity to gradually take on more complex tasks. CFP II was able to benefit from lessons learned during the implementation of CFP I. The risks were adequately assessed including the risk of an increase in the marginalization of certain communities arising from the selectivity in groups benefiting from the project. This project and its predecessor are internationally recognized as best practices and have become models for other countries. (b) Quality of Supervision Rating: Satisfactory The Bank supervision team included foresters, sociologists/anthropologists, biodiversity, economists, rural development and fiduciary specialists. The project had three Task Managers during the life of the project. The Bank team maintained a strong relationship with the Borrower during most of the project. For the period of time when CONAFOR's support was softening (2005), the Bank Team remained firmly committed to the project and kept the focus on the development objectives, while diplomatically promoting the project approach within CONAFOR. The team's experience and technical expertise contributed substantially to the success of the project. On average, supervision missions were carried out two or three times per year with 11 supervision missions in total. Most included extended and substantive field visits. The combined knowledge of the Bank and experience in the implementation of CFP I helped to guide the project's evolution. The project was almost completely decentralized, which demanded additional supervision efforts by the Bank team. The operation is considered highly successful in the forestry community in Mexico and by SEMARNAT, CONANP, NAFIN, CONAFOR, and CDI. The Bank has been widely recognized for its commitment to the project, which contributed to the success of an innovative and 28 culturally-appropriate means of technology transfer, based on empowerment and strengthening of social capital of indigenous communities and ejidos. (c) Justification of Rating for Overall Bank Performance Rating: Satisfactory In consideration of the ratings for preparation and supervision (above), the overall rating is considered satisfactory. The Bank fostered and supported a project that was innovative in its approach to community forestry through participation, organization, and empowerment (especially of indigenous groups). The project was implemented in a highly decentralized way. The Bank team managed the risks and challenges and was able to guide the project to a successful closure in concert with a wide range of stakeholders (communities, federal and state governments, and beneficiaries) and to meet or exceed most of the targets. 5.2 Borrower Performance (a) Government Performance Rating: Satisfactory The Government of Mexico supported project preparation and implementation. They collaborated with all work required by the Bank. They generated a successful model and platform for community forestry that is a best practice for Latin America and the global forestry community. The project succeeded in developing and employing effective approaches for community forestry development with indigenous peoples in six highly forested states. The project also promoted inter-institutional coordination and collaboration between many of the agencies involved in forestry, environmental and natural resource management, such as CONAFOR, SEMARNAT, CDI, CONANP and state authorities in high-priority areas, where poverty rates are high and environmental impacts due to deforestation and poor management are significant. The Government passed a new Forestry Law, created a National Forestry Strategy, assigned implementation of the project to CONAFOR and created a "community forestry" unit within CONAFOR to address community forestry issues in Mexico. NAFIN provided administrative support to the project implementation unit in Guadalajara and maintained routine contact with the Bank team, and participated in supervision missions. The Secretary of Hacienda also maintained contact with the Bank for high-level functions relative to the loan agreement, amendments, and reallocations. They routinely cooperated in the supervision missions and provided an important link between the project, the Bank and the government. (b) Implementing Agency or Agencies Performance Rating: Satisfactory The PIU was composed of qualified technical professionals and administrative staff based in Mexico City and Guadalajara offices and state offices. Based on the number of subprojects (198) and almost 3000 activities implemented under the project and supervised by the PIU, it was highly efficient in its work. During the course of the project, CONAFOR's Community Forestry Unit was established as a permanent part of the institution. Six state coordination offices were established, staffed, and strengthened and received a high level of support from many state governments (budgetary, office space, logistics, financing and other support). Some 30 state- based regional committees and 41 associations were established to provide a participatory stakeholder mechanism for the CFP II program and other issues related to forestry in the communities and ejidos. The regional committees and associations now function on a regular basis. 29 (c) Justification of Rating for Overall Borrower Performance Rating: Satisfactory Overall borrower performance is considered satisfactory given the level of government commitment during the project's tenure to provide the funding for execution, satisfactory performance of responsible agencies, including the high levels of results obtained and the sustainability of impacts generated. There were no cases of corruption, misprocurement or safeguard violations during the project's implementation. Results from the project include 90,920 thousand ha of forest certified as sustainably managed, 913,000 ha of forest area under improved forms of management, 1,783,574 ha under 274 zoning plans, 51 schemes established for the payment of environmental services, and the integration of the private sector into community development programs. Over 760 thousand hectares of new conservation areas were designated through the zoning plans as either community conservation areas or wildlife preserves. 6. Lessons Learned Broad Assessing quality of life and social capital can be a complex process facilitated by the use of proxies tailored to each context and project needs. The use of the terms "quality of life" and "social capital" are widely-used in development projects such as the CFP II. The project incorporates the "consolidation of social capital" as a specific objective and provides a definition for its use in the context of the ejidos and communities. Indicators such as formal legal regulations, levels of participation in assembly meetings and number of assembly meetings, community zoning plans, and seminars between communities proved to be excellent indicators of community social capital and success of the approach. Viable economic activities such as forestry can catalyze community development and strengthen social capital. The project helped beneficiaries to capitalize on their natural resource assets and bring focus to their community development process. Many of the communities had been affected by long-standing conflicts regarding land tenure, and high emigration rates. The forestry activities and investment opportunities provided by the project resulted in a positive focus for the communities, while generating greater income and employment opportunities. The inclusion of greater surface areas through forest planning and management strengthens conservation and environmental sustainability. The CFP II project provided a solid platform for the expansion of conservation and sustainable land management in globally important ecosystems through its zoning, forest management and conservation plans. The incorporation of increasing areas of forests using these instruments is conducive to environmentally- and socially-sustainable economic development of the sector. Project Level Sustainable forestry provides an excellent framework for generating positive benefits to biodiversity and ecosystem services but often require investments in building community social capital and technical assistance. Forestry in a community context often requires more than technical and infrastructure investments. Communities need assistance in organization, governance and training and capacity building to help them become empowered to make informed decisions and to generate a vision for the sustainable use of their forests. 30 The project provides a valuable model for the engagement of indigenous communities in climate change mitigation. Through its participatory and community-driven approach to forestry development, the project provides a reliable model for the engagement of indigenous communities in the reduction of deforestation and [forest] degradation (REDD). The project's approach serves as a best practice for consideration by other countries for engagement in REDD at a time when many are being challenged to do so. It also serves as a foundation for the Mexican Forest Sector to broaden its efforts for climate change mitigation with indigenous communities, which own around 65% of the country's forests. Improvements in the efficiency and output of community forest enterprises goes hand in hand with improvements in the community's livelihood and helps to alleviate negative impacts on the forest, especially degradation. Some of the CFP II communities and ejidos inherited a natural resource base which was degraded from over logging and poor management by the concessionaires. The investments in efficiency, diversification, and long-term management based on capacity building of community and ejido members proved to generate a positive or virtuous cycle. This is contributing to improved forest health and greater productivity of the sector. Weaker communities from a forestry standpoint (those in more diverse ecosystems, lacking sufficient standing volume or having extensive areas of degraded forests) can benefit by pooling resources and capacities with other communities and forming cooperatives. Ejidos and communities are highly diverse in terms of their natural resource holdings, which ranged from tens of thousands to hundreds of hectares. As a result of the project's promotion of community organization, community-to-community activities, and long-term planning, communities and ejidos were able to establish cooperative efforts to market their products through new inter-community associations. Such arrangements must be nurtured over many years following improvements in social capital and even then, are complex in their management. Community Zoning Plans (OTCs) are excellent tools for communities to bring focus to their development and conservation efforts while facilitating access to other donor and government programs. The large number of high-quality OTCs generated through the project and ProArbol helped stimulate other community investments. The zoning plans have developed a reputation for providing information needed to target and direct investments in the communities for the project, as well as The Payment for Environmental Services Program and NGO financing. Because OTCs are approved by the communities, investors know that ownership is high, which helps reduce the risks to the investment outcomes. Globalization and increasing competition have to be considered in the context of productive and industrial investment, even at the community level. The community forestry sector does not exist in isolation from the regional, national, and international/global forestry markets. Mexico continues to be a net importer of wood and increasingly, the national forest sector is challenged by the presence of low-cost or competitively priced wood and paper products from such remote places as Chile and Uruguay. As community forestry enterprises develop their growth will be increasingly challenged and guided by this competition. Market incentives for certified wood products are inadequate. Several communities supported by CFP II entered into voluntary certification programs. However, there are few financial incentives for doing so and transaction costs for certification are high. Communities that rely on local or national markets have difficulty using their certification to gain market share, improve prices or find niches. Increased efforts are needed to develop market mechanisms and create financial incentives for certified wood. 31 Promoting linkages across sectors, themes, and institutions can foster greater impacts in the forest sector. Forestry has important ties to other sectors including social (and indigenous), the environment and conservation, water, agriculture, housing, transport, energy, land administration, and others. While it may not be feasible or necessary to address all sectors at once, an understanding of the linkages and communication with key sister agencies can help to guide the development of the forestry sector and foster greater impacts. Good communication and collaboration is particularly needed with line agencies working in environment (SEMARNAT), indigenous issues (CDI), agriculture and watershed management (SAGARPA), and conservation (CONABIO). 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies Received from the Commission Nacional Forestal (CONAFOR) on June 9, 2009: (i) Comment: Attached please find an edited version of the Draft ICR with proposed modifications. Principally, we suggest the updating of select output measurements as noted. Team Response: Indicators have been checked and updated in the final ICR. (ii) Comment: The data in the Draft ICR relative to employment are from the external evaluation. We propose that the ICR use the data collected from the project instead. Team Response: Data provided by CONAFOR have been used in the final ICR. (iii) Comment: The number of years corresponding to the analysis for rates of return is corrected in the edited drafts. Team Response: Data provided by CONAFOR have been used in the final ICR. (b) Cofinanciers (c) Other partners and stakeholders 32 Annex 1. Project Costs and Financing (a) Project Cost by Component (in USD Million equivalent) IBRD IBRD Appraisal Actual/Latest Appraisal Actual Percentage of Components Estimate (USD Estimate (USD Estimate Estimate Appraisal millions) millions) (USD millions) (USD million) STRENGTHENING OF 3.94 4.80 5.36 111.73 SOCIAL CAPITAL 2.41 FOREST RESOURCE 10.19 MANAGEMENT 12.39 12.25 98.89 9.47 TECHNICAL ASSISTANCE DIVERSIFICATION AND 3.00 4.98 3.6 6.38 177.15 INVESTMENT INSTITUTIONAL 2.21 0.56 2.70 1.61 59.59 STRENGTHENING PROJECT 2.60 1.41 3.10 2.56 82.42 IMPLEMENTATION UNIT Total Baseline Cost 26.59 26.16 19.69 21.08 1.4 Unallocated Contingencies 2.10 0.00 0.00 Price Contingencies 0.00 0.00 0.00 Total Project Costs 28.69 28.16 Front-end fee PPF 0.00 0.00 .00 Front-end fee IBRD 0..21 0.00 .00 0.21 0.21 Total Financing Required 28.90 26.16 21.3 21.30 (b) Financing Appraisal Actual/Latest Type of Percentage of Source of Funds Estimate Estimate Cofinancing Appraisal (USD millions) (USD millions) Borrower Cash/In-kind 7.60 7.07 93 International Bank for Reconstruction and Cash 21.30 21.30 100 Development State Governments Cash 0 13.03 Total Cash 28.9 28.37 98 33 Annex 2. Outputs by Component Components A, B and C Outputs by Activities and theme: Activities Amount Types of Support Typology · Carbon (3) I · Certification (11) · Conservation (14) II · Environmental Services schemes (1) III 0 · Mushroom crop and courses (4) IV · Technical Assistance studies (32) · Wood extraction (4) Productive · Mezcal (2) Alternatives in · Furniture (2) Forestry · Non-timber (89) Ecosystems · Oregano (3) · Palm (7) · Technical procurement (machinery) (6) · Training courses for trainers (1) · Water projects (7) · Resin projects (11) · Tourism (43) · Wildlife Management Areas (19) II Productive · Certification (11) alternatives · Technical Assistance III Precertification studies (2) IV · Carbon (1) I · Community forestry firms (7) II · Technical Assistance Constitution and studies (19) III Strengthening of · Furniture (1) Productive · Non-timber (1) IV Associations · Oregano (2) · Water projects (2) · Tourism (7) Training for · Courses (36) NA AD technical service · Tourism (1) providers 34 Training for · Training for community IV community service providers (10) service providers NA AD · Forestry stock/supply (3) I · Crafts (7) · Sawmill (17) II · Milling (1) · Carbon (14) III · Carpentry (5) · Certification (8) IV · Conservation (66) · Mushroom crop and courses (56) · Gum (1) · Procurement of technology (machinery) (9) · Sawmill maintenance Courses (6) · Training courses for producers (292) · Directional felling (13) · Community forestry firms (10) Training courses · Technical assistance studies (6) · Wood conserving stoves (60) · Wood extraction (3) · Mezcal (2) · Furniture (18) · Non-timber (6) · Oregano (7) · Palm (10) · Forestry management program (2) · Water projects (16) · Resin projects (17) · Reforestation (2) · Sotol (2) · Environmental services schemes (1) · Tourism (81) · Wildlife management areas (11) · Procurement of I technology (machinery) Feasibility and (13) II community · Crafts (1) organization · Sawmill (15) III studies · Milling (1) · Carbon (1) IV · Carpentry (1) 35 · Gum (1) · Technical Assistance studies (41) · Wood conserving stoves (7) · Mezcal (2) · Furniture (7) · Oregano (3) · Palm (1) · Water projects (15) · Tourism (67) · Participatory rural I evaluation II Participatory Rural Evaluation III IV 0 · Procurement of I technology (machinery) (2) II · Sawmill (2) · Carbon (1) III Strengthening of · Gum (7) community · Community Forest Firms forestry IV (130) enterprises · Oregano (1) · Palm (1) · Water projects (8) · Resin projects (1) · Tourism (25) · Community zoning plans I (274) II Community Zoning Plans III IV · Forest management plans I (59) Forest II Management Plans III IV · Regulations and bylaws I (353) Regulations and II Bylaws III 36 IV · Crafts (2) I · Carbon (2) · Certification (1) II · Gum (1) · Conservation (3) III · Mushroom crop and courses (1) IV · Forestry Expo (33) Community to · Mezcal (1) community · Oregano (2) NAAD seminars · Palm (4) · Water projects (3) · Resin projects (1) · Community to community seminars (134) · Tourism (36) · Wildlife Management Areas (1) · Forestry stock/supply (3) I · Procurement of technology (machinery) II (37) · Crafts (5) III · Sawmill (30) · Milling (1) IV · Carbon (3) · Gum (1) · Drying stoves (14) Investment · Mezcal (3) Subprojects · Furniture (6) · No-timber (7) · Oregano (1) · Water projects (14) · Resin projects (1) · Investment subprojects (13) · Tourism (57) · Wildlife Management Areas (2) · Environmental services I schemes (51) II Environmental Services Schemes III IV I Total II 37 III IV NA Component D Outputs Support for 6 State PIUs (Oaxaca, Guerrero, Michoacán, Jalisco, Durango and Quintana Roo) included basic goods and services, and vehicles (not financed by the loan). It also included the design, development and implementation of a monitoring and evaluation system tracking and database (SISCO). Two strategic studies were carried out for the state of Oaxaca and for Guanaceví in Durango. Component E Outputs The main output was the support for a central (HQ) PIU and implementation of project audits for each year of the life of the project. Annex 3. Economic and Financial Analysis Project as a whole The Internal Rate of Return for the overall project amounts to 19.63%. Three categories of benefits were considered for the economic analysis of the project: (i) the benefits from community based-forest protection / conservation which were valued by taking the total area under conservation and applying the fee for environment services paid in Mexico12; (ii) the benefits from forest management which have been valued for timber and non-timber forest products according to the statistics available from the "Anuarios Forestales" from 2000-2004 at national level; (iii) the benefits from the productive subprojects which have been calculated separately (see below section on Productive Subprojects). Benefits not taken into account included: (i) educational activities; (ii) reduced pressure on existing native forests; (iii) increased employment; (iv) improved land-use; and (v) improved soil quality and decreased erosion. Productive subprojects CFP II financed 198 demand driven productive subprojects for a total amount of US$6.9 million (around 33% of total project cost) whereby eligible communities and ejidos have had access to funds for feasibility studies, market analysis and development of productive subprojects. Some 65% of these communities and "ejidos' that carried out the subprojects have been implemented have indigenous people. Community counterpart contributions for productive subprojects were 50 percent (1:1). 12 The economic price taken is USD 34.23/ha which is currently paid by CONAFOR to farmers via the PROARBOL programme for environmental services and represents the cost to plant 1 ha of maize in the central part of Mexico. This economic price is considered to represent the opportunity cost to maintain one hectare under conservation. 38 The financial analysis on the productive subprojects has used the results obtained on field work conducted by the "Universidad Autónoma Chapingo ­ (UACH) in late 2008. Project recorded data from 2004 to 2008 were used as were the financial analyses made for subprojects approval to justify these investments. The sample on which financial calculations were made was based on data compiled from 22 demand-driven productive subprojects (11% sampling intensity) (see Annex 1). To compare the results with the calculations ex ante made in the PAD, the study has divided the productive subprojects in two categories: (i) Community Forest Production such as improved traditional saw mills or kiln-dried devices and (ii) Non-timber Forest Products (NTFPs) such as resin extraction, spring water bottling and ecotourism projects. The sample consisted of 15 "Community Forest Production" subprojects and 7 "Non-timber Forest Products (NTFPs) projects. A synopsis of the selected productive subprojects is in Annex 10. The financial indicators chosen to illustrate the results of each to the 22 productive subprojects have been: the Internal Rate of Return (IRR), the net present value (NPV), the cost/benefit ratio, the accounting rate of return and the payback period. The discount rate employed was of 12% over a 20 years period. Annex 4 presents these financial indicators for each category of productive subprojects and Annex 5 gives the calculation details for each of the productive subproject sampled. Results of financial analysis on demand driven productive subprojects Financial Indicator Community Forest Non-timber Forest Products Production Projects Projects Net Present Value (Pesos) 4,784,593 3,804,301 Internal Rate of Return (%) 20.16 22.06 Cost/Benefit Ratio 1.78 1.73 Accounting Rate of Return (%) 29.26 23.78 Return on Investment (year) 6 5 With an average of 20.16% for the Community Forest Production projects and 22.06% for NTFPs, the IRR values obtained show that productive subprojects are clearly attractive from the financial point of view (rates to be compared with a cost of capital around 12%). The values obtained range from 13.55% to 44.14%. These values do not depart substantially from the results obtained at the appraisal stage as they appear in the PAD: the four Community Forest production projects had IRR values of 21%, 50%, 24% and 16% for the two NTFPs appraised (resin extraction and water bottling) had rates of 25% and 26% respectively13. Productive subprojects have a good cost/benefit (C/B) ratio, above 1 (Annex 4, refers), meaning that the return on investment is always positive. Some C/B ratios suggest that some projects have low costs which indicate a good project to be financed but more often than not the costs are underestimated and benefits overestimated; in order words some C/B ratios seem too high for such projects. 13 Second Community Forestry Project, Project Appraisal Document: Annex 4 ­ Pages 34-35 39 The accounting rate of return show values much dispersed ranging from 8.87 to 170.96 % and 135.95%. This is an indication that projects have probably been approved with different criteria. Accounting rates of return have to be examined together with the payback period. An accounting rate of return with high result but with long payback period, suggest that the project is modestly efficient or the costs are too high (for whatever reason) compared to sales, (average sales per year may be high but the related costs do not permit a rapid return on investment). On the other hand, a low accounting rate of return and small payback period show that annual sales may be low compared to investment but costs are contained making an efficient project. Community Zoning Planning Exercises Community Zoning Plans (Ordenamientos Territoriales Comunitarios) has been used extensively during CFP II implementation and helped to determine and implement, for "ejidos" and communities, in a participatory way, project activities: forest conservation, forest management and productive subprojects. CFP II financed 274 Community Zoning Plans, for the same number of ejidos or communities, on an area of 1,783,574 hectares for a total amount of US$2.45 million. One of the objectives of Community Zoning Plans was to catalyze additional financing for forest conservation. A significant share (17.25%) of the ejidos or communities assisted by CFP II has obtained additional financing: 26 projects for biodiversity (US$883,000); 16 projects for carbon capture (US$277,000); projects related with payments for environmental services on an area of 271,870 hectares for a total amount of US$26.58 million. It is estimated that 28% of the payments for environmental services resulted directly from CFP II. To date, due to CFP II, a total of 347 Community Zoning Planning exercises have taken place (CFP I undertook 63 and CFP II, 278) for a total area of 2,320,260 hectares which represents a cover of 26% of the "ejidos" o communities of the 6 States where CFP have been implemented (Durango, Guerrero, Jalisco, Michoacán, Oaxaca y Quintana Roo). Employment and incremental benefits The total population of the ejidos and communities under CFP II coverage has been estimated at 1,174,680 people14 of which 48% are of indigenous origin: Maya (15%), Purepecha (15%), Zapoteco (15%), Nahuatla (10%), Mixteco (8%), Amuzgo (5%), Chinanteco (5%), Tlapaneco (3%), Mazateco (3%), Mixe(2%), Mazahua (2%), Cuicateo (2%), Mazahu, Chontal, Triqui. The increase of jobs generated by the project within the communities and ejidos has been estimated15 to 27.2% on average which is slightly below the target of 30% set in the PAD (see logical framework in annex 1: Project Design Summary p.26). Over the project implementation period (2004 -2008), 1005 ejidos or communities have benefited from the project. The community forestry enterprises backed by CFP II employed around 159,930 people. The main benefits reported, as a result of CFP II intervention, have been: administration and management (47.8%) and an increase in commercialization aptitude (38.6%) From the 14 Source of information of this section ­ except if otherwise stated - is the External Evaluación 2004-2008 of PROCYMAF I , done by the "Universidad Autónoma Chapingo). 15 Universidad Autónoma Chapingo ­ (UACH): Evaluación externa del PROCYMAF II, marzo 2009, p.64-65. The sample on which calculations were made is of 67 communities distributed over the six states of Durango, Guerrero, Jalisco, Michoacán, Oaxaca y Quintana Roo. 40 survey16 made by the Universidad Autónoma Chapingo ­ (UACH), the increase in net value of forest goods and services has been evaluated at 36%17 to be compared with the 20% foreseen in the PAD18. 16 The survey took a sample of 67 communities within the six project States. These communities received a total of 334 inputs from the three main project activities: strengthening social capital ; strengthening community technical capacities; diversification and complementary activities 17 Universidad Autónoma Chapingo ­ (UACH): Evaluación externa del PROCYMAF II, marzo 2009, p.51. 18 Second Community Forestry Project, Appraisal Document. October 25, 2003 - Annex 1: Project Design Summary p.26 41 Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Responsibility/ Names Title Unit Specialty Lending Anthropologist and Daniel R. Gross Task Team Leader LCSEO TTL Francisco Jose Vtieri_Romano Consultant - James Smyle Sr. Forestry Specialist LCSAR Forestry Tania Carrasco Indigenous Peoples Specialist LCC1 Social Andrea Seaman Team Assistant LCSEO Operations Esme Abedin Operations Analyst LCC1 Operations Victor Ordoñez Financial Management Specialist LCC1 FM Marta E. Molares-Halberg Lawyer LEGLA Legal Ricardo Hernandez Sr. Environmental Specialist LCC1 Environment George Ledec Lead Environmental Specialist LCSEN Environment Rosita Valencia Estrada Procurement LCC1 Procurement Rees Waren Consultant - Edward Brenyan Economist LCSAR Economics Juan Martinez Social Specialist LCSEO Social Oliver Braedt Forestry Specialist LCSAR Forestry John Kellenberg Sector Leader LCSES Sectoral Leadership Carter Brandon Env. Economist, Peer Reviewer ESA Peer Reviewing David Cassells Forestry Specialist, Peer Reviewer ARD Peer Reviewing Supervision/ICR Robert Ragland Davis Sr Forestry Spec. LCSAR TTL/Forestry Francis V. Fragano Consultant LCSEG Biodiversity and ICR Jim Smyle Sr. Forestry Spec. LCSAR TTL and Forestry Financial Dmitri Gourfinkel Consultant LCSFM Management TTL/Lead Daniel R. Gross Lead Anthropologist and Consultant LCSUW Anthropologist Environmental Ricardo Hernandez Murillo Sr Environmental Spec. LCSEN Specialist Agriculture Yurie Tanimichi Hoberg Senior Agriculture Economist LCSAR Economist Procurement Efraim Jimenez Consultant EAPCO Specialist Juan Martinez Sr Social Scientist LCSSO TTL/Social Specialist Takako Mochizuki Consultant LCSAR Rural Development Victor Manuel Ordonez Conde Financial Management Specialist CTRLP Financial Specialist Gabriel Penaloza Procurement Analyst LCSPT Procurement Teresa M. Roncal Operations Analyst LCSAR Operations Andrea Semaan Consultant LCSEN Operations Analyst Jeannette Ramirez Rural Development Specialist LCSAR Operations 42 Officer/ICR Gilbert Landart Senior Ag. Economist FAO Economics Diana Re bolledo Language Prog. Asst. LCSAR Operations (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle USD Thousands (including No. of staff weeks travel and consultant costs) Lending FY99 27.72 FY00 4 4.88 FY01 165.26 FY02 55.80 FY03 34 0.52 FY04 12 0.00 FY05 0.00 FY06 0.00 Total: 50 254.18 Supervision/ICR FY99 0.00 FY00 0.00 FY01 0.00 FY02 0.00 FY03 78.77 FY04 98.93 FY05 14 122.65 FY06 23 163.01 FY07 26 109.44 FY08 22 102.65 FY09 18 104.71 Total: 103 780.16 43 Annex 5. Beneficiary Survey Results An external evaluation was conducted in the communities of all six states through questionnaires. In each community the following people were polled: commissioners, representative of civil society (municipal president or delegate or agent of the municipality) direct beneficiaries, presidents of the associations, administrators of firms, employees of firms, and technical service providers and promoters who were contacted via internet. Each person had to respond to a set of questions tailored to the type or role these played within the community and in relation to the project. All of the questionnaires asked for name, sex, age, level of education, ethnic affiliation, and native language. Depending on the role and responsibilities, the rest of the questions were standard as they pertained to number of people in the community, number of people in the firm/association, participation in the assemblies, frequency per year of assemblies, comparison of how many people participated before and after the project. Other questions focused on whether or not opinions of different participants in the assemblies were taken into consideration, how the assemblies carried out their mandates, established sanctions, and the type of decisions taken in this forum. Other questions focused on the participation of people in activities promoted by project from workshops to training courses or regional forums, etc. Other included the impact of the project on relations among and within communities and if consequently an improvement in social relations and organization related to production had taken place. Opinions about the project and possible continuation as well as the role of the implementing agency where also included. Beneficiaries were asked about changes in livelihoods, types of supports received, and what type of improvements were noted related to the project in education, health, quality of food available and material objects. Specific questions regarding training received, if useful or not, among others. The benefits of feasibility studies whether or not these had resulted in investments. As a result of the project, the general survey found: - an increase in investments in the forest sector from $84.98 to $134.33 - improvements in housing index from .28 to .46 - 13% noted improvements in natural resources - 25% noted improvements in legal activities - 18% noted improvements in community seminars - 43% noted improvements in training activities Technical service providers were asked about time associated with the project, how they learned about it and opinions about the diffusion of the project. General questions were asked about the operation of the program such as ideas for improving the project, main obstacles encountered; reason why proposals were rejected, and availability of resources to the communities. In the six states the results were tabulated. In summary a high percentage of all of those polled attended the assemblies and the number increased due to the project. An average of 8 assemblies was held per year. Opinions most regarded in the assemblies were those of representatives, technical service providers and assistants with those of external authorities a bit less. 44 Participation in training events, rural participatory workshops, community to community workshops and regional seminars was in the hundreds and thousands. General opinion about the project was high in most cases very favorable. People showed an interest that the project should continue but with some modifications. The perception of the implementing agency was generally consistently good. Direct Beneficiaries: About 48% of the direct beneficiaries belonged to ethnic groups and 31 % spoke a native language. Some 93% of direct beneficiaries in the six states attended the asamblea in their community or ejido since the beginning of the project (around 8 were held per year). Assembly attendance increased as a result of the project by 23% as a result of the project. The opinions of technical service providers, representatives, and assistants were highly regarded by beneficiaries during the asambela (with opinions of external authorities less so). According to the survey; 3,123 beneficiaries participated in training courses; 915 in community- to-community seminars; 3,968 in regional seminars and 1,833 participated in the conduct of studies. Some 93% of the beneficiaries felt that social relations had improved favorably as a result of the project. Beneficiaries ranked the project highly favorably (8 on a scale of 1-9) and believed that the project should continue. Their perception of change at the institutional level was 6 on the same scale or moderately favorable. Administrators: The average age of administrators was 47. About 97% participated regularly in the asamblea, about 8 of which were held annually. They commented that the number of people that attended the asamblea has increased. From the administrators surveyed: 929 participated in rural participative workshops; 1,833 in training courses; 559 in community-to-community seminars; 2,495 in regional seminars; and 1,191 participated in the conduct of studies. Some 94% of the administrators believed that social relations had improved as a result of the project, as had relations with other communities. Most agreed that the project should continue without changes. The perception of the institution in charge was 5 on the 9 point scale. Workers: The average age of the workers is 40. About 84% participated in the 9 annual assemblies. They commented that participation in the assemblies had increased from about 28% as a result of the project. They placed high value on the opinions of the technical service providers, representatives and their assistants, but less value on the opinions of external authorities. In general, they felt that agreements made in the assemblies were acted upon. According to the survey: 485 workers participated in rural participative workshops; 1,027 in training courses; 203 in community-to-community seminars; 903in regional seminars; and 1,191 in the conduct of studies. Some 91% of workers believed that social relations improved as a result of the project and 62% said the project should continue unchanged. The perception of the institution in charge was 5.67 on the 9 point scale. Commissioners: The commissioner's average age is 51. Most participated in the asambleas of which 8 are held on average per year. The number of those assisting the asamblea has risen from 98 before the project to 120 after. They commented that participation in the assemblies had increased from about 20% as a result of the project. They placed high value on the opinions of the technical service providers, representatives and their assistants, but less value on the opinions of external authorities. In general, they felt that agreements made in the assemblies were acted upon. From the commissioners surveyed: 708 participated in rural participative workshops; 1,203 in training courses; 300 in community-to-community seminars; 5,171 in regional seminars and 1,097 participated in elaboration of studies. Commissioners' opinions were mixed as to whether 45 or not social relations had changed as a result of the project (5 on a 9 point scale). Some 62% believe that the project should continue without changes. The perception of the institution in charge was 6.04 (on the 9 point scale). Of the benefits received by the community, they believed about 35% were a direct result of the project. TSPs: Responses by PSTs are insufficient to be representative ­ of 17 subprojects in the sample only 4 responded, providing partial information. The PSTs stated that the project is a good program but is underfunded and should include more training for beneficiaries. They also noted that more work needs to be done to identify good markets for wood and other products. Relative to subproject implementation, results were mixed. Two TSPs responded they had subprojects still underway due to delays in the procurement and installation of equipment. One noted a positive experience in a NTFP subproject involving mescal. 46 Annex 6. Stakeholder Workshop Report and Results 47 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR Summary of Borrower's ICR Introduction The original project objective was to assist indigenous communities and forestry ejidos of Mexico to increase their standards of living through improved management and conservation of forest resources, increasing their potential to enter regional national and international markets. Specific objectives were to: (a) improve management and conservation of natural resources by the community and ejido owners of those resources and (b) increase income based on their forest production. The objectives reflected the priorities in Mexico for the forestry sector at the time of preparation which were focused on the modernization and increasing the economic output of the forestry sector to reduce poverty through sustainable development. This was the first project to focus on income generation through sustainable means on a broad scale in Mexico. The project was also designed to improve and take advantage of growing demand for technical assistance, services, and products from the forestry sector. The objectives were clearly designed however the gradual expansion of the project from one state to several states was a challenge that was very demanding of a project envisioned as a pilot. Design Aspects and Consistency with Government Priorities Mexico is a country with a very high potential for production of forest-based goods and services, however several factors have not allowed it to play an important role in the overall GDP of the country, nor has it been recognized for its positive impact on the conservation of natural resources. In addition, other external factors such as migration have reduced pressures on forests and changed the context for forestry activities. Communities and ejidos own over 80% of the remaining forests in Mexico and it has been shown that those that manage their forests for timber and non-timber products, conserve their natural resource base and show higher income levels and improved social development indicators. The project was consistent with the GoM 2007-2011 National Development Plan, based on environmental sustainability while improving quality of life. In addition, the model for service provision selected for the project was innovative and participatory thanks to Regional Roundtables for Forestry Promotion (Foros Regionales de Promocion) and Regional Natural Resource Comittees (Comites Regionales de Recursos Naturales) which established periodic meetings for discussion, decision-making, and priority setting with the legal representatives of the communities and ejidos. Finally, the project incorporated several lessons learned from other programs in the sector such as the COINBIO (GEF/WB Indigenous and Community Conservation Project), PROCREF (Forest Conservation and Restoration Program), PRODEFOR (Forestry Development Program), PROFAS (Zoning and Forestry Management Project), and PSAH (Hydrological Environmental Services) programs. Achievement of Objectives and Outcomes Based on the final evaluation of the project, CFP II can be considered highly successful, given that it generated substantial impacts and changes in communities regarding forest resources management and broadening their income-generation options. From a quantitative standpoint the 48 project increased the surface area covered under new and improved management plans by working with 1005 communities and ejidos in the six states it operated in. Much of the support was also for non-timber forest products with investments of over US$4.4 million. Outcomes The outcomes were achieved in a satisfactory way under CFP II. Key indicators were developed and reviewed as part of the evaluation. Component 1 ­ Social Capital Strengthening Rating: HS 150 participatory rural evaluations were planned at the project outset and 241 were actually carried-out (160%), 48 community-to-community seminars were planned and 193 implemented (402%), 48 community statues or regulations were planned and 353 ultimately developed (735%) which clearly demonstrates the satisfactory outcome and interest of the communities in these instruments. Component 2 ­ Technical Assistance for Management Rating: HS Technical assistance studies were carried out in support of community natural resources management as well as workshops and capacity building programs for forestry producers. These support programs were carried-out in many cases by trainers from other more advanced production communities. Unfortunately, in many cases trained people migrated out of the communities. Some activities included under this component include preparation of zoning plans, pre-certification exercises, establishing community forestry enterprises and developing sustainable forestry management plans. Component 3 ­ Diversification of Investments Rating: HS Following the community organization, social capital strengthening, and improving technical/management capacities, investments were made in developing products and markets for timber and non-timber products, and ecosystem-based services. The project invested significant resources in developing investment plans and funding specific community investments. 51 payment for environmental services schemes also increased access by communities and ejidos to this government program. Other impacts Forestry Communities and Ejidos Rating: HS When ejidos and communities formally recovered the control of their forests in the mid-80's they were challenged by low levels of technical capacity and a lack of experience in sustainable forest management. In addition, capacities were needed in operating community forestry companies and other business/marketing skills necessary for success beyond the traditional forestry activities. The project focused on all these needs, supporting their capacities and organization through four typologies ranging from 1 (potential producers) through 4 (producers with transformation and marketing capacities). In addition, some producer associations were supported outside this typology structure of the project. In addition to those ejido and community members with property, the project benefited non-owners of the community and began a slow but increasing trend of including women in the productive sector, particularly in the non-timber forest product activities. Support to the Private Sector Rating: HS The project improved the service-provision sector by generating an important number of providers (450) throughout the six states of the CFP II. Although this is a substantial number, they are primarily focused on timber products and forest management. Other services, which 49 were also covered under the service-provider training, include conservation area management, flora and fauna, marketing, and accounting among others. Forestry Activities and Natural Resource Management Rating: HS The project approved 77 projects for conservation activities in addition to 257 conservation and management plans which represented a total of 2.9 million hectares under formal conservation and management plans including several under certification through the Consejo Civil Mexicano para la Silvicultura Sostenible based on criteria and indicators approved by the FSC. Promotion of Non-traditional/Non-timber Forest Products Rating: HS The CFP II provided an important stimulus to the production of NTFP's, improving the generation of employment and income-generating opportunities for young people and women in the communities that typically have less options in this regard. The most important investments were made in activities such as pine-resin production, medicinal plants, mushrooms, and ecotourism. Institutional Strengthening Rating: Substantial The project improved articulation among several projects within CONAFOR which also help target its outreach in a more focused manner however coordination on the dissemination and communication of project activities and objectives could have been more substantial. The project coordination unit was moved to Guadalajara to increase integration with the CONAFOR. Lessons Learned · The focus on community capacities is an effective approach to sustainable rural development that can produce social, economic, and environmental impacts. The typing of communities however is a practice that needs to be reviewed for future phases of the program. · Improving technical capacities and commercial relations among communities is important to gain the necessary scale for achieving sustainable forest management. Regional resource management visions and plans need to be developed. · Linking communities through coordinated production and sales of forestry and non-forest products generates positive economic and development impacts. · Strengthening community institutions through CFP and with private-sector involvement has improved ejido member confidence in their own organizations and other government programs involved in the rural sector. · Benefits have been noted for advancing employment of women through the project investments. · Conflicts between and within indigenous communities continue to be an important issue that needs greater investment. · Forestry enterprises must be prepared to compete in a global market. Community enterprises must be strengthened in their administrative, management, and marketing capacities. Main Performance Indicators Overall result: S Sustainability S 50 Impact on Institutional Development HS Bank Performance S Borrower Performance S Quality at Program Outset S Was project at risk at any time? No 51 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders 52 Annex 9. List of Supporting Documents The World Bank. 2008. Country Partnership Strategy for Mexico. Universidad Autónoma Chapingo. 2009. Evaluación Externa del PROCYMAF II. CONAFOR. 2007. Ordenamiento Territorial Comunitario, Manual Basico. ProArbol, Gerencia de Silvicultura Comunitaria. Guadalajara, Jalisco, México. CONAFOR. 2003. Gestión Comunitaria para el Uso Sustentable de los Bosques. PROCYMAF. Dinnerstein, et al. 1995. A Conservation Assessment of the Terrestrial Ecoregions of Latin America and the Caribbean. IBRD-WWF. Grootaert, C. 1998. Social Capital. The Missing Link?. Social Capital Initiative. Working Paper #3. The World Bank. Barton, D. and Merino-Perez, L. 2002. Community Forests of Mexico. Achievements and Challenges. Ford Foundation The World Bank. 2002. Country Assistance Strategy for Mexico. The World Bank. 2003. Project Appraisal Document for the Second Community Forestry Project. Report no. 26644. The World Bank. 2008. Country Partnership Strategy for Mexico. Universidad Autónoma Chapingo. 2009. Evaluación Externa del PROCYMAF II. The World Bank. 2004. Implementation Completion Report for the Community Forestry Project. Report no. 29582. The World Bank. 2008. Implementation Completion Report for the Indigenous and Community Conservation Project. Report ICR0000851. Websites CONAFOR. www.conafor.gob.mx 53 Annex 10. Sample of Subprojects Productive Subprojects Synospis No. Año Estado Ejido/Comunidad Nombre Actividad ADQUISICIÓN DEL CALDERO NECESARIO PARA 1 2004 DURANGO SAN PABLO Maderable COMPLEMENTAR EL PROCESO DE SECADO ADQUISICIÓN DE NAVE INDUSTRIAL CON 2 2007 DURANGO SAN PABLO INSTALACIÓN ELÉCTRICA DE BAJA TENSIÓN PARA Maderable FÁBRICA DE TABLEROS HACIENDITAS Y ADQUISICION DE MAQUINARIA PARA LA 3 2005 DURANGO Maderable ANEXOS FABRICACION DE TARIMA DE PINO Y ENCINO SUBPROYECTO DE INVERSION: ADQUISICION DE UNA 4 2005 GUERRERO LOS BAJITOS RETROEXCAVADORA PARA OPERACIONES DE Maderable MANEJO FORESTAL. SUBPROYECTO DE INVERSION PARA LA ADQUISICION 5 2007 GUERRERO LOS BAJITOS Maderable DE UNA ESTUFA DE SECADO Subproyectos de inversión "ESTABLECIMIENTO DE UNA 6 2005 GUERRERO PASCALA DEL ORO EMPRESA FORESTAL CONSISTENTE EN UN Maderable ASERRADERO TIPO BANDA DE 6" BARRANCA DEL 7 2006 JALISCO FORTALECIMIENTO DEL ASERRADERO EJIDAL Maderable CALABOZO BARRANCA DEL 8 2007 JALISCO ADQUISICION DE UN CEPILLO DE CUATRO CARAS Maderable CALABOZO ACTIVACION DEL CENTRO DE ACOPIO (COMPRA DE 9 2006 MICHOACÁN PUCUATO Maderable MAQUINARIA) ADQUISICION DE UN TALLER DE AFILADO DE SIERRAS 10 2004 OAXACA SANTIAGO XIACUI CINTAS Y SUS COMPONENTES PARA EL ASERRADERO Maderable DE LA COMUNIDAD SUBPROYECTO DE INVERSION PARA LA ADQUISICION DE UNA RETROEXCAVADORA CON ACCESORIOS DE 11 2007 OAXACA SANTIAGO XIACUI Maderable CARGADOR FRONTAL PARA EL ASERRADERO DE LA COMUNIDAD DE SANTIAGO XIACUI SUBPROYECTO DE INVERSION PARA LA SAN PEDRO EL No 12 2007 OAXACA AUTOMATIZACION DE LA PLANTA EMBOTELLADORA ALTO maderable DE AGUA BEEDANI SAN PEDRO EL ADQUISICION DE UNA GRUA HIDRAULICA PARA 13 2004 OAXACA Maderable ALTO CARGA MECANICA DE PRODUCTOS FORESTALES 14 2006 OAXACA IXTLAN DE JUAREZ AUTOMATIZACION DEL PROCESO DE ASERRIO Maderable SUBPROYECTO DE INVERSION PARA LA CONSTRUCCION COMPLEMENTARIA PARA EL No 15 2007 OAXACA IXTLAN DE JUAREZ FORTALECIMIENTO DE LA INFRAESTRUCTURA maderable ECOTURISTICA DE IXTLAN DE JUAREZ ADQUISICION DE EQUIPO COMPLEMENTARIO PARA 16 2004 OAXACA IXTLAN DE JUAREZ Maderable LA FABRICACION DE MOLDURAS DE MADERA ADQUISICION DE EQUIPO Y MAQUINARIA PARA LA QUINTANA REFORMA 17 2004 IMPLEMENTACION DE UN TALLER DE CARPINTERIA Maderable ROO AGRARIA PARA LA ELABORACION DE ARTESANIAS STA. TERESA DE LA No 18 2005 DURANGO PRODUCCIÓN DE ACEITE ESENCIAL DE OREGANO UÑA maderable SANZEKAN TINEMI, SUBPROYECTO DE INVERSION PARA LA CAVA DE No 19 2007 GUERRERO S.S.S. MEZCAL maderable FORTALECIMIENTO DE LAS FASES DE ACOPIO, VALOR SANZEKAN TINEMI, No 20 2006 GUERRERO AGREGADO Y COMERCIALIZAION DEL MEZCAL 100% S.S.S. maderable AGAVE 54 NUEVO SAN JUAN EMPRESA COMUNAL EMBOTELLADORA DE AGUA DE No 21 2004 MICHOACÁN PARANGARICUTIRO MANANTIAL maderable INVERSION PARA EL DESARROLLO DE LOS TRES PRODUCTOS DE ECOTURISMO COMUNITARIO PARA QUINTANA No 22 2007 Cuauhtémoc DIVERSIFICACIÓN PRODUCTIVA DE LOS RECURSOS ROO maderable FORESTALES Y COMO ESTRATEGIA DE CONSERVACIÓN AMBIENTAL Financial Indicators for Productive Subprojects Rentabilidad Periodo de No. Nombre VPN TIR B/C Contable recuperación ADQUISICIÓN DEL CALDERO 1 NECESARIO PARA COMPLEMENTAR EL 1,556,767.00 16.12% 1.25 16.05% 11 PROCESO DE SECADO ADQUISICIÓN DE NAVE INDUSTRIAL CON INSTALACIÓN ELÉCTRICA DE 2 1,627,729.76 14.08% 1.10 8.87% 9 BAJA TENSIÓN PARA FÁBRICA DE TABLEROS ADQUISICION DE MAQUINARIA PARA 3 LA FABRICACION DE TARIMA DE PINO 3,237,329.62 22.97% 1.76 22.81% 7 Y ENCINO SUBPROYECTO DE INVERSION: ADQUISICION DE UNA 4 1,602,447.26 25.16% 1.78 21.36% 4 RETROEXCAVADORA PARA OPERACIONES DE MANEJO FORESTAL. SUBPROYECTO DE INVERSION PARA LA 5 ADQUISICION DE UNA ESTUFA DE 13,627,323.65 150.12% 10.44 83.56% 1 SECADO Subproyecto de inversión "ESTABLECIMIENTO DE UNA EMPRESA 6 2,750,231.55 37.88% 2.39 24.96% 4 FORESTAL CONSISTENTE EN UN ASERRADERO TIPO BANDA DE 6" FORTALECIMIENTO DEL ASERRADERO 7 5,245,818.44 24.81% 4.63 97.59% 8 EJIDAL ADQUISICION DE UN CEPILLO DE 8 3,018,915.91 44.14% 8.58 170.96% 7 CUATRO CARAS ACTIVACION DEL CENTRO DE ACOPIO 9 2,491,522.25 29.90% 2.49 34.55% 5 (COMPRA DE MAQUINARIA) ADQUISICION DE UN TALLER DE AFILADO DE SIERRAS CINTAS Y SUS 10 736,401.27 14.62% 1.18 17.59% 16 COMPONENTES PARA EL ASERRADERO DE LA COMUNIDAD SUBPROYECTO DE INVERSION PARA LA ADQUISICION DE UNA RETROEXCAVADORA CON 11 3,131,453.19 18.46% 4.24 135.95% 12 ACCESORIOS DE CARGADOR FRONTAL PARA EL ASERRADERO DE LA COMUNIDAD DE SANTIAGO XIACUI SUBPROYECTO DE INVERSION PARA LA 12 AUTOMATIZACION DE LA PLANTA 21,688,080.84 17.30% 1.35 18.10% 10 EMBOTELLADORA DE AGUA BEEDANI ADQUISICION DE UNA GRUA 13 HIDRAULICA PARA CARGA MECANICA 5,297,678.68 31.05% 4.59 94.01% 7 DE PRODUCTOS FORESTALES AUTOMATIZACION DEL PROCESO DE 14 12,821,706.66 13.55% 1.11 15.47% 16 ASERRIO SUBPROYECTO DE INVERSION PARA LA 15 CONSTRUCCION COMPLEMENTARIA 2,144,986.82 24.86% 2.19 33.54% 7 PARA EL FORTALECIMIENTO DE LA 55 INFRAESTRUCTURA ECOTURISTICA DE IXTLAN DE JUAREZ ADQUISICION DE EQUIPO COMPLEMENTARIO PARA LA 16 19,839,140.19 19.54% 1.71 27.04% 10 FABRICACION DE MOLDURAS DE MADERA ADQUISICION DE EQUIPO Y MAQUINARIA PARA LA 17 IMPLEMENTACION DE UN TALLER DE 517,173.63 32.53% 2.69 35.70% 5 CARPINTERIA PARA LA ELABORACION DE ARTESANIAS PRODUCCIÓN DE ACEITE ESENCIAL DE 18 1,473,863.70 22.76% 1.94 32.35% 8 OREGANO SUBPROYECTO DE INVERSION PARA LA 19 10,179,282.22 23.76% 1.93 26.80% 6 CAVA DE MEZCAL FORTALECIMIENTO DE LAS FASES DE ACOPIO, VALOR AGREGADO Y 20 10,815,681.43 30.16% 2.28 30.31% 4 COMERCIALIZAION DEL MEZCAL 100% AGAVE EMPRESA COMUNAL EMBOTELLADORA 21 2,552,824.58 39.30% 3.19 45.64% 4 DE AGUA DE MANANTIAL INVERSION PARA EL DESARROLLO DE LOS TRES PRODUCTOS DE ECOTURISMO COMUNITARIO COMO OPCION VIABLE PARA 22 1,932,706.36 27.15% 2.46 37.52% 6 DIVERSIFICACIÓN PRODUCTIVA DE LOS RECURSOS FORESTALES Y COMO ESTRATEGIA DE CONSERVACIÓN AMBIENTAL 56 IBRD 32441 110° 100° 90° do ra lo Co U N I T E D S T A T E S O F A M E R I C A Br av BAJA o Gr an de 30° 30° G S O N O R A u CALIFORNIA l f os ra Sono nch Co C H I H U A H U A M E X I C O o qui Ya f SECOND COMMUNITY FORESTRY Br av o BAJA C C O A H U I L A Sa lad PROJECT (PROCYMAF II) a o TARGETED STATES CALIFORNIA l Gra i nde e er t f SUR JALISCO PROCYMAF II TARGETED STATES Fu o NUEVO TEMPERATE FORESTS r LEON n TROPICAL FORESTS i do ernan RIVERS San F a NATIONAL CAPITAL SI DURANGO N AL STATE BOUNDARIES O TAMAULIPAS A INTERNATIONAL BOUNDARIES Z A C AT E C A S 0 100 200 300 400 500 KILOMETERS 0 100 200 300 MILES SAN LUIS POTOSI AGUAS- Pánuco N AYA R I T CALIENTES Gulf of Mexico Gr an e rd de Sa nti Ve O ag GUANAJUATO AR Y U C ATA N o R ET Q UE 20° 20° HIDALGO JALISCO Lerma Bay of Campeche Q U I N TA N A V P A C I F I C O C E A N E MEXICO TLAXCALA ROO R CITY A D.F. D.F COLIMA MICHOACAN PUEBLA C MEXICO CAMPECHE R MORELOS U Z Bal TABASCO sas G U E R R E R O G rij al Us um BELIZE va ac int a O A X A C A C H I A PA S This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or G U AT E M A L A acceptance of such boundaries. HONDURAS 110° 100° 90° MAY 2003