Report No. PID11551 Project Name INDONESIA-Supplementary Project to the Second Coral Reef Rehabilitation and Management Program Project Region East Asia and Pacific Region Sector General agriculture; fishing and forestry sector (100%) Supplemental Project P071318 Borrower(s) GOVERNMENT OF INDONESIA Implementing Agency GOVERNMENT OF INDONESIA Ministry of Marine Affairs and Fisheries (MMAF). Address: Jl. MT. Haryono Kav 52-53, Jakarta Selatan--Indonesia Contact Person: Prof. Ir. Widi Agoes Pratikto Tel: (62-21) 7918-0163 Fax: (62-21) 7918-0456 Email: wapratik@rad.net.id Indonesia Institute of Sciences (LIPI) Address: Widya Graha Bld. 2 fl., Jl Gatot Subroto 10, Jakarta 12710--Indonesia Contact Person: Mr. S. Suparka Tel: (62-21) 522-5641 Fax: (62-21) 522-5709 Email: suparka@indosat.net.id COREMAP Phase I Office Address: Jl. Raden Saleh No. 43, Jakarta 10330--Indonesia Contact Person: Mr. A. Nontji Tel: (62-21) 314-3080 Fax: (62-21) 314-9377 Email: coremap@indosat.net.id Environment Category B Date PID Prepared January 8, 2003 Auth Appr/Negs Date May 12, 2003 Bank Approval Date October 16, 2003 1. Country and Sector Background Sectoral Importance Indonesia's coral reefs form the key ecosystem on which the majority of the coastal inhabitants of Indonesia rely for food, income generation, construction materials, and coastal protection. They are also of critical significance for scientific enquiry, educational purposes, pharmaceutical and health related drugs, and global conservation and heritage. It has been assessed that healthy reefs can produce marine products worth $15,000/km2/yr, and are an important source of food and economic opportunities for about 67,500 coastal villages across the country. Coastal and marine economic activities have been estimated to contribute to some 25-30t of Indonesia's gross domestic product (GDP) and provide employment to about 20 million people. The reefs also play an important role in marine-based tourism, attracting domestic and international tourist divers and providing the source of white sand for the country's popular beaches. The tourism value of coral reefs has been estimated at $3,000/km2/yr in low potential areas to US$500,000/km2 in high potential sites. Furthermore, fringing coral reefs also play key roles in dissipating wave energy, thereby protecting coastal lands from storms and wave erosion. The net benefits of coastal protection are estimated at $25,000-550,000 per km2 of reef, depending on the value of the infrastructure. Overall, the reefs provide direct and indirect economic value to Indonesia. Key Issues Facing Sector The Indonesian coastal and marine sector is beset with a number of problems that need to be addressed, foremost among which are the pervasive poverty in coastal communities and the extensive degradation of coastal resources. Coastal communities are among the poorest in the country, with large numbers of fisher families living in subsistence conditions and deprived of basic social services and facilities. Faced with problems of credit repayment, increasing debt, and low prices from middlemen/traders, fishers resort to destructive and illegal fishing methods (e.g., dynamiting, cyanide poisoning, trawling) in an attempt to increase their catch, thereby destroying coral reefs. Since about 90t of the fish in the country is caught by fishers dependent on coral reefs for a living, reef degradation has resulted in a drop in fish production, and therefore, lower incomes and poorer living conditions of coastal communities, particularly the small fishers. The Indonesian coastal and marine resources sector also suffers from policy, legal, and institutional constraints affecting resource management in the coastal areas. The National Coral Reef Policy drafted under Phase I of the Program is yet to be operationalized at the regional level. The Spatial Planning Act 24/1992, which provides the framework and legal basis for natural resources planning and resource allocation, needs to be amended for consistency with the provisions of recent laws on decentralization. Law 22/1999 on Regional Governance and Law 25/1999 on Financial Balance between the Central and Regional Governments have added new dimensions to governance and natural resources planning and management. However, while the devolution of resource management is expected to bring about long-term benefits, the lack of institutional capacity and preparedness of many local governments for the required tasks could exacerbate the problems of resource degradation and poverty prevalence in coastal areas in the short term. There is, thus, an urgent need to strengthen the institutional capacity of provincial and district governments in participatory resource planning and management to enable them to exercise their newly mandated authority and responsibility in resource management programs. The provincial and the district BAPPEDA (Regional Development Planning Agency), as well as other -2 - provincial and district agencies, need strengthening to equip them for their significantly greater planning functions and responsibilities. These include local-level resource planning, formulation of regional coral reef management policies and implementing guidelines within the framework of the National Coral Reef Policy, and co-management with local communities, resource allocation, and effective monitoring, control, and surveillance (MCS). It is also necessary to continue support for national initiatives in sector planning, information management, networking, and intersectoral coordination. As the jurisdiction for marine waters beyond the 12-nautical mile boundary remains with the central government, continuing technical and financial support needs to be extended to concerned sectoral agencies to enable them to carry out national-level sector planning and policy formulation and take appropriate resource management decisions. Finally, and most importantly, there is an urgent need to raise income levels and improve living standards among the coastal communities, and to empower coastal communities so that they could exercise effective stewardship over the coastal resources, particularly coral reefs and associated ecosystems. As resource degradation is exacerbated by the extreme poverty of artisanal fishers, who engage in fishing as a "livelihood of last resort," it is necessary to improve their income-earning potential and retrain them to undertake sustainable livelihood activities. Viable livelihood activities in coastal areas and small islands have to be developed/introduced specifically for small-scale fishers and with focus on the identification of investment opportunities. Local resource rights also have to be strengthened to ensure that investment benefits flow to the communities. Unless these are done, poverty in the coastal areas will intensify and lead to increased pressure on the resource, resulting in a vicious cycle of poverty and environmental degradation. The proposed Coral Reef Rehabilitation and Management Program Phase II Project is in line with the Government's current medium-term development strategy (PROPENAS) and the Guidelines of State Policy (1999-2004). It supports sector policy which covers efficient and sustainable management of maritime resources, the rehabilitation of damaged coastal and marine ecosystems, and improvement of the socioeconomic conditions of coastal communities, among others. It will assist the Government's poverty reduction thrust, which gives priority to developing income-generating activities in the coastal zone and small islands, particularly for small-scale fishers, many of whom live in abject poverty. It is also supportive of government-funded poverty reduction programs, including the Inpres Desa Tertinggal (IDT) implemented in a number of coastal villages in the country. Finally, it will implement an innovative process designed from the lessons learned from phase one to empower coastal communities to sustainably co-manage use of the coral reef ecosystems. 2. Objectives The development objective of the second phase of the Coral Reef Rehabilitation and Management Program is to establish a sustainable nationally coordinated but decentralized program in implementation to empower and to support coastal communities to sustainably manage use of coral reefs and associated ecosystem resources, which will in turn, enhance the welfare of these communities in Indonesia. - 3 - 3. Rationale for Bank's Involvement Bank-GEF support would ensure that Indonesia's coral reefs and associated ecosystems are sustainably manages. Bank-GEF support would also ensure that the desired six-fold outcome of the Phase II project is realized: (i) Communities are empowered to sustainably manage the adjacent coral reefs and associated ecosystems; (ii) Government & non-government institutions' capacity to respond to coastal communities' needs are strengthened. (iii) Financial sustainability of the program in participating sites is secured as a result of establishing formal partnerships with private and public organizations; (iv) Coral reef ecosystem productivity (and therefore fishers' income) is increased due to effective management; (v) Coastal communities' economies are diversified; and (vi) Awareness of the value of well managed coral reef ecosystem is increased. The Bank-GEF is also uniquely positioned to engage with regional and international initiatives in marine ecosystem conservation such as that of the World Conservation of Protected Areas (Marine), and the World Conservation of Protected Areas (Marine) Southeast Asia. Furthermore, the Bank is currently involved in two international efforts that specifically complement the proposed phase two program, namely (i) the Marine Market Transformation Initiative (MMTI) which is collaborating with external partners in finding solutions for the live reef fish trade, one of the most important threats to Indonesia's reefs; and, (ii) Bank/GEF Global Program of Targeted Research and Capacity Building for Coral Reefs, which seeks to build networks of scientists from the developed and developing world to fill critical gaps in our knowledge about factors which determine resilience and vulnerability of reefs under various forms of stress. This initiative has identified regional nodes in Mexico (Mesoamerica), Zanzibar/Tanzania (Western Indian Ocean), the Philippines and Australia/New Guinea in the Indo Pacific for collaborative research and capacity building. Finally, GEF support continues to help raise visibility and global support for the management of the most biologically important coral reef ecosystems in the world. GEF funding ensures that areas of global biodiversity significance, which may be isolated and of limited priority to regional governments, are included in proposed phase two project. 4. Description The proposed Coral Reef Rehabilitation and Management Program Phase II project is anticipated to comprise of the following three components: (a) Community Based Management & Development, (b) Institutional Strengthening; and, (c) Public Awareness & Education. The objectives of each component and sub-component are conceptualized below. Actual project activities financed under each sub-component are yet to be specified. (a) Community-Based Management & Development. The objective of this component is to empower coastal communities to sustainably manage coral reefs and associated ecosystems and diversify incomes which in tandem will in turn enhance community welfare. There are three sub-components envisaged: (i) Community Empowerment. The objective of this sub-component is to ensure that communities are organized and empowered to sustainably manage the coral reefs and associated ecosystem; (ii) Community Based Resource Management. The objective of this sub-component is to ensure that coastal communities in project districts formulate and implement effective - 4 - coral reef management plans; (iii) Community Development. The objective of this sub-component is to ensure that coastal communities' incomes are diversified through sustainable livelihood and microenterprise development. (b) Institutional Strengthening. The objective of this component is to enhance national, provincial, and district level government (and non-government) institutional responsiveness to meet the needs of coastal communities, in the context of project objectives. There are six sub-components envisaged: (i) National Coordination and Project Management. The objective of this sub-component is to ensure that institutional structures for national program coordination and decentralized project management are established and sustained; (ii) Legal Policy & Co-Management Strategy Assistance. The objective of this sub-component is to ensure that informal and formal laws governing communities' rights to sustainably co-manage coral reef ecosystems are established and that national, provincial, district, and local laws are established and/or strengthened to deter exploitation of the coral reef ecosystem resource and encourage sustainable management and use; (iii) Surveillance & Enforcement Program. The objective of this sub-component is to ensure that national and district level institutions are established and/or strengthened to support sustainable community based coral reef management; (iv) Coral Reef Information and Training Program. The objective of this sub-component is to ensure that public centers for coral reef awareness are established and functioning to support community-based coral reef management; (v) Sustainable Extension Service Program. The objective of this sub-component is to ensure that a financially sustainable extension program for community based coral reef ecosystem management is established and sustained; (vi) Monitoring, Evaluation and Feedback Program. The objective of this sub-component is to ensure that effective monitoring, evaluation, and feedback systems are established to ensure accountability, quality of outputs, measurement of social development outcomes, and support to communities for sustainable coral reef ecosystem management. (c) Public Awareness and Education. The objective of this component is promote village, sub-district, district, provincial, and national societal awareness to the local, sub-district, district, provincial, national, and global benefits of coral reef ecosystem conservation and sustainable use that could result in changed behavior from unsustainable to sustainable use of this natural resource. There are five sub-components envisaged: (i) International Public Awareness Campaigns. The objective of this sub-component is to create a consumer campaign for sustainable live reef food fish; (ii) National, Provincial, District, Sub-District, and Village Public Awareness Campaigns. The objective of this sub-component is to promote public awareness of the merits of sustainable use of coral reef ecosystems; (iii) National Coral Reef Awareness & Education Program. The objective of this sub-component is to ensure that coral reef conservation and sustainable use is mainstreamed into the education system; (iv) Target Village Coral Reef & Awareness Education Program. The objective of this sub-component is to ensure that coral reef conservation is mainstreamed into those schools in project villages; (v) Communication Supporting Project Implementation. The objective of this sub-component is to ensure that all project activities and outcomes are socialized at every level, and all nationally or regionally produced project outputs are transformed - 5- and communicated to project areas in a appropriate and culturally sensitive way. 5. Financing Total ( US$m) BORROWER $10.00 IBRD $15.00 IDA $15.00 BILATERAL AGENCIES (UNIDENTIFIED) $2.50 GLOBAL ENVIRONMENT FACILITY $7.50 Total Project Cost $50.00 6. Implementation The organization structure for COREMAP Phase II deviates from that of the first phase. The new structure is designed to ensure site specific flexibility, efficiency and control within the Project while fostering and maintaining clear communications and effective cooperation with various entities involved in Project implementation, including national, provincial, district, and local governments; NGOs; private sector, and community groups. The revised implementation arrangements also reflect Indonesia's move toward a more decentralization governance structure and the need to ensure financial sustainability by working with private sector partners, where possible. The institutional arrangements are presented below in two sub-sections: (a) Management and Implementation Functions, and (b) Advisory and Coordination Functions. The implementation arrangements are described in six sub-sections: (c) Implementation Schedule, (d) Accounting, Auditing and Reporting, and (e) Project Performance Monitoring, and (e) Mid-Term Review. (a) Management & Implementation Functions (i) National Coordination Unit & PMO (NCU-PMO). Ministry of Marine Affairs and Fisheries (MMAF) will be the executing agency (EA) for the Project, and will exercise overall operational responsibility for the national coordination, technical assistance and supervision of all Phase II activities. Although only created in 1999, MMAF has attracted a strong group of senior fisheries and resource management specialists who have accumulated extensive experience in implementing and monitoring donor funded projects. While MMAF has the GOI mandate for marine and coastal resource management in the country, it does not yet have jurisdiction over national marine parks. As a result, national coordination for Phase II means that operational staff from MMAF, Ministry of Forestry, LIPI, and Navy and other relevant national line-agencies are included in overall management. The NCU-PMO would ensure that decisions made by the National Steering Committee are operationalized. To oversee the day-to-day implementation of the Project, the NCU-PMO will be set up within Directorate General Coasts and Small Islands (DGCSI). NCU-PMO will be headed by a full-time Project Director who will report to the Director General, DGCSI. It will have adequate qualified technical and administrative staff and will be provided with the necessary office and communication equipment and vehicles. It will have the following responsibilities: (i) planning, scheduling and coordinating all Project - 6 - activities; (ii) administration of contracting activities for national activities; (iii) bookkeeping and maintenance of Project accounts and preparation and consolidation of reports; (iv) supervision, monitoring and technical assistance of the work program of the entire Project and preparation of consolidated monitoring reports; (v) serving as secretariat to the National Steering Committee (NSC); (vi) coordination of field activities; and (vii) liaison with World Bank/GEF. (ii) National CRITIC PIU. LIPI will be the national line agency responsible for the overall coordination and implementation of the national CRITC operation, including information, monitoring, research, and training. Staff from this project implementation unit would be responsible for fully participating in the national and local coordination of the CRITIC program and would be responsive to the National NCU-PMO and District PMOs. Under COREMAP Phase I, the program was managed from the COREMAP office housed within LIPI. (iii) District PMOs. To oversee the day-to-day coordination and implementation of the Project at each site, a District Project Management Office will be set up in each participating Kabupaten. Each District PMO will have a Manager who will be directly responsible for the project in that location. The Manager would report directly to the National PMO Director. District PMO staff will be detailed from the district fisheries services, the district planning agency, and other district agencies involved in coastal resource management. Consultants hired to assist in district project implementation would be an integral part of the management office and report to the District Project Manager. The DPMO will work very closely with the Bupati and district staff from the sector line agencies as well as with village government heads at the core sites. NPMO and DPMO will be responsible for (i) planning the work program, administering contracting services, maintaining Project accounts for monitoring Project expenses, and preparing liquidation reports; (ii) supervising and monitoring the work program for specific components and activities and preparing local progress and monitoring reports; (iii) providing technical advice and assistance to local government agencies on the technical aspects of the Project; (iv) coordinating the specific national and local activities of the different Project activities; and liaison with World Bank-GEF supervision teams. (iv) Site-Specific PIUs. Qualified non-government organizations (LSMs) and private sector organizations will assist in implementing the community based management and development component of the project and other aspects of the program where a demonstrated comparative advantage exists. Initial Memorandum of Understandings (MOUs) between the project and such identified private and non-government organizations discovered through the consultative process are being explored. (b) Advisory & Coordination Functions (i) National Steering Committee (NSC). An interagency NSC will be established to guide the overall direction of the Project and ensure overall coordination of activities between the Project and other government programs and projects. The NSC will be chaired by BAPPENAS and include the DG, DGCSI as Convenor. Other NSC members will include - 7 - representatives of the Ministry of Finance (MOF), LIPI, State Ministry of Environment, Ministry of Forestry, Ministry of Home Affairs, Ministry of Cooperatives and Small Enterprise Development, Ministry of Health, and the National Coordination Board for Sea Security (BAKORKAMLA). The NSC will provide policy guidance as needed follow up on policy and legal work, resolve any interagency problems, formulate solutions to impediments to Project implementation. It will meet at least quarterly in the first two years of implementation and semi-annually thereafter. The NSC will be assisted by a National Technical Committee (NTC) comprising the technical staff of NSC members, whose Chairperson will act as Secretary to the NSC. (ii) Provincial Advisory Committee (PAC). A PAC will be established in each Project province, headed by the Governor and composed of representatives of concerned sectoral agencies, local government agencies, NGOs, and CBOs. The RAC will oversee local Project coordination between participating agencies at the local level and liaise with the NSC as required. The RAC will meet at least quarterly each year. (iii) District Steering Committee (DSC). A district steering committee will be established in each participating project district to ensure overall coordination of activities within each district. The DSC would be chaired and convened by the Bupati and would include participation by relevant district line-agencies and well as a member from the district judiciary. (c) Implementation Schedule. The Phase II Project will be implemented over a six-year period (2003-2009). Project implementation activities (components, subcomponents and activities) and the order in which they will be implemented will be phased, and based on outcomes and outputs achieved rather than driven solely by a set implementation time schedule. (d) Accounting, Auditing, and Reporting. The PMO, PIUs, and other agencies involved in Project implementation will prepare and maintain separate accounts exclusively for the Project and will register in such accounts all receipts and payments for the Project in accordance with sound accounting principles and procedures. The accounts and financial statements for each fiscal year, including the special account and the SOE records, will be audited by the sovereign audit agency of the Government or other auditors acceptable to the Bank, in accordance with appropriate auditing principles. PMO will review and consolidate the accounts from the various agencies and, after audit, submit them to MOF and The World Bank. The audit report will include a statement verifying that funds disbursed by The World Bank against the SOEs were used for the purposes for which they were provided. Project accounts, including financial statements, SOEs, and special account records, together with disbursement documents, will be audited annually by independent auditors acceptable to World Bank, and will be submitted to the Bank not later than nine months after the end of each fiscal year. The Government and PMO will ensure the submission of audited Project accounts within the stipulated timeframe. The auditor's report will also include the auditor's opinion on the use of the special account and the SOE procedure. Both the financial statements and the auditor's report will be in English. Reporting systems will be set up at the national, regional, and local levels to enable DGCSI, through the PMO, to effectively supervise the - 8 - implementation of all Project activities and provide timely advice and support to the PIUs. PMO will be responsible for (i) collecting and consolidating all Project progress reports, site reports, technical and financial reports, and their submission to ADB and (ii) preparing quarterly progress reports, the midterm Project evaluation report, and the overall project completion report. The PIUs will be responsible for (i) preparing Project progress, technical, and financial reports covering site-specific activities and (ii) collecting and consolidating field data and feedback from local participating agencies and contractors that, in turn, will be relayed to the PMO. PMO will furnish quarterly progress reports to The World Bank on Project implementation, to be submitted within one month after the end of the quarter to which they relate, and such other reports and information relating to the Project as the Bank may reasonably request. Within three months of the physical completion of the Project, PMO will submit an ICR to the NSC and Bank. The responsibility for preparing these reports, accounts, and statements, and ensuring that they are submitted in accordance with the agreed time frame rests with the Project Director. (e) Monitoring, Evaluation and Feedback Program. MMAF and LIPI, in consultation with the Bank and other donors, will establish an appropriate Project Performance Monitoring System (PPMS) in PMO within six months of loan effectiveness. The PPMS will encompass (i) monitoring of physical and financial progress as well as economy and efficiency of key activities such as recruitment of consultants, procurement of equipment and materials, training arrangements, conduct of surveys and special studies, policy development, drafting of implementation guidelines, and the like; (ii) monitoring of the level and adequacy of participation of various stakeholders, including local communities, in Project activities, particularly those related to natural resources planning and management and social development; (iii) monitoring of the Project's social, environmental, and economic impact, including the establishment of benchmark information and data; (iv) assessing the effectiveness and utilization of CRITC networking; and (v) developing a mechanism for incorporating lessons learned from similar projects in the sector in Project planning. With the active participation of PMO and NPIU staff, contracted consultants will design and undertake a baseline survey. This survey will be repeated at midterm and at Project completion, to provide information necessary to evaluate the financial, economic, and social impacts of the Project. At the community level, participatory monitoring and evaluation (M&E) will be introduced as part of the Project's comprehensive participatory development approach. Special studies may be conducted to investigate issues relating to Project implementation and its impacts. For periodic monitoring, key indicators will be developed and incorporated in the regular reporting system. PMO staff will make regular visits to the field sites to monitor progress. Project M&E reports will be submitted by PMO to the Bank on a quarterly basis. On Project completion, the impacts of the Project will be evaluated according to a schedule and TOR to be agreed upon by GOI and the Bank. (f) Mid-Term Review. At the start of the fourth year of implementation, a comprehensive midterm review of the Project will be carried out to -9- identify any problems and constraints encountered and assess the need for mid-course modification of the Project scope and implementation arrangements. Technical and budgetary changes to the Project document, requested or arising from PPMS findings, will also be considered, as in the inclusion of additional activities at any of the field sites or the consideration of possible expansion of activities/sites over the remaining Project life. 7. Sustainability The adaptable program financing will closely match the program's investment needs, which are expected to decrease progressively from approximately 92 percent of the total costs in Phase I to 70 percent in Phase III. As the program matures, major capital expenditures in surveillance, technical assistance, and capacity building would be phased out. At program conclusion, the majority of the recurrent costs would be financed by GOI and private sector organizations. It is anticipated that financial and program sustainability and effectiveness would be ensured only by strengthening institutions and working with and through those organizations that have an incentive to sustainably manage the coral reef ecosystem (i.e. those whose livelihood are dependent on sustainable management of this natural resource such as private sector dive operators and research tourism and eco-tourism operators who have already invested significant amounts of capital in COREMAP locations). As a result, the project will seek out these organizations and identify specific areas of collaboration. 8. Lessons learned from past operations in the country/sector The Project is the second of three phases of a multi-year, multi-donor funded initiative to strengthen the management and conservation of Indonesia's coral reefs and associated ecosystems. The IUCN-led independent evaluation of Phase I entitled Independent Evaluation Report: Coral Reef Rehabilitation and Management Program (COREMAP) Phase 1 showed that the Project had successfully developed and established a comprehensive framework and program of national policy, monitoring, enforcement, and surveillance(MCS), public awareness, information and monitoring, and research in support of coral reef management, that will, in turn, guide and assist in further implementation to achieve the overall goal of the Project. It has contributed to the country's overall effort towards coastal resource management and poverty reduction. Specifically, the assessment indicated (i) a very high level of community involvement in coral reef resource management in the Project areas, resulting in a significant reduction in illegal and destructive fishing and coral mining in most of the Project sites by more than 50w, in some cases; (ii) greater public awareness of the importance of coral reef resource management; and (iii) stronger political will for coastal resource management and poverty reduction at all levels of government. However, although Phase I promoted coral reef resource management, its limited geographical coverage has resulted in limited impacts on altering coral reef use patterns, and improving institutional effectiveness to coordinate coral reef management. This is because of (i) the inherent complexity of coral reef management and poverty reduction, particularly at the initial stages of such initiatives; (ii) limited resources available for community-based management and alternative income-generating - 10 - activities; (iii) the lack of a supportive legal framework and weak enforcement of regulations; (iv) fragmented field implementation due to lack of cohesiveness between financing agencies and Project components; (v) the lack of a strategic approach and capacity in local government agencies to meet their enhanced role under the Law 22/1999 for management of inshore marine resources; and (vi) inadequate provision of basic social services and few tangible returns to poor coastal communities. Other lessons from Phase I include the following: (i) coral reef protection cannot be completely successful unless there is a strong legal and enforcement regime; (ii) a balance must be achieved between activities aimed purely at reef conservation and those targeting improvements in the quality of life of the communities; (iii) a broader ecosystem-based approach to address coral reef and biodiversity conservation is more effective than narrowly focused interventions; (iv) community improvement should emphasize sustainable socioeconomic activities that promote alternative livelihood, and social infrastructure projects should conserve resources, improve public health, or reduce pollution; and (v) considerable flexibility should be allowed in tailoring programs to the very diverse cultural, socioeconomic, and biophysical conditions in different localities in Indonesia. Incorporating lessons from Phase I and other similar donor-assisted projects in the sector, the Project will be cohesive in its design, and work toward one Project framework for implementation regardless of the source of donor financing. The Project will attempt to adopt a holistic approach to coral reef management and provide poor coastal communities with basic social services, social infrastructure, and income-generating opportunities to balance environmental and resource management with socioeconomic development. It will place heavy emphasis on the active participation of Project beneficiaries, local government institutions, non-government organizations (NGOs) and private sector organizations in the planning and implementation of resource management programs. The Project will include substantial community empowerment and capacity-building activities to ensure that public support is effective and sustainable beyond the life of the Project. It will also provide for national-level interventions to improve national coordination of coral reef research and monitoring, training, and public advocacy for coral reef conservation and sustainable use. 9. Environment Aspects (including any public consultation) Issues : The project aims to implement a process to empower coastal communities in targeted districts in Indonesia to sustainably manage their coral reef ecosystems, and as such most of the activities are expected to have benign, if not positive, impacts on the environment. However, two aspects of this process could potentially have site-specific, adverse environmental impacts. The project will fund community-determined micro-projects in each community, both basic needs proposals within a set and relatively small budget - such as water supply, school construction, etc., and alternative livelihood enterprises such as cottage industries. These micro-projects will be determined by communities throughout the course of project implementation and some may be classified as Category B, requiring an environmental assessment. Similarly, some of the micro-projects could be located in, and alter, critical natural habitats, promote agriculture using pesticides, impact cultural property, and - 11 - involve indigenous peoples. For this reason, the project has prepared and Environmental and Social Assessment Framework to be applied to the design and implementation of each of these micro-projects, so that they will be assessed and classified, using and EA Checklist, during the design, and those micro-projects triggering any environmental safeguards will be required to conduct a full Environmental Impact Assessment and Environmental Management Plan, in accordance with OP 4.01. 10. Contact Point: Task Manager/Task Team Leader Pawan G. Patil The World Bank 1818 H Street, NW Washington D.C. 20433 Telephone: (202) 458-4276 Fax: (202) 477-2733 11. For information on other project related documents contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-5454 Fax: (202) 522-1500 Web: http:// www.worldbank.org/infoshop Note: This is information on an evolving project. Certain components may not be necessarily included in the final project. This PID was processed by the InfoShop during the week ending January 24, 2002. - 12 -