Document of The WorldBank FOROFFICIALUSEONLY ReportNo: 32500-TZ PROJECTAPPRAISALDOCUMENT ONA PROPOSEDCREDIT INTHEAMOUNT OFSDR 33.9 MILLION (US$51MILLIONEQUIVALENT) AND ONA PROPOSEDGLOBALENVIRONMENTFACILITY TRUST FUNDGRANT INTHEAMOUNT OFUS$ 10MILLION TO THE UNITEDREPUBLIC OFTANZANIA FORA TANZANIA MARINEAND COASTALENVIRONMENTMANAGEMENTPROJECT June 21,2005 EasternAfricaEnvironment and Socially SustainableDevelopmentDepartment Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange RateEffectiveMarch 31,2005) Currency Unit = TSh TSh1,lOO = US$1 US$l.SOS = SDR1 FISCAL YEAR July 1 - June30 ABBREVIATIONS AND ACRONYMS AIGA Alternative Income Generating Activity AMC Asset ManagementCommittee BMU BeachManagementUnit CAS Country Assistance Strategy CBO Community BasedOrganization CCAF CoastalCommunity Action Fund CCAFTC CoastalCommunity Action FundTechnical Committee CCCE CoastalCommunity Capacity Enhancement CDD Community DrivenDevelopment CE Capacity Enhancement CFAA Country Financial Accountability Assessment CMA Community Managed Area CMAP Community Mitigation Action Plan CMC Community Management Committee CPAR Country Procurement AssessmentReport CSPC Community Subproject Cycle CTB Central Tender Board CVF CoastalVillage Fund DC Development Communication DED District Executive Director DFID Department for International Development DOE Divisionof Environment DPG Development Partner Group DSFA Deep Sea FishingAuthority EC European Commission EEZ Exclusive Economic Zone EGFT EEZGovernanceFacilitationTeam EIA Environmental Impact Assessment EO1 Expression of Interest ESA Environmental and Social Assessment FA0 Food and Agriculture Organization FMR Financial Management Report FMS Financial Management System GDP Gross Domestic Product FOROFFlcLALUSEONLY GEF Global Environment Facility GIS Geographic Information System GMP General Management Plan GOT Government of Tanzania GPN General Procurement Notice HIV/AIDS HumanImmunodeficiency VirudAcquired ImmuneDeficiency Syndrome ICB International Competitive Bidding I C M IntegratedCoastal Management IDA InternationalDevelopment Association IEC Information, Education andCommunication IFMS IntegratedFinancial Management System IMS Institute of Marine Science IOFC IndianOceanFisheries Commission IUCN World Conservation Union JAS Joint Assistance Strategy JSDF Japanese Social Development Fund KMKM Prevention of Corruption Bureau (Kikosi Maalumcha Kuzuia Magendo) LEA LimitedEnvironmental ImpactAssessment LG Local Government LGA Local Government Authorities LGC Local Government Council LSP Local Service Provider M&E Monitoring and Evaluation. MACEMP Marine and Coastal Environment Management Project MANREC Ministry of Agriculture, Natural Resources, Environment and Cooperatives M C A Marine Conservation Area MCS Monitoring, Control and Surveillance MDG MillenniumDevelopment Goal MIS Management InformationSystem MMA Marine Management Area MMT MACEMP Management Team MNRT Ministry of NaturalResourcesand Tourism M O U Memoranda of Understanding MPA Marine ProtectedArea MPRA Marine Parks and ReservesAct MPRU Marine Parks and ReservesUnit MSME Micro- Small- and MediumEnterprise MTB MinisterialTender Board MTEF MediumTerm Expenditure Framework NEMC National Environmental Management Council NGO NonGovernmental Organization NORAD Norwegian Agency for International Development NSC National Steering Committee NSGRP National Strategy for Growth and Reductionof Poverty NVF National Village Fund This document has a restricted distribution and may be used by recipients only in the performance of their official duties. I t s contents may not be otherwise disclosed without World Bank authorization. O M Operational Manual PADEP Participatory Agricultural Development and Empowerment Project PDO Project Development Objective PF ProcessFramework PGO Project Global Objective PIM Project Implementation Manual PORALG President's Office-Regional Administration and Local Government PRS Poverty Reduction Strategy PRSC Poverty ReductionSupport Credit PRSP Poverty Reduction Strategy Paper PSC Project Steering Committee RC Regional Commissioner RPF ResettlementPolicy Framework SACCOS Savings and Credit Cooperative Society SADC SouthernAfrica Development Community SBD StandardBiddingDocument SDP StandardDisbursement Percentage SME Small and MediumEnterprise SPN Special ProcurementNotices SWIO SouthWest IndianOcean SWIOFC South West IndianOceanFisheries Commission SWIOFP SouthWest IndianOceanFisheries Project TAFIRI Tanzania Fisheries ResearchInstitute TASAF Tanzania Social Action Fund TCCIA Tanzania Chamber of Commerce, Industry and Agriculture TOR Terms of Reference UNEP UnitedNations Environment Programme URT UnitedRepublic of Tanzania U SAID UnitedStates Agency for International Development vc Village Council WB World Bank WSSD World Summit for Sustainable Development WWF World Wide Fundfor Nature Vice President: GobindT. Nankani Country ManagerDirector: Judy M.O'Connor Sector Manager: KarenMcconnell Brooks Task Team Leader: Indumathie Hewawasam Table of Contents A STRATEGIC CONTEXT AND RATIONALE . ........................................................................ 4 1 Country andsector issues........................................................................................................ 4 . 5 7 B PROJECTDESCRIPTION .3.Rationale 2.Higher level objectives to which the project contributes ........................................................ for Bank involvement ............................................................................................. ........................................................................................................ 1 Lendinginstrument................................................................................................................. 2 Project development objective andkey indicators 3.Project global environment objective andkey indicators....................................................... .. 8 8 .................................................................. 8 9 4 Project components................................................................................................................. . 9 5.Lessonslearned andreflected inthe project design.............................................................. 14 C IMPLEMENTATION .6.Alternatives consideredandreasonsfor rejection................................................................ 15 .............................................................................................................. 18 18 2.Institutionaland implementation arrangements.................................................................... 1.Partnership arrangements(if applicable) .............................................................................. 19 3 .Monitoring 22 4.Sustainability and Replicability............................................................................................ and evaluation of outcomes/results.................................................................... 23 5 ..Criticalrisks and possiblecontroversial aspects................................................................... 24 25 D.APPRAISALSUMMARY...................................................................................................... 6 CrediVGrant conditions andcovenants................................................................................. . .......................................................................................... 26 2.Technical............................................................................................................................... 1 Economic andfinancial analyses 26 27 28 4 Social..................................................................................................................................... 3 Fiduciary ............................................................................................................................... 30 65.Environment ... .......................................................................................................................... 31 33 7.PolicyExceptions andReadiness.......................................................................................... Safeguardpolicies................................................................................................................. 33 TECHNICAL ANNEXES ............................................................................................................ 34 1.Country and sector or programbackground......................................................................... 34 2 ..Major relatedprojects financed by the Bank and/or other agencies..................................... ....................................................................................... 39 4.Detailedproject description.................................................................................................. 3 Results framework and monitoring 43 51 5 . .Project costs.......................................................................................................................... ............................................................................................... 78 7.Financial managementanddisbursementarrangements....................................................... 6 Implementation arrangements 79 96 8 .Procurement........................................................................................................................ 109 9.Economic and financial analysis......................................................................................... 117 10.Safeguardpolicy issues..................................................................................................... 122 12.Documents inthe project file ............................................................................................ 11.Projectprocessing............................................................................................................. 127 129 13. Statementof loans and credits .......................................................................................... 130 14.Country at a glance ........................................................................................................... 15.Development Communication Strategy............................................................................ 132 134 17.Incremental Cost Analysis ................................................................................................ 16.StakeholderConsultations ................................................................................................ 137 146 153 18b.Task TeamResponse to STAP RosterReview............................................................... 18a.STAP Roster Review...................................................................................................... 160 19.BiodiversityAssets of Tanzania's CoastalandMarine EcosystemsandAnalysis of Threats 20.Implementationof MACEMP Community Sub-projectsthrough TASAF 2...................164 andRootCauses...................................................................................................................... 175 185 22.Map: IBRD33494............................................................................................................ 21.Letter of Sector Policy...................................................................................................... 192 TANZANIA MARINEAND COASTALENVIRONMENTMANAGEMENTPROJECT PROJECTAPPRAISALDOCUMENT AFRICA AF'TS2 Date: June 21, 2005 Team Leader: Indumathie V. Hewawasam Country Director: Judy M.O'Connor Sectors: General agriculture, fishing and forestry Sector Managermirector: Karen Mcconnell Brooks sector (100%) Themes: Other environment and natural resources Project ID:PO82492/ PO84213 / PO88976 management (P); Other human development (S) GEFProject ID:2101 Environmental Screening Category: Partial Assessment Lending Instrument: Specific Investment Loan Safeguard Screening Category: LimitedImpact Borrower: Government of Tanzania Ministry for Finance P.O. Box 9111 Dares Salaam Tanzania Responsible Agencies: (1) Ministry of Natural Resources and Tourism (MNRT) P.O. Box 9372 Dares Salaam Tanzania Tel: 255-22-2122930; Fax: 255 - 22-2110352 E-mail:nature.tourism@mnrt.org Telegram: "MALIASILI", UVIUVI, DARES S A L A A M (2) Ministry of Agriculture, Natural Resources, Environmentand Cooperatives (MANREC) ~~ Revolutionary Government of Zanzibar P.O. Box 159 Zanzibar Tanzania Tel: 255-24-223-2840 Fax: 255-24-223-0290 E-mail: manrec@zanlink.com Project Implementation period: Start July 2005 EndAugust 2011 ExpectedEffectiveness date: August 2005 ExpectedClosing Date: August 2011 Does the prqject depart from the CAS [PRS] in content or other significant respects? [ ] Yes [ X ] N o Does the project require any exceptions from bank policies? [ ]Yes [XINO Have these been approved by bank management? [ ]Yes [ IN0 I s approval for any policy exception sought from the Board? [ ]Yes [XINO Does the prqject include any critical risksrated"Substantial" or "High"? [ X I Y e s [ ] N o Does the project meet the Regional criteria for readiness for implementation? [ X I Y e s [ ] N o Project development objective: The objective of the Project is to strengthen the sustainable management and use of the Borrower's Exclusive Economic Zone, territorial seas, and coastal resourcesresulting inenhancedrevenue collection, reduced threats to the environment, better livelihoods for participating coastal communities living inthe Coastal Districts, and improved institutionalarrangements. Project global objectives: The project global objectives are (i)to develop an ecologically representative and institutionally and financially sustainable network of marine protected areas, and, (ii)to buildcapacity in the United Republic of Tanzania to measureand manage transboundary fish stocks. Project description: There are four components as follows: Component 1. Sound Management of the Exclusive Economic Zone (EEZ), with the objective to establish and implement a common governance regime for the EEZ that contributes to the long-term sustainable use and managementof EEZ resources. Planning and policy support i s provided to harmonize domestic legal and policy instruments, with a view to operationalizing the Deep Sea FishingAuthority through: improved licensingof foreign vessels; enhanced monitoring, compliance and surveillance to regulate foreign commercial fishing fleets and reduce conflicts between artisanal and industrial fishing; establishment of a sustainable financing mechanism; and improvedfishery stock assessments on near- shore stocks. Partnerships with neighboring countries, local communities and the private sector are strengthened so that URT can better meet its regional obligations for improving the sustainable use of trans-boundary fish stocks and for decreasing post-harvest losses through reducingby-catch and - 2 - enhancing opportunities for domestic value-added processing. Scientific researchon potential benefits from utilization of marine genetic resources, scientific knowledgebase to set sound management targets, development of an EEZresource management strategy, marine environmental status monitoring system and an early warning system for environmental change are other activities to be supported within this component. Support will also be provided to facilitate regional dialog on EEZgovernance and collective effort towards regional quota systems for licensing relatedto maximum sustainable yields of key commercial transboundary species. Component 2. Sound Management of the Coastal Marine Environment, with the objective to establish and support acomprehensive system of managed marine areas in the Territorial Seas, buildingon Integrated Coastal Management strategiesthat empower and benefit coastal communities. Planning and policy support will be provided at the national, local government, and village levels to improve spatial planning along the coastal margin, to develop a national system plan for marine managed and marine protected areas (MPAs), and to promote marine zoning that encourageslocal co-management and decreasing open access conditions. Support is provided to strengthenthe existing network of marine managed areas, and to increase the area under effective management to meet the URTobjective of achieving 10% protection of its seas by 2012. Domestic partnerships are developed with local communitiesand the private sector to improve co-management efforts and to improve the overall cost efficiency of marine area management. Regional partnerships are enhancedto pursuejoint marine management initiatives, including establishment of transfrontier MPAswith borderingKenya and Mozambique. Component 3. Coastal Community Action Fund, with the objective to empower coastal communitiesto access opportunities so that they can request, implement and monitor sub-projects that contribute to improved livelihoods and sustainable marine ecosystem management. The component mirrors the structure of the Tanzania Second Social Action Fund(TASAF 2). Itestablishes aring-fenced Coastal Village Fund(CVF) within TASAF 2 to deliver Community DemandDriven sub-projects to coastal populations in mainlandTanzania and Zanzibar islands. A Coastal Community Capacity Enhancement sub-component supports villages and local government authorities in ensuring that the CVF delivers sub- projectsconsistent with overall MACEMP objectives, usingTASAF 2 access protocols. Component 4. Project Imulementation Support, with the objective to provide efficient project implementation services. The component supports a transitional EEZGovernance Facilitation Team duringthe start-up phases of the DeepSeaFisheries Authority, as well as mainstreamed MACEMI? Management Teams in government ministries to implement project activities on mainlandTanzania and inZanzibar. The support catersfor technical oversight and liaisonwith TASAF 2, and a comprehensive M&EStrategyandDevelopmentCommunicationStrategy will be executed through thiscomponent. Which safeguardpolicies are triggered, if any? The following safeguardpolicies are triggered: EnvironmentalAssessment (OP/BP/GP 4.01); Natural Habitats (OPIBP 4.04) ;CulturalProperty (OPN 11.03, being revised as OP 4.1 1); and, Involuntary Resettlement (OPBP 4.12). The Borrower has prepared an Environmental and Social Assessment (ESA) and a ProcessFramework (PF)which havebeenreviewed, approvedanddisclosed incountry on February 2,2005 and at the World Bank Info Shop on February 4,2005. Significant, non-standardconditions, ifany: Not applicable. Board Presentation: Signed Letter of Sector Policy. Credit Effectiveness: 6 core staff in MMTs completed training; 3 core positions in EGFT recruited; CCAFTC established; M o Uentered into with TASAF; monitoring and evaluation framework established: final version of the project implementation manual (PIM) developed; a District M O U entered into with Ieach of the Coastal Districts of Kilwa, Rufiji and Mafia. Covenants applicable to project implementation: release of GEF Capitalization Grant to MLF. - 3 - A. STRATEGIC CONTEXT AND RATIONALE 7. Country and sector issues National strategyfor poverty reduction Tanzania has put inplace policies and strategies on poverty reduction. These include the Poverty Reduction Strategy (PRS) finalized in2000, andthe new National Strategy for Growth and Reductionof Poverty (MKUKUTA') recently endorsedby Cabinet. World Bank's efforts inthis sector are consistent with and guidedby boththe PRS of 2000 and the NSGRP, which mainstreamsenvironmental sustainability. The MKUKUTA re-visits income poverty, status of employment, non-income poverty, vulnerability and cross-cutting issues such as environmental sustainability and HIV/AIDS. The strategy also recognizes geographic disparities, the growing rural-urbandivide and disparities across and within regions and districts inpoverty status. The NSGRPelaborates clusters of desiredoutcomes for poverty reduction as: (i) and growth reduction of incomepoverty; (ii) improved quality of life and social well-being; and (iii) good governanceand accountability. The MKUKUTAnotes upfront, a commitment to ensuring that development activities today do not adversely affect the development needs of future generations and places emphasis on sustainable use of the country's natural resources. The second cluster of outcomes: Quality of life and social well being addresses humancapability, survival, vulnerability, equity considerations andenvironmental sustainability. Key policy, institutional, and other issues (root causes, barriers, and threats) Growing coastal populations and persistent foreign interests inmarine fisheries are placing increasing pressures on fisheries andthe marine and coastal habitats that support them. Local fishermenand-to muchlarger extent -foreign fleets are fishing inde facto open access conditions inmost of Tanzania's Exclusive Economic Zone (EEZ) andterritorial seas. Marine and coastalecosystems are being threatenedfrom pressures such as destruction of critical habitats that providespawning and nursery grounds for fish andother marine biodiversity, from over-exploitation of some key commercial and vulnerable species, and from inadequate management of fishing methods and fishing effort. Sustainability of near-shore and transboundaryfish stocks is further underminedby inadequateinformationabout the stress-level on andthe resilience of the resourcebase. The lack of clear access rights innear-shorewaters continues to exacerbate the ongoing poverty incoastal communities and thwarts potential for substantial government revenue inthe EEZ. On the terrestrial side, unplanneddevelopment and unregulated construction along the coastalmargins threatens coastal ecosystemsand the various functions and benefits derived from such ecosystems. Government strategy towardssustainablecoastal and marine management The laws and policies inmainland Tanzania and Zanzibar relevant to coastal andmarine resourcesare relativelycomprehensive. But their implementation is rather uncoordinatedand current efforts focus onharmonizing legal instruments, or introducing new ones to conformto existing policies. Different institutional and legal systemsexist for the mainlandand Zanzibar, and there is potential for linkages through the Deep Sea FishingAct 1998andthe Territorial Sea andExclusive Economic Zone Act 1988.The government has inthe Letter of Sector Policy recognized the impediments to the sustainable management and utilization of resources inthe Kiswahiliacronym - 4 - EEZandconfirmed its commitment to operationalizing the Deep SeaFishingAuthority Act of 1989.The Government has also confirmed its intentions to amendthe Act to enable the establishment of the Deep Sea FishingAuthority by July 2005. Other commitments inthe Letter of Sector Policy include: the review of the Fisheries Act 2003 (mainland) and Fisheries Act 1989 (Zanzibar) towards harmonization of management actions consistent with the goals of MACEMP; implementation of the Integrated Coastal Environment Management Strategy and NationalFisheries Master Plan; review and updating of MarineParks andReservesAct, the National Fisheries Sector Policy and Strategic Statement, the Mangrove Management Plan; and commitment to protecting cultural heritage. Other recent achievements include: the adoption of the NationalEnvironmental Management Act (2004) providingfor improved environmental regulation and overall planning; and declaration of the first Marine Ramsar Site inSouthern Tanzania. Country eligibilityfor GEF co-financing The following key facts confirmTanzania's eligibility for GEF co-financing. Tanzania signed the Convention on Biological Diversity (CBD) on 12June 1992 andratified the CBD on 8 March 1996. As part of Tanzania's participation inthe CBD, a Coastal Biodiversity Conservation Strategy was elaborated in 1995 and a NationalBiodiversity Strategy and Action Planwas formulated in2000. Tanzania also is a party to the Convention on International Trade on Endangered Species (CITES), ratified on 29 November 1979. Supporting CITES, the Regional Lusaka Agreement on cooperative enforcement operations directed at illegal trade in wild fauna and flora, adopted in 1994, was signedby Tanzania on 8 September 1994. The Convention on the Conservation of Migratory Species of Wild Animals was adopted in 1979. The International PlantProtection Convention was adoptedin 1951.The Convention Concerning the Protection of the World's Cultural andNatural Heritage (the World Heritage Convention) was ratifiedby Tanzania on 2 August 1977. Tanzania becamea Contracting Party under the RAMSARconvention on 13 April 2000. Inaddition, Tanzaniaratifiedthe UnitedNations Convention on the Law of the Sea (UNCLOS) on 30 September 1985. Tanzania now also serves on the Governing Councilof UNEP. An important regional instrumentis the Convention for the Protection, Management and Development of the Marine and Coastal Environment of the EasternAfrican Region (the Nairobi Convention) and RelatedProtocols, which Tanzania ratifiedon 1March 1996.The objective of the Convention is to ensure sound environmental management of the maritime andcoastal areas of the East African region. Itprovides a framework for the protection and development of marine and coastal resources. The protocols focus on the conservation of flora and fauna and on measures for combating marine and coastal pollution. 2. Rationalefor Bank involvement The rationale for Bank involvement inthis project is that it supports directly or indirectly all the three pillars of the Government's National Strategy for Growth and Reductionof Poverty, the MKUKUTA,butwith aregionalfocus onthe coastal areas. The coastal districts remainamong the poorest inTanzania, and MACEMPprovides an opportunity to target these populations directly through acting concurrently on their environmental andeconomic vulnerability. The underlyingdevelopment hypothesis is that sound management of coastal resources, many of which are currently open access and are thus over-exploited or sub-optimally utilized, will - 5 - contribute directly to improved incomes and to reducedvulnerability to external shocks. A secondhypothesis (acting ina reversecausal direction from the first), is that increasedlocal empowerment, through enhancing community managementof the resourcebase and through better definitionof coastal andmarine property rights and responsibilities, will inturnleadto more sustainableuse of the resourcebase through, for example, improved commercial fish stocks, reduced by-catch wastes, and reduction indestructive fishing practices. These two causal links are mutually reinforcing, contributing over time to aconcurrent reduction inpoverty and improvement inthe quality of the resourcebase. The project could alternatively have addressed only one of these two hypothesesthrough, for example, focusing on resource protection alone or onlocalempowerment alone. But such a single pronged focus would haveleft potential positive feedback effects to chance. The two pronged approachis thus also a risk management mechanism. The lack of a sound governance regimefor bothoffshore marine fishery and the nearshore fisheries results inserious loss of revenue for Tanzania and lost economic opportunities for local fishermen and the growth and possible export of other marine products. The project aims to strengthenthe governance regime for boththe commercial fishery inthe Exclusive Economic Zone as well as the nearshoremarine resources. The project also aims to achieve improved quality of life and social well being inthe target areas through better information and training to promote innovation, access to markets, value addition of marine products, reductionof post harvest loss and the identificationof public-private partnerships to reduce risk and vulnerability. The project is therefore inline with all three pillarsof the MKUKUTA. Otherdonor support to the sector and comparativeadvantageof theBank International donors have been active inthis sector for about one decade. USAID has supported coastaldistrict planning andthe development of the NationalIntegrated Coastal Environment Management Strategy (NICEMS) on mainlandTanzania, adopted officially inDecember 2003. The EuropeanCommission (EC) has concentratedon strengthening URT's capacity inthe Monitoring, Control and Surveillance (MCS) of the country's EEZ through providingtechnical assistanceand equipment to facilitate offshore management. Numerous donors and NGOs (WWF, IUCN, JSDF, Ireland, Norway, Finland, Sweden) are providingsite-specific support for marine protected area management along the coast, including a wide spectrum of ecosystemson the mainland and the Zanzibar islands. At a regional scale, multi-country efforts to improve sustainable management and exploitation of the resources of the South West IndianOceanare being supportedthrough the South West IndianOcean Fisheries (SWIOF) and the UNDP supportedAghalus SomaliLarge Marine Ecosystems project. Scientific knowledge of selected coral reef ecosystems is being improvedthrough the GEF-supported Global Coral Reef Targeted Researchand Capacity Buildingfor Management Project. Sustainable management and improvement of culturalresources and assets along the coast have been the focus of attention by Frenchassistanceand UNESCO. The gaps inthe current assistanceare primarily as follows: lack of support for a common governance regime inthe EEZbetweenZanzibar and mainlandTanzania, although achieving and implementingsuch a regime is a policy priority and has supporting legislation such as the Deep Sea FishingAuthority (DSFA) Act. - 6 - lack of a systemic approachto developing a network of marine managedareas consistent with URT's 2003 commitment at the World Parks Congress to increase its level of protectionof the territorial seas from less than4% now to 10% by 2012 and to 20% by 2025. lack of explicit interventions that comprehensively tie coastal community livelihoods within a framework of empowerment and localresourcemanagement, such as that contemplated inNICEMS andinsimilar IntegratedCoastal Management (ICM) policies onZanzibar. The Bankhas a comparative advantage inaddressing some of thesegaps, andinproviding uniquecontributions that couldnot be addressedby other donors or other means, as follows: the Bank i s seen as an impartialfacilitator indeveloping and implementing a common governance regime inthe EEZ.For example, the EC is concurrently negotiating a commercial fisheries agreement with URT while also providingtechnical assistance in areas that would influence the monitoringof that agreement. the Bank can coordinate activities inMACEMP with those inits other operations, consistent with the intent of the Tanzania Assistance Strategy which is to "raise the effectiveness of development assistance and reduce the transactions cost of aid delivery." Specifically, one of the components of MACEMP will deliver coastalcommunity demand driven sub-projects through a TASAF 2 ring-fenced window. URTcan optimize the use of its borrowed resourcesby leveraging grant resourcesfrom GEF through the Bank which providefor financing of incremental costs associatedwith conservation of biodiversity incoastal and marine ecosystems andprotection and sustainable use of transboundary fish stocks inTanzania's territorial sea andEEZ. m the Bank is well placed to assist URT inachieving financial sustainability for this project becauseof the potential connection to other sectoral activities supportedthrough Bank assistance. Specifically, the project contemplates establishment of a MarineLegacy Fund mechanism that will indue course require coordination of efforts by numerous ministries. 3. Higher level objectives to which theproject contributes Higher-level objectivesfor the sector andfor poverty reduction The principal goal of the CAS is to helpGovernment reduce poverty throughthe promotionof higher growth, and through interventions that buildthe assets of the poor, reducetheir vulnerability andpromote better governance and accountability. The MACEMP specifically addresses the CAS objectives of reducing poverty throughpromoting growth inthe coastal areas by: (i) supporting micro and small enterprises to add value to marine and coastal products and reducepost harvest losses; (ii) providing access to markets both domestic andexternal; (iii) empowering coastal communities to have better access to, andmanage marine and coastal resourcesmore sustainably. The MACEMP also supports the CAS goals of public sector reform and institutionbuildingthrough supporting all levels of government and civil society inthe managementof coastal and marine resources. The project will specifically support: (i) a sound governanceregime for the offshore fishery throughestablishment and operationalization of a Deep Sea FishingAuthority; (ii) fisheries departments of both mainland Tanzania and Zanzibar governments to managethe nearshoremarine resources; and (iii) district and locallevel - 7 - authorities to plan and managethe coastal and nearshoreenvironment. This operation is financed from the new IDA 14 allocation for Tanzania. The project will explicitly target all coastaldistricts onthe mainland andZanzibar islands, plus the 200 000km2EEZ. The strategies being implementedare intended to be replicable throughout the coastal area, thus representing a potential target population of 8 million inhabitants along 1424 kmof coastline. The project will improve governanceof the EEZ,andwill increasethe effective management andprotection of the 37 000 km2of territorial seas. B. PROJECTDESCRIPTION 1. Lending instrument IDA Credit The IDACredit will be a Specific InvestmentLoan(SIL). This is the first such intervention by the Bank inthis sector andthe project design i s such that it will be stand-alone without subsequent phases. One of the project components will transfer resources directly into a ring- fenced TASAF 2 sub-project funding envelope; TASAF 2 is also designatedas a SIL. GEF Grant GEFfinancing is inthe form of two full-sizeproject grantsrelating to Operational Program2 (Biodiversity -Coastal, Marine, and Freshwater Ecosystems) andOperational Program 8 (International Waters -Waterbody-based). MACEMPhas beendeveloped at the same time as a potential Strategic Partnership for a SustainableFisheries Investment Fundfor Sub-SaharanAfrica has beenunder development within the Africa region. The Fisheries Partnership is conceived as a multi-country funding envelope that will finance individual national level projects contributing to sound managementof LMEfishery resources. GEFproposedfinancing to the FisheriesPartnershipwouldbetotal of US$60millionfor coastalnations inSub-SaharanAfrica. Tanzania is committed both to MACEMP and to the Fisheries Partnership. InJanuary 2005 Tanzania's representative was selectedto Chair the Technical Committee of the FisheriesPartnership, and Tanzania remains dedicated to the overall objectives of soundLMEmanagement. When the Fisheries Partnership receives focal point endorsement, and if it subsequently receives GEFCouncil approval, URT will review the objectives and modalities of the Partnership to determine institutionallinkages to ensure efficiency, complementarity and promote regional collaboration. 2. Project developmentobjective and key indicators The project development objective is: to strengthenthe sustainable management and use of the Borrower's Exclusive Economic Zone, territorial seas, and coastal resources resulting inenhancedrevenue collection, reduced threats to the environment, better livelihoodsfor participating coastal communities living inthe Coastal Districts, and improved institutionalarrangements. Key performance indicators (KPIs) for the project are: - 8 - w KPI1Revenue Generationto EEZAuthority [baseline=nil; EOPtarget = US$20milliordyr] KP12 MMA System own revenuegeneration as % of Recurrent Costs [baseline =40%; EOP target = 150 %] KPI3 Coastal fisheries householdsperceiving an improvement intheir welfare and economic status [baseline 0%; EOPtarget 80%]. Note: KPI3 is monitored basedon samples of households participating inMACEMP financed CDD subprojects that are delivered through TASAF 2; TASAF 2 will also report on these households on the contribution to MDGindicators inCoastal Areas. 3. Projectglobal environmentobjectiveand key indicators The project global environmental objectives are: OP2 -to develop an ecologically representative and institutionallyand financially sustainablenetwork of marineprotectedareas, and OP8 -to buildURT's capacity to measure and manage transboundary fish stocks. Key performance indicators for measuring progress toward achieving these outcomes are: KPI4 Percentageof territorial seas under effective management[baseline =4%; EOP target = 10%] m KPI5 Daily observations of vessel catch and effort entered into URT Fisheries InformationManagement System. [baseline = 1000/year; EOP target = 15000/year] 4. Project components There are four components requiringUS$61.75 million financing (including contingencies) as follows: Component 1.SoundManagement of the Exclusive EconomicZone (EEZ), with the objective to establish and implementa common governance regime for the EEZthat contributes to the long-termsustainableuse and managementof EEZresources (US$16.15 million). Component 2. Sound Management of the Coastal MarineEnvironment, with the objective to establish andsupport a comprehensive system of managedmarine areas in the Territorial Seas, building on I C M strategies that empower andbenefit coastal communities (US$26.25 million). Component 3. Coastal Community Action Fund, with the objective to empower coastal communities to access opportunities so that they can request, implement and monitor sub-projects that contribute to improved livelihoods and sustainable marine ecosystem management (US$l 1.97 million). Component 4. Proiect ImplementationSupport, with the objective to provide efficient project implementation services (US$7.38 million). Basisfor selection of components Themajor target beneficiaries inthis project arepopulations inthe coastalcommunities that rely on marineand coastal resources; citizens throughout Tanzania will benefit from enhanced revenuegeneration from the EEZ. Improving managementof these resources generally involves a series of activities consisting o f (i) planning support, (ii) policy investment, and (iii) building and strengtheningpartnerships to ensure sustainability. But the actual activities differ - 9 - considerably inscope andnature inthe offshore EEZ andthe near-shoreterritorial seas and coastal areas. Inthe offshore, policy support is generally at a high national levelrequiring coordination of Zanzibar and mainland Tanzania policies, supportedby harmonized monitoring and enforcement policies andcomplementedby partnerships that include collaboration with foreign countries. By contrast, inthe near-shore, policy and planning supportis directed to decentralized authorities at the district or community level, supportedby a strengthenedsystem of marine managedareas (that include centrally managedprotected areas as well as co-managed near-shore fishing areas), complementedby a wide range of private andNGO partnerships.For this reason, the core Components 1and 2 focus on the EEZ and near-shoreareas respectively, although eachconsists of operational sub-components that include specific policy planning, investment, and partnership elements. The two core components are complemented by community demand-driven sub-projects that support the overall project objectives. The sub-projects follow TASAF 2 targeting procedures- focusing on vulnerable groups - with the addedcaveat that eligible activities must promote sustainable marine ecosystemmanagement.To permit harmonization of sub-project identification, appraisal, implementation, and monitoring, MACEMPwill transfer sub-project funds to aring-fencedTASAF 2 funding envelope. To facilitate this integration and improve transparency, these activities are isolated within the stand-alone Component 3 that mirrors TASAF 2: where the TASAF 2 components include a NationalVillage Fundand Capacity Enhancement, MACEMP's Component 3 includes a Coastal Village Fundand Coastal Community Capacity Enhancementas its sub-components. Experience with other projects inthe URT demonstrates that the differing demands and systems of Zanzibar and mainland Tanzania often present coordination challenges. As a risk mitigation mechanism, Component 4 is therefore dedicated to providing implementation support, including project monitoring and evaluation requirements. Elements of this component will becomethe responsibility of a Deep SeaFisheries Authority once established. Main targetgroup and outcomefor each component Component 1. SoundManagement of the Exclusive Economic Zone (EEZ) (US$10.33 million IDA:US5.07 million GEF: US$0.75 millionURT). The target populationis all citizens of Tanzania as those benefiting from improvedrevenue generation from EEZresources; MNRT and MANREC will lead implementation of Component 1.The mainbeneficiaries from Component 1 will be the Ministries responsible for Fisheries inboth sides of the Union, Ministry of Natural ResourcesandTourism (MNRT) inmainlandand Ministry of Agriculture, Natural Resources, Environment andCooperatives (MANREC) inZanzibar. The Departments for Fisheries inthe two Ministries would benefit from policy, regulatory, and institutionalreform as part of establishing the common governanceregime. The two agencies and the DSFA (once established) will benefit from targeted capacity buildingas part of their involvement injoint implementation of soundgovernance of the EEZ andsustainable management of the related livingresources. Other beneficiaries would include key researchorganizations inURT that are involvedin resource assessments and monitoring. The expected outcome i s a shift from a defacto open- access towards a managed-accessregime to provide for long-termsustainability and of the marine resourcebase and to maintain resilience of fish stocks to absorb controlled levels of utilization. MACEMP's comprehensive approach to sound governanceof the EEZ is expected to - 10- contributeto financial sustainability through improved capture of resourcerent supportedby strengthenedcontrol and enforcement mechanismsand through incentives for sustainable resource use. This component will support URT's national contribution to meeting specific targets set at the WSSD related to maintenance and restoration of national and transboundary fish stocks to sustainable levels. Component 1has been organized into three closely inter-linkedsubcomponents: Subcomponent I(a)will provide for the underlying planning support necessary for development of a soundEEZ governanceandmanagementregime.The aim is to develop a fisheries managementsystem that caters for an appropriate balance between maximizationof income from and long-term sustainability of the fisheries. To implement the fisheries managementsystem, a common EEZ authority capable of decision-making on behalf of the Unionand fast and effective enforcement will be established. Planning support will include relevant policy, regulatory and institutional reform as well as development of the scientific knowledge base indispensableto inform soundand adaptable managementof the marine resources. Financial sustainability will be supported through design of a MarineLegacy Fund(MLF).GEFOP8 funding (US$1.62 million) will focus supporting managementof the scientific knowledge base includingdesignof an EEZresource monitoringstrategy and a near-shore stock assessment. GEFOP2 funding (US$75,000) will provide supplemental financing to develop modalities for capturing genetic resourcevalue within the MLF. SubcomponentI(b) will provide the means for effective and efficient implementation of the EEZGovernance Regime.This will include strengthening of monitoring, surveillance and enforcement systems with a view to control fishingeffort, implementation of a sustainable financing mechanism, as well as pro-active EEZresource managementand monitoring. Comprehensive andtargeted capacity buildingand institutionalstrengthening for key operational agencies involvedinEEZ governance and management as well as key researchinstitutions will develop improvedperformance of these players inthe sector. GEFOP8 funding (US$1.44 million) will focus on implementing the EEZresource monitoring strategy andMCS efforts, as well as providing one quarter (US$250,000) of the initial seed capital for the MLFrevolvingfund.2 9 SubcomponentI(c) will support partnership buildingfor EEZ governance.This includes partnershipswith the private sector to improve sector sustainability and food-security through enhancedpost-harvest processes as well as appropriate landing andmarket facilities. The project will further strengthen the regional dialogue on soundgovernance and sustainable management of marine resources inthe West IndianOceanand build regional cooperation on transboundary marine and fishery issues. GEF OP8 funding (US$1.69 million) will focus on supporting international andregionaldialogs on EEZ governance and on supporting selectedcommunity investments associated with reduction of by-catch and post-harvest losses. 'MLFseed capital will be US$1 millionsubject to achieving an acceptabledesign. No IDA resources will be used to capitalize the MLF; the GEFcontribution will be US$250,000, and will be provided subject to parliamentary approval of MLF; appointmentof Executive Director and/or Boardof Directors inconsultation with the Bank, and deposit of the Governmentcontribution of US$750,000 to capitalization of the Fund. - 11- Component 2. SoundManagement of the CoastalMarine Environment (US$21.32 million IDA; US$4.93 million GEF OP2). The target population is all coastal communities inTanzania, with an emphasis on those dependenton near-shoreresourcesof threatened highbiodiversityvalue; MNRTandMANREC will lead implementationof Component 2. Component 2 has been organized into three closely inter-linkedsubcomponents: 0 Subcomponent2(a)will provide for the underlying planning support necessary for strengthening IntegratedCoastal Management (ICM) processes at the localgovernment level. The aim is to buildcapacity at the district levelthrough resource assessment, capability mapping, and spatial planning.I C Mplanning support will also beprovided to mainlandand Zanzibar inthe form of developing action plans for specific coastal areas, consistent with the NationalIntegrated Coastal Environment Management Strategy (NICEMS) on the mainlandand Environmental Management for Sustainable Development Act inZanzibar. Community access will be strengthenedthrough policy initiatives that support marine zoning (e.g., through a Community Territorial Sea) and through supporting a NationalPlanfor community managedareas ("National CMA Plan"). Integrationwith terrestrial planning will be ensuredby providing support for integrated land-use/marine planning to coastal districts (e.g., through planning biosphere reserves). 0 Subcomponent2(b)will provide the means for effective and efficient implementation of the network of Marine Managed Areas (MMAs) andMarine ProtectedAreas (MPAs). The subcomponent concentrates90% of its effort on site specific support, with about 10% allocated for umbrella support to core institutions. The umbrella support will include providing core funding support for institutions involved inimplementingthe National CMA Plan, as well as general MPA managementtraining for staff inthose institutions. Support will also be provided for strengtheningAntiquities departments on Zanzibar and the mainland to undertake inventories, planning and monitoringof cultural assets. Site specific support will be provided for: (i) existing MPAs/MMAs/CMAs; (ii) emerging five sites; (iii) mangrove areas at Chwaka Bay and Rufiji; and (iv) an unspecified number two of culturalheritage site investments to ensure their protection consistent with World Bank Safeguards- although some priority cultural sites have been targeted for initial years (Kilwa and other sites on the mainland; Livingstone House, Maruhubi/Mtoni ruins, Mangapwani ruins, Mkamandumeruins, cave system at Kiwengwa, Mtende and Chwaka inZanzibar). Thebulkof GEFfunding (of US$2.6 million) inthis sub-component will be dedicatedto expanding the current network of MMAs and MPAsby setting up and supporting full implementation of managementplans at two new sites: the Pemba Channel Marine Conservation Area on Zanzibar and the Kilwa-Rufiji ecosystemon the mainland. Inaddition, GEF support (of US$1.3 million) will finance the training requirements under the umbrella support, and about 10% of the support costs at existing sites, focusing on boundary demarcation and education campaigns at those sites. 0 Subcomponent2(c)will develop and support the buildingof regional, community and private sector partnerships.Regional partnerships focus on strengthening the ongoing dialog with all states bordering the EEZ;3an initial focus will be on neighbouring Kenya Inprinciple, this can also include all countriesinthe region that share transfrontier species, with aview to managingthe area to the benefit of all throughjoint monitoringefforts, shared science, or establishment of refugia or other forms of deep sea protectedareas. - 12- and Mozambiquewith a view to establishing regional transfrontier protected area networks. Strengthening of community partnerships will be done through replicating co- management models currently being pilotedat two areas (Kilwa and coastal areas of Zanzibar) by JSDF. Private sector partnershipswill be encouragedthrough capacity buildingthroughadistrict levelbusinessadvisory portalthat addresses private sector constraints through MSME capacity buildingand through access to financial services. GEFfinancing (of US$l.O million) for this sub-componentwill finance the regional partnership building and an expansion of the community partnership model beingtested by JSDF; the expansionsites will target communities near those sites being supportedby GEF inSubcomponent2(b). Component 3. Coastal Community Action Fund(US$10.97 million IDA: ;US$l.OO million Community). The primary beneficiaries of this component are the vulnerable poor incoastal communities. The expectedoutcome is a reduction inincome poverty, and increased participationof rural communities insustainable resourcemanagementdecisions andbenefits. The component is designedas a stand-alonelink to TASAF 2, and its two sub-components mirror those of TASAF 2: Subcomponent3(a)provides sub-project funding through a Coastal Village Fund(CVF). While the number of projects delivered will be linked to demand, the CVF is expected to deliver approximately 400 sub-projects at an average value of US$20,000 eachover the project life. Sub-projects will follow the CDD model and will entail a community contributionof 5% to 20% of total sub-project value. The US$8.0 millionof IDA financing associatedwith this sub-component will be transferred to TASAF 2 into the MACEMPRASAF 2 funding envelope. A resource allocation method provides a CVF . allocation to coastaldistricts on the Tanzania mainland, andto Pemba and Unguja islands on Zanzibar. Subcomponent3(b)provides Coastal Community Capacity Enhancementto assist coastal communities inaccessingthe CVF, and to facilitate identification, assessment, and monitoring of sub-project implementation. The US$3.O million of IDA financing will be managedthrough CCAF Coordinators stationed ineachof the line implementing Ministries; this sub-component is not part of the MACEMPRASAF 2 fundingenvelope. Component 4. Project Implementation Support (US$7.38 million IDA).The primary beneficiaries of this component are the MACEMP managementteams on the mainland and in Zanzibar, and the Deep SeaFisheries Authority once established. The expectedoutcome is an efficiently delivered project meetinghigh standards of transparency and participation. The component consists of two sub-componentsas follows: Subcomponent4(a) consists of the core staffing and technical assistance to the project. Activities including: (i)expert advisory staff and overheads for anEEZ Governance FacilitationTeam (EGFT) that facilitates establishment of the DSFA provides guidance to implementingline agencies; (ii) office staff and support for mainstreamedMACEMP Management teams (MMTs) inline agencies on the mainland(MNRT) and inZanzibar (MANREC); and (iii) technical inputs relatingto a project steering committee, a technical steering committee, and a roster of experts for sporadic advisory services. Some functions of the EGFTwill be transferred to the DSFA once operational. - 13- Subcomponent4(b) will cater for the monitoring and evaluation (M&E) needs of MACEMP. These include annual reporting (including safeguards), annual audits, the mid-termreview, andtheproject closing report. Baseline studies for projectmonitoring purposes are also catered for here. The MMTswill also beresponsible for overseeing a development communication (monitoring andlearning) strategy. Sector issues addressedby theproject The principle sector issuesinvolvereductionof incomepoverty, improvedlocal empowerment andsoundenvironmental management, with targeting to coastal areas. Indirect support to poverty reduction will be provided by improving the integrity of the far-shore andnear-shore resourcebase. Environmentalmanagement is addressedfor both marineand coastal resources. Marine managementis addressedthrough harmonizing regulatory practices of fisheries, with a view to increasing the available resourcerents and increasing the effectiveness of rent capture. Near-shore management will focus on designing and implementing a system of managedmarine areas that includes formal MPAs, formal marine conservation areas, managedfishery areas, and near-shoremarine zoning through a community territorial sea. Poverty reductionwill be addressedmore directly through supporting community demand-driven sub-projects inthe coastal areas, and through improvingempowerment of coastal communities inresource management. 5. Lessons learnedand reflected in theproject design Lessonsfrom analytical work and operationsthat are reflected inproject design Project Component 1(Sound EEZManagement) builds on existing work that has culminated in unimplemented legislationfor harmonized governance of the EEZ(through the Deep Sea Fishing Authority) andbuilds on 3 years of experience and capacity buildinginMonitoring, Compliance and Surveillance (MCS) that was initiatedunder EC leadership. It seeks to achieve conformance with international best practices as dictated under the FA0 Compliance Agreement and Fish Stock Assessment Agreement, to ensure sustainable fisheries within the EEZ. Key lessons reflected inthe component designare: harmonization of regulatory practices is important to improving fishery management. effective MCS can increaserevenue generation and retention, while also reducing wasted fishery by-catch. without the measuresproposed inthis project, predation by foreign ships will result in destruction of the fishery; increasedfishing intensity is already observable. financial risk managementis improvedthrough introducing effective revenue pooling and sharing mechanisms. partnershipsat all levels (including local communities, and neighboring countries) can enhancethe effectiveness of deep sea fishery management. Project Component 2 (Sound Management of Marine Coastal Environment) builds on the government's general policy direction for decentralized planning and management, complementing the Local Government Reform Programme (LGRP) and fitting into mainland Tanzania's National Integrated Coastal Environment Management Strategy (NICEMS). The development of marine managed areas has been informed by two years' of sector work that identifiedkey design elements insuch a system. Some of these design elements include: support for a system of networks with co-managedlocal areas, reliance on alternative income generating - 14- mechanisms to facilitate adjustment to new modes of sustainableresourceuse, introduction of marine zoning through acommunity territorial sea, participation inrisk poolingmechanisms, and . incorporation of cultural assets and resourcesto enhanceprotectedarea management. Key lessonsreflected inthe component design are: spatial planningwithin the context of an integrated coastal zone management strategy can reduce negative impacts of resourceexploitation. = sustainability of a network or systemof protected and managedareas is feasible when a diversity of adaptive managementmodels reflects local needs and capacity. A comprehensive and representativesystemis ecologically more resilient and will . contribute to poverty reduction innear-shoreareas while also providing ecosystem support for deep sea fisheries. co-management models will improve cost effectiveness and implementationefficiency of marine management, especially when applied to monitoring and enforcement tasks. Private sector involvement inco-management is particularly cost effective. Project Component 3 (Coastal Community Action Fund)directly complements the TASAF 2 . operation and builds on lessons learned from TASAF 1.Key additional lessonsreflected inthe component designare: alternative livelihoods schemes that promote sustainableresourceuse are consistent with decreasing income poverty and improving local empowerment. Project Component 4 (Project Implementation Support) buildson experience from other Bank operations inTanzania that involve delivery of activities both inZanzibar and the mainland. More specifically, the implementation modelfollows that of the JSDF financed coastal .. managementproject, implementedby the same task team insites inZanzibar and the mainland. Key lessonsreflected inthe component designare: inclusion of two separateproject management teams attached to line agencies reduces project risk and improves implementation efficiency. use of distinct stand-alone M&Eactivities under a common M&Eplanimproves overall execution as they do not interfere with day-to-day implementation of the other components. Review of project performance in the sector There have beenno similar projects inthis sector addressingmarine system or protected area management. Inaddressingthe social dimensions, TASAF 1was rated Satisfactory although it was recommendedthat eligible sub-projects be expandedto include income generating activities. TASAF2 includes this adjustment and MACEMP design also underlines the importance of alternative income generating activities that complement sound marine and coastal resource management. 6.Alternatives considered and reasons for rejection Rationalefor proposedproject approach The proposedproject designis the result of over two years of consultations, discussions and negotiations that included stakeholdersfrom community to policymaker level and essentially determined the means for best addressingpoverty issues incoastal areas (see Annex 16). - 15- Project identification and preparation benefited from a comprehensive and tangible processof community participationthat was largely carried out as part of associatedESSD sector work. It involvedextensive consultations with stakeholders, includingend-usersat the village level to identify issues inmarine protected areas and marine managedareas (MPAsMMAs)inthe URT. Key issues identifiedrelated inter alia to sustainablelivelihoods, constraints to development, gender issues, and cultural issues (including indigenous knowledge). Basedon a review of these issues, the ESSDsector work made recommendations on how best to addressthe challenges of marine management under conditions of achieving dual goals of improved ecosystemintegrity and poverty alleviation. The ESSD sector work clearly pointed to the needof a long-term support agenda and consequently the MACEMPproject concept emerged. Discussions and negotiations with key ministries followed and focusedon synthesizing the results of the consultations, exploring different project alternatives and options for implementation, establishing priorities, identifying target sites, and further developing the linkages of the projects to sector activities being undertaken by government, other donors, and the World Bank. A series of subsequentconsultative meetingswith local level stakeholders rangingfrom community associations to members of civil society includingprivatesector to district administration officials took place at eachof the target sites identified and focused on modalities of engagement inthe project by different interest groups andthe local administration. The project will buildon successful initiatives inthe country as well as pilot new approachesto participatory management of coastal and marineresources, and thus follow an adaptive learning process. Following agreement and completion of project design basedon stakeholder input, the two lead implementingagencies inTanzania mainland andZanzibar initiated aninternalization process for MACEMPwith stakeholdersfrom central to local levelthat is still ongoing. The series of internalization events is aimedto ensure full understanding of the project and its implementation modalities by all stakeholders andtailored to the respective audiences from community-levelto policymaker-level. The internalizationprocesshas received a lot of media attention and coverage inlocalnewspapers, radioandTV broadcasting. Stakeholder consultations and continued involvement of communities andbeneficiaries are also fully integrated into all componentsof the six-year project design. This is evidenced, for example, through a comprehensive Development Communications (DC) Strategy; the CDD approach for subproject identification, development, implementation, andmonitoringunder Component 3; and the proposeddevelopment of Community Mitigation Action Plans inall MACEMP target communities as per Process Framework to guide all aspects of local community investments and MMA/MPA identification and implementation (Components 1 and2). Alternative approachesconsidered and rejected Numerous alternative approaches and designs were consideredbefore settling on the current structure. These alternatives can generally be characterized as follows. = Budget Support vs Stand-aloneProject. Because the project addresses similar themes to those inPRSC2, one alternative considered was to cast the project interms that would be suitable for inclusionwithin annual PRSC operations. But budget support works for - 16- institutions that already exist, have clear mandates, and are fundedby the budget; all that i s needed in such a case is to provide funding and monitor use of the funds. Inthe case of MACEMP, the project supports the development of a new authority (the Deep Sea FishingAuthority) and its initial operational phase; this would notbe likely to succeed under budget support. The stand-aloneproject alternative is also preferable because: (i) a traditional long implementation cycle would better permittargetedinterventions; (ii) twoconcurrentdevelopmenthypothesesrelatingtothelinkagesbetween testing environmental integrity and coastal poverty requires closer supervision efforts and greater M&Eefforts than is usually possiblewithinbudget support. NoEEZGovernance Component. The original project was conceivedto focus on coastal livelihoods, with no explicit link to far offshore resourcesinthe EEZ.URTsubsequently identified EEZ Governanceas a critical complementary objective. Its absence would have undermined the potential financial sustainability of many of the other initiatives inthe coastal areas. Expanded EEZGovernance Component. The project is potentially significantly larger, incorporating necessary elements inEEZ science, as well as compliance monitoringof foreignvessels. Fullinclusionof these elements was rejectedbecause some also fall in the potential funding envelope of SWIOFP, which i s being prepared inparallel to MACEMP. Inprinciple, the allocation betweenMACEMP and SWIOFP was agreed throughconsultations to let MACEMPfocus onnear-shoreEEZmonitoringand compliance issues, while SWIOFP would focus on issuesto the outer limits of the EEZ that will require more intense cooperation among countries within SWIOFP.4Froma practical perspective, for example, this implies that full scientific stock assessments throughout the EEZwill not be done within MACEMP, nor will MACEMP finance large vessels to undertake such assessments or to enforce compliance. MACEMPwill, however, include near-shore stock assessments and the financing of vessels appropriate for near-shore assessments and enforcement. More components. Early renditions of the project were more complex and specified scientific knowledge management, private sector development, and community planning as separatedistinct components. The separationof these components was rejected when it was determined that it would be more efficient for project implementationto integrate these activities within the current component structure. Explicit Inclusionof CDD Sub-proiects within MACEMP. This alternative was rejected when it was determined that TASAF 2 couldefficiently accommodateMACEMP's sub- project delivery requirements with minimal additional cost. Single ImplementingAaencv. Extensive discussions focused onthe possibility of having a single implementingagency within URT to deal with boththe Zanzibar and mainland Tanzania activities. Advantages of that arrangement mighthave resulted infewer management staff and lower costs. This alternative was, however, rejected on the following grounds: (i) it may have marginalized some activities onZanzibar, which would be contrary to the spirit of the project to promote local empowerment; and, (ii) it For the purposes of coordination, MACEMPaccepts the near shorearea as comprising all waters of less than 500 mdepth.This implies that the near shore includes the continental shelf and the shallower parts of the continental slope. URTinfact has a relatively narrow continental shelf of 17 900 km2while the Territorial Seas (within the 12nm limit) are approximately 37 000 km2.It is within this zone that some of the more destructiveforeign commercial fishing techniquesalso hamper artisanal pelagic fisheries and threatenshallower reef ecosystems. - 17- would have increasedproject implementation risksbecause it may have encountered additional capacity constraints by relying on one rather thantwo structures. C. IMPLEMENTATION 1. Partnership arrangements(if applicable) Coordination and collaborationarrangbmentswith other initiatives The GOT has stated its commitment to the principlethat all donor activity relatedto marine and coastal management will be coordinated through MACEMP. Discussions are also underway to move towards a sector-wide approachinmarine resourcesmanagement. An informal marine donor group has been formed to share informationand to promote synergy and cost effectiveness. Only GEFfinancing is direct co-financing, but a more complete listing of donor activities inthe sector (outside of MACEMP) includes the following: GEF(US$IOmillion co-financing). GEFfinancing is implementedby the World Bank and is blended with the overall project for implementation and reporting purposes. GEF . financing is targeted to specific eligible activities (under OP2 and OP8) under a stand- alone Grant Agreement. EC (US$2 million parallelfinancing). EC financing is anticipated to focus primarily on activities complementary to Sub-component l(b) and related activities associatedwith Monitoring, Compliance and Surveillance. JSDF (US$1.818million parallel financing). JSDF financing is implemented by the World Bank under a separate Grant Agreement that becameeffective inmid-2004; it targets selectedeligible activities intwo specific sites within the project and complements activities inMACEMP Component 2. JSDF implementation arrangements use MNRT in the mainlandand MANREC inZanzibar. SWIOFP (N/Sparallel financing). Activities for SWIOFPwill focus on scientific knowledge managementand relatedpolicy indeep sea fisheries of international commercial interest while those for MACEMP will focus on scientific knowledge managementof fisheries of domestic commercial interest (e.g., by-catch). . Implementation of Tanzania's efforts under SWIOFP will be through MACEMP's implementing agencies. UNDP/GEF/IUCN (US$2 million parallelfinancing). This project inthe Mnazi Bay area will have approximately two years remaining inits project life that focus on developing and implementing the management plan. It complements Sub-component 2(b); the site is not within the initial target areas of MACEMP but it will benefit fromthe broader . initiatives under MACEMP and could receive specific support inlater years of MACEMP. USAID (US$2 million parallel financing). Financingwill focus on activities complementary to Sub-component2(a) through continued institutionalsupport of the Tanzania Coastal Management Partnership, which will be mainstreamed as a government function within NEMC. This provides explicit support to I C Mplanning capacity and training neededfor decentralized implementation. WWFDFID (US$2million parallel financing). Proposedfinancingwill focus on implementing managementplans and providing core support at selected existing MPA sites specified inSub-component 2(b). Inparticular, this would support a Seascape for the existing Mafia initiativethat includes the RufijgKilwa areas. - 18- FrenchAssistance (N/Sparallel financing). Financing will focus on activities complementary to Sub-component 2(b) relating to historic andcultural assets; training support to the relevant antiquities departments is anticipatedto be provided, as well as ad hoc responsesto requests from these departmentsfor specific investments. Global Coral ReefTargeted Researchand Capacity Building for Management Project (N/Sparallelfinancing). A global project -with one site inZanzibar -inwhich financing will focus on conductingtargetedresearchon coral reef ecosystemhealth that can inform policy and management decisions. Further, capacity building for science-based managementof coral reefs indeveloping countries will be supported. UNDP/GEF/UNOPS (N/Sparallel financing). The Agulhas and Somali Current Large MarineEcosystemProgram is currently under preparation and will focus on filling the knowledge gap needed to inform the regional ecosystem-basedapproach to sustainable management of resourcesinthe two LMEs includingregional ecosystemmonitoring. 2.Institutional and implementation arrangements Implementation arrangements The Ministry of NaturalResourcesandTourism (MNRT) inTanzania mainland and the Ministry of Agriculture, NaturalResources, Environment andCooperatives (MANREC) inZanzibar will have overall responsibility for project implementation. BothMinistries will coordinate closely with the Vice President's Office, the Ministry of ForeignAffairs, the Ministry of Lands, PO- RALG, andthe NationalEnvironment Management Council (NEMC) for specific project activities. At the national level aProject SteeringCommittee (PSC) composedof the PermanentSecretaries responsible for NaturalResource, Finance, and Local Administration from bothsides of the Union as well as the PS of the Vice President's Office will guide policy, institutional, and regulatory reform as well as strategiesfor implementation. The PSC will also adopt the annual work planand corresponding budget and semiannual update thereof. A Technical Committee composedof Directors of key ministries and institutions as well as private sector representativeswill monitor and guide project operations, advise onresearch needs, and review annual work plans andbudgetas well as annual progress andperformance reports prior to submission to the PSC. Short-term support for quality control, riskmitigation, and technical and scientific guidance would be available from a Roster of Experts on the basis of anhonorarium agreement. Ajoint EEZGovernanceFacilitationTeam (EGFT)will facilitate coordinationbetween Tanzania mainland andZanzibar and will assist consolidated M&Ereportingon all aspects of project implementation to the Technical Committee and the World Bank. It will serve an advisory function for MACEMP ManagementTeams (MMTs) inTanzania mainland and Zanzibar on all operational aspects such as monitoring, disbursement, financial management, procurement,andreporting.The EGFTwould will further be responsiblefor all those cross- cutting functions that do not fall within the mandate of either MNRT or MANREC, and to this end, would carry out related procurement functions inclose collaborationwith the MMTsin MRNTandMANREC, respectively. Some functions of the EGFTwill indue course be transferred to the Deep Sea FishingAuthority once operational. - 19- The MMTswill beresponsiblefor day-to-day implementation,financial management, procurement, processing, andother follow up on issuespertaining to either side of the Union. MMTswill also prepare the annualwork plans. The EGFTis regardedas a transitional body and many of its functions will be absorbedand transferred to the DSFA once operational. All staff in the MMTs are mainstreamed line agency positions with salaries paidby govemment and subject to civil service policies. Core staff inthe EGFT are recruited by the project as experts and include aTeam Leader, aDevelopment Communications Specialist, a Monitoring and EvaluationSpecialist, a Financial Specialist and a Procurement Specialist. Implementation at locallevelwill follow the current decentralized administrative structure, which provides for significant delegation of control to the regional and district level as sector district officers answer directly to the local District Council insteadof the line Ministry.Coastal Community Subprojects financed via the Coastal Community Action Fund(CCAF) would be implementedaccording to the TASAF2 implementation structure through Local Service Providers andCommunity Management Committees under supervisionfrom Village or Shehia Advisory Council. The two MMTManagers will be nominated by the PS MNRT andPS MANREC to sit on the TASAF 2 Sector Experts Team (SET), which reviews subproject eligibility against sector norms. To back-up the TASAF 2 sub-project approval mechanism, a CCAF Technical Committee (CCAFTC) is established to meet quarterly andreview subprojects that the respective sector representativeson the SET (Le. the MMT Managers) may refer for secondary review. The CCAFTC consists of the two CCAF Coordinators, the two MMT Managers, and the MACEMP EGFTTeam Leader; it can refer individualsubproject proposals for external review if necessary. Basisfor institutional arrangements The project implementation arrangements were selected from a number of potential options following discussion andconsensus by a broad forum of key project stakeholders duringproject preparation. Alternative arrangements considered and rejected included fully parallelproject coordination structures for Tanzania mainland andZanzibar or onejoint implementation structure representing bothsides of the Unionwithout parallel features. The institutional arrangementspresentedabove were selectedas a model acceptable to all. The proposedset up will provide for joint reportingto the World Bank on project progress. Incontrast, the MACEMP Management Teams attachedto bothMNRT and MANREC will provide for day-to-day project managementaccording to the needs and specifics of each side of the Union.The slight duplication of responsibilities and functions inthe current implementation structure is intended to reduce risks related to implementationcapacity inboth Ministries. The initial CDD modelfor implementation of community-based livelihood initiatives is now absorbed inthe demand-driven operational set-up for Component 3 that follows the TASAF 2 implementationmodel. As mentioned above, Component 3 will be implemented through TASAF 2 andthis will be addressedinthe legal agreement for MACEMP. (See Annex 6 for detailed charts of ImplementationArrangements). - 20 - Capacity constraintsto be addressed by theproject Results from a Country FinancialAccountability Assessment (CFAA), carried out in2001, concluded that Tanzania has a soundsystemof formal rules for financial management, but that capacity constraints exist related to internal auditing, budgetexecution & monitoring, and effective implementation of the anti corruptiodethics bodies. While the project will be implementedoutside the maingovernment financial management system, key managementand implementing staff will be civil servants from the MNRT andMANREC. Accordingly, project risks are expected to result from staffing shortages inthe two implementing ministries as well as staff abilities to implementcontrolprocedures, such as accounting, internal audits and inspections. A financial managementassessment also indicated that there i s a riskthat funds may not be usedinan efficient and economical way, inparticular at community level. Further, the capacity of local governments andvillage governments may be constrained interms of supervising accountability of fundusage at community level. To mitigate these risks, MACEMP will establish strongaccounting and internal control systems at national, local andvillage level. A financial specialist will becontracted to support the managementteams inMNRTand MANREC with all aspects of accountability andreporting. A certain levelof completed and commenced training is also an effectiveness conditionfor the project and a detailed training plan for management staff has been developed. Inaddition, supplementary consultants will be available to support the MMTs inMNRT and MANREC with procurement, accounting and financial managementespecially duringthe initialproject implementation. At the local and village level, TASAF incollaboration with local governments, has put inplace a strong and comprehensive accountability system, includingdeployed systemaccountants, internal and external verification of expenditures, andcapacity enhancement measures (See Annex 7 for details on FinancialManagement and Disbursement Arrangements). Flow of funds and accountabilitiesfor financial reporting Four Special Accounts will be openedfor the implementation of MACEMP: - SpecialAccountA:IDAforTanzaniamainlandadministeredbyMNRTforC1,C2,C3, c 4 - SpecialAccountB:IDAforZanzibaradministeredbyMANRECforC1,C2,C3,C4 - SpecialAccountC:GEFforTanzaniamainlandadministeredbyMNRTforincremental cost of Cl, c 2 - SpecialAccountD:GEFforZanzibaradministeredbyMANRECforincrementalcostof c1,c2 Fundswill be managedthrough 4 local currency project accountsparallelto the abovementioned special accounts (except for C3a). Funds for the Coastal Village Funds under C3a will be disburseddirectly into separate localproject account administered andmanagedunder TASAF 2. A project budget anda disbursement schedulehave beendrawnupto serve as the basisfor preparation of annual work plans and associatedbudgets. According to the agreedproject activities, approximately 60% of total project funds will flow to mainland and 40% to Zanzibar. Due to capacity constraints related to timely consolidation of FinancialMonitoringReports (FMRs) inministriesanddistricts participating inMACEMP,the project will, at least untilmid- term, use traditional disbursement methods. Hence, IDA and GEF disbursements will be based on standardprocedures anduse of SOEs. Inaddition, TASAF on behalf of MACEMP as well as the MMTs inMNRT andMANREC with support from the EGFT specialists will produce - 21 - monthly expenditure reports.These reports have beendesignedto provide quality and timely information to project managementand various stakeholders on project performance. Although the monthly reports will initially function as a monitoring tool only, they have been designedin such way that they can serve for the purpose of switching to FMR if and when the URTrequests the WB to agree to use of FMRbaseddisbursements. (See Annex 7 for detailed financial managementand disbursement arrangements.) 3. Monitoringand evaluation of outcomes/results Monitoringwill be undertakenby all key partners (within MNRT on the Mainland and MANREC inZanzibar), communities, district administration, private/NGO sector and World Bank). Results indicators for the Community Coastal Action FundComponent will also rely partially on the TASAF 2 managementinformation system. Monitoring and evaluation The EGFTwill facilitate the MMTs inmaintaining an informationdatabase linkedto the Management InformationSystem(MIS) and the results framework. This will allow the agencies to assess and report on the quality and quantity of work at eachlevel. Specific capacity strengthening will occur through including M&Eelements into training activities inall components. An M&ESpecialist (at a basecost of US$225,000) will be part of the core project team inthe EGFT to facilitate this strengthening throughout the project life. Inaddition, specific M&Eactivities havebeendefinedwithin Sub-component 4(b) at atotal cost of US$3.2 million; these include establishing a project MIS,baseline surveys, an M&E implementation strategy, a development communications strategy, annual M&Ereporting, annual safeguardreporting, the MTR, annualaudits andthe completion report. Reportingand learning The M&ESpecialist will be responsible for compiling an annual report that reflects key performance indicators andrelated managementindicators. The annual report will be part of routine reporting requirements that involve the project steering committee and technical committee. Duringimplementation, the project MIS will be integrated with information systems inMANRECandMNRTandwill remaininplace after project completion. Informationrelating to MACEMP sub-projects executedthrough TASAF 2 will also be made available to the TASAF Management Unit to be disseminatedthrough TASAF 2 communication programs. During project preparation,the potential use of the "Reporting Progressat ProtectedArea Sites: A simple site-level tracking tool developedfor the World Bank and WWF" Toolkit was evaluatedfor its applicability to activities in Component2 of MACEMP. It was determinedthat the Toolkit is most applicableto single site evaluations, and that existing M&Esystems and those beingdevelopedunder MACEMP would better and more cost-effectively serve the needs of MANFEC and MNRT inevaluating the overall effectiveness of implementing a system. KPIs for the project also reflect system effectiveness,rather than the effectiveness of individual sites. The costs of implementing the proceduresdescribedin the Toolkit were regardedas too onerous: an optimal implementationof the Toolkit (annually at all project areas including all stakeholders in 30 to 50 community sites) would cost approximately US$1.3 million; a minimal implementation (baseline, mid-term and closing) would cost about one half of this amount. Full implementation of the Toolkit is henceexcluded from the project. Itwill, however, be made available to all MPAs for use on a voluntary basis to pilot it as a local managementtool. - 22 - 4. Sustainabilityand Replicability Borrower's commitment to and ownershipof theproject and the relevantpolicies The Minister of State for Environment and the PermanentSecretary, Vice President's Office wrote to the World Bank specifically requesting assistanceto address poverty issues incoastal areas.6A Project PreparationTeam comprising representativesof bothGovernment andnon- Government entities was establishedinDecember2003 to assist MACEMP preparation. Several consultative workshops were facilitated by this team involving: government ministries from Zanzibar and the mainland; private sector; NGOs and bilateral partners. This commitment to the Project is complemented by GOT'Scommitment to policies contained inthe PRSP, the Fisheries Acts of both mainland Tanzania and Zanzibar, the NationalIntegratedCoastal Environmental Management Strategy for mainlandTanzania, Environmental Management for Sustainable Development Act (1996) for Zanzibar, and the new NationalEnvironment Act. Commitment to sub-projects inComponent 3 is shown through Government interest inthe CDD approachas a way of empowering communities to participate inthe implementationof the PRSP. There is also commitment to decentralizationbelow the LGC as away of empowering communities, andthis i s demonstratedby constitutional provisions that recognize Village Government as the third sphere of governance (to complement NationalandLocal levels). These emphases are also mirrored inthe Fisheries Acts of the two sides of the Union Government. As the project design matured, issues inthe EEZ gained a highlevel of priority, with a high degree of attentionbeing given from the Ministry of Finance itself, to the losses inrevenue from commercial fisheries due to the prevailing absence of a soundgovernanceregime for offshore fisheries. Consequently, opportunities for improving governance inthe EEZ beganto take center stage mid-way inproject development, which is reflected inComponent 1of the project. At the same time ahighly consultative sectoral analysis on options for sustaining the marine environment was carried out involving a wide range of stakeholders. The findings of this analysis provided the basis for Component 2. Criticalfactorsfor project sustainability The on-going commitment to decentralization is important bothfor assigningresourcerightsto localcommunities and for allowingrevenue retention at the LGC level to provide the necessary recurrent expendituresfor any infrastructure built through community efforts. Furthermore, commitment to continuedharmonization of the MCS regimes inmainland Tanzania and Zanzibar is a pre-requisite for implementing the DSFA Act and for improving rent capture from offshore fisheries. Project preparationresourcesfacilitated the resuscitation of the dialogue on implementing the DSFA Act. Currently there is a highlevel of commitment to ensuring that agreement is reachedon modalities for removingconstraints for implementingthis Act. Project designfor sustainability The project provides explicit institutionalcapacity development to develop and implement policies that promote sustainability inthe EEZ and, more significantly, it provides in-built incentives for encouragingsuccessful outcomes. Successful implementation of MCS efforts and the DSFA will enhance revenues to URT. Successful design and implementation of the Marine Legacy Fund, for example, will improve the financial sustainability of MCS efforts and of the marine protected area network. MPAs will be designed inconjunctionwith income earning Letters received in 2002 from Minister of State for Environment and in2003 from the Senior Permanent Secretary, Vice President's Office. The Letter of Sector Policy has been signed by the Minister o f Finance, June 3,2005. - 23 - opportunities so that local people support continuation. Successful implementation of sub- projects through the T A S A F 2, for example, will provide models for other communities to replicate and will provide an impetus andjustification for greater decentralization. Project design also aims to provide a legal basis for protecting the interests and livelihoods of communities through the demarcation of special areas whether on landor the sea. Project design internalizes a number of key lessons learned from various donor and govemment supported initiatives in coastal areas which should minimize risks and ensure sustainability. For example, the project allows Tanzania to participate inregional initiatives that encourage a sustainable fisheries regime. 5. Criticalrisks and possible controversialaspects Major project risks Risk Risk Rating Risk MitigationMeasure Implementation of decentralization in M Clear division of responsibilities between the country slows down. LGCs (supported under the LGSP) and VCs (supported under TASAF 2 and MACEMP). New National Environment Act supports decentralized capacity. PRSC provides budget support for building caDacitv at district level. Conflicts arise between Zanzibar and M Support to an EEZGovernance Facilitation mainlandTanzania in executing Team (EGFT)to assist the two MACEMP activities. Management Teams (MMTs)in coordinating project implementation. Delays in operationalizingof Deep Sea S Facilitation within project to operationalize FishingAuthority. DSFA. Revenue generation and increase already evident and partially independent of DSFA operations. ~ Difficulty in identifying appropriate S Technical assistance is provided within alternative income generating MACEMP for identifying opportunities. opportunities. Some opportunities will replicate existing pilot activities (inJSDF project) or other projects (e.g., IUCNalternative income assessment). Target communitiesare unable to access M TASAF 2 legal agreement specifies the TASAF 2 funding window. modalities of ring-fencing to accommodate community projects demanded by MACEMP. The TASAF 2 Operational Manual contains specific information regardingthe community investment packagesfunded through MACEMP. MACEMP'sDevelopment Communication Strategy will facilitate accountability and governance. Delivery capacity is constrained because S Targeted capacity buildingefforts are of unavailability of qualified staff. imbeddedinto all project components to ensure staff of key implementing agencies have the skills necessary to carry out the proposed project activities. Training - 24 - programsexplicitly incorporatedin start-up years, with a trainingplancurrentlybeing developedby other donors (EU). M Site inventorywill be completed by ~~Unclear standards for acceptable rehabilitationof cultural sites. Antiquities departments, with project support providedto these departmentsto identifynecessary investmentsconsistent with UNESCO norms andWorld Bank Safeguards, andto monitor activities. Investment funding is availablewithin the projectthroughactivitiesundertaken: (i)directlybyantiquitiesdepartments; (ii) within implementationof MPA/MMA management plans; and(iii) as public works service packagesthroughthe CVF subprojects. Potentialexpansionof projectactivities to ~~ assessments (plannedunder SWIOFP) additionalstock assessmentscan be self- not undertaken. financed througheventual EEZ revenues. OverallRiskRating M de or Low) The major risk associatedwith the option of not undertaking the project is continued degradation and inefficient exploitation of coastal resources, which directly increasesthe vulnerability of coastalpopulations. Poverty may be exacerbatedintarget areas as new development opportunities bypass localpopulations because of lack of exposure and skills; benefits will flow to outsiders. A careful evaluationof the international legal claims associatedwith the EEZof URT and those of neighboring countries shows that the project does not involve disputed areas. The review did, however, reveal that there is currently no formal agreement between Comoros andURT regarding the EEZboundariesbetween the two nations. Becauselegislation inbothcountries recognize the equidistanceprinciple, there is no dispute. Duringproject preparation, an exchange of letters to this effect has been initiated, and the project itself caters for ongoing dialogue to put inplace aformal agreement. 6. CrediVGrantconditionsand covenants The following are Conditions of Effectiveness: 1. The EEZGovemance FacilitationTeam, including team leader, financial management specialist and procurement specialist under terms of reference acceptable to the Association has beenestablished; 2. The MACEMP manager,procurement officer and accountant for the MNRT and MANREC MMTs,respectively, with terms of reference acceptableto the Association, identifiedand key training of the said persons completed; 3. The Coastal Community Action FundTechnical Committee under terms of reference that are satisfactory to the Association established; 4. A MOU entered into with TASAF that is satisfactory to the Association; - 25 - 5. A Monitoring and evaluation framework for the Project developedthat is satisfactory to the Association; 6. The PIM ina form and substancethat is satisfactory to the Association prepared and adopted; and 7. A District MOUentered into with the each of the CoastalDistricts of Kilwa, Rufijiand Mafia. Thefollowing is aConditionof Disbursement: 1 Disbursementof GEFGrant proceedsrelatedto one-time MarineLegacy Fund(MLF) ~ Capitalization is subject to parliamentary approval of MLF; appointment of Executive Director and/or Boardof Directors inconsultation with the Bank, anddeposit of the Government contributionof US$750,000 to capitalization of the Fund. D. APPRAISAL SUMMARY 1. Economic and financial analyses Project structure is not amenable to a full stand-alonefinancial or economic analysis. Selected micro-economic analyses were, however, conducted to ensure that the chosenstructure was economically efficient and financially sustainable over the long-term. The following summarizes the findings of these analyses: -EEZfishery economics. Current rent collection is far from adequate, largely becauseof lack of an effective licensing system andinadequateharmonization of licensing fees. Modest improvements have been made over the past year which indicate the long-termpotential. Whereas historicallyfishery licenses have captured less thanUS$lOO,OOO annually intotal, in 2003 the licensesgeneratedjust over US$700,000 andin2004 this had climbed to US$1.3 million simply through better licensing mechanisms. Illegal fishing continues, however, andfees fall short of their potential. An analysis of the tuna catch inthe peak 2004 season, for example, suggestedthat the industry exceededUS$220 million invalue. Capturing a part of this share, through licensing or through value-addedprocessing inTanzania, could see some US$50 million annually infishery rents to URT. -MMA and MPA system economics.The current system is highcost and suffers from a long legacy of donor dependency. Ownrevenue generation is about 40% of operating costs. MPA financing relies 87% on foreign donors. Futureefforts will need to rely on cost reduction through usingco-managementmodels that feature partnerships among government, communities, and private sector. -Role of afinancial sustainability mechanism (the Marine Legacy Fund). Risk pooling is an important meansfor ensuringsustainability of institutionalmechanisms (such as the DSFA) and a protected area system. Analyses of a financing mechanism for an MPA system recommended that aMarine Legacy Fundbe establishedwith a long-termfund value of the order of US$50 million. Usingthe fund also to underwrite fixed costs of an EEZAuthority would increasethis amount to US$75 million. The model is that of a revolving fund with multiple inflows (from all resource sectors inthe EEZ) and outflows to guarantee the fixed operational costs of core agencies and parts of the system. -CCAF economics.There is evidence that communities can construct assets that are cost- effective comparedwith costs incurred under other mechanisms, with the addedbenefit of local - 26 - ownership which protects the assets from vandalism and deterioration. The CDD model requiring5%-20% local contribution provides in-built incentives to choseefficient and locally appropriate designs. Inaddition, an incremental cost analysis (ICA) assessedthe incrementalcoststhat wouldbe eligible for GEF financing. The total expenditure under the Baseline Scenario is estimatedto be US$51.75 millionwhile the total expenditure under the GEF Alternative is estimated to be US$61.75 million.The incremental expenditures (costs) under the GEF Alternative are therefore approximately US$10.0 million. Incremental costs associatedwith OP2 are US$5.O million. Incremental costs associatedwith OP8 are US$5.0 million. The incremental cost of OP8 could be substantially greater but no assessment was undertakenof the investments, domestic benefits, and global benefits associatedwith deep water management (>500 mdepth) of the EEZ; these investments and benefits are associatedwith programs to be delivered under SWIOFP. 2. Technical The fundamental technical designfeature of this project is that it clearly separates offshore management issues of the EEZ andthose associatedwith near-shore coastal management. Within each of these, planning is linkedto implementation, and i s further reinforced through building regional and local partnershipsto encourage adaptive managementand replication of successful experiences.Poverty alleviation issues incoastalcommunities are more directly addressed through a stand-alone component, the execution of which will complement EEZ and coastal managementefforts without encumbering such efforts. The design conforms to international standards primarily to the extent that it permits EEZ issues to be addressedwithin an international or regional framework that considers proper management of resource stocks (consistent with international codes of conduct and best practices) while also . providing abasis for clearly monitoringthe effectiveness of revenue generation efforts linkedto international commercial fisheries. Inthe near-shoreareas, the technical designof the project reflects best international practices of integrated coastal zone management (ICZM), while following domestic efforts to implement formal strategies related to ICZM. Such efforts reduce vulnerability of coastal populations through improved incomes and greater security, while concomitantly contributing to more effective biodiversity conservation andmanagement.The technical standards of the project are infact quite high, and inmany ways surpass typical international and World Bank practice through the introductionand testing of innovative elements within a closely monitored structure. Examples of such innovative elements include: (i)introductionof a financial sustainability mechanism that promotes riskpooling; (ii) of testing a community territorial sea (marine zoning) model to reduce non-sustainable open access exploitation; (iii)linkingthe sub-project activities of MACEMP into anexisting provendelivery mechanismthrough another World Bank project (TASAF2). It is expectedthat these elements will improve sustainability, social acceptability, and overall delivery efficiency of project finances. The technical designalso meetsthe client's needs through: (i) addressingdirectly the low rent capture associatedwith open access to offshore fishery resources; (ii) on existing laws building and policies such as the UNConvention on the Law of the Sea, the DSFA Act, NICEMS, and the new Environmental Act; (iii) recognizing the legitimate interests andexpertise extant inboth - 27 - Zanzibar and mainland Tanzania, and reinforcingcooperative efforts between theseparties; and, (iv) providing a portal for overseeingand coordinating other donor efforts to contribute to sound marine andcoastal management. A critical technical element of the project is the Development Communications (DC) Strategy which concurrently acts as: (i) an awareness buildingdevice for stakeholdersranging from policymakers to individualhouseholdsinfishingvillages; (ii) a project management tool for assisting local government andcommunities inidentifying appropriate subproject interventions; (iii)projectcoordinationtoolforfacilitatingcoordinationbetweenTASAFandMACEMP,as a well as other projects; and, (iv) an accountability andtransparency mechanismfor communicating targets and access norms for project activities andfunding. The DC Strategy consists of a robustpackage spearheadedby a fulltime DC specialist, complemented by an array of media rangingfrom print to radio to local theatre productions. The Strategy is modeledafter the successful TASAF communication norms with which stakeholders are already familiar, and buildson this throughthe development and inclusionof messagesthat are specific tailored to coastal communities and MACEMPobjectives. 3. Fiduciary Procurement. Parliament passedanew Procurement Act inNovember 2004 that repealedthe Public Procurement Act of 2001 basedon 2003 Country ProcurementAssessment Report (CPAR) recommendations. The new Act was effective on May 1,2005. The new legislation improves the current GOT procurement system. This project will pilot the use of Government approval systemsfor all the procurement activities carried out duringthe first one year. Thus, for all the procurementactions to be executedduring the first year of the project, there will be no prior review by IDA.The EGFT and MNRT will use the Mainlandapproval systemthat i s beingestablished under the new Regulations that are being preparedto implementthe Procurement Act (2004). MANREC would use the existing Zanzibar Government approval system. Both Mainlandand Zanzibar approval systems will be described indetail inthe ProcurementManual, which is partof the PIM.Prior ReviewThresholds (PRTs) would be set only after the first year of operation. The Government has agreedto an action planto reduce procurement risk to medium. At the end of one year, IDA will review all the procurement actions that have been carried out during the year to verify compliance with the Procurement Planand the Procurement Manual. The Procurement Plan was approved by IDA before Negotiations. The draft Procurement Manual was reviewed duringnegotiations andthe final version will be approved before Project Effectiveness. Financial.The financial management capacity assessmentrevealed that the project's financial management arrangementssatisfy the Bank's requirements under OP/BP10.02. However, some improvements remain to be effected for the system inorder to establish an acceptable control environment and to mitigate financial management risks. The project financial managementrisk i s assessed as being high unless the financial management arrangements are properly implemented and the following financial management action plan is satisfactorily addressedin practice. - 28 - Financial Management system. The accounting systems, policies andprocedures to be employed by the two ministries inmainland andZanzibar and at TASAFmanagement unit in accounting and managingfor TASAF I1funds are documented inthe Financial Management Manual which contains detailed descriptions of the accounting systemand procedures. A Chart of Account structure has been developed to allow for project costs to be directly relatedto specific work activities and outputs of the project and formats of the various periodic financial reports. The government system, though computerized, cannot be usedbecauseit does not have a project managementmodule. The designedsystem will be computerized usingthe Epicor or a solution deemed fit by the borrower. Financial and procurement manual. Financial andprocurement manuals done for the project have beenreviewed for quality assurance and adequacy. They are part of the operational manual andshall be readtogether with it. District level activities. Activities to be undertakenat district levelhave been definedinthe cost tables and procurement plan submitted by the UnitedRepublic of Tanzania to the World Bank. A Memorandum of Understanding shall be signedbetween the MNRT as the implementing agency for MACEMP inTanzania mainlandandcoastal districts of Tanzania mainland into which funds will be disbursed. The M O Ushall stipulate their working modalities, relationship and cooperation on this project. Subproject fiduciary controls. A ringfenced arrangementhas been designed and put inplace for component 3, where the chart of accountsfor TASAF will reflect funds and activities to be financed onbehalf of the MACEMP. A separatelocal bank account will be opened as afirst step towards ring fencing such proceeds. The codes inthe TASAF chart of accounts will depict the special sub projects to be financed out of the MACEMP component to communities. Using information from the district MIS, the funds disbursedout of the MACEMPcomponentwill be tracked up to sub project level and details of the make up of the beneficiaries tracked and recorded for purposes of monitoring andrecording impacts after fully disbursingthe funds. As funds are utilizedat TASAF MU,Zones, LGA andcommunity levelinboth mainlandand Zanzibar, the reporting of the funds utilizedas per each sub-project/activity of project category, together with bankreconciliation, will be done on a regular basis. This is to allow the Directorate of Finance at TASAF MUto submit withdrawal application to IDA for the replenishmentof funds to the Special Account set upfor the Project. Disbursements to the sub projects shall be made intranches of 50%/50%. Payment of the last tranche shall only be made after justification of 70% of the first tranche. Each community committee shall have two groups of signatories-ClassA and B. There will be an attempt to make one of the signatories to be a woman. Systems auditors shall be involved inmonitoringthe usage of funds at community level. Village governments and local governments shall also be involved inmonitoringfunds. MACEMP will use traditional disbursement method while TASAF will produce FMRs whose information will be usedto consolidate overall financial statements of the project. The FMRs produced by TASAF will not therefore be usedas abasis of disbursements. Disbursements to TASAF will betransfers from the IDA special accounts to be maintainedby MNRTand - 29 - MANREC, respectively. The FMR producedby TASAFwill be an accountability tool to MNRT and MANREC on the usage of funds disbursedto it. Lack of adequate and qualified accounts staff inLocal Governments and some government departmentshas been identifiedas a weakness, andthis has beenaddressedby (a) makingthe availability of such staff apre-condition for bothMANREC and MNRTto implement the project (b) andfor the TASAFexecutedcomponent, the provisionof funds through TASAFI1Capacity Enhancementcomponent to strengthenthe capacity of Local Governments infiduciary capacities requiredby community subprojects (inparticular internal audit, monitoring, and management information systems) will help inbuildingcapacity. Appropriate qualifiedFinancial Specialist and Accountant will be recruitedat TASAF levelto coordinate andhandle all project financial arrangements related to MACEMP. Appointment of adequateand qualified accounts staff will be conditionfor project effectiveness.WithinMANREC andMNRT, government has agreedto provide staff with requisite competence or technical specialiststo supportministry officials duringthe life of the project. Inaddition to the annual audits of MACEMP, internal auditors from the MNRT and MANREC will also be doing their own reviews. District level internal auditors will also be expected to carry out audits of the sub-project activities being financed from MACEMPRASAF2 in their jurisdiction andreport to the LGCs. MarineLegacy Fund. A MarineLegacy Fundshall beestablishedinthe Ministry of Natural Resources and Tourism under the department of Fisheries. A separateaccount shall be establishedinto which contributions will be made. The contributions shall come from GEF when evidence is received by the Bank of parliamentary approval of MLF; appointment of Executive Director and/or Board of Directors inconsultation with the Bank, and deposit of the Government contribution of US$750,000 to capitalization of the Fund. Additional contributions shall come from URT and other sources. Bankreconciliations of this account shall be made on a monthly basis and checked by the Chief Accountant inthe ministry. Usage of the fund shall befor activities that promote marine resources managementthat have been approved by the Ministry. The Boardof Directors and/or the Executive Director of the MLFshould exercise control over the use of the resources of the fund. A separatereport shall be produced every month and shall be tabled at quarterly steering committee meetings. Inaddition, the MLF shall consult with the Bank prior to affecting any changesrelatingto the positionof Executive Director or composition of the Boardof Directors throughout project implementation and for a period of not less than three years after the latest capitalization of the MLF with GEFproceeds. The Bank shall have the right to request audits of the MLFthroughout the project implementation period. 4. Social The client has elaboratedaProcessFramework (PF) that will be followed inall instances involving local populations; the PF was reviewed, approved and disclosed incountry on February 2,2005 and at the World Bank Info Shop on 4" February, 2005. Key features recommendedinthe PF and incorporated within MACEMP design include: (i) specific support for Community MitigationAction Plans (CMAPs) at the community level; (ii) inclusion of social screening proceduresfor all community based investments (including those financed through the TASAF2 window); (iii) introduction of formal dispute resolution mechanisms. - 30 - For sub-projects funded through the TASAF 2 window, protocols will follow the stricter of MACEMP procedures(whichare governed by the MACEMP PF) and TASAF procedures (which are governed by the TASAF 2 ResettlementPolicy Framework). This component will not finance any sub-projectthrough the TASAF 2 envelope where communities have beenunable to successfully resolve any resettlementissues. The TASAF 2 Operations Manual and various handbooks outline procedureswhich communities must follow to ensure that the safeguards are observed. 5. Environment Integration of environmentalissues intoproject design This is a Category B project whose potential adverse environmental impacts are few and site- specific. The ESA noted that the project had many positive environmental impacts. The ESA identified the following as key concerns around potential negative impacts: (i) restrictions of access and short-term reduction in income to artisanal fisheries from MCS activities; (ii) restrictions of access and development impacts from support to MMA/MPA investments; (iii) development impacts from sub-project investments through TASAF 2; and, (iv) risks to cultural property. An evaluation of the existing institutional structure for monitoring and controlling impacts showed that legislation relating to environmental management, coastal zone management, fisheries management and coastal forest management was comprehensive and relatively modern. Principle weaknesses are associated with implementation at the decentralized level (district or local government). For impacts associated with MMA/MPA management in Component 2, support to communities would mitigate this weakness. For sub-project investments, MACEMP sub-projects will follow the same process and procedures as those adopted by TASAF 2. When E-PRAs are done with communities, potential environmental impacts will be identified and a Limited Environmental Impact Assessment (LEA) will be conducted under the leadership of Ward and District extension staff trained in environmental issues. MACEMP has developed additional guidelines for coastal communities that will be applied at the time of desk and field appraisal of sub-projects being considered under the TASAF2MACEMP funding envelope. Within the CDD approach, projects that cannot develop mitigation measures that are acceptable to the community and are in line with national environmental policy guidelines and norms cannot be fundedby TASAF 2 or MACEMP. Appropriate mitigation measures are elaborated as part of the ESA, which was reviewed, approved and disclosed in country on 2 February, 2005 and at the World Bank Info Shop on 4& February, 2005. The mitigation measures also incorporate those in a Process Framework (PF) that was disclosed on these same dates. For community level sub-projects financed by MACEMP, the project will also be governed by the TASAF2 Environmental and Social Management Framework (ESMF) and the TASAF 2 Resettlement Policy Framework (RPF), which were disclosed at the World Bank Info Shop on 6thAugust, 2004. The MACEMP ESA provides explicit details on how the TASAF2 ESMF will be augmented through additional screening and assessment proceduresas part of the MACEMP mitigationmeasures. A key institutional recommendationof the ESA-to addresspotential cumulative impacts with other donor activities - is that "when donor-supported coastal and marine management projects - 31 - exist, where area-basedactivities overlap, MACEMP should coordinate such activities." This coordination role of MACEMP is reflected inthe project design. Environmental benefits of the EEZ component of the project are associatedwith sound managementof EEZ fisheries, reduction of by-catch waste, and support for implementing UN Convention on the Law of the Sea. Monitoring of thesebenefits will be through the stock assessments and through the monitoring component of the MCS efforts. Environmental benefits of the MMA/MPA component are associatedwith improved biodiversity quality andreduced threats on the biodiversity. This is monitored through the M&Estrategy of MACEMP, which involves community-based reporting of ecosystemconditions and of artisanal fishing effort by gear type. The ESA also elaboratesM&Erequirementsfor safeguardreporting which will be integrated into the M&EStrategy. Environmental issuesand linkagesto livelihoods A specific project objective is to enhance livelihoods of the poor through improving the resource base quality and improving access to these resources and to social infrastructure. Reduced poverty will reduce vulnerability. In addition, mitigation measures are in place to prevent increases in vulnerability. The project supports interpretation and implementation of the new Environmental Management Act, 2004 at the LGA level. Within the sub-project cycle of TASAF 2 funding, safeguards are inplace to mitigate impacts through the TASAF2 ESMFand RPF, and are further enhanced through the additional screening mechanisms introduced in the MACEMP ESA. Where no negative environmental impacts are identified, the LGC officer responsible for environment and natural resource managementwill sign off at the desk appraisal stage that this is so, and confirm that a LEA has been conducted for sub-projects with identified impacts. Measures to minimise and mitigate environmental impacts will be confirmed during field appraisal, and again the leader of the appraisal team will sign off that this has been done. Sub-projects requiring Environmental Impact Assessments (EIAs) will be sent to the NSC for evaluation by the SET (which will send environmental experts to the LGCs to conduct the necessary EIA, upon recommendation of the MACEMP CCAF Technical Committee). In accordance with recommendations in the ESA, MACEMP will also implement specific M&E programs that address vulnerable persons. Environmentalrisks and linkage toprotection of people's health There will be many community sub-projects aimed at improvingthe health of poor communities throughthe provisionof cleanwater and sanitation facilities. The promotionof environmental awarenessduring sub-project identification, appraisal, and implementation will havepositive impacts on the attitude of whole populations towards environmental protection. Enhancementof cultural heritage assets Cultural resourcesare valuable assets, and if sustainably utilized, they can contribute significantly to development and to improving livelihoodsinimpoverished areas. Growth in coastaltourism will inthe long rundepend on well preserved and managed cultural assets. MACEMP will provide support inraisingawarenessof the value of bothnatural and cultural heritage. This is important becausethe value of Tanzania's cultural assets inthe coast and the need for conserving themshould be understood and supported at the local level if the effort to protect them is to bear fruit. The project provides an opportunity for addressingcultural assets - 32 - through provisionof resourcesto restore or rehabilitate cultural sites on the mainland and Zanzibar, not leaving such enhancement to chance. The Antiquities Department will be assisted with identification and documentation of historical sites, to include demarcation of boundaries andsignboards inorder to informthe public about the sites and involvecommunities intheir protectionand managementto prevent encroachmentandremoval of resource materials. Support to the Antiquities departments will be provided to: (i)conduct an inventory of potentially affected sites, including an assessment of vulnerability to potential impacts; and (ii) conduct planning studies to ensure protection of the vulnerable sites, usingstandards and norms consistent with national policy and UNESCO guidelines. Potential investments at the sites will be supported through a numberof mechanisms including: (i) investmentsundertakenby the Antiquities Departments themselves within this sub-component; (ii) investments undertaken as part of MPA/MMA managementplan implementation within this sub-component; or, (iii) community demand drivensubprojectsunder service packagesrelating to public works projects inComponent 3. 6. Safeguardpolicies Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP/GP 4.01) [XI [ I Natural Habitats (OP/BP 4.04) [XI [ I Pest Management (OP 4.09) [ I ixl Cultural Property (OPN 11.03, beingrevised as OP 4.11) [XI [ I Involuntary Resettlement (OP/BP 4.12) [XI [ I IndigenousPeoples (OD 4.20, being revised as OP 4.10) [ I ixl Forests (OP/BP 4.36) [XI Safety of Dams (OPBP 4.37) i[lI [XI Projects inDisputedAreas (OP/BP/GP 7.60) [ I 1x1 Projects on InternationalWaterways (OP/BP/GP 7.50) [ I Ex1 7. Policy Exceptions and Readiness This project contains no PolicyExceptions. The Government is ready and committed to implementing the project. The letter of Sector Policy datedJune 3, 2005 outlines this commitment.Negotiations among stakeholdersregarding operationalizing the DSFA have already been initiated. Agreement has been reachedbetween mainland Tanzania andZanzibar on the project implementation modalities. - 33 - 7. Country and sector or program background Background Mainland Tanzania and Zanzibar are endowed with a richdiversity of tropical marine and coastal systems including coral reefs, seagrass beds, mangrove stands and cultural resources. Marine resourcesare critical to Tanzania's economic and social development and underpin the livelihoods of coastal communities, who rely heavily on the sea for their food andincome. Coastal communities of the UnitedRepublic of Tanzania are characterizedby extreme poverty, with less that US$lOO per capita GDP at current prices according to the nationalsurvey. Hence, addressing the issues associatedwith the small-scale, sustainableuse of coastal resources is critical to poverty eradication and slowing ruralto urban migration. The economy of coastal communities depends mainly on smallholder farming, subsistenceforestry, artisanal fishing, lime and salt production, seaweedfarming, livestockhusbandry, and small-scale trade. Coastal and marine resources, if well managed, can contribute substantially to growth andreduction of poverty. Poor managementfor the same resources will lead to their degradation which could contribute to: (i)engendering threats to public health; (ii)undermining attainment of Millennium Development Goals (especially for reduction of poverty, reduction of malnutrition, and protection of the environment), and(iii) at risk flora and fauna of importance to global putting biodiversity. The coastal and marine resources inURT are facing a number of threats including: (a) open access to marine fisheries resources resulting inunsustainableutilization; (b) insufficient skills, knowledge, and institutions for sustainableuse andmanagementof coastal and offshore fisheries; (c) unregulated coastal development; and (d) poor scientific understandingof the status of the fishery resources andbiodiversity ingeneral, and factors affecting it. Many of the problems, opportunities andlinkages of marine and coastal activities in Tanzania have regional implications, particularlyexploitation of fisheries, managementof marine ecosystems, andexploitation of coastal mineral and offshore energy resources. The Marine and Coastal Environmental Management Project (MACEMP), funded through IDA credit and GEFgrant is designedprimarilyas an institutionalsupport project that strengthens existing andnew institutions intheir mandate to provide better managementof coastal and marine resources.The project will also empower the local communities to manageeffectively, and utilize sustainably, the biodiversity resources on which their livelihoods depend. Summary of SectoralSetting and Tanzania's PovertyReduction Strategy Tanzania launchedthe participatory PRS process in 1999with the preparation of an interim PRS, followed by the approval of a full PRS in2000. A new National Strategy for Growth and Reductionof Poverty (MKUKUTA)has recently beenendorsed by Cabinet, includinga comprehensive review of experience and PRS achievements to date. Preparation of anew Joint Assistance Strategy (JAS) hasbeen timed to allow full alignment and consistency with the MKUKUTA; expectedto be submitted to the Bank's Boardof Executive Directors during2005. To support the implementation of the MKUKUTA,efforts to maintain macroeconomic stability are continuing, and focus is shiftingto assure that the commendable recent growth is shared - 34 - broadly enough to meet targets for reduction of poverty. Sectoralperformance and public sector management are accordingly receiving additional attention. Since many of Tanzania'spoor derive livelihoods from natural resource-basedactivities, the linkages betweenand among growth, incomes of the poor, andpublic sector managementare particularly relevant at this stage. One of the key themes of the new JAS will be the full alignment of Bank instrumentswith the principles of local ownership and leadershipof development efforts as set out inthe NSGRPand, more specifically, inthe Tanzania Assistance Strategy (TAS). Becausegovernment policies and the government budget are the key instrumentsfor implementing the NSGRP, the Bank will increasingly provide budget support, a shift that has already been initiatedunder the current Country Assistance Strategy. Over the mediumterm, the PRSC is expectedto become the main instrumentfor the transfer of financial resourcesandpolicy dialogue. A shift inlending modalities is considered desirable because sectoral interventions through investmentprojects have inthe past beencharacterizedby varying degrees of local ownership, coherencewith other programs, and sustainability. Assistance delivered through separate projects has insome instances undermined development of governmental systems, particularly incases inwhich partners constructed separate mechanismsfor delivery of aid. The shift to programmatic lending was precipitated by the government's call for a change inpartners' lendingmodalities, and is justified onthree grounds: (1) the MKUKUTAhas evolved to bethe overarching framework for policy dialogue and formulation, bothwithin Tanzania andbetween government and the donor community; (2) progress on the macroeconomic front has lessenedthe need for traditional adjustment lending; and (3) progress inplanningandbudget managementprovides confidence that public resource allocations are consistentwith MKUKUTApriorities. The transition in modalities of assistancewill be a gradual one, andbased on the extent to which the justifications for programmatic lending obtain inparticular instances. Support through the PRSC will coexist with investment operations and programmatic support to well-articulated sector programs and technical assistancefor the strengtheningof governmental systems and capacities. This approach, inwhich the PRSC initially covers primarily cross-cutting issues andpolicy dialogue and gradually embraces widening scope of sectoral support, provides opportunities for learning for boththe Bank and the government. The approach also accommodates focused assistance in areas for which the institutional framework at present cannot justify budget support. The MKUKUTA focuses on three mainpillars. The first i s reduction inthe breadth and depth of income poverty. The outcome targets include reductionof poverty as measuredby unmet basic needs includingfood, with a particular focus on rural areas, where poverty is most prevalent. The secondarea is improving the quality of life and social well-being. This entails improved human capabilities, enhancedlongevity and survival, social inclusion and personal security, improved nutrition,andcontainment of extreme vulnerability (mainly through social safety nets). The third broad area concerns sustaining an environment that is conducive to development, which encompasses macroeconomic stability, good governance, and responsible stewardship of natural resources.The MACEMP is inkeepingwith all three pillars as outlined inthe maintext. - 35 - Summary of Policy,Institutionaland Legal Framework7 Inaccordancewith the Constitution of the UnitedRepublic ofTanzania of 1977, policies and laws respecting natural resourcemanagement, includingcoastal and marine resources, are established and implemented by the central government. Zanzibar has a unique legal status within the URT. According to Article 2(1)of the Constitution, the territory of the United Republic consists of the whole area of MainlandTanzania and the whole of the area of Zanzibar, and includes the territorial waters. One MainlandTanzania law (the Fisheries Act of 2003) does not cover the territorial waters of Zanzibar, andZanzibar has its own fisheries legislation (Fisheries Act 1988). However, the Deep Sea FishingAuthority Act and the Territorial Sea and ExclusiveEconomic Zone Act apply to bothmainland Tanzania and Zanzibar. Indeveloping a commongovernance regimethis is a subject that requires careful consideration. Broadinstitutionalissues: The laws andpolicies inmainlandTanzania and Zanzibar that are relevant to coastal and marine resources are relatively comprehensive. But their implementation i s rather uncoordinated. Different institutionaland legal systems exist for the mainland and Zanzibar, and there is potential for linkages through the Deep Sea Fishing Act 1998 andthe Territorial Sea and Exclusive Economic Zone Act 1988. Management of the Exclusive EconomicZone: The Deep Sea FishingAuthority (DSFA) andthe Ministry of ForeignAffairs are the legally mandatedinstitutions to control and regulate the EEZ. The law provides for collaborative arrangements or delegation of the functions to other competent institutions.Since the DSFA is not yet inplace, the EEZ is beingregulated under ad hoc arrangements. Under the Deep Sea FishingAct there is no provisionfor designation or regulation of MPAs; it focuses on monitoring, control and surveillance mandates inthe EEZ. Fisheries laws: Fisheries laws are essentialelements inthe managementof coastal and marine resources.The Fisheries Act 2003 provides for linkages among other sectors and the fisheries sector. It also recognizes Beach Management Units(BMUs) and empowers the Director of Fisheries to enter into managementagreements with BMUs as a way of promoting local fisheries. The Zanzibar Fisheries Act provides for the Minister to declare an area of waters to be protected area; the Act (contrary to the mainland Fisheries Act) further provides for preparation and review of fisheries managementplans. Management Objectives for Marine ProtectedAreas andVillage lands: While the Marine Parks and ReservesAct 1994provides for MPAs that are to be managedunderthe Marine Parks and ReservesUnitat the national level, it does not cover community managedareas (CMAs) establishedat the local level. CMAs are under other laws, hence raising the possibility of institutional overlaps inmanagementroles and responsibilities. The existing legal framework does not differentiate managementobjectives for different MPAs/CMAs, despite the distinctiveness intheir managementobjectives. MPAslCMAs by design, encompassparts of village lands as buffer zones, etc., hence use of those areas calls for conformity with the restrictions inherent inthe Marine Parks and ReservesAct (MPRA). 'This section is basedon ShauriV, 2003, Study on the legal and institutionalframework for marineconservation areas inthe UnitedRepublicof Tanzania. Study Commissionedby the World Bank. 77 pp. - 36 - Management plans under the laws regulating coastal and marine resources: With the exception of MPRA,managementplans are not providedfor inother laws that are applicable to coastaland marine areas. Management plans are necessary inorder to ensure controlled consumptive use and sustainability of the resources inthe long-term. By contrast, Zanzibar Fisheries Act provides for some elements of the managementplan, e.g., the state of exploitation of each resource, annual yield, etc. Mainstreaming conservation awects inlaws regulating marine and coastal areas: For long-term conservationgoals to be achieved there is an urgentneedfor the laws that regulate marineand coastal areas to incorporate provisions on conservation, for example, EIA, management planning, zoning, contingency plans, etc. This calls for the reformof the legal framework to encompass conservation provisions with a view to improving the management of coastaland marine resources. Integrated coastal managementas provided under the laws: Coastal district planninghas been - encouragedthrough USAID financing andculminated inthe development of the National Integrated Coastal Environment Management Strategy (NICEMS) on mainlandTanzania, adopted officially inDecember 2003. But legal instruments to implement the strategy are not yet inplace.The situationis somewhatdifferent inZanzibar, with the Environmental Management for SustainableDevelopment Act 1996providing inprinciple for integrated coastal area managementplanning, although no operational modalities for it are available. Network of protected areas: Creation of a network of protected areas is not provided for by any law inthe mainland. InZanzibar, Environmental Management for SustainableDevelopment Act introduces "a national protected areas system" that constitutes aquatic, terrestrial, and mixed territorial aquatic ecosystems, reserves, sanctuaries, controlled areas and other areas protected wholly or inpart by a lead institutionare also included inthe system. International conventions relevant to the managementof coastal and marine resources: At a regional level, the UNEPConvention for the Protection, Management and Development of the Marine and CoastalEnvironment of EasternAfrican Region(the NairobiConvention) is one of the major sub-regional instruments of significant importance to conservation of coastal and marine resources. Insummary, there remaingaps relating to traditional userightsandto enforcement authority. The following are areas of concern: ... The existing legislationdoes not provide adequaterecognition and attention to traditional use rights; Co-managedareas will require strengthening of legislationto make arrangementsclear and protect traditional userights; There is a lack of clarity inexisting institutional and legalframeworks with respect to enforcement authority and responsibility ina decentralized context; Trans-boundary issues are not well coordinated and require strengthenedregional institutions. - 37 - The above concerns notwithstanding, the essentialinstitutional framework and legal instruments are inplace for MACEMP to proceed, although MACEMPwill need to contribute to strengthening a number of the policy elements. Roleof MACEMP The Government ingeneralhas inplace acomprehensiverangeof legislative andpolicy initiatives that will support and guide the full implementation of the project towards its broad objective of improvingmanagement of coastal and marine resources as a way of addressing poverty reduction. Although the list reviewed above is not inclusive of all national legislation and policies supporting MACEMP, it nevertheless presentsa broad sample of existing initiatives. There is, however, needfor review of the entire policy and legislative framework with aview to updating some instruments, harmonizing the goals and develop new initiatives to respondto changing circumstances. More coordination of policy initiatives with respective line ministries and agencies would help broadenthe framework and allow coordination betweennational authorities for the good of the project. Operationalization of relevant initiatives such as NationalICEM Strategy, Mangrove Management Plan, Poverty Reduction Strategy, Fisheries Master Plan, and Fisheries Acts of mainland and Zanzibar is constrained by inadequateresources. The Government is ina position to take advantage of existing opportunities andthose that are likely to come up infuture cooperation agreements to fully explore, review and operationalize policies and legislation in support of conservation, managementand utilization of coastal and marine resources.The Marine and Coastal Environment Management Project (MACEMP) presents such an opportunity. - 38 - 2. Major relatedprojects financed by theBank and/or other agencies Sector issue Project Latest Supervision addressed Impl. (IP) (DO) Cross-cutting ISocial Action FundProject (TASAF), PO65372 [closing S S June 20051 Cross-cutting Second Social Action FundProject (TASAF 11), S S PO85786 Agriculture Participatory Agriculture Development and S S EmpowermentProject (PADEP),PO71012 Cross-cutting Local Government Support Program (LGSP), PO70736 S S Environment Japanese Social Development Fund(JSDF) Grant, S S Fisheries SouthWest IndianOcean Fisheries Project (SWIOFP), Not yet Not yet effective effective Cross-cutting Lake Victoria Environmental Management Project S S Environment ILower Kihansi Environmental ManagementProject, S S PO73397 Cross-cutting Second Poverty Reduction Support Credit (PRSC2), S S PO74073 [PRSC1 - PO740721 Cultural Heritage I French Assistance: Conservation and Development of I N/a N/a Environment I DFIDMrWF:Mafia IslandMarinePark(MIMP), N/a N/a RuMaKi Seascape Programme Environment IUCN: Tanga Coastal Zone Conservation and N/a N/a Management Program (TCZCMP) Environment UNDPIGEF:MnaziBay Marine Protected Areas Project N/a N/a Environment USAID: Tanzania Coastal Management Partnership N/a N/a (TCMP) Environment UNDPIGEF: Large Marine Ecosystem Programme N/a N/a Fisheries EC: Tuna Tagging Project N/a N/a Environment GEF:Global Coral ReefTargeted Research and N/a N/a Capacity Buildingfor Management Project Environment UNDP/GEF/UNOPS: Agulhas and Somali Current N/a N/a LMEProject - 39 - Linkages with SWIOFP: The Southwest IndianOceanFisheries Project (SWIOFP) is a regional project including Kenya, Tanzania, Mozambique, Comoros, South Africa, Madagascar, Seychelles, Mauritius, and France (participating, but not beneficiary of SWIOFP funding). SWIOFP i s currently under preparation and is expectedto become effective inearly 2006. It is one of three projects, which together form the basis for the Somali and Agulhas Currents Large MarineEcosystemProgram. While the SWIOFP is beingpreparedandwill be implemented through the World Bank, the other two oceanographic and coastalresearchand demonstration projects under the Somali and Agulhas Currents LMEProgram will be preparedandimplementedthrough UNDPand UNEPwith close cooperation with the World Bank. The multi-donor initiativeaiming to builda long-term vision for sustainable managementof the Somali and Agulhas LMEs is expected to have multiple phases. The mainexpected output of SWIOFP is input to a comprehensiveTransboundary Diagnosis (TDA) andto a Strategic ActionPlan(SAP) onall aspectsrelating to regional fisheries issuesin the Somali andAgulhas LMEs.Key activities under SWIOFP will be: (i) undertake a regional to fish stock assessment, and(ii) survey pressuresonthe transboundary fish stocks andthereby to buildthe scientific basis for development of the SAP. Inaddition, SWIOFP would support and strengthen institutionallinkages for cooperationbetweenthe nine West IndianOcean states participating inSWIOFP. MACEMP and SWIOFP will be closely coordinated as they are expected to work through the same government agencies. MACEMP's mainfocus lies onnational fishery policy, institutional aspectsrelated to governanceof the national EEZ, implementationof national fishery regulations, development and implementation of national resource management strategy for EEZ as well as overall institutional strengthening and capacity building.MACEMPwill also support specific research activities that link more closely to SWIOFP. Specifically, MACEMP will complement SWIOFP by supporting fish stock assessment inthe near-shore waters of Tanzania. For purposes of coordination, it was agreed betweenthe two projects that MACEMP would focus on researchand monitoringof all waters of less than 500 mdepth. This implies that the near-shoreincludes the continental shelf and the shallower parts of the continental slope and that almost all of the Territorial Seas (within the 12nmlimit) are covered throughMACEMP, while SWIOFP will focus on the outer limitsof the EEZ. Linkages with TASAF 2: See detailed description of linkages betweenprojects in Annex 20. The TASAF 2 Project has been approved by the World Bank Board inNovember 2004 and became effective inMay 2005. TASAF2 will have an implementationperiodof 5 years. TASAF2 andMACEMP are closely linkedthrough MACEMP's Component 3, the Coastal Community Action Fund(CCAF), which will be implemented through the institutionaland operational mechanismsof TASAF 2. Operationalmodalities specific to the linkage between TASAF 2 and MACEMP include: (i) MACEMP follows the TASAF 2 sub-project cycle; (ii)MACEMPtargets coastalgeographic areas and defines additional service packagesto correspond to MACEMP objectives, and MACEMP includes additional safeguard screening criteria of its sub-projects; (iii) the MACEMP Coastal Village Fund(CVF) is ring-fenced within a single TASAF 2 Special Account, and applies a simple resource allocationmethod to distribute - 40 - it to MACEMP target districts and islands (see Annex 20); (iv) MACEMP implements the MACEMP Coastal Community Capacity Enhancement (CCCE-Subcomponent 3(b)) through the MACEMP Management Teams (MMTs) on mainlandTanzania andZanzibar. Linkages with JSDF: The JapanSocial Development Fund(JSDF) madeavailable US$1.818 millionfor the Tanzania Community BasedCoastalResourcesManagement andSustainableLivelihoodProject, which becameeffective inMay 2004 andhas an implementation periodof 2 years. This grant for civil society is to be implemented through NGOsto be selectedthrough a competitive process. The objective of the project is to overcome the problems of poverty and resource degradation inthe coastal areas of Zanzibar and Kilwa areas through enhancing the livelihoods of the poor and vulnerable groups inthe coastal communities. The JSDF is closely associatedwith MACEMP andenablesthe testing of different models to support communities. The experiencescan thereafter be replicated on a larger scale through MACEMP. Linkages with SADC MCS: The regional SADC MCSproject is fundedby the EC andhasbeeneffective for the last three years. The project will close inAugust 2004. Underthe SADC MCS project important building blocks for effective MCS have been establishedand a basis of skilledand trained staff for sea- and air-patrol, fishery patrol, fishery inspectorate,and other MCS related activities has beenput inplace. The projecthas enabledTanzaniato operateimportant componentsofMCS, however other components such as a Vessel Monitoring System(VMS) and InformationSystemstill need substantial support for establishment andinstitutionalization. Close donor coordination was established betweenthe SADC MCS Project and MACEMP to ensure that efforts and results achieved under the SADC MCS Project can link directly into MACEMP. MACEMP informed the MCS Work Planfor Tanzania during the final implementation periodwith a number of activities that will facilitate a smooth start of MACEMP inrelation to MCS activities (Le. identificationof staffing andrespective trainingplanfor the proposedEEZAuthority). Linkages with Other World Bank Projects supporting Environmental Assessment: MACEMPprovides selected support to districts and communities to assist ininterpreting environmental assessment requirements within localplanningmechanisms. The support complements (anddoes not duplicate) past and concurrent efforts to strengthenthis area. For example, work under the PRSC, Lower KihansiEnvironmental Management Project, and the LakeVictoria EMPhave all contributed to domestic capacity inenvironmental assessment, strategic environmental assessment, and ecosystemplanning. These have inturnbeen historically coordinated with the USAIDefforts that supported the I C MUnit inNEMC (which supports the I C M Strategy and integrates I C M concepts into district development planning.) Linkages with the Global Coral Reef Targeted Research and Capacity Buildingfor Management Project: The project will conduct targetedresearchto further the global understanding of what determines coral reef ecosystemvulnerability and resilience. It will establish a scientific knowledge base for synthesizing and comparing findings around the world andbuildcapacity of researchers within - 4 1 - developing countries as part of the global, applied researchframework. The project further aims to support application of the relevant researchfindings to managementinterventions and policy formulation at national andlocal levels. Coralreefs off Zanzibar represent one of the sites for targeted researchunder the project. MACEMP will coordinate with the project to respondto recommendations related to informed, science-basedcoral reef managementinterventions at local level. Linkageswith the Agulhas andSomaliCurrentLMEProject: The regionalAgulhas andSomali Current Large Marine EcosystemProject representsa second project under the broader Agulhas andSomali Current LMEProgram that also includes SWIOFP.The project is expectedto bepartially fundedby the GEFand is currently under preparation by UNDPwith support from UNOPS. An ecosystemand trans-boundary approach will be adopted to assist the West IndianOceancountries with the assessment and monitoring of the living marine resources of the two LMEs.Specifically, the project will fill knowledge gaps to inform long-termsustainable managementof two LMEs, and facilitate ecosystemmonitoring, evaluation andreporting includingGEFIW indicators. MACEMP will complement the regional Agulhas and Somali LMEproject: by reinforcing national commitments andpriorities relatedto sustainablefisheries; by implementing key policy reforms supporting governanceand sustainablemanagement inURT's EEZ; andby buildingthe countries' capacity to participate fully insub-regional managementof transboundary fish stocks and LMEsina broader sense. The close project collaboration link between SWIOFP and MACEMP will also provide for coordination with other projects under the Agulhas and Somali Current LMEProgram. MACEMPfurther provides adequatebudget to support participationof URTrepresentativesinregional conferencesand meetings relatedto EEZgovernanceand transboundary fisheries management. - 42 - 3. Results frameworkand monitoring Results Framework PDO Outcome Indicators Use of Outcome Information The objective o f the Project is to 1.Increased revenue generation to Year 1-3: Assess capacity of EEZ strengthen the sustainable EEZAuthority to US$20 milliodyr 4uthority to increase revenue management and use o f the by End-of-Project (EOP). :eneration. Borrower's Exclusive Economic 2.Own-revenue generation as Year 4-6: Document level of re- Zone, territorial seas, and coastal percentage of recurrent costs from investment o f revenue into the resources resulting inenhanced 40% at baseline to 150%by EOP Fisheriessector. revenue collection, reduced from the system of Marine Year 1-3: Assess capacity of MMA threats to the environment, better Managed Areas (MMAs). systemto generate revenue and to livelihoods for participating 3.Increase in the percentage o f -educeoperational cost. coastal communities living in the coastal fisheries households Year 4-6: Document financial and Coastal Districts, and improved perceiving an improvement intheir institutional sustainability of MMA institutional arrangements. welfare and economic status: 0% at system. baseline to 80% by EOP. Year 1-3: Assess coastal community Zapacitiesto access and use grants. Year 4-6: Documentcontributions to intermediate MDG indicators and assess options for replication and mainstreaming activities into local development initiatives. PGO Outcome Indicators Use of Outcome Information OP2 - To develop an ecologically 4.An increase inarea from open Year 1-3: Assess management representative and institutionally access to effective managed access regimes in project target areas. and financially sustainable from 4% to 10% by 2011, within Year 4-6: Document management network of marine protected the territorial seas. effectiveness interritorial seas and areas. 5.Increase indaily observations of associatedreduction of threats to vessel catch and effort entered into biodiversity. OPS To buildURT's capacity to - URTFisheries Information Year 1-3: Assess increased capacity measure and manage Management System from 1000 of EEZAuthority to monitor and transboundary fish stocks. per year at baseline to 15,000 per enforce sound fisheries management year and data in compliance with inthe EEZ. management targets for EEZ Year 4-6: Document increased level fisheries by EOP. o f compliance o f EEZfisheries with URT's fisheries management targets. Intermediate Results Results Indicators for Each Use of ResultsMonitoring Component Component 1.Sound 1. Component 1. Management o f the Exclusive -Componentregulatory instruments Policy and Year 1-3: Assess operational Economic Zone. for EEZcommon governance performance o f EEZAuthority and Objective: A common governance regime inplace: EEZ Authority identify any policy and training gaps. regime for the EEZ contributes to established by Year 2, Fishery Year 4-6: Review sustainability the long-term sustainable use and Policiesharmonized by Year 3, strategies for EEZ and marine management of EEZresources. Fisheriesjudiciary systemrevised by ecosystem management. Year 4, Fisheries Management System (input & output controls) enforced by Year 5. - Marine Legacy Fundestablishedat EO- PY3. - EEZAuthority supporting 80% of the EEZoperational budgetby EOP. - 43 - Component2. Sound -Component community managed 2. Component 2. Management o f the Coastal and A designated Year 1-3: Assess capacity of local Marine Environment. areas established ineach target area stakeholders (communities as well as Objective: A comprehensive o f project focus by EOP. local government authorities) to system o f managed marine areas - Elimination of destructive practices develop local ICMaction plans and inthe Territorial Seas, basedon inall areas of project focus by MMAmanagementplans. ICMstrategies that empower and EOP. Year 4-6: Review and document benefit coastal communities. - Cabinet endorsement of proposed coverage of coastal communities MF'A network design (including at empowered to manage sustainably least two new Conservation Areas) the coastal resources on which their by EOP. livelihoods depend. - Substantially reduced fishing effort targeting vulnerable species evident in50%of sites. Component3. Coastal Component 3. Community Action Fund. -Component 3.incoastal target areas Households Year 1-3: Assess impact o f assets Objective: Coastal communities with increased availability and use created on improved services and demand, implement and monitor of basic and market services. progress towards the attainment of services, and access opportunities - Number of subprojects through PRS/MDG indicator targets in that contribute to improved CVF completed. coastal communities. livelihoods through the - Households participating in Year 4-6: Review sustainability sustainable achievement of strategies. specified MDGindicator targets community savings schemes. within the Tanzania PRSP. Component4. Project Component 4. Implementation Support. -Component 4. activities identified 90% of project Year 1-3: Assess whether capacity of Objective: To provide efficient inannual work plans have been MMTstaffis adequateto deliver project implementation services. satisfactorily completed by end o f project implementation and each year. associated reporting and adjust - Semi-annual progress reports trainingprograms. produced on time and with Year 4-6: Review strategies for EEZ satisfactory quality. Authority to absorb key EGFT staff. - Performance and impact monitoringreports produced on time and with satisfactory quality. - Disbursement in accordance with costs and time schedule identified inPIM. - 44 - I 1 i t 3: $- 8 I 2- R ? I P I 2- P $? 3 0 3 P 2 P d n 3 i n gn 5 P 2 gn X X . 9 P 3 3 n 2 gn < X - P g 0 n < X sp I P 3 gn 5 d X 3 n - - P 3 3 3 3 3 0 Monitoring& Evaluation(M&E) The overall objective of M&EinMACEMP is to ensure better planning,targeting, feedback to relevant stakeholders and timely decision making inorder to improve service delivery. I twill helpto: improve managementof programs, subprojectsand supporting activities ensure optimum use of funds and other resources draw lessons from experience so as to improve the relevance, methods and outcomes of cooperative programs improve service delivery inorder to promote active community participation, quality of subprojects, transparency and accountability with a view to ensure that resourcesmade available to subprojects are usedto meet the intended purposes strengthen the capacity of co-operating agencies, non-governmental organizations and local communities to monitor and evaluate improve information sharing systems and enhanceadvocacy for policies, programs and resources that improve the MACEMP contributiontowards poverty alleviation and sustainable environmental management improve national and district capacity for effective data collectionand stock assessment of bothnear-shore and offshore fisheries improve fisheries data collection along the coast and implement appropriate stock assessment researchrelevant for marine resource usemanagement improve the mechanismfor fisheries statistics production and stock assessment information analysis, storage and dissemination improve the scientific knowledge base on which domestic, regionaland international resource managementpolicies and decisions rely. Itwill have aresults-basedM&Esystemthat will monitor project processesusingthe following methods and tools : A well defined Results framework that is derived from clearly defined goals, objectives, outputs and activities with corresponding indicators, means of verification and key assumptions A well defined M&Estrategy for project processes, informationrequirements, tools and methodologies for data collection, analysis and reporting A comprehensive M&Eplanwith clear roles andresponsibilities as they relate to indicators tracking with respectto data gathering andreporting A Project tracking systembasedupon agreedindicators as derived from the logical framework matrix of the MACEMP program Internal andExternalperiodic assessment and evaluations which would include baseline studies, beneficiary assessments, mid-termevaluations, ex-post evaluations and impact evaluations Participatory Community Monitoring and Accountability approaches and systems. MACEMP will ensure that all stakeholders are taking part inmonitoringof project processes according to definedroles and responsibilities basedon specific performance indicators. MACEMP will commission external evaluative studies such as beneficiary assessments to complement the internal monitoringarrangements. MACEMP will collaborate with other - 47 - Government initiatives such as the National LevelPoverty Monitoring being facilitatedby the Vice President's office. MACEMP will promote participatory community monitoring to ensure that project implementation processesare executedina satisfactory manner and that benefits are sustainable. MACEMP Key Pe$ormance Indicators MACMEP will assess its project management systems and procedures inrespect of their relevance, effectiveness, efficiency andimpact at community, operational area andnational levels. This will becarried out through input, process, output, outcome and impact tracking indicators which are gearedtowards meeting the national MDGgoals. Information Technology MACEMP will develop and maintain an effective decentralized Site-basedMIS that will assist stakeholdersinmonitoringproject processesand procedureseffectively and efficiently. The project design strengthens the abilities of local governments to plan, fund, implement and monitor community empowerment and delivery of socio-economic services to the poor. Since most of the activities will be taking place at community and local government levels, it is imperative that the MIS systembe decentralized andthat it interface with any other systems either planned or being tested inthe Districts. MACEMP MIS will also interface with any other MISsystemscurrently existing or beingproposed-both at the national andDistrict levels.The long-term placement of the MIS will bedetermined at mid-termreview and will dependon how various systems evolve; it is anticipated that the final network will have nodes at MNRT (fisheries), MANREC (fisheries), the DSFA and various local governments. The MACEMP MIS systemwill operate at three different levels and will include the following sub-systems: . Community Level (paper-based): .. Uptake from these community level processeswill feed into similar functions/processes at the District level. District Level MACEMPNational Level Other Systems = Geographic Information System (GIs). While this is not inthe initial full project plan, it may be developed insome LGAs if local expertise exists and if appropriate to the planning systemsbeing adopted at that level. Knowledge Dissemination System. This supports information and resource sharing within MACEMPas well as other relevant stakeholders, and is part of the Development Communication Strategy beingimplementedby the Development Communications Coordinator. - 48 - Appendix to Annex 3 A Note on the Selection of the InternationalWaters - Key Performance Indicator(KP15) ProposedKPI5 -Daily observationsof vessel catch andeffort entered into URTFisheries InformationManagement System.[baseline = 1000; target = 15000annual] For MACEMP, the selection of an appropriate long-term success indicator for Component 1is complicated by the fact that, at this time, no stock assessments or effort assessments are available. MACEMP infact proposesto buildthe capacity to conduct such monitoring and assessment. Background papersprovidedby GEF (see extracts that follows) show that one would ideallyhave an indicator that addresses an institutional dimension (that evaluates the ability to monitor stress reduction) as well as an impact measure (of over-fishing). Tanzania is currently at the highestlevel of monitoring capacity usingthe GEFnomenclature (see Extract l), butthere are nonethelessdifferent degrees of capacity within this level that canbe measuredsimply throughintensity andcompletenessof monitoringefforts. Early surveillance efforts show that over-fishing is quitereal and evidenced bothby illegal pelagic fishing within territorial waters as well as destructive fishingpractices (through nearshoreprawntrawling). By contrast, Tanzania is not inapositionyet to evaluate over-fishing through any of the proposed direct measures (Extract 2) becauseof the lack of baseline stock assessments. Inselectinga KPI,MACEMPhasthus focused onahybridindicator which is usefulfor short- and medium-term monitoring andwhich will demonstrate bothcapacity and rationalizing of fishing effort. Early experiencehas shown that increasedmonitoring is closely linkedto both compliance andto revenue generation; as formal ship-basedmonitoring has been introduced, licenseshave increased, revenues to government has increased, and illegalfishing activity has dropped. The use of ahybrid indicator such as "daily vessel reports of catch" is thus a good proxy bothfor capacity and for rationalized fishingeffort; the MACEMP supportedprogramme infact supportsasystemthat combinesvesselbasedmonitoringusingsatellite technology, trained monitors and inspectors, and sophisticated data reduction systems (setup financed under the EUSADC project closing inmid-2005) inwhich all ship-basedinformationreceived is automatically assessedand summarized for monitoring and compliance purposes. Inlater years of the project, it may also be possible to augment the impact indicators with those tied to stock assessments but, untilsuch stock assessments are completed (relying bothon MACEMP and SWIOFP) no indicator for long-term assessment is proposed. In2002, KPI5 was zero, andin2004 itwas approximately 1000basedonpaperbasedreporting. This was from licensed vessels who transmitted daily catch statistics for entry into systems housed inTanzania. Fullautomation of the system across all licensed vessels (potentially 200 underZanzibar or Tanzania licenses) for up to a 150day seasonwould yield up to 30,000 records annually. An EOP target of 15,000 records has been established for MACEMP; achievementof this target would signify both a substantial increaseinmonitoringand assessment capacity, as well as providing a proxy for compliance infishing effort. - 49 - ~ Extracts From: Program Performance Indicators for GEF InternationalWaters Programs, GEF/Ca22/Inf.8, November 1 1, 2003. Paper preparedby GEF Monitoring & EvaluationUnit with important contributions from GarethPorter, Aaron Zazueta, Jarle Harstad, Andrew Hutzon, Marea Hatziolos, Alfred Duda, Juha Uitto, Andrea Merla, John Pemetta, Alexis Maimov and Vladimir Mamaev. Extract 1. TABLE7: INDICATORS OFMONITORING AND REPORTING ONSTRESSREDUCTION Monitoring planfor Monitoring system No planfor stress reductionshas established. systematically monitoring stress beenestablisheddata Monitoring planfor gathers andreports reductionhas been gathering stress reductionis data relatedto the established responsibilitiesare under baseline. Datahas clearly defined, and implementationbut beendocumentedand adequate staff and no datahavebeen analyzed. budget provided reported Extract 2. Over fishing [potential indicators] 1. Elimination or reduction of the gap between actual fish catch and estimated maximum sustainable level of fish catch for modeled fish stocks. 2. Reduction of fishing capacity, measuredby total number of vessels multipliedby estimated average catching capacity per vessel at full utilization, as a proportion of estimated fishingovercapacity. 3. Reduction of rate of by-catch of non-target species. 4. Increase in area (inkm') of no-fishing zones. 5. Increase in area of fishery with seasonal limits on fishing. - 50- 4. Detailed project description Project Description Summary The Marineand Coastal Environment Management Project (MACEMP) is a 6-year project for the UnitedRepublic of Tanzania with a focus on the sustainable managementand utilization of the coastal and marine resources. MACEMP will support marine and near-shorepolicy reforms and implementation of activities that will impact positively the quality of life of populations in coastal area, and also on the integrity of the off-shore resourcebase that i s of national, and international, significance. The project emphasizes the establishment of an effective regulatory and institutional framework, participatory planning and the creation of an enabling environment for integrated coastal and marine resources management and private investment incoastal areas. The objective of the Project is to strengthenthe sustainablemanagement and use of the Borrower's Exclusive Economic Zone, territorial seas, and coastalresources resulting in enhancedrevenue collection, reducedthreats to the environment, better livelihoods for participating coastal communities living inthe Coastal Districts, and improvedinstitutional arrangements. The project activities have beendesigned to assistthe Government in implementing the NationalIntegratedCoastal Environment Management Strategy, the National Fisheries Master Plan, and the Fisheries Act, MarineParks andReserves Act. Specific objectives of the project include: Strengthening institutions charged with management of marine resources, inZanzibar and on the Mainland, with a focus oncreating a common governance regime for the Exc'lusive Economic Zone; Supporting the establishmentof a network of marine protected areas andmarine managed areas for conservation of biodiversity and sustainableutilizationof coastal andmarine resources, basedonplanning mechanisms consistent with sound integrated coastal zone management; Supporting poverty reduction efforts incoastal areas through promoting community demand-driven development initiatives that empower local populations and generatecash income basedon methodsthat are consistent with sustainableresource management. The primary beneficiaries of the project include MNRT, MANREC, coastal districts and community groups. All citizens inTanzania will benefit from the improvedmanagement of EEZ resources through enhancedrevenuesgeneration and rent capture. The main implementing agencies involvedinthis project are the Ministry of Natural Resourcesand Tourism (MNRT- MainlandTanzania) and the Ministry of Agriculture, Natural Resources, Environment, and Cooperatives (MANREC - Zanzibar). Key project expectedoutcomes include: (a) increased incomes through improved management of marine resourcesthrough increasedproductivity and added value from improved post-harvest processing and market access; (b) reduced vulnerability of communities to extemal shocks through diversification of local productionsystems; diminishedmarket risks through mutually beneficial private sector and community partnerships; and stabilization, and where possible, - 51 - reversal of current trends inmarine resources degradation and productivity; (c) increased Government revenues from improved managementof off-shore fisheries; and (d) improved ecosystemservices and conservation of globally significant marine andcoastal biodiversity. MACEMP generally aims to improve sustainable management and use of the URT's Exclusive Economic Zone, territorial seas, and coastal resources. Sustainable management and use will be reflected in enhanced revenue collection, reduced threats to the environment, improved livelihoods of participating coastal communities and improved institutional arrangements. GEF funding would finance incremental cost associatedwith: . Improving biodiversity conservation through development of an ecologically representative and institutionally and financially sustainablenetwork of marine protected areas; and Improving sustainablemanagement of transboundary fish stocks through building URT's capacity for policy and institutional reform. The project has three core components. Implementation is supported by a fourth component for facilitation and monitoring. IComponent Financing Summary (US$ million including contingencies) Component I Component I IDA (%) I GEFOP2(%) I GEFOP8 (%)1 Component 1. Sound Management of the Exclusive Economic Zone US$16.15 million (includes US$10.33 millionIDA plus GEF increment of US$5.07 million; URTcontribution of US$0.75 million) To achieve sustainability and productivity of the offshore fisheries as well as maximizelong- term government income from fisheries rightsfees and other relatedrevenue streams, URT has confirmed its commitment to put inplace a sound governance framework for its 200 nm Exclusive Economic Zone and develop and implementa sustainable management strategy for the living marine resourcesand their supporting marine ecosystem inthe EEZ. Sustainability of the offshore fisheries has thus far beenimpededby the absence of ajoint and coherent governance regime for the EEZ. Parallel regulatory and institutional structures within the Unionhave undermined URT's negotiatingposition inrelation to fishing rightsagreements and havehamperedappropriate capture of resourcerent for the living marine resources. A parallel system of sector strategies with little harmonization between the two sides of the Union has affected adequate managementof the EEZresources and development of sound management goals for the highly mobile living resources inthe Tanzanian EEZ is now urgently neededto reduce stress-levelson the resourcebase and ensureresilience of fish stock inthe future. - 52 - While the Constitution of the URT regards fisheries as anon-Unionmatter with resulting discrete regime for managementthroughbothsides of the Union, Tanzania mainland and Zanzibar effectively share the same EEZ andthere is a mutual commitment for joint and sustainablemanagement of the offshore marine resources. Objective of this component is to establish and implement a common governance regime for the EEZthat contributes to the long-term sustainableuse and managementof EEZresources. Component 1has been organized into three closely inter-linked subcomponents: -SubcomponentI(n)will provide for the underlying planningsupport necessary for development of a soundEEZgovernance and managementregime. The aim is to develop a fisheries managementsystemthat caters for an appropriate balance betweenmaximizationof income from and long-term sustainability of the fisheries. To implement the fisheries managementsystem, a commonEEZ authority capable of decision-making on behalf of the Unionandfast andeffective enforcement will be established. Planning support will include relevant policy, regulatory and institutionalreform as well as development of the scientific knowledge base indispensable to inform sound and adaptablemanagementof the marine resources. -SubcomponentI(b)will provide the means for effective and efficient implementation of the EEZGovernanceRegime.Thiswill include strengtheningof monitoring, surveillance and enforcement systems with view to control fishing effort, implementation of a sustainable financingmechanism, as well as pro-active EEZresourcemanagementand monitoring. Comprehensive and targeted capacity buildingand institutional strengthening for key operational agencies involvedinEEZ governance and managementas well as key research institutions will develop improvedperformance of these players inthe sector. -SubcomponentI(c) will support partnership building for EEZ governance. This includes partnerships with the private sector to improve sector sustainability and food-security through enhancedpost-harvestprocessesas well as appropriate landingandmarket facilities. The project will further strengthenthe regionaldialogue on soundgovernance and sustainablemanagement of marineresourcesinthe West IndianOcean andbuild regional cooperation on transboundary marine and fishery issues. Expectedoutcomefrom Component 1:is a shiftfroma de facto open-accesstowards a managed-accessregime to provide for long-termsustainability and of the marine resourcebase and to maintainresilience of fish stocks to absorb controlled levels of utilization. MACEMP's comprehensive approach to sound governance of the EEZ i s expected to contribute to financial sustainability throughimprovedcapture of resourcerent supportedby strengthenedcontrol and enforcement mechanisms andthrough incentives for sustainable resource use. This component will support URT's national contributionto meetingspecific targets set at the WSSD relatedto maintenanceandrestoration of national and transboundary fish stocks to sustainablelevels. Implementation:MNRTandMANREC will lead implementation of Component 1.The two lead agencieswill collaborate or link-up with the Ministryof ForeignAffairs, the Ministry of Trade and Industry, the Ministry of Finance, the Navy, the Marine Police, the Coast Guard (KMKM),the Port Authorities, the NationalEnvironmental Council, the Meteorology - 53 - Department, the Vice President's Office, the Ministry of Lands andHumanDevelopment (Mapping Section), local Universities andresearchinstitutions. The three closely inter-linkedsubcomponentsare: Subcomponentl(a): EEZPlanningSupport ~~~US$2.31 million (includes US$0.61 million IDAplus GEF increment of USsl.70 million) ~~ Policy: Support Domestic Dialogues on Boundaries and Governance (US$220,000) Policy: Design Legal Mandate and Policy (US$ll5,000) Policy: Design Marine Legacy Fund (MLF)(US$270,000) Policy: Link MLF to Genetic Value Capture Instruments (US$75,000) Science: Design EEZResourceManagement Strategy (US$160,000) Science: Research and Monitoring-Territorial Waters StockAssessment (US$l,470,000) Activities will support the domestic dialogue and planningprocesstowards establishment of a common governance regimefor the EEZof the UnitedRepublic of Tanzania. The dialogue will focus on the underlying principles of EEZgovernance andoptions for reformof the current policy, regulatory and institutional framework for EEZ governancethat are acceptable to both sides of the Union. Reformwill focus on the two key instrumentsapplicable to the EEZ, the Territorial Sea and ExclusiveEconomic Zone Act of 1988 that respondsto the UNConvention on the Law of the Sea (UNCLOS) and the Deep Sea FishingAuthority Act of 1998. Reformof the Territorial Sea and EEZAct will focus on shifting its emphasis from prioritizing marine resourceutilizationto sustainable long-term use of marine resources.The Act will further berevised to define mandatesof the Minister of ForeignAffairs versus the Ministriesresponsible for natural resourcemanagementonboth sides of the Union. Experiencehas shown that the functions of the Minister of ForeignAffairs as stipulated inthe Act, such as the promulgation and implementation of environmental regulations, are difficult to put into practice without any coordinated linkage to the relevant Ministries and result inadhoc managementarrangements of the EEZ. Lastly, overlaps inscope and applicability of the Territorial Sea and Exclusive Economic Zone Act andthe Zanzibar Fisheries Act will need to be resolved. Currently bothlaws are applicable to the EEZ management and to Zanzibar'. The Deep SeaFishingAuthority (DSFA) Act makes provisions for the establishment of a common governance regime for the EEZ, however it has not become operational due to structural and functional shortfalls. The project will assist with review of the Act, will address its shortfalls, and redefine the mandateof the DSFA according to outcomes of the domestic dialogue'. Structural shortfalls to be resolved include the needto define means of collaboration ~~~ The Territorial Sea and EEZ Act applies to Zanzibar by text and by interpretation as implementation o f international treaties is a union matter. At the same time, Zanzibar has declared its own EEZ under the Zanzibar Fisheries Act, which does not recognize the Territorial Sea and EEZAct. As per Deep Sea Fishing Authority Act of 1998, the functions o f the DSFA are to promote, regulate and control fishing in URT's EEZ; to regulate licensing of persons and vessels intending to fish in the EEZ; to initiate, - 54 - with other institutions for monitoring, controland surveillance mandates as officials of other institutions are not recognizedunder the Act as "authorized officers". A functional overlap to be resolved, is the Authority's mandateof outlining national fisheries polices, the latter which is also the function of the Ministers responsible for fisheries onboth sides of the Union. The Act will further be revisedto clearly stipulate enforcement function, as the mandates andpowers that may be exercised by the enforcers of the Act are currently spelled out vaguely enough to lead to potential conflict of laws and mandates inthe EEZ.The regulatory framework will further need to speak to powers for declaration of marine parks or closedfishing areas inthe EEZ as current laws provide for overlapping or unclear powers". As part of the reformof theAct, the mandateof the proposed `common authority for the EEZ' will be defined and agreedupon during the processof dialogue and negotiation engaging the two sides of the Union. The proposedAuthority is expected to act as the executing agency for daily managementof the EEZ resources and implementation of MCS activities. It will be responsible for all aspects of managing industrial fishing rights inthe EEZandhold powers to issue and withdrawal of fisheries authorization, set fees and managevessel registration. The authority will collect deep sea fisheries data and holdresponsibility for preparation and implementation of EEZ resource managementplansand strategies. For means of minimizingcost undbureaucratic burden,the Authority will needto be closely linkedwith thenavy, the marine policy, and the judiciary system, so that vessels violating establishedrules andagreementscanbe patrolled and prosecutedthrough existing capacities with the respective mandates. The domestic dialogue supported by the project will further aim to reach an agreement on distributionof any surplus income from administration of EEZresources, inparticular fisheries. Inaddition to activities promoting institutionalsustainability, MACEMPwill place apriority on developing financial sustainability for the common EEZ governanceregime and for priority coastal and marine managementmeasures. Activities under this sub-component will support the designof arevolvingfundto meet the core cost of managingthe marine resources andthe marine ecosystemthat support them. The proposed MarineLegacy Fund(MLF)will collect receipts from highly variable multiple sources and redistribute to core functions on an annual basis, retaining an averagefund value equal to about three years of outflow. The revolvingnature of the Marine Legacy Fundis intendedto provide adequatebuffer for periodic shocks (revenue shortfalls or emergency expenditures). The MLFwill introducediverse revenue generation from a variety of potential sources including increasedtourism fees and taxes, increasedlicense fees and export royalties for offshore fishing, selectedfines and levies, partialrevenue surplus from MPA entryfees, permitsandproductionroyalties onoil andgas extraction, as well as routine budget allocations, potentialexternal assistance andbudget support. The different sources of inflow, as well as outflow will betraceable, but importantly all funding will be fungible to implement and ascertain the enforcement of polices on deep sea fishing vessels; to formulate and coordinate programs for scientific research in respect o f fishing; to formulate fisheries policies; and, to negotiate and enter into any fishing or other contract, agreement or any kind of fishing cooperation with any government, international organization or other institution in pursuance o f the provisions o f the Act. "Currently, MPRUfor Tanzania mainland and NPAB for Zanzibar, may designate and manage Marine Protected Areas inthe EEZ.It is recommended to establish a framework o f cooperationbetween the two institutions for the purpose of MPAs in the EEZ. "ThenameoftheDSFAmaychangesubject toreformoftheAct.Forthepurposeofthisdocument a`reformed DSFA' is referredto simply as EEZAuthority. - 55 - diversify risk.The minimumcapital of such a MarineLegacy Fundis estimated to be of the order of US$75 million to provide an adequatebuffer for the core elements of the system, although it could conceivably fluctuate from betweenUS$35 andUS$l50 million depending on year-to-year circumstances. Studieson revenuegeneration potential duringthe first year of the project will substantiatethe current income scenario. Nationallegislation inbothTanzania mainland and Zanzibar already provides for the establishment of higher level pooling mechanismsfor sustainable finance. The MLFwill buildand extendon existing smaller funds, such as the National Fundfor ProtectedAreas Management and the Conservation and Development Fund'*as well as the existing revenueretention scheme for fisheries. Itwill pull these funding mechanisms for marine resourcemanagementtogether for conversion into one larger cost-effective and sustainablefinancing mechanism. (See Annex 9 for a detailed discussion on the MLF).Other measures complementing this sustainable financing mechanism, such as cost reduction for management of the MPA network, are discussedunder Component 2. To substantiate and validate the financial scenario for the MLF, adetailed environmental economic analysis of the potential value of the marine resources inthe EEZ and possible revenue generation will be developed. Initially, a number of studies will be carried out to inform the broader economic analysis. This will include a number of value-added studies to determine the potential scope for royalties and other charges onharvest, utilization, and upstreamprocessing of potentially lucrative marineresources, such as for example seaweed. Most importantly, studies will be undertaken to investigate feasible increaseinEEZfishing license fee rates, the development of a more efficient licensing andallocation system, the structure of penalties, and their legal f~undation'~. aim of the study will be to provide recommendations for a fisheries An license systemthat reflects the real value of the offshore fisheries. The study will further assess the revenuepotential and practical feasibility of commercial and semi-commercial landing of fish catch, of trans-shipment andcommercial processingas well as relatedroyalties, suchas landing fees and export royalties. Studies will also include a review of the potential benefits arising fromutilizationof marine genetic resources, including access to genetic resourcesfor commercial utilization. The study will also cover recommendations for a regulatory and incentive framework that safeguards fair and equitable sharing of the benefits arising from commercial utilization, such as biotechnology and genetic engineering, and stipulates guidelines for equitable contracts for bio-prospecting. The secondblock of activities under this subcomponent will concentrateon developing the scientific knowledge baseneededto set sound managementtargets andprovidefor adaptable management inthe long run.With the aim to develop a fisheries management systemthat caters for an appropriatebalance betweenmaximizationof income from and long-term sustainability of the fisheries, assessment of available fish stocks and current stress levels on the resourcewill be indispensable.MACEMP will support a fish stock assessment inTanzania's territorial waters. l2The National Fundfor ProtectedAreas Management was established under the Zanzibar Environmental Management for Sustainable Development Act o f 1996;the Conservation and Development Fundunder the Marine Parksand ReservesAct of 1994. l3At present, anannual fishing license for the Tanzanian EEZwithout major restrictions on total catch allowance on average only cost to the amount of US$l8,000-20,000. It is estimated that even a ten-fold increase of costs would not present a significant economic disincentive to vessel operators. - 56 - The project will dependon other ongoing andplanned initiatives, inparticular the SouthWest IndianOcean Fisheries Programme currently under preparation, to provide the necessary data on offshore and transboundary fisheries stocks. (See Annex 2 for further details on linkages with other initiatives.) Based on the knowledge baseevolving from fish stock data as well as other targetedmarine research, an EEZresourcemanagementstrategy and action planwill be drawn up. With a view to fisheries, the EEZresourcemanagementstrategy will form the basis for setting sustainable fishing quotas and will guide sustainable levels for issuingfishing licenses. The overall EEZ resource strategy will be developedbasedon the results of an initial needs and impact assessment of the EEZresources. As part of implementingthe EEZresourcemanagementstrategy, the project will support the establishment of an environmental status monitoringsystem, including an early warning system for environmental change. The marine resourcemonitoring system would enable the Union to the prepareperiodicalreports on the `State of the MarineEnvironment' as well as to track and monitor any critical environmental trends or disasters early on and to adapt marinemanagement accordingly. Subcomponentl(b): ImplementationofEEZ CommonGovernanceRegime US$10.44million (includes US$8.00million IDAplus GEF increment of US$1.69million; URT contribution of US$O.75 million) Boundary Agreements (US$llO,OOO) Training Programme -Needs Analysis and Higher Education (US$245,000) Training Programme - Operational Agencies (US$470,000) Agency Infrastructure & Equipment (US$4,300,000) MLF Implementation (US$l90,000) MLF Capitalization (US$l,OOO,000) Implement EEZ ResourceManagement Strategy (US$410,000) Monitoring, Control, and Surveillance (MCS)(US$3,720,000) Sound governance of the EEZwill be basedon the implementation of the EEZresource management strategy and implementationof the fisheries management and control systembased on a reformed regulatory framework, strengthenedinstitutions, and results from targeted research that inform and drive managementdecisions. MACEMP will provide support to the proposed EEZ Authority responsible to administer and implement the fisheries management systemfor the EEZ. The EEZAuthority will use a mix of management instruments includingboth output controls, such as total allowed catch, and input controls, such as legal fishing methods, number of vessels, or number of days fished. These instruments will be complemented through managementof exploitationpatterns, e.g. through regulation of fishing operations inand around closed areas. Increased negotiation power of the URTby means of the common authority will support the aim to regulate fishingmethods, restrict maximumcatch allowances, and minimize by-catch as part of fishing agreements. - 57 - Monitoring, Control, and Surveillance (MCS) will be scaled up to observe the fishing industry's activities and enforce adherenceto the rules of the fisheries managementsystem. The project will supportoperational cost of regular sea and aerial patrol^'^. To complement MCS activities, the fisheries judicial system will be supported to provide for prompt prosecution andprocessing of alleged violations of fisheries managementrules. This will includeformulation of clear provisions for fishery observers, clearly draftedpowers of inspectionand enforcement officers, clearly defined offenses, provisions for arrest, penalties, andforfeiture of vessel, gear, and catch, and for the level of proof requiredfor enforceability. MACEMP will further provide equipment and infrastructure support to capacitate the proposedEEZAuthority to enforce that all vessels fishing inthe EEZwill be authorized by license agreementandwill befishing inconformity with national regulations. At present, foreign vessels licensedto fishinthe EEZhavebeenrequested to report oncatch (target species and quantities) on a voluntary basis. While most Europeanvessels have complied with the officially transmitted requestby the Director of Fisheries, MNRT,other fishing vessels have largely failed to report. The rate of reportinghas also reducedover time and the MCS officers managing the data are still facing difficulties due to unharmonized reportingformat by the different vessel operators. The installation of an adequateVessel MonitoringSystem (VMS) inconjunction with astandardreportingthroughthe transpondersinstalledinall licensedvessels will greatly facilitate monitoring of fishing effort andcontribute to improvement of URT's MCS system. Effective MCS will also force foreign commercial fishing fleets to remain outside the territorial waters, thereby significantly reducing competition andconflict betweenartisanal and industrial fishing capacity onover-stressedfish stocks inthe shallower waters, andprotecting the livelihood of artisanal fishers along the densely populated Tanzanian coast and islands. The project will further provide support to cover costs relatedto set up and operationof the EEZ Authority and implementation of the EEZresource managementstrategy until sustainable fundingstreamsthroughthe MarineLegacy Fundbecome available. An initialcapitalization of US$l million of the MLFis contemplated from project financed funds as seed capital. No IDA resourceswill be used incapitalizing the MLF;GEF fundingwill provide US$250,000 once evidence is received by the Bank of parliamentary approval of MLF, appointment of Executive Director and/or Boardof Directors inconsultation with the Bank, anddeposit of the Government contributionof US$750,000 to capitalization of the Fund. While the primary aim of the MCS system will be to enforce adherence to the fisheries laws and regulations, it will also providefor collectionof fisheries catch data to inform future fisheries managementdecisions as well as decisions inthe case of prosecutionthrough thejudiciary system. l4Tanzania already has proven capacity and experience in aerial patrol and subsequentprosecution of unlicensed fishingvessels basedonphotographic evidence. However, sea patrol is effectively limiteddue to inadequate equipment, thus putting constraints on efforts to inspect vessels and actual catch. - 58 - A capacity needs assessment will be undertakenduring the first year of project implementation to analyze training andcapacity buildingneeds for operational agencies, inparticular the proposedEEZ Authority and the respectivedepartmentsresponsible for fisheries inTanzania mainland and Zanzibar. A comprehensivecapacity buildingand institutional strengthening programme for key operational agencies will be implemented over the duration of MACEMP and will include training for fisheries inspectorates,fisheries observers, vessel patrols, legal awareness, communication andjoint, transboundaryoperations, MCS standards and equipment operation. Training levels and course curricula will bereviewed andupdatedas project implementation progressesbasedon experiencemade. Project funds will also support selected targetedresearch directly related to EEZgovernance and management. Subcomponent l(c): Developingand Supporting Partnerships inEEZManagement US$3.41million (includes US$1.72 million IDAplus GEF increment of US$I.69million) Support International and Regional Dialogues on Boundaries and Governance (US$490,000) Support Private Sector Dialogue (US$2I5,OOO) Support Specific District Level Investments (US$2,705,000) The projectwill facilitate the regional dialog onEEZgovernanceandcollective effort towards development of regional quota systems for licensing relating to maximumsustainableyields of key commercial transboundary species. Assistance will be provided to establish informationand knowledge sharingmechanismsfor scientific data, e.g. informationonfish stocks, andrelated to experience and lessonslearned from implementation of fisheries and EEZresource management. A linkage to the IWLEARNinitiative couldpotentially function as amechanismfor sharing of lessons learned. Results from fish stock assessments inTanzania's territorial seas will also present a building block for regional collaboration on assessmentsof transboundary fish stocks inthe EEZ of the West IndianOcean states and the HighSeas. Through various activities described in Subcomponents l(a) and l(b), MACEMP will buildthe capacity of the URT to fully participate inregional initiatives suchas the upcoming SouthWest IndianOceanFisheries Programandthe Agulhas and Somali Current Large Marine Ecosystem (A&S LME)Program (See Annex 2 for details on project linkages.). MACEMP's assistanceto development of the EEZresource management strategy will provide an important national input to the development of a strategic action plan (SAP) that is envisaged for the wider regionunder the A&S LMEprogram, and for meeting national obligations arising from international and regional conventions to which the URT is aparty. MACEMPfinancing will also provide coordination betweenMACEMPand other regional initiatives relatingto LMEs within the potential Fisheries Partnership or other LMEinitiatives outsidethe FisheriesPartnership. Coordination will includeharmonizationof activities, sharing of lessons learned, and development and implementation of potential replication strategies. The project will support the participation of URT delegates fromkey implementingagencies in regional andinternational meetings relatedto regional initiatives such as the IndianOceanTuna Commission, as well as relevant international and regional conventions. Assistance will also be - 59 - provided to finalize agreementson boundariesof the Tanzanian EEZ with the Comoros inview of finalizing maritime boundary delimitation. MACEMP will buildon progress madeby the EC-financed SADC MCS project indeveloping an effective system of surveillance, monitoring, and enforcement inthe region. MACEMPis expectedto extend regional collaboration northtowards Kenya andEritrea and other neighboring states that have not participated inthe EC project limitedto SADC states. Expected activities will include the development of a regional vessel monitoring satellite systemto potentially observe all movements of industrial and intermediate technology fishing vessels as well as further development of the capacity for joint patrols by air and sea, and mutual agreements for hot pursuit of illegally operating fishing vessels into neighboring waters. The project would support private sector dialogue related to potential improvements to post- harvest processing and market access. It would provide assistanceto specific district investments throughupgrading andrehabilitating of localports andfish market infrastructure, inparticular installation of cooling and storing facilities, to reduce and prevent post-harvest loss and improve local markets. Incremental activities: GEFgrant-financed activities wouldrealize incremental benefits associatedwith the aimto improve sustainability of transboundary fish stocks through stress reduction on the resource and initialization of a sustainablefinancing mechanismsto ensure sustainability of management efforts beyond the lifetime of the project. Specifically, incremental activities (GEFOP8) would focus on identification and formulation of resourcemanagementapproaches, such as input and outputcontrols, andmanagementtargets basedonthe scientific knowledge generated.As part of stress reduction measures, incremental funding would concentrateon efforts to minimize waste anddiscardsthrough post-harvestloss andby-catch, includingcatch of non-target species, both fishandnon-fishspecies, as well as other negative impacts onendangeredspeciesthrough measuresincluding enforcing use of selective, environmentally safe, and cost-effective fishing methods and improvedpost-harvest processes.Incremental funding will thus partially cover monitoring, surveillance and enforcement activities as well as investments into technology facilitating monitoring andcompliance efforts, such as the Vessel Monitoring System(VMS). Last, incremental funding would provide for seed fundingfor capitalization of the Marine Legacy Fundto mobilize additional financial resources for managementof transboundary marine systems. Accordingly, GEF funding would focus on incremental cost associated with the following project activities: Designand implementation of the EEZ Resource Management Strategy (OP8); Assessment of the status of fisheries stocks interritorial waters (OP8); Seedfunding for the sustainable financing mechanismonce designed and established (OP8); Incremental shares of capacity building and institutional strengtheningfor and implementation of Monitoring, Control and Surveillance (OP8); Support of International andRegional Dialogue on EEZGovernance (OP8); Incremental shares for specific district investments related to reduction of post-harvest loss (OP8). - 60 - Inaddition, GEFincremental fundingwill address some cross-cutting issues with biodiversity conservation through financing the part of the MLFdesignstudy that relates to genetic value capture (OP2). Beneficiaries: The mainbeneficiaries from Component 1will bethe Ministries responsiblefor Fisheries inboth sides of the Union, MNRT and MANREC respectively. The Departmentsfor Fisheries inthe two Ministries would benefit from policy, regulatory, and institutional reformas part of establishing the commongovernance regime. The two agencies and the DSFA (once established) will benefit from target capacity buildingas part of their involvement injoint implementation of sound governance of the EEZ and sustainablemanagement of the relatedlivingresources. Other beneficiaries would include key research organizations inURT that are involvedinresource assessments and monitoring. Component2. Sound Managementof the Coastal MarineEnvironment US$26.25 million (includes US$21.32 million IDA plus GEF increment of US$4.93 million) Tanzania recognizes the value of the coast and the need to facilitate sustainable development, hence its commitment to sustainable coastal governance through ICM. Specific coastalresources andactivities are addressedto a certainextent by various sectoral policies. The complexity and challenges of the coastal and marine managementcalls for coordination and feedback mechanisms among agencies, decision makers and implementing authorities at all levels. The effective governanceof coastalresourcesrequires improvedmanagementstructures and capacity of relevant agencies (particularly at district and village levels) as well as improvedenforcement of existing laws. The marine area system as envisaged inthis component entails a linkingof areas under different managementregimes.These regimes can include a wide range of options, includingtraditional "no-take" Marine Protected Areas (MPAs), community managedareas (CMAs), andmarine management areas (MMAs).The MPA system approach is important for Tanzania because marine andcoastalecosystems and the communities therein, are linkedto each other through an intricate web of ecological and oceanographic processes.The establishmentof a systemof MPAs/CMAs/MMAs is one technique of marine conservation that is applied ina defined area and normally integratesmany approaches/mechanisms, including but not limited to species populationprotection, fisheries management, integrated coastal management, land use planning and adherenceto international conventions. MainlandTanzania addressed marine protected areas through enactmentof the MarineParks and Reserves Act of 1994. This Act provides for the establishment, management andmonitoring of Marine Parks and MarineReserves and the institutionalframework for their management. Marine protection may also be achieved through local government instruments.The local mandate for resource managementis also recognized by Land Tenure (Village Settlement) Act, the Village Land Act, and LocalGovernment Act. The legislative structure for Zanzibar puts management of most marine areas under thejurisdiction of the Fisheries Divisionwithin MANREC, with a legal backing afforded by the Environmental Management for SustainableDevelopment Act of 1996. - 61 - The objective of this component is to establish and support a comprehensive system of managed marine areas in the territorial seas, building on ICM strategies that empower and benefit coastal communities. Specifically, the component aims to: (a) support integrated coastal management planning; (b) implement a comprehensive, effective and representative system of MPAs encompassing ecologically arid culturally significant areas; (c) develop and support regional, community and private sector partnerships in integrated coastal management; and (d) improve the livelihoods of coastalcommunities through ICMplanningactivities. Component 2 has been organized into three closely inter-linkedsubcomponents: -Subcomponent2(a)will provide for the underlying planningsupport necessaryfor strengthening ICMat the local government level. The aim is to buildcapacity at the district level through resource assessment, capability mapping, and spatial planning. ICMplanning supportwill also be provided to mainlandTanzania and Zanzibar inthe form of developing action plans for specific coastal areas, consistent with the NationalIntegrated CoastalEnvironment Management Strategy (NICEMS) on the mainland and Environmental Management for Sustainable Development Act inZanzibar. Community access will be strengthenedthrough policy initiatives that support marine zoning (e.g., through a Community Territorial Sea) andthrough supporting a national planfor community managedareas. Integration with terrestrial planningwill be ensured by providing support for integrated land-use/marine planningto coastal districts (e.g., through plaking biosphere reserves). -Subcomponent2(b)will provide the means for A Support Package for Generic h4PA Site effective andefficient implementation of the Investment network of MMAs and MPAs. The subcomponent 1. Resource Assessment; concentrates90% of its effort on site specific 2. Community Engagement -including support, with about 10%allocated for umbrella Community Mitigation Action Plans; support to core institutions. The umbrellasupport 3. Support gazetting process, including will include providingcore funding support for district by-laws and other regulations institutionsinvolved inimplementing the National necessary; 4. Development of general management Plan, as well as general MPA managementtraining plan; for staff inthose institutions. Support will also be 5. Develop specific management plans, provided for strengthening Antiquities departments land use plans; on Zanzibar and the mainland to undertake 6. Boundary demarcation; inventories, planning andmonitoringof cultural 7. Construction o f offices, field assets. Site specific support will beprovidedfor: accommodation, information center; (i) MPAs/MMAs/CMAs;(ii) emerging existing five 8. EauiDment sumort for MPA staff: sites; (iii) mangrove areas at Chwaka Bay and two 9. Staff training (technical amectsk Rufiji; and(iv) an unspecifiednumber of cultural 10. Operational cost support; heritage sites, although some priority cultural sites 11. Baseline Studies (socio-economic, havebeentargetedfor initial years (Kilwa and other ecological); sites on the mainland; LivingstoneHouse, 12. Establishing M&Esystem; MaruhubMtoniruins, Mangapwani ruins, cave 13. Environmental education and system at Kiwengwa, Mtende and Chwaka in awareness raising; Zanzibar). GEF support (of US$1.3 million) inthis 14. Strengthening community management sub-componentwill finance the training committees; requirementsunderthe umbrellasupport, and about 15. Communitv training: 10%of the support costs at existing sites, focusing 16. Equipment support for communities (management equipment). - 62 - on boundary demarcation and education campaigns at those sites. The bulk of GEF funding (of US$2.4 million) will be dedicatedto expanding the current network of MMAs andMPAsby setting up and supporting full implementation of managementplans at two new sites: the Pemba Channel Marine Conservation Area on Zanzibar and the Kilwa-Rufiji ecosystemon the mainland. At each of these emergingsites, funding will be made available for all activities listed inTableA4.1. -Subcomponent2(c) will develop and support the buildingof regional, community and private sector partnerships. Regional partnershipsfocus on strengthening the dialog with neighljouring Kenya and Mozambiquewith a view to establishing regional protected area networks. Strengthening of community partnerships will be done through co-management models currently beingpiloted at two general areas by JSDF: Kilwa (Kilwa District, RufijiDistrict, Mafia island) and MarineConservation Areas (MCAs) on coastal Zanzibar (Menai Bay MCA, Mnemba Island MCA, Misali IslandMCA). Private sector partnerships will be encouragedthroughMSME capacity building and facilitating improved access to credit. GEF financing for this sub- component will finance the regional partnership buildingandan expansionof the community partnership modelbeingtestedby JSDF; the expansion sites will be among those being supportedby GEF inSubcomponent 2(b). Expectedoutcomefrom Component2: is ashift from a de facto open-access towards a managed-accessnear-shore regime that protects biodiversity while providingadditional development opportunities for local populations through greater involvement inlocal resource managementdecisions. MACEMP's comprehensive approach to community involvement in coastal management is expectedto contribute to more sustainableresource use andto improved resource quality. This component will implement Zanzibar's and National ICM strategies and increasethe area of territorial seas undereffective management. Implementation: Component 2 implementing andcollaborating agencies include: Ministry of ForeignAffairs, Ministryof FinanceMinistry ofTrade andIndustry,MarineParksandReservesUnit(MNRT); MANREC; NationalProtectedAreas Board(Zanzibar); Vice President's Office (NEMC, DOE); President's Office -Regional Administrationand Local Government, District Councils; Antiquities Departments, andrelevantresearch institutions inthe mainlandandZanzibar; CBOs; and NGOs. The three closely inter-linkedsubcomponents are: Subcomponent2(a): IntegratedCoastalManagement(ICM) PlanningSupport This subcomponent is designedto improvethe livelihoods of coastalcommunities through supporting integrated coastal area planning. Mainland Tanzania has developeda National IntegratedCoastalEnvironment Management Strategy with details on action plans and different coastal districts are at different stages inthe development of their environmental planningand implementationcapacity. These districts will need assistanceinimproving these skills. This subcomponent will support the development of a mechanism for ICMplanning inZanzibar since the mainland I C M Strategy does not cover the isles. For Zanzibar, the mainfocus will be to - 63 - identify issues for ICMplanning, review andharmonization of policies andlaws where relevant, and develop guidelines for translating the I C M action plansfor sustainabledevelopment. As a measureto promote ownership and awarenessof the ICM, the project will also circulate relevant informationpamphletsdescribing I C Mprocedures. US$6.0million (IDA) District (Local Government)CapacityBuilding - ResourceAssessment and Capability Mapping(US$2,950,000) District (Local Government)CapacityBuilding - Village[Interaction] (US$650,000) District (Local Government)CapacityBuilding -Spatial Plans (US$l,400,000) ICM Planning Support (Zanzibar) "Action Plans" in MANREC (US$24.5,000) ICM Planning Support (Mainland) "Action Plan''in MNRT (US$250,000) National CMA Plan (MANRECMNRT)[Planning] (US$390,000) GovernanceIssues in ICM: Community Territorial Sea (US$llO,OOO) Furthermore, the subcomponent will support awarenessraisingprograms to local authorities on importance of planning as well as capacity buildingfor I C Mimplementation through institutional and individual strengthening for coastal resource management. Tailor made programmes including specialized short term training relating to implementation of procedures inthe Environmental ManagementAct 2004 will also beprovided. Itis envisagedthat the project will provide facilities and equipment for relevant institutionsto support development of monitoring systems. This subcomponentwill also support capacity to review environmental and sociaL'resource assessment proceduresto enhance sustainable development. This will necessitatedeveloping and creating awarenessonEIA guidelines andprocedures at district andnationallevels. This component will work towards mainstreaming environment incoastal area planning. These activities will generate a greater understanding of the role of the environment inthe daily lives and long-term prospectsof those who live there. MACEMP will provide resources to support planning of more rational use of the environment and support for the correct implementationof these plans at the local level. Throughimprovedrecognition, improvedformal rights over their traditional resources, better information, skills and participation inplanning, localcommunities will be better empoweredto managetheir natural resources and more able to ensure that their development needs are recognized and responded to. The lessons learnt by communities, the district teams, scientists and other stakeholderswill contribute to a growing body of knowledge and skills on integrated coastal zone management. This will lead to investments innew programmes of this nature. The anticipated output fromthis subcomponentis the successfulimplementation of plans for localco-management for marine and coastal resourcesin selectedproject sites. It is expected that the natural environmenton which local communities dependfor much of their livelihood will be better managed andbetter able to provide sustainable resources. Withcontinuing deterioration of the coastal andmarine resources, it hasbeenrealized that it is not possible to attain sustainable development under a centralized and non-participatory system. - 64 - Consequently, MACEMP will support targetedcoastal areas to develop and implement participatory resource management strategiesand action plans for activities like ecotourism, biodiversity conservation, fisheries management, and seaweedfarming, as demanded. This task will involve anumber of actions, including identification of areashectors of participatory management; facilitating resourceassessmenb'inventory leading to production of resourcemaps for districts; providingtechnical support to communities to formulate by-laws and implementing them. The project will also support strengtheningof district and community institutions through capacity buildingprogrammes for resourceusers and managers.This activity will involve strengtheningcapacity of district level environmental committees on management andplanning of shared/trans-boundary areas; strengthening village environmental andresource management committees; strengthen negotiation skills and conflict resolution mechanisms at village level. MACEMP will also support targetedcapacity buildingfor environmental civil society organizations directly contributing to the project objectives. MACEMP will provide support for capacity buildingfor resource users and managers. This activity will on the larger part support capacity buildingfor the various levels including strengthening of the District Environment Management Team. Specifically, focus will be on strengthening capacity of district-level environmental committees on management andplanning of sharedareas as well as strengthening village environmental andresourcemanagement committees. The project will support negotiation of management agreementsbetween communities and authorities with a view to establishing and strengthening coastal/beach managementunits. Support of the consultative process for developing resource management plans shall be provided as part of the facilitationprocess towards implementation of participatory resourcemanagementaction plans.Other support shall include provisionof specific skills such as negotiation skills and conflict resolution mechanismsat village level, and strengthening capacity for resource user groups including women and other vulnerable groups. The subcomponentshall also providetraining of trainers for targeted capacity buildingprogrammes focused on CBOs and NGOson environmental issues. Implementationof MMA/CMA/MPA network will call for institutionalstrengthening both in terms of humanresources and infrastructure/facilities. MACEMP support to institutional capacity strengthening will be usedinthe implementation of a number of activities, which include improving social and ecological knowledge basefor MPA/CMA network. Specifically this task will involve ecological and socio-economic assessmentof MPAs and CMAs including habitats supporting fisheries, priority spawning sites, critical coral reefs for artisanal fisheries and oceanic survey. The project will also support a study to review the representativeness of MPA and recommend areas for regazettementas well as for establishment of new MPAs. Other activities underthis subcomponent include: 9 Review of existing MPA/MCA/CMAs laws and regulations -there are areas of laws that require review, for example, the existing legal framework does not differentiate managementobjectives for different MPAs/CMAs-an issue that needs attention inthe review; 9 Harmonization of laws and regulations with a view to removing potential conflicts among a plethora of laws and regulations that concern coastal areas; - 65 - Develop nationalM P A M M A master plan(including strategic and business plans) -This i s an important element inthe development of MPAs inTanzania. The systemplanning exercise includes both physical as well as institutional elements. Subcomponent2(b): Implementationof Networkof MMAs, CMAs andMPAs US$l6.37million (includes US$12.45 million IDAplus GEF increment of US$3.92 million) National CMAPlan (MANREUMNRT) [Core Support] (US$720,000) General MPA Management Training (US$l,050,000) Supportfor Existing MPAs/CMAs/MMAs (US$5,900,000) Supportfor Emerging MPAs/CMAs/MMAs [S Sited2 GEF] (US$6,500,000) Supportfor Mangrove Sites (US$S60,000) Cultural Heritage Sites-Mainland (US$670,000) Cultural Heritage Sites -Zanzibar (US$670,000) Core supportfor implementing the national systemplan is provided within this sub-component, including: Outreach and communication; Establish national monitoring and evaluation system-this will involve setting up of national monitoring and evaluation systemfor habitats within andoutside MPAs; Establish Marine Conservation Unit inZanzibar - this is the equivalent of MPRUon the mainland. Properly trained human resource is a prerequisite inthe conservation and management of the biodiversity inthe protected areas. MACEMPwill support development of humanresource capacity for MPA managementinthe core institutions (MNRT and MANREC) through a number of activities includingdeveloping a curriculumfor mastersdegree programme incoastal managementand provide scholarshipsfor at least one batch of students. Supportwill also be extendedto training staff at undergraduatelevel anddevelopment of short-term training courses for MPA managers, park wardens, and local staff (MPRUand MCU). These short courses will befocused at buildingskills of these key staff. Exchange visits for MPRUand MCUstaff inand outside the country and establishmentof a marine conservation unit for Zanzibar, will form part of the support. MACEMP will provide supportfor existing and emerging MPAsKMAs. This support will entail direct investments and capacity buildingfor local communities inexisting and emergingMPAs and CMAs through the life of the project. Existingand emergingMPAsKMAs (Mafia Island Marine Park GMP is due for review) will need general managementplans as guides inthe implementation of their development and conservation activities. The managementplans will be developed ina participatory manner with involvement of communities and other stakeholders. Community engagementwill include developmentof Community MitigationAction Plans (CMAPs) inaccordance with the MACEMP ProcessFramework (PF). Involvement of local communities inthe management of CMAs with technical backstopping from the government agencies and NGOs will require negotiated agreements. MACEMP support will be usedfor the development of general managementplans, co-management agreements, and implementation of - 66 - such plans inthe form of boundary demarcation, site infrastructure, and start-up operations for emerging MPAdCMAs. Support will also be extendedto develop specific managementplans for things like tourism, mangrove, turtle, village landuse plans, etc. Environmental education and awarenessraising activities are a key element to capacity building. These will be supported by the project and will aimto buildcommitment to the MPA/CMA, increase appreciation for the importance of local marine resources, develop awarenessof threats to related biodiversity and especially their relationships to long-term use values among local communities and the wider public. MACEMP will also support strengthening of community managementcommittees to performactivities such as community-based monitoring with technical backstopping from MPA staff or other scientists. One of the goals of MPAs is to create wealth to communities living within and outside the parkkonservation area. Wealth creation is expectedto reduce extractive pressure on the marine resources.MACEMP intervention will support environmentally sustainablelivelihood activities such as mariculture, environmentally friendly gear exchange, and activities targeting women as beneficiaries. These andother alternative income generating opportunities couldpotentially improvethe livelihoods of the people inways that are vital to achieving the biodiversity objectives of the MPAs. ... Other activities to be supported by MACEMP for emerging MPAs/CMAs include: Resourceassessment (or inventory); Gazettementprocess including review of the district by-laws and other regulations as necessary; Baseline studies (socio-economic and ecological); Equipment support for communities; This subcomponent is expectedto result inimproved protection of threatenedhabitats and species through both a significant increaseinproactive management and a significant reduction indestructive practices.As alongterm goal, this should leadregenerationandrehabilitation of habitats andreducedpressure and threat on critical species. MACEMP will support the protection and managementof selected key natural and cultural resources inthe coastal zone that significantly enhance the value of the MPA system. Specifically, the mangrove and cultural investments outside MPA will be addressed. Mangroves as aresource are under threat of over-exploitation due partly to lack of alternative income generating activities. For example, mangrove forest productsare a key livelihood resource for people inRufiji(mainland) and Chwaka (Zanzibar). They are important sources of local building material, raw material for charcoal makingand fuel wood. All of these activities are depleting available mangrove forest habitats. MACEMP support will enable Marine Parks and Forestry Departmentsto address pressures and threats that are facing mangroves. Supportfor conservation and managementof mangrove forests will be precededby a needs assessment so as to avoid duplication of effort, followed by assessment of the mangrove forest biodiversity. For the Mainland, support will be providedto updating of the existing Mangrove Management Plan, and for Zanzibar, a managementplanwill be prepared. Part of the budget will bechanneled to - 67 - supporting community-based conservation activities inthe project areas on the mainland and Zanzibar. Culturalresources are valuable assets, and if sustainably utilized, they can contribute significantly to development andto improving livelihoods inimpoverished areas. Growth in coastaltourism will inthe long rundepend on well preservedand managedcultural assets. MACEMPwill provide support inraising awareness of the value of bothnatural and cultural heritage. This is important becausethe value of Tanzania's cultural assets inthe coast and the need for conserving them should be understood and supportedat the local level if the effort to protect them is to bear fruits. This subcomponent provides an opportunity for addressingcultural assets through provision of resources to restore or rehabilitate cultural sites on the Mainlandand Zanzibar. Specific areas that are targetedby the project during the first two years include: Kilwa and other sites on the mainland; Livingstone House, MaruhubiiMtoniruins, Mangapwani ruins, Mkamandume ruins, cave systemat Kiwengwa, MtendeandChwaka inZanzibar. The Antiquities Department will be assistedwith identificationand documentation of historical sites, to include demarcation of boundaries and signboards inorder to informthe public about the sites andprevent encroachment and removal of resourcematerials. Support to the Antiquities departments will be providedto: (i) conduct an inventory of potentially affected sites, including an assessment of vulnerability to potential impacts; and (ii) conduct planningstudies to ensure protection of the vulnerable sites, using standards and norms consistent with national policy and UNESCO guidelines. Potential investments at the sites will be supportedthrough a number of mechanisms including: (i) investmentsundertaken by the Antiquities Departments themselves within this sub-component; (ii) investments undertaken as part of MPA/MMA managementplan implementation within this sub-component; or, (iii) community demanddriven subprojectsunder service packages relatingto public works projects inComponent 3. This sub-component complements other activities inthe project which could then support trainingof localcommunity members as guides. This activity is poisedto improve their livelihoods since the proceedswill be sharedbetweenthe guides andthe administrative cost of runningthe activity. Investments inthese areas will be monitored as apart of ongoing MACEMP supervisionto ensure that MACEMP cultural safeguards are respectedinaccordance with the Environmental andSocial Assessment. Subcomponent2(c): Developingand SupportingPartnershipinICM US$3.83 million (includes US$2.82 million IDAplus GEF increment of US$l.Ol million} Regional Partnerships - ProtectedArea Initiatives (Mozambique, Kenya) (US$510,000) Community Partnerships - Expansion Pilot Projects (US$500,000) Private Sector Partnerships (US$2,820,000) There are important marine biodiversity areas (e.g. coral reefs) onboththe northernboundary with Kenya andsouthern boundary with Mozambique. Currently there are no transboundary conservation initiatives inplace that would ensurethe protectionof these biodiversity andkey habitats for sustainable resource use. The project will extend support to developing - 68 - transboundary MPAs.Communities living inandoutside the emerging MPA will be involved in the planningprocess as a way of increasingownership. Community partnerships are currently beingtested through the JSDF funded project inKilwa and Zanzibar. MACEMPresourceswill beusedto replicate the successfulpartnership models elsewhere inthe project area. The focus of private sector partnership will be to create an enabling environment for environmentally sustainable micro, small and medium enterprises (MSME) growth along the coast. It will be important to involve activities that change livelihoods and enable communities to break out of the shackles of poverty. It will be important to develop improved market access and MSMEsfor marketing andprocessing that will not only provide new sources of income, butwill also add value to local production. MACEMP will provide support indeveloping private sector partnershipsto improve the livelihoods of the coastal communities. These partnershipswill assistinMSME Capacity Buildingby developing the capacity of the ruralprivate sector to participate inviable domestic andinternational markets. The partnerships will also provide improvedAccess to Financial Services by supporting existing microfinance providers to expandtheir outreach. MACEMP support will be usedto identify local investment opportunities and constraints, in other words, identify legal or regulatory aspects that pose constraints to privateinvestment inthe target areas towards creating a stronger business enablingenvironment, and establishbusiness linkages programme. Support will also be extendedtowards facilitating establishment of local business councils to provide and disseminate businessinformationto the community. Action plans to improve businessclimate will be developed and implemented. These action plans will address among other things, centralflocal government taxation issuesand incentives to private sector for MSMEs.Surveys on marketvalue chain to identify and addvalue of sustainable utilizable natural resources inthe pilot areas includingdevelopment of markets andpromotionof branded products will be part of this subcomponent. A need to develop and support matching grant programme is also notedto be of great importance. Facilitationof credit availability will be through facilitating micro-lending by supporting NGOs that are involvedinthis type of activity, specifically supporting themto providetraining to potential borrowers, support local government to facilitate the movement of these micro-lenders to and within the project sites. The projectmay also facilitate small lendingoperations through facilitating SACCOS's and village banks (offer training inSME lending andfacilitate outreach to members), strengthening of existing SACCOS and village banks by offering training inSMElendingand outreach to members. Training will be extended to investment centre staff (including Tanzania Investment Centre, Zanzibar InvestmentPromotionAuthority, TCCIA, ZCCIA, Boardof External Trade, and Small IndustriesDevelopment Organization) ininvestment promotion, business services, and related skills. For capacity building, the support by MACEMP will be through providing resources needed to ensure that implementing agencieshave the requisite capacity to implement the activities supportedby the project. This subcomponent promotes savings and investment culture and interventions by the poor as a way of equippingthem with tools to better manage social risks andrespondto shocks. Inaddition, MACEMP will support local level initiatives in - 69 - support of creating localbrandsaround eachconservation area for promotionof localprivate and community-owned businesses; initialtesting of the brandingmodel will be undertaken for the MenaiBay Conservation Area, Incremental activities: GEFgrant-financed activities wouldrealize incrementalbenefits associatedwith development of a network of arange of different types of MPAs and MMAs that ensure ecological representativeness, ecosystemconnectivity, and resilience against external shocks. Incremental activities would support implementing the National Planfor the proposednetwork, specifically extension of the current systemtowards meeting ecological network criteria mentionedbefore. Two new sites of highglobal biodiversity value have already been identified for extension of the network andwill receive full support for incremental cost associatedwith set-up and operationalization of the managementregimes. Extensive community consultations and sensitization towards proposed co-managementarrangementshave beencarried out and Government has demonstratedstrong commitment for the proposedextension. Incremental fundingwould support efforts to promote participation of localcommunities andresourceuser groups inco-managementarrangements-especially inthe extensionsites, but also inexisting managementareas. Besides community awarenessandcapacity building for partnershipmodels, such supportwould include support to alternative livelihood and sustainableuse activities by means of small grant funding. Core operating or investment cost of existing MPAs or MMAs would not be funded out of GEF grant resources. Although a key priority for GEFfunding, also no incrementalfinancing pertaining to financial sustainability of the network is planned under the OP2 window as development of a financial mechanism, specifically the Marine Legacy Fund, is already addressedunderComponent 1. Maximizationof synergies across focal areas would receive special attention. For example, the project would aim to maintainecosystemlinkages betweenoffshore EEZresourcesandcoastal habitats such as mangroves and seagrass beds critical to certain stages of the marine lifecycle. Potential effects of climate change to coastal and marine ecosystemswould be reducedby ensuringthat the proposednetwork of marine managedareas covers sites with minimum vulnerability or exposure to climate change induced events such as coral bleaching, etc. Accordingly, GEF OP2 funding would focus on incremental costs associatedwith the following activities: P Subcomponent2(b) -GEFOP2 support inthis sub-component will finance approximately one-half of the trainingrequirements under the umbrella support, and about 10%of the support costs at existing sites, focusing onboundary demarcation and education campaignsat those sites. The bulk of GEF funding will be dedicated to supporting full implementationof managementplans at two new sites: the PembaChannel MarineConservation Area on Zanzibar and Rufiji-Mafia-Kilwa Complex likely to be managedas an biosphere reserve on the mainland. At each of these emerging sites, funding will bemade available for: Resource Assessment; Community Engagement; Support gazetting process, including district by-laws and other regulations necessary; Development of general managementplan; Develop specific managementplans, landuse plans; Boundary demarcation; Construction of offices, field accommodation, information center; Equipmentsupport for MPA staff; Staff training (technical aspects); Operational cost support; Baseline Studies (socio-economic, ecological); - 70 - EstablishingM&E system; Environment education and awareness raising; Strengthening community management committees; Community training; and, Equipmentsupport for communities (management equipment). Subcomponent 2(c) - GEFOP2 will finance the regional partnership buildingandan expansion of the community partnership model beingtested by JSDF; the expansion sites will be among those being supportedby GEF inSubcomponent 2(b). Beneficiaries: The primary beneficiaries of this component are existing MPAs/CMAs, local communities inthe project sites, NGOs and relevant government departments. Component 3. Coastal Community Action Fund US$11.97 million (includes US$10.97 million IDA pluscommunity contribution of US$1.O million) Component 1and Component 2 set the stage for improving overall managementof marine and coastal resources inURT.They promote sustainableplanningand will support mechanismsthat encourage community andprivate sector participation. Their further intent is to have an unequivocal impact on poverty reduction incoastal areas, and this is best facilitated through promotingthe uptake of sustainable alternative income generating activities among the coastal poor. The promotionof such AIGAs is the raison d'ztre of Component 3. To have a lasting impact, it i s expected that the component will assist inidentifying and piloting those activities that promote sustainableresourceuse, and have the potential for replicability inother coastal areas. To ensure replicability and cost-effective delivery that is relevant to localpopulations, a CDD approach is used aroundto support specific sub-project. To prevent the proliferationof sub-project delivery mechanisms, this component takes advantageof the good track record establishedby TASAFby integrating its delivery completely with that of TASAF 2. The TASAF 2 objective is to "empower communities to access opportunities so that they can request, implementand monitor sub-projects that contribute to improved livelihoods [linkedto MDG indicator targets inthe PRS]." To complement this, the objective of Component 3 of MACEMP is to empower coastalcommunitiesto access opportunities so that they canrequest, implement and monitor sub projects that contribute to improved livelihoods and sustainable marine ecosystem management. Component 3 has been organized into two subcomponentsthat mirror the components in TASAF 2: -Subcomponent3(a) will provide sub-project funding through a "Coastal Village Fund" (CVF). -Subcomponent3(b) involves "Coastal Community Capacity Enhancement (CCCE)" and is primarily focused on assistingcoastal communities and their local government authorities in accessingthe CVF, and to permit identification, assessment, and monitoring of sub-project implementation. - 71 - Subcomponent3(a): CoastalVillage Fund(CVF) IUS$9.0 million (includes US$8.0million IDAplus community contribution of US$l.O million) Though the exact number of sub-projects will dependon demand, the CVF is expected to deliver approximately 400 sub-projects at an average value of US$20,000 each over the project life. Sub-projects will follow the CDD model and will entail a community contributionof 5% to 20% of total sub-project value. Targeting and eligibility criteria for the CVF are identicalto those in TASAF 2 with the additional requirement that recipients must be incoastalvillages within MACEMP's project areas. The service packages available to the recipients are also similar to those inTASAF 2 with the additional caveats that: (i) the supportedactivities must not hinder sustainablecoastal resourceuse (a negative list has beenpreparedand will form part of sub- project screening activities); (ii) education andawareness element mustbe integrated into an every subproject to promote sustainable resource use; and (iii) because MACEMP andTASAF 2 have triggered different safeguards for different reasons, specific sub-projects will be subject to ESAscreeningconsistent with MACEMPsafeguardrequirements(a screening tool is provided inthe ESAto beusedby thoseundertakingdeskandfield appraisalof subprojects). More information on the linkages betweenTASAF 2 andMACEMP is detailed inAnnex 20. The CVF will provide money to a Village level fund as the principal input for households to produce outputs that improve service availability and use, as well as incomes for the able-bodied poor and the vulnerable. Beneficiaries will be facilitated to identify priority problems, design interventions, and prepare proposals which MACEMP will finance (through a dedicated TASAF2 funding envelope) in the form of subproject grants given to the village level fund. Each subproject will be managed by a democratically-elected Community Management Committee (CMC); with specified amounts retained by the Local Government Council (LGC) and Village Council (VC) to finance facilitation for the successful subproject's management. Key outputs for the first sub-component are: coastal householdswith increasedaccess to anduse of specified service packages individuals with increasedand quantified employment opportunities and cashtransfers through the subprojects individuals receiving assistancefrom subprojects becausethey are vulnerable Attainment of ecosystem improvement of improved livelihoods and sustainable marine ecosystem management is highly dependent on improving the current fishing practices of small scale fishers. For many years their fishing practices have revolved around near-shore waters using poor fishing gear and non-motorised and non-seaworthy fishing crafts; this has ledto local over-fishing and destruction of ecosystems around the area. Any attempts to improve the ecosystem (including through creation of MMAsMPAs) must address the issue of diversifying the current fishing practices of small scale fishers and empowering them to exploit distant resources using appropriate fishing gear and technology using seaworthy motorisedboats, gear and equipment. To achieve sustainable marine ecosystemmanagement, the CVF will offer a package among the other packages through which individuals and groups of fisher folk can access fishing gear and related equipment on a demand driven basis following the TASAF methodology. The package - 72 - will take into consideration the pilot fishing activities initiated by NGOs implementing the JSDF "Community Based Coastal ResourceManagement and SustainableLivelihoods Project.'' Three types of beneficiary groups will be targeted by the CVF to improve their livelihoods: (i) service poor households who will avail themselves of improved services in health, roads, education, water and sanitation, markets, banking, and others, (ii) food insecure households with able-bodied adults who will increase their incomes from working inCVF-financed public works programs, and (iii) vulnerable individuals who will work through community-based organizations to access resources for increasing incomes at the household level. The main outcomes will be: improvedservices by households improved employment opportunities for individuals to meet basic needs increasedcash and other benefits reaching vulnerable individuals A resource allocation methodology will`be usedwith the intent to promote transparencyin availability of CVF to targeted areas; this is similar to the resource allocation undertaken for the NationalVillage Fund(NVF) under TASAF 2 although different allocation criteria are used(see Annex 20). The allocation of funds from the CVF will be made available as follows to the indicated districts and islands: Tanzania mainland (60% of total CVF): Unallocated (36% of total CVF) KilwaDC (8% of total CVF) MafiaDC (8% of total CVF) RufijiDC (8% of total CVF) I Zanzibar (40% of total CVF Unallocated (0% of total CVF) Pemba(20% of total CVF) The US$8.00 million of IDA financing associatedwith this sub-component will be transferred to TASAF2 into the MACEMPRASAF2 funding envelope. Subcomponent3(b): CoastalCommunity CapacityEnhancement(CCCE) I US$2.97million (IDA) The CCCE sub-componentwill provide resourcesfor training, monitoringand evaluation of activities financed from the CVF sub-component; the mainoutputs being the number of sub- projects completed ina satisfactory manner. Membersof Community Management committees, their trainers, and the trainingof trainers will receive support under this sub-component. In addition, support will be given to voluntary Savings Groups of at least 10members (this reflects provisions for TASAF 2). Key outputs for the second sub-component are: individuals incoastal communities participating ininformal and formal savings and market-driven initiatives - 73 - . individuals incoastal communities reachedwith capacity enhancement activities at Village, Ward, DistrictMunicipal, and Nationallevels Under the CCCE sub-component, beneficiaries will be agencies (public and private) that support communities to make the best use of resources made available under the CVF, as well as poor individuals participatingingroup savings and taking advantageof investment opportunities createdby various private-public partnerships.The CCCE sub-component will respondto individuals from LGCs and various agenciessupporting Village Governments, comprised of Village Councils and Village Assemblies, implement subprojects usingthe TASAF 2 sub-project cycle. This sub-component will complement activities funded by the LGSPto strengthenLGCs. The mainoutcomes will be: application of skills gained by individuals increasedopportunities for savings and investment The US$2.97 million of IDA financing associatedwith this sub-componentwill not be transferred to TASAF 2. Expectedoutcomefrom Component3: is a reduction inincome poverty, and increased participation of rural communities insustainableresourcemanagement decisions and benefits. Implementation:Component 3 will be implementedby MACEMPManagement teams onthe mainland andZanzibar. Funds inthe CVF will be transferred to the TASAF 2 Special Account in the TASAF 2 project and will be releasedthrough the TASAF 2 project cycle under authority of TASAF 2 National Steering Committee (NSC). The MACEMP Team Leader inthe MACEMP EEZGovernanceFacilitationTeam andtwo CCAF Coordinators (one ineachof the line agency MACEMP Management Teams) will form a CCAF Technical Committee that oversees Sub- component 3(b) and that sits on the TASAF 2 Sector Experts team (SET) advising the NSC on the compatibility of sub-projects with sector norms. It should be notedthat TASAF2 is a five year project effective inearly 2005, while MACEMP is a six year project effective inmid2005. Disbursement arrangements for Component 3(a) will continue to use in-place government structures beyond the TASAF 2 closing date; these arrangementswill be confirmed at the time of Mid-Termreview of MACEMP. Component 4. Project ImplementationSupport US$7.38 million (IDA) The primarybeneficiaries of this component are the MACEMP managementteams on the mainland and inZanzibar, and the DeepSeaFisheries Authority once established. Inaddition, funding of community demanddriven subprojects through TASAF 2 usingMACEMP funds will benefit the respective communities. The expectedoutcome is an efficiently delivered project meetinghighstandardsof transparencyandparticipation. The componentconsists of two sub-componentsas follows: Subcomponent 4(a)consistsof the core stafling and technical assistanceto the project. - 74 - Subcomponent4(b)will cater for the monitoring and evaluation (M&E)needs of MACEMP. Subcomponent4(a): CoreStaffingandFacilitation US$4.17million (IDA) EEZ Governance Facilitation Team (EGFT)-Specialistsand Training (US$l,720,000) MNRT MACEMP Management Team (US$365,000) MANREC MACEMP ManagementTeam (US$365,000) EGFT/MNRT MMT (Mainland)- Overheads(US$695,000) MANREC MMT (Zanzibar)- Overheads(US$370,000) Facilitation of Steering Committee(US$240,000) Facilitation of Technical Committee(US$260,000) Facilitation of CCAF TechnicalCommittee(US$60,000) Roster TechnicalExperts (US$90,000) This subcomponent provides financingfor (i) positions andoverheadsfor the EEZ staff Governance FacilitationTeam; (ii) to line agency office staff for separateMACEMP support Management Teams on the mainland (MNRT) and inZanzibar (MANREC); and (iii) technical inputsrelatingto aproject steering committee, atechnical steering committee, a CCAFtechnical committee, anda roster of experts for sporadic advisory services. Specific costs covered include: - Service Contracts for specialists inthe EGFTwill include: Team Leader; Development Communications Specialist; M&E Specialist; Financial Specialist; Procurement Specialist; - Administrative Assistant. Service Contracts for specialists inthe MMTswill include: MMTProcurement Officers and Specialists (temporary short-term contracts for project start-up). - Trainingand for the following MMTmembersinMNRTand MANREC: MACEMP Manager; CCAF Coordinator; MACEMPProcurement Officer; MACEMPAccountant; Administrative Assistant. MACEMP will not pay salaries of these staff (except Procurement Officer). - Overheads inthe mainland (EGFT andMNRT MMT) will cater for operation of offices and transport, as well as purchaseof equipment including: 6 computers, 3 printers, 2 photocopiers, fax machine, office furnishings for 10rooms. - Overheads inZanzibar (MANREC MMT)will cater for operation of offices and transport, as well as purchaseof equipment including: 4 computers, 2 printers, 2 photocopiers, a fax machine, office furnishingsfor 5 rooms. - Steering Committee meetings: twice a year involving 16 people. - Technical Committee meetings: four times a year involving 18 people. - Facilitationof bi-annual workshops to provide input to Steering Committee and technical Committee. Workshops will be organized for three groups: (i) Private Sector/NGOs to addresspotential conflicts and opportunities; (ii) scientific community to address emerging scientific issues or findings; and (iii) efforts and coordination inthe sector. donor - CCAF Technical Committee meetings: four times a year involving 3 people; four times a year meeting (involving one person from MACEMP) with TASAF 2 SET. - Specialist advisory services as neededfrom Roster of Experts. - 75 - 1Subcomponent4(b): Monitoringand Evaluation (M&E) US$3.22 million (IDA) Baseline Surveysfor Key Pe$ormance Indicators (US$280,000) M&E StrategyImplementation (US$610,000) Annual M&E Report (US$220,000) Annual Safeguard M&E and Reporting (US$570,000) Development Communication Strategy (US$860,000) Mid-term Review (US$180,000) Annual Audit (US$300,000) Completion Report (US$200,000) The M&Eoutputs include annualreporting (including safeguards), annual audits, the mid-term review, and the project completion report. Baseline studies for project monitoringpurposes are also cateredfor within this sub-component.Core support for the M&E strategy is cateredfor in this sub-component; this includes office equipment,training, and synthesis studies and assessments. The development communication (monitoring and learning) strategy is also supported, which includes support for designstudies, reviews, communication equipment, and operating costs associatedwith media and advertising costs. Relevant tracking tools for protected area monitoringwill be distributedto all project sites for potential use inmonitoring.The relevant tools will include those recommendedby GEF (e.g., MPA Tracking Tool) as well as others (e.g., those currently being usedinvarious projects inthe country). Project Sites and Site Selection Criteria MACEMPfollows an ecosystem management approach, meaningthat ecological and socio- economic considerations factor into coastal and marine managementobjectives. Ecosystem management seeks an appropriate balance between use and conservation of biodiversity and natural resources. I t is aimed at being decentralized to the lowest appropriate level and to function inan economic context, e.g. by aligning incentives to promote sustainable use, by internalizing costs andbenefits. Also, ecosystemmanagementneeds to be undertaken at the appropriate scale: recognizing ecosystemfunctioning and effects of adjacent ecosystems. Inlinewithecosystemmanagementprinciples, project stakeholdersconcludedto follow an "area-based approach" for selection of project sites for MACEMP. This means that eachtarget areawas chosenat an appropriate scale and may thus extend across District boundaries and include several managementregimes including Marine Protected Areas, Marine Conservation Areas, Community-managed areas, and areas which are currently under no managementregime. To have considerable impact on the ground, and to not spreadproject activities andresources too thinly, MACEMP will concentrate on strategically chosentarget areas for Years 1and 2. Based on results and impact achieved ininitially selectedproject target areas, the number and/or extend - 76 - of project areas will be scaled up during further project implementation. It should be noted that selection of target areas does not apply to Component 1, which relates to management of the entire EEZof URT. To identify priority target areas for the project, the following list of selection criteria has been identified: 0 Areas with strong community-driven demand and ownership for marine managed areas and/or co-managed marineprotectedareas; 0 Areas of national priority as per environment-poverty linkages and objectives highlighted inthe draft Poverty ReductionStrategy11; 0 Areas of global environmental importance (Le. biodiversityhotspots); 0 Areas with strong potential for sustainability (from an institutional point of view); 0 Areas where MACEMP support can play a catalytic role (Le. MACEMP support for institutional strengthening, capacity building, development of management system, etc. would leadto leverage of additional financial resources for overallproject objectives.); The initial prioritization of project target areas for Years 1and 2 basedon the above criteria is listed below. Additional sites will be selected as part of the preparationof Annual Work Plans and basedon progress and impact ininitial target areas. = . ....Rufiji-Mafia-Kilwa-Complex Trans-boundary MPA with Mozambique LathamIsland Mnemba IslandMarine ConservationArea Menai Bay Marine Conservation Area Pemba Channel Marine ConservationArea (includes Misali Island) - 77 - 5. Project costs ProjectCost By Component and/or Activity (US$ million) Local Foreign Total Sound Managementof the ExclusiveEconomic Zone 10.43 3.15 13.59 SoundManagement of the CoastalMarineEnvironment 17.02 5.01 22.03 CoastalCommunity Action Fund 10.92 0.66 11.58 ProjectImplementationSupport 4.83 1.31 6.14 ProjectPreparation 0.85 0.15 1.oo Total BaselineCost 44.05 10.29 54.33 PhysicalContingencies 1.70 0.40 2.09 PriceContingencies 5.13 1.20 6.33 Total ProjectCosts 50.87 11.88 62.75 Total FinancingRequired 50.87 11.88 62.75 - 78 - 6,Implementationarrangements DetailedImplementationArrangements Project Facilitation and Management: The Ministry of Natural Resources andTourism (MNRT) inTanzania mainland and the Ministry of Agriculture, NaturalResources, Environment and Cooperatives (MANREC) inZanzibar will have overall responsibility for project implementation. BothMinistries will coordinate closely with the Vice President's Office, the Ministryof Foreign Affairs, the Ministryof Trade and Industry,the Ministry of Finance, Ministry of Lands and HumanDevelopment, the Ministry of State, the President's Office-Regional Administration andLocal Government, the Vice President's Office, the Navy, the Coast Guard (KMKM),the MarinePolice, the Port Authorities, the NationalEnvironmental Council, the Meteorology Department, localuniversities and research institutions, the NationalProtected Areas Boardof Zanzibar, and the Antiquities Departments of MainlandTanzania andZanzibar, respectively for specific project activities. At the national level, aProject Steering Committee (PSC) composedof the Permanent Secretariesresponsible for Natural Resource, Finance, and Local Administration from bothsides of the Union as well as the PS of the Vice President's Office will guide on policy, institutional, and regulatory reform as well as strategies for implementation. Role of the PSC will be to facilitate coordination and linkages between the various different ministriesto ensure consistency with sector polices and adherenceto established norms and standards. The PSC will also adopt the annual work plan andcorresponding budget and semiannualupdate there of, keeping inline with the project's objectives. The PSC will have a key role inguiding and approving the common governance regime for the EEZ that will be established duringproject implementation. It will also function as a body to attendto and resolve any disputesor political issues pertaining to MACEMP. The PSC will meet on a semiannual basis. A Technical Committee (TC) composed of Directors of key ministries andinstitutions as well as private sector representatives(see TORbelow for detailed composition) will monitor and guide project operations, advise on researchneeds, and review annual work plans and budgets as well as annual progressand performance reports prior to submissionto the PSC. The Technical Committee will also consult with the EGFTon the need for short-term support for quality control, risk mitigation, andtechnical and scientific guidance available from a Rosterof Experts on the basis of a honorariumagreement. The TC may delegate specific tasks to individual Directors. For example, responsibility to review and clear the procurement processes carried out by the MACEMPManagement Teams (MMTs) above certain thresholds has been delegatedto the two Directors of Fisheries. For matters pertaining to the EEZ, only a subset of relevant Directors may be requiredto meet. The role of such a Technical Task Force will be to discuss and address any technical issues related to establishment of the commongovernance regime for the EEZ.The Task Force may meet inbetween regular Technical Committee meetings on an as- neededbasis. The Technical Committee will meet on a quarterly basis. AnEEZGovernance Facilitation Team (EGFT)will facilitate coordination betweenTanzania mainland andZanzibar and will be responsible for facilitate reportingon all aspects of project implementationto the Technical Committee and the World Bank. It will serve an advisory - 79 - function for the MACEMP ManagementTeams (MMTs) inTanzania mainland and Zanzibar on all operational aspects such as monitoring, disbursement, financial management, procurement, and reporting. The EGFT would further be responsible for all those cross-cutting functions that do not fall within the mandateof either MNRTor MANREC, andto this end, would carry out relatedprocurement functions inclose collaboration with the MMTs inMRNT and MANREC, respectively. Some functions of the EGFTwill indue coursebe transferred to the Deep Sea FishingAuthority onceoperational. The EGFT is headed by a Team Leader who reports directly to the Technical Committee. The EGFTfurther consists of aDevelopment Communications Specialist, M&ESpecialist, Financial Management Specialist, ProcurementSpecialist, and Administrative Assistant. These positions will be selectedcompetitively; the TeamLeader, Financial Management Specialist, and Procurement Specialist will berecruited before project effectiveness. The EGFTfacilitates the assembly of the Project Annual Work Plans basedon inputreceived from mainlandTanzania and Zanzibar and inaccordance with the Operation Manual. The EGFT facilitates all reporting to the Technical Committee and the World Bank including overall project progress, procurement, financial management and M&Ereporting (results from process and impact monitoringandevaluation). The EGFT,through the Financial Management Specialist maintains the required financial managementsystemto assemblethe reports required by the World Bank. Similarly, the M&ESpecialist consolidatesM&Edata obtainedfrom the MMTs into ajoint M&Ereport basedon a sharedInformationManagement System. The EGFTalso provides technical support andguidance to the MMTsfor procurement and financial managementprocesses. The M&E Specialist guides and assists MMTs with implementationof M&Eactivities to facilitate project performance evaluation. The EGFT is not directly involvedinday-to-day activities of project implementation unlessthey pertain to crosscutting issues or activities pertaining to the EEZ component that cannotbe delegateddown to either or bothMMTs. The EGFTprovides secretarial servicesto the Technical Committee andProject Steering Committee (e.g. meeting organization, agenda, etc.). It will establish, maintain andcoordinate access to the Roster of Experts. The EGFTwill further support WB supervision activities, includingvisiting missions, through logistical assistance. The MACEMPManagementTeams (MMTs)will beresponsible for day-to-day implementation, administration of project funds, financial management, procurement, processing, andany other issuespertainingto either side of the Union. Roleof the MMTs will be to preparethe annual work plans for consolidation by the EGFT. Each MACEMPManagement Team is headedby a MACEMP Manager who formally reports to the Director of Fisheries of MNRT or MANREC, respectively, and works closely with the Team Leader inthe EGFT.The MMTs further consist of a MACEMPProcurement Officer, an Accountant, a CVF Coordinator, and a Project Assistant. All of these positions are staff from MNRTandMANREC, and they will havereceivedtrainingby MACEMPeffectiveness.The - 80 - two MMTs are responsible for preparation of Annual Work Plans including timely submission to the EGFTfor consolidation into onejoint Annual Work Plan. The MMTs are ultimately responsible for implementation of project components as per agreed work plans and day-to-day operations of the MMT inmainlandTanzania and Zanzibar. The two MMTsareresponsible for procurement of goods andservices, disbursementandfinancial management according to their respective work plans. Each MMT administers an IDA and GEF Special Account inUS$ inaccordance with the World Bank's rules and regulations. Inaddition, a Special Account inTsh is administered to handle day-to-day transactions, i.e. to make payments to contractors, suppliers and consultants. When required,the MMTsprepare requests for replenishment of the Special Accounts through the Ministry of Finance or the Project Account through the respective authorized representatives.The MMTs are responsible to prepare the financial statements andother documentsfor regular audits that are performed inaccordance with standards acceptableto the World Bank. The GOTensures that the independent auditor is acceptable to the Bank and is appointed intime to carry out its responsibilities. The MMTs are responsible to report onprocurement processes,financial management, and monitoringresults of project progress.The MMTsfurther performreportingon progress and expenditures to MNRT and MANREC, inparticular the respectiveDirectors of Fisheries, as required.Over the courseof project implementation, staff inthe MMT acquires adequate capacity to implement small and large-value procurement, andfinancial management.The specialized Financial Management, Procurement, and M&EAdvisors inthe EGFTprovide a support and quality-control function for financial management andprocurement processes, especially inthe first years of project implementation. The MMTs have a numberof important roles andresponsibilities, and capacity buildingand supplementary support through specialized consultants will be required.Capacities of the MMT staff will be compared with the roles andresponsibilities of eachindividualposition and capacity buildingandtrainingplans will be developed for each MMTmember.Capacity-building will include on-the-job training, in-country courses, SADC regional courses, Word Bank training offered within the region, team building, ensuringthat eachMMT member can meet duties and responsibilities as perjob description. Project budgets to these units include training budgets plus the hiringof temporary personnel to fill induringextended absences. Duringthe first few years of project implementation andthroughout the project as needed, supplementary consultants specialized inprocurement, accounting, and financial managementwill be contracted to support the duties of the MMTs ,to ensure smooth project management processes, and to curb any delays duringinitialproject implementation. The Roster of Experts is to act as aresource available for quality control, due diligence, and riskmitigation. Therole is not to engageexpertsinthe oversightof the project. Further,the Technical Committee or the Technical Task Force may recommend contracting a specific advisor to guide on ongoing researchand studies or to recommend additional researchstudy to support objectives of MACEMP. The project may call upon short-term support from experts of the Roster, inparticular component leaders, to provide technical guidance on contract work (Le. support drafting of TORSthat need specialist input, to review proposals for services that may - 81 - needtechnicalreview, and for review andcomments on draft deliverablesfrom contracted services). The CoastalCommunityActionFundTechnicalCommittee(CCAFTC) will providea back- upreview function for subprojectspotentially eligible for funding throughthe CoastalVillage Fund(CVF). Coastal Community Subprojectsfinancedvia the CCAF would be implemented accordingto the TASAF 2 implementationstructure throughLocal ServiceProvidersand Community ManagementCommitteesunder supervisionfrom Village or Shehia Advisory Council. The two MMT Managerswill be nominatedby the PS MNRT andPS MANREC to sit on the TASAF 2 Sector ExpertsTeam(SET), which reviews subprojecteligibility against sector norms.To back-up the TASAF2 sub-project approvalmechanism, a CCAF Technical Committee(CCAFTC) is establishedto meet quarterly andreview subprojectsthat the respective sector representativeson the SET (Le. the MMTManagers)may refer for secondaryreview. The CCAFTC canrefer individual subprojectproposalsfor externalreview ifnecessary. The CCAFTC will furtherbe responsiblefor oversight on smooth operationof the operational linkagesbetweenTASAF 2 andMACEMP andoverall coordinationbetweenthe two projects. The CCAFTC will comprise: (a) the EGFT Team Leader, (b) the MNRTMMT Manager, (c) the MANREC MMTManager, (d) the MNRT CCAF Coordinator; and, (e) the MANREC CCAF Coordinator.The CCAF Technical Committee will meet on a quarterly basis andaccording to the schedule of the Sector Expert Team (SET) of TASAF 2, or if called uponby the Chair of the CCAF TC. FiguresA6.1, A6.2 andA6.3 provide an overview on the implementationstructure of MACEMP. - 82 - FigureA6.1. MACEMPImplementationArrangements. - 83 - FigureA6.2. Sub-project Approval Flow for CoastalVillage Fund.This diagram provides a simplifiedflow diagram of the CVF approval processfor sub projects. The processis identical to that for the National Village Fund(describedinmore detail inAnnex 20, Appendix 1).The explicit link to MACEMP is through the CCAF Technical Committee, which resides in MACEMP. All structures specific to MACEMP are highlighted ingrey inthe figure below. - 84 - Figure A6.3. Implementation and Flow of Fundsfor the Coastal Community Action Fund.This diagram provides a simplifiedflow diagram of the CVF flow of funds and the CCCE flow of funds. CVF flows are identical to that for the National Village Fund(described inmore detail in Annex 20, Appendix 1). ..... ...... .... ..I.. I - 85 - Implementation of components Component 1: Duringinitial project implementation, the EGFTwill facilitate implementationof all activities pertaining to the EEZ, includingestablishmentof the EEZAuthority. For the purposeof implementation, an annualwork planwill be prepared with budget allocations indicating estimated costs of activities. The work plans will detail eligible purchasesand other eligible expenses. The Project SteeringCommittee and World Bank supervision missions will monitor the compliance of the implementation of agreed-uponannual work plans. The dialogue and planningprocesstowards establishment of the EEZAuthority will be coordinated by the EGFTunder technical guidance from the Technical Task Force. The Divisions responsible for Fisheries in MNRTand MANREC together with NEMC and the Ministry of ForeignAffairs will engage to review andformulate the mandateof the EEZ Authority andto revise the underlying policy andregulatory framework. Technical assistanceto support this task will be contractedthroughthe EGFT.The Steering Committee will be ultimately responsible to approvethe recommended structure and mandate of the EEZAuthority prior to submission for Parliament approval. The EGFTwill further beresponsibleto initiate studies to informthe Steering Committee on potential institutionalandfinance options for the set up of the MarineLegacy Fund. Set up of the MLFandthe underlying regulatory framework will besubject to Parliament approval. The MCS operation centers establishedunder the EC-funded SADC MCS project for mainland and Zanzibar will continue to carry out operation of MCS activities untilthe establishment of the EEZAuthority, which will eventually incorporate the MCS operations centers andtake over implementation. The EGFTwill be responsible to oversee implementation of MCS activities according to Work PlanAgreements. Development of the EEZ Resource Strategy will be facilitated by the EGFTwith technical guidance fromthe TC. Implementationof the EEZ Resource Strategy will ultimately be the responsibility of the EEZ Authority uponits creation. Key nationalresearchpartnerswill be invitedunder guidance from the TC to contribute to and participate inthe fish stock assessmentof the territorial seas andwill play a key role in establishing a linkage to regional efforts infisheries research. While the EGFT would facilitate implementation of the Operational Programrelated to EEZ managementand MCS, the MMTsfor Tanzania mainlandand Zanzibar will coordinate activities relatedto capacity buildingand institutional strengtheningfor MNRT and MANREC. The MMTswill further take the leadon specific investments andprivatesector dialogue relatedto improvedpost harvestprocessing and market access inboth sides of the Union. Component 2: Similarly to above, Component 2 will be implementedaccording to agreed-uponannual work plans. However, the MMTs for Tanzania mainlandandZanzibar, respectively, will be responsible to oversee implementationof the Component 2. The Project Steering Committee and World Bank supervision missions will monitor the compliance of the implementation of agreed- upon annual work plans. - 86 - MMTswouldcoordinate with district authorities andauthorities at locallevelfor implementation of I C Mplanning, includingresourceassessments and capability mapping at district level and capacity buildingfor ICMplanning at district and village level. Implementation of I C M "Action Plans" as well as specific resourcemanagementplans at local level, such as mangrove managementplans, will follow the current decentralized administrative structure, which provides for significant delegation of control to the regional anddistrict level as sector district officers answer directly to the local District Council instead of the line Ministry. NEMC will lead a consortium of stakeholders includingFisheries Divisions of MNRT, and MANREC, MPRUfor the development of a NationalPlanfor marine managedareas, such as MPAs, CMAs, andMMAs.ManagementTraining andother capacity buildingrelatedto MPAs would be planned and implemented inline with annual work plans by MPRUinmainlandandby the Department of Fisheries inZanzibar, respectively. Local level activities pertaining to individual MPAs, CMAs, and MMAswill be planned and implemented by the respective resource managers, i.e. local marine parks managementstaff incollaboration with communities for MPAs, community managementgroupsfor CMAs, and staff from Fisheries Divisions for MMAs. Community PartnershipPilot Project wouldbe implementeddirectly by NGOs andCBOs throughcontractual arrangementswith the MMTsfor Tanzania mainland andZanzibar. Component3: Component 3 would be implementedpartially through MACEMPandpartially through the TASAF implementation arrangements(see FigureA6.2 andFigureA6.3 for details on the implementation linkages betweenMACEMP andTASAF 2 for the Coastal Community Action Fund(CCAF). Component 3(a) `Coastal Village Fund(CVF)' andresultingCoastal Community Subprojects would be implemented according to the TASAF 2 implementation structure (see Annex 20, Appendix 1)through Local Service Providers andCommunity Management Committees under supervisionfrom Village or Shehia Advisory Council. Actual implementation of eligible, community demanddriven sub-projects will be the responsibility of the local communities and investment groups that have identifiedand initiatedthem. Local community groups will identify their priority investments andpreparesubproject plans andfinancing requests. Subproject planning, procedural assistance, andtechnical advice will be available through local service providers that canbe recruited with subproject funds. Uponsubproject identification, Community Management Committees (CMC) would pass subproject proposals on to Village Councils for approval (ifbelow agreed thresholds; see Annex 20 for details) or for further upstreamreviewby Local Government Authorities (LGAs).Village Councils will also play an important role inproviding guidance for subproject identificationand formulation as well as monitoringof subproject implementation inline with transparency and accountability guidelines. At the LocalGovernment Authority (LGA) level, the LGA FinanceCommittee will have the responsibility for endorsing subprojects below a certain threshold (US$lO,OOO contributionfrom CVF approved by the Village Council) and approving subprojects above the threshold (US$10,001-30,000) for further review by the Sector Experts Team andendorsementby the - 87 - National Steering Committee. The LGA play a similar role as the VC interms of conducting desk and field appraisals, and supervision of subprojects, however for subprojects above the agreed thresholds. Inaddition, they engagelocal serviceproviders for all fundedsub-projects in line with subproject agreements signedwith the VC and the CMC. The TASAF Management Unit, answerableto the National Steering Committee, support strengthening institutionaldevelopment at national anddistrict levels insupport of communities and village governments by providing service packagesfor TASAF2 sectors, such as education, health, and water supply. TheTMUwill also carry out regular service audits. For all aspects pertaining to coastal livelihoods, coastal community structures, andcoastal environmental issues, the capacity enhancement function of the TMU for district and other local stakeholderswill be supported andcomplemented by the MACEMPManagement Teams, specifically the CCAF Coordinators. Their primary function will be to ensure delivery of capacity buildingservice packages to beneficiaries as well as support for institutional development at local andcommunity level. The TMUfurther compiles schedulesof subprojectsreceived from various LGAsfor review by the Sector Experts Team (SET). To ensure conformity of sector norms and standards, which exist but are oftenpoorly enforced at Village andLocal levels for a variety of reasons, the Sector Experts Team (SET) will review subprojects prior to submissionto the National Steering Committee for endorsement. Incontrast, to subprojects eligible for the National Village Fund(NVC), the review function for subprojects potentially eligible for the Coastal Village Fund(CVF) is heldby the Coastal Community Action FundTechnical Committee (CCAFTC). TheChair of the CCAFTC will sit on the SET and will refer projects to the CCAFTC for review and approval if detailed review is necessary. Upon approval by the CCAFTC, the schedule of subprojects is referredback to the SET and again fully incorporated into the line of approval of TASAF 2 (see FigureA6.2 for details). The CCAFTC will beresponsible for oversight on smooth operation of the operational linkages betweenTASAF2 and MACEMP and overall coordination betweenthe two projects. The SET will, on an annual basis, review sector norms with view to recommending any changes respondingto the diversity of subprojects submittedfor approval. At the national level, the TASAF NationalSteering Committee under the Office of the President and comprising representativesfrom both public andprivate sectors, will behave the responsibility of endorsing schedules of subprojects which have been scrutinized through the before mentionedprocedures.The NSC relies mainly on the SET to confirmthat all sub-projects for endorsementby the NSC are inline with sector norms and standards. Subcomponent 3(b) Coastal Community Capacity Enhancement (CCCE) initiatives will be implemented through MACEMP implementation structures (and not through the TMU as is the case for other sector, such as education, health, and water supply). The Coastal Community Action Fund(CCAF) Coordinators of the MMTsinTanzania mainland and Zanzibar will hold principal responsibility for implementation of comprehensive outreach and information campaigns to inform local communities and community groups about the Coastal Community Action Fundand the process of obtaining funds. The MMTs would also be responsible for implementationof CCCE initiatives aimed at local capacity building inmanagerial, budgeting, - 88 - and financial management skills, as well as local institutional strengtheningfor CBOs, NGOs, associations, cooperatives and other local groups interestedinsupporting participatory and sustainablemanagement and livelihood initiatives. Capacity buildingsupport will be providedto key stakeholders for coastalenvironmental management at the local government level. Flow of Runds: The following accounts will be openedfor the implementation of MACEMP: > Special Account IDA for Tanzania mainland denominated inUS$ for Cl, C2, C3(b) and C4 and to be held at StandardCharter Bank and administered by the MNRT MMT. k SpecialAccount IDAfor Zanzibar denominated inUS$for C1, C2, C3(b) andC4andtobe held at Standard Charter Bank and administered by the MANREC MMT. k SpecialAccount GEFfor TanzaniamainlanddenominatedinUS$for incrementalcost of C1, > C2 andto be heldat Standard Charter Bank and administered by the MNRT MMT. Special Account GEFfor Zanzibar denominated inUS$ for incremental cost of C1, C2 and > to be heldat Standard Charter Bank and administeredby the MANREC MMT. Project Account for IDNGEFfor Tanzania mainland denominated inTsh and to be heldat a > local commercial bank andto be administeredby the MNRT MMT. Project Account for IDNGEFfor Zanzibar denominated inTsh andto be heldat a local commercial bank and to be administered by the MANREC MMT. Fundsfor implementation of Component 3(a) `Coastal Village Fund' will betransferred into a separatering-fenced account underTASAF 2 and will be administered by the TASAF 2 Management Unit (TMU).Paymentsfrom the account would strictly follow TASAF 2 protocols andTMUwould account for andreport regularly on the disbursement of funds ring-fenced for the MACEMP Coastal Village Fundunder overall TASAF 2 implementation (see Figure A6.3.). The ring-fenced account will bereplenished usingthe same methods of replenishment as the NationalVillage Fundof TASAF 2. IDAwill disbursethe initialadvance from the proceedsof the grant into the Special Account. Actual expenditure there from will be reimbursed through submission of Withdrawal Applications (WAS)and against Statements of Expenditure(SOEs), which will be approved in accordance with internal control procedures to be establishedby the MACEMPManagement Teams. Counterpart funds will be allocated through the normal Unionbudgetaryprocess. An initial advance from Government will also be required. Details of the necessary authorizations and the bank account signatories should be documented as part of the FinancialandAdministrative Manual. Terms of Reference Terms of reference are attachedfor the following functions: 0 MACEMP Steering Committee 0 MACEMPTechnical Committee 0 Roster of Experts 0 Coastal Community Action FundTechnical Committee - 89 - Termsof Reference MACEMPSTEERINGCOMMITTEE Role: A Project Steering Committee (PSC) will be responsible for providing overall policy guidance for MACEMP. The PSC will ensure that MACEMP activities are carried out inaccordance with the MACEMP OperationsManual. The Technical Committee will meet on a semiannual basis or ifcalled uponby either DirectorFisheries ofTanzaniamainlandor Zanzibar. The Chair of the Technical Committee shall be Secretaryto the Project Steering Committee. Composition: Members of the Project Steering Committee will be Permanent Secretaries drawn from key ministries. The composition of PSC is as follows: . Permanent Secretary Ministry of NaturalResources and Tourism . Permanent Secretary Ministry of Agriculture, Natural Resources, Environment and Cooperatives (Zanzibar) Permanent Secretary Vice PresidentOffice (VPO) H Permanent Secretary Ministry of Regional Administration and Local Government . (Tanzania Mainland) Permanent Secretary of Regional Administrationand (Zanzibar) PermanentSecretary of Ministryof Finance (Tanzania Mainland) PermanentSecretary of Ministry of Finance andEconomic Affairs (Zanzibar) Functions: Approve MACEMP's annual work plans and corresponding budget. Provide coordination and linkages between various sector ministries and MACEMP to ensure consistencywith sector policies and adherenceto establishednorms and standards. Approve the annual progress and performance reports and adopt audit reports and accounts of MACEMP. Overseethe process of recruitingkey staff. Approval of the Common Governance Regimefor the EEZ. Assist indisputeresolution. Attendto political issuespertaining to MACEMP. Receive and consider briefings from donor, private sector, NGO, and scientific workshops. - 90 - Termsof Reference MACEMPTECHNICALCOMMITTEE Role: The MACEMP Technical Committee will provide overall Project guidance and intra-ministerial coordination. MNRT and MANREC will be responsible for ensuring the smooth and efficient implementation of the project's various technical programs. The Technical Committee will ensure that guidance to the Project is conducted efficiently, and it may thus from time to time delegate specific technical tasks to individual Directorates (in particular if they relate to the issues specific to Mainlandor Zanzibar). The Technical Committee will meet on a quarterly basis or as otherwise may be agreed (in consultation with the ChairKO-Chair of the Committee). Routine meetings of the Technical Committee will be attended by all members, the EEZ Governance Facilitation Team Leader and the two MACEMPManagers fromMainlandand Zanzibar. The EEZGovernance FacilitationTeamLeader will be Secretary to the Technical Committee. Composition: Members of the Technical Committee will be assigned by the Steering Committee. The Technical Committee will be chaired by the Director of Fisheries, MNRT and co-chaired by the Director of Fisheries, MANREC. It is composedof the following members: Director of Fisheries Division(Tanzania Mainland) Director of Fisheries and Marine Resources(Zanzibar) Director of Poverty Eradication (VPO) Director of Environment (VPO) Director General -National Environment Management Council (NEMC) Director of Environment (Zanzibar) Director of RegionalAdministrationand Local Government (Tanzania Mainland) Director of Regional Administrationand Local Government (Zanzibar) Director of Commercial Crops, FruitandForestry (Zanzibar) Representatives(2) from the Private Sector (Tanzania Mainlandand Zanzibar) Functions: The Technical Committee serves as the technical advisory body to `the Project Steering Committee of Permanent Secretaries with regard to the implementationof MACEMP. It will have the following functions: Provide technical information to the Steering Committee in order to facilitate policy decision-making and to encourage high-level commitment to improved sustainable management of the marine and coastal ecosystems for the benefit of the coastal population of Tanzania. - 91 - Guide and oversee overall Project implementation, especially through review of the Annual Work Plan and corresponding annual Project Budget based on initial figures provided inthe Operations Manual. Review identified roles of different sectoral Directorates within the activities identified in that Annual Work Plan. Review the Annual Report of Activities and Project Progress, and the corresponding report on annual disbursement. Provide strategic decisions, especially basedon results of the Project Monitoring System. Advise on the need for retaining specific advice from the Roster of Experts, Advise on the needfor supportive researchstudies relating to relevant policy initiatives. Review and assess the overall thrust of Project progress and provide guidance for possible and desirableadjustments. Serve as a forum for co-operation among participating Ministries. The Technical Committee will purposely support the adoption of a long-termapproachto ensure sound management of marine and coastal ecosystem. To that end, the Technical Committee will support partnership and coordination with existing national and regional initiatives and neighboring countries. Receive and consider briefings from donor, private sector, NGO, and scientific workshops. Provide advice on selection of key staff to the MNRT and MANREC MMTs. Supervisory role to EGFT and MMTs. - 92 - Terms of Reference ROSTER OF EXPERTS Role: The Roster of Experts is to act as a resource available to the project for quality control, due diligence, and risk mitigation. The role is not to engageexperts inthe oversight of the project. The Technical Committee or the Technical Task Force may recommend contracting a specific advisor as needed through an honorarium arrangement (i.e., through payment of professional fees to someone on the roster of experts) to advise on ongoing research and studies or to recommend additional research study to support objectives of MACEMP. The EGFT or MMTs may further call upon short-term support from experts of the Roster, in particular component leaders, to provide technical guidance on contract work (i.e. support drafting of TORSthat need specialist input, to review proposals for services that may need technical review, and for review and comments on draft deliverables from contracted services). Members on the roster will be categorized by areas of expertise to facilitate their identification for needed tasks. Areas of designated expertise will also include those associated with project safeguards and will, for example, thus include at least one expert on social issues. Specific Tasks: Membersof the Roster of Experts wouldbe called uponto: Advise the Technical Committee on long-termresearch studies ongoing or planned, and .. to recommend additional studies as considered necessary to support MACEMP objectives; Review the terms of reference for all contract work, as well as studies and surveys to be carried out by staff of implementing government agencies; Review proposals and tenders submitted by prospective consultants and to support the EGFT and MMTs with selection (Le. as part of a small selection committee). To . comment on methods used and/or proposed by consultants, to guide on the expected format of reporting study results, and to guide on localities for surveys and studies; Review and comment on final draft products of consultancies and provide comments for improvement prior to final delivery of products; Experience and Qualifications: Membersof the "Roster of Experts" are expected to: 0 Have an appropriate post-graduate degree or comparative relevant working experience. - 93 - 0 Have at least five years experience in the respective area of expertise pertaining to each component, 0 Have knowledge of the project objectives and project design. 0 Be prepared to meet with the members of the MACEMP Technical Committee, EGFTand MMTswhenever necessary. 0 Meet any other requirement as may be specified by the Technical Committee. Logistical considerations: 0 It is anticipated that the time commitments of members of the Roster of Experts will not exceed eight hours per month on average, and will mostly be less than that. For review of consultant's reports including provision of written comments, a member may invoice a maximum of 2 working days. Documents should be reviewed and returned with comments to the EGFT Team Leader within five working days of receipt unless arrangementshave been made for an extendedreview period. 0 Members of the Roster of Experts will be paid on receipt of an invoice for the hours they have worked at a rate agreed upon prior to their engagement. Detailed invoices (ifapplicable) mustbe submittedto the MMTwithin 14daysof service delivery. 0 On occasions, it may be necessary for an expert to visit field sites to ensure consultant's work is proceeding according to the terms of reference. Subsistence and travel will be reimbursedat previously agreedrates. 0 Members of the Roster of Experts will not be allowed to tender for contracts under the MACEMP due to a conflict of interests. - 94 - TermsofReference COASTALCOMMUNITY ACTIONFUNDTECHNICALCOMMITTEE(CCAFTC) Role: The CCAF Technical Committee will provide a sub-project review function for projects potentially eligible for funding through the Coastal Village Fund (CVF). The CCAFTC will further be responsible for oversight on smooth operation of the operational linkages between TASAF and MACEMPand overall coordination between the two projects. The CCAF Technical Committee will regularly review TASAF progress reports to ensure that CVF disbursement i s conducted efficiently. If necessary, it may delegate specific implementation or coordination issuesto the MACEMPTechnical Committee for review. The CCAF Technical Committee will meet on a quarterly basis and according to the scheduleof the Sector Expert Team (SET) of TASAF, or if called uponby the Chair of the CCAF TC. Composition: The CCAFTC is composedof the following members: 9 EEZGovernanceFacilitationTeam Leader 9 Manager (MNRT MMT) 9 Manager (MANREC MMT) 9 CCAF Coordinator (MNRT MMT) 9 CCAF Coordinator (MANREC MMT) Functions: The Technical Committee serves as the advisory review panel for sub-projects submitted to CVF. It will have the following functions: Review quarterly schedule of sub-projects received for review for conformance with sector norms. Seek specific advice from the Roster of Experts on an as neededbasis. Designate Chair for CCAFTC who shall serve on quarterly SET meetings and refer all MACEMP eligible sub-projects to the CCAFTC. Monitor quantity and quality of schedule of sub-projects and ensure that capacity enhancement activities are adaptedto provide adequate support for beneficiaries. Serve as a forum for co-operation and knowledge exchange for the two CCAF Coordinators for both sides of the Union. Review from time to time overall thrust of CVF implementation andprovide guidance for possible and desirable adjustments in operational set-up to MACEMP Technical Committee. - 95 - 7.Financialmanagement and disbursementarrangements Summary of the FinancialManagementAssessment CountryRisks A Country FinancialAccountability Assessment (CFAA), carried out in2001, concluded that: "significant advances have beenmade inTanzania inthe last few years, particularly interms of accounting andexpenditure control as well the introduction of the MediumTermExpenditure Framework (MTEF). Equally there are other areas, which for various reasonshave not advanced as quickly, such as the internal auditing, budgetexecution & monitoringand capacity of the national audit office or the ability of the anti corruptiodethics bodies to undertake their duties effectively. Generally, Tanzania has a sound systemof formal rules for financial management andmany of these rules have recently beenupdatedand strengthened". GOT has clearly made great steps inimprovingfinancial managementandthrough the revised Public Financial Management ReformProgram(PFMRP) which sets out a methodology to carry the processforward. These initiatives are significantly supportedby the donor community at, for instance, the Accountant General andthe NationalAudit Office (NAO) as well as the Accounting Departments of a number of line ministries. The speedof progress of implementation and integration of the IFMSand the legislative changeshas however left a number of gaps, which unless filled, will negatethe benefits of the achievementsof the recent past. Inaddition, issuesof non-compliance, limitedexecution, inadequatemonitoring, insufficient capacity andlack of enforcement need to be addressed. Theses issues indicate that inadequatefinancial accounting and auditing systems bothat central and local government level pose ahighfiduciary risk. Priority issues identifiedinthe CFAA include strengtheningof planningandbudgeting, improved governance and integrity, strengthening of local government financial management and maintenance of high standards of financial reporting and auditing. The country's financial accountability framework, andtherefore financial management, would be considerably moreeffective and the associatedfiduciary risk mitigated, if these areas were strengthened. The revised PFMRP,which is soon to be launched, is designedto address these weaknesses. Although the CFAA has not beenupdated, the recent Public Expenditure Management Assessment Reportfound that GOT has made significant progress inpublic financial managementand continued to implement comprehensive reforms at bothNational and Local level with improvement in(a) budgetingprocess and execution, (b) developing the internal audit functions inall MDAs, (c) strengthenthe fiscal reporting system, and (c) enhancepublic financial managementsystems through IFMS and accountability. A full CFAA update will be carried out inyear 2005. ProjectRisks Key risks that may face the project include: Fundsmay not usedinanefficient andeconomical way andexclusively for purposes intended-especially at community level; - 96 - . Staffing shortages inboththe Ministry of Natural ResourcesandTourism (MNRT) and Ministry of Agriculture, NaturalResources, Environment and Cooperatives (MANREC). Their abilities to implement the control procedures(accounting, internal audit and inspection) as stipulatedinthe Public Financial Management Act as well as the Financial . Procedures Manual documentedfor the project are consideredlow, but expectedto improve within eighteen months after project effectiveness. Fundsflow delays-as experiencedduring the execution of the PPF, PDFB andJSDF; .. Lack of bothinternal and external audit capacity to provide rigorous assurance on accountability of funds. Timely accountability of fund usageat community level may also be a problem. Local Governmentsand Village Governmentsmay be constrained incapacity to supervise communities inthe face of TASAF activities that go to the same communities. Inmitigationof these risks, MACEMPwill establish astrong accounting andinternalcontrol system at nationallevel through recruitment of a Financial Specialist to be basedwithin the EEZ GovernanceFacilitationTeam (EGFT).At Localand Village level, TASAF incollaboration with local governments has put inplace strong accountability systemby: i.Re-deployingTAOs(tobecalledsystemsaccountants)attheRegionalSecretariatsto provide the Districts with technical support inaccounts, audits, andjustifications. Each systems auditor will beresponsible for three districts and any reports issued by them will be submitted to the District Executive Director with copies sent to the Regional Commissioner, andthe TASAF managementUnit.The Systems auditors will also be taskedwith responsibility to buildcapacity of communities to properly account for funds tranched to .. them. 11. Internal and external verificationof expenditureswill be carried out duringproject implementation inorder to ensure compliance with all accountability rules and procedures. This will be through MANREC andMNRTinternalauditors andthe hiring of Justification Assistants (Accounts Assistants) at the District for TASAF related activities to support ... subprojects, andcarrying out bi-annual external audits. 111.Timely submission of reports by village and local governments to the TMU and later EGFT will be enforced to ensurecomplete adherenceto the rules of the project. iv. Providing adequatefunds under the Capacity Enhancement component to strengthenthe capacity of Local and Village Governments infiduciary capacities requiredby community subprojects (inparticular internal audit, monitoring, and management informationsystems) inorder to ensurethat the financial managementrequirements, includingreporting, are met. V. Having the quarterly financial reports preparedby the CMC made public. vi. Quarterly disbursementsfrom IDA to MUwill be based on the six month cashforecast and on report-basedmethod. Disbursementsfrom MUto LGAs will be against schedules of subprojects approved at the Village, Local, andNational levels. MainStrengthsandWeaknesses Strengths: 0 Over the last three years the government has initiatedpublic financial managementreforms interms of (a) Rollout the central government IFMS to 32LGAsout of 114, with an additional 30 LGAs expected to be trained and equipped with IFMSby of endof this FY;(b) - 97 - The Accountant Generalhasbeguntrainingof fresh graduatesonthe IFMS,and inthe areas of informationtechnology, accounting and materials managementto be able to provide support to the LGAs. (c) Enhancementof budget formulations at local govemment, LGCs are now usingMTEFplanning framework for developing their budgets; (d) Monthly accounts are now beingpreparedby LGCs and quarterly financial reports are beingsubmittedto the central government. 0 The MNRT and MANREC accounting system i s computerized and basedon Epicor as well as those for some 32 Local Government Authorities and are on double entry, and accrual- based system. TASAF 1's accounting systemand quarterly FMRs i s basedon the Epicor. 0 A comprehensive FinancialManagementProceduresManualwhichhas a set of Financial Rules and Regulations for runningthe project and describesthe internal control systemand a set of accounting procedureshas beenwritten and reviewed by boththe GOT and the World BankTeam; 0 There has been a steady improvement inauditing inthe last three years. Based on the Report of the Controller and Auditor General on Local Government Authority Accounts for the Year ended31stDecember 2002, all LGCs were able to submit their final accounts ontime for audit. Major weaknesses: - While the project will be implemented outside maingovernment financial management system, the people implementing such a systemwill be core civil servants assistedby the Financial Specialist. It is expectedthat such an arrangement will encounter weak budget discipline and controls inbothMNRT, and MANREC and for funds disbursedto LGAs for supervision, such cashwill encounter the risk of loss at LGAs as evidenced by losses of cash, questionable payments, store losses, and unsatisfactory accounting and banking -- of revenues. Most of the LGAs also lack effective internal audit units and internal audit manual. Follow-up on the implementationof auditor's recommendations by the Accounting Officer is very poor. - - Weak capacity of the NAO. Low capacity inmost of the LGCs particularly interms of finance, accounting and internal auditing skills to carry out appropriate accounting andfinancial management. FinancialManagementSystem andReporting Financial/AccounthgPolicies & Procedures: The accounting systems, policies andprocedures to be employed by the two ministriesinmainland -MNRT andZanzibar-MANREC and at TASAFmanagementunitinaccounting andmanaging for TASAF I1fundshave been documented inthe Financial Management Manual which is regarded as part of the operational manual of the project. The manual was reviewedduring appraisal and considered adequate.The basis of accounting for the project is cash. The Manual includes detailed descriptions of the accounting system, policies and procedures to be used inthe project financial management. A Chart of Account structure has beendeveloped to allow for project costs to be directly related to specific work activities and outputs of the project andformats of the various periodic financial reports. It shouldbe noted that the Financial - 98 - Management manual is part of a package of manuals preparedfor this project and should be considered as part of the overall operational manualfor the project. Since some of the activities will happen at district level, LGCs will follow accounting system governed by the Local Government FinancesAct of 1982 and Local Authorities Financial Memorandum of 1997 whose output will be recordedat the TASAF managementunitbefore being forwarded to the EGFTfor purposes of consolidation. LGCs accounting system is based on double entry, accrual-basedsystem. For the TASAF component, aring fenced arrangementhasbeendesignedand put inplace where the chart of accounts for TASAF will reflect funds received and activities to be financed on behalf of the MACEMP. A separate local bank account will be openedas a first step towards ringfencing suchproceeds. The codes inthe TASAFchart of accounts will depict the special sub projects to be financed out of the MACEMPcomponent three. Usinginformationfrom the district MIS,the funds disbursed out of the MACEMP component will be tracked up to sub project level and details of the make up of the beneficiaries tracked and recorded for purposes of monitoring and recording impacts after fully disbursingthe funds. Information systems: The govemment wide computerized IFMS is known as Epicor and is the same systembeingusedby the local governments.The system is user friendly andcan produce various financial reports. The properties of the system are still being studied to determine their ability to generate andproduceFMRs straight from the system. Owing to perceived problemsof collectinginformationfrom districts which will participate in the MACEMPfor consolidation to produce the Financial MonitoringReports, it has been suggestedthat the project uses traditional disbursementmethod. When the project is assessedas ready to use FMRsas abasis of disbursements,the government of Tanzania shall informthe Bank about this readiness inwriting after which the Bank will carry out a preliminary assessment to confirm the readiness and process through a legal amendment interms of the basis of disbursement . Financial Management Reports (FMRs): The project's financial managementmanual has draft reporting formats, which cater for tasks to be implementedby MANREC inZanzibar, MNRT in the mainland andTASAF, respectively. These reports will be further improvedthrough the design of monthly sub projects for GEF and IDArelated expenditures incurred at district, and community level. Such reports will have to be submittedto each ministry on the fifteenth of the following month for consolidation and monitoring. Inaddition, there is needto separately design reports for field staff enabling them to report on their own expenditures inform of imprest retirement forms. The imprestretirement form shall detail all expenditures that the field staff have incurred for the month.Each of these agencies shall producemonthly expenditure reports and financial statements, which shall be consolidated at the EGFTby the financial specialist before they are sharedwith all stakeholders entitled to receive such reports. The designedreports are designedto provide quality and timely informationto project management and various stakeholdersonproject performance. The content of the designedreports, which follow FinancialMonitoring Reports formats and have included the following minimumreporting content: - 99 - e FinancialReports: a) Sources andUses of Fundsby FundingSource b) Uses of Fundsby Project Activity/Component e Physical Progress or output monitoringreports 0 Procurement Report The format of these reports havebeendefinedandagreed. TheseFMR format type of reports have beenreviewed and agreedto by MNRT, MANREC, TASAF managementunit and the World Bank team. The Project will be usingthe traditional transaction baseddisbursement methodology. The Borrowercanrequest the Association to consider the use of report based disbursements inthe course of the project if it so wishes and the Development Credit Agreement will provide for the possibility. Consequently, the Financial Monitoring Reports to be prepared under the project will beusedpurely as a monitoringtool, and will not form the basis for any disbursementsunder the project, unless the Association consents to the use of report based disbursements inthe course of the project, inwhich case the Financial MonitoringReports would berevised accordingly. Owing to problems of collating informationfrom districts, and ensuringthat timely information i s produced for purposes of disbursement, it has been agreedthat the MACEMPproject shall use traditional disbursementmethod as stated above. FMRsproducedby TASAF which will contain summary informationregarding the MACEMP component three, will be usedto consolidate overall financial statements of the project at national level. Separately, transaction information relating to expenditures from TASAF will be submittedto the EGFTFinancial Specialist by the Assistant Accountant basedat TASAF for purposes of preparing withdrawal applications. Disbursements to TASAF MACEMP account will be transfers from the IDA special accounts to be maintained by MNRTandMANREC. Project Financial Statements:The project financial statement shall be inaccordancewith Generally Accepted Accounting Practice (which inter alia includes the application of the accrual basis of recognition of transactions). The Development Credit Agreement and GEF Grant Agreement will require the submission of audited financial statements to the Bank within six months after the fiscal year-end. MNRT, MANREC, and TASAF shall produce their individual monthly statements, which shall be consolidated by the EGFTFinancialSpecialist. These Financial Statements will comprise: A Balance Sheetreflecting the assets, liabilities andfunding of the project basedon the accrual bases. A Statementof Sourcesand Uses of FundKnsh Receipts and Payments, which' recognizes all cash, receipts, cashpayments and cashbalances controlledby the entity for this project; and separately identifies payments by third parties on behalf of the entity. This report will also include a brief procurementandoutput monitoringreports. TheAccounting PoliciesAdopted and Explanatory Notes. The explanatory notes should be presentedina systematic manner with items on the Balance Sheet and Statementof CashReceipts and Paymentsbeingcross-referenced to any related informationinthe notes. Examples of this information include: - 100- o a summary of fixed assets by category of assets; o a summary of SOEWithdrawal Schedule, listingindividual withdrawal applications; o A ManagementAssertion that Bankfunds havebeenexpended inaccordance with the intendedpurposes as specified inthe relevant WorldBank legal agreement. Monitoring Project monitoring will take the following forms: Management oversight of the IDNGEF Annual external audit of the Project finances Production of systems audits by systems auditors. Production of internal audit reports by the InternalAudit Directorate within MNRT and MANREC. Staffing and Training Stuffing: Lack of adequateand qualified accounts staff inLocal Governments and some government departments has been identifiedas a weakness, and this has beenaddressedby (a) making the availability of such staff a pre-condition for bothMANREC and MNRT to implement the project (b) andfor the TASAF executed component, the provision of funds throughTASAF I1Capacity Enhancementcomponent to strengthenthe capacity of Local Governments infiduciary capacitiesrequiredby community subprojects (inparticular internal audit, monitoring, and managementinformationsystems) will help inbuilding capacity. The TAOs (also knownas systemsaccountants) employed by TASAFI,and currently basedin TASAF IDistricts, will be redeployed and placed under the Regional Commissioners and each responsible for three districts inorder to provide Districts with technical support inaccounts, audits, andjustifications. Appropriate qualified assistant accountant will be recruited at TASAF level to coordinate andhandle all project financial arrangements related to MACEMP. Appointment of adequateandqualified accounts staff will be conditionfor project effectiveness. WithinMANREC andMNRT, government has been askedto provide staff with requisite competence, which shall work on the project for the entire life of the project and ensure that they are promoted within their job done therein. Training: Significant trainingefforts are being made to enhanceaccounting skills. A staff training planwill be discussedat negotiations to ensure that it is sustainable andtargets the needs of government staff who will work inthis project. Duringproject implementation more training will be provided onWorld Bank financial, disbursement, and auditing procedures and guidelines. It is also expectedthat more training will begivento accounting staff within MANREC and MNRT, TASAFinternal auditors, and systemsaccountants so that they canbetter support the implementation and delivery of the various sub projects coming out of the MACEMP country wide. - 101- PlanningandBudgetpreparation A project budget andadisbursementschedulehasbeendrawnup andincluded inthe Project Appraisal Document and the Operations Manual. Itis from this disbursement schedule (as may be subsequently revised) that annual budgets will be drawn. MANREC and MNRTwill work with IDA and other stakeholders to formulate the annual work planwhich shall constitute the annual budget of the project. The annual estimates will be finalized three months before the beginning of the financial year so that they canbe included inthe NationalBudgetfor purposes of counter part funds. Audit Internal: The internal audit function is weak andnot clearly establishedthroughout the LGAs and incentral government. The role of internal audit functioninassessinginternal controls and recommending improvements to systems and proceduresis well defined within government, which has recently issued an internal audit manual. However, the scope of internal audit work is limited to financial verifications such as receipts andexpenditureswithout sufficient emphasis on the efficiency and effective use of public resources. This is due to the inadequate capacity, resources, lack of guidingmanual, and guidelines. Other reasons for this ineffectiveness is lack of enforcement of punitive measures, inadequatetechnical and managerial capacity inthe finance function and lack of accountability of Accounting Officers. Under other government programs such as public sector, efforts will be made to strengthenthe capacity of internal audit unitwithingovernment while TASAF11willcater for internal audit directorate within itself and at Local Assembly level. ExternalAudit: As per Public FinanceAct, 2001, the NAOhas the responsibility for the audit of all government organizations including local authorities and public corporations and donor funds. The Controller andAuditor Generalhasthe power to authorize any personcarrying on the profession of accountantto conduct an audit onhisbehalf. The auditors will be required to express an opinion on the audited project financial statementsonly, incompliance with International Standards on Auditing (IFAC pronouncements). Inaddition, provide a detailed managementletter containing the auditor's assessment of the internal controls, accounting systemand compliance with financial covenants inthe Development FinancingAgreement. Thus audit of the project shall be undertakenby the Controller andAuditor General from the mainland. Since MACEMP will operate insome selected districts, the NAO will carry out a bi-annual audit review of the projects systems to ensure uniformapplication of the procedures, and check on adequacy of internal controls and timely submissionof the final audit. Government internal auditors inboth MANREC and MNRT will ensure that they include review of internalcontrols andother functions of this project within their annual work program. As such, it is expectedthat bothministriesshall work closely with the Accountant General and that all the remaining vacancies intheir respective internal audit units are filled inthe shortest time possible for an effective internal audit unit. - 102- Supervision Plan The Financial Management Specialist (FMS) will carry out financial managementsupervision regularly at least twice a year. Inaddition, the project may be subjectedto regular Statementof Expenditure reviews as requiredby the World Bank. The supervision will be further aided by internal audit reports and for the TASAF executedactivities, systems accountant's reports to provide basis of risk planning to guide aspects on which to concentrate. The FMS will also: Review the annual Audit Reports and Management Letters from the external auditors and follow-up on material accountability issues by engaging with the TTL, Client, and/or Auditors. Conclusion The evaluation above indicates that the project's financial management arrangements satisfy the Bank's minimumrequirements under OP/BP10.02. However, some improvements remainto be effected for the systeminorder to establish an acceptable controlenvironment and to mitigate financial managementrisks. The project financial managementrisk is assessed as beingmedium to highprovided that the financial managementarrangements are properly implementedand the following financial managementaction plan is satisfactorily addressedinpractice: No. Action Due date Conditionality 1. A designof the reports to be usedat eachlevel August 2005 Effectiveness of implementation-FBO, community level, Local Government level (coastal districts) that feed into the FMRs should have been completed. 2. The operational manual should have been August 2005 Effectiveness revised inaccordancewith revised financial pathways and funds flow 3. Memorandum of Understandingamongst August 2005 Effectiveness TASAF, the Ministryof NaturalResourcesand Tourism, andMinistry of Agriculture, Natural resources, environment andco-operatives entered into ~ 4. Capacity buildingfor staff working inthe two August 2005 Effectiveness pro-jectmanagement teams has commenced 5. Ability to prepareFMRs demonstrated. One year after Condition for shift effectiveness from SOE to FMR based disbursement - 103 - DisbursementArrangements Flow of FundsArrangements Flow of funds from IDA to MNRT and MANREC MMTs: The funds flow arrangementsare guided by the fact that the project will have four components, which will be implemented by three implementers. MANREC inZanzibar andMNRTon the mainlandwill bothbe responsible for implementing components 1,2,3 (b), and4 of the project. TASAFwill implement sub- component 3(a), the CoastalVillage Fund.The sourcesof funds for such implementation will come from IDA. The funds flow were discussedand agreedat appraisalas follows: Both, mainlandandZanzibar will have two special accountseach. One special accountwill be for GEF funds and the second for IDA credit. Funds will betransferred from the World Bank Credit and GEF Grant accounts into the two respective special accounts maintained by each one of the two ministries andrunby the Department of Fisheries inMNRT (mainland) and MANREC (Zanzibar). The special accounts will be maintained at a commercial bank of government's choice inmainlandand in Zanzibar. Ithas been agreedwith government that according to project activities planned approximately 60% of the total projects resources will flow to the mainland and 40% to the Zanzibar. Fundswill be transferred from their respective special accounts into two respective corresponding local accounts to be maintained at mainlandandZanzibar. A fifth local account will bemaintained by the Tanzania Social Action Fund(TASAF) inthe mainland. Fundsinto this accountwill becontributed by the government inthe mainland andZanzibar inthe ratio 60%:40% fromallocated IDA resources.Paymentswould be made to community-managed accounts whose overseers would be project management committees at community level along the coast (90%) and village governments (2.5%) and local assemblies(7.5%) for supervision on top of the value of approved sub projects. The first payment into the TASAFlocal account for MACEMPrelated activities would bebased on an estimatedfigure of sub projects to be approved under the CVF. Thus, MNRT would disburseits share of 60% of suchbudgetfrom its IDA localaccount andMANRECwould pay 40% of its share from its IDA local account. Subsequentpaymentsinto the TASAF local account would be made quarterly by bothministries basedon the value of subprojects approved by Sector Experts Team (SET) shared at 60%:40%. Ontop of such amounts, both governments would also pay 10% additional of its share to cater for local and village government supervision and operational costs. This understanding and other governing principlesof the CVF to be implementedby TASAF are contained ina Memorandumof Understanding, a draft of which has beenreviewed by IDA. The Memorandum of Understanding will be signedbetween TASAF and MNRTandMANREC as implementing agencies for MACEMPprior to effectiveness of the Credit. Arrangements for ring fencing the MACEMP funds inTASAFhave beenprovidedfor; assessed andconsideredadequateas outlined above. - 104- Generalfund flow rules to Local assemblies and communities on MACEMP related activities handled by TASAF: Disbursementof funds to LGCs will be against schedules of subprojects approved at the village andlocal level, (approval levels set onthe basis of complexity of subprojects, size, and requiredmanagement expertise). Fundingwill be releasedeither in tranches of 50/50; basedon service packages designed. Follow-on tranches will only be disbursed once 70% of the previous tranchehave beenaccountedfor. Fundsto the Local Government will be accompaniedby a schedule showing which subprojectshave beenidentified, what resources are to be (i) at the localgovernment level to finance facilitation of retained subprojects usingdistrict and Ward-level extension staff, (ii) sent to an MWK account to facilitate supervision by the Village Council (not to exceed2.5% of subproject prime costs), and (iii) toanaccountinthenameoftheCMCfortheapprovedsubprojects(accountingforat sent least 90% of subproject prime costs). The following are some measures which will be taken against any Local government should it misuse any funds meant for itself, a Village Council or Community. The measuresare as follows: The local assembly will be suspendedfrom participation inany TASAF financed activities untilthe misappropriation is made good. The account out of which the local government funds have beenpaidout andmisused will beblocked. Fundsmeantfor communities will be retrievedby the TMUanddisburseddirectly to communities. The misuse and name of the local government will be published inthe three most popular daily newspapers inTanzania for a week. Should a Village council misuses funds that are meant for its own activities, capacity building and supervision, the following rules shall apply: The Village Councils account shall be frozen till those that were responsible for misuse have been identified. The amount misused will be deductedfrom the next 2.5% disbursed to the Village Council. The individuals identifiedfor misusewill not participate inthe activities related to TASAFand their names shall bepublished for aminimumof two days inthe two most popular news papers inTanzania. Fundsflow to districtlevel for Components 2 -Mainland15 Activities to be undertaken at district levelhave been defined inthe cost tables and procurement plansubmittedby the UnitedRepublic of Tanzania to the World Bank. A Memorandum of Understanding shall be signedbetween the MNRT and each district into which funds will be disbursed.The MOU shall stipulate their working modalities, relationship and cooperation on this project. A draft MOUhas beenreviewed by IDA and will be finalized prior to effectiveness. l5The level of decentralization differs for Tanzania mainland and Zanzibar. For the purpose of implementing project activities under component 2 at district and local level inZanzibar, detailed instructions will be provided to the officers at districts level. Officers at district level report directly to MANRECand thus no special arrangement for flow of funds to the district level is necessaryfor Zanzibar. - 105 - It is anticipated that activities relating to the MACEMPproject at district levelshall have an individual plan, which will be integratedinto the overall district plan. The MACEMP Management Team (MMT) shall be an integralpart of this planning cycle that shall suggest the activities to be undertaken ina district and a supervision planfor the communities carrying out andimplementingthe MACEMP activities duringthe year. Such aplanshall be sharedwith all stakeholders and approved at district level. Since a number of activities shall take place at this level, the related operating costs shall flow to suchdistricts as articulated below: Based on a quarterly planapprovedof activities to be undertakenand related cashflow submittedto the Ministry of Natural Resources andTourism (MNRT) at the beginning of every quarter and, the Accountant at MNRT shall release such quarterly funds into a sub of the MACEMP opened at district level. This account shall be runby the District Executive Director (DED)under delegatedpowersof the Ministry andinconjunctionwith the MMT.The District Executive Director will designatesomebody to account for funds of the project, accounting records and ensure that proper supporting documentation is kept. Signatories to this account shall be designatedby the DED.All documents andpreparationof reports on the usage of such funds shall be done by the designatedaccountant at the end of each quarter for submission to the Project Accountant at MNRT who shall review the supporting documentation submitted and the relevant report. The District Executive Director and MNRT shall certify each report so submitted as reflecting to the best of their knowledge the transactions of the project. The next quarterly tranche will only be released after a particular district has fully accountedfor the whole tranche for the previous quarter andjustified. All this will be inthe M O U signedbetweeneach district beingfinanced and MNRT. The following are some of the suggestedactions that will enhance accountability at district level: > The Local government internal auditor will audit all the transactionsof the previous six months every year and submit an audit report to the Permanent Secretary of MNRT > copied to PO-RALG. Any district executive officer foundmisusingsuch funds shall be dealt with using governments current reported to PRO-ALG andMNRT for action as stipulated inthe Public FinancialManagement Act and any other related laws of the land. Incases of outright theft, such officer should be reportedto the Police. DisbursementArrangements MANREC and MNRT through the Ministry of Finance shall open four Dollar SpecialAccounts inalocalcommercial bankinmainlandTanzania andZanzibar. MNRTshall havetwo special accounts: one for GEF and another for IDA credit. The same will apply to MANREC. Each one of the four special accounts will have a corresponding local account. TASAFwill have a fifth local account funded from contributions made from MANREC and MNRT inratios of 60%:40%. Government of Tanzania contributionto the project towards capitalization of the Marine Legacy Fundwill be releasedto one separaterespective local account inmainland. Funds into this account will be releasedon a quarterly basis. Contributions to this Fundare contingent on the Fundbeingset up and on deposit of the Government contributionto capitalization of the Fund. - 106 - Owing to the approval by the IDA of Tanzania's Country Financing parameters inOctober 2004, it has been agreed that IDA canthrough negotiationfund 100%of the cost categorieswhere the level of taxes are consideredreasonable. Owing to this flexibility, the MACEMP will take advantage of this situation to fund all cost categoriesat 100%. SpecialAccount The project will have four Special Accounts -two for IDA (one mainland and one Zanzibar) and another two for GEF (one mainland andone for Zanzibar). These special accounts are denoted as-Special Accounts A and C for mainlandand B and D for Zanzibar. These accounts will be openedthrough Ministry for Finance inlocal commercial Banks. The ceiling for SA A-IDA for mainland will be $3m and SA B-IDA for Zanzibar will be $2m. SA C-GEF for mainland will have a ceiling of $lmand SA D-GEFfor Zanzibar will be $lm. All requisite disbursement documentation whether relating to reimbursement through statement of expenditures, direct payments, special accountreplenishments, or special commitments documentation will be initiatedand kept by the accounting department of the project inMNRTand inMANREC. Documentationrelatedto TASAF CVF will be sent to MNRT for preparingwithdrawal applications. IDA should be informedof the special accounts opening andwill deposit funds with the accounts once the project i s declared effective. Withdrawal application for reimbursement, direct payment instructions, and other disbursement requestswill originate from the MANREC and MNRT MMTsandbe endorsedby the Ministry of Finance (MOF) Claims Unitto the World Bank. Payment instructions direct to suppliers will be sent through the same route through commercial banks, as pursuant to World Bank instructions. Consolidation of all payments and accounts for each quarter and end of the year shall be done at the EGFTthrough the financial specialist. StatementsofExpenditure All applications to withdraw proceedsfrom the credit andthe grant will befully documented. However, it has been agreedthat for this project, there will beno prior review of contracts during the first year of project implementation for withdrawal of the credit and grant proceeds.Thus all applications for withdrawal of credit and grant proceedswill be on SOE basis duringthis pilot phase. AnSOE audit will be conducted one year into projectimplementationtogether with a procurement audit to determine whether the usage of SOE should therefore be limited. Withdrawal application for reimbursement, direct payment instructions, and other disbursement requestswill originate from the Project MANREC and MNRTandbe endorsed by the Ministry for Finance Claims Unit to the World Bank. Payment instructions direct to suppliers will be sent through the same route through commercial banks, as pursuant to World Bank instructions. Consolidation of all payments and accounts for each quarter and end of the year shall be done at the EEZ facilitationteam through the financial advisor. All related documentation related to such transactions should be maintained at MANREC, MNRT andTASAF to facilitatereview by World Bank missions and other stakeholders. - 107- Schedule of MACEMPSpecial Accounts for the IDA Credit Allocation (inUS$) and the GEFTrust FundGrantAllocation (inUS$): A. Draft Schedule of MACEMPIDA Accounts for MainlandTanzania and Zanzibar respectively Amount ot the Credit Allocated(Expressed % of Expendituresto be Category inDollars) Financed 1 Works 100% (a) MainlandTanzania 3,600,000 (b) Zanzibar 2,200,000 2 Goods 100% (a) MainlandTanzania 4,200,000 (b) Zanzibar 3,400,000 3 Consultants' Services 100% (a) MainlandTanzania 6,000,000 (b) Zanzibar 4,000,000 4 Training 100% (a) MainlandTanzania 1,800,000 (b) Zanzibar 1,300,000 5 Operating Costs 100% (a)iMainlandTanzania 6,800,000 (b)Zanzibar 4,200,000 6 Subprojects 100%of amountsdisbursed (a)zMainlandTanzania 4,800,000 (b)iZanzibar 3,200,000 Amountdue pursuantto Refundingof Project Section2.02(b) of the 7 Preparation Advance 1,000,000 LegalAgreement 8 Unallocated 4.500.000 B. DraftSchedule of MACEMPGEF Trust FundGrant Accountsfor Mainland Tanzaniaand Zanzibar respectively Amount of theGEF Trust FundGrant Allocated(Expressed % of Expendituresto be Category inDollars) Financed 1 Works 100% (a) MainlandTanzania 110,000 (b) Zanzibar 275,000 2 Goods 100% (a) MainlandTanzania 1,500,000 (b) Zanzibar 1,200,000 3 Consultants'Services 100% (a) MainlandTanzania 1,200,000 (b) Zanzibar 900,000 4 Training 100% (a) MainlandTanzania 750,000 (b) Zanzibar 500,000 5 OperatingCosts 100% (a)eMainlandTanzania 1,000,000 (b)aanzibar 1,300,000 MarineLegacy Fundunder 6 Part A.l. (b) of the Project 250,000 100%of amountsdisbursed 7 Unallocated 1,O 15,000 TOTAL 10,000~000 - 108- 8. Procurement A. General Procurement for the proposed project would be carried out inaccordancewith the World Bank's "Guidelines: Procurement UnderIBRDLoans and IDA Credits" datedMay 2004; and "Guidelines: Selection andEmployment of Consultants by World Bank Borrowers" dated May 2004, and the provisions stipulated inthe Legal Agreement.The various items under different expenditure categories are described ingeneral below. For eachcontract to be financed by the Credit, the different procurement methodsor consultant selection methods, the needfor pre- qualification, estimated costs, and time frame are agreedbetween the Borrower and the Bank in the Procurement Plan. The ProcurementPlanwill be updated at least annually or as requiredto reflect the actual project implementation needs and improvements ininstitutional capacity. Procurementof Works: Works procuredunderthis project will mainly consist of the following: (a) construction of 2 buildings for the proposedDeep SeaFishing Authority (DSFA); (b) rehabilitation of buildings for MNRT and MANREC where the MMTs will be housed; (c) improvement of Dar es Salaamand Zanzibar portsfor fish landing; (d) rehabilitation of various buildings andother infrastructure for existing and emerging MPAs,CMAs and MMAs; (e) rehabilitation of cultural heritage sites; (f)rehabilitation of laboratories; (g) construction of small buildingsto support local government capacity building; (h)civil works for private/public sector partnerships; (j) civil works for conservation andemerging sites including Rufiji-Mafia-Kilwa complex and Pemba Channel Conservation Area; and (k)civil works for community driven development activities to be identifiedat community level. Civil works estimated to cost more than US$2.0 millionwill be procured through ICB. Civil works contractsestimated to cost less than US$2.0 million would be procured through NationalCompetitive Bidding(NCB) except for small value contracts of less than US$50,000, which may be procured through shopping or community participation. The procedures to be usedfor NCB and shopping, as well as community basedprocurementwill be described inthe Procurement Manual which will be preparedfor use by beneficiaries andrelevant stakeholdersand the Community Procurement Manual of TASAF. These manuals will be approved by the Bank. The MainlandGovernment has SBDs andBidEvaluationforms for procurement of civil works, which have been found acceptable by the Bank. The MainlandGovernment and the EGFTmay use such documents. The Zanzibar Government may use the same documents otherwise the Bank will needto approve any other documents. Procurementof Goods: Goodsprocured underthis projectwould mainly include: (a) tools and equipmentfor improvingthe Dar es SalaamandZanzibar portsfor fish landing; (b) patrolboats (new or used) and equipment; (c) vehicles (including video vans); (d) office equipment and furniture for new and refurbishedoffices; (e) equipment for existing and emerging MPAs, CMAs and MMA; (f)researchand laboratory equipment; (g), equipment for conservation andemerging sites including Rufiji-Mafia-Kilwa complex and Pemba Channel ConservationArea; (j) equipmentfor land capability assessments; (k) equipment for community basedprojects; and (1) M&Eequipment.All the goods will beprocuredusingprocedures describedinthe MACEMP's and TASAF's procurement manuals. Since most of the goods to be procured would be imported, the threshold for ICB has been set fairly low, at US$150,000. Contracts estimated to cost - 109 - US$150,000 or below may be procuredusing NCB, Contractsestimatedto cost US$50,000 and below may use the Shopping methodor IAPSO.Direct contracting may be usedwhen it canbe justified that a competitive method would not yield better value for money. The Mainland Government has SBDs and BidEvaluationforms for procurementof goods, which have been found acceptableby the Bank. The MainlandGovernment and the EGFTmay use such documents. The Zanzibar Government may use the same documents otherwise the Bank will need to approve any other documents. Procurement of non-consultingservices: Services requiredunder the Project will include: (a) selection of institutions of higher learning for the postgraduatestudies and specialized training in marine and environmental management; (b) selection of venues for workshops and training; and (c) purchaseof materials for workshops. The selection of institutions of higher learning will be done on the basis of quality and therefore the QBS method will be used. Venues for workshops andtrainingandpurchase of materials will bedone onthe basis of at least three quotations. The productionof messages will also be procuredthrough shopping. The dissemination inthe public mediawill be sole sourced on the basis of communication means that exist invarious parts of the country. Selection of Consultants: Mainconsultant services requiredunder the Project include: (a) supportfor existing andemergingMPAs, CMAs andMMAs;(b) support for Rufiji-Mafia-Kilwa complex, Pembaconservation area and other emerging sites; (c) support for infrastructure design, engineering, planningand supervision of constructionhehabilitation works; (d) support for baseline surveys for performance indicators and annual surveys; (e) inventory studies for cultural heritage sites; (f) designof the Marine legacy fund; (8) preparation of various papers and periodic reports; and (h) EA operationalization and sensitization. Consulting firms for services estimated to cost more thanUS$lOO,OOO would be selectedthroughQCBS. Consulting firms for services estimatedto cost less thanUS$lOO,OOO may be selectedusingthe consultant's qualificationmethod. Individualconsultants will be selected on the basis of their qualifications in accordancewith the Procurement Manual. Single source selection may be usedwhere it can be justified. Short lists of consultants for services estimatedto cost less than $200,000 equivalent per contract may becomposedentirely of national consultants inaccordancewith the provisions of paragraph 2.7 of the Consultant Guidelines. Inthe event that there is a need, for capacity reasons, NGOs could be employed to assist where they have advantage over commercial firms. Operating Costs: The operating costs for MACEMP shall consist of office supplies, operation and maintenance costs .for vehicles and equipment, communication charges, utility expenses among others. These will be procured using the procedures described in the Procurement Manual. Others: The procurement procedures and SBDs to be usedfor each procurement method, as well as model contracts for works and goods procured, are presented in the Procurement Manual, currently under preparation. All ICB and QCBS contracts will be promptly submitted to the Bank not withstanding the absence of prior review of contracts during the first year of implementation (see below). - 110- B. Assessment of the agency's capacityto implementprocurement Procurement under MACEP will be carried out by three institutions: MNRT, MANREC and a project coordination team, the EEZ Governance Facilitation Team (EGFT). The MNRT and MANREC will carry out the procurement function through two MACEP management teams (MMT), which are already in place and the project managers for the preparatory phase are in place. It is assumed that the same managers will continue with the implementation phase. The MNRT MMT and the MANREC MMT will each consist of the following core positions: Manager, Procurement Officer, Accountant, CVF Coordinator, and Administrative Assistant. MMTpositions are not financed by the project, butproject financing is available for trainingand for operational overheads. The EGFT is yet to be created but it will comprise of the following core positions: Team Leader, Development Communications Specialist, M&E Specialist, Procurement Specialist, and Financial Specialist. The EGFT core positions are project financed and will be competitively filled. The EGFTwill carry out the function of procuring works, goods and consultancy services for common use of both governments. It will also provide procurement advisory services to the two MMTs. An assessment of the capacity of the ImplementingAgency to implement procurement actions for the project was carried out by the IDA (by Rogati Kayani, Lead Procurement Specialist) in February 2005. The assessment reviewed the organizational structure for implementingthe project and the interaction between the MMT's staff responsible for procurement andfor administration and finance, as well as other participants inprocurement. The key issues and risks concerning procurement for implementationof the project have been identified and are discussed inthe following paragraphs. The corrective measures, whichhavebeenagreedare describedin the Action Plan. Staffing: An assessmentof the procurement capacity of the current supplies staff inMNRTand MANREC concluded that the staff do nothave adequate experience inboth government and Bank procurement procedures. The issue now is whether to recruit procurement specialistsfrom the outside to fill the procurement officer positions to be createdinthe MMTsor to train the current suppliesofficers to fill these positions. It was decided that the current supplies officers would be trained to fill the positions This training shouldstart as soon as possible andit was agreed that the slack periodbetweenNegotiations and Effectiveness would be ideal for such training. The institutions that this training could be obtained include: East and SouthernAfrican Management Institute (ESAMI) inArusha, Ghana Institute of Management and Public Administration (GIMPA)inAccra, Ghana; ILO Training School inTurin, Italy; India.. etc. Since at the beginning all staff of the project will need to be familiar with procurement procedures, a general training will initially be organized inDSWZBRfor all staff inthe MMTs and thenthe designatedprocurement officers could go for more specific training at the above institutes. Itis unlikely that the Supplies Officers will attain the requisite level of competence to carry out all the procurement functions inthe first year of the project. It was agreed duringnegotiations that procurementspecialists familiar with Bank and Government procurement procedureswould be employed for the two MMTs to assist the two designated procurement officers at the beginning of the project. The procurement specialists would be paid from the project and they would be employed as long as the MMTs require their services Inaddition, the procurement officers will be working with andunder the guidance of the Procurement Specialist at the EGFT. - 111- Approval Process: InNovember 2004, the Parliament approved a Bill to abolish the Central Tender Boardinthe Mainlandand to fully decentralize the procurement function to procurement entities. The new Act was effective on May 1,2005. Thus, all procurement approvals will be done at the procuringentity level inthe Mainland. All procurement approvals above the thresholds for Directors of the Fisheries Department and PS of MNRT will be done by the MinisterialTender Boards (MTBs).At the moment the MainlandMTB meets only once a month and this is likely to cause delays during implementation of the project. It is recommended that the MTB meets at least twice amonth. Considering the importance of this project, it is further recommendedthat the MTB delegates as much approval authority as possible to the PSs of MNRT and MANREC andthe Directors of Fisheries. Record Keeping. There are existing procurement filing systems at MANREC and MNRT but these are not considered adequate. An appropriate new procurement filing system would be established by each MMT, with the help of the Bank. The need for proper filing inthis project is particularly important considering that there will be no prior reviews by the Bank inthe first year and a comprehensive procurement audit will be carried out after that period to determine the appropriate levels for prior review. The overall project risk for procurement is HIGH. Inorder to mitigate the risks posedby the above capacity issues, the following Action Planis beingproposed. ActionPlanto Mitigatethe Risk RiskFactor Action to mitigaterisk Action by Deadlinefor Completing Action Inadequate appropriate Prepareand finalize Procurement MNRTand By Effectiveness Procurement Manual MANREC Procedures Organization Structure Create a procurement officer MNRTand By Effectiveness of MMTs inadequate positionineachMMT MANREC Insufficient number of MTB to meet at least two times a MNRT Continuous meetings of the MTB month Lack of trained (a) Train staff of MMTin MNRT and Before procurement staff at procurement and specifically the MANREC Effectiveness MNRTand MANREC designatedprocurement officers (b) Recruit a procurement specialist for eachMMT to work with and train the designated procurement officer. I RiskFactor Actionto mitigaterisk Action by Deadlinefor Completing Action Procurement staff at EGFT Recruit a procurement MNRTand Before - 112- not inplace specialist for the EGFT MANREC Effectiveness Inappropriate recordof Establish appropriate MNRT and Before procurement information procurement filing system MANREC Effectiveness and processes and unit cost data base C.Prior Review Thresholds Pilot Case for usingnationalapproval systems - This project will beusedas a pilot to spearheadthe use of Government approval systems for all the procurement activities carried out during the first one year. Thus, for all the procurement actions to be executed duringthe first year of the project, there will be no prior review by IDA. The EGFT and MNRT will use the Mainland approval systemthat is being established under the new Regulations that arebeingprepared to implementthe Procurement Act (2004). MANREC would use the existingZanzibar Government approval system. BothMainland andZanzibar approval systems will be described indetail inthe ProcurementManual. Prior Review Thresholds (PRTs)would be set only after the first year of operation. If recommendationsproposedintheActionPlanareimplemented,theprocurementrisk the should reduce to medium.At the endof one year, IDA will review all the procurement actions that have beencarried out duringthe year to verify compliance with the Procurement Plan and the Procurement Manual. These two documents would have been approved by IDAbefore Negotiations and beforeProject Effectiveness, respectively. The levels of PRTswill be set dependingonMACEMPsperformance and the perceived risk at that time (low, mediumhigh). For those contracts which IDA determines to have been executed inconsistentlywith the Procurement Plan and Procurement Manual, misprocurement may be declared. However, IDA would be monitoringthe procurement performance closely throughout the year andgiving advice as required. D.ProcurementPlan The Borrower haspreparedaprocurementplanfor project implementation, which provides the basis for the procurement methods. This planwas agreed betweenthe Borrower and the Project Team on April 7,2005 and is available at MNRT and MANREC. Itwill also be available inthe project's database and inthe Bank's external website after Board approval of the project. The Procurement Plan will be updated inagreement with the Project Team annually or as requiredto reflect the actual project implementation needs and improvements ininstitutional capacity. The PRTcolumnof the Procurement Planwill be entered when the Planis reviewedandrevisedafter one year. E.Frequency ofProcurementSupervision Inaddition to the day-to-day monitoring to be carried out from Bank offices, the capacity assessment of the Implementing Agency has recommended at least three supervision missionsto visit the field to carry out post review of procurement actions. - 113- F.Detailsof the Procurement Arrangements InvolvingInternationalCompetition 1. Goods, Works, and Non Consulting Services Procurement Plan for July 2005 -June 2007 is presented below 0 Prior Review Threshold: There will be no Prior Reviewby the Bank inthe first year of project implementation. 0 Domestic Preference: Domestic preferencewill be applicable for all ICB contracts. 1 2 3 4 6 7 8 9 Ref. Contract Estimated Procurement Domestic Review Expected Responsible No. (Description) cost US$ Method Preference by Bid- Entity XlOOO (yes/no) Bank Opening (Prior Date / Post) A.5.2.3 Patrolling 242.37 ICB Yes Post July 2006 EGFT Equipment (excl vessels) - MCS A.S.2.5 PatrolBoats (near 1,721.OO ICB Yes Post h e 2006 EGFT shore capable)- MCS A.5.2.6 Cold Storage and 5 15.97 ICB Yes Post July 2006 MNRT Hygienic Equipment for Mainlandfish landingports (Dar and Bagamoyo) A.5.2.7 Cold Storage and 309.00 ICB Yes Post Jan. 2007 MANREC Hygienic Equipment for Zanzibar (one location)fish landingport - 114- 2. Consulting Services Procurement Planfor July 2005 -June 2007 is presentedbelow 0 Prior Review Threshold: Inthe first year there will be no prior review by the Bank 1 2 3 4 5 6 7 Ref. Description of Estimated Selection Review Expected Responsible No. Assignment cost US$ Method by Proposals Entity XlOOO Bank Submission (Prior / Date Post) A.5.4.14 Agency Infrastructure: 142.62 QCBS Post Apr 2006 EGFT DesignandEngineering Services(Mainland) A.5.4.19 Landcapability study 168.68 QCBS Jun 2006 EGFT (including near shore marine resources)at 1:150,000 scale for MainlandandZanzibar A.5.4.20 Landcapability study 168.68 QCBS Post Jun 2006 EGFT (including near shore marine resources)at 1:50,000 scale for pilot districtsof Mainland andZanzibar A.5.4.21 Consultancyfor RapidRural 140.57 QCBS Post Jun 2006 MNRT Assessment (Social Assessment-2.I.1.4PIM) A.5.4.22 Consultancyfor RapidRural 140.57 QCBS Post Jun 2006 MANREC Assessment (Social Assessment-2.1.I.4PIM) A.5.4.37 Servicesfor Ecologicaland 165.38 QCBS Post Jan 2006 MNRT socio-economic aspects assessmentof MPAs and CMAs including:habitats supportingfisheries, priority spawning sites, critical coral reef for artisanalfisheriesand oceanic survey. Review representativenessof MPA andrecommendareas for regazettmentas well as for establishmentof new MPA. A.5.4.41 Preparationof NationalMPA 101.21 QCBS Post Jul2006 MNRT M&E System[2.1.5.6PIM] A.5.4.48 Consultancy Servicesto 120.00 QCBS Post Jul2006 MNRT Develop/ReviewGeneral ManagementPlans- Support of implementationfor Existing MPAs/CMAs/ MMAs: A.5.4.49 Consultancy Servicesto 120.00 QCBS Post Jul2006 MANREC DeveloplReviewGeneral ManagementPlans- Support of implementationfor Existing MPAdCMAsl MMAs: - 115- Ref. Description of Estimated Selection Review Expected Responsible NO. Assignment cost US$ Method by Proposals Entity XlOOO Bank Submission (Prior I Date Post) A.5.4.50 Services to Developand 211.85 Post lun 2007 MANREC implement specific managementplans(tourism, mangrove, turtle, village land use plans, etc) in Supportof implementationfor Existing MPAsICMAsl MMAs: A.5.4.51 Services to Developand 211.85 QCBS Post Iun2007 MNRT implementspecific management plans(tourism, mangrove, turtle, village land useplans, etc) inSupport of imnlementationfor Existing MPAsICMAsl MMAs: - A.5.4.54 Services to Support 285 Post Sep 2006 MANREC gazettementprocess, includingdistrict by-lawsand other regulationsnecessary for Mnemba, Chwakaand Menai Bay MCA andPemba Channel Conservation Area (inc. Misali Cons. Area) Site Services A.5.4.55 Services to Support 427 QCBS Post Mar 2006 MNRT gazettementprocess, includingdistrict by-lawsand other regulationsnecessary for Rufiji-Mafia-Kilwa- Complex andTrans boundary MPA Mozambique(including gazettementprocess, district by-lawsandother regulations necessary) A.5.4.56 Services to Suu~ortgazettement 142.49 QCBS Post Mar 2006 MANREC .I I process, including district by- laws and other regulations necessaryfor PembaChannel Conservation Area (inc. Misali Cons. Area) Site Services A.5.4.64 Contract for Inventory- 112.46 Post Jun 2006 MNRT Cultural HeritageSites (Mainland - MNRTIAntiquities) A.5.4.66 Contract for Inventory- 112.46 Post Sep 2006 MANREC CulturalHeritageSites (Zanzibar - Dept of Antiquities) A.5.4.76 275.63 Post Sep2005 EGFT PerformanceIidicators - BaselineSurveys for Kev - 116- 9. Economic and financialanalysis Project structure is not amenable to a full stand-alone financial or economic analysis. Selected micro-economic analyses were, however, conducted to ensure that the chosen structure was economically efficient andfinancially sustainable over the long-term. This annex summarizes the findings o f these analyses. FisheriesSector in Tanzania'` Fisheries i s not a union issue inthe United Republic of Tanzania, thus far allowing the governments of mainland Tanzania and Zanzibar to operate autonomously when dealing with any fishery issues. Tanzania mainland: InTanzania mainland, fisheries make up2.7% ofGDP(2001) and 12%ofallexports. The fisheries sector is currently dominated by the artisanal Nile Perch fishery onLake Victoria, both interms oflandedvalue, export revenue andgovernment tax revenues. The most significant marine fishery is the industrial shallow water shrimp fishery, but its contributionto the economy has been much less significant than the freshwater fishery. Principle fiscal instruments accruing to central govemment include: licensing of industrialvessels, royalties charged on fisheries exports, and export licenses (thus far only generated fromfreshwater fishery). Instruments accruing to local govemment include: licensing of artisanal vessels andfish sales tax fees (fish levy). The legal basis for the various charges inthe sector is the Fisheries Act of 1970, last modified in2003. Charge rates differ between foreign andnational vessels. In2002, 80-90% of the total revenue earned at central level (US$6.9 million)was fromexport royalties on Nile Perch-relatedproducts fromLake Victoria, and only 10-20% o f the revenue earned was from marine commercial fishery, i.e. shrimp fishery and EEZ fishery. Total revenue collected at decentralized level amounted to US$1.5 million, of which 99% was due to fish levy and less thanhalf of which frommarine fisheries. Recently, the licensing of EEZ vessels has become a more significant revenue stream (up to US$700,000 in2003, and up to US$1,300,000 in2004), andthe numberoflicenses soldhas increasedsignificantly". Theincrease innumber of vessels applying for EEZlicenses is a result of the recent efforts throughthe SADC MCS project for the emerging management of the EEZfishery. InmainlandTanzania, the Ministry of Financeallows retention of part of earnedrevenues inthe fisheries sector. For the fiscal year 2001/2,48% of earned revenue was sent back to the Fisheries Department, 6% was taken as overhead by the Ministry of Natural Resources and Tourism, and the remaining 46% retained by the treasury. l6This section is basedonWilson JDK. 2003. Fiscal Arrangements inthe Tanzanian Fisheries Sector, FA0Report. Updates are basedon the SADC-financed MCS compliance monitoring information system. "ThenumberofEEZlicenseshasincreasedfrom 1 in 1999to 10 licenses in2002,39 in 2003, and 74 in 2004. It should be noted that the increased number of licenses sold should not be interpreted as an indicator o f increasing effort or development in the EEZfishery. It is believed that illegal, unreported, and unlicensed vessels were already fishing in the EEZprior to the recent improvements in resource monitoring. - 117 - Zanzibar: InZanzibar, artisanalfisheries usedto dominate the fisheries sector as there arenolarge-scale commercial inshore fisheries. Recently, revenuefrom EEZ fishing startedto returnthe highest shares of revenues from the sector and makes a relatively larger contribution to the state revenuesthan inmainlandTanzania. The principle fiscal instrumentsaccruing to central government include: licensing of vessels, licensing of fishers, migratory license, and export royalties. Instruments accruing to local government include: fish landinglevy and access fees for migratory fishers. The legal basis for the charges is originally set out inthe 1988 Fisheries Act. Revenue collected for the Zanzibar government totaled US$0.06 million in2002, of which 73% was collected from royalties. Most export royalties were collected fromexport of driedseaweed (approx. 4,000 mtlyear), produced by extensive small scale mariculture. Fishlanding levies and access fees for migratory fishers accrue to local village committees. In2002, local revenue collectionform the fishery was estimated to be US$0.22 million, hence significantly more than accruing centrally. Total tax burdenon the fishery was estimated as 2.5% of landed value. Since 2003, EEZ license fees have startedto dominatethe revenuesinthe fisheries sector. The sales of licenses increaseddramatically in2003 to 78 licenses, which was twice the number of licenses issued inmainland. The revenueearnedfrom EEZ licenses alone (US$0.16 million) in2003 was 3 times the total revenue collected centrally from the fisheries sector in2002. As inmainland Tanzania, the increasedlicense sale is not an indicator for increasedeffort, but insteada result of the emerging MCS initiatives and the pro-active stance by the Government of Zanzibar to have a managementagreement with an agent to facilitate EEZ licensing. InZanzibar, aretentionscheme was startedin2003. However, the fundamental modalities of operation, such as degree of retention, are yet to be established. For the fiscal year 2001/2 the department spent 170% of collected revenue and thus required support from the treasury. However, the figures for 2003 show significantly different figures with net contributions from the sector to government revenue due to the increasedrevenue from the EEZ fisheries. Potentialfor increasedrevenuefrom the sector: InbothmainlandTanzania andZanzibar, the licensingof vesselsto fishinthe EEZhasthe greatest potential for increasing government revenue from the sector. For effective revenue collection, investments inappropriate institutions are needed, such as establishment of acommon governance regime and further development of management mechanisms including MCS. Currently, the sale of annual fishing licenses is the principle mechanism for bothsides of the Union to control effort inindustrial fisheries anda limitednumber of licenses are sold each year. However, no control and enforcement mechanismsfor compliance with catch limits or quotas associatedwith fishing licenses are inplace and Tanzania does not require fleets to take on board observers to report on fishing effort and catch. Further, investigation will be required on the real - 118 - potential and sustainableyield levels of the resource as well as the feasible levels for increaseof EEZfishing licensesfees, the structure of penalties andtheir legal foundation''. Latest catch reports (approximate periodJuly to September 2004) recorded by the MCS operations center inMbegani and accounting for about a thirdof all active vessels inthe EEZ, indicate that up to 10,000 mt of tuna are being caught inthe TanzanianEEZper week during the peak tuna season. Under a conservative scenario, this would addup to 200,000 mt er tuna season for the monitored vessels only andindicates a multi-million dollar business . Pg MPA Economics,Financial Risk Pooling and the MarineLegacy Fund2' While Tanzania and Zanzibar have significant experienceindifferent MPA and MMA models, the financial sustainability of these models is far from secure. To date, the general trend is that sites operate inisolation, with little or no regardfor linkingthem as a network or a system. Individual sites are characterizedby extreme dependencyon external financing that is not guarantied in perpetuity, and at times imposeshighcost structures that will themselves be difficult to finance. Surveys showed that on average, marine protected areas received 87% of their financing from external funds. Moreover, own-revenue generation was capable of financing only 40% of the recurrent costs. By contrast, it is instructive to consider Tanzania's national budget.Recent trends have seen steady decreases inexternal dependency. In2002/03, the entire national government budget was financed 47 percentby foreign assistance. In2003/04 this had declined to 45 percent and the 2004/05 budget figures project 41 percent. Fromthis perspective, the 87 percent dependencyof marine parks on foreign assistanceseems disproportionately high. . Addressingfinancial sustainability needsto take a multi-pronged approach: Cost reduction is an obvious first step. This is achievable through different means. Surveys show that personnel, especially foreign technical assistance, remains one of the highestdirect costs inmarine managementinTanzania. Long term financial sustainability will require that thesehighcost resourcesbe replacedby more cost- . effective local expertise. Fortunately, Tanzania's pool of skilled labor is growing, and more training is necessaryto achieve self-reliance. Another means of changing cost structures is to rely more on co-managementmodels that permitprivate sector or community participation. Evidence shows that including private sector partnersandcommunities within the overall management framework will reduce overall costs, while also achieving ecological and social equity goals. Distributional . issues - whether they relate to taxation or benefit sharing - remain one of the more difficult issues inachieving financial sustainability. More diversified revenue generation is the next step inachieving financial sustainability. At present, tourism revenue remains the principletarget for covering operational costs. '* At present,an annual fishing license for the Tanzanian EEZwithout major restrictions on total catch allowance cost only to the amount of US$18,999 on average. It is estimated that even a ten-fold increase o f costs would not present a significant economic disincentive to vessel operators. l9 20 week tuna season x 10,000 mt/wk = 200,000 mt x US$1100/mt =US$220 million per tuna season; the URT's accounting rate for tuna is US$l.l/kg (=US$lIOO/mt). Global market value would be considerably higher. *' This section is based on: Ruitenbeek J, Hewawasam I, M.Editors. Blueprint 2050: Sustaining the Marine Ngoile Environment in Mainland Tanzaniaand Zanzibar. World Bank, Washington D.C. - 119- Butrelyingon such a single sourceofrevenueis little different thanrelyingonforeign donor assistance. It is more appropriate to rely on a diversity of sectors and mechanisms. Recent work argues that systemic models are most appropriate for addressing long-term sustainability andrisk poolingrequirements. Areas such as Mnazi Bay may never be financially sustainableby themselves, but they warrant being includedas an importantpart of a national system. Financingmust also therefore look at more extensive pooling of resources, from a diversity of sources. Many analystspropose local revenue pooling or revenue retention schemes, which are accessible by districts, local communities, and MPA or MMA authorities themselves. Such local pools can themselves inturnbe connectedto higher level funds. Indeed,national legislation both inZanzibar and Tanzania mainland provides for the establishment of higher level poolingmechanisms. Duringproject preparationfor MACEMP, the issue of sustainablefinancing cameup frequently and the government originally identifieda "sustainable financing mechanism" as an important element. Within MACEMP it i s referred to as the Marine Legacy Fund. I s a Marine Legacy Fund practical? How large should it be, and what are the potential revenue sources?To answer these questions, we must recognize that the goal of the fund is to act as a conduit for collecting and redistributingrevenues, andfor acting as abuffer duringbadyears. This is quite different from an "endowment arrangement" inwhich a fixed amount of capital generatesinterest payments which finance the core costs of the system. We estimate that the core costs of a systemin Tanzania and Zanzibar would be of the order of US$6 million annually, covering approximately 30 core MPAs or MMAs.An endowment fund with no revenue sources generating a 5 percent return on capital invested would needto be US$120 million insize to cover those costs. But the MarineLegacy Fundwould not operatethis way: it would collect and redistributerevenues on an annual basis, relying on a diversity of revenue sources (including some operating interest on fund capital). It would need to be able to weather a few years of income shortfalls, and the value of the Fundcould thus fluctuate over abroader range of values. But because it is not an endowment, its target value could be somewhat less than that of an endowment fund. We estimatethat an adequatefund level to address MPA/MMA systemfundingneeds would be approximately US$50million,with operating fluctuations fromUS$25 million to US$lOO million. This would be adequateto cover an annual US$6 million operational cost outflow, with annual average inflows to the fund of US$3 million (the balance of US$3 million is internally generated). This scale would also permit a 4 year hiatus ininflows. The operational question thenbecomes: I s it possible to expect US$3 million of inflow into the Marine Legacy Fund?To putthis inperspective, let us translatethis into some physical measuresfromlead sectors that might conceivably contribute to such inflows. Tourism. MPA entrancefees are upto US$lO a visit. Typical scuba dive charges internationally attract a US$25 supplement. VAT on a typical upscale hotel room generates US$40a night. A typical visitor on a one week dive vacation can thus generate almost US$500 indirect revenues; about 500 such visitors a month would entirely finance the Fundrequirements. Puttingthis into perspective, Tanzania typically received over 500,000 tourists annually from 2000 to 2003. Fisheries. Offshore fisheries inthe EEZ are poorly regulated and much of the catch and effort i s unreported. Basedon reported statistics, however, the landed value of marine fisheries was approximately US$35 million in2002; actual values could have beenan - 120- order of magnitude higher. This suggests that, ina properly monitored and regulated fishery, a royalty of as little as 1percent on fishery products may be adequateto cover the Fundinflow requirements. H Oil and gas. Tanzania's offshore potential is not yet fully exploited, but the 270 MW potential power generationbeingprovided by the Songo Songo gas field project provides a useful estimating basis. Electricitywill have an averageproduction cost of about US$O.O7/kWh during the project life. Ifinflows to the MarineLegacy Fundwere entirely financed through mechanisms that were included within the cost of power, the impact would be a US$O.O013/kWh on average production cost: a 1.8 percent increase. Other. Other potential sources of funding also remain available. The Marine Legacy Fund remains the natural repository for capital endowments or donations from foreign donors, private foundations, or the sale and lease of select island properties. Inshort, relyingonsuchfinancial inflows is not unreasonable.A mix of tourism, fisheries, and nonrenewable offshore resource income could adequately finance such a scheme. Community Sub-projects2' CCAF is primarily demand driven. Under the Coastal Village Fund(CVF), representing 80% of the component, communities identify and decide on the type of subprojects demanded in their area. Poor communities are rational economic actors whose choices will reflect those subprojects that provide the greatestreturnto their input of labor, time materials and cash. As a consequence, and since the benefits gained are longer rather than short-term, a traditional cost benefit analysis i s not suitable for the project. Much of the returns to CCAF investments will be inthe form of social capital and sustainability of community assets as a result of involvement of Local Government, and the communities through the CMC's. The interaction of the communities as subproject implementers and Local Governments as overseers, will promote both upward and downward accountability, thus increasing the delivery of services at the community level. The following beneficiary groups will be supported (i) the service poor; (ii) able-body food insecure; and (iii) vulnerable. the the The economic rationale for CCAF is basedon the following principles: 0 CCAF funds are essentially public funds and the activities financed by CCAF represent the highest priority use of public resources. 0 Cost effectiveness of subprojects will be facilitated by provision of costed design options, a unitcost databank, encouragement of localcompetitioninprocurement of goods and services and involvement of sector staff at appraisal to ensure that sector norms and standards are met. 0 Savings from the poor will be available for on-lending and investment through community and commercial micro-financing institutions. 0 CCAF also has a number of externalities such as building community skills, strengthening decentralization of service delivery in the long term and community capacities to prevent, mitigate and manageriskshhocks. This section is basedonthe analyses undertaken insupportof TASAF 2. - 121- 10. Safeguardpolicy issues SafeguardsTriggered Applicable?SafeguardPolicy IfApplicable,How MightItApply? [XI EnvironmentalAssessment (OPBP 4.01) The primary potential detrimental impacts will arisefrom efforts to improve incomes incoastal communities. These efforts, through income generatingprojects, may either have direct environmental impacts (from small-scaleactivities) or indirect impactsthrough increasedincomes that permit investmentinnon-sustainableharvesting. Such impacts, where they arise, are likely to be localizedbut may require mitigative measures to put inplace as part of the project implementation. An evaluation of the existing institutional structurefor monitoring and controlling impacts showedthat legislation relating to environmental management, coastal zone management, fisheries managementand coastal forest managementwas comprehensiveand relatively modern. Inaddition, the Borrower haspreparedanEnvironmental and Social Assessment (ESA) with appropriatemitigation actions includinga screening tool for income generating investmentssupportedby the project. [XI NaturalHabitats(OPBP4.04) The project does not propose significant investmentswithin natural habitats (designated,proposed, or potential), but it may involve changedtenure arrangements by promoting a change in managementregimes involving such habitats.The ESA outlines proceduresfor addressingthese concerns, including the preparationof Community Mitigation Action Plans (funded by the project) and the subprojectscreeningtool. [XI InvoluntaryResettlement(OP/BP 4.12) Because the project proposesto improve economic efficiency and environmental effectivenessof resourcemanagement by movingaway from what is currently an openaccess regime inthe off- shorewaters, the changes inaccess provide some prospectfor reducedavailability of resourcesto some individuals insome coastalcommunities. The scale of such impacts is expectedto be relatively small, but it may result in localized exclusion of some coastalcommunities. The Borrower has preparedaProcessFramework to addresspotential social impacts due to limitation of access. [XI CulturalProperty(draftOP4.11 OPN 11.03) - The project will work incoastaldistricts and areas where specific cultural heritage resourceshave already either been identifiedand gazetted or may be discovered during project implementation. The resources identifiedincludephysical resources (suchas buildings on land or sunkenwrecks in sub-tidal areas), as well as traditional human knowledge relating (for example) to boatbuilding. MACEMP incorpratesplanning, investmentand monitoringmeasuresto ensure that cultural resources inproject areas are protectedaccording to internationally accepted standards under the oversight of UNESCO. EnvironmentalAssessment Category: [ ] A [XIB [ ] C [ ] FI [ ] TBD (to bedetermined) - 122 - ExecutiveSummaryfrom Environmentaland Social Assessment22 This document presentsthe Environmental and Social Assessment (ESA) for the Marine and Coastal Environment ManagementProject (MACEMP) (the Project) of the UnitedRepublic of Tanzania (URT). MACEMP i s a 6-year project anticipated to beginmid2005. The purposeof the Project is to improve managementof coastal and marine resources, to enhance the contributionof these resourcesto economic growth, to reducepoverty, and to develop the scientific understanding of the marine and coastalresourcesandmajor threats to them.The Project will: Strengthen marinemanagement institutions inZanzibar and on the Mainland, with a focus on creating a common governance regime for the Exclusive Economic Zone (EEZ) (Component 1); Support coastal area planning and the establishment of a network of marine protected areas (MPAs) and marine managedareas (MMAs) for conservation of biodiversity and sustainable utilization of coastal and marineresources (Component 2); and 9 Create an enabling environment for environmentally sustainable investment along the coast (Component 3). The principalMACEMP implementingagencies inTanzania include MNRT (for Mainland Tanzania) and MANREC (for Zanzibar). Within MNRT, the principal implementing partners will include the Department of Fisheries andthe Department of Antiquities, while within MANREC it will include the Departmentof Fisheries, the Department of Environment, and Department of Commercial Crops, Fruits andForestry. Over the course of MACEMP, the Project could potentially involve activities focusedanywhere within the coastal zone or the broaderEEZ. Individual sub-project opportunities will be identifiedas the Project proceeds, basedonresults achieved ininitially selectedproject target areas. For the first two years of the Project, the geographical areas of focus for Component 2 (Sound Management of the Coastaland Marine Environment) and Component 3 (Coastal Community Action Fund) will include the following: i. Rufiji-Kilwa-MafiaComplex .. 11. Trans-boundary MPA with Mozambique (Mnazi Bay-Ruvuma Estuary area) iii. LathamIsland iv. MnembaIslandMarineConservation Area v. MenaiBay MarineConservationArea vi. Pemba Channel Marine Conservation Area (includes Misali Island Conservation Area) The potential impacts of MACEMP were evaluated for identified valued environmental aspects (including marine ecosystemsandcoastal ecosystems), valued socio-cultural aspects(including social capital, vulnerable groups, and cultural property andantiquities), valued economic aspects ** Fulldocument disclosed2 February2005. - 123 - (includingcommercial and artisanal fisheries, tourism, coastalforest resourceuse, mariculture, andother livelihoodactivities) andvalued institutional aspects (including national andlocal government, and NGOs, CBOs and the private sector). Appropriate mitigationmeasures that will reduce the significance of negative impacts on valued aspects are identified. For all valued aspects, there are no predictedsignificant residual negative impacts of the Project after applicationof the identified mitigationmeasures. The cumulative impact assessment focused on other development programmes specifically affecting the marine environment,coastal socio-economic conditions or cultural property, and/or use of the marine environment, and included the following: The Tanzania Social Action Fund(TASAF11); m Japan Social Development Fund(JSDP) activities; The Local Government Support Programme (LGRP); The Participatory Agricultural Development and Empowerment Project (PADEP); EuropeanUnionProgrammes; Restoration of Cultural Heritage Sites inMainlandTanzania and Zanzibar; m The SouthWest IndianOceanFisheries Project; The TargetedResearchProject onCoralReef Management; The Tanzania CoastalManagement Partnership(TCMP); and The National Strategy for Growth andReduction of Poverty Inadditionto the development programmes listed above, there are other site-specific coastal zone management initiatives incoastal areas of the URT. Itwill be important for MACEMP to effectively link with these projects where area-basedactivities overlap. All such donor activities should, infact, be coordinated through MACEMP, as the larger, coast-wide programme. Existing URTpolicies and legislationwill serve to mitigate many of the negative impacts of the Project, as well as enhance the positive impacts insupport of the Project's objectives. The relevant policies and legislation fall under the following categories: Environmental management; Coastal zone management; Fisheries management; Coastal forest management; Land management; and Cultural property and antiquities. The pertinent feature of the policies and legislation are summarized, with the emphasis on key mitigationsfor MACEMP. Inadditionto the national policies and legislationanalyzed here, there are several local-level policies that may apply, but these will vary substantially by region and community. It will be important for MACEMP to review the applicability of these once individual sites and sub-projects have been identified. Of particular relevance are Village Land Use Plans and Village By-laws. - 124- The table below summarizesthe recommendedmitigationmeasures by project component. With respect to sub-projects implementedunder Component 3 (Coastal Community Action Fund), environmental assessment process and procedures are also describedinthis report as the appropriate safeguardfor evaluating the potential impacts of individual sub-projects. Inaddition, all aspectsof the TASAF environment and social management framework will be applied to MACEMP subprojects. With respectto MACEMPsupport for existing and emerging MPAs under Component 2 (Sound Management of the Coastal andMarineEnvironment), a Process Framework is providedas a separatedocument. As part of recommendationsfor environmental management, requirements for monitoring and evaluation are describedto compensatefor uncertainties andinformationgaps inthe impact assessment and, more generally, to ensure that actual residual negative impacts are no greater than as predictedinthe assessment. Recommendations for monitoringand evaluation are in keeping with the principle of adaptive management, whereby policies, practices or procedures are adjustedappropriately during project implementation to improve the efficacy of management strategies and mitigation measures. - 125 - ..I. I I I I I . I 11. Project processing Timeline Planned Actual PCNreview 22 October 2004 11November2004 InitialPID to PIC 12December2004 12December 2004 InitialISDS to PIC 17 February 2004 17 February2004 Quality EnhancementReview January 2005 10January 2005 Appraisal January 2005 1-12February 2005 Negotiations March 2005 5-7 April 2005 BoardRVP approval May 2005 21July 2005 Planneddate of effectiveness September 2005 Planneddate of mid-termreview September2008 Plannedclosing date August 2011 Key Institutionsresponsiblefor project preparation LeadImplementingInstitutions Ministry of NaturalResourcesandTourism (MNRT [Departmentof Fisheries; Marine Parks and ReservesUnit]) Ministry of Agriculture, NaturalResources, EnvironmentandCooperatives(MANREC, Zanzibar [Departmentof Fisheries]) Other Institutions President's Office -Ministry of RegionalAdministration andLocal Government Vice President's Office -Departmentof Environment Vice President's Office -NationalEnvironmentManagementCouncil Ministry of ForeignAffairs MNRT (Department of Antiquities) MANREC (Department of Environment) MANREC (Department of Forestry) Ministry of EducationandMoralEthics (Department of Archives, MonumentsandAntiquities) TanzaniaFisheries ResearchInstitute (TAFIRI) Ministry of RegionalAdministration andLocal Government (Zanzibar) National ProtectedAreas Board (Zanzibar) Bank Staff and consultantswho worked on project Name Title Unit IndumathieHewawasam Task Team Leader AFTS2 KarenBrooks Sector Manager AFTs2 Aza Rashid Task Team Assistant AFC04 Da Zhu Economist WBIEN Daniel Kanyi Private Sector Development AfricanProjectDevelopment Specialist Facility, IFC David Freestone Deputy General Counsel LEGVP DeanHousden ProgramAssistant AFTS2 - 127- * DonaldMphande Senior Financial Management AFTFM Specialist Ghazali Raheem M&EConsultant Consultant Gloria Sindano Task Team Assistant AFC04 IdaManjolo Social Protection Specialist AFTH1 Jack Ruitenbeek LeadConsultant Consultant KassimKulindwa GEFSTAPReviewer Consultant Ladisy Chengula Rural Development Specialist AFTS2 Marius Koen Senior Financial Management AFTFM Specialist MartinGuard Marine Science Specialist Consultant Melita Samoilys Indicators Consultant IUCNEAfrica Regional Office Mercy Mataro Sabai Senior FinancialManagement AFTFM Specialist .. MichaelWong Senior Private Sector Specialist AFTPS MinePabari Consultant, Regional IUCNEAfrica Regional Programme Manager, Office Nguinye Mungai Lenneiye Senior Social Protection AFTH1 Speicalist Nikolay Mandinga Junior ProfessionalAssociate AFTPS PaavoEliste Economist AFTS 1 PascalTegwa Senior Procurement Specialist AFTPC PrasadC Mohan LeadDevelopment AFTKL Communications Specialist RaviRuparel Senior FinancialSector AFTFS Specialist Rogati Kayani LeadProcurement Specialist AFTPC Roxanne Hakim Anthropologist AFTs2 Steve Gaginis Senior Finance Officer LOAG2 William Leeds Lane Sr. Natural Resources AFTS2 Management Specialist Zainab Semgalawe Ooerations Officer AFC04 Bankfunds expended to date Bank funds expendedto date on project preparation: a) Bank resources: US$194,373 b) Trust funds: US$213,069 c) Total: US$407,442 EstimatedApproval and Supervisioncosts: 1. Remainingcoststo approval:US$60,000.0O 2. Estimated annual supervision cost: US$150,000 - 128 - 12.Documents in theproject file Hurd,Andrew K. 2003. SustainableFinancing of Marine ProtectedAreas in Tanzania. Leon, Yolanda, James Tobey, ElinTorell, RoseMwaipopo, Adolph0 Mkenda, Zainab Ngazy, Farhat Mbarouk. 2004. MPAs and PovertyAlleviation: An Empirical Study of 24 Coastal Villageson Mainland Tanzaniaand Zanzibar. Lindhjem,Henrik. 2003. SustainableFinancing of Marine ProtectedAreas in Zanzibar. Moon, Karen. 2004. Cultural Tourismon the TanzanianCoastand Islands. Ruitenbeek,Jack, Indumathie Hewawasamand MagnusNgoile (Editors). 2005. Blueprint 2050: Sustaining theMarine Environmentin Mainland Tanzaniaand Zanzibar. World Bank, Washington DC. Shauri, Vincent. 2003. Study on theLegal and Institutional Frameworkfor Marine ConservationAreas in the UnitedRepublic of Tanzania. Silva, Patricia, PaavoElisteandAdolfo Mkenda. 2004. Poverty Analysis of Coastal Communities in Tanzania. UnitedRepublic of Tanzania, January 2005. Environment and Social Assessment of the Marine and CoastalEnvironment Management Project (MACEMP). UnitedRepublic of Tanzania, January 2005. Environment and Social Management Process Framework. UnitedRepublicof Tanzania. 2005. Project ImplementationManual. UnitedRepublic of Tanzania. 2005. Financial Management Manual. UnitedRepublic of Tanzania. 2005. Procurement Manual. Wells, S., S. Juma, C. Muhando, V. Makota and T. Agardy. 2004. Study on the Ecological Basisfor Establishinga System of MPAs and Marine ManagementAreas in the UnitedRepublic of Tanzania. - 129- 13.Statement ofloans and credits Difference between Original Amount in expected and actual US$Millions disbursements IDA* GEF Cancel. Undisb. Orig. Frm. Rev'd lP059073 2003 DARWATER SUP& SANITATION 61.5 48.7 12.9 PO57187 2000 FIDPII 27.5 10.5 9.0 5.5 PO02789 1998 HumanRes. Dev. I 20.9 0.5 0.4 PO60833 2000 PUBLIC SERV REFPROG 41.2 22.8 -20.6 PO49838 2000 Privitization 45.9 28.3 26.0 PO69982 2001 Regional TradeFac. Proj. - Tanzania 15.0 8.8 7.4 PO82335 2004 Second Health Sector Dev. 65.0 39.1 31.9 PO47762 2002 T Z - RURALWATER SUPPLY 26.0 25.0 13.0 PO74072 2005 TZPRSC2 150.0 0.0 0.0 PO02770 1994 TZ ROADS I1 170.2 63.5 13.7 81.9 46.4 PO02797 2002 TZ SONGO SONGO GAS DEV. & POWER GEN. 183.0 100.6 69.8 PO78387 2004 TZ-Central TransportCorridor Prj (FY04) 122.0 117.1 44.2 PO74624 2004 TZ-Emergency Power Supply(FY04) 43.8 0.1 -37.3 PO58706 2002 TZ-Forest Conserv & Mgmt SIL (FY02) 31.1 32.9 16.1 PO57234 2004 TZ-GEF EasternArc ForestsSIL (FY04) 7.0 7.0 2.8 PO71014 2004 TZ-HIV/AIDS APL (FY04) 70.0 71.4 16.5 PO46837 1997 TZ-Lake Victoria Environment(IDA) 18.6 2.8 -5.6 1.1 PO70736 2005 TZ-Local Govt SupportProjectSIL (FY05) 52.0 54.3 7.3 PO73397 2002 TZ-Lower KihansiEnv Mgmt TAL (FY02) 6.3 3.7 I.6 PO67103 2003 TZ-Partic Agr Dev & EmpwrmntS I L (FY03) 56.6 54.4 7.7 PO83080 2004 TZ-SecondaryEdu Dev Prj (FY04) 150.0 100.2 -0.1 PO85786 2005 TZ-Social Action Fund2 SIL (FY05) 150.0 152.7 3.5 PO65372 2001 TZ-Social Action FundSIL (FYOI) 60.0 0.0 0.I -3.7 PO47761 1999 Tax Administration 40.0 13.1 8.9 -0.7 Total: 1,606.58 7.0 63.6 907.8 293.4 52.3 * incl. IDAGrants - 130- TANZANIA STATEMENT OFIFC's HeldandDisbursedPortfolio InMillionsof US Dollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. I997 AEF Aquva Ginner 0.68 0.00 0.00 0.00 0.68 0.00 0.00 0.00 200I AEF BoundaryHi1 0.20 0.00 0.00 0.00 0.20 0.00 0.00 0.00 1998 AEF Maji Masafi 0.18 0.00 0.00 0.00 0.18 0.00 0.00 0.00 2000 AEF Zan Safari 0.52 0.00 0.00 0.00 0.52 0.00 0.00 0.00 1997199 Aminex 0.00 0.12 0.00 0.00 0.00 0.12 0.00 0.00 2002 EximBank 2.50 0.00 1.00 0.00 2.50 0.00 I.00 0.00 1996 IHP 0.23 0.00 0.00 0.00 0.23 0.00 0.00 0.00 2000 IOH 2.50 0.00 0.00 0.00 2.50 0.00 0.00 0.00 2000 NBC 0.00 10.00 0.00 0.00 0.00 3.63 0.00 0.00 1993 TPS (Tanzania) 4.38 0.87 I.04 0.00 4.38 0.87 1.04 0.00 1991197 TPS Zanzibar 0.00 0.03 0.00 0.00 0.00 0.03 0.00 0.00 I994 TanzaniaBrewery 0.00 5.10 0.00 0.00 0.00 5. I O 0.00 0.00 Totalportfolio: 11.19 16.12 2.04 0.00 11.19 9.15 2.04 0.00 - 131- 14. Countryat a glance Tanzania at a glance 5/5/05 Sub POVERTYand SOCIAL Saharan Low- Tanzania Africa income Developmentdiamond' 2004 Populatron,mid-year(millions) 35.1 703 2,310 GNI percapita(Atlas methd, US5) Lifeexpectancy 320 490 450 GNI (Atlas method, US5billions) T 11.1 347 1,038 Averageannual growth, 1998-04 II Population(%) 2.6 2.3 1.9 Labor force (%) -0.8 2.4 2.3 --- - Gross Most recent estimate (latest year available, 199&04) per primary capita enrollment Pwetty (% ofpopulationbelownationalpovertyline) 35 Urbanpopulatii("A oftotalpopulation) 36 36 30 Lifeexpectancyat birth (years) 47 46 56 lhfantmortality(per 1,000livebirths) 85 103 82 Childmalnutrition("A ofchildrenunder5) 44 44 Access to improvedwater source Access to an improvedwater source (% ofpopulation) 56 58 75 Illiteracy(% ofpopulationage 7%) 21 35 39 Gross primaryenrollment (% ofschool-agepopulation) 105 87 92 Tanzania Male 109 94 99 Low-incomegroup Female 102 60 85 KEY ECONOMIC RATIOS and LONG-TERMTRENDS I 1984 1994 2003 2004 Economicratlos' GDP (US$ billmns) 6.3 4.5 10.3 10.8 Grossdomestic invesbnentfGDP 24.8 18.6 19.2 Exports of goods and ServicesIGDP 8.3 20.6 18.3 18.6 Grossdomesticsavings1GDP 7.8 -0.3 9.5 8.5 Grossnationalsavings/GDP 9.9 6.6 9.3 8.1 Currentaccount balancdGDP -5.0 -23.8 -9.9 -10.3 InterestpaymenWGDP 0.5 1.4 0.3 0.8 TotaldebWGDP 114.7 160.4 73.1 69.3 Totaldebt servicelexports 26.6 21.5 5.2 13.2 Presentvalue of debtfGDP 18.5 18.9 Presentvalue of debtfexexports 107.3 99.8 1984-94 1994-04 2003 2004 2004-08 (average annualgrowh) GDP 2.9 5.0 7.1 6.3 6.7 Tanzania GDPpercapita 1.2 2.1 5.0 3.8 4.3 Low-incomegroup Exports of goods andservices 11.9 5.0 5.8 -7.0 3.8 STRUCTUREof the ECONOMY I 1984 1994 2003 2004 ~ (% of GDP) Gfowlhof InvestmentandGDP(X) Agricunure 52.6 45.0 450 44.8 Industry 10.9 151 164 16.7 Manufacturing 7.7 7.4 7.2 Services 36.5 39.9 38.6 38.6 Pnvateconsumption 778 812 791 :r&!-++-- Generalgovernment consumption 146 171 174 134 Importsof goodsand services 151 436 274 289 1984-94 1994-04 2003 2004 (average annualgrowfh) IGrowth of exports and imports(%) c Agriculture 3.5 3.9 4.0 5.5 Industry 1.o 7.3 10.2 8.0 Manufacturing 39.9 5.7 8.6 8.0 Services 4.1 4.9 5.6 6.4 Privateconsumption 3.1 5.6 9.7 4.4 Generalgovernmentconsumption 0.7 4.1 26.1 24.4 Grossdomestic investment 3.8 4.9 4.6 9.1 lmpotts of goods andservices 2.9 5.9 16.1 2.2 I Exports --O"lmports Note: 2004dataare preliminaryestimates. Groupdata are for 2003 *The diamondsshowfour key indicatorsinthe country(in bold)comparedwith its incomegroupaverage. If dataare missing,the diamondwill be incomplete. - 132- PRICESand GOVERNMENTFINANCE 1984 1994 2003 2004 ~- - Domesticprices Inflation(%) 7 (% change) Consumer prices 36.1 33.1 4.4 5.0 ImplicitGDP deflator 31.1 5.7 4.0 Governmentfinance (% of GDP, includescurrentgrants) Current revenue 18.1 10.5 11.4 12.2 Current budgetbalance -2.2 -1.8 -2.5 -3.6 Overallsurplus/deficit -8.1 -5.1 -8.0 -9.7 TRADE I 1984 1994 2003 2004 (US$ millions) Exportandimport levels(US$ mill.) Total exports (fob) 388 486 999 1,212 Commodity 1 154 115 40 47 Commodity 2 50 105 40 47 Manufactures 33 77 72 79 Total imports (cif) 856 1,344 2,104 2,425 Food 83 97 186 215 Fueland energy 230 124 375 470 I " " " o l * " " I Capitalgoods 336 597 855 975 Exportprice index (1995=100) 82 84 104 116 ,Import priceindex (7995=700) 74 103 82 96 Exports Imports Termsof trade (7995=100) 111 82 127 121 BALANCEof PAYMENTS 1984 1994 2003 2004 , Current (US$millions) account balanceto GDP(%) I Exports of goodsandservices 491 855 1,691 1,961 0 Importsof goods and services 920 2,242 2,682 3,038 2 Resource balance -429 -1,387 -991 -1,078 -4 Net income -73 -154 -54 -50 6 Net current transfers 186 465 29 12 Current accountbalance -315 -1,076 -1,016 -1,115 Financingitems (net) 350 1,183 1,447 1,347 -16 ;i Changesin net reserves -35 -107 -431 -231 -18 - I Memo: Reserves includinggold (US$ millions) 306 2,040 2,238 Conversionrate (DEC,local/US$) 12.6 509.6 1,039.1 1,091.1 EXTERNALDEBTand RESOURCEFLOWS 1984 1994 2003 2004 (US$millions) Compositionof 2004 debt(US$ mill.) Totaldebt outstandinganddisbursed 7.228 7,235 7,517 7,509 IBRD 206 114 3 0 IDA 518 1,998 3,474 3,608 G: 831 Totaldebt service 131 183 92 271 IBRD 31 42 3 3 IDA 5 70 29 85 Compositionof net resourceflows B.3,608 Officialgrants 291 564 788 829 Officialcreditors 324 156 459 171 Private creditors 35 2 16 13 Foreigndirect investment 63 232 232 Portfolioequity 0 0 0 0 I World Bank program Commitments 35 195 251 451 A IBRD - E Bilateral Disbursements 74 217 397 193 B- IDA D- Other multilateral F Private Principal repayments 17 77 12 62 C IMF . G Short-term .-- Net flows 57 139 385 131 Interestpayments 20 35 20 26 Nettransfers 38 104 365 105 Development Economics 5/5/05 - 133 - 15.Development CommunicationStrategy Background A development communication strategy was developedthrough meetingswith representativesof GOT, donors andNGOs. The recommendations inthis annex regarding a possible development communication (DC) strategy are basedon these and on the experienceswith Bank-assisted projects across sectors and regions. Discussions with NEMC indicated that Development Communication was considered a critical tool for the project. GOT also indicated that a synergy between Communication and M&Einitiativeswould be very productive, i.e. gather data, analyze it, and disseminatethe findings. This type of knowledge sharingwas something the Bank was supporting insome projects under the title of Monitoring andLearning. It is clear from the experience of bothindustrial and developing countries that the free flow of informationconstitutes a powerful development intervention that helps to move societies from an information-poor environment to an information-richone, thus makingmore transparent the opportunities for development at all levels and the possible impediments to that progress. The experience inTanzania from the implementation of the TASAF project seems to bear this out. Consequently, the project's development communication initiatives will aim at supporting this move towards the timely flow of information within the context of overall project objectives. 0bjectives The development communication initiativeswill seek to createadynamic informationnetwork that will help to build strategic alliances between the various levels of stakeholders to achieve optimal project implementation. These initiatives will also seek to modify behavioral attitudes at the different stakeholder levels on issues emerging from the components- there will be a clear emphasis on simple, direct messagesraising awarenesson the cause-andeffect sequence inthe context of marine and coastal environment management. Issues a) Need for all concerned stakeholders to have a uniformunderstanding of the project's objectives and methodology. b) Needfor stakeholdersto develop a sense of ownership of the project. c) Need for heightened environmental awarenessof stakeholders, especially the coastal communities. d) Needfor coastal communities to have a clearer ideaof the cost-benefits andeconomic implications of the proposed marine andcoastal initiatives. e) Need for coastal communities to have access to economic opportunities (TASAF 2 links). Actions arisingfrom Issues a) MACEMP will formulate a fully-costed development communication strategy. b) MACEMP will hireinTechnical Assistance (TA) to helpdevelop the communication strategy. c) MACEMP will hire ina full-time Development Communications Specialist. d) MACEMP to launch anintensive communication campaign focusing onmarine and coastal issues, especially with regard to the coastal communities. - 134- e) MACEMP to subsequentlyopen dialogue with TASAF 2 to link coastalproject communities to TASAF 2 initiatives. ProposedDevelopment Communication Strategy To address the issuesidentified, the proposedstrategy will : a) Provide timely, accurate and consistent information on the various components, with an emphasis on detailing the roles and responsibilities of the various stakeholders (communities, NGOs, CBOs, the private sector, etc. ). There will be a specific emphasison the present Component 3 involving the coastal communities. b) Raiseawarenessamongst the various stakeholderson issuesrelating to environmental and natural resource management issues specifically relatingto marine andcoastal environmental issues. c) Document and disseminatethe experiences of the various project communities and other stakeholders, recognize and publicize their contributions to project implementation, identify Good Practices and the LessonsLearned. On the basis of previous experience, it is clear there will be a needto managethe challenges relating to expectations raised amongst the communities and the inevitable informationdistortion that accompaniesprojects sending funds directly to communities. Hence, the focus on the project's principles, proceduresand processeswill need to be reiterated as often as neededand as clearly as possible through the various proposedmedia. Proposed DevelopmentCommunicationactivities Complementary and mutually reinforcing mediavehicles will be used, with an emphasis on radio and folk drama. These will enable the messages to reach all stakeholders, some of whom have differing levels of access to different types of media. Where coastal communities are concerned, informationcouldbe preparedand put on to TASAF's radioprograms, transmitted through folk drama andfeatured inthe various District InformationNewsletters. i.Brochure A brochure inEnglishand Swahili with core text on the project, sourcedfrom the Operational Manual, but written insimpler language. This will be for extensive dissemination. ii.Radioprograms The experiencewith the implementation of the TASAF communication strategy indicates that radio is a critical vehicle for development communication inTanzania. The project will support the production and dissemination of targeted messages usingeither RadioTanzania or private FMstationsinthe areas of project implementation. iii.Folkdrama The project will support the productionof folk drama, puppet shows, local songs, etc. to be performedby groups from the community. Experience inthe field indicates that communities appreciate the participatory nature of this mediumand also tendto internalize messages received through it. - 135 - iv. Video To capture the development experiencesof communities, avideo will bemade at the endof the project. v. Posters Posters will be produced on two specific themes per year. vi. Newsletter Inthose districts where bothMACEMP andTASAFarebeing implemented, andwhere coastal communities are accessingTASAFfunds, community experiencesare written up inthe District Newsletters already being produced by the various District InformationCommittees. vii. Dissemination A video vanwill bepurchasedby the project for eachof the mainland andZanzibar to assist in delivering messages andproducts. To share information, experiencesmade, and lessonslearned with stakeholdersworking on similar initiatives inthe region and around the globe MACEMPwill also use web-based dissemination mechanismsand will link to the Africa portal inthe International Waters Resource Centre IW: Learn systemfundedby GEF. viii. Evaluation The project's development communication activities will be reviewed and their impact assessed by an external reviewer at the time of the Mid-term Review and at the end of the project. Apart from these formal reviews, informal evaluations will be carried out with relationto Component 3 and the TASAF-relatedsub-projects through periodic Beneficiary Assessments. Linkswith TASAF 2 The initial communicationcampaign will have a strong environmental emphases, the concerned coastal communities will thenbe taken through aTASAFExtended PRA (TASAF 2 is intended to be a national project) which sensitizes themto the opportunities available to themthrough TASAF. Thus, the communities would, following the TASAF2 principles andprocedures, access funding for the Community Development Initiative or Public Works components, thus creating infrastructure or accessingthe safety net available, or, using an intermediary organization, access the Social Support Program that focuses on the vulnerable, or, by forming savings groups, access the proposedCommunity Savings andInvestment Programto leverage their savings. - 136- 16. StakeholderConsultations Stakeholder Involvementfor Project Preparation The proposed design for MACEMP is the result of over two years of discussions and negotiations that include key ministries from mainland Tanzania and Zanzibar. Project preparation and associated sector work also facilitated numerous workshops, conferences and consultations in establishing project priorities, identifying project target areas, and determining the means for best addressing poverty issues in coastal areas. The work involved consultations down to the village level usinga broadrangeof consultative andfield appraisal approaches. The development of the project benefited from a comprehensive andtangible in-country process. MACEMP will support ongoing efforts to increase community participation in coastal resource management, efforts to improve protection of the territorial seas, and efforts to manage the risks associated with increased development and population pressures are all continuing apace on the Tanzania mainland and the Zanzibar Islands. The project will build on successful initiatives in the country as well as pilot new approaches to participatory management of coastal and marine resources, and thus follow an adaptive learning process. Project concept development commenced in mid-2002 through ESSD sector work that focused on identifying issues inmarine protected areas and marine managedareas inthe URT.The ESSD work linked closely to the Tanzania Coastal Management Partnership, which was responsible for developing and finalizing the National Integrated Coastal Environment Management Strategy. The sector work engaged ina comprehensive series of studies that gathered primary information inthe areas of socio-economic conditions, financial conditions, andlegal constraints; areview of the secondary literature of ecosystem conditions was also undertaken to identify ties between ecosystem quality and human well-being. The primary survey work consisted of extensive consultations with stakeholders, including end-users at the village level. It addressed inter alia sustainable livelihoods, constraints to development, gender issues, cultural issues (including indigenous knowledge) and made recommendations on how best to address the challenges of marine management under conditions of achieving dual goals of improved ecosystem integrity and poverty alle~iation.~~ As the implementationof the sector work progressed, the stakeholder group engaged inthe review of the study findings identifiedthe need for a long term support agendafor implementing the key recommendations.The MACEMPproject concept thus emergedto develop a coastal livelihoods project. Furtherconsultations with key stakeholders ingovernment led to the expansion of this concept to address issues throughout the EEZ. Formal identification of the project commencedwith a World Bank missioninNovember 2003 that confirmed the major elements of the project. By that stage, significant consultations had already occurred and subsequent discussionsfocused on synthesizing the results of the consultations, exploring different project alternatives andoptions for implementation,and further developing the linkages 23Theresults of this work are available inapproximately 1000pagesof background studies and a forthcoming World Bank publication (February 2005) entitled "Blueprint 2050- Sustaining the Marine Environment in MainlandTanzania and Zanzibar", Ruitenbeek HJ, HewawasamI, Meditors. Ngoile - 137- of the projects to sector activities beingundertakenby government, other donors, andthe World Bank. The key subsequent synthesis events during project preparation were: a) A seven-day workshop inMay 2004 to discuss expectationsof various stakeholders of the proposed MACEMP project, to identifykey areas of intervention and define draft project components, and to discuss the linkages to other ongoing efforts and initiatives related to marine andcoastal management.The workshop was attendedby over 60 participants from various levels of govemment, from the donor community, from the private sector, and from civil society andnon-governmentalorganizations. b) A ten-day planning workshop inSeptember2004 on the identificationof project implementation structure, identification of streamlined component design anddetailed activities, as well as selection of project target areas. The workshop was attendedby over 50 participants from key ministries involved, by local government representatives, technical staff at local level (Le. District Environmental Officers), NGO andprivate sector representatives, as well as other donor representatives. c) A two-day scoping workshop inSeptember2004 with the aim to confirm a common understanding of the impacts of coastal activities to date, and to receive comments on the draft scope of the environmental andsocial assessment. Inparticular, it was important to prioritizethe issues that were to be addressedby the Environment and Social Assessment and, therefore, guide the implementation of the Project. The workshop was attendedby 40 participants from key ministries involvedas well as technical staff from the Districts and representativesfromkey NGOs. d) A three-day workshop onProject MonitoringandEvaluation inNovember 2004 to review and specify output targets andmilestones, to identify expected changes and outcome/impact indicators for MACEMP, to ensure that there is a sharedunderstanding of and agreement ontargets/milestones& indicators for MACEMP, and to prioritize and select Key Performance Indicators. The workshop was attendedby over 30 participants from key ministries involved, by local government representatives, as well as NGO representatives. e) Consultative meetings with stakeholdersranging from district administration officials to members of civil society including private sector and community associations took place inNovember 2004 at eachof the target sites. The discussions focusedoncurrent issues and modalities of engagement inthe project by different interest groups and the local administration. Inaddition, numerous one-day meetings and working sessions were held with different interest groups (i.e. stakeholders relevant to overall policy issues, to EEZ management, relevant to private sector engagement, relevant to improvedlivelihood opportunities, etc.) inorder to ensure full understanding and ownership of the proposed MACEMP project across relevant Ministries and at central andlocal levels of government. - 138 - The overall project approach and design for MACEMP respects the outcomes o f this process, and reflects the complementary initiatives of other development partners that have been active in these areas. Stakeholder Consultation Process24 The consultation process for the development of the Environmental and Social Assessment (ESA) for MACEMP supported numerous other more loosely coordinated on-the-ground consultations. The E S A consultation program consisted of a scoping workshop (also see above), focus group meetings, and stakeholder interviews. Table A16.1 provides an outline of the workshops, focus group meetings and interviews conducted duringthe preparation of the ESA. TableA16.1 Stakeholder Consultation Processfor ESA Date Location Stakeholder Representation Scoping September 27, Bagamoyo 38 individuals representing various Workshop 2004 stakeholders, including the Departments of Fisheries, Environment, Forestry and Tourism (both MainlandTanzania and Zanzibar); District Governments; Tanzanian Commercial Fisheries; SADC MSC Programme; University of Dar es Salaam; TA6RI; andNEMC Focus Groups September 21, Zanzibar Town, Division of Fisheries and Marine Resources, 2004 Unguja MANREC September 22, Kizimkazi, Unguja Fisheries Committee and Fishermen (Menai 2004 Bay Conservation Area) September 22, Jazani, Unguja Jozani Environmental Conservation 2004 Association (JECA); Jozani Credit DevelopmentOrganisation (JOCDO) September 22, Pwani mchangani, Mangrove Conservation Committee, Pwani 2004 Unguja September 22, Matemwe, Unguja Matemwe Sheha and Fishermen, Mnemba 2004 IslandConservation Area September 22, Chwaka, Unguja Chwaka Shehaand Fishermen 2004 September 23, Wete. Pemba CARE Tanzania; Department of Commercial 2004 Crops, Fruitsand Foiestry (MANREC); Department of Fisheries and Marine Resources(MANREC); Misali Island Conservation Area September23, Wesha. Pemba Village Conservation Committee, 2004 Fishermen. and village women 24Tables A16.1 and A16.2 of this Annex are basedon the "Environmental and Social Assessment of the MACEMP" that was carriedout with support from JacquesWhitford EnvironmentLimited, Canada. - 139- September 24, Chake, Pemba Zanzibar InvestmentPromotion Association; 2004 Zanzibar Tourism Commission; Department of Lands, Surveying and Mapping September 24, Kijiwera, Pemba KijiweraFishermen 2004 September 24, Kijiwera, Pemba Kijiwera Women 2004 September 30, Mgao, Mtwara Mgao Fishermen 2004 District September 30, KilwaMasoko, Kilwa District Fisheries andMangrove 2004 Kilwa District Forestrv Officers September 30, KumiVillage, Kilwa Fishermen from Mpara, Masoko, and 2004 District Mmazimmoia Villages. Kilwa District September 30, Impala Village, Mangrove Group, Impala, Kilwa District 2004 Kilwa District September 30, Kilwa Kivinje, Kilwa Fishermen, Kilwa Kivinje 2004 District October 1, Mchungu Village, Representativesof the Village Government, 2004 RufijiDistrict Mchungo Village, RufijiDistrict October 1, Nymisati Village, Members of the Village Council, Village 2004 RufijiDistrict Leaders and Members of the Mangrove Management Group Focus Groups October 1, Msimbati, Mtwara Msimbati Village Government, Mnazi Bay- 2004 District RuvumaEstuary Marine Park village authorities Interviews September20, Dares Salaam Director, Fisheries Division, MNRT 2004 September20, Dar es Salaam Manager, Marine Parks and ReservesUnit, 1 2004 MNR? September21, Zanzibar Town, Director, Department of Fisheries and 2004 Unguja Marine Resources,MANREC September21, Zanzibar Town, Director, Department of Environment, 2004 Unguja MANREC September21, Zanzibar Town, Department of Commercial Crops, Fruitand 2004 Unguja Forestry, MANREC September2I, Zanzibar Town, Institute of Marine Sciences, University of 2004 Unguja Dares Salaam September21, Zanzibar Town, Department of Tourism 2004 Unguja September23, Wete, Pemba Acting Assistant Director (Head of Planning 2004 and Administration), MANREC September23, Chake, Pemba Department of Environment, MANREC 2004 September30, Mtwara, Mtwara Acting District Fisheries Officer 2004 District September30, Mtwara, Mtwara DistrictMangrove Forest Officer 2004 District September30, Mtwara, Mtwara DistrictNatural Resources Officer 2004 District - 140- September 29, Utete, Rufiji District District Lands and Natural Resources 2004 Officer, Rufiji District October 1, Mtwara, Mtwara Acting District Planning Officer 2004 District October 1, Mtwara, Mtwara Park Warden, MnaziBay-Ruvuma Estuary 2004 District Marine Park October 1, Kibiti, Rufiji District Assistant Manager and Forester, 2004 Mangrove Management Project, RufijiDistrict October 5, Dares Salaam Vicfish Ltd. and Bahari Foods Ltd. 2004 October 5, Dares Salaam Director o f Tourism, MNRT 2004 October 6, Dares Salaam Director, Antiquities Department, MNRT 2004 October 6, Dar es Salaam Directors, Department o f Environment, Vice 2004 President's Office October 6, Dares Salaam WWFTanzania ProgrammeOffice Stakeholder Commentsand Concerns A variety of comments were made and concerns where raised during stakeholder consultations. Insome cases the comments were addressedthrough the provisionof further informationon the Project. Issues or concerns, which were not simply a result of a lack of information on the Project, are specifically addressed in the Environmental and Social Assessment for MACEMP. Table A16.2 below provides a summary of all comments andconcerns. Table A16.2 Summay If Stakeholder Commentsand Concerns Issue Type IssueDetails Fisheries Difficult for fishermen to moveaway from fishing, becauseit is the primary source of income. There is also a culture of fishing, particularly amongolder fishermen. Fishermenrequire technical support (particularly for offshore fishing), proper extension and appropriate gear for fishing. Needto take into account that fishermen usingdifferent methodshavedifferent requirements. Require the developmentof markets for fish products, storage facilities, locally appropriateprocessingfacilities and technical capacity to be able to develop andrun businesses and increase market access. Useof inappropriatefishing gear needs to be addressedthrough gear exchangeprograms and surveillance. Industryis interestedindeveloping co-operativebusinessventures with the artisanal fishers for finfish(e.g., provide cold storageand transport to market), but needsufficient control to protect investments.Prawn fishery interestedincollaboration and cost sharing. Mangrove Use and Human use of mangroves (e.g., fuel wood, construction, charcoal) versus conservation Conservation provides a challenge. I I Community lack knowledge on the environmental effects of cutting mangroves. Tourism The environment is critical to successful tourism inthe URT. Tourism operatorsdo not follow environmental management and development plans, and ~ the government is unableto enforceestablishedtax and revenueagreements. Social structuresinvillages change due to income inequity from those employed in I I tourism businesses versus those not. Inaddition, villages experiencecultural influences from tourists. Over-investment inthe tourism industry may leadto increasedpressureon and - 141- I degradationof the environment. Proper planning inthe coastal zone is required. Lack of benefits to local communities from current tourism developments. Local communities require capacity building to be able to provide goods and services to local tourism operators. Livelihood There are a variety o f alternative livelihood opportunities (e.g., crop farming; seaweed Opportunities farming; solar salt ponds; aquaculture; crafts), but they are often restricted by the availability of capital, training or market access. There is concern that the project will impact on traditional activities negatively (e.g., collection of bivalves). Traditional methods are difficult to change (e.g., miningo f fresh corals, insteado f using fossil corals, for lime production). There are gender roles in marine resource use activities (e&, women collect shellfish, fish octopus, and farm seaweed). This may restrict feasibility of certain alternative livelihood activities. Inmany cases, benefits from alternative livelihoods do not meet expectations. Often there is a substantial time lag between investments and financial reward, resulting in abandonment of the alternative livelihood activity. There is a concern that restrictions on access or current activities will be applied without providing alternative livelihoods. Individuals are open to other small-scale business, but facilitation is required to determine what they can do. Need a micro-credit facility to support the development of small businesses. Common governance is required. There is a recognized need to implement the Union management strategy (e.g., Deep Sea FishingAuthority). Need to maximize revenues from foreign fleets and improve surveillance. Need to increase fishing infrastructure to handle catchesof foreign fleets (perhaps processing bypass). Offshore fishery should move to long-line from purse seine to protect the environment. Need scientific knowledge of EEZresources to properly manage. Tanzanian commercial fishing industry interested inexpanding into the large pelagic fishery, to both fish and process catch for export. Consultation and Private sector has not been involved in the decision-makingprocess to date, yet private Communication sector funding will ensure the sustainability of the MACEMP inthe long-term. Conservation initiatives will not be successful unless there is community participation and planning (Le., there is a need for grassroots buy in). Needmore effective communication for communities to assess the desirability of participating inMACEMP. Resource Use Restricted access based on conservation principles (e.g., spawning areas) is not always Conflicts viewed favorably. Community management andparticipation is essential for establishing exclusion zones. Resource use conflicts include: Resource use by tourists conflicting with community requirements (e.g., beach access, reef diving); Other coastal economic activities affecting the environment (Le., oil spills, waste disposal); Illegal fishing; Conflicts between artisanal fishermen and migrant fishermen (unsustainable resource use), seaweed farmers, and commercial fisheries (particularly prawn trawling); Use of mangroves and mangrove harvesting conflicts (illegal harvesting); Inter-village conflict over fishing grounds; and Fisheries for the non-local or export market affecting the local community price o f "luxury" fish (e.g., lobster, octopus). Resource use conflict resolution should be through village governance structures (e.g., resource use management agreements). Most communities do not have the resources to control illegal fishing, and participate in co-management. Monitoringand No current coastal resource use monitoring and evaluation, and no baseline data. Stock Evaluation - 142- Project Consultation burn-out may hinder project implementation(concernthat there has been Implementation littlefollow-up and no perceivedbenefitsfrom previousprojects). Need to take into accountthe varying characteristicsof each area. Eachsituation is differentand implementationneedsto includestakeholders andpartners. MACEMP should not duplicate what is already beingdone, butrather should complete. Use local NGOs to facilitate and assist with identification of environmental concerns, and ensure participation by vulnerable groups. Migration to and settling inmarine parksrequiresproceduresto be put inplace. Governance Need to make district authority more aware of environmental management, and improve I local govemment planning (e.g., through TASAF). Current policies of government are repetitive andcan contradict each other. Needto havecommunity involvement inthe managementand conservationof resources, and better communication betweencommunities and govemment (especially regarding grievances). I Politicscan interfere with processes to implementprogrammesat the village level. Communities can be highly politicizedand individuals may not participate unless there is a political issueto discuss. Muslimreligious teachingsregarding environmentalconservationcanbe usedto promote behavioral changes. Lack of governmentfunding threatens long-term sustainability of the programme. Natural 1Imanagementcommittees, fisheries committees). Need to consider the by-catchof whales, dolphins and turtles (particularly inthe EEZ). - Resource Solid and liquid wastehisposal may impact the coastalenvironment. Conservation Basic needs (e.g., nutrition) conflict with conservationneeds. Need to consider spawning aggregationsfor marinemanagement. Cultural Objectives for rehabilitation of cultural property mustbe consistentwith the values of the Heritage and local communities, andcommunities must see the benefits.Communities mustbe involved Antiquities intheplanningprocess. Transboundary The problem of dealing with migratory speciesrequirescross-border fisheries Issues managementstrategies(Mozambique, Kenya). Project Internalization Process- Preparation Phase Following consultations, subsequent improvement of the project design, and finally agreement and completion of project designbasedon stakeholder input, the two lead implementing agencies initiated an internalization process for MACEMP with stakeholders from central to local level. The internalization process was carried out in Zanzibar during November and early December 2004 and is described in Table A16.3. Mainland will carry out a similar internalization process over the periodDecember 2004 to February 2005. All events heldinZanzibar, as described below, were first widely announced and publicized on the key television and radio programs in Zanzibar. All events received a lot of media attention and also press coverage in local newspapers. Inparticular, the Policy Maker Workshop received a lot of TV attention. The discussions held during the meetings with NGOs were aired on local radio and later also on TV. In addition, all events were captured on video by professional film teams for future reference. - 143 - Table A16.3 Events of tht 'roject InternalizationProcessin Zanzibar Event Stakeholder Representation Policy Maker Workshop a) Ministersfrom 5 key stakeholder Ministries: for Zanzibar, Ministry of State Office: RegionalAdministrationand Special (1 00+ participants) Departments; 0 Ministry of State Office: ConstitutionalAffairs andGoodGovernance; Ministry of FinanceandEconomicAffairs; Ministry of Agriculture, NaturalResources, Environmentand Cooperatives; Ministry of Trade, Industry, MarketingandTourism; b) PrincipalSecretaries andDirectorsof the relevant Ministries above (includingall membersof the Zanzibar MACEMPTechnical Committee); c) "Sub"-directors of sectoralMinistriesfor Pemba; d) Relevanttechnicalstaff from key stakeholder ministries; e) RegionalCommissionersof the 5 Regionsof UngujaandPemba (Zanzibarislands); F) Membersof Parliamentfor the projecttarget areas; g) Members of the Houseof Representativesfor the projecttarget areas; NGOWorkshop for ~~ 0 NGO community inUnguja; 16 NGOs participated; Unguja NGOWorkshop for NGO community inPemba: PRIO, MICA, WECO andseveral other Pemba small NGOsparticipated; Local Level Workshop ShehimillageConservation Committees; Series for Unguja, Village DevelopmentCommittees; (Series Of 5 meetings in FishermenAssociations projecttarget areas) Other CBOs (i.e. Women SeaweedFarmersAssociations) Local Level Workshop 0 ShehimillageConservationCommittees; Series for Pemba, Village DevelopmentCommittees; (Series Of 4 meetings in FishermenAssociations projecttarget areas) Other CBOs (Le. Women SeaweedFarmersAssociations) Project InternalizationProcess- ImplementationPhase Stakeholder consultations and continued involvement of communities and beneficiaries are fully integrated into all components of the six-year project design. This i s evidenced, for example, through the following: MAPFMP inrliidpc rnmnrehpncivpnevelnnment PnmmiinirntinnclnPl W-Rteov 2 spearneaaeuoy a UL Looruinator anu a corresponuing wager line tnat involves a Droaa rangeof media including: brochures, radio, folk drama, video, posters, andDistrict Newsletters already beingproduced by the various District InformationCommittees. The Strategy closely links into the WI3 implemented TASAF 2 program which has a proven track record (through TASAF) and which will be effective approximately half a year before MACEMP. = Under Component 3, which targetsvulnerable coastal communities and individuals, MACEMP will follow exactly the CDD methodology of TASAF 2, which includes extensive facilitated community discussions insubproject identification, development, implementation and monitoring. - 144- Through all aspects of local community investments, MMA/MPA identificationand implementation (Components 1and 2), MACEMP is guided by and committed to a ProcessFramework that has beenreviewed, acceptedand disclosed by Government and the World Bank.A key feature of the PF is the commitment to establishing Community Mitigation Action Plans inall MACEMP communities; these follow a participatory format that will be monitored and evaluated against World Bank safeguardson an annual basis. - 145 - 17.Incremental CostAnalysis BaselineScenario 1. General Scope. Inthe absence of GEF assistance, it i s expectedthat GOT would nonethelesspursue aprogram to meet selecteddomestic development objectives incoastal and marine areas. Other donor support inthe general sector is also evident, but it is not included within the scope of the baselinebecausefew agreementshave beenformalized to the point that it is possible to ascertain the domestic benefit. Some support may go beyond domestic objectives; an example is assistance coming from the EC as part of a fishery agreement. This would be providedto improve fishery managementincluding monitoringof migratory species; the value of this assistance is will depend on the final terms of the agreementand the actual fishery catch over the following 5 years. Some of this support obviously address"baseline" domestic costs while parts may be incremental to what URT might normally be expectedto invest. The scope of this ICA includesjust those activities andcosts includedinthe detailed project description (Annex 4). 2. Costs.Over the six year project period, the total expenditures associatedwith the Baseline Scenario are estimatedto be US$51.75 million. These are noted inTable A17.1 and can be described as follows: 0 Broad-based Activities and Reforms inEEZ Management. (US$l1.08 million) This substantial baseline activity includes supportfor implementing the Deep SeaFishing Authority (DSFA), which is the lead agency inharmonizing management of the EEZ.The baseline involves planning efforts, implementation and operation of the Authority, and selectedinvestments that will buildpartnerships with the private sector and local communities. The baseline activities are targetedtowards realizingthe domestic benefits associatedwith improved rent capture from the EEZfisheries. The activities inthe baseline thusinclude all of the planningandconsultations associatedwith operationalizing the DSFA as well as many of the operational costs associatedwith implementingthe harmonized arrangements between Tanzania mainland and Zanzibar. Monitoring activities inthe baseline emphasize compliance monitoring inthe areas close to shore, with less emphasis on monitoring for scientific and informationmanagementpurposes. Partnership agreements also focus on achieving greater value-added from the landed commercial fishery through dialoguing with the private sector and through providingcommunities close to the major ports inDar es SalaamandZanzibar with improvedaccess andfacilities for handling commercial catch. EEZmanagementwill also involvethe design of a financing mechanism that contributes to long-termsustainability of EEZ managementefforts. 0 Broad-basedActivities and Reforms inImplementing IntegratedCoastal Management Efforts. (US$21.32 million) This baseline activity focuses on realizing domestic benefits associatedwith planning and implementing land-use andmarine zoning with a view to decreasingthe open access conditions that currently characterize resource use inthe near- shore areas and inlow elevation coastal areas. The baseline also upholds maintainingthe country's commitment to some of its existing systemof MPAs and marine managed areas, and to engaging private sector andother co-managementpartners with a view to improving the cost-effectivenessof this management. Activities inthe baseline thus include support for district and local community planning, support for planninga nationalsystem of community managedareas, marine managed areas, and marine protected areas. - 146 - 0 Communitv-level Support to Vulnerable Persons. (US$l 1.97 million) This activity provides support to communities incoastal areas through a CoastalCommunity Action Fundthat involves sub-project financing and associatedcapacity enhancement at the community level. It is partof the baselinebecauseit is focuses on government priorities to addressincome poverty of vulnerable groups; it concomitantly will decrease unsustainableharvesting pressures on living coastalresources and will permit communities to take advantage of income generating opportunities afforded by sound resourcemanagement. 0 Project Implementation Support. (US$7.38 million) Government is committed to providing implementation support to the portfolio of efforts inthe baseline, 3. Benefits. The benefits under the Baseline Scenario focus on decreasingopen access conditions with a view to improvingcommercial fishery rent capture, reducing income poverty incoastalareas, andestablishing long-term systemsof co-managementand sustainablefinancing that minimize the needfor public subsidy. Inaddition, the Baseline confers modest global benefits through permittingthe identification of core areas of biodiversity significance basedon an ecological and socio-economic systemassessment, and to introducing incentive and compliance systems that will contribute to the sustainable exploitation of transboundary fish stocks. The quantitative level of these domestic and global benefits is not estimated as it is the same inthe Baseline andGEFAlternative cases. Global EnvironmentalObjective 4. The proposedproject is part of the Government of Tanzania's efforts to implement international commitments and to address national and global environmental priorities. Tanzania signed the Convention on Biological Diversity on 12June 1992and ratifiedthe CBD on 8 March 1996. As part of Tanzania's participation inthe CBD, a Coastal Biodiversity Conservation Strategy was elaborated in 1995 and a NationalBiodiversity Strategy and Action Planwas formulated in2000. Tanzania also is a party to the Convention on International Trade on EndangeredSpecies (CITES), ratified on 29 November 1979. Supporting CITES, the Regional Lusaka Agreement on cooperative enforcement operations directed at illegal trade in wild fauna and flora, adoptedin 1994, was signedby Tanzania on 8 September 1994. The Convention on the Conservation of Migratory Species of Wild Animals was adopted in 1979. The International Plant Protection Convention was adoptedin 1951.The ConventionConcerning the Protection of the World's Cultural and NaturalHeritage, (the World Heritage Convention) was ratifiedby Tanzania on 2 August 1977. Tanzania became a Contracting Party under the RAMSARconvention on 13 April 2000. Inaddition, Tanzania ratifiedthe UnitedNations Convention on the Law of the Sea (UNCLOS) on 30 September 1985.Tanzania now also serves on the Governing Council of UNEP.An important regional instrumentis the Convention for the Protection, Management and Development of the Marine andCoastal Environment of the EasternAfrican Region(the Nairobi Convention) and RelatedProtocols, which Tanzania ratified on 1March, 1996. The objective of the Convention is to ensuresound environmental managementof the maritime and coastal areas of the East African region. Itprovides a framework for the protection and development of marine and coastal resources. The protocols focus on the conservation of flora and fauna andon measures for combating marine and coastal pollution. - 147 - 5. The project development objective is to improve sustainable management and use of the URT'sExclusive Economic Zone, territorial seas, and coastal resources. Sustainable management and use will be reflected in enhanced revenue collection, reduced threats to the environment, improved livelihoods of participating coastal communities and improved institutional arrangements. The activities proposed under this project are fully consistent with the priorities of the GEF Operational Program2 (OP2 Biodiversity - Coastal, Marine, and Freshwater Ecosystems)and Operational Program 8 (OP8 InternationalWaters -Waterbody- based). The project global environmentalobjectives are: OP2 -to develop an ecologically representative and institutionally and financially sustainablenetwork of marine protected areas, and OP8 -to build URT'scapacity to measure and manage transboundaryfish stocks. 6. The project is fully aligned with GEF Biodiversity Strategic Priority #1: `Catalyzing Sustainability of ProtectedAreas' and, Priority #2: `Mainstreaming biodiversity inthe productionseascapes and sectors'. GEF support will contribute to SP#1objectives, while SP#2 objectives will be achievedthrough activities funded mainly with IDA resources. 7. Taking aholistic ecosystemapproach, the project will makea significant contribution towards linkingexisting protected and co-managedareas and thereby establishing a systemof coastal and marine managedareas inTanzania. The project will further expand coverage of this systemwith creation of two new marine managedareas of highglobal andregional biodiversity value inthe marine and coastal zone, i.e. the PembaChannel MarineConservation Area and Rufiji-Mafia-Kilwa Complex. Linkages between existing marine protected areas across boundaries will be strengthenedto create a larger transboundary protected area. The project respondsto GEF's principles(i) by placingpriority on participationof local communities residing inand around marine protected areas inco-management, (ii) by facilitating local partnerships with the private sector through marketing initiatives andbarrier removal, and (iii) by addressingsustainability aspects includingecological, institutional, and financial sustainability of the proposed network of marine protected and marinemanaged areas. 8. The project will support mainstreamingof the biodiversity inthe productionlandscape (i) strengtheningenvironmentallysoundcommunitymanagementbypromotingeconomic by incentives for sustainableuse, (ii) by strengthening local institutionalcapacity to address environmental issues and manage or co-managemarine and coastal resources, and (iii) through strengthening integrated land-use andmarine planning and zoning at local government level. 9. Further, the project responds to GEF's International Waters Strategic Priority #1 `Catalyzing financial resourcemobilizationfor implementation of reforms and stress reduction measures agreed for transboundary systems'. Specifically, the project will address ecological sustainability of the marine ecosystems through improvedresource monitoring and adaptive management. The project's specific focus is on contributingto targets for transboundary, marine fisheries resourcesas identifiedat the WSSD. It aims to reverse unsustainabledepletion patterns of commercial fishery inthe EEZ and to maintainresilience of transboundary fish stocks to absorb controlled and balancedlevels of utilization. The underlying institutional, policy, and regulatory reformtowards a commongovernance regime for the EEZ will facilitate increased revenue generationfrom the resource and will contribute to the long-term financial sustainability - 148- for management of the marine resourcesthrough the creation of aMarineLegacy Fund. GEF Alternative 10. Scope.The project scope of the GEF Alternative is the same as that for the Baseline, focusing geographically on coastal and marine areas within the URTEEZ. The biodiversity aspects are expanded to better protect and manageglobally significant biodiversity, including the genetic resource value of that biodiversity. Withinthe EEZ, the scope is expanded to include sound management of scientific informationandby-catch managementassociatedwith near- shore fisheries. It is important to note that, at the time of MACEMP identification, preparation and appraisal, the South West IndianOcean Fisheries Partnership (SWIOFP) is also being prepared. SWIOFP involves nine countries inthe SWIO and includes a potential US$10million GEFgrant(under OP8) plusUS$27 millionof co-financing; the project schedulefor SWIOFP lags that of MACEMPby less than one year, and it is expectedthat concurrent implementation of these projects will improve overall implementationefficiency. For example, inTanzania SWIOFP will operate through the same implementing agencies as MACEMP. For MACEMP designand implementation purposes, a practical approachhasbeentaken to separatethe role of these projects. MACEMPwill concentrateon addressing domestic policy priorities through, for example, harmonizing licensing arrangements andputtingits institutions inplace to effectively capture commercial fishery rents throughout the EEZ.For implementation, MACEMP will concentrateon monitoring and compliance efforts associatedwith the near-shore areas which are defined as a water depth of less than 500 m. This water depthcorresponds approximately to the territorial seas but, more critically, includes all of the continental shelf anda part of the continental slope; this area has historicallybeen associated with greatest conflicts between commercial foreign fisheries and domestic artisanal pelagic fisheries. Commercial fleets have at times come somewhat closer to shore - trawling the sea bed-anddamaging biodiversity assets and underminingcommunity livelihoods. The scope of the investments and efforts inthe GEF Alternative for MACEMP thus concentrate on managing this area, throughimproved monitoring, compliance and surveillance. Researchandpatrolling efforts for this zone are qualitatively different thanthose for deeper waters for the simple reason that the patrolling can be done with smaller vessels (capable of policinga range to about 20 nmfrom shore) and with community and private sector operators (who also regularly access these areas for artisanal fisheries, sport fishing, tourism). The deeper waters, by contrast, will require larger vessels (such as those of a coast guardor navy) and differentpartnership modalities (e.g., sharedinvestments with neighbouring countries); this realm is thus operationally left for SWIOFP. Iffor some reason SWIOFP does not proceed as intended, MACEMP can accommodate additional co-financing to addressthese offshore requirements. This Incremental Cost Analysis thus addresses only the MACEMP-eligible activities, and excludes investment needs for SWIOFP. 11. Costs.The total expenditures associatedwith the GEFAlternative are estimated to be about US$61.75 million; these are summarized inTable A17.1. Under the GEF Alternative, the programwould still comprise the following Baseline element with no changes or additions: (iii)Community-level Support to Vulnerable Persons(US$l1.97 million); and, (iv) Project ImplementationSupport (US$7.38 million). Inaddition, the program would involve the following expandedand new activities: Broad-basedActivities and Reforms inEEZ ManaPement (OP8). (US$16.08 million)This expanded activity includes support for implementingthe Deep Sea FishingAuthority, andfor - 149 - expandingpartnership efforts to support scientific monitoringand compliance. Additional investments inthe GEFAlternative include: (i) one quarter of the seed capitalization of a sustainablefinancing mechanismto encourageadditional long-term financing support - designof this mechanism will be inthe baselineactivities and capitalization will only proceed if all design elements are inplace (GEFUS$250,000); (ii) designand implementation of the EEZ ResourceMonitoringStrategy (GEFUS$570,000); (iii)contributionto near-shorestock assessment (GEFUS$1,470,000); (iv) support for patrolling efforts inthe near-shore areas for four years of the project - inthe longer term these patrol efforts will be self-financing and these near termefforts contribute primarily to improving the current scientific informationbase (GEFUS$320,000); (v) support for the Vessel Monitoring System (VMS)- the VMS has been available inprinciple for some time but is not expectedto beput inplace untilrevenuesare adequate to support it, thus its acceleratedadoption under the GEFAlternative also permits improved monitoring(GEF US$700,000); (vi) support specific district investments for community partnership initiatives that reducepost-harvest losses (GEFUS$1,200,000); and, (vii) support for Tanzania's involvement inparticipating in(but not implementing) international andregional initiatives (GEFUS$490,000). Broad-based Activities andReforms inEEZManagement (OP2). (US$75,000) This additional activity includes studies to support the entrenchment of genetic value capture within the sustainable financing mechanism(Marine Legacy Fund[MLF])that would also eventually assist inthe sustainable financing of marine protected areas supportedunder Component 2 of MACEMP. Broad-based Activities andReforms inImplementingIntegrated Coastal Management Efforts (OP2). (US$26.25 million) This expanded activity includes all investments inthe baseline as well as significant additional investments inthe systemof marine managedareas andmarine protected areas. The expandedinvestments include co-managementefforts and grants to communities to reduce,pressuresonbiodiversityresourcesof global significance (GEFUS$l,OOO,OOO). Specific focus will be onimprovingthe boundary demarcation at all areas, improving community education and awarenessefforts, and adding approximately five new sites to the MMA systemthrough the project life (GEFUS$3,250,000). The GEF alternative also includes additional training inMPA managementfor line department staff (GEFUS$680,000). Incremental Costs 12. The total expenditure underthe Baseline Scenario is estimated to be US$51.75 million while the total expenditure under the GEF Alternative is estimatedto beUS$61.75 million. The incremental expenditures (costs) under the GEF Alternative are therefore approximately US$lO.OOmillion. Incremental costs associated with OP2 are US$5.00 million. Incremental costs associatedwith OP8 are US$5.00 million. The incremental cost of OP8 could be substantially greater butno assessment was undertaken of the investments, domestic benefits, and global benefits associatedwith deep water management(>500 mdepth) of the EEZ; these investmentsand benefits are associatedwith programs to be delivered under SWIOFP. 13. GEFis requestedto fundthe incremental costs of US$10 million.GEF'sOP2 contributionwill cover works (US$250,000), equipment (US$900,000), training andTA services (US$2,620,000) and incremental operating costs (US$1,240,000). It is estimated that 54% of the - 150 - OP2 expenditures will be administered by the MANREC MMT(Zanzibar), with the remainder 46% through MNRTMMT(mainland Tanzania). GEF's OP8 contributionwill cover works (US$180,000), equipment (US US$2,140,000), training and TA services (US$1,065,000) and incremental operating costs (US$1,365,000), as well as dedicating US$250,000 to the Marine Legacy Fundas seed financing. It i s estimatedthat 39% of the OP8 expenditures will be administeredthrough the MANREC MMT (Zanzibar), with the remainder 61% through MNRT MMT(mainland Tanzania). - 151- TableA17.1- TanzaniaMarine and CoastalEnvironment Management Project (MACEMP) Incremental CostDetermination (US$ million) GEFComponent Category cost DomesticBenefit Global Benefit la. EEZManagement Baseline(OP8) $1 I.08 Improvedfishery rent capture. Improvedmanagementof transboundary (Core Programs) soecies With GEF $16.08 Reducedby-catch losses from greater Improvedinformationregarding Alternative (OP8) monitoring andcompliance. Longer-term intemational fish stocks. Sustainable cost-efficiency from self-reliant institutions. fiiancing of transboundary fish stock Less damage to near-shore fisheries. monitoringandof near-shorebiodiversity. Decreasedpost-harvest losses. With GEF Not Less damage to offshore fisheries. Improvedinformationregarding Altemative (OP8 Estimated Improvedlong-term, rent capture. Improved intemational fish stocks indeep sea incl. SWIOFP) ~S16.08 relations with neighbours intrade issues. (>500 m). Decreasedpost-harvest losses. Incremental $5.oo Ib. EEZ Management Baseline (OW) $0.00 None. None. (Genetic Value Capture) [inSub-component l aof With GEF $0.07 Potentialfor genetic value of biodiversity to Preservationand sustainable management MACEMP] Altemative(OB) be capturedthrough sustainablefinancing of biodiversity assets for beneficial global mechanisms.Protection of domestic uses (e.g., inpharmaceutical or resource property rights. industries.). Incremental $0.07 11. Coastal Management Baseline (OR) $21.32 Improvedland-useand marine planning Sustainableuse of globally important decreases rent loss from open access species and ecosystems. situation. Protection of core elementsof the existing marine managedareas (MPAsKMAs). With GEF $26.25 Expansionof MMAs and sustainableuses Improvedprotection of globally important Altemative(OR) from these contributes to poverty reduction. species andecosystems. Cost effective (and more sustainable) managementof such ecosystems through co-management arrangements. Incremental $4.93 111. Coastal Community Baseline $I 1.97 Poverty reductionincoastal communities. Reduced pressureon globally significant Action Fund (OR andOP8) Increasedenvironmental awareness. biodiversityresourcesand near-shore fishery. Increasedawarenessof global benefits. With GEF $1 1.97 As above. As above. Altemative (OW andOP8) Incremental $0.00 IV. Project Baseline $7.38 Capacity for managing core baseline Enhancedmonitoring andinformation Implementation Support (OP2 and OP8) domestic benefits, including improved exchangepermittingadaptive management. environmental awareness from increased Improvedscientific andtechnical communication efforts. knowledge basefor decision-making and site selection. Greater cost-effectiveness in achieving global impacts. With GEF $7.38 As above. As above. Altemative (OF? and OPX) Incremental $0.00 Baseline $5I.75 Totals With GEF $6I.75 Alternative Incremental $10.00 iAnalysis of Incremental: OP2 $5.00 GEF(OP2 Share): $5.00 OP8 $5.00 GEF(OP8 Share): $5.00 Total $10.00 GEF(Share): $10.00 - 152- 18a.STAP Roster Review STAP Reviewer: DrKassimKulindwa EconomicResearchBureau, University of Dar es Salaam, POBox 35096Dar es Salaam, Tanzania. Phone:255-741-338845, Fax: 255-22-2410212. Date: 17December 2004 [Note: This Annex contains an extract of the STAP Review, with all review remarks and comments intact. The full STAP review included elements of project description and implementation arrangements that are repeated elsewhere inthe PAD; these have been removed fromthis Annex inthe interests of space. The reviewer has approvedthis extract and the full original review is available uponrequest to the TTL.] Introduction The MACEMP proposal deals with two GEF areas of concern namely OP2 and OP8, which focus on Coastal, Marine andFreshwater Ecosystems, and Water body-based operational program (international waters) respectively. This review report is presented in three main sections namely; general observations, comments following specific TOR concems categories and finally conclusions. General Observations Country and Sector Issues This section bringsout well the PRS's significance inthe whole processofPoverty Reductionand Sustainable Development inthe 3 key pillars. l(b) also discusses well the global environment interms of the marine environment and utilization pressure and methods under open access which in actual sense in "open access" to foreign vessels mainly and "limited access" to local artisanal fisher folk. The root causes for this situation needs to be discussedalso25,mainly the lack of adequate capital and modem equipment and skills on the part of local fisher folk together with this the current weak monitoring and enforcement of the EEZallowing for huge losses infisheries resources rents. Mention should be made however, of efforts being made by the government in the area of legal and institutional framework. Environmental regulations are working on introducing economic instruments in the managementof the environment ingeneral inorder to achieve sustainable development (incentives and disincentives). Mention should also be made of existing projects incollaboration with international NGO's like WWF, IUCN,TCMP, Mangrove Management Project, MMP,MnaziBay Estuary Marine Park, Coastal Zone Management, WIOMSA, Mangrove management inRufiji & Mafia Marine Park etc. Eligibility Most of the relevant regional and internationalconventions and agreementshave been mentioned. However, one 1972 LondonConvention on the Prevention of Marine Pollution by dumpingof waste has not featured. Project Components Sup-comp l(b) of the project aims to provides means for effective or efficient implementationof the EEZ governance regime. The document elaborates that these resources will be used to strengthen monitoring 25See Kulindwa,K, H.Sosovele and Y.D.Mgaya (2001) Socio-economic Dimensions of Biodiversity Loss in Tanzania. Dares Salaam University PressDUP,Dar es Salaam. - 153 - and surveillance is enforcement systems in order to control fishingeffort. Since the MCS will already be incontrol, it will be profitable to use it for checking illegal fishingandfishingpractices andnotonly fishing effort alone as detailed above. Lessons learned reflection Project component 2 (Sound Management of Marine Coastal Environment): Co-management models and their cost effectiveness and implementation efficiency of marine management are discussed. This is only true if the concept is properly introduced to coastal communities. Available evidence has shown that improper introduction of the concept may not yield the desired outcomez6.Kulindwacautioned that, "BMUs should not be construedto be a tool of any interest group or even thefisheries department,it should be all inclusive and not be enmeshed in tribal, religious or political divides." Ifimproperly introduced, there will be those who may think the government is running the show as has been the norm and hence depend on it for all the inputsfor operationalisation /implementation of the concept. Ownership of the processand full participation in decision making, planning execution, cost and benefit sharing among others will ensure the effectiveness and efficiency and sustainability of co-management of coastal and marine resources.This aspect should be given due consideration. Among the straightforwardjustifications for choosing the proposed approach or design is the existing policy environment and existing planneddevelopment strategiesinthis area. The Ministry of Natural Resources and Tourism through its Divisionof Fisheries have a fisheries master plan inplace with proposals similar to the projectz7,the fisheries policy already has some elements inthe direction of the project and therefore this project enhances itz8.Section 3.3.6 of the National Fisheries Sector Policy Strategy Statementcontains Policy statements6,7,8 which specifically mentionconservation sustainable use of fisheries resource and the protection or biodiversity of coastal aquatic ecosystemsetc. The various efforts on the ground are clearly given a boost by the proposed project (including PRSP as mentionedin the PAD). Institutional and implementationarrangement The institutional arrangement for the project has been well articulated, however, it is important that institutional arrangementsto exhibit coordination and efficiency (minimumnecessary bureaucracy). Above all it has to have an in built mechanism for transparency and accountability for effective and successful implementation of the project especially at the local level where trust is essential for community buy-in of the project concept and participation. Implementationcapacity at the district level has suffered from government down sizing. Extension officers who are normally closer to the people have to a large extent been retrenched. The project needs to do needs assessment in terms of capacity to effectively implement the project at that level and take the necessary safeguardmeasures. Monitoring and Evaluation of Outcomes/results Indicators are shown to be elaborated later. However, this is a major bottleneck in planning and monitoring ingeneral. Due consideration and time should be invested inan elaborated framework on the `relevant' data flow and responsibilities for collection. Methodologies for collection, frequency and consistency (Le. SMART: systematic, measurability, accuracy, reliability and timelines; elements have to 26 Kulindwa (2001), The contribution o f Lake Victoria Fisheries to the Tanzanian Economy. A report submitted to LVEMP,Fisheries researchcomponent, Socio-economic sub-component, FA0(2003), Management, co- management or no management? Major dilemmas in southern African freshwater fisheries 1. Synthesis report. FA0 fisheries technical paper 4261'1 27 MNRT/JICA (2002), The Master Plan Study on Fisheries Development in the United Republic of Tanzania. Main Report. 28 URT (1 997)The National Fisheries Sector Policy and Strategy Statement. Ministry ofNaturalResources and Tourism, Dares Salaam. - 154- be included inthe design). Sustainability should, be consideredparticularly for those at the coastal village communities levels in terms of training and facilitation. Project Development Objective and Key indicators Management of welfare indicators missingto gauge livelihood improvement and poverty reduction objective (need to measure distributional aspects of benefits accruedeither at community level or individual level. At community level at least the distributional or benefit-sharing mechanisms need to be outlined. MDG indicators are the measurement for basic needs definition of poverty. Measures of deprivation need to be included29. KP12.1 mentions the percentage of territorial seas under effective management; this is well and good. However, the quality of management needs to be considered. What does effective management comprise of? What change in marine environment should we anticipate? Sub-component l(b): Implementation of EEZ Common Governance Regime. Inaddition to the MCS system providing for the collection of fisheries catch datato informfuture fisheries management decisions and prosecution, collection of fisheries data to enable the construction and continuationor maintenance of fisheries Environmental and Natural ResourcesAccounts should also be considered. NRA is a crucial managementtool for environmental and natural resources, it will enable the determination of sustainable use and inform us on resourcerent capture among other things. In supporting capacity buildingtherefore, training of fisheries personnel and other appropriate stakeholders inNRA (e.g. National Bureauof Statistics) shouldbe considered together with facilitation for fisheries NRA construction as well. Environmental and naturalresourcesaccounts are soon to be constructedfor the forest, water and mineral resourceswhile fisheries although identified among the four initial resource to be addressedwill follow later after more reliable data is f~rthcoming.~' Incremental Cost Analysis The GEF operational strategy explicitly recognizes the importance of removing barriers to the developments that incorporates global environmentalbenefits. The objective of the current proposal to GEF is to avert unsustainable harvesting of fisheries resourcesandreducespost harvest lossesboth inthe territorial and Trans boundary resources. Furthermore since this project proposal deals with international waters, improved management of Trans boundary species is seen to potentially bring about the achievement of this objective. Incremental costs are determined for components 1and 2 of the project, which deal explicitly with GEFs Operational Programmes OP2 & OP8. The justification for this incremental cost is given as due to improved information regarding international fish stocks, sustainablefinancing of transboundary fish stock monitoring and near-shore biodiversity and decreasedpost-harvest losses. These could otherwise have not been achieved under domestic benefit objective alone. On the part of GEF, global benefitswill be enhanced interms of biodiversity conservation through the avoidance of destructive harvesting techniques, which not only destroys fish habitat but also put pressure on available stocks. As for OP8, the GEFalternative imposesa US$5.13 million incremental cost, which is a full cost amount to be met by GEFgrant. The case is welljustified given that without the GEF alternative, the baseline scenario would proceed to meet the domestic benefit of improved fishery rent capture and also spill over to global benefits improve management of trans-boundary species something that can not be separated. However, in order to achieve further benefits, building on the existingbaseline, improve information regarding international fish stocks, sustainable financing of trans-boundary fish stock monitoring of near- 29 Sen, Amartya (1 98I)Poverty and Famines:An essay on entitlements anddeprivation, Oxford, ClarendonPress. 3o The Centrefor Environmental Economics and Policy in Africa (CEEPA) in collaboration with the University of Dar es Salaam is undertakingthis project with some fundingfrom Sida. - 155- shore biodiversity and decreasedpost-harvest losses are possible to achieve. This then justifies the full incremental cost to be borne by GEFgrant. Sub project throughTASAF 2 The objective of implementingcommunity sub-project through TASAF2 is "to improve the livelihood of coastal communities by providing support to activities that enhance and diversify their income eaming potential while sustaining the integrity of coastal resources..."(PAD). Under TASAF 2, communities will needto contribute 5% to 20% of the sub-project value through their own efforts (e.g. community labour). There is always a sustainability problem when it comes to credit extension or development assistance to communities. Of more importance is the harmonizationof project approaches targeting rural communities. There has been quite a number of conflicting approachesby various donors and government and NGOs working to facilitate or support development activities in rural areas. The focus and intention has always been to assist them to engage in productiveactivities through credit, self help schemes with some topping up assistance, infrastructuraldevelopment projects with in kindself help inputs(schools, roads, healthcentres etc). The expectation is for these communitiesto be self-reliant later on and sustain themselves and ultimately prosper. The conflicting approachesconfuses the beneficiaries by on one hand, inculcating a sense of ownership and responsibility for implementation and sharing the costs and benefits, and on the other hand encouraging complacency and donor dependency by providing handoutswithout obligation. While others have to contribute the labour time and brawns to construct say a road with anticipated benefits, others get paid to do the same. Such confusing signals puts the self reliance approach injeopardy and does not help much the sustainability of initiatives like this one. Specific Review for OP2: Biodiversity& OP8: InternationalWaters The two operational programmes are reviewedjointly and only discussion specifics to a particular OP pointedout in case divergences occur. Scientific and Technical Soundnessof the Project The proposed project has adequateecological and technical information base, for OP2 and OP8 as well. Numerous studies exist on coastal and marine environmental science by the University of Dar es Salaam31,Institute of Marine Sciences (IMS) inZanzibar and other organizations such as WWF, TCMP, IUCN, WIOMSA, MNRT, UNEP, among others. An Atlas of the East African Coastal Resources for Tanzania, which contains detailed information on marine resources available inthe country's territorial waters was launched in 2001, November. The book is a project of UNEP. Nevertheless there is still more information and studies to be conducted to fill the existing data and information gaps such as stock of fish and status of our fisheries. The project is further buildingon numerous initiatives inthe area inthe past and on going. So it is good to know that the project will set out purposely to link with the various projects and hopefully facilitate their coming together. Such initiatives as the EAME, TCMP and SWIOFP among others. One additional benefit which can come out of this project is to try and organize information and a data bank for Tanzania, bringingtogether and to the surface the numerous information and data generated by the various projects and initiatives as opposed to the current scatterednature. As for OP8, international waters domain, further studies and collaboration with neighbouringhordering countries of Kenya, Somalia, Mozambique and South Africa need to be done in collaboration with the various initiatives of EAME, WIOMSA and SWIOFP. The proposed project mentions data collection with respect to EEZ(OP8). Since the project is still at its initial stages of development, approaches to collect relevant information for the project (scientific, social- economic etc) needtojust be outlined in order to shed light on appropriateness and inter-comparability of data among the different sources and within the project itself. 31See Howell, K.Mand A. K.Semesi eds (1999), Coastal Resources of Bagamoyo District, Tanzania. Faculty of Science, University of Dar es Salaam. - 156 - The project discussesuse of technology inEEZ-MCS (OP8) for example and incoastal communities adoption of modern technology to improve their fishing efficiency (OP2). However, these have not been identified yet and so it is not possible to judge neither their appropriatenessnor their impact on marine environment. Suffice to take into consideration the above and discuss about the nature of the intended technology use in relation to marine environmental integrity and sustainability. Threats to the ecosystemhave beenconsidered mainly those associatedwith harvestingpressureand practice. However, the document is quiet on the pollution of the marine ecosystem by ocean going vessels. The EEZ-MCS has been focused on deep-sea fishing with the aim of capturing resources rents. Explicit monitoringcontrol and surveillance of pollution through oil spills of various scales and other pollutants need to be considered. The proposed environmental status monitoring system could accommodate this more explicitly. The PADhas pointedout several researchefforts to be undertaken by the project as being baseline studies for informing project planning for execution. Fishstock determination/assessmentstudies inTanzania's territorial waters is one of them and will act as a building block for regional collaboration on assessments of trans-boundary fish stocks in the EEZof the WIO states and the highseas. Allowance must also be made for other researchactivities on specific aspects arising from project implementation inall the relevant areas social, economic, marine and terrestrial ecology processes and management area. Indicators to monitor and measure progress and the achievement of set goals and targets are important. The PAD has identifiedthree key performance indicators as: Revenue generation, MPA system own revenue generation, same as KPIfor TASAF 2 basedon MDG indicators but applied to coastal areas. Environmental/ecological indicators are glaringly missing. Inadditionto the objectives for monitoringandevaluation mentioned inthe PADtwo additional areas can be added namely; (i)ensure the appropriate approach for community participation is being implementedand (ii) ensure the targets set for the project are being achieved as planned. These two aspectsdidnot come out clearly. The PAD has shown that the approach adopted inthe project proposal can achieve the objective of conservation of biodiversity if implemented well. The PAD asserts that this will be achieved through improved governanceof EEZ putting inplace clear transparent mechanism by involving for coastal communities in planning, implementationand benefit and through increasedeffective management and protection of 37,000 km2of territorial seas (which is 18.5% of EEZ).Special consideration shouldbe given to the manner communities are involved inthe process. (see above lesson learnedreflection). Inaddition to the critical risksidentifiedinthe PAD, there is also a potential riskof misconceptionof the co-management concept due to improper introduction and execution. This may hurtthe sustainability aspect of the project due to the entrenchment and propagation of dependency on the project/government becauseof lack or inadequate sense of ownership of the process. At the end of the day, the coastal communities andthe government are the beneficiaries. There is a risk if the local communities do not properly buy-inthe project (particularly co-management) hence proper introductionof the project needsto be well planned and awareness appropriately created, trust, transparency and accountability clearly incorporatedin project implementation. The weakness of the project is embodied in the risks, which face it. It mightbe quite challenging to synchronize priorities of the various players in implementing the project as planned. If the decentralization processstalls for any reason, some of the project activities relyingon that structure (local level) may also move sluggishly. Where two governments are involved (Zanzibar and Mainland Tanzania), the risk is always there that bureaucracy (red tape) may also affect the project. Delays as always cause increases of costs of project implementation. Last but not least, community participation is crucial for efficiency and sustainability of activities initiated by the project, hence needs careful and proper introductionand practice. - 157- Harmonizationof various policies, institutional and legal framework has to be give due urgency inthe critical risks section in order to expedite ajoint execution of the project activities between Zanzibar and the mainland. The project introduces possibilities for efficiency and sustainableutilization of fisheries resourcesand habitat conservation. However, the improvementon fishing gear and the possibility of better income generation may attract increasedfishing effort and therefore pressureon fisheries resourcesand possible conflicts. Here the monitoring, control and surveillance and also managementaspect of the project, working intandem with co-management coastal communities has to be effective. It is therefore important to pay particular attention to this aspect. The PAD has articulated well the Marine Legacy Fundand also mechanisms providing coastal communities with financial resourcesfor investingin social services, income generating activities and ensuring food security. Although these funds are treatedas compensation and inputstowards improving coastal communities' livelihoods, it may also be desirable to introduce a sustainability clause of this newly, created level of welfare through paying back some of the funds for a revolving fundor SACCOS enhancement in the coastal village communities, otherwise hand-outs have a habit of creating dependency. Legal instruments aspectsto be dealt with have been identifiedparticularly interms of the creation of new institutions (EEZauthority) and streamlining and harmonization between Zanzibar and mainland Tanzania. Interms of the set development objectives, the activities outlined inComponent 1to Component 3 provide for a great opportunity for the best solution in meeting the objective. The suggestedactivities are focused and implementable, the modalities of implementation will ensure sustainability and hence long- term solutions. In order to enhance the management of marine resources,Environmental and Natural ResourcesAccounting should be considered inorder to enhance planning for sustainable use of marine resources. Identification of global environmentalbenefits The area for the proposed project has ecosystemsand key speciesof global importance. It is considered globally outstanding and considered a priority. There are some key habitats such as coral reefs, mangroves and sea grass beds among others. Importantbiodiversity species include the dugong, which is one of the most endangered species, eight speciesof dolphins, 5 speciesof sea turtles etc. By implementing this project, these habitats and species of sea life would be conserved, whichjustifies GEF's fundingfor the project due to these global benefits andthe country's eligibility status.32 How does the Project fit within the context of the goals of GEF The project falls under two of GEF's operational programmes namely OP2: coastal, marine, and freshwater ecosystems, and OP8; Water body-based Operational Programme (intemational waters). The PADhas shown clearly the connection between the projectand the two programmes by including activities with both domestic and global benefits interms of biodiversity conservation through co- managementand the monitoring control andsurveillance of EEZfor sustainable use and management. The project therefore fits very well within GEF's global environmentalobjectives and goals. Regional Context OP8 considers intemational waters and trans-boundary fisheries resources, which involve other neighbouringcountries. The strengthening of partnerships with neighbouring countries is proposed to be initiated through regionaldialogue on sound governance and sustainable management of marine resources inthe West IndianOcean. The regionalcontext is well accommodated. 32UNEP/CBD/COP/l/S - 158 - Sustainability and Replicability Objective: To enhance the contribution of fisheries resourcesto economic growth and reduction of poverty, inorder to sustain ably manage the massive and coastal environments and resourcesthrough: 1. Attacking poverty in coastalcommunities through provision of credit (TASAF 2) to local communities and hence support directly and indirectly key elements of PRS. 2. Better definition of marine and coastalproperty rightsand responsibilities for sustainable use of the resource base (reduced by-catch wastes and destructive fishingpractices). 3. Improve the regulatory and institutionalframework for managementof marine resources (marine environment and fishery resourceslink establishment). 4. Fill datagaps describingthe fishery inTanzania. The potential for continuation and sustainability is great conditional upon the success of MLF and co- management of coastal and marine resources.Replicability of this project's successful experiences is anticipated through building local and regional partnerships. Conditionsfor replication are therefore set through working with different levels of stakeholdersfrom the outset of project implementationand particularly regional stakeholders. It would therefore be useful to also earlier on, identify and mention areas most probableand ideal for replication. Degree of Involvement of stakeholders inthe project The project has done a good effort inidentifyingthe relevant stakeholdersand involving them inthe process at different levels of project implementation. Provisions for the establishment of appropriate lines of communication have been made. The Project Implementing Unit (PIU) will establish a comprehensive communications strategy and will manage it. Capacity buildingaspects: No mention of indigenous knowledge has been madethroughout the document. Where local communities are involved, consideration of indigenous knowledge intheir everyday life is paramount. This is because their knowledge is what drives their innovative behaviour. This is something that needs to be accommodatedinthe new approachesand shouldnot be sidelined. It is therefore suggested to consider indigenous knowledge in the project development. Inconclusion then, save for the few identified issues, the PADhas addressedmost of the review questions satisfactorily according to GEF's two operational programmes and strategy and global environmental objectives as provided by the TOR and various GEFdocumentation. The project needsthough to address the few comments and suggestionsmade inthe review. - 159- 18b. Task Team Response to STAP Roster Review Date: 20 December 2004 The Task Team sincerely thanks the STAPreviewer for his careful and comprehensive review. Inparticular, the reviewer correctly notedthat the revieweddocumentsprovidedonly summary descriptions of M&Eissues, communications strategies, root causes, linkages to other donor efforts, and some aspects relating to implementation - especially as they related to grassroots stakeholders. For the record, the Task Team acknowledges that the version of the project documents that was reviewed by the STAP reviewer didnot include the full detail of these elements, as they were still beingfinalized by the Pre-appraisalMissionPhase I1at the time of STAPReview. Also, the project description and financing structure changedsomewhat after the Pre-appraisalMissionas a consequenceof clarifications receivedfrom the Ministry of Finance regarding counterpart contributions, and as a consequenceof further discussions with TASAF regarding implementation arrangements of Component 3 of the project. While GEF is not financing Component 3, some of its funding modalities (including stakeholder participation) will be replicated elsewhere inthe project. The current documentation package (included inthis PAD/GEFBrief) is thus more comprehensive thanthat reviewedby the STAPreviewer. In particular, the current documentation includes: complete detailed annex on root causes; detail on links to other projects; detailed annex on development communication strategy; detailed annex on stakeholder consultation plan; and, a revised annex containing the detailed project description showing additional explanations of activities. The following specific responses thus highlightthe STAPreviewer concerns and shows how they have, have not, or will be accommodated inthe formulation of MACEMP. Responseto Overview Remarks The STAPreviewer identifiedthe needto highlightthe lackof adequatecapital and modern equipment as root causes. This is now clarified inmore detail inAnnex 19 "Biodiversity Assets of Tanzania's Coastal and Marine Ecosystems and Analysis of Threats andRoot Causes." H The STAPreviewer's comment to describe existing projects incollaboration with international NGO's is now further addressedinAnnex 2 "Linkages with Major relatedprojects financed by the Bank and/or other agencies.'' The STAP reviewer notedthat the 1972LondonConvention on the Preventionof Marine Pollution was not mentioned inthe list of protocols to which Tanzania is signatory. The Task Teamacknowledges that this is not on the list, but the list includes thoseprotocols that make Tanzania eligiblefor OP2 or OP8 funding. This protocolis not normally applied within the context of OP2 or OP8, and the activities inMACEMP do not directly support this (although there may be indirect support throughthe coastal zone planning that occurs inMACEMP). Moreover, Tanzaniahas not yet ratified MARPOL, the COLREGs, or other relatedconventions. This conventionhasthusnot beenaddedto the list. H The STAP reviewer pointed out that the MCS systemshould also be usedto check illegal fishingandfishing practices. It is infact, one of the key purposesof the MCS systemto enhance surveillance of illegalfishing and fishing practices. The text relatingto Component 1inthe DetailedProject Description has beenreviewed as to better presentthis intent. This Detailed Project Description, as well as Annex 2, also now provides a complete description of the - 160- previous efforts that financed MCS efforts by the EC-SADC initiative, including the role of the Vessel Monitoring System (VMS) that GEF will assist infinancing. The STAPreviewer emphasizedthat participatory andco-managementapproaches and especially the adequate introductionof these models to communities shouldbe given due consideration. A full description of the Stakeholder Plan, includinghow it will be entrenched within the project through suchactivities as the Development Communication Strategy, the Community MitigationAction Plan, andthe ProcessFramework measures, is now includedin the project documentation annexes. m The STAPreviewer expressedconcerns regarding transparency andaccountability. The institutional arrangementshavebeen designedto provide mechanismsfor transparency and accountability as is now highlighted inthe diagrams inthe Detailed Project Description and the detailed Terms of Reference of all of the various committees and individuals inAnnex 6 "Implementation Arrangements". Inaddition, the Task Team acknowledges that the full financial and procurement arrangements are not yet specified inthe GEF Brief. These remain to be developed as part of formal appraisal. Government is currently preparing a detailed procurement planandafinancial managementmanual. Draftswere receivedon 17December 2004 and are beingreviewed by the World Bank with a view to having finalized manuals and plans inplace as a conditionof appraisal. The STAP reviewer indicatedthat capacity to deliver the project may beweak, in particular at the District Level. The Task team concurs with this observation. The project design thus putsa strong emphasisoncapacity buildingandinstitutional strengthening at the local government level as is reflected inComponent 2(a) and associatedcost. Inaddition, it is acknowledged that this is a project risk (but the risk mitigation is entirely internalized and within the project's control). Project M&Eindicators for Component 4 have, however, also beenre- aligned to better identify delivery effectiveness. Weak performance of those indicators during project supervision would signal that capacity buildingefforts may need to be steppedup or adjusted. The STAPreviewer notesthat the M&Easpects are important but appear weak. A detailed M&EManual is currently under development andwill thus address concerns of the STAP reviewer that the data flow and monitoring responsibilities are clearly assigned. The detailed M&EStrategy is already inplace outliningthe overall approach of the project with view to monitoring, learning, and adaptivemanagement. The STAP reviewer notesthat some of the indicators provide quantitative but not qualitative measuresof management.The Task Team acknowledges this but notes that it is a common problem with projects which have a short life compared to the ecological time cycles that they attempt to influence. Nonetheless, the project K p I s were the subject of additional scrutiny and analysis through a workshop and through reviews by the IUCN (these were not available at time of STAP Review but are incorporated into the more recent versions of the GEF Brief). The current indicators as expressedinthe new Results Framework thus correct some of the previous weaknesses; the indicators are now believed to be the best available which still permitroutine monitoring. The STAPreviewer recommends to consider the use of NaturalResourceAccounting (NRA)as a managementtool for environmental andnatural resources. The Task Team concurs that this may be auseful tool to mainstream the information gatheringwithin policy-making. The current project description now shows better that MACEMP will be supporting continued - 161- productionof "State of the Coast Reports". Incorporating NRA into this structure will be discussedwith the client and evaluated during appraisal through discussions with the Bureaus of Statistics inmainlandand Zanzibar; these institutions have notheretofore been involved in projectpreparation. The STAPreviewer has provided the Task Team with potential contacts in these institutions and a decision regarding scope and activities will befinalized during appraisal. The STAPreviewer notedconcerns inrelation to sustainability of community projects under TASAF 2 and harmonization with conflicting approaches from other donors. This falls under Component 3, which is not part of GEFfinancing. Nonetheless,the Task Team notes that implementation and monitoring of these sub-projects will fall under TASAF 2, and that the full modalities of this are now described inthe PAD. Responseto Consolidated OP2/OP8 Remarks The STAP reviewer generally acknowledges: the project's technical soundness; the project's eligibility given the identified global benefits; the project's fit within GEF goals; the project's accommodation of the regional context (OP8); the prospectsfor sustainability; and, the project's efforts ininvolving stakeholders. The following additional points, however, were raised that meritresponse. The STAPreviewer notes that there is no identificationof specific technologies to be promoted at community level. MACEMP does not identify these, as they will be demand driven. These will not be explicitly identified.The criteria for selection are, however, explicitly noted that they must promote sustainable resourceuse. Specific technologies for higher level interventions (commercial fisheries) relating to MCS, have now beenelaboratedinthe project documentation (these pertainprimarily to the VMS systemnotedabove). The STAPreviewer pointed out that threats were mainly identifiedinassociation with harvesting pressures and practices and that marine pollutionthrough ocean going vessels andoil spill contingency planning specifically, havebeenleft out of the project design. This has been done intentionally, as another GEFfinanced project currently underpreparation is addressing this issue specifically. The West IndianOceanMarine Electronic Highway Project that includes Comoros, Kenya, Madagascar, Mauritius, Mozambique, Seychelles, South Africa, and Tanzania will among other activities, support Mozambique, Tanzania, and Kenyato develop, test, and adopt national oil spill contingency plans as three countries were not involved inthe predecessor "West IndianOcean Oil Spill Contingency Planning Project", buthave now officially requested support to benefit from the approach pursuedinthat project. The WIO MEHproject will also address the policy and regulatory framework inrelation to oil spill prevention and contingency planning. For example, Tanzania has not yet ratifiedthe InternationalConvention for the Prevention of Pollutionfrom Ships (MARPOL 73/78), the International Convention on Oil Pollution Preparedness,Response, and Cooperation 1990 (OPRC go), or the Convention on the International Regulations for Preventing Collisions at Sea, 1972 (COLREG 72). Tanzania will be able to receive support under the WIOMEH project to translate the provisions of conventions, once ratified, into local laws and regulations. The STAPreviewer recommendedbroader researchefforts inmore areas. This recommendationhas notbeen accommodated for a number reasons. First, the research inthe project is adequateto meet the project's needs - it does not seek to do researchfor the sake of other objectives beyondthose of the project. For example, there is researchon social and economic aspects within the context of the National C M A Plan, but not socio-economic research - 162 - ingeneralfor the sake of comprehensivecoastalplanning (dealing, for example, with industrial pollution). Second, some research is already being pursued-or will be pursued-by other initiatives (e.g., SWIOFP and others) and MACEMP researchhas been careful not to duplicate this; these interactions are now further describedinAnnex 2 andelsewhere. The STAPreviewer repeatedconcernsrelatingto monitoring, KPIs, andcommunity engagement, These concerns have already beenaddressedinthe previous discussion. The STAPreviewer reiteratesthe concernsregardingimplementation needsandcalls for harmonizing efforts betweenZanzibar and mainlandbefore the project commences. The Task Team feels that this specific risk is overstatedby the reviewer: harmonization is an over-arching theme throughout the project activities andbecause many of the activities promote harmonization, it can not be made too strong a condition of effectiveness.Indeed, the Government has demonstratedstrong commitment to date to harmonization, and its request for this project to assist with suchharmonization demonstrates that commitment. The STAPreviewer makes recommendations onhow the MLFshould or mightbeused. The Task Teamneither endorsesnor disagrees with theserecommendations,but will notreflect theminproject design. The ideaof the MLFis well articulated inthe documentation (as -acknowledgedofaprocesstobeundertakenwithintheproject,ratherthansomethingthatis by the reviewer) butthe design of the MLF-andof how its funds mightbeused i s a subject initially constrained. The STAPreviewer acknowledgesthe efforts to promote sustainability andreplicability, butrecommends identificationof replicable activities "early on" inthe process.These cannotbe identified yet, becausenonehave yet been implemented. The M&Eprogramis, however, designedto monitor success andfailure of specific activities andwill thus advise the process. a The STAP reviewer notes that the project does not, but should, address Indigenous Knowledge. The project does not explicitly refer to "Indigenous Knowledge", but does address local knowledge and expertise of all stakeholders, which have always been a driving element in project preparation and will continue to be inexecution; this is outlined fully inthe Stakeholder Consultations (Annex 16). As a consequenceof this review, the current project documents(20 December 2004) reflect the STAPreviewer comments, with the exception that the following will still be addressedprior to or during appraisal: o accountability via availability of FinancialManagement Manual and Procurement Plan prior to appraisal; o discussionwith client -during appraisal - of including NaturalResource Accounting activities. - 163 - 19.Biodiversity Assets of Tanzania'sCoastaland Marine Ecosystemsand Analysis of Threatsand Root Causes Description of the URT's marine and coastal biodiversity The URT's coastal andmarineecosystemscover the mainlandcoast, threeprincipal islands (Pemba, Unguja, andMafia) all of which are less than 100kmoffshore, numerous small near- shore islands and islets, and one oceanic island, LathamI. continental shelf, covering an The estimated 17,500 - 17,900 sqkm(to 200 mdepth) is generally narrow (narrowest point 2 km, widest 80 km), and drops sharply after 60 mdepth. Pembaand Lathamare separatedfromthe mainland by relatively deep water (c. 400-500 mand 200-300 mdepth respectively). Pembais believed to be part of the mainland that broke away about 10million years ago. Unguja and Mafia are limestone islands onthe continental shelf and were probably part of aPleistocene inshore coral reef system which is now separatedfrom the mainland by relatively shallow (30- 50 mdeep) channels. a. Coastalecosystems andassociatedhabitats: Important marine ecosystemsinthe URT include mangrove forests, estuaries, coral reefs, sea grasses beds and intertidalflats. Coral reefs are found around much of the coastline of Tanzania, and are most extensive aroundTanga, Kilwa, Mtwara, and the islands of Unguja, Pemba, andthe Songo Songo archipelago. Mangroves are found inmost river mouths, with the RufijiRiver delta said to support the largest single mangrove forest ineastemAfrica. These ecosystemssupport a very highdiversity of plant and animal species including marinemammals, marine turtles, coastal and seabirds, fish, plankton, sponges, crustaceans, molluscs, echinoderms and a variety of other organisms. The coastal and marine ecosystems of the URT are part of the East African Ecoregion (EAME), a WWF Global 200 Ecoregion, and considered globally outstanding for marine biodiversity. The ecoregion has been identifiedas a global priority, and WWF has supported development of an ecoregional biodiversity vision and action plan through a multi-stakeholder process. Coralreefs: cover an estimated 3,580 sqkm(Spalding et al., 2001), and are found along at least two thirds of the country's coastline. The areas of greatest concentration are Tanga, Pemba, Unguja, Mafia, the Songo Songo archipelago andMtwara. Coral and reef fish dieversities in URT arehigh, but there hasbeenlittlerecent detailed taxonomic work. Some 140 speciesof corals were recorded in 1984. Ifthe reefs that are monitored by IMS, the highest diversity ones are found inMisali Island, the reefs of Mafia Island, and the Songo Songo Archipelago. The closeness of the reefs to land make them particularlyprone to humanimpact, either from exploitation or indirect terrestrial influence such as pollution. Overall, reef health is probably quite good. Insome MPAs and managedareas (e.g. Muheza, Tanga andPangani Districts), much of the destructive fishinghas been stopped, particularly dynamiting, although it still tends to resurface periodically, as well as illegal beach seiningand other damaging methods. Inother parts of the country, it is still a serious problem. A more localised problem, although having a 33The information presented above is based on the following study prepared as part of MACEMF' preparation: Wells, S. et al., 2004. Study on the Ecological Basis for Establishing a System of MPAs and Marine Managed Areas inthe United Republic of Tanzania, 44p. - 164- major impact where it occurs, is the miningof live corals from reefs to make lime.This has been a particular probleminMafia andMtwara Districts (both of which have been making considerable efforts to halt it) andinthe Dar es Salaamarea. Mangroves: Comprehensive baseline datawere collected on the mangrovesof mainland URT in the 1980s during the preparation of the Mangrove Management Plan. A total of 8 species of mangrove (Avicenniamarina, Bruguiera gymnorrhiza, Ceriops tagal, Heritiera littoralis, Lumnitzera racemosa, Rhizophora mucronata, Sonneratia alba, Xylocarpus granatum) are found inmainlandTanzania andinadditionXylocarpus mulluccensis occurs inZanzibar. Themost recent information indicates that the mainland mangroves cover about 108,300 ha, those on Zanzibar cover about 18,000 ha (6000ha inUnguja, and 12,000 ha inPemba). The RufijiDelta, with sediment loading of 13.5 x16 tonnes per year, supports the largest mangrove forest (53,000 ha) within URT as well as inEasternAfrica. All mangroves are protected as forest reserves and are managed through the Mangrove Management Project. This may have resulted ina reduction inthe amount of clear felling andclearancefor agriculture, constructionof salt pans, andcoastal development. Mangrove condition or quality, however, varies from locality to locality, and is primarily related to the extent to which the forests have been affected by cutting for domestic (firewood, buildinghouses, fences, boat making, fish traps and medicine) or commercial use (timber, fuel for lime production). Seagrass beds: Twelve of 50 species of sea grass that are found worldwide occur inURT (Cymodocea rotunda, C. serrulata, Cymodoceasp., Enhalus acoroides, Halodule wrightii, H. uninervis, Halophila minor, H.ovalis, H. stipulacea, Syringodium isoetifolium, Thalassodendron ciliutum and Thalassia hemprichii).The dominant species are T. ciliutum, T. hemprichii and S. isoetifolium. The area covered by sea grass beds and the relative species densities inURT are not known. Sea grass beds are found inabundance insheltered areas of the coast inTanga, the tidal zones fronting the deltas of Ruvu, Wami and Rufijirivers and around Kilwa. They also occur in Pemba, Ungujaand Mafia Islands. The extent of threats to sea grass beds inURT is not known. Other key habitats: include estuaries andcoastal lagoons. River estuariescontribute to the maintenance of deltas, tidal flats andshorelines and to the nourishment of mangroves and sea grass beds. River mouths and estuaries are also important spawning and nursery grounds andkey habitats for commercially importantprawns. There are relatively few coastal lagoons inURT. Muchof the coastal shore line is dominatedby mudandsaline flats whichhavebeenlittle . studied, but usually have abundant invertebrate life and become important feeding areas for birds, particularly if the coast is regularly inundated. b. Important biodiversity species: The dugongDugong dugon is one of the mostendangered species on the African continent and i s almost extinct inURT. It i s inAppendix 1 of CITES and i s listed on the IUCNRedList as Vulnerable. Dugongs are very rare, with only 32 sightings inthe whole country betweenJanuary 2000 to May 2003. The first nation-wide assessment(in2003), on going researchon Mafia Islandand the capture of an individual ina fishing net inJanuary 2004 indicate the existence of - 165 - small and threatened population inthe Mafia-Rufiji-Kilwaarea. Other relativelyrecent sightings include near Moa inMuheza District and inthe northern part of PembaIsland. Other marine mammals: There is little informationon other marine mammals inURT.Eight species of dolphin have beenrecorded.The commonest species are probably the Indo-Pacific bottlenose dolphin Tursiops aduncus,the Indo-Pacific humpbackdolphinSousa chinensis and the spinner Stenella longirostris. Menai Bay has a significant population of 150resident bottlenose and 75 humpback dolphins. Humpbackandother whale species pass through Tanzanian waters on migration(and may calve inMnazi Bay). Marine turtles: All five species of sea turtles found inthe WIO occur inURT waters: the green turtle Chelonia mydas and the hawksbillturtle Eretmochelys imbricata, both of which nest are the commonest; and the olive ridley turtle Lepidochelys olivacea, loggerhead turtle and leatherback turtle which are occasionally seen. All species of sea turtles are listed on Appendix 1 of CITES; the green turtle, olive ridley and loggerheadare categorized by IUCNas Endangered; the leatherback andhawksbillare classified as Critically Endangered. In1988therewas a nestingpopulationof about 300greenturtles. There are thought to beonly about 50 hawksbill nests annually (20 usedto nest on the mainrookery, Maziwe Island, before it became a sandbank and regularly submergedon hightides). The olive ridley is a rare visitor nesting insmall numbers. Reeffish: The most comprehensive survey of reef fishhas been for Mafia where almost 400 specieshavebeen recorded. Otherwise, there is very little information available on fish diversity. Rareandthreatenedfish species include the coelacanth which has beenrecently beendiscovered inURT. Invertebrates: Equally little is known about the status and distributionof invertebrates. The threatenedCoconut Crab, is an indicator of relatively undisturbedareas and occurs on Misali and Chumbe and probably other small islands. Sea cucumbershave drastically declined throughout the inshore waters of URT, and MPAs may be their last refugia. Many of the commercial species of mollusks are thought to be over-exploited, whether for food or for their shells, but distribution and abundance data are lacking. Birds:A wide variety of coastalbirds andseabirds are foundinURT, particularlyinmangrove forests, intertidal flats andon rocky cliffs. Waders and shorebirds visit URT inlarge numbers eachyear betweenAugust and May to feed, particularly on intertidalflats at low tides. 10 Important BirdAreas (IBAs)have been designated by Birdlife International along the coast of URT. - 166 - I I vi vi 2 I 8 3 I 0 . . . . . . . . . . . . . . . n 2 . . 0 E . 0 0 0 0 0 0 I 0 2 I 0 0 0 n n z N N x ) 0 e e e e e e * e e e e e e e e e e 0 e e e e 0 0 0 0 0 0 0 0 e e e e e 20. Implementation of MACEMP CommunitySub-projectsthrough TASAF2 MACEMPaims to improve the livelihood of coastal communities by providing support to activities that enhance and diversify their income earning potential, while sustaining the integrity of coastalresources which formthe basis of coastalcommunities' livelihoods. The project will therefore support coastal communities to identifysub-projects, ina participatory manner, that supportthe development of sustainable livelihoods strategies, inclose liaisonwith the private sector, local government structures and other institutions of civic society operating at the community level. MACEMPwill carry out awareness raising activities incostal communities, which will focus on sensitizing coastal communities on sustainable livelihood strategies, facilitating the formation of resourceuser groups, and identificationof eligible sub-project activities. MACEMP will also buildthe capacity of District Environmental ManagementTeams, Village Environmental Councils, and other community basedorganizations, as needed, to ensure capacity to provide technical assistanceto communities inthe preparationandevaluation community sub-project proposalspertaining to MACEMP. The implementationof sub-projects identifiedthrough MACEMPwill take placethrough TASAF2 -the secondphaseof the Tanzania Social Action FundProject. The success of the TASAF 1community driven development (CDD) activities provides thejustificationfor the implementation of MACEMP sub-projects through TASAF 2. Under TASAF 2, communities will needto contribute 5% to 20% of the sub-project value through their own efforts (e.g., community labor). While TASAF 1has proved successful inaddressingdevelopment priorities of local communities, it is recognizedthat important long term development activities that focus on sustainableutilizationof coastal and marine resources may not rank highestina community's action plan.A provision for financial resourcesto be allocated for the implementation of MACEMPsub-projects will therefore be ring-fenced inthe TASAF 2 project. This ensures resourcesare available to meet MACEMP's development objectives. MACEMP's sub-projects will follow the implementation arrangements establishedby TASAF 2, as describedinthe TASAF 2 Operational Manual and as summarized inthe TASAF 2 Project Appraisal Document. This annex highlights anumber of technical aspectsrelating to: (i)eligibility criteria, resource allocation andthe MACEMP Community Service Package; (ii)monitoring and safeguards; and, (iii) interactions betweenTASAF and MACEMP. TASAF 2 Eligibility Criteria TASAF2 supports community sub-projects aimed at improvingservice access to health, education, water and sanitation, bankingand markets; transferring cash through labour-intensive public works and supporting income generation for households with vulnerable individuals. The sub-projects are funded through a NationalVillage Fund(NVF- see Appendix A). The three categories of beneficiaries whose sub-projects are financed through TASAF 2 are: - 175 - . The service-poor communities whose sub-project aims at closing gaps insocial services delivery (Closing Services Gap Package); Foodinsecure communities whose sub-projects leadto cashtransfer to able-bodied poor . through the creation of economically viable community assets (Safety Nets Scheme) ; and Vulnerable personsand disadvantagedgroups whose sub-projects would benefit from TASAF2 resourcesusedto support incomegenerating activities by their care givers (Vulnerable Groups Support Package). Coastal communities are amongthe poorest and most vulnerable inthe UnitedRepublicof Tanzania. They live inmarginalized areas, lackingaccess to many basic services, and are vulnerable due to the seasonality of livelihoodactivities and the lack of alternative economic opportunities. Coastal communities therefore fit the criteria established by TASAF 2 for targeted assistance. Eligibility criteria for MACEMP sub-projects do not differ from these. The differences in eligibility relate to location(coastal sub-districts targeted by MACEMP) andto the types of support available. The geographic eligibility for sub-projects is governed by a simplified resource allocationmethodology; the subproject eligibility is not constrained but is guidedby the MACEMP Coastal Community Package. Simplified ResourceAllocationfor the CoastalVillage Fund TASAF 2 allocates its NVFsubproject funding envelope to LGAs andIslandsnation-wide through a resource allocation formula that is basedon population, poverty levels, and geographical size. EachLGNIslandunder this model is thus provided with a transparentbasis for its allocation to which local authorities are held accountable. MACEMP, for similar reasonsof transparency, has developed a simplified resource allocation method for allocating the CVF resources under Component 3(a). Inthe coastal villages targeted by MACEMP, poverty levels do not differ obviously and entitlements are not readily measurable because of the open access nature of the marineresources.Physical measures such as area of territorial sea or coastline lengthare similarly not representative of MACEMP's targeting requirements, especially becauseof the open access nature of these areas and of the different resource productivities along the coast. Measures focusing solely on population will tend to under-allocate to remote or island communities. Finally, the CVF is intended to complement other management initiatives inMACEMP which have beentargeted to selecteddistricts or areas for reasonsrelating to other MACEMP development or global environmental objectives. For these reasons, a simplified negotiated resource allocationis usedthat reflects MACEMP priorities to distribute the resources on an equitable basis. The allocation principle still targets the resourceallocationusingthe same geographical areas as does TASAF 2. The methodology, however, distributes an equal unit share of the resource envelope basedon a notional fixed amount per year per LGNisland; where one unit is 4% of the resources available. The 4% figure is calculated as follows. For designpurposes, the MACEMP/TASAF CVF window will be delivered over a five-year periodcorresponding - 176- approximately to a timeframe that starts six-months into MACEMP and finishes six months before MACEMP closes. MACEMP is designedto work intensely inabout five areas inany given year; this will always include Pemba and Unguja on Zanzibar, and it will initially include Kilwa, Rufiji and Mafia on the mainland. The five areas over five years thus implies that a "unit" of resources-delivered on averageto any one area over one year -corresponds to 4% of the total available envelope. The resource allocationi s thus as follows: Regioflsland LGMsland Units Initial I NVF It is noted that the resources under Component 3(b) will be targetedaccording to needs within the coastal communities, and are not governed by an allocation formula. Also, distributionof the funding below the Local Level will follow TASAF2 guidelines under the Community Subproject Cycle (CSPC). The methodology below district (or Island) level will undertake targeting and prioritizing the more deprived and weaker communities and by carrying out more focused facilitation processes to stimulate demand. At the community level, gender equality is taken on boardby ensuring 50% female membershipat the CMCs. MACEMP Coastal Community Package The Coastal Community Packagewill guide communities on activities that are eligible for funding and supportunder MACEMP. Thesepackages comprise a set of interventions to be carried out and will be inthe form of provisionof informationand education; capacity enhancement; and delivery of services. - 177 - The following interventions will be implementedas a part of the CoastalCommunity Package: I.Advocacy, Information andMobilization This will informpeople aboutnatural resourcemanagementandthe needandbenefits from improvedpractices. A coastalresourcesmanagementpackageto informthe communities will be prepared basedon needs assessment. Communities andhouseholdswill be mobilisedand sensitised to facilitate formation of resourceuser groups (including apex groups where applicable) to formulate sustainable livelihood options. II.CapacityEnhancement This package will include support for initiatives aimed at providing skills neededto design, implement and effectively manageprojects at community levels. Activities will facilitate participatory community involvement and selection of priorities, as well as trainingin managerial, budgeting, and financial accountability for the procurement of goods and materials. It will also focus on strengthening the capacity of communities to establish linkages with other organizations, particularly CBOs and NGOs interested insupporting participatory management activities. Italso includes activities to strengthenandprovide technical supportto district environmental officers who would be involved inthe appraisalof sub-project proposals are also envisioned. These would be further supportedby the development and awareness creation of simple environmental impact assessment guidelines to evaluate proposedcommunity activities. III.Improvementof Quality andIncreasedSustainable Utilizationof CoastalResources Thispackagewill support community driveninitiatives to improve coastalcommunities livelihoods. The initiatives may include the demand o f (i) technical, (ii) physical, or (iii) social services to support potential community sub-projects, including AIGAs (Alternative Income Generating Activities), such as: Fishery Based: Fishery Aggregation Devices (cooperatively ownedby about 20 fishers) to increase fish catch fish processing - small scale Value Addedproduction activities onshore sustainable aquarium-fish collection fishcage aquaculture small-scale fish landing site infrastructure (i.e., water supply for cleaning and disposal, shade areas to minimize waste) medium-scale fish infrastructure such as small docks complementary fish processing devices such as ice plants and refrigerationunits Coastal ("Water" - below low tide mark) Basednon-fishery: pearl or shellfish culture inshallow water . seaweedlalgaefarming value added industry associatedwith pearl or shellfish culture value addedindustry associatedwith algae farming - 178 - Coastal ("Land" - above low-tide mark) basednon-traditional fishery brackish water agriculture (rice/asparagus for food, grasses for crafts) sustainable mangrove production (including non-timber products) mangrove honey andwax production for candle making fishfry nursery Coastal (Other) complementary industries:e.g., value addedprocessingon non-edible fish by-product waste for agriculture inputs as natural fertilizers (wastedbycatch canbe significant) joint food product value added(e.g., fish andgrain cakes) cultural tourismventures eco-tourism ventures Rehabilitationof cultural sites intarget communities will be an eligible publics works activity (underTASAF Safety nets Scheme) underthe CVF, provided that the subproject planning and monitoringis coordinated with the relevant Department of Antiquities. Monitoringand Safeguards Implementationof MACEMP sub-projects through TASAF 2 incoastal areas will abide to the coastaVenvironmentaVfisheries policies as well as Local Government regulations, norms and standards. This will be facilitated by experts at community, council andcentral levels, CBOs and NGOs, and environmental institutions as needed. This will include following guidelines on geographical distributionand construction of facilities (such as fisheries landing sites) in observanceof Ministerialpolicies and relevant by laws. This will be built into the selection criteria and will informdecisions to fund sub-projects. Screening guidelinesare part of the MACEMPESA and will be incorporated into screening proceduresfor subprojects. TASAF WMACEMP InstitutionalArrangements MACEMP will use TASAF protocols within the sub-project cycle. The following summarizes key features and special institutional arrangements to accommodate the interactions between TASAFandMACEMP. 1. A separatespecial account will be establishedwithin TASAF2 to receive MACEMP funds from MACEMP Sub-component 3(a) [the Coastal Village Fund].The funds within this account will be disbursed by the TASAFNational Steering Committee (NSC) usingprotocols inplace inTASAF. 2. Replenishment of the special account will bebasedon the same mechanisms as will be usedby TASAF. 3. Funds corresponding to MACEMP Sub-component 3(b) [Coastal Community capacity Enhancement] will not be transferred to TASAF andwill be retained in the MACEMP Special Accounts administered by the two MACEMP Management Teams (MMTs). - 179- 4. Sub-projects receivedby the TASAF ManagementUnit(TMU)will be referred to the Sectoral Experts Team (SET) of TASAF to ensure conformance with sector norms. A representativefrom MACEMPwill participate inSET meetings and refer all MACEMP-eligible sub-projects to MACEMP. 5. MACEMP will establish a small Coastal Community Action FundTechnical Committee (CCAFTC) which comprises the following three individuals: (a) the MACEMP EEZ GovernanceFacilitationTeam Leader; (b) the MNRT CCAF Coordinator; and, (c) the MANREC CCAF Coordinator. The CCAFTC will designate a chairpersonto represent MACEMPon the TASAF SET. The CCAFTC has access to an independentroster of technical experts inthe event that it requires or desires areview of agivensub-project proposal. - 180- Appendix A -NATIONALVILLAGEFUND of TASAF 234 Mainstreamingthe community-drivendevelopment approach I.WhatwilltheNational VillageFunddo? The NationalVillage Fund(NVF) is being set up as the main instrument under the Tanzania Social Action Fund(TASAF) to respond to community requests for investmentsthat will assist specified beneficiary groups (poor communities andhouseholds, as well as vulnerable individuals) to take advantage of opportunities that can lead to improved livelihoods. Experiences from TASAF Iindicated that approaching this via components (such as Community Development Initiatives, Public Works Programs, Social Support Projects, etc.) seems to drive subproject requestsinline with what communities perceive canbe funded, rather than what is actually of highpriority. Rather than designing components under which subprojectscan be fitted, the emphasis of the NVF is onhaving no components, but rather a fund with specific access/approvalcriteria that canbe usedto finance community requests as long as they fit within a framework defined by the following two elements: (a) That a subproject request assists a community contribute to Tanzania's Poverty Reduction Strategy (PRS) goals of: - Reducing the number of people living on less than $1dollar a day; -- Achieving universal primary education; Attaining gender equality inprimary and secondary schools; - Increasing the number of people with access to improvedwater sources; - Reducing under-five mortality; -- Reducing maternal mortality; and Halting and reversing the spreadof HIV/AIDS. (b)That a sub-project is: - The result of a verifiable andsystematicextended-participatory rural appraisal (E-PRA) process; - Community owned with a mandatory minimumcommunity contribution; and - Inlinewith approved sectornorms andstandards. Any activity that (a) fits within these parameters, (b) is under the US$30,000NVFcontributionper sub- project, and (c) has been approved by the appropriate authority (see I11and IV below) will be funded. LGA staff involvedinthe facilitation as well as desk and field appraisal will verify that the community sub-project requestshave followed the sector guidelinesas they relate to issues of safeguards (environment and resettlement) and occupational health. Funds disbursedfrom the NVFwill go into a Mfuko wa Kijiji/ShehidMtaa (MWK) thereby mainstreaming the community-driven development approach into Tanzania's PRS. The NVFhas madeprovisionfor ear-markedfunds which can be usedto meet the needs of special groups (e.g. vulnerable individuals, food insecurehouseholds with able-bodied adults, communities wishing to managetheir natural resourcesbetter, such as forests or coastal/marine resources, persons affected by HIV/AIDS, etc.) by creating "windows" where resourcescan be accessedon a demand- =This appendixis a productof TASAF 2 andshouldnot be modified. It is intendedas a commonmessagefor all TASAF communities. Modificationof this appendixmay resultin mixedmessagesand confusionat the community level and may undermineTASAF and MACEMPprojectobjectives. - 181- driven basis. This means that special facilitation will be requiredso that communities that have these specific needs can access these specific resources; the "ring-fenced" resourcesmust be exhaustedbefore requests inthese areas canbe fundedfrom the mainNVFbudget. For instance, TASAF 2 has an IDA Grant of US$21millionwhich can only be used to meet the demand-driven needs of vulnerable individuals and food insecure households,these Grant funds must be exhaustedbefore funding will be made available from the Credit. No funds will be provided from the NVF to any community, VC or LGA if a Village Fund Coordinator and a Village Fund Justification Assistant (an Accounts Assistant) have not been designatedby the LGA from its staff. 11.NationalVillage Fund(NVF) The NVFexists to mobilize and disburseresources to MWK insupport of community efforts to improve their lives and become active participants innational development. The NVFwill maintaina team of experts inthe areas of financial management, procurement, participatory planning, information management, auditing, andmonitoringand evaluation to ensure that the NVF is able to: 1. Disbursefunds to LGAsagainst a schedule of sub-projects submittedfromthe LGAs and endorsedby the NSC. 2. Rely on the SET to confirm that all sub-projects financed are inline with sector norms and standards issuedby central Government on service provision. 3. Disburse funds to VCs after endorsement by the NSC. 4. Receiveprogress reports from LGAsonthe use of funds before further disbursements. 5. Regularly publishreports on the use of resources and the results. 6. Develop tools to promote accountability and transparency inthe use of funds. 7. Submit annual audit reports to the Public Accounts Committee. 8. Submit quarterly and annual reports to the NSC and relevant financiers (e.g., Government, World Bank, and donors). 111.LocalGovemment Authority (LGA) The LGA is the Planning Authority which provides planning guidelines to be followedby the MWK. Its mainfunctions with respect to the MWK are to: 1. Receive 100%grantsfromthe NVFfor approved sub-projects to disburseto the MWK(92.5%), while retaining 7.5% (once the LGA has met specified fiduciary access conditions for central government grants). 2. Use 2.5% of the 7.5% retained from 1above to facilitate a participatory preparation of sub- projects, to conduct desk andfield appraisals, and approval, andto use the remaining5% to undertake supervision. The NVFwill be able to provide advances to the LGAs (against the 2.5%) to cover the cost of ExtendedParticipatory RuralAppraisal (E-PRA) as well as desk and field appraisals so that approved sub-projects canbe submittedto the NVFwithout delay. 3. Endorse sub-projects from the VCs as long as the LGA meets the conditions stipulated under the NVF:have a designatedVillage FundCoordinator and aVillage FundJustification Assistant (an accounts assistant) to receive NVFresources. 4. Engagea LSP(from its own staff or private sectorNGOs) for all funded sub-projects inline with agreements stipulated inthe Sub-project Financing Agreement, signed with the VC and the Community Management Committee (CMC). 5. Monitor andreport on the activities of LSPs. - 182- 6. Receive progress reports on sub-projects implementation as well as results from Community Statistics Day, Community Score Cards, and Citizens Report Cards inorder to improve district- level managementof development activities under the NVF. 7. Produce and submit to the NSC, TASAF ManagementUnit,and Regional Consultative Committee an annualreport on service coverage and challengesinthe district as a guide for future planningandas contributionto national monitoringefforts. 8. Maintain financial records as required by the NVF. IV. Village Government The Village Government consists of anAssembly (made up of every personwho is ordinarily resident in the village and who has attained the apparent age of 18) and a VC (made up of 25 persons elected at an Assembly to runthe affairs of the Village Government). The VC, as the executive arm of the Village Government, will: 1. Call meetings for the E-PRA sessionsconductedby extension staff. 2. Oversee the election of a CMC by the Village Assembly. 3. Approve sub-projects requiring a NVFcontribution of less than $5,000 if the sub-project addresses one goal from the Tanzania PRS. 4. Approve sub-projects requiringa NVFcontribution of up to $10,000 if the sub-project addresses two or more PRS goals. 5. Endorse sub-projects that have a NVFcontribution above $5,000 (if addressinga single PRS goal) and those above a NVF contributionof $10,000 (if addressingtwo or more PRS goals) and forward themto the LGA. 6. Convene meetings and undertake other activities necessaryfor the monitoring of sub-project implementation inline with NVFtransparency and accountability guidelines. 7. Receive reports from the CMC, review andforward themto the LGA. V. Mjkko wa Kijiji/Shehia/Mtaa (MWK) The MWK, to be operatedinthe context of the LocalGovernment Act No. 7 of 1982, is a fund operated by Village Governments to respond to community-identifieddevelopment needs inthe kijiji (rural), Mtaa (urban), andShehia(Zanzibar). Ithas abasic structure definedby the following elements: 1. Forthe MWK, acommunity isneed-defined andcouldcover part, all, or severalgeographical villages. 2. Management is by a VC through its Finance Committee. 3. Implementationof sub-projects is by democratically elected CMCs. 4. A total of 10%from NVFcontributionto a sub-project is set aside as a managementfee (2.5% for the VC, 2.5% for the LGA, and the remaining 5% will be givento either the VC or the LGA, depending on who will be responsible for the bulk of the supervision). 5. The VC scrutinizes all sub-projects after suitable facilitation by LGA staff and/or NGOs and submitsthemto the Local Government Finance Committee (LGFC) for approval and/or endorsementfor funding from the NVF as follows: Subprojects that have a NVFcontributionof less thanUS$5,000 and contribute to a single PRS goal can be approved at the VC level and sent for endorsementby the LGFC; 0 Subprojectsthat have a NVFcontributionequivalent to or less than US$lO,OOO and contribute to more than one PRS goal can be approved at the VC level and sent for endorsementby the LGFC; - 183 - 0 Subprojects which only address a single PRS goal and have a NVFcontribution of more than US$5,000 will needapproval by the LGFC; and 0 Subprojects that have aNVF contribution ranging from US$10,001-US$30,000 will need approval at the LGlevelby the LGFC. 6. At the apex, the National Steering Committee (NSC) will have a final endorsing function for all sub-projects andwill be guided by recommendations of the Sector Experts Team (SET). 7. Quarterly progress reports will be preparedby CMCs for the VC to sharewith Village Assembly andLGAs. 8. Completed assets are maintainedthrough specialized committeeshodies made up of beneficiaries under the VC (e.g., committees for schools, healthfacilities, water points, etc.) or by the relevant sector. 9. An account, which is auditedyearly by the LGA, from which funds are disbursedto implementingbodiedcommittees. 10.Reports areproduced fromCommunity Statistics Days, Community Score Cards, andCitizens Report Card activities and disseminatedwidely. VI. Local Service Provider (LSP) This is atechnically competent persodinstitutionthat can support the CMC andprovide some degree of verifiable oversight on behalf of the LGA or VC. The LSPcan be an extension worker, consultant, or NGO/CBO representative who actively supervises sub-project implementation. The LSP mustbe: 1. Identifiedby CMC duringor soonafter the E-PRA. 2. Engaged inaccordancewith duties specified inthe Sub-project Financing Agreement. 3. Paidout of the 5% retained by the LGA or VC to cover cost of supervision. 4. Responsible for assisting the CMC prepare short reports and signs off on all schedules of procurement before the CMC incurs expenditures. 5. Able to prepare separateprogress reports for the VC or LGA on the way the CMC i s managing sub-project implementation. VII. Community Management Committee (CMC) This is the implementing mechanismfor VCs, and its mainfunctions are to: 6. Elect an executive (with powers to disburse funds from a sub-project bank account). 7. Identify a LSP (during the E-PRA) for contracting by the LGA or VC -e.g an NGO, an individual private consultant, a named extension staff category from District and/or Ward levels, etc.). 8. Helpto disseminate informationon the TASAF project and its processes and methodology. 9. Preparedetailed sub-project costings (with facilitationfrom extension staff, consultants, etc.) 10. Advertise contracts and overseethe selection of a contractor to execute works and provide services. 11.Makepaymentsto contractors uponthe satisfactory completion of acontract. 12. Maintainfinancial andprocurement records for inspectionby VCs and LGA representatives. 13. Liaise with technical experts who undertake supervision on behalf of VCs, LGAs, and NVF management. 9. Produce quarterly progressreportsfor public display by the VC at places agreeduponby the Village Assembly. - 184- 27.Leffer of Sector Policy "HEUNITEDREPUBLICOFTAN= THEMINISTER.FOREWANCE 'elephone: 2112854 TREASURY, Fax: 2117790 mP.O.Box 9111, DARes SALAAM, Inreplypleasequote TANZANIA. Re No: C/DB.150/359/01 June3", 2005 Ms. Judy M. O'Connor Country Directorfor Tanzanla and Uganda, World Bank CounbyOffice, DARESSALAAM. DearJudy, LElTEROF SECTOR POLICY ON MARINEAND COASTALENVIRONMENT MANAGEMENT 1. IamwritingonbehalfoftheUnitedRepubltcofTanzaniatorequestfor approximately US$ 51.634 million from the Intematlonal Development Association (IDA) to support Marine and Coastal Environment Management Project (MACEMP). MACEMP is proposed to be a 6-year project that is intended to support policy reforms and policy implementation activities on marine and coastal resources in order to bring positive impact on the quality of the life of populations in coastal districts and also to improve on the integrity of the off-shore resources base that is of natlonaland internationalsignificance. BACKGROUNDAND RATIONALE 2. Mainland Tanzania and Zanzibar are endowed with rich marine and coastal resources, which are critical to the national economy and social development. The coastal communitiesrely heavily on these resources for their food and income; most of them have a total dependency on fish for their protein. However, coastal communities are among the most impoverished InTanzania and have less than US$ 100 per capita GDP. In addition, the coastal communities are prone to HN/AIDS. The coastal resources which provide livelihoods, are facing threats which include depletion of near shore fisheries resources due to open access, inadequacy in regulatingcoastal development such as urbanizationand tourism, weak institutional capadtiesand coordination especially for the management of offshore fisheries and poor scientific understandingon the status of marine and coastal resourcs. Some of the problems facing Tanzania with regard to the management of marine and coastal resources are transboundaryand consequently have regional implications, In order to address the development agenda, the Government has prepared and adopted vision 2025, and the National Strategyfor Growth and Reductionof Poverty (NSGFP) (Mainland Tanzania) as well as the Development Vision 2020 and the Poverty Reductlon Plan (ZPRP) (Zanzibar) with the aim of eradicating poverty through enhancingsustainable utilization and management of natural resources. As a contribution to the implementationof these visions, the Govemmentis lnitiating the Marineand CoastalEnvironmentManagement Project(MACEMP). - 185 - 063ECTIVES OF MACEMP ' 3. The overall goal of the Marine and Coastal Environment ManagementProject [MACEMP) is to enhance sustainable economic growth and livelihoods in coastal communities (inciuding gender and vulnerable groups), through the improvement of policy, regulatory and institutional framework for managing resources in the Exclusive Economic Zone (EEZ) and territorial waters. The specific objectives of MACEMPare: to establish and implement a common governance regime for the EEZ that conlributes to the long-term sustainable use and management of EEZ resources; to establish and support a comprehensive system of managed marine areas in the territorial seas, bullding on Integrated Coastal Management (ICM) strategiesthat empower and beneFk coastal communities; to empower coastal communities to access opportunities so that they can request, implement and monitor subprojects that contribute to improved livelihoodsand sustainable marineecosystem management, MACEMPhasfour components: Component 1: Sound Managementof the ExclusiveEconomic Zone Component 2: Sound Managementof theCoastal and Marine Environment Component 3: CoastalCommunity Action Fund. Component 4: Projectimplementation. 4. The project scope will'provide for interventions in all coastal districts of Tanzanla Mainland and Zanzibar and wlll Include the territorial seas and Exclusive Economic Zone (EEZ). The regional scope will include dialogue with neighboring countries to ensure coordinationof managementeffortsover living resourceswithln the Westem Indian Ocean. The project will assist Tanzania to meet its multilateral environmentalagreements relevantto the marineand coastal environment to which itis aparty. POLICIESAND STATUTES 5. Tanzania Mainland and Zanzibar haveinstitutedvarious policles and statutes for the effective management of marine and coastal resources. However, due to inadequate capacity and financial resources, the Governmenthas not been able to successfully manage the marine and coastal resources sustainably so as to contribute towards poverty eradication, especially in the coastal communities. All these policiesand statutesare supportiveto the implementationof MACEMPand call for integration, coordination, lnnovativeness and adoption of participatory, cross- sectoral multidisciplinary approaches in the implementation process. All these are key issuesfor the implementationof MACEMP, 6. Article 2(i) of the Constitution of the United Republic of Tanzania (URT) specifiesthat "the territory of the UnitedRepublic of Tanzania consists of the whole area of Tanzania Mainland and the whole of the area of Zanzibar including the territorialwaters". TheTerritorialSea and ExclusiveEconomiczone Act of 1989 and ,the Deep-sea Fishing Authority Act of 1998 have implications on Union matters. Both acts statethat they will be applicableto Zanzibar as well as MainlandTanzania. 2 - 186- 7. The Management of marine and coastal resources in Tanzania Mainland is guided by policies, and strategies which include: Fisheries Policy and strategy of 1997; Natlonal Environment Policy, 1997:. Nat!ona! IntegratedCoasb! n?limnment ManagementStrategy 2003; National Poverty EradicationStrategy 1998 and Poverty Reduction Strategy Paper of 2000, the 2004 National Strategy for Growth and Reduction of Poverty; NationalTourism Policy 1999 as well as several leglslations such as the FisheriesAct 2003. Natlonai flsheries Master Plan; Marine Parks and Reserves Act 1994 and the Mangrove Management Plan. In addition, there are several sectoral statutes, which are also relevant to the managementof marineand coastal resources, and these includethe ForestAct, 2002, EnvironmentManagement Act, 2004; Village Land Act, 1999; Tanzania Investment Act etc. Recognizing the importanceof cultural resources, Tanzania has enacted the Antiquities Act of 1964 to safeguard the management of these resources. The Act empowers local government authorities to make by-laws and to performfunctions in relation to the preservation of and access to monuments. There is need to conserve and increase the awareness on these cultural resources so as to realize their contributionto the growthof the economy. 8. In Tanzania Mainland, the lowest administrativeunit of the local government ladder isthe villagecouncil. Section 22 of the Local GovernmentAct providesfor the functions and mandates of a village council. These include: planning and coordinatingthe activities of, and renderingassistance and advice to, the residents of the vlllage engaged in aquaculture, fishery, agriculture, horticulturalforestry or other activity or industry of any kind; and to encouragethe residents of the village to undertakeand partidpateincommunalenterprises. 9. Zanzibar has a number of policy documents that can adequately support the implementationof MACEMP. These policy documents include: the Zanzibar Poverty Reduction Plan, Fisheries Ad, No. 8 of 1988, Forest Resource Management and Conservation Act No, 10 of 1996, Zanzibar Nature ConservationAreas Management Unit Act No. 10 of 1999 and The Environmental Management forPromotion Sustainable Development Act, 1996. Other legislations include Investment & Protectlon Act, 2004 and The Ancient Monument Preservation Decree Cap 102 of 1934. The Decree provides for the declaration, acquisition, preservation and maintenanceof monuments/antiquities in Zanzibar. Italso provides for the right of access by the public to protected monuments/antiquities. The poilcy initiativesthat support management of the coastal and marine environment are The Agriculture Sector Policy (ZOOO), The National Forest Policy (1995), The NationalEnvironmental Policy (1995), The Land Use Plan (1995), The Investment Policy (2003) and the Tourism Policy(2004). 10. The ongoing Local Government reform in Zanzibar will support the implementation of MACEMP. The RegionalAdministrationAct No. 1of 1998 provides the legalframework for the establishmentand functloningof the offices of Regional Commissioner, DistrictCommissioner and the office of Sheha (as part of the district adminisbation). TheAct also providesfor the functionof the various officials as well as the DevelopmentCommittees at regionand district levels. The Distrlctand Town Council Act, 1995 establishes the town councils and districtcouncils in Zanzibar. As provided by this Act, the functions of the District Councils include the formulation, coordinationand supervision of the implementation of the plans for the economic, commercial, industrial and social development. Also the District Councils have the - 187 - responsibilities of making by-laws applicable through out its areas of jurisdiction, and make consideration, and regulate and co-ordinate development plans, projects and p r o g m " of vil!ags an!! hwnship councils wlthin its are8 dj~rkdictior!.In addition, district councils are mandated to take measures for environmental protection through the Environmental Protectlon and Social Welfare Committee; which has the functions of maWng by-lawson regulationof fisheries, and utilization of naturalresources. 11. TheCooperativeAct No. 4of 1986providesfortheregistrationof cooperative societies, which include FisheriesCooperatives andThe SocietiesAt& 1995provides legal basis for registration, conduct, administration, inspection and cancellation of societies in Zanzibar INTEGRATIONWITH NATIONALPROGRAMMES 12. MACEMP intends to work closely wlth the ongoing programmes to create synergy and avoid duplication of efforts while contributing to povew eradication, MACEMP will integrate with the IDA supported Tanzania Social Action Fund 11 (TASAF II), GovernmentSupport Programme (LGSP), PartlcipatoFyAgricultural Local Development and Empowerment Project (PADEP), the Sustainable Management of Land and Environment (Zanzibar) (SMOLE) as well as the Agricultural Support: Services Programme (ASSP) `(in the pipeline) and Pastoral and Agro-pastoral LivestockDevelopmentProgramme(PAPUDEV) (inthe pipeline). 13, The PADEP that Is financed by IDA (will cover equivalent of two districts of Zanzibar and 26 districts on the Mainland Tanzania) has the objectives of strengthenlng the capacity of rural communities, and relevant Institutions in planning and implementing demand driven agricultural development initiatives. PADEPalso intendsto increaseagriculturalproductivityand productionby promoting integrated and sustainable use and management of natural resources through the adoption of improved technologies and enhancement of private sector participation in input and output markets and in the provision of services to rural communities. In collaborationwith TASAF 11, which is a US$ 150 million project, MACEMP aims to empower coastal communities to acces opportunities for livelihood development, The Coastal Village Fund will be established to enhance and diversify livelihood activities in the project participatingdistricts. INTERNATIONALCONVENTIONS 14. Tanzania is party to a number of Multilateral Environmental Conventions (MEA) such as the conventionon BiologicalDiversity, CrrES, UNCLOS, RAMSARand Nairobi Convention and has partldpatedin the Global intergovernmental processes such as UNCED -1992, No 4- 5 - 1997, WSSD -Johannesburg 2002, Millennium Summit -2000, In an endeavour to implementthe commitments In these MEA, a number of projects and programmes have been developed and/or are being developed. MACEMP will link up with these projects for purposes of intemalisatlon of these commitments at national level. Specifically, MACEMP will coordinate with GEF initiativesincluding the South West Indian Ocean Fsheries Project (SWIOFP), the Targeted Research Projecton Coral Reef Internationalon Westem IndianOcean Management and the Agulhas Current and Somali Current Large Marine Ecosystem Project (ASUME). MACEMP will also link up with the project, which is addressing Western Indian Ocean Land-based (WIOLAB) activities that impact the coastal and marineactiiitles under the NairobiConvention. 4 - 188 - INSrrrUTIONAL FRAMEWORKFORMACEMPIMPLEMENTATION 15. MACEMP wlll largely be implemented within the existing institutional framework both at the national and local levels. However, dellberate effort will be made to enhance the capacity of all responsible institutionsfor the implementation of the project, The Mlnistries of Natural Resources and Tourism (MNTR) uanzania Mainland) and Agriculture, Natural Resources, Environment and Cooperatives (MANREC) (Zanzibar) are the main authorities responsible for natural resources. Whereas MANREC is also responsible for environmental management in Zanzibar, the Vice President's Office and NEMC is responsible for the management of environment In MainlandTanzania. Within MNRTand MANREC, the Departmentsof Fisherieswill coordinate and host the Management Units for the implementation of MACEMP. fncludeOther 16. Institutions which wlll participate in the implementation of MACEMP Ministry of ForeignAffairs and International Cooperation Minisby of Lands and Human Settlement, Presidenfs Office - Regional Admlnistratlon and Local Government (PO-RALG), Ministry of Home Affairs, Ministry of Trade and Industries, Department of Antiquities of the MNRT; Mlnistry of State, Local Govemment and SpecialDepartment (Zanzibar), Departmentof Archives, Museums and Antiquitiesof the Ministry of Education, Sports and Culture (Zanzibar), Ministry of Trade and Industries, Ministry of Justice and Constltutional Aftairs, Marketing and Tourism (Zanzibar), Tanzania Investment Centre, Chamber of Commerce, Industry and Agriculture (Zanzibar), financial institutions, NGOs active in promoting sustainable community based coastaland marineresourcesmanagement. 17. Through MACEMP, communities will be empoweredto be able to implement subprojects for livelihood improvement. Support will also be provided for the formationof Community Saving and Investment Groups/Assoclations and eventually the establishment of Community Saving and Investment Banks. The existing Institutionalarrangement at the District, village and Shehia levels is very supportive to the proposed MACEMPinterventions. For the purpose of across government and regional (Western IndianOcean) coordination as well as harmonization in reporting, the EEZ Governance Facilltatlon Team will be engaged to backstop the MACEMP ManagementTeams withinthe MNRTand MANREC. GOVERNMENT'SCOMMITMENTS 18. The United Republic of Tanzania and Zanzibar are aware of the impediment to the operation of the Deep Sea Fishing Authority Act, of 1998 and to the implications on the managementand utilization of the EEZ resources, and thus are committed to review, and amendthe EEZAct, 1989as well as the Deep-sea Fishing Authority Act, 1998, Already the Deep-sea FishingAuthorii Act has beenpresented eo the House of Representatives, Zanzibar, InJanuary 2005 and will be presentedto the URT Parliament with the Wew of amending the Act to facilitate the operational'ition of the Deep-sea Rshfng Authority by July 2005, The current negotiations on the Agreement between the European Community and the United Republic of Tanzania on Fishing in Tanzania's Fishing Zone will factor in the objectives of MACEMP as well as MACEMP to provide framework for and/or guide negotiations. 5 - 189- 19. The Governmentis committed to reviewingthe FisheriesAct 2003 (mainland) and FisheriesAct 1989(Zanzibar) for the purposesof harmonization of management actions consistent with MACEMP. Other :eviews lntlildz the Fisheries M&er Pian and the MangroveManagementPlan. 20. natureRecognizingthe required to abieve sustainability in their use; Tanzania of managementvalue of marine and coastal resources and the cross-sectoral Mainland has approved the National Integrated Coastal Environment Management (ICM) Strategy. This strategy will assist Tanzania with coastal planning and preparedness to deal with natural catastrophes such as tsunamis, which have caused great loss of life and damage to propertyand investmentsin South fast Asia and the Indian Ocean at large, The Government is committed to the implementation of the ICM strategy and MACEMP will certainly enhance the realizationof the goals and objectives stated in the Strategy. With regardto cultural resources, the Government is committed ta improving their conservation and management through the revislons of the relevant legislations as well as rehabilitation of the sites andcapacity building 21. With regard to the management of marine protected areas, Tanzania Mainland has enactedthe Marine Parks and Reserves Act, 1994and is committedto the implementation of the Act including the requisite requirement of involving coastal communltles In the planning, development, management and sharlng of the proceedsfrom the park's resourcesas well as the ertablishment of the Marineparks and Reserves Development Fund. Zanrlbar has already established the Protected Areas Board as provided for under the EnvironmentalManagement for Sustainable Development Act, of 1986. However, since its establishment the Board has not operated effedlvely. The Government intendsto strengthen the functioning of the Board by establishingthe Nature Conservation Unit as providedfor by the Zanzibar Nature ConservationUnit Act, 1999. The Unit shall coordinate all activities related to protected areas both in territorial and aquatic ecosystems. The Marine ConservationUnit will also be established and supported by the project and later on affiliated to the Nature Conservation Unit to enhance better coordination and networking of MarineProtectedAreas (MPAs). 22. United Republic of Tanzania will review their MPAs related laws for the purpose of harmonizing them to enhance networking and will expand the area coveragefor MPAs in accordance with the commitmentwhich was made during the IUCN Parks Congress in Durban, South Africa, 2003. Both the Union Government and Governmentof Zanzibar are committed to establish and Implement an MPA in the EE. Durlng MACEMP implementation, negotlations will be initiated with the neighboring countries for the purpose of enhancing collaboration in implementing transboundary marine protectedareas. 23 The Government recognizes the institutional weaknesses and low capacity to coordinate the management of marine and coastal remurces and is committed to harmonizatlon of the management of marine and coastal resources between Zanzibar and MainlandTanzania and intends to continuewith the Local Government reforms to devolve more responsibilities to the local author'Ry institutions and enhance public/private partnerships in sustainable natural resources management and utilization. The Governmentis also committed to create more public awareness on the importance of sustainable marine and coastal resources and on related 6 - 190- policies and legislations in order to enhance policy lmpiementation and law enforcement. 24. Management of the EEZ will require collaboration and consultations with neighboringcountries borderingthe URT's EEZ. Furtherwithinthe territorialsea, the managementof transboundarycoastal issueswill requirejoint effort with Kenyaand Mozambique. The United Republicof Tanzania is committedto enter into a regional dialogue with these neighboring countries on marine and coastal management issues and priorities and on collaborationrelated to transboundary fisheries issues. Regarding delineation of the E2 boundaries, the Government will embark on a dialogue with the Government of Comoro with a view of reaching an agreement on the boundaries, CONCLUSION 25. The United Republic of Tanzania has In place a comprehensive range OF legislative and policy initiatives that can support and guide the implementationof MACEMP towards attaining its envisaged objectives. However, the Government believes that MACEMP objectivescan only be met if there is adequatecommitment and participationof all stakeholders Inthe conservation, managementand utilization of natural resources. The implementation of MACEMP will create favorable policy and leglslative environment that will enhance capacity building for ail responsible institutions and communities to enable their participation in the implementation of projectactivitles. 26. In addition to improved management of marine and coastal resources, MACEMP will increase productivity and added value from improved post-hanrest processing and provide market access. This will in turn increase Incomes and government revenue as well as contribute to economic growth. The projectwill also contribute towards the reduction of vulnerability to external shocks through diversification of local production systems as well as diminish market risks through privatesector and community partnershipsand reversal of current trends In marine resources degradation. Finally, MACEMPwill improve ecosystem service and provide for the conservationof globallysignificantmarineand coastalbiodiversity. 27. In this respect, the Government views the partnership with IDA and other development partners contributing to MACEMP as yet another commitment and willingness to support Tanzania to implement *tSNational Strategy for Growth and Reduction of Poverty and the Zanzlbar Poverty ReductionPlan. The Governmentis committed and will ensure that the implementation of MACEMP targets the poor coastalcommunities and supportsthe nationaleconomic development initiatives. 28. We thankyou for your continuedsupport and cooperation Yours sincerely, 7 - 191- 22.Maps InsertIBRD Map 33494 - 192- IBRD 33494 TANZANIA SELECTED CITIES AND TOWNS MAIN ROADS PROVINCE CAPITALS RAILROADS NATIONAL CAPITAL PROVINCE BOUNDARIES RIVERS INTERNATIONAL BOUNDARIES 30°E 32°E 34°E 36°E 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 To To 0° endorsement or acceptance of such boundaries. Tororo 0° To To UGANDAKampala To To Kampala Lake Kagera To To Victoria Nakuru K E N Y A Bukoba Musoma Mara To To Nakuru Buoen RWANDA KAGERA M A R A 2°S 2°S Lake Mwanza Natron ToKama M WA N Z A Simiyu A R U S H A Kilimanjaro (5895 m) BURUNDI Arusha Moshi To To Lake Malindi Kibondo Moyowosi Yalova S H I N YA N G A Eyasi Lake Shinyanga Manyara Kahama Pangani KILIMANJARO Nzega Steppe 4°S Babati Same CONGO K I G O M A Masai PEMBA NORTH Kasulu Steppe Kigoma Singida OF. Kaliua Kondoa Tabora Iwembere SINGIDA Wete PEMBA Tanga SOUTH TA B O R A TA N G A Mkoani ZANZIBAR REP Lake Ugalla Manyoni NORTH Tanganyika DODOMA Mts. Mkokotoni ZANZIBAR SOUTH & Zanzibar Koani CENTRAL Mpanda Wamimi D O D O M A Wa ZANZIBAR DEM. Nguru Morogoro Kibaha WEST R U K W A Dar Es Salaam Rungwa Great MOROGORO DAR ES SALAAM Ruaha P WA N I Lake Iringa 8°S Sumbawanga Rukwa M B E Y AangeR I R I N G A Utete 8°S Mpui Mbeya Rufiji INDIAN Kilwa Mbeya Kilombero Matandu Kivinje Tunduma To To Kasama Kipengere OCEAN Njombe L I NuD I 10°S To To Kasama Range Mbemkur Lindi 10°S Mtwara ZAMBIA To To Songea Masasi TANZANIAKasungu Lake R U V U M A MTWARA Tunduru Malawi Ruvuma To To Chiúre Chiúre To To 12°S To To Marrupa MOZAMBIQUE Lichinga 0 50 100 150 200 Kilometers 32°E 34°E 36°E 0 50 100 150 Miles 40°E JULY 2005