21218 PILOT BRAZIL RAIN FOREST L PILOT PROGRAM UPDATE -If!Ii1Xn do Pi ogi-u a Piloto pa,ia ,a Prote&o das Florestas Tropicais do Bf idL Volume 7 (1999) . Number 2 Institutional Reform and the Rain Forest Pilot Program The Pilot Program represents a new and so far unique model the basis of these conclusions, the review team has recom- of international partnership. Collaboration on environ-mental mended that altemative institutional arrangements be considered, issues of global concern requires building and fine-tuning novel and proposed three options for institutional restructuring to institutional arrangements on an intemational scale. Together, address basic problems: the Brazilian'gov,ernment, the World'Bank and the donors are * A managed partnership with a Joint Program Steering seeking to make this innovative partnership work. The Pilot Committee as its central structure, to establish a framework Program> is currently undertaking^a, process of institutional forBraziliangovermentleadershipofthePilotProgram; reform that may result in substantive changes to the program's governance 'and 'the roles and responsibilities of the various * An aid group that would use aid coordination arrangements partners involved. to improve govemment performance in the management of bilateral and multilateral financial and technical assistance; The framework for-this institutiohal reform is the Pilot Program's mid-term evaluation, an ongoing review initiated in 1998. As afirst step in thisprocess; and in responseto concerns * An independent foundation chartered by the Brazilian raised' during ,the 1997 Participants' Meeting, a team of govemment and financed by donors to manage the Pilot independent consultants have prepared an institutional review of Program through a Board of Trustees with membership the Pilot Program. The.mid-tern evaluation, once completed, drawn from Brazilian civil society. will also include ani assessment of the outcomes of Pilot Program The Ministry of Environment (MMA) has assessed these projects in comparison with stated project objectives and options within the context of a broader rain forest strategy. performance indicators` and a, review of social, institutional and MMA's analysis demonstrates that the dynamics of rain forest political impacts generated by the program. Terms of reference degradation have changed since the Pilot Program first began, for the entire mid-term review process will be discussed at the with a consequent need to reformulate objectives and reprogram 1999, Participants' Meeting taking-place in Brasilia on October resources. Their view is that this can be achieved through a 27-29,1999-.,,, version of the managed partnership. The Brazilian govern- Results of the Institutional Review. The conclusions of the ment's proposal will form the basis for the discussion of institutional review' emphasize certain procedural issues institutional reform during the upcoming Participants' Meeting. - 'hanpering'Pilot Program performance. These include the lack The Pilot Program's institutional reform process also of - an agreed program strategy; problems with program includes a review of the role and function of its principal source managemeiit; 'difficulties- on the part 'of the Participants in of external advice and review: the International Advisory Group addressing'and resolving fundamental programmatic issues; and (IAG). The lAG is currently responsible for providing an the complexity of project design and financing arrangements independent technical evaluation of the design and implementa- leading to costly' and time-consuming project processing. On . . . - ~~~~~~~~~~~~~~~~(Continued on page 4) About the Pilot Program The Pilot Program to Conserve the Brazilian Rain Forest supports an integrated set of projects that will contribute to a reduction in the rate of deforestation,of Brazil's rain forests in a manner consistent with the sustainable development of the area's natural and human resources,-and that, will provide lessons for designing future activities. The Pilot Program was launched at the request of the Group of Seven (G-7) industrialized countries and also enjoys financial support from the Commission of the European Communities and the Netherlands. The total volume'of financial and technical assistance pledged to the Pilot Program to date, including associated bilateral projects, is about US$250 million. The Pilot Program is coordinated by the World Bank, in accordance with agreements reached by the Pilot Program Participants (the donors and Brazil). 'The Pilot Program is designed to address the underlying causes of deforestation in Brazil's rain forests through a three-pronged approach. Projects will help-.strengthen the capacity of the public sector to set and enforce sound environmental policy; improve management of special protected areas, including parks, extractive reserves, national forests and indigenous lands; and increase the knowledge base on conservation of the rain forest and-sustainable utilization of its resources. BRAZIL RAIN FOREST PILOT PROGRAM UPDATE Project Updates 0@@O@ SO Floodplains ( Vdrzea) Management The "promising initiatives" component is well underway. The Floodplains (Vdrzea) Management Project is poised to This component will support promising approaches to begin. The US$15.5 million project, which is co-financed by sustainable forest management initiated by community groups, the German Bank for Reconstruction (KfW) and the United NGOs and private firms. Eight proposals are currently under Kingdom's Department for International Development (Df[D), review by the PCU and the PROMANEJO reviewing aims to promote the conservation and rational use of vdrzea committee. A second call for proposals will go out in early ecosystems, with an emphasis on fisheries and other aquatic 2000. In addition, at least seven proposals for community wildlife. The Rain Forest Trust Grant Agreement is under forest management subprojects in the Tapaj6s Natiofial Forest review by the Brazilian government and will be signed shortly. are in the final stages of preparation. Agreements with KfW and DflD have already been signed. The project is supporting the development by IBAMA of A brief mission to discuss conditions for project plans for ecotourism, fire prevention and environmental effectiveness took place on July 22-23, 1999. Participating in education in the national forest. These plans are currently the mission were representatives of the World Bank, KfW, under preparation and are being discussed with local DfID and the German Agency for Technical Cooperation communities and the Tapaj6s Management Committee, which is (GTZ). In an effort to facilitate project effectiveness, the composed of representatives from more than 30 entities, mission team recommended that the Project Management Unit including IBAMA, NGOs, community associations and the (PMU) be created as soon as the Rain Forest Trust Grant local government. Agreement is signed. The Brazilian government agreed to PROMANEJO has also co-funded two important forest prepare an implementation plan for the establishment of the management meetings recently held in Maraba and Manaus: the PMU, which is currently under Bank review. *: Second Community Forest Management in the Amazon Workshop (September 27-October 6, 1999), and a workshop on Forest Resources Management..' Business Opportunities in the Sustainable Production of Timber Implementation of the US$20 million Forest Resources in the Amazon (October 4-6, 1999). (See related article on Management Project (PROMANEJO) is now underway. The page 3). - five-year project is designed to support the development and Indigenous Lands adoption of sustainable forest management systems in the A so Amazon through strategic actions and pilot experiments in for Reconstruction (KfW) and the German Agency for priority areas. Technical Cooperation (GTZ) took place on July 7-14, 1999 in The Project Coordination Unit (PCU) in Manaus is fully Brasilia. staffed and functioning. Technical advisors from the German The supervision team observed that since 1996, the Agency for Techrnical Cooperation (GTZ) are also working withnthe PCU Technican the raziin InsTitute forthe Environment Indigenous Lands Project has made major contributions to the svith the PCU and the Brazilian Institute for the Enviromnent regularization of indigenous lands in Brazil, with over 20 and - Renewable Natural Resources (IBAMA) on project million ha. demarcated with project funds. An innovative and implementation. A project launch workshop took place on mily par demarcat.io ofuthe 8. million ha. Octobe 6-9 199 inManausto trin PCUstaffin proect hlghly participatory demarcation of the 8.5 million ha. October 6-9, 1999 in Manaus to train PCU staff in project Indigenous Land Vale do Javari is currently underway. The administration procedures; review project objectives and project has also contributed to improving the technical indicators; and discuss the first annual work plan. procedures of the National Indian Foundation (FUNAI) and facilitating indigenous participation in land regularization Your questions and comments are e activities. Write us aJ:- : .^- .'( -i- WThe Wr Bat. Nevertheless, the team expressed concern that project Plot ogriBamk; to Conserve the; zi .am Foes . : S i:; :0.implementation has slowed considerably during 1999. They A.tm:P Rain Forestf -i-ot Progra pdatenoted that while the Technical Secretariat of the project . : 1818 HStreet, N.W. -0Room 16-177 0 0 00 t.: d; continues to function effectively, it has been hampered by Wahington, D.C. S20433 USAt administrative delays in participating FUNAI departments. :Elditors: Judith Lisansky and Loreottkaspissler FUNAI was urged by the team to adopt measures to facilitate the contracting of anthropologists and other specialists involved Brasaia Address:. in identification and demarcation activities. They also recom- Banco Mundial mended that the Technical Secretariat attempt to integrate the SClVNQuadraO01- LoleA 60;q40 vloy; project more fully within FUNAI through regular meetings to Ed.Corporate Financial Center, Connt 303304 :,J.',discuss activities with participating departments, and an 70Tel2-900(55-61) Br9-1OOia . Brax:l (55-6}) 32A:^ t t;information campaign throughout FUNAI. Tel:- (5-1) 329-1000; Fax: (55-61) 329-12 (Continued on page 3) 2 BRAZIL RAIN FOREST PILOT PROGRAM UPDATE Indigenous Lands (Cont. from page 2) Sustainable Forestry Workshops Held The team was positive about the Technical Secretariat's The Second Community Forest Management in the proposal for revising the capacity building component to Amazon Workshop was held in Marabi on September 27 - include indigenous organizations, and a plan to add dissemin- October 6, 1999. Funded by the PROMANEJO and ation activities to the project. The team was also impressed Demonstration (PD/A) Projects, USAID and GTZ, the with the development of an improved financial management workshop brought together representatives from every system for the project. The monitoring and evaluation (M&E) community with forest management initiatives in the Amazon to system has also been significantly improved, although it still share information and experiences. The event was organized needs to include appropriate indicators for measuring the by the State University of New York/Worldwide Fund for overall impact of the project on the regularization of indigenous Nature (SUNY/WWF) in cooperation with the Friends of the lands. The Technical Secretariat agreed to provide a plan for Earth Amazon Program and the Institute for Forest and further development of the M&E system, in conjunction with Agricultural Management and Certification (IMAFLORA). the Monitoring and Analysis Project. Over 30 organizations involved in community forestry Science Centers and Directed Research participated in the meeting, along with representatives of the The Science Centers and Directed Research Project-Phase Brazilian government, the World Bank, donor agencies, I will close on December 31, 1999. Discussions on the design universities and the Brazilian Biodiversity Fund, which was of a possible follow on operation are currently underway. A created, in part, with seed money from the Global Environment project preparation visit by the World Bank, the U.S. Agency Facility (GEF) through the World Bank. An important for International Development (USAID) and the European outcome of the workshop was the decision to hire a technical Commission (EC) took place on June 7-12, 1999. The team coordinator to provide technical support and linkages to all concluded that a final rigorous evaluation of the Phase I and community forestry initiatives in the Amazon. This position Emergency Assistance Projects should be completed prior to will be funded by PROMANEJO. making decisions about the design of the next project. The The partnership of PROMANEJO, PD/A, USAID and Emergency Assistance Project closed on June 30, 1998. GTZ will continue to fund annual community forestry It was agreed that one implementation completion report workshops for information sharing and exchange. The next (ICR) would be done by the Bank for both projects. The workshop is expected to take place during the first half of 2000. government's own evaluation report, which will serve as an The Frst Workshop on Business Opportunites in the input to the ICR, will include: (1) a self-evaluation by each Sustanable Producton of Timber in the Amazon took place in science center and directed research beneficiary, already Manaus on October 4-6, 1999. The workshop was organized completed; (2) an updating of the 1992 needs assessment for with funding from PROMANEJO, the Rain Forest Trust, GTZ science centers and rain forest research in the Amazon, and Axial Bank to discuss the timber certification process and scheduled to take place in mid-November 1999; and (3) a final . . independent evaluation by the projects' International Group for Scientific Monitoring (GIAC), which is taking place on October Over 100 public and private entities participated in the 18-26, 1999. meeting, including some of the largest loggers in the Amazon; The mission also included a two-day workshop to discuss national and international NGOs; timber buyers from Brazil, lessons learned from the two initial science projects, and the Europe and the USA; the Brazilian National Development Bank design of the next project. The participants, including (BNDES); and the Bank of Amazonia (BASA). representatives of the scientific community, NGOs and Important outcomes of the workshop include the adoption technical secretariats of the Pilot Program, made many positive of a resolution proposed by the Friends of the Earth Amazon observations about the projects. They emphasized the need for: Program, the Brazilian Institute for Man and the Environment (1) better integration of the science subprogram into the overall in the Amazon (IMAZON) and IMAFLORA to set a target for objectives of the Pilot Program; (2) more consideration of the production of two million cubic meters of certified wood regional and local research needs; (3) greater emphasis on from the Amazon by the year 2005. collaborative, inter-institutional and interdisciplinary research; (4) consideration of research fellowships, stipends and other In addition, several timber buyers made a commitment to support, and (5) better dissemination of research results to a bfonly certified wood and a Brazilian buyers group for broad spectrum of users. ~~certified timber was formed. Furthermore, a task force composed of representatives from BNDES, BASA, Axial Bank The follow on project has preliminary financing of and the UN Development Programme (UNDP) was created to approximately US$12 million. Evaluation activities of the propose changes in the credit system for the forest sector, in initial two projects, programmed from June 15 to December order to address new demands from managed and sustainable 15, 1999, are expected to provide important inputs to the forestry initiatives. * design of the next project. *> 3 BRAZIL RAIN FOREST PILOT PROGRAM UPDATE Pocus On: Private SectorIvlv et intePio rgram Sustainable development of the Amazon and Atlantic rain and other projects in this area. One of the possible mechanisms forest regions can succeed in the long-term only with the for implementing this project would be through a revolving participation of the private sector. Private sector involvement fund. The project would have the following objectives: is. especially important in the development of marketing strategies for sustainable rain forest products; the creation of Promote sjoint ventures between community production collaborative business partnerships with local communities; and initiatives and private companies. the establishment of linkages to commercial financing sources. * Assure market penetration for community sustainable Since late 1997, the Pilot Program has focused more production. intensively on cultivating private sector participation in * Assist with the preparation of projects to create businesses program activities. The emphasis so far has been on the (market research, business plans, etc). development of initiatives linked to specific projects. Under the Demonstration Projects (PD/A), for example, a subproject * Help with access to other sources of funding, such as is being developed with the support of two international firms, credit lines and venture capital. Cargill and Mars, to revitalize the sustainable production of Operational guidelines for the project would be similar to cocoa in southern Bahia. Another proposed PD/A subproject those of PD/A (a formal call for proposals; evaluations by an would support the production of curaui in Santarem, Para to executive commission; technical and financial support for one supply the auto firm Mercedes-Benz of Brazil. The firm has to two years). Successful joint ventures formed with support been studying the potential of this natural fiber to replace fiber from the project would be required to repay the amount glass in many car and truck parts. Curaua cultivation would originally invested. also help in the recovery of degraded land in the region. Discussions are also underway with the staff of the The Extractive Reserves Project (RESEX) is also Brazilian Biodiversity Fund (FUNBIO) to link the proposed benefiting from private sector involvement. RESEX officials PPSB with two FUNBIO initiatives to support the formation of recently signed a contract with Axial Bank to develop a private sector partnerships with local communities and a grant business plan with the Chico Mendes Extractive Reserve in fund to support the development of community business plans. Acre. Financing will come from a venture capital fund set up FUNBIO was created, in part, with seed money from the GEF. by Axial Bank with contributions from the Global Environment Facility (GEF) and the International Finance Corporation (IFC) The Government of the Netherlands has reviewed a to support environmentally sustainable businesses in Latin preliminary proposal for this project and has expressed interest America. With the development of a business plan, the reserve in providing up to US$5 million towards the initial cost. * will be better equipped to attract partners for marketing and - ~~~~~~~~~~Institutional Reform (Cont.ftom page IJ investment purposes. Other activities with private sector involvement include the of individual projects, and the effectiveness of the Pilot organization of a timber certification workshop, which took Program as a whole. Composed of 14 Brazilian and place in Manaus on October 4-6, 1999. The workshop was international experts on the Amazon, the IAG meets twice a designed to show loggers, timber buyers, bankers and investors year to review program progress, conduct field visits to project that there is a profitable market for certified timber, where sites, and report on its findings and recommendations for consumers are willing to pay a premium for sustainably improving the implementation of program activities. Revised harvested products. The event also inaugurated a new forum in terms of reference for a smaller IAG with a more strategic which programs such as the Pilot Program can play a key role - orientation will be discussed at the Participants' Meeting in catalyzing commercial partnerships among private The Pilot Program is also receiving advice on institutional companies, NGOs and financial institutions for sustainable reform from a variety of other sources, including the two development. (See related article on page 3) principal NGO networks that participate in the program (the Despite the innovative nature of project-specific initaives Amazon Working Group-GTA, and the Atlantic Forest involving the private sector, there o are,limitations to titis Network- RMA). In addition, individual NGOs, such as approach. The PD/A project, for example, was not developed Greenpeace, have produced reports with suggestions for the to support business start-ups. Rather, it was designed to test program's institutional future. different models of sustainable production and conservation. The 1999 Participants' Meeting in Brasilia will provide an testing models and profit-making are, not. always compatible important forum to discuss the various options and forge a strategies. In an effort to promote the development of more consensus on which organizational structure will best allow the far-reaching business partnerships between rain forest Pilot Program to realize its primary objective: namely, to dem- communities and private firms, the creation of a Project to onstrate sustainable approaches for conserving Brazil's rain Promote Sustainable Businesses (PPSB) has been- proposed by forests. *> the Pilot Program to complement the current role of PD/A Impresso em papel reciclado ..~~~~~~~~~~~ Impess em pae .r.e..i..._l_ad_o