Document of TheWorld Bank FOR OFFICIAL USEONLY ReportNo: 35969-IU PROJECTAPPRAISALDOCUMENT ON A PROPOSED GRANT FROMTHE GLOBAL ENVIRONMENT FACILITY TRUST FUND INTHEAMOUNT OF US$1.80MILLION TO THE REPUBLIC OF KIRIBATI FORAN ADAPTATION PROJECT- IMPLEMENTATION PHASE (IWP 11) May 4,2006 RuralDevelopmentandNaturalResources Sector Unit East Asia andPacificRegon This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. Its contents may not be otherwise disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective at Appraisal - December 12,2005) Currency Unit = AUD 1AUD = US$.075 1US$ = AUD 1.34 FISCALYEAR January 1 - December33 ABBREVIATIONSAND ACRONYMS ADB Asian Development Bank A M I < All Women of IGribati(national women's association) APL Adaptable Program L o a n AusAID Australian Agency for International Development CCA Clunate Change Adaptation CCST Climate Change Study Team DCC Development Coordmation Committee ECD Environmental Conservation Division (MELAD) EEZ Exclusive Economic Zone EU European Union GEF Global Environment Facility GoI< Government of IGribati I C Island Council IWP InternationalWaters Program ICANGO IGribatiAssociation of NGOs ICAP IGribatiAdaptation Program LDC Least Developed Country MCIC M i n i s t r y of Commerce, Industry and Cooperatives MCTTD M i n i s t r y of Communications, Transport and Tourism Development MEA Multllateral Environmental Agreements MELAD M i n i s t r y of Environment, Lands and Agriculture Development M E Y S M i n i s t r y of Education, Youth and Sports MFAI M i n i s t r y of Foreign Affairs and Immigration MFED M i n i s t r y of Finance and Economic Development MFMRD Ministryof Fisheries and Marine Resources Development M H M S M i n i s t r y of Health and Medical Services M I S A Ministryof Internaland SocialAffairs MLPID W s t r y of Line and Phoenix IslandDevelopment MPWU M i n i s t r y of Public Works and Uthties MOP M i n i s t r y Operational Plan NAPA National Adaptation Programme of Action N A S C National Adaptation Steering Committee N B S A P National Biodiversity Strategy Action Plan N D S National Development Strategies NGO Non Governmental Organization NEPO National Economic Planning Office NZAID N e w Zealand Agency for International Development OB Office T e Beretitenti (Office of the President) 01 Outer Island PICCAP Pacific Islands Climate Change Adaptation Program PMU Project Management Unit POPS Persistent Organic Pollutants S A P H E Sanitation, Public Health and Environment Improvement Project S D G I K Strengthening Decentralized Governance in Kiribati (UNDP) S I L Sector Investment Loan SNPRA Strategic NationalPolicy and RiskAssessment Unit SOPAC South Pacific Applied Geosciences Commission SPREP South Pacific Regional Environment Programme UNCBD United Nations Convention on Biodiversity UNCCD United Nations Convention to Combat Desertification UNDP United Nations Development Programme UNFCCC United Nations Framework Convention on Clunate Change Acting Vice President: Jeffrey S. Gutman, EAPW Country Manager/Director: X i a n Zhu, EACNF Sector Manager: H o o n a e I-, EASRD T a s k T e a m Leader: I d a h Pswarayi-Riddihough, EASRD KIRIBATI ADAPTATION PROJECT.IMPLEMENTATION PHASE(KAP11) CONTENTS Page A. STRATEGIC CONTEXT AND RATIONALE ................................................................. 1 1. Country and Sector Issues (see Annex I$r details) .................................................................. 1 2. Rationale for Bank involvement ........................................................................................... 3 3. Higher level objectives to whlch the project contributes ....................................................... 4 B. PROJECTDESCRIPTION (SeeAnnex 4for further details) ......................................... 4 1. Lending instrument .............................................................................................................. 4 2. Project development objective ............................................................................................. 5 3. Project components ............................................................................................................. 6 4. Lessons learned and reflected inthe project design .............................................................. 7 5. Alternatives considered and reasons for rejection ................................................................. 7 C. IMPLEMENTATION ......................................................................................................... 8 1. Partnershp arrangements (ifapplicable) ............................................................................... 8 2. Institutionaland implementation arrangements (see alsoAnnex 6) .......................................... 9 3. Monitoringand evaluation of outcomes/results ................................................................. 12 4. Sustainability and Replicability ............................................................................................ 12 5. Critical risks and possible controversial aspects .................................................................. 14 6. Loan/credit conditions and covenants ............................................................................... 15 D. APPRAISAL SUMMARY ............................................................................................... 16 1. Economic and FinancialAnalyses .................................................................................... 16 2. Technical ............................................................................................................................ 16 3. Fiduciary ............................................................................................................................ 17 4. Social ................................................................................................................................. 17 5. Environment., .................................................................................................................... 19 6. Safeguard policies ............................................................................................................... 19 7. Policy Exceptions and Readiness ........................................................................................ 20 ANNEX 1COUNTRY. SECTORAND PROGRAMBACKGROUND .................................................... 21 ANNEX 2: MAJOR RELATED PROJECTSFINANCEDBYTHE BANKAND/OR OTHERAGENCIES 36 ANNEX 3: RESULTS FRAMEWORK MONITORING AND ................................................................ 37 ANNEX 4: DETAILED PROJECTDESCRIPTION ............................................................................ 43 ANNEX 5: PROJECT COSTS........................................................................................................... 51 ANNEX 6: IMPLEMENTATION ARRANGEMENTS .......................................................................... 52 ANNEX 7: FINANCIAL MANAGEMENT AND DISBURSEMENT ARRANGEMENTS ......................... 57 ANNEX 8: PROCUREMENTARRANGEMENTS ............................................................................... 63 ANNEX 9: SAFEGUARDPOLICY ISSUES ........................................................................................ 70 ANNEX 10:PROJECT PREPARATIONAND SUPERVISION ............................................................. 81 ANNEX 11:DOCUMENTS INTHE PROJECTFILE ......................................................................... 83 ANNEX 12:STATEMENT OF LOANSAND CREDITS ...................................................................... 84 ANNEX 13: COUNTRYAT A GLANCE ............................................................................................. 85 ANNEX 14: INCREMENTAL COSTAND ECONOMICANALYSIS ..................................................... 87 ANNEX 15: STAP ROSTERREVIEW .............................................................................................. 95 MAP IBRD#33427 KIRIBATI ADAPTATION PROGRAMPHASE I1- PILOT IMPLEMENTATIONPHASE (IUP 11) PROJECT DOCUMENT EASTASIA AND PACIFIC EASRD Date: April 5, 2006 Team Leader: Idah2.Pswarayi-kddhough Country Director: &an Zhu Sectors: General water, sanitation and flood Sector Manager/Director: Hoonae I& protection sector (60°/o);General public Project ID: PO89326 a h s t r a t i o n sector (25%);Generalagriculture, FocalArea: C h a t e change fishmg and forestry sector (15%) LendmgInstrument: Specific Investment Loan Themes: Vulnerabhty assessment and monitoring (P);Climate change (?);Natural dsaster management (P);Other environment and natural resources management (P) Environmentalscreenmg category: Partlal I Assessment FOR INTERNATIONAL DEVELOPMENT NEW ZEALAND, GOV. OF (EXCEPT I 0.46 0.51 0.97 FORMIN.OF FOR.AFFAIRS) Total: 4.34 2.24 6.58 Responsible Agency: Ministryof Finance & Economic Development PO Box 67 Bairh, Tarawa, IOlibati Tel: 686 21660 Fax: 686 21307 -w- A- 7 8 9 I 10 -. I 0 0 0 0 Annual 0.02 0.38 0.50 0.65 0.25 0.00 0.00 0.00 0.00 Cumulative 0.02 0.40 0.90 1.55 1.80 1.80 1.80 1.so 1.80 Project implementation period: StartJune 1,2006 End:June 30,2009 Expected effectiveness date: June 30, 2006 Expected closing date: June 30,2009 Does the project depart from the CAS incontent or other significant respects? Ref: PADA.3 [ ]Yes NNo Does the project require any exceptions from Bank policies? Ref: PADD.7 [ ]Yes N o Have these been approved by Bank management? ~~ I s approval for any policy exception sought from the Board? [[ ]Yes [ IN0 ]Yes No Does the project include any critical risks rated "substantial" or "high"? Ref: PAD C.5 W Y e s [ ] N o Does the project meet the Regional criteria for readiness for implementation? -Ref:- - PADD.7 H Y e s [ ] N o -- -.. Project development objective Ref: PAD B.2, TechnicalAnnex 3 The key objective of the proposed Pilot Implementation Phase of I(AP (I(AP-11) i s to develop and demonstrate the systematic diagnosis of climate-related problems and the design of cost-effective adaptation measures, while continuing the integration of climate risk awareness and responsiveness into economic and operational planning. Lessons learned from I(AP-I1 would be used to plan the long-term national response to climate change envisaged for 2008/9 onwards, and would also be relevant to many other small island states around the world. Global Environment objective Ref: PAD B.2' TechnicalAnnex 3 The global environmental objective of the IL4P I1i s to assist the GoK in enhancing its capacity to plan and implement adaptation measures to the climate-related issues facing the country, which wdl also reduce the detrimental impacts of climate change on the fragile atoll ecosystems of IGribati. Ths would be achieved by providingan essential transitional stage inpreparation for the long-term national response to c h a t e change, includmg pilots that wdl generate experience for wider application inI G i b a t iand other small island states. Global benefits would include improved management, conservation, restoration and sustainable use of biodmersity, such as improved protection and management of mangroves and coral reefs which harbor a wide variety of fish - on which IGribatii s highly dependent. Apart from reduced vulnerability to climate change, climate variability and sea level rise, national benefits would come from stabilizing ecosystems and improvingproductive capacity of mangroves and coral reefs which affect the availability of fish catch, thereby reducing economic vulnerabhty of those dependent on these activities and contributing to poverty reduction. Project description [one-sentence szmmary ofeachcomponeng Ref: PAD B.3.a' TechnicalAnnex 4 IUP-I1 aims to change the way IGribati handles its planning and implementation of regular activities so that they better take account of climate risks. This requires progressive reinforcement of adaptation-related programs in the national Government's budget and sectoral plans, incombination with a process of participatory adaptation, involvingisland councils, NGOs, churches, communities, md indwiduals. The priority adaptation investments supported by IUP-I1 will not only provide m e d i a t e results interms of reduced vulnerability, but wdl also help to demonstrate and promote a Aimate-risk aware approach to planning and design of such activities. After IUP-11, these activities gill be expanded as part of a continued adaptation program, both in scope and in terms of addressing additional sectors. r h e project would have five broad components: Zomponent 1: Policy, planning, and information (US$ 1.17 d o n , of which US$0.81 million i s Gnanced from GEF). This component supports three core elements of all adaptation efforts in Kiribati. The first element i s awareness raising and consultation. The second element i s policy coordination and planning, including technical assistance for the new Strategic National Policy and Risk Assessment Unit in the Office of Te Beretitenti; capacity buildinginIntegrated Coastal Zone Management among key government staff; continued mainstreaming into Ministry Operational Plans; and integration of adaptation into government development programs. The third element i s to generate scientific climate risk information and refurbish the capacity of the Meteorological Office with new equipment and training of staff. Component 2: L a n d use, physical structures, and ecosystems (US$ 2.17 d o n , of which US$0.40 million is financed from GEF).This component will contribute to reducing the vulnerability of the coasthe including key public assets and ecosystems, shifting the coastal management practice from a reactive, single technique approach to repairing damage as it occurs, to a preventative and more technically varied risk mitigation strategy, including more attention for environmental sustainability. More specifically, the component would support technical assistance, workshops, and awareness materials for the development and application of improved risk diagnosis and response methods! and improvements in planning and permitting processes to guide coastal zone activities; finance design and construction guidelmes, and apply them by implementing protective measures at a sample of public assets that are at risk; as well as finance the monitoring and pilot activities tc protect and restore coastal ecosystems and biodiversity affected by climate change, climate variabiliq and sea level rise, including the detrimental effects of current adaptation practices. Component 3: Freshwater resources (US$ 2.16 million, entirely financed by AUSAID). Th: component includes the development and management of freshwater resources to reduce theh vulnerability to climate variability and climate change. It will provide support for technica assistance, awareness materials, and workshops to update the national water policy, improve watei resource management, and revise building codes to enhance opportunities for rainwater catchmen] and storage. On Tarawa, the component wdl also support the preparation of a master plan for watei resources on Tarawa, as well as the implementation of pilot projects to identify and increase watei resources in freshwater lenses; rainwater collection and storage systems at government anc community buildmgs; and a public awareness and education campaign to change user attitudes. On the Outer Islands, the component will support water resource assessments as well as physical improvements inthe water supply system in selected locations, and technical assistance to review the feasibhty of non-pollutingsanitation systems. Finally, the component wdl establish an Outer Island community development grant scheme for roof catchment and sanitation. Component 4: Capacity at island and community level (US$ 0.55 d o n , of which US$0.31 million i s financed from GEF). Ths component will provide technical assistance to the Ministry of Internal and Social Affairs (MISA) to include adaptation in the Outer Island Profiles, and training on climate risk management for local governments. Furthermore, it will finance a pilot program of small-scale adaptation investments in two selected Outer Islands, identified through participatory planning and implemented directly by communities. Component 5: Project management (US$ 0.39 million, of which US$0.23 million i s financed from GEF). This project component will provide overall support to the project, including project management, accounting, procurement, and running costs of the Project management Unit. It will also support the mid-term and end-of project review of IUP-I1in view of the continuing GoK adaptation efforts. W h c h safeguard policies are triggered, if any? Ref: PAD D.6 TechnicalAnnex 10 The Environmental impacts of the project are expected to b e small. There may be some small-scale construction associated with the project, but h s i s not expected to have major negative environmental consequences. As a result, the project has been rated Category B, requiring a partial EA. However, the increasing and cumulative effects of coastal infrastructure developments are hkely to be important, and as such, it will clearly be advisable to initiate an environmental management program targeted at the coastal development sector. An integrated coastal management program would examine the current extent of clunate change adaptation options and coastal construction activities and the impacts (both beneficial and adverse) experienced to date. The environmental management program should consider the preparation of a National EIA Training Program and a series of Codes of Environmental Practice for use during the planning, design, construction, and operation as well as maintenance of all roads and coastal works inI G b a t i . The two OPs triggered are OP4.01 and OP 4.12. Detailed studies and mitigation options have been prepared inboth cases. Significant, non-standard con&tions, if any, for: Ref: PAD C.7 Board presentation: Loan/credit effectiveness: N o n e Covenants applicable to project implementation: N o n e A. STRATEGIC CONTEXT AND RATIONALE 1. Country and Sector Issues (seeAnnex I j r details) The Republic of IGribati i s one of the most isolated Least Developed Countries in the world. With a population of almost 98,000 (2004 est.), it consists of 33 low-lying atoll islands spread over a vast area of 3.5 d o n km2of ocean inthe central and western Pacific. GNIper capita was US$970 in2004, but has been declining due to a decrease inrevenues from fishing licenses in2002-2004. IGribatihas one of the hlghest poverty rates in the pacific, and only 10 O/oof the population i s formally employed in the cash economy. Nearly half of the population lives in South Tarawa, a highly dense area with a population growth of 3 percent per year. At current rates, the national population will increase by 55 O/o by 2025, placing even greater challenges on the fragile environment. The poor atoll soil offers little potential for agricultural development, but the immense area of ocean encompasses some of the richest fishmg grounds in the world, and, together with revenues from a phosphate-derived trust fund, provides IGribatiwith its most important source of revenue. IGribati i s one of the most vulnerable countries in the world to climate change and sea level rise. Most of the land is less than 3 meters above sea level and on average only a few hundred meters wide, rendering retreat options untenable. The islands are exposed to periodic storm surges and to droughts, and are becoming increasingly vulnerable due to high population concentration, accelerated coastal development, and environmental degradation. The 2000 World Bank Regional Economic Report estimated that by 2050 up to 25-54 O/oof areas in Bikenibeu, South Tarawa and 55-80 O/o of Buariki, North Tarawa, could become inundated. Climate change and sea level rise could also severely affect the main Tarawa groundwater lens, increase the epidemic potential for dengue fever, decrease agricultural productivity, and &vert critical tuna resources from IGribati waters. Moreover, climate change i s threatening the marine ecosystems around IGribati, inparticular through impacts on the coral reefs surroundmg the islands, with implications for subsistence and small-scale commercial near shore fisheries, failure of the reef to act as an effective buffer of wave energy, and increased island instabllity as sediment resources decline. Overall, in the absence of adaptation, IGribati could face economic damages due to climate change and sea level rise of US$8-$16d o n a year by 2050, or 17-34 O/o of its 1998 GDP. The Government of IGribati ratified the UN Framework Convention on C h a t e Change (UNFCCC) in 1995, and continued to prepare an initial National Communication (1999) and National Implementation Strategy (2003), with support from the UNDP-GEF funded Pacific Island Climate Change Assistance Programme. IGribati also participates in regional climate change cooperative activities, such as the Pacific Islands Framework for Action on Climate Change, Climate Variabhty and Sea-level Rise (2000). The IGribati Adaptation Program PUP) started in 2003 under World Bank/Japanese assistance, and has been merged with the UNDP-GEF-supported preparation of a National Adaptation Programme of Action (NAPA). The 2004-2007 National Development Strateges identified c h a t e change as a key risk to economic growth, and provided the basis for the ongoing mainstreaming of adaptation in all relevant Ministry Operational Plans. The Government of IGribati i s also strongly committed to the other Multilateral Environmental Agreements (MEAs), includmg the Convention on Biodiversity and the Cartagena Protocol on Biosafety, the UN Convention to Combat Desertification, and the Stockholm Convention on Persistent Organic Pollutants. Along with the other chate-related risks facing the country, Kiribati's ecosystems also experience extreme vulnerability, particularly of their plant, animal, soil and water resources, and their cultures as well their traditional resource-use systems to outside human induced disturbance and over-exploitation. 1 Given dus, successful atoll development requires that the integrated aspects of the environment and social conditions, as well as external conditions - in relation to stabhty of global economic systems - are taken into account. Ecosystems: IGribati is home to a number of globally important marine biodrversity, including up to 200 species of coral; hundreds of fish species, including threatened species such as the Humphead wrasse (Cheilinus undulates) and Sicklefin Lemon Shark (Negaprion acutidens); and several threatened turtle species, such as the endangered green turtle (Chelonia mydas) and critically endangered Hawksbill turtle (Ehetmochelys imbricata). IGribati also provides a nesting area for a variety of birds, includmg vulnerable migratory species such as the Bristle-dughed Curlew (Numenius tahitiensis) and endangered species such as Icuhl'sLorikeet (Vinikuhh)and Phoenix Petrel (Pterodroma alba). In addition to the effects of climate change, coastal degradation and poor mangrove and coral reef management are endangering habitats for this important biodiversity. Inthe absence of adaptation, these impacts would translate in the loss of globally important biodiversity, land degradation, loss of marine and coastal habitats and reduction inoverall natural capital. Status of threatened ecosystems: Marine resources are generally considered abundant. The state of abundance depends on the health of the corals, which i s partly determined by the impacts of higher temperatures on the physical condition of corals. Coral bleachmg has been observed in several parts of IGribati, including the Gilbert Islands, particularly during El Niiio episodes, w h c h already feature the higher sea surface temperature that are expected to occur more frequently when climate change progresses. However, the extent and the severity of current coral bleaching are poorly known. With the assistance of GEF, through UNDP, IGribati prepared its National Biodiversity Strategy and Action Plan (NBSAP) in 1998. IGribati i s presently also implementing the NBSAPAdd-on Project, of which the expected outputs are: (i) extensive consultations with grassroots communities, as well as inter-island consultations with all islands of IGribati (North, Central and South islands including the Line and Phoenix Groups); and (ii) a new NBSAP, for submission to the Conference of the Parties (COP) to the Convention on Biological Diversity (CBD) in early 2006. The basehe on the status of some of the biodrversity i s still being established. Given the potential threats of climate change to the biodrversity of IQibati, IUP-I1will contribute to biodiversity conservation in various ways, particularly by improving the attention and need for environmental sustainabhty as part of coastal protection and asset management strategies, and for activities that reduce beach mining; all of w h c h are supported by strong participatory processes and public awareness campaigns. Moreover, IUP-I1 would assist in building a monitoring system, particularly for the coral reefs, which can also be adapted for other ecosystems, to strengthen the country's capacity to reduce the ecosystems' vulnerability; supplemented by enhanced access to new technologies in coral and ecosystem management (includmg through pilot experiments). T h e monitoring system is expected to help streamline sustainable integrated systems management into adaptation processes, building on governance aspects that will support the enabling environment needed to make such activities successful, and implementing the NBSAP objective of integrating biodiversity conservation into the national development process. Target ecosystems: Target ecosystems are primarily coastal and near-shore marine habitats, particularly coral reef and mangrove systems, which harbor valuable biodmersity. Specific target areas and ecosystems will be selected during the first year of the project, once MELAD has assessed the existing information it has, and prioritized the ecosystems that are most easily supported by the IUP, and that would not be duplicated by other on-goingefforts in the country. 2 2. Rationale for Bankinvolvement T h e World B a n k has been involved inc h a t e change adaptation inIGribati since 1999, w h e n it funded a major study on vulnerability and adaptation for the Regional Economic Report 2000. Since that review, adaptation and risk management have become one of the pillars of the World B a n k program in the Pacific, with support to five country-level projects' and regional strategic assistance. Together with other donors a n d regional organizations, the World B a n k helped organize two High L e v e l Adaptation Consultations in the Pacific in 2003-04, w h i c h concluded that adaptation needs to b e mainstreamed into national development plans, policies and budgets. T h e preparation phase of the IGribati Adaptation Program cI(AP-I - see box below), which was the first World B a n k pilot project f d y dedicated to adaptation in the East Asia and Pacific Region, put those principles to practice. T h e Bank`s role in adapting economic mainstreaming complements the ADB's program on macro-economic planning a n d water and sanitation, a UNDP project to strengthen decentralized governance, vulnerability mapping and planning activities funded by the European Commission, a n d GEF-funded activities to implement various Multilateral EnvironmentalAgreements (see i t e m C.1). Kiribati Adaptation Program Preparation Phase (KAP-I) - IUP-I, the preparation phase o f the IUP, had two major objectives: (i) mainstream adaptation into national To economic planning; and (ii) to prepare a pilot Adaptation Project to reduce IGribati's overall vulnerability to climate change, climate variabhty, and sea level rise. More specifically, the project aimed to: (i) carrv out a National Consultation - which involved all major stakeholders in IGribati (government, NGOs, private sector, and communities) in reaching a consensus on national adaptation priorities and strategies to be mainstreamed into national economic planning, budget, and sectoral plans. It also helped stakeholders discuss their roles in implementingadaptation options; (ii) raise Public Awareness - summarise and convey reliable information o n adaptation and risk management to (a) hgh-level policy makers; and (b) the general public. This was achieved through simple briefings and seminars for Ministers and Parliamentarians on desirable policy measures, traditional meetings, radlo scripts, and the production of an information video; (i) build CaDacitv in Risk Management, introducing SOPAC's Comprehensive Hazard and Risk Management process to IGibati. CHARM is a process of capacity buildingand planning that incorporates dlsaster and clunate risk management into national development planning; (iv) mainstream AdaDtation into National Economic Planning - incorporating and institutionalizing the recommended mainstreaming activities into Government planning processes, procedures and regulations. T h i s activity built upon the results of the national consultation and capacity building to effectively incorporate adaptation and risk management into economic planning, including the National Development Strategy, sectoral strategies, and public expenditures; and (v) undertake a Social Assessment, to (a) ensure that the national consultation i s fully participatory; (b) produce an assessment of traditional adaptation options; (c) produce a checkhst of social issues relevant to the ImplementationPhase and ways to address them. Implementation of IUP-Ihas been successful and the project i s expected to close within the f i r s t quarter of 2006. G i v e n its combination of LDC and small island status, extreme vulnerabhty a n d good progress in mainstreaming, IGribati i s ideally positioned to become one of the first countries to implement the n e w GEF Strategic Priority rrPilotingan Operational Approach to Adaptation". Lessons learned from h s pilot are expected to become important for global strategies on adaptation investments, and help move 'Kiribati Adaptation Project Preparation, Tonga Cyclone Emergency Recovery Project, Samoa Cyclone Emergency Recovery Project, and Samoa Infrastructure Asset Management Projects Iand 11. 3 internal incentives towards hazard risk prevention. IUP-I1was accepted to the GEF's pipeline on July 12,2004 and approved by the GEF Council on November 8-10,2005. Recognizing that adaptation i s a long term concern, and as a direct follow-up to several studies and initiatives, and with support from the World Bank, the Government of I k i b a t i started the IGribati Adaptation Program @UP),with the key goal of reducing Kiribati's vulnerabdity to c h a t e change, climate variabllity and sea level rise. The program i s envisaged to involve the following phases. Phase I: Preparation (2003-2005;ongoing)- is intended to mainstream adaptation into national economic planning, prepare a National Adaptation Programme of Action and design an intermediate pilot investments phase, IUP-11; Phase 11: Pilot Implementation (2006-2008) i s the focus of the current PAD. It aims to implement pilot adaptation measures, and consolidate the mainstreaming of adaptation into national economic planning; and Phase III:Expansion (2009-2015)would gradually scale up the investments piloted under Phase I1to cover all major islands and vulnerable sectors of IGribati. This phase may be eligible for fundmg under one or more of the three global funds for adaptation (LDC, Special C h a t e Change Fund and Adaptation Fund), complemented by basehe fmancing from the GoICs own budget as well as bilateral contributions. Care would be taken to ensure that there would be no duplication of activities funded under the GEF Strategic Priority and those funded under the global funds, should they be accessed. The progression of I U P phases i s o u h e d in more detail in Annex 1. 3. Higher level objectives to which the project contributes The Government of IGribati's key objective i s to "enhance and ensztre the eqzlitable distribzltionofdevelopment ben$ts according to thepn'naplesofgoodgovernance".The 2004-2007 NationalDevelopment Strategies (NDS) hlghlight c h a t e change as a key risk to economic development, and provides for consultation-based measures for climate change adaptation. It also emphasizes the need to care for the islands' fragde environment and for sustainable use of natural resources. On the other hand, the Bank`s new Four- Year Strategy for the Pacific Islands, published in June 2005, identifies improved hazard risk management as one of the five pillars contributing to the economic growth and job creation. Thus, there i s a strongjustification for IUP-I1inboththe national andWorld Bank strategic priorities. B. PROJECTDESCRIPTION (SeeAnnex 4forfarther details) 1. Lendinginstrument The project i s proposed as a Sector Investment Grant (SIL). An Adaptable Program Loan (APL) was considered, but for two reasons it was judged inappropriate: (i) GEF can no longer commit up front to co-finance all the phases of an APL, and although this policy does not close the door for subsequent phases, each phase must be developed independently. So although the f i l l program may be articulated, proposals can only justify incremental cost financing for the Phase in question; and (ii) as the adaptation financing arrangements under the Least Developed Countries and/or Special Climate Change Fund- which IGribati hopes to access for Phase I11of the Program - are still evolving, it was better to prepare t h i s distinct phase and reconsider the lending instrument at a later date. 4 Project development objective and key indicators Project development objective The key objective of the proposed Pilot Implementation Phase of IL4P (IL4P-11) i s to develop and demonstrate the systematic hagnosis of clunate-related problems and the design of cost-effective adaptation measures, while continuing the integration of climate risk awareness and responsiveness into economic and operational planning. Lessons learned from IUP-I1would be used to plan the long-term national response to climate change envisaged for 2008/9 onwards, and would also be relevant to many other small island states around the world. Global environment objective The global environmental objective of the I U P - I 1i s to assist the GoI< in enhancing its capacity to plan and implement adaptation measures to the climate-related issues facing the country, which WIU also reduce the detrimental impacts of climate change on the fragile atoll ecosystems of IGribati. This would be achieved by providmgan essential transitional stage inpreparation for the long-term national response to climate change, including pilots that will generate experience for wider application in IGribati and other small island states. Global benefits would include improved management, conservation, restoration and sustainable use of biodiversity, such as improved protection and management of mangroves and coral reefs which harbor a wide variety of fish - on which IGribati i s highly dependent. Apart from reduced vulnerability to c h a t e change, climate variabhty and sea level rise, national benefits would come from stabilizing ecosystems and improvingproductive capacity of mangroves and coral reefs which affect the availabdity of fish catch, thereby reducing economic vulnerability of those dependent on these activities and contributing to poverty reduction. Key indicators include: 0 the establishment of the Strategic National Policy and Risk Assessment Unit (SNPRA Unit) as the lead agency coordmating climate change adaptation and related strategic issues; 0 the percentage of climate-affected programs in M i n i s t r y Operational Plans that reflect systematic climate risk management; and 0 consistent use of best practice in the application of risk management, environmental assessment and options analysis to public infrastructure and vulnerability reduction measures. The main biodiversity outcome would be the mainstreaming of biodiversity concerns into the overall Government development efforts to reduce vulnerability to clunate change, clunate variability and sea level rise, as reflected, particularly, in the third outcome indicator. Given the detrimental impacts of many of the ad-hoc coastal protection efforts, such mainstreaming provides major benefits interms of biodiversity conservation. The environmental assessment process would prominently include attention for biodiversity, includmg, in relation to the adhtional threats posed to these biodiversity resources by climate change. 5 2. Project components IWP-I1aims to change the way IQribati handles its planningandimplementationof regular activities so that they better take account of climate risks. This requires progressive reinforcement of adaptation- related programs in the national Government's budget and sectoral plans, in combination with a process of participatory adaptation, involving island councils, NGOs, churches, communities, and individuals. The priority adaptation investments supported by IUP-I1will not only provide immedate results in terms of reduced vulnerability, but will also help to demonstrate and promote a climate risk aware approach to planning and design of such activities. After IUP-11, these activities w d be expanded .as part of a continued adaptation program, both in scope and in terms of addressing additional sectors. Component 1: Polig, pLanning, and infomation (US$ 1.17 million). This component supports three core elements of all adaptation efforts in Kiribati. The first element i s awareness raising and consultation, including technical assistance to review and redesign frameworks and processes for participation and awareness at national and local level; two-yearly national consultations; regular adaptation-related participatory events; a newsletter, m e d a releases, educational material; and an annual survey on public attitudes and awareness. The second element i s policy coordination and planning, including technical assistance for the new Strategic National Policy and Risk Assessment Unit in the Office of T e Beretitenti; capacity building in Integrated Coastal Zone Management among key government staff; continued mainstreaming into M u u s t r y Operational Plans; and integration of adaptation into government development programs. The third element i s to generate scientific climate risk information and refurbish the capacity of the Meteorological Office with new equipment and training of staff. Component 2: Land zlse, ph_yscaL stmctzlres, and ecogstems (US$ 2.I7 million). This component w d contribute to reducing the vulnerability of the coastline including key public assets and ecosystems, shifting the coastal management practice from a reactive, single technique approach to repairing damage as it occurs, to a preventative and more technically varied risk mitigation strategy, including more attention for environmental sustainability. More specifically, the component would support technical assistance, workshops, and awareness materials for the development and application of improved risk diagnosis and response methods, and improvements in planning and permitting processes to guide coastal zone activities, includmg regulatory adjustments, awareness raising, and economic and environmental monitoring. Secondly, the component will produce design and construction guidelines, and apply them by implementing protective measures at a sample of public assets that are at risk, including the national hospital and vulnerable coastal areas. Thirdly, the component includes monitoringand pilot activities to protect and restore coastal ecosystems and biodiversity affected by clunate change, climate variability and sea level rise, including the detrimental effects of current adaptation practices. Component 3: Freshwater resozlrces (US$ 2.16 million). Ths component includes the development and management of freshwater resources to reduce their vulnerability to clunate variability and climate change. It will provide support for technical assistance, awareness materials, and workshops to update the national water policy, improve water resource management, and revise building codes to enhance opportunities for rainwater catchment and storage. Given that water management problems are most acute on the central island, Tarawa, the component will also support the preparation of a master plan for water resources on Tarawa, as well as the implementation of pilot projects to identify and increase water resources in freshwater lenses; rainwater collection and storage systems at government and community bddings; and a public awareness and education campaign to change user attitudes. On the Outer Islands, the component will support water resource assessments as well as physical improvements in the water supply system in selected locations, and technical assistance to review the 6 feasibihty of non-polluting sanitation systems. Finally, the component wdl establish an Outer Island community development grant scheme for roof catchment and sanitation. Component4: Capacz9 at island and communi9 level (USJ0.55 million). This component w d provide technical assistance to the Ministry of Internal and Social Affairs (MISA) to include adaptation in the Outer Island Profdes, and training on climate risk management for local governments. Furthermore, it will finance a pilot program of small-scale adaptation investments intwo selected Outer Islands, identified throughparticipatory planningandimplemented directly by communities. Component5: Pmject management (UJJ0.39 million). This project component will provide overall support to the project, includmg project management, accounting, procurement, and running costs of the Project management Unit. It will also support the mid-term and end-of project review of IUP-I1inview of the continuing GoI< adaptation efforts. 3. Lessons learned and reflectedinthe project design A number of key lessons are starting to emerge from IUP-Ias well as from other hazard management initiatives inthe Pacific: C h a t e change and sea level rise need to be treated as a major economic and social risk, and not just a long-term environmental problem. Addressing short-term vulnerabilities i s the best strategy to prepare for long-term impacts. Adaptation should preferably focus on no-regrets strategies. Rather than site-specific structural solutions, adaptation should look for soft options, embedded in sustainable natural resources management. Adaptation needs to be housed within a highlevel coordinating Ministry,which needs to effectively coordinate investments across sectoral Ministries and influence national development planning. Adaptation needs to be fully integrated into national economic planning, and the preparation of sectoral plans and budgets. Adaptation investments need to be informed by a long-term process that hks bottom-up consultation with top-downplanning and policy. A well crafted, country-specific consultation framework is critical to ensure that community participation and awareness raising result inchanges in behavior. Alternatives considered and reasons for rejection The `do nothing' scenario: In the absence of adaptation, the economic, social and environmental impacts of climate change in I G i b a t i could be severe, with potential economic damages averaging US$8-$16 million a year, equivalent to 17 to 34 percent of the 1998 GDP (WorldBank 2000 Regional Economic Report). Given these enormous impacts; the potential for adaptation to reduce them; the fact that most of the adaptation measures can be based upon no-regret approaches; and the Government of Kiribati's strongwill to act now, the do-nothingscenario was rejected. The "one-off adaptation investments" scenario: Another alternative would have been to focus only on a few specific adaptation investments, primarily in infrastructure. However, a programmatic approach was strongly preferred given that lessons from experience (in IGribati and elsewhere) show that such one-off adaptation investments are generally not the most effective, and are often unsustainable. Using a programmatic approach allows measures to be integrated in government programs and be h k e d to regulatory changes and raising awareness to change public behavior; it also 7 allows institutional capacity to be built; lessons learnt to be used to refine follow-on activities; and successful pilots to be replicated. C. IMPLEMENTATION 1. Partnershiparrangements(ifapplicable) The IUP-I1project would be co-financed with the Australian Agency for International Development (AusAID) and the N e w Zealand Agency for International Development (NZAID), whde the European Union wdl provide parallel financing. The project wdl be implemented in close collaboration with parallel initiatives being implemented and/or envisaged by UNDP and ADB, and several GEF- supported programs implementedby UNDP and UNEP. Australian Agency for International Development (AusAID) and N e w Zealand Agency for International Development (NZAID): AusAID has released AUD$2 million into a Bank-managed trust fund to finance South Tarawa water planning, remedial ac&ons and pilot projects, as well as Outer Islands assessments and systems upgrades for Clunate Change Adaptation. NZAID i s planning to contribute NZ$ 1.5 million to IUP-11, primarily for activities relating to coastal infrastructure. The Australian Bureau of Meteorology and N e w Zealand Meteorological Office will be closely involved in the upgrading of clunate monitoring systems. The European Union (EU): The EUwould provide IGribati a grant of Euro 2 million (implemented by SOPAC) to establish a environmentally sustainable source of aggregate from a naturally replenished site inside the lagoon, a necessary condition for the prohibitionof the opportunistic beach mining that i s severely increasing coastal vulnerability. IUP-I1 provides policy and planning support for the EU project, including environmental monitoring. The EU i s also supporting a SOPAC-led program for Water Governance in IQribati, which started inJune 2005, and i s being closely coordinated with the freshwater management component of IUP-11. United Nations Development Programme (UNDP): UNDP is implementing a US$1 million program to Strengthen Decentralized Governance in IGribati (SDGIK).IUP-I1wdl benefit from the capacity building activities under this project, and duplication will b e avoided through coordination by the Ministry of Internal and Social Affairs (MISA) and close collaboration with UNDP. Asian Development Bank (ADB): The ADB has been financing the Sanitation, Public Health and Environment Improvement Project (SAPHE), composed of a US$10.24 d o n loan and U S $ 1.5 million grant. SAPHE, which is drawing to an end, which comprises a sustained program of improvements inwater supply, sewerage, solid waste management and environment conservation. The freshwater management activities in IUP-I1will be closely coordmated with the remaining work under SAPHE, and take account of lessons learned. Coordination wdl primarily be through the Ministry of Public Works and Utilities. The ADB i s also providing technical assistance to develop Outer Island Growth Centers in the Gilbert and Phoenix islands. There are clear linkages to adaptation to climate change, and the ADB has indicated it wants to coordinate closely with I(AP to ensure optimal mutual benefits. Global Environment Facility -United Nations Development Programme 8z United Nations Environment Programme (UNDP-GEF and UNEP-GEF): I h b a t i is also undertakmg several initiatives, supported by the GEF and implemented by UNDP and UNEP, to strengthen its capacity to implement various multilateral environmental agreements. Given the close interrelationships between 8 adaptation to climate change and proper environmental management of the fragde atoll environment, these initiatives closely fit the objectives and activities of IUP-11. Besides the preparation of a NAPA, which has been closely integrated with IUP-I, UNDP-GEF i s also supporting an add-on project to the National Biodlversity Strategy Action Plan (NBSAP) will help to implement a country driven Clearing House Mechanism for the UN Convention on Biodiversity (UNCBD), and identify capacity buildingneeds for protection of national biodiversity. UNDP-GEFis also preparing a NationalCapacity Self-Assessment (NCSA) project, which consists of a self-assessment of the current capacity constraints to be able to address global and local environmental issues. As part of a regional UNDP-GEF supported International Waters Program (IW),executed through SPREP, Kiribati established requirements for marine protected areas, sustainable coastal fisheries, and protection of freshwater resources; and undertook several community-based waste management pilots. UNEP-GEF is supporting I(iribati to prepare a National Biosafety Framework (NBF) under the Cartagena Protocol on Biosafety, and a National Implementation Plan (NIP) for the Stockholm Convention on Persistent Organic Pollutants (POPS). Close coordination, complementarily and derivation of mutual benefits between IUP-I1and these other GEF-funded projects will b e ensured through the Environmental Conservation Division (ECD) in MELAD, which is responsible for the implementation of all M E A s and related projects, but also provides technical support for interdepartmental climate change issues under IUP-11,. Furthermore, MELAD/ECD will be responsible for all IUP-I1 activities that involve environmental regulations and monitoring. The projects mentioned above primarily focus on analysis, awareness raising, and policy development. IUP- 11's focus on implementation and close linkages to national economic planning wdl provide excellent opportunities for mainstreaming of global environmental issues through the coordinating mechanisms set up for adaptation to climate change. 2. Institutional and implementation arrangements (see alsoAnnex 6) Overall du-ection and coordination of the project will be provided by the Office of T e Beretitenti (Office of the President, OB) throughthe Strategic National Policy and &sk Assessment Unit (SNPRA Unit),whch is being established within the OB.The Secretary of the OB wdl head the SNPRA Unit, and act as Project Director for IUP-11. Inaddition, the 2006 budget provides for two senior (Director or Deputy Secretary Level) policy positionswithin the SNPRA Unit.This capacity will be strengthened by IUP-11, which will provide for a third senior position (long-term consultant), responsible for coordination of adaptation and climate risk management throughout the government, and also act as the IUP-I1Project Coordinator. The Project management Unit (PMU),which wdl carry out all day-do- day project management, i s headed by the Project Manager, who reports to the Project Coordinator, and also includes a Finance/Accountant, a Procurement Officer, a more general Project Officer, and a Project Assistant. The quality of project implementation will be ensured by the attention and capacity built duringIUP's preparation phase. IUP-Iproject management is currently carried out by an all I- Kiribati team, which has substantial experience in World Bank financial management, reporting and procurement procedures. Both the Project Manager and the FinancelAccountant are expected, to continue in the PMU for IUP-11, thus ensuring continuity and retention of capacity. Specific components of IUP-I1 will be managed by key line ministries, in particular the M i n i s t r y of Environment, Lands and Agriculture (MELAD), the M i n i s t r y of Public Works and Utilities (MPWU), the M i n i s t r y of Internal and Social Affairs (MISA), the M i n i s t r y of Fisheries and Marine Resources Development (MFMRD),and the M i n i s t r y of Communications, Transport, and Tourism Development (MCTTD) . 9 Project activityplanningfor implementation: At the higher level, activity planningwould be at the level of the Ministry Operational Plans (MOPs), specifically to ensure that there is mainstreaming of adaptation at the operational level. The MOPs are a key planning tool for all Government Ministries and public enterprises; and benefit from outputs of the National Consultations. The MOPs, will incorporate the add-on investments of IUP-11. The enhanced MOPs to be implemented from 2006 represent the first generation of MOPs with comprehensive mainstreaming of adaptation priorities across all climate relevant programs inthe key ministries. Every year, a Program of Activities to be fmanced by the project will be prepared prior to implementation. T h e Program of Activities would be prepared by the PMU; and submitted to the OB/MFED and the Bank for concurrence, and shared with AusAID and NZAID for comments and suggestions. The Program of Activities must take into account the relevant Procurement Plan, which becomes an appendix. Ths one-time up-front non-objection should minimize delays in implementation. Exceptions that may require an additional step relate to large investment packages for w h c h more complex economic analyses requiring a comparative cost-benefit analysis would be done; for example, the rehabhation of the hospital and the causeway. Although the TA to be hiredwould be expected to carry out the required analyses, it i s important that the National Economic and Planning Office (NEPO) in MFED, who routinely carry out such analyses, are consulted from the activities' inception stage. The NationalAdaptation Steering Committee (NASC), which was established during IUP-I, i s responsible for promotingand monitoring coordination among project activities across the implementing agencies, including the utihzation and sharing of technical expertise. The NASC i s chaired by the Secretary (S) of the OB, and includes higher level officials from all key Ministries, as well as representatives of the Kiribati Council of Churches, the IGribati Association of NGOs (IUNGO), the national women's organization All Women of IGribati (AMI<), and the IGribati Chamber of Commerce. The NASC will continue to provide overall policy analysis, quality control and advice to the GoK on matters related to climate risk management, covering both NAPA and I U P - I 1 issues and activities. The Climate Change Sta& Team (CCST), also established during IUP-I, contains technical officers from all key departments affected by climate risks. The CCST will continue to provide expert analysis and technical advice to the GoI< on climate-related matters, as well as coordmate scientific activities relevant to the planning and execution of the NAPA and IUP-11. Over the course of I(AP 11, the detailed institutional and implementation arrangements may evolve for various reasons, such as, the need to take account of new mechanisms for increasing consultation w i h various ministries in the GOK; the need to enhance coordmation between stakeholders in general; and for other reasons that may require changes to b e made to the existing coordination framework. For example, I U P I1calls for the recruitment of a Project Coordinator, reporting directly to the Secretary of the Office of T e Beretitenti, who wdl monitor the implementation of I U P I1and ensure regular consultation on a continuing basis with all key stakeholders, including OB, other GOK ministries and international donors. Inaddition, the GOI< recently establishedan Outer IslandProject Coordinating Committee (OIPCC), chaired by the Secretary, M i n i s t r y of Internal and Social Affairs (MISA), and comprised also of the Secretaries of other Mmistries delivering government services to outer islands. Under its terms of reference, the OIPCC meets monthly to review the status of projects in the outer islands; recommends follow-up actions as may be required on each project; ensures cost effective and efficient implementation of project related activities; ensures compliance of all projects with Government policies; and reports monthly to Cabinet on the status of all outer island projects. 10 Inview of the foregoing arrangements, over the course of the project OB may review the scope, tasks and membership of existing coordinating mechanisms that support I(AP 11, to ensure that these mechanisms remain relevant and effective. The institutionalrelationshps are illustrated inthe following diagram: SNPRA: Strategic NationalPolicy and RiskAssessment Unit Fzmz'sflow: On receipt of funds, the Ministry of Finance and Economic Development (MFED) will warrant financial provision to the OB from the Development Fund in accordance with public finance law. The OB (through the PMU) will allocate resources to project components to fund specific project activities to be carried out in accordance with the annual Ministry Operational Plans (MOPs) of h e ministries. These activities will appear in MOPs under the appropriate &visional programmes of ministries in substantially the same form as they appear in the Project Implementation Plan. T h e Ministry of Finance and Economic Development (MFED), and particularly the National Economic Planning Office (NEPO), will play an important role inthe continued mainstreaming of adaptation into MOPs and the 2008-2011 NDS, MOPs monitoring, as well as in economic appraisal of adaptation options. 11 Regarding disbursement, project funds w d flow through the Government's budget and accounting processes. The Government Number 4 Development Project Bank Account will b e used to receive advance funds from the World Bank in AUD. Government Accounting systems w d account for the advance at an aggregate level but detailed reporting will be provided through a parallel management information system maintained by the project implementation unit.There i s also a need to ensure that adequate accountability mechanisms are established for pilot small-scale Outer Island adaptation investments and the proposed Outer Island grant scheme for community development for water and sanitation. As such, disbursements for these activities would take place only once Procedures Manuals for the implementation of these activities have been developed, and are of a quality satisfactory to the Bank. Two disbursementcategorieswill be usedfor theproject; one that will be followedby all the project, with the exception of the Outer Island community development grant scheme for roof catchment and sanitation (insupport of the revolving fund for the 0 1 s household scheme for roof catchment and sanitation), for which no disbursements would be allowed from the grant prior to the development and approval of an Procedures Manual, which demonstrates how the funds would be used and accounted for. Expenditurereportingwill be against agreed annual activities which will determineeligibility. 3. Monitoringand evaluationof outcomes/results Overall project monitoring and reporting will be the responsibhty of the OB, whde the day to day monitoring and evaluation activities would be carried out by the PMU inthe SNPRA Unit.As almost all project activities will be integrated and reflected in regular Ministry Operational Plans (MOPS), project monitoring will primarily b e based upon MOP progress reports with financial information provided by the PMU, complemented by project-specific results monitoring (see Annex 3). MOP progress reports are normally required at the end of 4 2 (mid-year) and 4 4 (end year), but for IUP-11- funded activities additional progress reports will be required at the end of Q1 and 43.The half yearly and yearly reports would contain information on the project's progress; financial and physical, with an explanatory write-up. Quarterly reports from line ministries would be mainly on fund usage and will be collated by the PMU. A consolidated quarterly IUP-I1progress report will b e submitted to the NASC, Cabinet, MFED and the WB. The reports would be shared with AusAID and NZAID through the Bank. Quarterly reports will also contain implementation and work plans for the coming 6 months. Halfway and at the end of the project, an evaluation of the project will be conducted, primarily aimed at identifying lessons learned from the pilot implementation phase, w h c h could be applied to the expansion of the I G i b a t i Adaptation Program. Both the PMU and the Island Development Committees w d regularly monitor progress in the implementation of the small scale adaptation investments. Implementation review missions w d be carried out, at least twice a year, and they would provide an opportunityfor the donors and the Government to review project progress; develop recommendations and an Action Plan based on w h c h issues identified would be addressed. The World Bank would invite AusAID and NZAID to participate inthe implementation review missions. Prior to commencing the missions the government and the donors would agree on the implementation aspects to be reviewed. 4. Sustainability and Replicability Sustainability: There are three key factors that increase the potential for sustainability of the pilot adaptation investments. First, the national consultation and mainstreaming are directly linked to the national planning process. In IUP-I, the national consultation was used not only to derive inputs for 12 adaptation investment, but also to produce inputs to the 2004-2007 National Development Strategy and the Ministry Operational Plans. The national awareness and ownershp of the concepts of vulnerability and adaptation obtained through the two National Consultations will also increase the likehhood of sustainability of activities implemented under the project. This close link i s expected to continue inIUP-11: biennial National Consultations w d bringkey stakeholder groups together to share their experiences, refine priorities, and encourage policymakers to attend to adaptation issues. As bottomup planning and top downprogram formulation becomes progressively institutionahzed within the national planning process (and given that many of the concerns of the Outer Islands relate h e c t l y to vulnerabllity reduction) adaptation investments and concerns are expected to flow naturally from this process. Second, the proposed placement of I(AP within the National Strategc ksk Management Unit under the umbrella of the Office of T e Beretitenti i s expected to give it a permanent institutional `home' with direct access to the Development Coordination Committee (composed of Secretaries of all Government Ministries) and with h e c t responsibility for risk management. T h e access and linkage to high level policy makers is an important asset if the Unit is to function at the level of coordination envisaged, in particular driving the preparation and monitoringof the MOPs and coordmating broader adaptation activities which transcend IUP-11, including donor and stakeholder efforts for adaptation. Thu-d, and with the exception of the island pilots, only adaptation investments which are clearly identified as national priorities in the Ministry Operational Plans will be funded. This, and the fact that the Government will be contributing a substantial proportion of the funding for these investments, ensures that the programs are fully institutionalized within the respective Ministries. As earlier discussed, whde the Government is expected to cover a substantial proportionof the costs of avoidmg maladaptation (under the baseline scenario), the alternate scenario assumes that a more complete treatment of these options wdl be carried out. The expectation i s therefore that, the absolute Government contribution to sectoral investments i s likely to b e higher in IUP-I1than in the future, given that much of the initial investment will focus on current vulnerabilities and avoidance of maladaptation. And ifclimate change impacts intensify, the need for incremental financing may also be higher in the future. However, the process of mainstreaming adaptation which was piloted under IUP-Iwould help ensure that baseline investments would concurrently increase to cover current-day mal-adaptation, thereby increasing the overall sustainability of the program. Moreover, the priority investments proposed for financing will be activities that entail significant incremental development costs in helping I e i b a t i adapt to the long-term effects of climate change and sea level rise that fit w i h a coherent project that will also deliver globalenvironmentalbenefits. ImDortance of technical assistance to imdementation and sustainabllitv: The project contains a relatively high share of technical assistance, which i s unavoidable given the current limited technical capacity to address climate change. IUP-I provided the building blocks for engagement with the communities and prioritization of adaptation strategies. IUP-I1will build on this base to increase capacity for implementing the strategies identified in IUP-I, including integration into regular work in the key line ministries. Furthermore, the awareness and behavior change activities that were started under IUP-Ineed to be expanded and approached more systematically to address the issues identified under the scoping consultations under IUP-I, to generate a real behavioral change (partly co-aligned with better provision of alternative solutions to adaptation-related problems, such as beach mining). Once all of these processes are in place, and government staff has implemented adaptation-related programs as part of their regular responsibilities within their Ministries' MOPs, they should be able to continue to apply these improved standards in their work. Furthermore, 85% of the total TA time i s 13 allocated to national consultants, coupled to k t e d inputs of international TA for initial training of these national consultants and their government counterparts. Inthis way, the capacity built innational consultants will remain available to the government. Replicability: Through the IUP, Kiribati would be one of the first countries in the world to pilot adaptation implementation. Hence, lessons learned from I U P (some of which are listed in section B.3) will be hlghlyrelevant for other Least Developed Countries and small island economies. The proposed project, the soon to close IUP-I, the NAPA preparation, and various pieces of World Bank supported sector work have included many provisions for the sharing of lessons learned. In the past years, the Government of I h i b a t i has been invited to present the project at the UNFCCC COP in Buenos Aires and at the pre-UNFCCC SBI LDC consultations about the LDC fund. Lessons learned have also been incorporated in a World Bank supported Risk Management Policy Note prepared for the Pacific region, targeting high level decision makers in the Pacific and the donor community. As part of the dmemination of the Policy Note, participatory country level profiles will be prepared and discussed with interested countries, the results of which should enrich the NAPA preparation process, and/or adaptation inthe countries selected. At the nationallevel, lessons learned from IUP-Iand the NAPA have already contributed significantly to the preparation of the Climate Change Adaptation (CCA) strategy that was recently adopted by the Cabinet, and will now be used as a planning tool for future adaptation activities in the country, including mainstreaming into the MOPS. These lessons will certainly also contribute to the AusAID/NZAID country assistance strategy that is being prepared; and is expected to pay ample attention to population policies and urban renewal issues (both`of which are closely linked to IG-ibati's adaptive capacity inthe face of climate change). I U P - I 1 also includes provisions for periodic evaluations to inform the expansion phase of the adaptation program, as well as other pilot adaptation initiatives in the region and beyond. IUP-I1 would also include substantial domestic replicabdity, as it would provide the foundation for scaling up and expanding the pilot adaptation investments to the national level under the expansion phase (KAP- III). 5. Critical risks andpossible controversial aspects' Risks RiskMitigationMeasures RiskRating with Mitigation Faihre or del9 in establishing SNPRA Unit the OB, A clear recognition and commitment fromthe MFEDandPSO.As specifiedinGoKs2005 CCA responsible agencies to the importance of a strategy statement, adaptation depends on strong, timely creation and staffing of the SNPRA politically-supported, focused and effective co- Unit.Once established, the SNPRAUnit L ordination by the newly-established SNPRA Unit should provide continued advocacy to sustain under the umbrella of the OB for i t s success public and political support for systematic CCA.The OB is responsible for the creation of the SNPRA Unit. Failure to secure support and collaborationOf&y CCA Continue to advocate andbddon the Ministtiesand the communz~.An unambiguous widespread concern about possible effects of spokesperson or standard-bearer for CCA (and so climate change. Capacity buddingand advocacy for KAP-11) within the political government does work to create awhole-of-government- and M not as yet exist. indeed, whole-of-community-collective will to adaptation. The OB, through the SNPRA Unit wouldleadthe policy dialogue; and the 14 Ministries through their MOPSwould contribute to coordinated CCA activities. Failure to strengthenthe capah& motivation andfundingof Develop effective, responsive local localgovernment - an important issue, given that much government capacity to manage CCA across of the physical response needed to adapt to climate the country, by buddingthe necessary change lies within the ambit o f face-to-face contact capacities inlocal government -activities of households, communities and enterprises with which have already beganwith the assistance agencies of government of UNDP and MISA throughtheir long-term M program, to which addtional resources will be allocated under KAP-I1to reinforce and assist this process. That serious storm damage orprolonged drought duringthe Buildcapacity of the agencies to be mentally period of KAP-I1may force GoK to take short-term and physically prepared to respond promptly to r e m e l a l action for humanitarian and political deal with immediate catastrophes, even while reasons, that would divert resources and public developing and proving longer-term support away from the longer-termand ultimately solutions-using appropriate technical designs more cost-effective ways of reducingvulnerability inthe immediate response that enable S being developed under this CCA-based KAP-I1 integration of the necessary short-term repairs into the longer-term climate-proof upgrade process. 6. Grant conditions and covenants Effectiveness condtions:The GEF Grant wdlinclude as a condition of effectiveness: 0 that the DCC would approve the project and ensures its incorporation into the FY06 budget 0 adoption of the Project Implementation Plan acceptable to the Bank by the government 0 adoption of the draft Operations Manual for the project and the pilot small scale 01 adaptation investments schemes procedures manual acceptable to the Bank by the government. Financial covenants: 0 The PMU shall maintain a management information system acceptable to the Bank as a supplement to the Government's accounting system 0 The project financial statements shall be auhted by auditors acceptable to the Bank and on terms of reference acceptable to the Bank 0 The audits shall be conducted in accordance with International Standards on Auhting (ISA) as issued by the IFAC and on terms of reference acceptable to the Bank 0 The annual audited statements and audit report shall be provided to the Bank withm six months of the end of each fiscal year and at the closing of the project 0 No disbursements in support of the revolving fund for the Outer Island community development grant scheme for roof catchment and sanitation would be allowed from the grant prior to the development and approval of a Procedures Manual, which demonstrates how the funds would be used and accounted for. Other covenants: 0 Prepare and submit a report of the monitoringand evaluation results at mid-term 0 Take all measures necessary to ensure that the Project i s implemented in full compliance with the provisions of the Strategic Environmental Assessment and the Project Implementation Plan and Operations Manual ina timely manner. 15 D. APPRAISAL SUMMARY 1. Economic and financial analyses Economic bent@ will derive from improved environmental management, includmg the reduction in coastal zone degradation, improved water resources management; and a reduction in loss of biodiversity, habitats, and fish resources. In addition, the intended outcome i s that Kiribati wdl be equipped with the field-tested engineering designs, information, analytical capacity and technical know- how needed to adapt successfully to climate change inthe years ahead. Through the use of these better technologies, public investments should require less maintenance as they become better able to withstand climate variability, climate change, and sea level rise. There are also additional benefits expected from the development and implementation of alternative livellhoods by the communities, which should eventually result in a better standard of living for the beneficiaries. A more comprehensive economic analysis can be foundinAnnex 14. Fiscal impact: because the majority of the activities to be funded are already included as part of the MOPS,the project would not represent a significant additional fiscal burden for the country. Instead, the project simply provides the additional financing that allows the government to expand and reorient the existing programs to reduce vulnerability to climate change. The Government has already identified provisions in the budget for the existing programs at an estimated cost of US$2.3 milhon, which represents 35% of the total project cost of US$ 6.6 million (including contributions by GEF, AusAID and NZAID). M e d m m term fiscal impact of the project i s likely positive as lessons learned are applied in design standards and coastal protection and building practices, as well as the priority national investments themselves. The use of improved methodologies should result in better adaptation to climate variability, clunate change, and sea level rise, thus reducing costs to respond to those impacts. With respect to coastal land use, this should result inlonger life spans and lower maintenance for key public assets. Furthermore, the priority national investments in the water sector should reduce the disease burden and associated health service costs related to poor water quality. 2. Technical IUP-I1 will b d d upon technical guidance developed during IUP-I, including state-of-the-art assessments of adaptation options for coastal management and the water sector. Inaddition, the project will compile a comprehensive c h a t e risk profile, which will budd upon the current set of climate scenarios for.IGribati. The upgradmg of the Meteorological Office will include the purchase and upgrading of meteorologcalmeasurement instruments which will be used to gather key data needed for monitoring and early warning. For coastal management, the initial phase of the project wdl provide additional resources to refine approaches for preventative rather than responsive coastal management, based upon well-established methodologies for integrated coastal zone management and integrated assessment of adaptation options. Climate-proofing of public assets will inparticular include analysis of soft, i.e., non-engineering solutions. Design parameters for protective works will be based upon field work and study of oceanographic data. The sustainable lagoon-based aggregate extraction is part of an associated EU-SOPAC project, w h c h will provide the appropriate TA to update a 1998 feasibility study, including extensive technical and environmental assessments before any physical investments are undertaken. In the water sector, most investments will be based upon well-established technologes while more experimental pilot activities - particularly the groundwater recharge and the feasibility study for an artificial water lens, w h c h were based on successful examples in other atolls - will require further technical inputs and evaluation for application inIGribati. The small-scale adaptation activities at the community level are gwded by a clear Procedures Manual for the pilot small-scale adaptation 16 investments, which describes the participatory planning that should result in activities that are technically robust and can be implemented largely on the basis of local knowledge. Lessons learned from the island adaptation pilot activities will be used to update the Procedures Manual, w h c h could subsequently be used for all the islands of IGribati. Such updates might include changes in positive and negative lists that define the scope of the potential investments, or specific technical guidance on the implementation of particular activities. All pilot investments in IUP-I1wiU be closely monitored and lessons learned will be documented and taken into account in the design of expanded adaptation investments after IUP-11. 3. Fiduciary Accredited senior specialists assessed the government's financial management capacity during program preparation and found that satisfactory and acceptable systems are in place to ensure smooth implementation of the project. The core financial management arrangements for the project will make use of the Government of Kiribati's financial management and budget systems supplemented by a parallel information system to provide the necessary level of detailed reporting. In order to maintain the Parallel information system the PMU will require one additional staff member shortly after the commencement of the project. With regards to procurement, the general procurement assessment shows that additional procurement capacity is needed. In particular, it was noted that the National Procurement A c t i s quite recent (October 2002), and the implementing agency has no dedicated procurement staff. And although capacity has been built in the I U P office under the ongoing IUP-I project, this has been lunited to recruitment of individual consultants and procurement of goods. Under the proposed project, the procurement scope dbe significantly expanded, as dthe level of interaction with other government agencies. Briefly, the following activities to strengthen implementation have been agreed: (a) planning ahead for procurement activities; @) contracting of a Procurement Officer in the PMU; and (c) contracting of a Procurement Specialist (to assist in capacity development). 4. Social Key social issuesrelevant to theproject objectives and social development outcomes Improving the abfity of the I-IGribati to adapt to the stresses presented by changes as a result of climate change i s the key social outcome expected under the project. The main strategy for achieving this i s to improve the abhty of people at the local level to interact with officials at island and national level inways that allow integration of local level concerns and strategies with island and national level responses. In this respect, IUP-I1i s building upon a series of National Consultations and a Social Assessment (SA) that examined traditional IGribati society, land tenure patterns, social and cultural organization, political organization and patterns of social and cultural adaptation over time, including in-depth case studies of five islands. 17 Participatory Approach The key stakeholders are the people of IGribati, local level groups, institutions and organizations, the Island level political and adrmnistrative structures and officials, national level institutions, civil society and donor agencies. The people of IGribati at the local level have been involved inthe design of IUP- I1through national consultations and a social assessment during ICAP-I (see above). The National Consultations brought together Chief Councilors, council clerks, government staff on the islands, unimwane representatives (traditional elders), women and youth from each of the islands of IGribati. The first round of consultations resulted in a catalogue of the kinds of changes experienced over the last 20-40 years, traditional coping mechanisms; a preluninary assessment of areas where assistance would be needed; a strategy for further local level consultations; and a shared d e h t i o n of vulnerabllity and adaptation. The second round of consultations resulted in prioritization of vulnerabilities; identification of adaptation strategies; and a classification of those strategies by level of urgency. Some urgent strategies could be undertaken by communities themselves, for the others the consultations designatedresponsibility to specific government ministries. Consultations and collaborations withNGOs and other civil society orgamzations The National Adaptation Steering Committee includes representatives from the IGribati Association of Non-Governmental Organizations (IUNGO), the national women's organization - All Women of Kiribati (AMAK), the IGribati Council of Churches, and the IGribati Chamber of Commerce. I(ANG0 has participated in several visits to Outer Islands in order to consult with village level I- I(iribati to elicit their views and concerns with respect to climate change. NGOs and churches, which occupy a central social position in IGribati society, are expected to play an important role in the design and implementation of the pilot small-scale Outer Island adaptation investments, as well as in the awareness raising and public consultation. Institutional arrangements Although it is unlikely there wdl be any substantial resettlement, the institutional arrangements for resettlement activities are described in the Resettlement Policy Framework. Instihtional arrangements for the pilot small-scale Outer Island adaptation investments are described in a detailed Procedures Manual for that subcomponent, including the participatory process by which vdlages and communities will come to consensus throughan inclusive process of locallevel discussion and debate concerning the most pressing concerns facing the community and means by which those concerns will be addressed. With the assistance of civil society organizations and the Island Project Officer, proposals for small- scale adaptation investment grants wdl be formulated and passed on to the Development Committee at the island level and, from there, to the PMUat the national level. Both the PMU and the Island Development Committees will regularly monitor progress in the implementation of the small scale adaptation investments. The implementation of the MOPSwill be monitored by each ministry on an ongoing basis. The M&E system for the resettlement and land acquisition aspects of the project i s described in the Resettlement Policy Framework. A social assessment will be conducted towards the end of the implementation phase to determine the social development outcomes achieved under the project, and to identify lessons learned for further adaptation planning. 18 5. Environment A Strategic Environmental Assessment (SEA) has examined the environmental issues that are likely to arise under IUP-11. As specific investments to be undertaken under IUP-I1have yet to be designed, the SEA provides a general methodology for environmental screening of policies and plans; the preparation of environmental impact assessments for various kmds of potential activities, including how best to mitigate any possible negative consequences; and the monitoring of the implementation of the recommendations of those EIAs. The project will have some environmental impacts, but in most cases these impacts are not k e l y to be substantial. In almost all cases the impacts are expected to be positive over the longer term. There i s an established regulatory environment in Kiribati that mandates certain actions in the case of negative environmental impacts. The Environment A c t of 1999 establishes an integrated system of development control, environmental impact assessment and pollution control. The Minister of Environment, Lands and Agricultural Development i s responsible for the due administration and implementation of the Act. All development proposals of government ministries, island councils, private developers and non-government organizations must undergo the environmental screening procedures of the Environment and Conservation Division (ECD) as stipulated in the Environment Regulations 2001. The screening procedure requires all project proponents to apply for a permit to carry out a prescribed development. The application form will be reviewed by ECD to determine whether the proposal requires an initial environmental examination (IEE) or an EIS (a comprehensive EIA study). The EIA procedure allows for the project proponent to conduct its own EL4 study and implement the ECD approved environmental management plan of project activities. The ECD would also provide monitoring measures for the proponent to implement and for w h c h National Environment Inspectors would closely monitor environmental compliance of the project. Project activities in an Outer Island would undergo the same environmental screening system. The implementation, management and monitoring of the local project would be supervised by the Island Council, with possible assistance from ECD. All subprojects under the Pilot Island Adaptation component and any major activity under the MOPS will undergo environmental screening to determine the likely level of environmental impact. Activities wdl be categorizedina way consistent with Bank OD4.01. 6. Safeguard policies Safeguard Policies Triggered by the Project Yes No Knvironmental Assessment (Ol'/I31'/Gl' 4.01) [XI [I Natural Habitats (OP/BP 4.04) [I [XI Pest Management (01' 4.09) [I [XI Cultural Property (OPN 11.03,being revised as OP 4.11) [I [XI Involuntary Resettlement ((Il'/BP 4.12) [XI [I Indgenous Peoples (OD4.20, being revised as OP 4.10) [I 1x1 Forests (W/m4.36) [I [XI Safety of Dams (OP/HI' 4.37) [I [XI Projects inDisputed Areas (Ol'/l31'/Gl' 7.60)' [I [XI Projects on International Waterways (OP/BP/C;P 7.50) 11 [XI * By supporting theproposed project, the Bank does not intend toprejudice thefinal determination of theparties` claims on the disputed areas 19 The Environmentalimpacts of the project are expected to be small. There may be some small-scale construction associated with the project, but this i s not expected to have major negative environmental consequences. As a result, the project has been rated Category B, requiring a partial Environmental Assessment (EA). However, the increasing and cumulative effects of coastal infrastructure developments are likely to be important, and as such, it wdl clearly be advisable to initiate an environmental management program targeted at the coastal development sector. An integrated coastal management program would examine the current extent of climate change adaptation options and coastal construction activities and the impacts (both beneficial and adverse) experienced to date. The environmental management program should consider the preparation of a National EIA Training Program and a series of Codes of Environmental Practice for use during the planning, design, construction, and operation as well as maintenance of all roads and coastal works inKiribati. 7. Policy Exceptions and Readiness None. 20 ANNEX 1:COUNTRY, SECTORAND PROGRAMBACKGROUND KIRIBATI ADAPTATION PROJECTIMPLEMENTATION - PHASE(KAP11) Country background IGi-ibati i s one of the most isolated and vulnerable countries in the world. It consists of 33 low-lying atolls and small reef islands spread over a vast sea area of 3.5 million km2in the Western and Central Pacific. Intotal sea area, from East to West, IGribati i s nearly as wide as the continental United States, extendmg over 4,000 km and three island groups (Gilbert, Phoenix and Line Islands). The total land area, however, i s only 726 km2,supportinga population of almost 98,000 (2004 estimate). Half of the population lives in the capital atoll island of Tarawa (inthe Gilbert Island Group), a densely populated area with a population growth rate of 3 Yo per year. The population shares a common cultural heritage and speaks one nationallanguage. F&. 1.Map OfKzribati,showingthe extent ofsea areaandremotenessofthe OuterIslands Source: http://www.infoplease.com/atlas/county/k,itibati.html The poor atoll soil offers little potential for agricultural development apart from a few commodities such as copra. At the same time, the vast fishing area provides IQribati with i t s most important source of revenue inthe form of fishing licenses, w h c h amounted to about 23 O/Oof GNP in 2001-02. The total GDP of IGribati was US$54.6 million equivalent in 2003 or about US$ 567 per capita. However, because seamen's remittances and fishing license revenues i s a s i p f i c a n t contributor to IGribati's economy, GNI i s a more relevant measure of income than GDP. The GNI per capita declined from US$1,040 in 1999 to US$970 in 2004, reflecting the contraction in GNI in 2002-04 due to a decline in fishinglicense revenues. Official grants and loans amounted to US$58 million equivalent in the 2000-02 period, or 30 YOof the Government's annual budget expendtures. Though fishing revenues vary from year to year, the IQribati economy i s stabdized by its Revenue Equalization Reserve Fund (RERF) derived primarily from phosphate revenues, which is used to balance the budget and was valued at US$335.7 d o n in end-2003. Official external reserves are equivalent to 8 times the annual imports. 21 The main challenge facing I h i b a t i at present i s the high population growth, averaging 2.1 O/o a year in 1998-04. By 2025, at current rates, the population of I h i b a t i wdl grow to 140-145,000, with Tarawa - already densely populated- supportingat least 70,000 of this population. Thus would place tremendous added pressure on the already fragile atoll environment. The concentration of population inTarawa i s largely due to employment and livelihood opportunities. Currently, only about 10 O/o of the population i s formally employed inthe cash economy, and two-thirds of the jobs are provided by the public sector. Ths high reliance on the public sector for job security has been at the core of the Government's reluctance to privatize many of the 28 public enterprises. The Government i s currently studying voluntary incentives to attract migration into IGitimati (Christmas Island) in the Line Island Group (3,500 km east of Tarawa), which is under Government land. Though IGitimati - the largest atoll in the world - comprises half of the land area of IGibati, it lacks direct air links with Tarawa, and suffers fromperiodic droughtsand poorly developedinfrastructure. Vulnerability Kiribati i s one of the most vulnerable countries in the world to the effects of clunate change and sea level rise. Although it lies outside the cyclone path, most of the land i s less than 3 meters above sea level and lies along a narrow strip surrounded by sea on both sides. The average width of urban Tarawa, for example, is just 450 meters (see Table 1). Table 1 Kiribati MainAtolls Population and IslandWidth - Atolls and island Population (2000) Widest widths (m) Average widths (m) M a k i n 1,691 1700 600 Butantan 3,464 1200 350 Marakei 2,544 2100 500 Abaiang 5,794 800 300 NorthTarawa 4,477 1400 500 Maiana 2,048 1100 400 K u n a 961 3700 1,700 Aranuka 966 1600 770 Abemama 3,142 1200 710 Nonouti 3,176 900 400 Tabiteuea Nth 3,365 2300 700 Tabiteuea Sth 1,217 2000 650 Onotoa 1,668 940 420 Bern 2,732 1800 800 Nikunau 1,733 2600 1,300 Tamana 962 1100 900 Arorae 1,225 1100 800 Orona (Hull) 30 N/A N/A Teraina (Washington) 1,087 N/A N/A Tabuaeran (Fanning) 1,757 N/A N/A Kintimati (Christmas) 3,431 39,000 7,245** *wu.w.woildtravclcruide.iict/d:itd/ Sources:Land and Stlruy Division (original); Government Kiribati; IGCI (1999). of kir/kii.:isp** Minimumwidth ofChristmasIsland (wivw.woi~kcr~foiicsus.c(,in/31-rnci.htm) The islands are exposed to periodic storm surges with a return period of 14 years and to droughts during La NGia years (about once every 3-4 years). Rainfall above 3,000 mm per year (leading to floods) occurs once every 6-7 years. Added to natural vulnerability there is also considerable socio- economic vulnerability due to highpopulation growth rates and in-migration into Tarawa, where semi- 22 permanent settlements, rate of development, and environmental degradation are already pronounced, and expected to accelerate inthe near future. T h e impacts of climate change are expected to be severe. In 1999-2000, the World Bank funded a study of vulnerability and adaptation in Tarawa, conducted by experts from the International Global Change Institute, the Government of IGribati, the University of Otago, and Eco-wise Environment. The study found that climate change and sea level rise are likely to lead to severe incremental impacts, disruptingmajor economic and social sectors (Table 2). By 2050, inthe absence of adaptation, IGribati could experience potential economic damages of US$8-16 million a year, equivalent to 17-34 percent of the 1998 GDP. Table 2. Potential Impacts of Climate Change, Variability and Sea Level Rise in Kiribati, 2050 Annual Damages L v e l oj Tjpojlmpact PhysicalImpact (in millions o j 1998 Certain0 US#) Impact on coastalareas: Loss of land to erosion 0.1-0.3 Low Buariki (NorthTarawa) 0.3 to 0.7% Bikenibeu (South Tarawa) 0.6 to 1.3% Loss of land and infrastructure to inundation 7-12 Low Buariki (North Tarawa) 18 to 80% Bikenibeu (South Tarawa) 0 to 54 Yo Loss of coral reefs 10to 40% 0.2-0.5 Very Low Impact on water resources: Change in groundwater thickness (Bonrikilense) 19 to 38% 1-3 Low Impact on agriculture: Depends on rainfall scenarios; sea + Low Agriculture Output Loss level rise would have negative impact Impact onpublic health: Expected to increase ++ Low Increased incidence of diarrheal disease 22 to 33% Low Increased epidemic potential of dengue fever 4.6 to 6.1 fold ++ Low Increased incidence of ciguatera poisoning Substantial impact on subsistence + Very Impact on public safety and the poor crops/fisheries, increased crowding Low Potentialincrease in fatalities due to inundation and Expected to increase + water-borne or vector-borne diseases Low TotalEstimated Damages >8-1/;+ - .- Furthermore, the study suggested that 18 to 80 Yo of the land inBuariki, North Tarawa, and up to 54% of landinBlkenibeu, SouthTarawa, could become inundatedby 2050, thoughthe effects of erosion are expected to be relatively small. The combined effect of sea level rise, changes inrainfall, and changes in evapotranspiration due to hgher temperatures could result ina 19-38 Yo decline inthe thickness of the main groundwater lens inTarawa. Agriculture productivity - particularly for taro and pandanus - could d e c h e due to storm induced saltwater intrusion into groundwater. Higher temperatures could also increase the epidemic potential for dengue fever by 22-33 Yo, increase the incidence of ciguatera poisoningand degradation of coral reefs, and divert critical tuna resources away from I h b a t iwaters. 23 Fig.2 -Projected Inundation of Bikenibeu Island (South Tarawa) under Worst-case Scenario -.-_ --_ _ _ _ _ _ _---- *- _ _ - e - Reef Edge ,mm --. --. Key [B 1.0m abavsMHWS A: Presentstatus B: Residualisland under a worst case scenario,2100; C: Residualisland under worst case scenario and storm surge, 2IO0 Source: WorldBank (2000). Climate change scenarios The IGribati Climate Change Study Team recently adopted an updated set of climate change scenarios (see Table 3). However, all policy documents also recognizes that the main impacts of c h a t e change will not be felt through changes in the annual mean temperature or rainfall, but throughits effects on the variabhty, includmg return periods of particular storm surges, intense rainfall, or drought. Hence, c h a t e change adaptation should be managed by addressing the full range of climate-related hazards, ranging from weather extremes to creeping hazards and long-term trends. IQiP-11will provide for TA to prepare risk information that includes the whole spectrum of c h a t e variability and climate change, including current return periods of various c h a t e extremes (droughts, extreme rainfall, storm surges, etc), and projected trends therein. Table 3. Initial planning assumption for climate change on Tarawa 1 I 2025 I 2050 I 2100 Mean sea level rise +39 c m relative to the level inyear 2000 I(::::?26 cm) (+12 to +83 cm) Change in annual mean air temperature +0.4 O C + L OO C +2.3 OC relative to year 2000 (+0.3 to +0.5) (+0.8 to +1.4) (+1.3 to +3.5) I Change in annual meanrainfall +3% +7% +15% relative to year 2000 (+I%+70/0) to (+2% to +170/0) (+4% to +46%) 24 Country Strategy The Government of IGribati has shown nearly a decade of commitment to clunate change adaptation. A nationalClimate Change Team was established in 1995 under the U S Country Studies Program. The team continued i t s work under the GEF-funded Pacific Islands Climate Change Assistance Programme (PICCAP, under UNDP assistance), which supported the preparation of Ieibati's initial National Communication to the UNFCCC (submitted at the 5th Conference of the Parties in 1999), as well as a C h a t e Change National Implementation Strategy PIS), issued inJanuary 2003. In subsequent years, preparation phase of the IGribati Adaptation Program, and the preparatory activities for the National Adaptation Programme of Action, provided further consultations and analyses that are currently guidingIGribati's response to adaptation. InJune 2005, the Government o f Kiribati adopted the following formal Policy on Adaptation to Climate Change: "Warning ofthe earth5- climate, with an associated rise in sea level and an increase in thefrequeny and seven3 of extreme weather conditions, is current4 occumng and is like4 to continue through this century. Theprincipal cause of these changes is the efect on the earth's atmosphere of emissionsfrom economic activities in industrialixed countries. Internationalrecognition ofthis has led wealthy nations to set up arrangements to help developing countrieswith the design andjinancing ofnationalprogrammes ofadaptationto climate change. Kiribati isparticular4 vulnerableto the impacts ofclimate change, which constitute a mqor strategic risk to the economy and national well-being. The nature ofthe risk has to be specz$ed and appropriate responses developed at national and local levels, Successive Governments ofKiribati have been active in global and regional consultations about the climatic changes takingplace and how to deal with them. National expertise has developed and links have been established with the relevantregionaland internationalinstitutions. A s Kzribati cannot escape climate change it must adqbt to it. The adaptationprocess needs to givepeople the bestpossible chance ofliving decent lives during and byond theperiod ofclimate change nowforeseen.A s the impacts ofclimatechange reach into all aspects of/$ in Kiri`bati, broadpublic consultation andparticzpation inplanning and implementation are neededfor sustainableresponses. M a 9 departments ofgovernment are involved, requiring both centralpoliy co-ordination and clear delegation ofresponsibiliij for action. And as the precise speed and extent offuture climate change is unknowable, adqbtiveresponses themselvesneed to be risk-minimi@ng,flexible andprogressive. Thecurrent statement$National DevelopmentStrategies(NDS) 2004-7 identzj?esclimate change as a mqor area of developmental concern. In Ky Poliy Area 1, Economic Growth, Issue 3 states %limate change bringspotentialh cost4 r i d s to economic growth and calls for the development ', ofpartinpato ry and cost-efective way of minimieng and managing risk oflossfrom climate change-relatedevents TheGovernment'spoliyaims in respect ofclimate change are thergore that: Kzribati should be mental', physical4 andjinancialh wellprepared to deal with whatever climatic trends and events thefuture m y hold,. this should be achieved through a coordinated,particzpation-basedadaptationprogramme carried out Ly oflcial andprivate agenczes; and externaljinancialassistanceshouldbe obtainedto meet the costs ofthe nationaladaptationprogramme." with t h s Policy Statement, the government adopted a more elaborate C h a t e Change Adasation Strategy, w h c h i s implemented, among others, through the IGnbati Adaptation Program. The following sections hghlight the background of the Policy Statement, C h a t e Change Strategy, the IGribatiAdaptation Program, as well as the current IUP-I1project. 25 Regionalcontext That approach to adaptation taken in IGribati, including the mainstreaming of adaptation into economic planning, i s fully consistent with the Frameworkfor Action on Climate Change, Climate Variabilig and Sea Level Rzse in the Pacific Island Regon (2000). Under the adaptation objective statement, the Framework lists the following key outputs: 0 Mainstream effective and efficient c h a t e change related risk management in national development plans, budgets, sectoral plans, policies and projects 0 Implement integrated adaptation measures and policies at the national and/or community level 0 Strengthen national capacity to deal with and respond to c h a t e related issues and mainstream adaptation in national planning Disseminate information about clunate related issues related economic and social implications to high-level policy makers as well as the general public. 0 Enhance the methods to help ensure a more effective linkage between identified vulnerabiltties and proposed adaptation measures. The Government's approach i s also consistent with the recommendations of the f u s t and second Pacific Islands High Level Adaptation Consultations (2002 and 2003). The 2002 N a d i Communiqui, endorsed by the Pacific Island Forum, stated that "climate change, climate variabdi~,and sea level rise is notjust an environmental, but also an economic, social, andpolitical issuefor Pacz$c Island countries". The Communiqui recommended the following major principles inmainstreaming adaptation: Integrate risk management in the national development planning and budgeting process Strengthen capacity for risk assessment and risk management Strengthen capacity of the ministries of environment to perform macroeconomic and cost/benefit analyses Strengthen the capacity of the ministries of planning and fulance to internalize the implications of environmental issues and incorporate adaptation and disaster management concerns into the budget and planningprocesses Strengthen institutional arrangements for high-level national coordination and the formulation of national policies, strategies and strategic plans Disseminate information about climate change and adaptation and related economic and social implications to high-level policy makers as well as the wider public Include risk assessment and risk management in the formulation of projects, programs and the development plan itself The KiribatiAdaptation Program (KAP) In2003, as a direc'tfollow-upof the 2000WorldBank Study and the regonaldevelopments mentioned above, the Government of IGribati, with support from the World Bank, started the IGribati Adaptation Program QUP), with the key goal of reducing IGribati's vulnerability to climate change, climate variability and sea level rise. The program i s envisaged to involve the followingphases: P Phase I: Preparation (2003-2005). This phase aimed to mainstream adaptation into national economic planning, prepare a National Adaptation Program of Action and design an intermedate pilot implementation phase, IUP-11. All of these activities were based upon an extensive consultation and process, as well as several technical studies in key affected sectors. It i s being 26 funded under a Japan PHRD Climate Change Initiative &JS$645,580), a National Adaptation Programme of Action grant under the LDC fund (US$200,000), Government contributions &JS$25,000), and a GEF PDF-B Grant (US$99,100). Phase II;.Pdot Implementation (2006-2008) is the focus of the current PAD. It aims to develop and demonstrate the systematic diagnosis of climate-related problems and the design of cost- effective adaptation measures, while continuing the integration of awareness and responsiveness into economic and operational planning. This will be achieved through continued consultation and awareness raising; consolidation of the mainstreaming of adaptation into national economic planning; and implementation of pilot adaptation measures to address pressing adaptation issues while building capacity in key government ministries, local government and communities. Besides the Government of IGi-ibati's own contribution, it wdl be financed by the GEF's Strategic Priority "Piloting an Operational Appmach to Adaptation", with cofinancing from AusAID and NZAID and parallel financing from the EU. Phase III: Expansion (2009-2015)would gradually scale up the investments piloted under Phase I1 to cover all major islands and vulnerable sectors of Kiribati. This phase may be eligible for funding under one or more of the three global funds for adaptation (LDC, Special Climate Change Fundand Adaptation Fund), complemented by basehe financing from the GoISs own budget as well as bilateral contributions. Care would be taken to ensure that there would be no duplication of activities funded under the GEF Strategic Priority and those funded under the global funds, should they be accessed. The progression of I U P phases i s outlined schematically below. Phase I: Phase II: PhaseIII: Preparation Pilot Implementation Expansion Previous4 GEFfunded: National Communication Adaptation Investments 2003 2005 2007 2009 2011 2013 Phase I PhaseII Phase IIl IGEFFunding: NAPA SPA LDCF/Special Climate Change Fund/Adaptation Fund Baseline: Japan CC Funds I Government Government AusAID, NZAID, bilateral contributions EU It is expected that external financing for mainstreaming wdl progressively decline as it i s institutionalized into Kiribati's national economic planning, whdst financing for adaptation investments would be expanded to cover all critical islands and sectors. Successfulmainstreaming would not imply that no further investment costs are required, only that adaptation response i s integrated into regular 27 policy and implementation. Vulnerable countries &e IQribati are quite likely to see risingimpacts and incremental development costs due to climate change, almost regardless of the effectiveness and sustainability of early adaptation measures. Mainstreaming i s the best way to: (a) ensure that many low- cost adaptation measures are integrated into government policy and thereby become sustainable; and (b) ensure that the incremental investments needed to adapt to climate change are as effective and efficient as possible. For these investments, the Government of IQribati hopes to gain support from the internationalcommunity. Results from KAP-I: Mainstreaming Adaptation into National Economic Planning I(AP-I has been closely linkedwith the preparation of the 2004-07 NationalDevelopment Strategy and the Ministries' 2-3 years Operational Plans (funded partially through ADB assistance). It i s also being coordmated with the preparation of the National Adaptation Programme of Action PAPA) funded by GEFunder UNDPexecution. The process followed inmainstreaming is shownbelow: National Implementation Strategy (2003) FirstNational Consultation: Assessment of Island Vulnerabilities fcombleted) Second National Consultation: b b Prioritization of Coping Strategies fcombleted) - Integration of Adaptation into 2004-07 b .National Development Strategy fcombleted) Initial Technical, Social and Economic Analysis of Adaptation Options fcombleted) Climate Change Adaptation (CCA) Strategy b (adoptedbJiCabinet-June 2005) I I Adaptation Mainstreaming into Ministry Operational Plans fon-~oin~) b Pilot investments under RAP-I1 (this PAD) NationalAdaptation Programme of Action /to be combletedin second half o f2006) ( N A P 4 28 National Consztltations. Using established risk management tools (Comprehensive Hazard and Risk Management) developed by the South Pacific Applied Geosciences Commission (SOPAC), IUP-Iheld two major national consultations, which gradually built awareness and commitment for adaptation and climate change. The First National Consztltation, held inthe Gilbert and Line Island Groups from'23 of June to 15 August 2003, brought together Chief Councilors, government staff, clerks, zlnimwane representatives (tradtional elders), women and youth from each of the islands of ISiribati. K e y results included: 0 Awareness that the changes they faced were not unique to their islands, but shared across the islands 0A catalogue of kinds of changes experienced over the last 20-40 years, and tradtional coping mechanisms used to deal with those changes A preliminary assessment of areas where people felt they needed additional assistance in coping with their vulnerabilities 0A strategy to take results back to their islands for further locallevel consultations A shared and distinctively I-ISiribati definition ofwhat is vztlnerabiligand adaptation The Second National Conszlltation (November-December 2003) included most of the same stakeholders fromthe First Consultation, but also IslandProject Officers. Key results included: 0 Prioritization of vulnerabilities identified by the island stakeholders 0 Identificationof adaptation (coping) strategies for the identifiedvulnerabilities 0 A classification of adaptation strategies into (a) those which were urgent and could be undertaken by communities themselves; @) those which were urgent and would require outside help, and (c) those w h c h were less urgent and did not need to be addressed immediately 0 Participants then assigned urgent adaptation strategies for w h c h outside help was required to specific ministries for inclusionintheir operational plans Mainstreaming into National Development Strateg. The National Consultations were closely coordinated with the formulation of the 2004-2007 National Development Strategy. Meetings on adaptation were immediately followed by discussions on the NDS, involving many of the same stakeholders. As a consequence, adaptation issues are well integrated into the NDS, and climate change i s recognized as one of the key issues potentially affecting economic growth. In order to implement the NDS mandate to address that vulnerabhty, the I-Kiribati Cabinet recently also adopted the Climate Change Adaptation (CCA) Policy Statement and Strategy (see above), With respect to the responsibilities of the national government, the CCA Strategy adopts a perspective of mainstreaming adaptation into national economic planning, as reflected inthe structure of IUP-11. Furthermore, IUP-I1 provides the resources and technical assistance to establish the participatory planning process envisaged inthe CCA strategy, and delivers the external financial resources to address, on a pilot basis, the additional cost of some of the priority adaptation investments identified under I U P - I . Mainstreaminginto Ministy OperationalPlans. Mainstreaming at the operational level i s being enhanced by using the outputs of the National Consultations to inform the formulation of the annual M u i s t r y Operational Plans (MOPS).MOPS,w h c h were introduced in 2004, are the key planning tool for all Government Ministries and public enterprises. They are coupled to the government's program budget 29 (which in this context includes all sources, i.e. recurrent plus development, in kind and cash), and subject to biannual progress reporting to monitor M h s t r y performance. While in 2004, only a few MOPSreflected adaptation priorities, the 2005 MOPSshowed considerable attention for adaptation in many key programs. The 2006 MOPs, which will incorporate the add-on investments of IUP-11, will be the first generation of MOPs with comprehensive mainstreaming of adaptation priorities across all climate relevant programs in the key ministries. During IUP-11, thls mainstreaming process will continue, and adaptation priorities in the key MOPs will be fine-tuned on the basis of further consultations and technical inputs.While specific pilot investment activities that are part o f IUP-I1wlll only appear in the MOPSfor the years inwhich they are implemented, most of the mainstreaming of adaptation inMOPSprograms wlll be based on recurrent budget resources, and are expected to become continuous components of relevant MOPs, fully sustainable after the end of IUP-I1(although future specific adaptation investments in the expansion phase would again be added to the regular level of activity inthe MOPSof affected Ministries). Social, Technical and Economic Assessments. Under complementary I U P and NAPA funding, adaptation investments have been assessed and prioritized based on technical, social and economic merits (as summarized in Annex 4). In response to the concerns expressed by the national consultations, key technical and economic assessments focused on strategic options for coastal management and freshwater resources. As part of the coastal vulnerabhty analysis, IUP-I also supported a comparison of old (post World War 11) maps to determine historical rates of island erosion. A comprehensive social assessment "The Sun is Coming Closer to my Island" was conducted based partially on fieldwork in five islands (Butaritari, Abemana, I(iritimati, Tamana, and Onotoa). As part of the GEF-PDF B preparation grant, an environmental analysis, regulatory review, land acquisition framework, fuvther technical assessments, and preparation of a Procedures Manual for island investments have been carried out. The NAPA process is expected to result in a National Adaptation Program of Action in early 2006. The basis for the design of KAP-11's pilot investments IUP-I1 component includes a number of priority public sector adaptation investments in key vulnerable sectors, as identified and prioritized in the Ministries Operational Plans (MOP). By adding project funds to the Government budget for these investments, the project provides an incentive for a gradual uptake of adaptation-friendly investments and policies across the development planning of Kiribati. IUP-I came at an opportune time, since 2004 marked the first year that MOPs were introduced in Kiribati. Each priority program in sectoral Ministries and public enterprises will have specific program indicators, and should be supported by the Ministry's program budget. These indicators, once developed, will also become the output in&cators for IUP-11, thus ensuring that project monitoringi s closely linked to the national budget. The process for prioritization of adaptation investments i s explained briefly below: 1. Identification ofCopingStrategies During the first national consultation, representatives from each of the islands identified the key changes (hazards) experienced over the past 20-40 years, and the coping mechanisms proposed to deal with these changes. An example is shown below: 30 Hazards Impact CopingStrategies High stormsurge Inundation :water becomes brackish Construct wood embankment Erosion: reduction of land area Plant mangroves; limit removal of aggregates 2. Adaptation Prioritization andResponsibilityAllocation During the second national consultation, island representatives rated the adaptation options and classified them into four categories: A = Urgent adaptation options which can be done by communities themselves ("things that we can do nght away') B = Urgent adaptation options for which communities need assistance from the Government ("things that we want to do nght awy, butjr which we need assistance") C = Adaptation option that are less important/urgent ("things that are somewhatless importantlurgent") D = Adaptation options for which there is still no need or willingness to implement ("things that we do notyet need or want to do"). OnlyB category optionswere considered inthe process of mainstreaming into the MOPS. Adaptation Option I Priority Category IRank I Category I Lead Ministry I Awareness raising I B I 1 IGeneral 1 MELAD MCTI'D/MEYS Water Resources: Water resources -Protect water wells B 3 MPWU -Assess available water B 4 MPWU -Water pumps and pipes B 2 MPWU 3. Assessment of Potential Global Environmental Benefits and Incremental Development costs The priority adaptation options were then assessed on a preliminary basis against their potential global environmental benefits, and incremental development costs due to climate change. Not surprisingly, this analysis found that many adaptation investments with significant incremental development costs &d not have sipficant global environmental benefits: Priority Rank Category Lead Ministry Option Category 7 Yes (High) B General MELAD M C T T D / M E Y S Water Resources: -Protect water wells N o Yes (Med) B 3 MPWU -Assess available Yes (Low) Yes p e d ) B 4 MPWU water No No B 2 MPWU -Water pumps and pipes 31 4. Assessment of T 9 eofResponseRequired The adaptation options were then divided into five categories according to the nature of the response: (1) Changes to government policies and strategies (2) Changes to laws and regulations, with appropriate mechanisms to improve compliance (3) Interaction of extension and information services with communities and households (4) Formal engineering and construction works by Government, island councils and contractors (5) Informal engineering and construction works by households and communities 5. Mainstreaminginto theMinistry OperationalPlans The adaptation options were circulated to all relevant W s t r i e s during the process of formulation of their Operational Plans, and facilitated by a team of consultants. The investments were checked against the Ministries key programs to ensure that they had a `home'. The results are summarized in Table 4. The 5 major sectoral Ministries that would be most involved inimplementing adaptation include: 0 W s t r y of Environment, Lands and Agriculture Development (MELAD) 0 Ministryof PublicWorks andUtilities (MPWU) 0 M i n i s t r y of Internal and Social Affairs (MISA) 0 Ministryof Fisheriesand Marine Resources Development (MFMRD) 0 Ministryof Communication, Transport and TourismDevelopment (MLPID) The Ministry of Health and Medical Services i s closely involved inI(AP, but will not be implementing specific investments during IUP-11. M o r e in general, it i s important to emphasize that I(AP-I1 has been selective, and that a future expansion of the adaptation program will probably not only involve a scalmg up of I(AP-11's pilot investments, but also an expansion to other sectors. Examples include health (includmg vector-borne disease management) and agriculture - both sectors have clear adaptation issues, but were deemed less important want water and coastal protection (also because improvements in water and sanitation and coastal land use also address some of the key health and agriculture issues that were identified by the national consultations). To date, the adaptation options emerging from the nationalconsultation have been treated with respect among Government Ministries. Sectoral Ministries have raised no objections to the sharpening and intensifying of their response to the challenges of climate change. However, the prioritization of adaptation options has not yet penetrated very far down to the operational level. Part of the problem may be I(AP's focus on "no regrets" options, rather than expensive, attention-catching solutions to c h a t e change which can excite public imagination. I(AP's approach i s in effect an all-pervading but incremental, low-key process, eventually affecting all key aspects of the National Development Strategy. Itis expected that this will be ultimately more effective than investing large fundmginonly a few high- profile investments. 15. Priorithhg and SpeciFng the Investments The next steps in project preparation have been to prioritize specific adaptation investment, based uponthe following criteria: 32 1. Degree of adverse effects/vulnerability beingaddressed (uey high/ h&b/medium/low/ vey low) (based upon hsk/ vulnerabiLi9anahsis) 2. Importance attached by the national consultations (uey high/ h&b/medium/low/ uey low) (based upon rankingsfrom national consukations) 3. Cost relative to benefits (uey high/high/medium/low/uey low) 4. Timing/urgency (immediatelcanwaitlunknown) 5. No-regrets lyeslno) 6. Environmental impacts lyes/ some/ no/ unknown) 7. Culturally acceptable? lyes/probab&/ma_ybe/no- htpotentialproblems) 8. Level of implementation (genetic/sector-speazclsite-speaJc/ sector-and-site-speaz~ 9. Participatory (bottom-upltop-down/ both) 10. Synergy with poverty reduction lyeslsomelno) 11. Synergy with other multilateral environmental agreements lyeslsomelno) The outcome of h s prioritizationwas used as an important input for the final design of IUP-11, which was based upon solid technical and economic assessments of the priority options. Finally, the nature of IUP-11's design added another, crucial criterion, namely that the investments had to fit within a MOP program identified by the leadmg Ministry, including allocation of resources from the government's recurrent budget. Furthermore, in addition to the priority investments, IUP-I1includes support for continued participatory mainstreaming of adaptation, which will not only support the achievement and sustainabhty of the sectoral investments under IUP-11, but also involve a much wider set of actors in the adaptation process, and set the stage for the expansion of the adaptation efforts,in IG-ibati during IUP-111. Furthermore, as can be seen inTable 4 below, many of the priority adaptation options identified by the national consultation involve regulatory reform or improved compliance to existing regulations. The legislative and regulatory review (funded by the GEF PDF-B) has recommended several changes to existing regulations and policies. All sectoral investments under IUP-I1 also include elements of regulatory reform, supported by provision of alternatives for destructive activities (such as beach mining) and awareness raising to foster behavioralchange. 33 r c r * hl VI o w 00 - 0 0 - h l 2 &3 R g % % VI rr, hl .-. m ffi ffia ffi affiaa c m ffi a a a a a cs B TI0 4 gc1 Y F; R 2 3 3 3 , .-. c Lc ffiffiffi ffi ffisffi Ec ffi ffiffi 2 z z z g 0 0 0 ANNEX 2: MAJORRELATEDPROJECTSFINANCED BYTHE BANK AND/OR OTHER AGENCIES KIRIBATI ADAPTATION PROJECTIMPLEMENTATION - PHASE(KAP 11) The IOribatiAdaptationProgramis the fEst World Bankinvestment operationinIGribati. Latest Saperuision Ratings Project SectorIssueAddressed Implementation Development Progress Objective WorldBank-managed: AdaptationMainstreaming and S S Kiribati Adaptation Project Preparation (Kill'-I) Preparation of UP-I1 Other DevelopmentAgencies: ADB: Water Sector TechnicalAssistance (ongoing) Water sector policy and possible follow-upinvestment EU/SOPAC: ReducingVulnerabrlity inPacific A C P States Vulnerability mapping; (ongoing) Possiblefuture investment in coastal protection (under EDF) EU/SOPAC: Pacific Program for Water Governance Assistance to improve freshwater resources management, including participatory planning UNDP: Outer Island Governance Assistance (Inpreparation) Assistance to improveOuter Islandgovernance ADB SAPHE project Sanitation, Public Health and EnvironmentImprovement UNDP/GEF, add-onproject for BiodiversityStrategy Biodiversityconservation Action Plan UNDP/GEF, NationalCapacity SelfAssessment Capacity to implementMEAs UNDP/GEF, throughSPREP:International Waters project International Waters UNEP/GEF,Persistent OrganicPollutants(POPS) Persistent Organic Pollutants UNEP/GEF,BiosafetyFramework Biosafety ADB: TA related to potential developmentof Outer Feasibility of population Islands Growth Centers resettlement (particularly to Kiritimati) 36 ANNEX 3: RESULTS FRAMEWORK MONITORING AND KIRIBATIADAPTATION PROJECT - IMPLEMENTATION PHASE (KAP 11) Results Framework tco T o develop and demonstrate the SNPRA Unit established within first YR 1gauge institutional progress systematic diagnosis of climate-related year o f implementation as lead agency problems and the design of cost- coordmating CCA and related YR 2 assess effectiveness and effective adaptation measures, while strategies determine whether components need continuing the integration of Percentage o f clunate-affected MOP to be adjusted awareness and responsiveness into programs that reflect systematic economic and operational planning. climate risk management YR 3 feed results and lessons learned Consistent use o f best practice 111 the into design of continued GoK application o f risk management, adaptation program enwonmental assessment and options analysis, consistent with relevant defined strategic aims and policies, to pubhc infrastructure and CCA vulnerabhty reduction measures Component One: Component One: Improved consultation, planning and Proportion o f the adult population o n YR1/2/3: assess adjustments to be coordmatlon mechanisms to support Tarawa that i s aware of CCA made to awareness raisingand Number o f NASC meetings with consultation activities participation o f Director/Senior Assistant Secretary or higher level YR3: assess evidence that awareness officials of at least 4 key ministries messages are resulting inthe intended Number o f CCST meetings attended behavioral changes by technical officers o f at least 6 key departments Yr3 :l o w incorporation o f CCA messages or impact may indicate need Number o f schools that have to change the awareness message incorporated climate risk management dissemination or incentives inthe intheir curriculum project Number of church events that incorporate CCA messages YR2 : large number o f Steering Consultation and awareness raising Committee meetings without the activities reflect clear role for NGOs intended participants may indicate and women waning interest in topic or limited Climate risk profile produced and understanding on particular ministry's used inat least three major role in the C C agenda infrastructure investments 37 Component Two: Component Two : Component Two: Improved management of climate- Pilot investments are based o n YRI/YR2 assess awareness o f the related hazards to coasts, public assets rigorous analysis o f risk treatment communities to the need t o reduce and ecosystems options, including economic analysis, and or ban coastal aggregate mining environmental and social assessment YR2/3 develop acceptable and cost- Frequency of flooding causing effective options for climate proofing disruptiono f hospital services public assets reduced to an acceptable return YR2-3 compile lessons learnt from period the various activities and use to Number of reports o f coastal and improve design o f new works, but marine ecosystem monitoring also for use inthe expanded climate proofing activities YR2/3 assess detail of coral monitoringfor linkage to overall climate change agenda, but also to improved integrated ecosystem management Component Three: Component Three: Component Three: 1m;proved sustainability o f freshwater NationalWater Strategy (NWS) YR1/2 and 3 gauge adequacy in resources adopted and reflected inMPWU linkages in the preparation of the MOP and PUBbusiness plan NWS,MP for Tarawa and ongoing Master Plan for water o n Tarawa consultations to ensure subsequent produced and reflected inMPWU acceptability by all stakeholders MOP and PUBbusiness plan YR 2/3 Assess whether the rainwater Number of rainwater tanks are making a difference in collection/storage facilities at increasingwater availability government/community buildings YR 2/3 Gauge whether reduction in Buildingcode includes freshwater leakage i s increasing water availability collection and storage as an objective for families intarget areas Percentage reduction inwater leakage YR 2/3 Gauge capacity of local ~ intarget area onBetio islet authorities in the use of building Number of water locations assessed codes and supplyimprovements implemented Component Four: Component Four: Component Four: Improved capacity for CCA at island Number of Outer Island Profiles that YR 1/2/3 Gauge understanding of government and community level contain climate risk information C C A inthe OIs, and intensify Number of Island Councils trained o n awareness campaign if inadequate CCA roles and responses Number o f small scale adaptation YR 2/3 Assess whether criteria to investment grants awarded accessing the small scale adaptation investments are well understood and Itgrants awarded for soft solutions adjust as needed 38 Support for implementation o f KAP-I1Project management YR 1/2/3 Gauge adequacy o f project activities integrated into SNPRA Unitin OB facilities for the U P - I 1office: Percentage o f project progress reports human and equipment to support a that are timely and reflect a good robust M&Ereporting system understanding o f progress, critical issues, corrective actions, YR 1/2/3 Assess adequacy o f the accountability for actions and timing. reporting system for the project in Lessons learned compiled for future response to the various donor adaptation program design requirements 39 0 d $ N m 3 ! n o .-C z 3 E z B I s cd \ m -. z3 z B B s B 0 z 0 z Y v, z B z B i? s 3 B B 0 z z z n 5 i 3 51 J 4 3 2 i i i ' d g --.m * N N $ w z ; ANNEX 4: DETAILED PROJECTDESCRIPTION KIRIBATI ADAPTATION PROJECT IMPLEMENTATION - PHASE(KAP11) The objective of ICAP-I1i s to develop and demonstrate the systematic diagnosis of climate-related problems and the design of cost-effective adaptation measures, whde continuing the integration of CCA awareness and responsiveness into economic and operational planning. Ths objective is derived from and governed by the national CCA strategy ofJune 2005. The objective does not require any adhtional major functions to be performed by GoK agencies beyond those already established or committed, but it requires performance of those tasks to be substantially expanded and improved. ICAP-11's efforts will be directed towards changing how existing functions are carried out, by modifying the attitudes, skdls and practices that govern how people interact with the chate, and strengthening technical and financial capacity for planning and implementing CCA measures. ICAP-I1 thus provides an essential transitional stage in working out the content of the long-term national response to climate change. It will form a developmental bridge in2006-8 between the initial NAPA and ICAP-I-sponsored national consultations and assessments of vulnerabhty and adaptation options, which have run through2003-5, and the longer-term countrywide and unified application of CCA responses envisaged for 2008/9 onwards. ICAP-11's outputs will consist of changes to CCA-related institutional and operational arrangements, and the development and feasibility-proving of financial assistance schemes, design processes and physical works. The intended outcome i s that I h i b a t i wd,have the information, analytical capacity and technical know-howneeded to adapt successfully to climate change inthe years ahead. The project i s designed to provide coordinated, mutually reinforcing and progress-monitored action to: strengthen the foundation for continued application of CCA-based approaches to development at national and local levels nurture long-term public support for and participation inCCA promote whole-of-government co-ordination inplanning and operation of critical programs develop mutually supportive linkages between CCA and other key national development strateges prohbit land uses and activities that destabhze coastal zones and assist those that improve stability throughout I h i b a t i re-establish nation-wide weather monitoringand reporting implement the first phase of a long-term, CCA-inclusive, program of freshwater resource development and supply management develop cost-effective climate-proofing of public and private assets and apply the techniques to public assets at risk collaborate with other externally-funded interventions in CCA-related areas, eg, risk management, water strategy and buildingnational planning capacity. The project addresses those aims through activities infive components, namely: 1:Policy, planning andinformation 2: L a n d use, physical structures and ecosystems 3: Freshwater resources 4: Capacity at island and community level 5: Project management 43 The components are described below. The project design emphasizes the need for careful study of problems before undertakmg solutions, and for analysis of the perceptions and attitudes governing people's behavior before designing interventions to change that behavior. Over the life of the project the balance of activities s h f t s progressively from surveys and analysis towards implementation of physical improvements. 1. Policv. DlanninP andinformation 1.l. Frameworks and processes for particzpation and awareness. Much of CCA and I(AP I1 are about changing people's attitudes and understanding about the climate and the environment inwhich social and economic activity takes place. Difficult and potentially unpopular choices lie ahead for governments and communities. The process by which important and sometimes complex issues are canvassed and decided needs to be carefully designed, so that the process itself builds trust and increases understanding among those involved. This sub-component comprises the analytical review, and redesign if necessary, of the consultation and participation process in use in IGribati to mobilise public support for major policy initiatives such as CCA. It i s to be done as early as possible in the project, as it i s intended to shape and inform several important consultative activities under this and other components. Provision i s made for a combination of national and international expertise to review the current practice of consultative and participatory planning in IGribati and propose changes where these appear necessary to improve its effectiveness. 1.2. National consultation, particzpation and awareness. O n e of the strengths of I(AP I1 and its companion programme, NAPA, i s the social and political foundation provided by two rounds of national consultations in 2002 and 2003. Insights gained there have helped to shape the I(AP I1 programme here described. This sub-component aims to sustain and b d d on that foundation, creating greater and more competent awareness of climate change and variabllity, and appropriate responses, throughout the country. The activities wdl be planned and coordinated by the PMUwithin OB'SSNPRA Unit,with close involvement from other members of the NASC, including IUNGO, AMAK, and the Council of Churches. The design of the activities wdl be guided by the outputs of the preceding sub-component. Four specific consultation-related activities have beenidentified duringproject design. These are: 1.2.1. Twoyearly national consaltations. Further national consultations, with themes and content about aspects of CCA to be decided nearer the time, are provisionally scheduled for the thrd quarters of 2006 and 2008. Ths roughly straddles the expected 2007 national parliamentary election and four- yearly review and roll-fonvard of National Development Strategies. 1.2.2. Regalar CCA-basedpartzczpatoy events. As the GoICs CCA strategy emerges in 2005-6 through I U P 11, NAPA and the inclusion of CCA-related activities in MOPS,regular promotional and informational events will be organised with sporting, cultural and educational content and a clear CCA message. These will keep CCA in the public mind and convey useful information at several technical and political levels. Appropriate specialist advisers and trainers will be obtained as national and international consultants to OB'S SNPRA Unit to work with the I U P I1 and NAPA office in preparing and implementing these events. 44 1.2.3. Newsletter, media releases, and educational material. It i s expected that a regular CCA newsletter wdl b e established, carrying global, regional and local CCA news and views. Interesting periodic and adhoc m e d a releases wdl keep CCA inthe public mind, and collaboration with MEYS's curriculum unit will lead to the inclusion of substantial and interesting CCA material in school curriculums. National and regionalTA wdl b e mobllized to assist inthis activity. 1.2.4. Annual suwy ofpublic attitudes and awareness. The general level of CCA-awareness and attitudes to the prospect of changing life-styles and habits in order to adapt to CC wdl be surveyed annually, first to establish a baseline for measurement of change, and later to assess the impact both of I(AP I1 and other deliberate interventions, and of climatic and other events. National and regional TA will be combined to design and execute this activity. The survey results will inform the design of campaigns and consultative/participatory activities for the overall adaptation efforts and at the specific component/activity level, e.g., management of freshwater resources inSouth Tarawa. 1.3. Poliv coordination andpianning. As GoISs CCA strategy points out, if CCA i s to succeed it must reach into almost all parts of the public and private sectors, and actions across a wide field must be coordinated so as to complement and support each other. NDS2004-7 and the CCA policy and strategy also make clear that climate change i s a key area of strategic risk for IQribati. For these reasons GoK has decided to place responsibility for planning and co-ordmating CCA inthe portfolio of OB and its SNPRA Unit.Similar strategic and risk-management considerations apply to population policy, with which CCA has a close intellectual and practical connection. At the same time the continued development, under the guidance of MFED's NEPO, of the MOP-based government operational planning and monitoringsystem-which still requires further attention -is necessary for the effective direction and control of GoICs manifold activities. Four activities have also beenidentifiedin&us sub-component, as follows: 1.3.1. SupportNJRMin OB with overall responsibilipfor CCA . The SNPRA Unit has been established by Cabinet decision in 2005, and will become operational in early 2006. Pressure on the new office will be immediate, as it has to take on `strategic risk management' responsibhty for CCA, population policy and disaster management, all of w h c h are waiting for its establishment to provide them with an overseeing hectorate. Integration of its own and other ministries' CCA responsibilities into the 2006 MOPSwill be a priority concern of OB/SNPRA Unit, in coordmation with the NEPO in MFED. Technical assistance i s being provided to OB by AusAID. As IL4P I1funds become available and the SNPRA Unit gets into its stride the coordination, monitoring and reporting of CCA and I(AP I1 progress will become a key activity. 1.3.2. Development ofdsk diagnosis and responseprocess. Earlier in the design process this sub-component was perceived as mainly applicable to coastal zone management and climate-proofing of structures at risk. It is now given wider significance under Component 1, comprising the application of risk management techniques and disciplmes to CCA issues generally, under the supervision of the SNPRA Unit. This involves changing the perceptions and attitudes of practical, technical persons to the problem of coastal zone management and asset protection under CC condtions. The required shift i s from a reactive, single-technique strategy of repairing damage as it occurs, to a preventive and more technically varied risk-mitigation strategy. Training and workshop activities for MELAD and MPWU technical staff under this sub-component should deliver the development and application of improved methods of CC-related risk diagnosis and response design. By linkmg this process to other sub-components of IL4P I1 engaged with public consultation and participation it 45 should be possible to reach many more people, and influence attitudes about the application of CCA to many parts of nationaland community life. 1.3.3. Support population and resettlement programmes. The strong link between CCA and population policy i s stressed in the CCA Strategy. I(AP I1will provide support to the implementation of GoISs population policy, which i s also to be located in the OB/NSRM portfolio. The project will provide fundmg for long-term national and short-term international consultant personnel in2006-8 to work with GoK staff and the national consultative and coordinating institutions concerned with population policy. 1.3.4. Support NASC and CCST. The two-tier structure of coordmating committees (NASC and CCST) has provenvaluable in overseeingI U P Iand ensuring that project design activities I(AP Iand NAPA do not become dsconnected. It is important that this machmery is kept in good workmg order. I(AP I1makes provision for the costs of regular meetings of both NASC and CCST duringthe life of I U P 11. 1.4. Infomation for climate risk management. I(AP I1 aims to prepare people to adapt to climate change. To do this, good-quality information on the nature of climate change must b e regularly made available in understandable form and given wide distribution in the context of consultative and participatory activities. IQribati lacks base-line climatic data in suitable form for public education and use, and has no established process for producing, updating and disseminating such information. Ths sub-component will provide short-term international TA to work alongside MELAD staff to set up an appropriate system, and produce the base-line data inusable and up-datable form. 1.5. Climate monitoring systems. This small but important activity is to restore the national ' meteorologcal reporting system to operational effectiveness. I t wdl take about six months to complete. I(AP I1provides funds for purchase of equipment and costs of training/retraining staff in its use. The project will be implemented by the GoK-funded Meteorological Division of MCTTD, assisted by TA organised in liaison with the World Meteorological Organisation under a regonal programme to supportnational meteorologcal offices. 2. Land use. Dhvsical structures and ecosvstems This component is crucial to the long-term success of GoISs CCA strategy. Itinvolves bringingabout substantial changes in public understanding and attitudes to land use in coastal zones-effectively most of the land area of IQribati. Activities inthis component will make changes to the way GoK and local governments intervene to modify or prohibit behavior that threatens coastal stability and the security of public and private structures and other assets. They wdl include systematic analysis of coastal risks and causes of actual damage, leading to establishment of improved design parameters for coastal-zone construction and more cost-effective physical or behavioral responses to perceived risks. The component will include more focused and coordinated assessment of emerging risks to marine and land-based ecosystems, and identification of ways of enhancing their abillty to adapt to climate change. The sub-components and key activities identified duringproject design are as follows: 2.1. Integrating Climate ChangeAdaptation into Land UsePoliczes 2.1.l. awareness, strengthen rgulation and pemitting. The effectiveness of GoICs permitting Raise operations, overseen by the Foreshore Management Committee, i s identified as a cause for concern in the CCA Strategy. 46 Immediately, more intensive monitoring and measurement of existing beach mining activities, w h c h collectively are removing substantial amounts of aggregate from South Tarawa beaches (while providmg an important source of income for a significant number of households) is required to establish a b a s e h e for change and enable the careful planning of tighter and more effective restrictions and eventual prohibition. Not much later, the planned prohibition of beach miningin all but a very few situations (envisaged for mid-2007) will require stronger implementation and probably some revision of existing legislation, together with more effective co-ordination between national and local governments in South Tarawa. Strong political coherence and commitment, assisted by public education and attitude-changing activities under Component 1, will be needed to m o b h e public support and carry throughthls crucial reform. For thls activity I(AP I1will provide national and regional TA to help MELAD revise, expand and carry out its planning and regulating tasks. 2.1.2. Monitor environmental and economic impacts of apgate mining project: As the lagoon mining of aggregate (planned for late 2006) comes on stream its environmental impact will require close monitoring, and prompt feedback to enable any adjustments necessary to keep that impact at an acceptable level. This activity will provide a combination of international and locally recruited TA to set up effective monitoring and assist MELAD to carry it out. 2.2. Improvingprotectionofpublic assets. This sub-component is aimed at increasingMPWTJ's capacity and versaulity in confronting the impact of clunate change and the existing exposure to risk of damage from severe weather) inrespect of public structures-seawalls, port facilities, roads, airfields, schools, hospitals/clinics, houses and workplaces-and making this enhanced capability avadable to the public through the established permitting and public-advisory process. Two main activities are identified in t h i s sub-component: 2.2.1. Develop a ystematic risk, analysis/design response process and revised design parametersfor coastal haxard protection. Specific training activities are envisaged for MPWU professional and technical staff, conducted by international TA. Exercises and feasibility studies will demonstrate use of systematic risk analysis, and the costs and benefits of alternative design responses, including soft, ie non- structural, solutions. Field investigations and study of oceanographic and other climatic data (see sub-component 1.4, above) will provide specific design parameters, eg for wave heights under storm conditions, that can be adjusted for changing climatic scenarios to help shape IGribati engineering, structure-sitting and soft-solution designs and CCA strateges. 2.2.2. Improveprotection ofkypublic assets at ?irk.As design parameters for protective works emerge they will be applied to selected public assets inSouth Tarawa. Sufficient provinginan 01environment will also be carried out to demonstrate feasibhty inmore remote and less developed settings. Reduction of flooding risk at the national hospital at Blkenibeu, incorporation of CCA factors in the design of the South Tarawa road upgrade project in 2006-7, the improved protection of one or more of the South Tarawa causeways, and the use of new seawall designs in economically signtficant locations, would all be covered in h s activity. 47 The activity embodies sufficient flexibility of funding allocations to enable it to function as a contingency resource in case of damage from severe weather requiring urgent attention during the period of IL4P 11. 2.3. Monitoring and sustaining coastal ecoytems. Climate change is putting coastal ecosystems under pressure, but there i s little specific information available on coastal ecosystems in IGribati, nor on whether any changes are mainly attributable to CC, including shoreline movement, or to other factors such as increased pressure from human activity. Tks sub-component will enable the Environment and Conservation Division of MELAD and the Fisheries Division of MFMRD to undertake wider and more effective monitoringoperations. Itwill combine international and national expertise to draw together information on the impact of c h a t e change on coastal ecosystems and shorelines, set up monitoring systems and develop ways to analyse data and plan systematic responses to identified threats. Lump-sumprovision i s made for small investments in pilot schemes to protect endangered ecosystems identified during the monitoringactivity. 3. Freshwater resources. This component combines the normal operational commitments of MPWUand the water division of PUB with additional external inputs.These are to be fmanced by Australian aid througha trust fund established with the World Bank. This i s expected to become operational at the start of 2006, several months before GEF funds become available. Additional inputs to be financed include national, regional and international TA and the purchase of equipment and services, includmg contracting of unskilled labour on water supply projects. 3.1. Update waterpdiy, standards and capabilities to indude CCA. This sub-component is duected to the whole country. Activities include development of a National Water Policy to provide a 20-30 year framework for freshwater resource planning; building capacity in MPWU and PUB to adopt a systematic, medium-term approach to water resource development and management incorporating information on clunate variability and climate change; revision of national building codes to strengthen aspects relating to freshwater management (including rainwater) and sanitation; and development and promotionof guidelines on rainwater catchment, storage and use. IL4P I1activities supportingdevelopment of the NationalWater Policy and other related activities are being defined in cooperation with the IGribati component of the EU-funded, SOPAC-executed Pacific Programme for Water Governance 3.2. Soutb Tarawa waterplannin& remedial actions andpilot projects. Pressure on the water resources and supply systems of IQribati's main island is expected to increase under conditions of population growth, greater climate variability and continuing climate change. This sub-component will assist MPWU and PUB to prepare a master plan for water inTarawa atoll, carry out assessments and pilot projects and studies to identify and increase available resources. Funds w d be provided to carry out intensive repairs and other measures to reduce losses from the installed systems. Activities aimed at increasing future availability of freshwater will include new approaches to obtaining access to known additional water reserves, pilot projects in rainwater collection and storage, and study of the feasibility of creating addtional freshwater lens capacity by reclamation of land. 3.3.Outer Islands assessments andpublic andprivate ytem upgrades. Outer Islands freshwater systems are widely in need of repair and upgrading. Assessment, prioritization and design need to b e promptly 48 followed by systematic improvement. This sub-component wdl enable this work to be undertaken incorporating climate variability and change factors. A grant scheme based on the success of a somewhat sirmlar scheme in South Tarawa, to assist 01households to invest inrainwater catchment and storage-and possibly to install water-saving sanitation systems-wdl be piloted, and if successfd, extended. As t h s sub-component develops momentum there will be scope for allocation and use of addition external funding from other donors who are interested in assisting 01 development andwelfare. 4. CaDacitv at island and communitv level This component targets administrative and planning capacity at the sub-national level, which is critically important to the sustainability of CCA. With the help of a major UNDP project2, MISA i s currently initiating major efforts to improve island-level administration and community participation ingovernance. Under that project `island profiles' are being updated and expanded, spatial and statistical information i s being put onto a GIS data base; and funds are being sought for 01 `growth centre' planning and investment. It i s very important that these developments are all fully CCA-conscious and that island- level CCA design responses are well coordmated. The fullest possible development and use of GIS- basedinformation on the physical condition of each island i s potentially of tremendous CCA value. At national level OB throughits SNPRA Unithas oversight of the concern for coordination, sharing of information and collaboration in project planning and implementation. At island and local government level-including, very importantly, the urban governance of South Tarawa- responsibility will rest with MISA, assisted by I(AP I1funding and help with participatory planning and inscollaborationwith MELAD on coastal zone management. Four sub-components identifiedinproject design are briefly described below. 4.1. Local consultations and particz3atoy ksk assessments. Increased efforts at national level to improve public understanding of, and participation in, CCA will need to be backed up by similar efforts at island and community level. Provision i s made for short-term international and longer P term/periodic national TA to assist in design and conduct of these efforts and for the cost of 5-10 meetings to support development and implementation of improved participatory methods in 0 1 s and SouthTarawa. 4.2. Training in localgovernment CCA roles and reqonses. Councilors and staff wdl benefit from specific training inhow to analyse situations arising from CC, and how best to use resources available to them inresponse. Provisionis made for design and implementation of a training programme inselected 0 1 s and South Tarawa. Programme content will also reflect activities taking place under other components of I U P 11. 4.3. Include CC vulnerabilio in Olprojles. Provisionis made for national and international TA to ensure that CCA-related information i s captured and presented usably in the GIs-based 01profiles. 4.4. Pilot small scale OI adaptationinvestments scheme. This activity will test the feasibility of a grant scheme to assist small-scale CCA-related investments by communities in Outer Islands. Rules for eligibhty and adrmnistration have been developed with WB guidance during I(AP I1project design, and are Strengthening Decentralized Governance in Kiribati, a US$lmproject over three years 49 described in a Procedures Manual for thls activity. Two Outer Islands are being selected for the pilot scheme, chosen to be representative of larger, more developed and smaller more remote locations. The scheme w d b e managed by MISA in accordance with the Procedures Manual. 5. Promam manapement 5.1. Operation ofprogram management #nit witbin OB. It is intended to keep the I(AP Iprogram office in operation and have it seamlessly assume responsibility for I(AP I1 (including the current project manager and the project accountant). Itwillbe particularly important to observe the procurementand reportingrequirements of bothGoK and WB, the latter acting on behalf of GEF, AusAID and NZAID. Provision i s made for special training in procurement procedures and for the addition of a procurement officer and a general project officer to the program office staff from the start of 2006 for the life of IC4P 11. 5.2. Program ofactimxies. A Program of Activities to be financed from the project wlll be prepared prior to implementation at the beginning of each year. Worlung on the basis of a Program of Activities should: (i) for the operationalization of a simplified reporting system; and (ii)speed-up allow implementation as activities for funding are planned for up-front and pre-approved by the Bank/OB and MFED and shared with AusAID and NZAID for comments and suggestions. The Program of Activities would b e prepared by the PMU no later than mid-January of each implementation year. The Program of Activities must take into account the relevant Procurement Plan, which becomes an a p p e n h . Economic assessmentsforlarger investmentpachugex For some larger investments to be funded under IC4P 11, comparative cost-benefit analyses are required; for example for the rehabhtation of the hospital and the causeway. Although the TA to be hired would b e expected to carry out the required analysis, it is important that the National Economic and Planning Office (NEPO) in MFED, who routinely carry out such analyses, are consulted from the activities' inception. 5.3. Review o f U P 11.Financial provisioni s made for mid-term and end-of-project reviews of I(AP 11. 50 ANNEX 5: PROJECT COSTS KIRIBATIADAPTATIONPROJECT -IMPLEMENTATION PHASE(KAP 11) Project Cost by Component Local Foreign Total Project CostBy Component US$million US$million US$million Policy, planning and information 0.68 0.49 1.17 L a n d use, physical structures, and ecosystems 1.52 0.66 2.17 Freshwater resources 1.31 0.86 2.16 Capacity at island and community level 0.46 0.10 0.55 Project Management 0.29 0.10 0.39 Total Baseline Cost 4.26 2.20 6.46 Physical Contingencies 0.08 0.04 0.12 Price Contingencies Total Project Costs 4.34 2.24 6.58 Total Financing Required Project Cost by Financier (estimated) Policy, planning and information 0.81 0.00 0.00 0.37 1.17 Landuse, physical structures, and 0.40 0.00 0.76 1.05 2.17 Total ProjectCosts (Jhtimated) 1.80 1.49 0.97 2.31 6.58 51 ANNEX 6: IMPLEMENTATIONARRANGEMENTS KIRIBATI ADAPTATION PROJECTIMPLEMENTATION - PHASE(KAP11) Stakeholder Involvement Key stakeholders in the project are all key actors who have a part to play in the long term mainstreaming of adaptation in national and local planning and policies. Strength of the IUP-I process has been the early mobilization of these stakeholders in a cooperative and coordinated process of awareness, consultation and strategy formulation. This coordination i s expected to be a central element of all future phases of I U P as well. At the island level stakeholders include village populations and subgroups that are actually experiencing the consequences and impacts of changes in their environment and quality of life, resulting from climate events. This includes households, extended household groups (kainga), traditional vdlage institutions (such as the unimwane or traditional elder male decision makmg body), church groups (especially the IGribati Protestant Church and the Catholic Church), women's and youth groups, and the village population as a whole, which congregates at the traditional village meeting houses, or maneaba. The social assessment and local level consultations mobilized these key groups in an initial assessment of vulnerabilities and possible coping mechanisms. Representatives from the unimwane,women's groups, and youth fromkey populated Outer Islands were present at the two National Consultations held in Tarawa (for Gilbert Island representatives) and IQritimati (for Line Island Group representatives), where their concerns and recommendations were both shared with one another and communicated to the nationallevel. Other key stakeholders at the Island Level include the Island Council, island level church organizations, key subcommittees of the Island Council (particularly the Development Committee), and locally seconded representatives of central government (such as the head nurse of the island c h i c , the Island Project Officer, agricultural officers and others). Many of these - and notably the C h e f Councilor (elected head of the Island Council) and Chief Clerk - were participants at the National Consultations. At the national level key stakeholders include: 0 The National Government as a whole, as represented by the Office of T e Beretitenti, or Beretitenti,which also chairs the Cabinet. 0 National Ministries, particularly those germane to c h a t e change issues, includmg: MFED-Ministryof Finance and EconomicDevelopment MELAD-MLnistry of Environment, LandandAgriculture Development MPWU-Ministry of Public Works and Utillties MISA -Ministry of Internaland SocialAffairs MFMRD-w s t r y of FisheriesandMarine Resources Development MLPID -Ministry of Line and Phoenix Islands Development MHMS-Ministry ofHealthand MedicalServices MCTTD -W s t r y of Communications, Transport and TourismDevelopment 0 Other Ministries with indirect links to climate change adaptation: 52 o MCIC-Ministryof Commerce, IndustryandCooperatives o MEYS-Ministryof Education, Youthand Sports o MFAI-Ministry of ForeignAffairs and Immigration 0 Civil Society, notably the IQribati Association of NGOs (IUNGO) and its constituent members, the women's organization All Women of I h b a t i (AMAK) and the Council of Churches 0 The private sector, as represented by the IQribati Chamber of Commerce These stakeholders have also been ongoingparticipants inthe consultation and planning process, and have had several opportunities (as at the National Consultations) to interact with village and island- wide stakeholders from the Outer Islands. One of the key strengths of IUP-I has been its direct support for the National Development Strategy and MOPSas key tools for mainstreaming - the I U P consultants responsible for mainstreaming were also those assisting MFED with NDS and MOP development. The processes of local and national consultation, as initiated inIUP-I, provide a unique opportunity inIGribati for the development ofan adaptationprocessbasedonactual needs as expressed fromthe lowest levels, communicated to and through island-wide bodies and institutions and incorporated at the national level throughboth policy and Ministerial Operating Plans. Ultimately each major island i s expected to develop mechanisms by which decisions are made concerning adaptation priorities, and an assessment made concerning w h c h measures can be implemented by people at the local level, which require assistance at the island-wide level (through, e.g., the Island Council or Island Church Councils) and w h c h need to be communicated to the national level for inclusion in annual budgets. As such, the ICAP process would go hand in hand with a strengthening of local governance and participatory planning processes, which i s also expected to be assisted by a UNDP governance operation. Finally, GEF, AusAID, NZAID, the World Bank and, by extension, other donors are important stakeholders both with respect to providmg support for these processes, as well as by gaining experience on the modalities by w h c h adaptation to climate change can be effectively mainstreamed into national development processes. The IGribati experience is providingimportant lessons w h c h are instrumental in the approach taken by global funding facilities with respect to such issues as incremental funding, and modalities of cooperation in addressing local and global issues related to climate change. Coordination betweenNAPA and KAP and GEF Implementing Agencies The preparation of IGribati's National Adaptation Programme of Action (NAPA), supported by a Least Development Country Fund grant of US$200,000 has been closely linked to the preparatory work under IUP-I. The merger of I U P and NAPA processes, though desirable from both the implementing agencies (World Bank and UNDP) as well as the Government, has not been an easy process. NAPA is sponsored by UNDP and executed by MELAD. ICAP-Is sponsored by the World Bank and executed by MFED. Ths dual arrangement arose from both nationaland global forces. 53 Historically, climate change issues inIGribati have been the mandate of MELAD (and its predecessor, the Ministry of Environment and Social Development). MELAD headed the national team under the Pacific Islands Climate Change Assistance Programme (PICCAP) and was responsible for preparing both the National Communications (1999) as well as the Climate Change National Implementation Strategy (2003). Global negotiations also favored UNDP as the GEF implementation agency for the NationalAdaptation Program of Action (NAPAs), and MELAD secured a NAPA grant inearly 2004. Whilst MELAD included the bulk of the technical expertise on climate change, it lacked the institutional leverage to influence the programs of other vital sectoral Ministries, such as Public Works, Internal Affairs, or Fisheries and Natural Resources. This was recognized both within in IGribati, as well as regionally. During early consultations on IUP-I, it was therefore decided that the Office of T e Beretitenti would chair the IL4I"s Adaptation Steering Committee, and the Ministry of Finance and Economic Development would execute the project. This arrangement worked well in mainstreaming adaptation into economic planning, but it worked less well inmobilizing the technical experts necessary to prioritize MOP adaptation investments. In parallel, the NAPA team has mobilized to prepare a NAPA inaccordance with strict UNFCCC guidehes. The process of merging of the two teams has been approved by Cabinet as follows: The NAPA and I U P programs are merged and will result ina single national adaptation strategy covering a full range of responses at government, community and household levels; as well as a NAPA to communicate the mosturgent and immediate needs to the UNFCCC. The I(AP Steering Committee has been reestablished under a new name, National Adaptation Steering Committee (NASC), under the Office of T e Beretitenti. The IL4P Project Management Unit will be the Secretariat for the Steering Committee. The NASC oversees the joint work program for the NAPA and IL4P. The existing NAPA Team has become the Clunate Change Study Team (CCST), the technical team for the unified program, reporting to the Steering Committee. The NAPA Management Unithas beenactingas the Secretariat for the CCST. Two separate project management units have continued to exist to execute IUP-I funds (under MFED)andNAPA funds (under MELAD). The Office of T e Beretitenti i s responsible for overall supervision of the unified climate change program. These arrangements wdl need to be closely monitored with a view of ensuring a fully unified institutional arrangement for IL4P-I1and beyond (see next section). Other GEF-funded projects in IGribati include e n a b h g activities for the Stockholm Convention on Persistent Organic Pollutants (POPS),in order to prepare a National Implementation Plan, as well as enabling activities for the UN Convention on Biodiversity, inorder to prepare a NationalBiodiversity Strategy and Action Plan, and Country Report to the UNCBD (managed by UNEP and UNDP respectively, and implemented by the Ministry of Environment, Lands, and Agriculture Development, MELAD).IGribati is also participating in the regional Pacific Invasive Species Management Project (managed by UNDP).Wherever overlaps between these projects and IL4P could occur (for instance inthe case of investments related to biodiversity conservation), close coordination wouldbe sought by the continuous involvement of MELADofficials inthe program. 54 ImplementationArrangements for KAP-I1 The final implementation arrangements for ICAP-I1are as follows (see also the figure below): Overall Coordination. The Office of Te Beretitenti (President) has overall coordinating responsibilities for ICAP-11. Project management functions will be housed under the Strategic National Policy and hsk Assessment Unit (SNPRAU). The Secretary to the Office of T e Beretitenti, who also heads the SNPRA Unit,wdl act as Project Director. Besides her, the SNPRA Unitwill have two senior policy officers (at Director level). The project will be contributing two additional senior policy level positions inthe SNPRAUnit:a Senior Strategic Risk Management Officer (at Director level) who would act as Project Coordinator, and whose primary responsibilities would be policy and coordination matters related to KAP I1and implementation o f adaptation strategy; and a senior policy position to coordinate and plan action on population issues. The Project Coordinator would liaise with the PMU, which would consist o f a project manager, a project accountant, a procurement officer, a general project officer, mainly charged with monitoring and reporting, and a project assistant. An Ad@tation/Risk Management Steering Committee (derived from the ICAP-I National Adaptation Steering Committee, NASC) i s responsible for promoting and monitoring coordination among project activities across the implementing agencies, including the utilization and sharing of technical expertise. The Steering Committee wdl be chaired by the Secretary for the Office of T e Beretitenti, and consist of senior officials from the main implementing agencies, and representatives of ICANGO, AMI<, the Council of Churches, and the Chamber of Commmerce. The Steering Cormnittee will report to the Development Coordmating Committee (DCC), a permanent body composed of Secretaries of all the Ministries, chaired by the Secretary to the Cabinet (based at the Office of T e Beretitenti). The Steering Committee will be assisted by an inter-sectoral TechnicalTeam, responsible for day-to-day technical coordination, and derived from the Climate Change Study Team (CCST). The Steering Committee and Technical Team would be expected to assisting the Strategic fisk Management Divisionnot only inmanaging ICAP, but also other hazard riskmanagement initiatives inKiribati. The Office of T e Beretitenti, through the PMU, would be responsible for overall project financial management (following existing Government accounting and budget procedures), including audits, financial reporting and allocation of funds to components and activities identifiedinthe MOPS. The implementing agencies will be the key ministries/departments involved inactivities related to climate change and adaptation to c h a t e change. Ths is expected to include primarily the Ministry of Environment, Lands and Agriculture (MELAD), the Ministry of Public Works and Utilities (MPWU), the Ministry of Fisheries and Marine Resources Development (MFMRD), the Mitllstry of Internal and Social Affairs (MISA), and the Ministry of Commerce, Transport and Tourism Development (MCTTD). Each of these agencies will be responsible for implementation of activities contained in their Ministry Operational Plans funded by the project. T h e PMUwould support the h e ministries by providing procurement, fmancial management, and project management services. The main implementing agencies would coordinate their activities through the Steering Committee and Technical Team, and would share and exchange technical expertise in any instance inwhlch activities undertaken by one agency are likely to affect, or be affected by, areas addressed by another agency. MISA will be the leading agency for the Pilot Island Adaptation Component. I(ANG0 and/or the Council o f Churches wdl play an active role in facilitation and awareness. Mainstreaming into the 55 MOPSand the 2008-2011NDSwill be the joint responsibility of the SNPRA Unit and the National Economic Planning Office in the Ministry of Finance and Economic Development. Furthermore, the National Economic Planning Office (NEPO) wdl also play an important role in the provision of economic analysis for specific components of IUP-11,inparticular the options analysis for adaptation investments. The quality of project implementation will be ensured by the attention and capacity built during IUP's preparation. IUP-I project management is currently carried out by an all I-IGibati team and they are experienced in Bank financial management, reporting and initial procurement procedures. This team is expected to continue inIUP-11,thus ensuringcontinuity and capacity retention. Technical oversight will be done at three levels: First, through the national Technical Team (currently CCST) and Steering Committee (currently NASC) under the Office of T e Beretitenti, w h c h reports directly to the Secretary to the Cabinet. Second, the project includes a budget for mid-term and end- of-project review to assess the progress of implementation in the pilot islands and sites chosen by the national adaptation investments. Results of this technical audit would be used to adjust and improve subsequent implementation. Finally, the World Bank will exercise close oversight of the national investment. In order to do so, the World Bank will evaluate options to minimize travel costs to pilot island sites, includmg, inter alia, contracting out detailed supervision in advance of regular biannual supervision missions. InstitutionalArrangements for KAP-I1 56 ANNEX 7: FINANCIAL MANAGEMENTAND DISBURSEMENT ARRANGEMENTS KIRIBATIADAPTATION PROJECTIMPLEMENTATION - PHASE(KAP11) The desired outcome/result of project financial management (FM) arrangements i s that project funds, including counterpart funds where applicable, wdl be used for the purposes intended. The identified fmancial management risk, i s of the trust fund proceeds not being used for the purposes intended, and i s a result of a combination of country, sector and project specific risk factors. Taking into account the risk mitigation measures proposed the FM risk ratiw for this Droject is moderate. The Government of IGribati (Go10 has expressed a strong preference for the project to follow the normal GoI< processes for Development projects. The core FM arrangements for the project will make use of the GoK financial management and budget systems which have been assessed as reliable and robust but w h c h cannot provide management reporting in sufficient detail for project monitoring purposes. A parallel information system wdl therefore be maintained to provide management information. Project funds wdl flow through the Government's budget and accounting processes and be disbursed against a project code inthe Development Budget. Advances wdl be made directly to the Government's Number 4 Bank Account (the development project bank account) and be accounted for as a virtual Special Account. The Government uses a warrant system to ensure that funds received are used for the purposes intended. Although the Number 4 Bank Account forms part of the overall Government cash position, the risk of advances being used to finance other short term needs of Government i s low (GoK has reserves in excess of 5 times annual recurrent expenditures). There i s a need to ensure that adequate accountability mechanisms are established for both the Outer Island Grant scheme and the Outer Island community development grant scheme for roof catchment and sanitation. The procedures for the Outer Island grant scheme have been established, while those for the Outer Island community development grant scheme for roof catchment and sanitation are to be developed during the f x s t year of implementation. It i s therefore recommended that no disbursements for the Outer Island community development grant scheme for roof catchment and sanitation be made untilthe project has submitted to the Bank a satisfactory Procedures Manual. A single disbursement category WIU be used in each legal agreement which will significantly reduce the burden of reporting for the Government without negatively impacting on the Bank; however an additional hsbursement category relating to the Outer Island community development grant scheme for roof catchment and sanitation dbe required so as to allow monitoring of the proposed disbursement condition. Initially, disbursement on the project will be transaction based, however the legal agreements will contain provisions for the adoption of report based disbursement as it i s expected that the implementing agency will reach the necessary standards of reporting and accounting rapidly. SummaryProjectDescription The primary activities of the Project are: (i) fund priority adaptation measures mainstreamed into to the Ministerial Operating Plans of K e y Sectoral Ministries; (ii)to fund pilot community based adaptation investments in two pilot islands according to a whole-island approach; (iii) to fund periodic national consultations, awareness, and consultation in islands targeted for the expansion phase; and (iv) to fund training, priority stuhes, and project management. 57 ImplementinsEntity The project will b e implemented by the Office of the Beretenti which i s in the process of establishing a National Strategic Risk Management Unit. To reduce the incremental burden on the OB, a project management unitwillbe established (a feature carried over from the first phase of the project). The PMU will be responsible for processing of payments /budgets through the Government systems, maintenance of a parallel information system and ensuring that the two systems are reconciled. In addition, the OB may issue departmental warrants to the M i n i s t r y of Works for items that are to be procured using"Force Account". The PMUwill assist the Ministryof Works inthe proper acquittal ofwarrants issued. The PMU located within the I(AP1 project has a senior accountant responsible for the preparation of reports and the processing of payments - it has been agreed that this person will also be employed under IUP-11. Given the expected increase in the volume o f transactions, a further member of staff will be added to the PMU to assist in general project implementation, including frnancial management. KiskAnalysis The table below summarizes the risk analysis. With the appropriate risk mitigation measures as o u h e d the overall risk assessmentis moderate. 58 %r: 3 -0 2u 4W Y E d - Ax Y .-E: a Budgeting Prior to project effectiveness the GoK will approve the project through the Development Coordination C o d t t e e for incorporation into the FY06 budget document. Development projects are not subject to Parliamentary appropriation per se but once incorporated into the Budget Document, the Minister of Finance may issue warrants on receipt of funds from the Development partner. Onan annual basis there wdl be an agreed set of activities derived from the MOPS,against which the project would lsburse. Funds FIow and DisbursementArrangements The dagram below summarizes the fund flow arrangements. The Bank will advance funds inAUD sufficient to meet 4 months of expenditure to a virtual Special Account held in the GoK Number 4 Development Budget Bank Account. As there will be more than one legal agreement the authorized allocations will need to b e determined for each agreement, but the aggregate should not exceed AUD 500,000. On receipt of funds, the GoK will issue the necessary warrants to the Office of the Beretenti who wdl then have the legal authority to expend the funds. The PMU will, in the first place, prepare monthly withdrawal applications on a transaction basis in order to replenish funds expended triggering another cycle of warrants etc. The legal agreements would provide for the transition of the project into report based disbursement - this would be expected to happen within the first year of the project life once reconcdiation procedures between the Government accounting and project information system has shown them to be robust. Country FinancingParameters have not been prepared for IGribati. The disbursement percentage will be set at 100% but the legal agreements will specify that expenditure on certain items (Tax, insurance and inland freight) will not be eligible for financing from the Trust Funds.Moreover, the government will also be specifically endorsing to the Bank that they will not be chargmg these costs to the grants. A special case will be made in respect of the reasonable share of the safeguard costs incurred in making materials available on Outer Islands. The Bank recognizes that the use of commercial shippinglines by suppliers exposes both the supplier and the DoW to an unacceptably highlevel of risk of misappropriation (which cannot be insured against). In order to mitigate against this risk the Bank agrees that the DoW should assume responsibdity for the supply chain to the Outer Islands through charter operations the costs ofwhich wouldbe covered under incremental operating costs. A single disbursement category will be used in each legal agreement plus additional disbursement categories required for the monitoring of disbursement conditions - the need for addltional lsbursement categories was considered but in this case i s not justified. The key in determining expenlture eligibllity wdl be the annual activities list derived from the MOPSof Line Ministries. 60 T- 1 - ICI I Financial Reporting The OB will be the implementing agency for the project and it i s expected that the current project management unit w d transfer to this office and operate under the SNPRA Unit. Given the increased volume of transactions and the requirement to adrmtllster the Small Grants Scheme it is recommended that an additional two staff members be recruited for the PMU (one who would be an experienced junior accounts person and the other acting in support of procurement). The PMUwill therefore require addtional workmg space and additional equipment (includmg access to the MFED Attach6 accounting system - h s could be through the existing OB link). Consideration was given to utillzing the existing resources available w i h the GoK accounts cadre to undertake the FM work. Tks would have placed an undue burden on the h t e d resources available which are already over stretched (and may be a cause of processing delays). The Department of Works (DoW) will play an important role in the acquittal of activities on Outer Islands which will be managed through the issue of Departmental Warrants (DW) by the OB. The DW will be restricted to those items which are requked to be procured under "Force Account" arrangements on Outer Islands w h c h would typically include labor; local materials; local plant and equipment; and accommodation costs of supervisors. The PMU will need to be prepared to support the DoW in the process of acquitting these warrants as expenditures wdl not be eligible for inclusion on a WA until acquittal has been received. The DoW will also receive materials procured on their behalf and will be required to account for the use of these materials (a stock control system i s already inplacewhich is capable of accounting for materials at aJob level) -itwill be a requirement that the DoW provides stock reports and a note wdl be included inthe project financial statements indicating the levels of stock held. The PMUwill adapt the systems currently in place for I(AP1 for use in IUP-I1(a manual cash book supported by Quick Books accounts software) and this will provide the necessary financial information. Reports will be prepared on a quarterly basis and submitted to the Bank within 45 days of the quarter end. An addtional requirement will be to show reconciliation as between the project information systems and the accounting records of Government (includmg reconchation of the Virtual Special Account as represented by the Project Code within the Development Budget). The expendture reports would be against the agreed list of activities for the financial year. Accounting Policies and Standards - The accounting standard to be used will be Financial Reporting under the Cash Basis of Accounting as set out in the International Public Sector Accounting Standards (IPSAS). Auditing The Office of the Auditor General under the relevant legislation i s mandated to audit the financial accounts of Government. I(AP-I1 audited annual reports dbe available to donors not later than 6 months after the end of each GoK financial year. The audit reports wdl be subject to the same scrutiny process as followed for other reports issued by the Office of Auditor General which includes tabling the reports inParliament. Supervision Plan The overall ratinp for the proiect i s moderate and it i s envisaged that after the first year of operation FMsupervisionmissions wouldberequiredat most on an annual basis. 62 ANNEX 8: PROCUREMENTARRANGEMENTS KIRIBATI ADAPTATIONPROJECTIMPLEMENTATION - PHASE(KAP 11) A) General Procurement for the proposed Project would be carried out in accordance with the World Bank`s "Guidehes: Procurement under IBRD Loans and IDA Credits" dated May 2004; and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004, and the provisions stipulated in the Global Environment Facllity Trust Fund Grant Agreement and the Australian Grant for Cofinancing IGribatiAdaptation Project Phase 11. The general description of various items under different expenditure category i s described below. For each contract to be financed by the Grant, the different procurement methods or consultant selection methods, estimated costs, prior review requirements, and time frame are to be agreed between the Recipient and the Bank project team in the Procurement Plan. The Procurement Plan wdl b e updated at least annually or as required to reflect the actual Project implementation needs and improvements in institutional capacity. I. ProcurementofWorks(US$0.6million) (a) International Competitive Bidding: ICB procedures shall be used for procurement of works estimated to cost US$lOO,OOO or more per contract. Works planned for procurement through ICB include beach nourishment at national hospital, clunate proofingcauseway structure and climate proofingvulnerable infrastructure. The estimated cost of worked goods to be procured through this method i s less than US$700,000. (b) National Competitive Bidding (NCB): Works estimated to cost more than US$50,000 but less than US$lOO,OOO per contract may be procured through NCB. The current legislation forms a sound basis for NCB and addtional criteria for acceptabhty of NCB procedures are not considered necessary. (c) Shopping (Small Works): The Project would finance a number of small works for rainwater collection/storage facilities at community buildings and rainwater collection for groundwater recharge. These works are estimated to cost less than US$ 50,000 each. Procurement of such small works shall be under lump-sum and/or fixed price contracts awarded on the basis of quotations obtained from at least three qualified domestic contractors in response to written invitations. The invitations for quotation shall include a detailed description of the works including basic specifications, the required completion date, and a form of agreement acceptable to the Bank, and relevant drawings where applicable. The award shall be made to the contractor offering the lowest price quotation for the work and who has experience and the resources to complete the contract successfully. (d) Force Account: Construction by the use of the Recipient's own personnel and equipment will be used for activities that are udkely to attract any bidders, in particular those in the Outer Islands (mainly physical improvements in the water supply system in selected locations under Component 3: Freshwater resources). Refer to I t e m B below for further details. 63 11. Procurement of Goods (US$ 0.G million) (a) International Competitive Bidding (ICB): ICB procedures shall be used for procurement of goods estimated to cost US$lOO,OOO or more per contract. Goods planned for procurement through ICB include pipes and fittings for rehabilitation of Betio distribution and household plumbingsystem and solar pumps, pipes for water supplyimprovements. The estimatedcost of goods to be procured through this methodis less than US$400,000. (b) National Competitive Bidding (NCB): Goods estimated to cost more than US$50,000 but less than US$lOO,OOO per contract may be procured through NCB and include rainwater collection/storage facihties. The estimated cost of goods to be procured through this method i s less than US$lOO,OOO. The current legislation forms a sound basis for NCB and additional criteria for acceptabllity of NCB procedures are not considered necessary. (c) Shopping: Goods estimated to cost less than US$50,000 per contract may be procured through Shopping. The estimated cost of goods to be procured through this method is less than US$150,000. (d) Direct Contracting: Procurement of standardized of equipment or spare parts, to be compatible with existing equipment, may justify adltional purchases from the origmal Supplier. The estimated cost of goods to be procured through this method i s less than US$ 80,000. (e) Procurement from IAPSO: Computers and related equipment may be procured through the Inter-Agency Procurement Services of the United Nations (IAPSO). The estimated cost of goods to be procured through thls method i s less than US$lOO,OOO. 111. Selectionof Consultants (US$2.0 millions) The consultant's services would consist of survey and water resources assessment, w h c h shouldbe conducted by consulting firms. Due to the small national consulting industry, short lists of consultants composed entirely of national consultants shall not be applicable. (a) Selection Based on Consultants' Qualifications (CQS): Regardmg small assignments of routine nature, such as survey and assessment of simple nature, qualified consultant firms shall be selected through CQS method. The estimated value of consultants selected through CQS method would not exceed US$ 0.25 d o n . (b) Individual Consultants: Approximately fifty individual consultants would be procured under the Project. They should be selected through a comparison of qualifications of at least three qualified consultants among those who have expressed interest in the assignments or have been approached directly. The total estimated cost of the individual consultants to be selected through a competitive process i s US$ 1.8 d o n s . In addition, with appropriate justifications and after concurrence by the Bank, indwidual consultants may be selected on a sole-source basis in exceptional cases, such as (i)tasks that are a continuation of previous work that the consultants have carried out and for which the consultants were selected competitively, (ii) assignments lasting less than six months; and (c) when the individual is the only consultant qualified for the assignment. Based on the proposed Procurement Plan, selection of consultant to produce climate / weather / sea level risk 64 information and selection of consultant who will provide training at the Meteorological Office may be done on a sole-source basis. IV. Small-Scale Adaptation Grants (US$0.4 million) The project will finance a number of activities under the Capacity at Island and Community Level Component and it will be carried out with the active participation of local communities. A Procedures Manual (Pilot Outer Islands Investments Scheme Procedures Manual) for &us component, with rules for eligibility and the procedures for selection and disbursement of the grants, including appropriate fiduciary and safeguard measures have been developed. The remoteness o f the pilot islands is a major issue from an implementation perspective and due to these characteristics, special arrangements were considered. The selection criteria and the process for allocation, sample agreements, procurement and disbursement of the grants shall be in accordance with the Procedures Manual and the following procedures: (a) Community Participation i. Goods: Mostgoodsconsistofrehabilitationmaterialsandotherrelatedconsumables. e Direct contracting: Because of the small size of the individual purchases and since a comparison of prices may not be practical due to quality and distance considerations, procurement of materials costing US$2,500 or less per contract may be through b e c t contracting from local markets or suppliers. e Shopping: Except as provided above, for goods that are estimated to cost US$15,000 or less per contract, a comparison of three quotations shall be required. There wdl not be contracts above US$15,000. ii. Works: Mostgrants involve onlyminorrehabllitationworksnecessary for smallrepairs and adjustments or water and sanitation arrangements. e Direct contracting: Because of the small size of the individual contracts and since a comparison of prices may not be practical, procurement of works costing US$2,500 or less per contract may be through direct labor. e Procurement of Small Works: Except as provided above, for works estimated to cost US$ 20,000 or less per contract, a comparison of quotations shall be required. Procurement of such small works shall be under lump-sum, fmed price contracts awarded on the basis of quotations obtained from at least three qualified domestic contractors in response to written invitations. The invitations for quotation shall include a detailed description of the works includmg basic specifications, the required completion date, and a form of agreement acceptable to the Bank, and relevant drawings where applicable. The award shall be made to the contractor offering the lowest price quotation for the work and who has experience and the resources to complete the contract successfully. If three qualified contractors are not available within the community area, the contract may b e awarded on basis of two quotations or awarded b e c t l y to a sole qualified contractor. There will not be contracts above US$20,000. 65 iii. IndividualConsultants: Services to beprovidedbylocalconsultantswillinvolvetraining and workshops and will follow the individual selection procedures on the basis of comparison of qualifications. e Sole Source: Because of the small size of the individual contracts and since a comparison of three qualified candidates may not be practical, then selection of individual consultants costing US$2,500 per contract or less may be through Sole Source. a Comparison of three qualified candidates: Except as provided above, for indmidual contracts that are estimated to US$lO,OOO or less per contract a comparison of three qualified candidates shall be required. There will not be contracts above US$lO,OOO V. Operational Costs (US$ 0.4 million) Ths item would include communications, utilities, stationary, transportation, accommodation and allowances. The procurement of such items would follow implementingagency's administrative procedures. B) Assessment of the agency's capacity to implement procurement Procurement activities wdl be carried out by the Project Management Unit, which wdl be under the supervision of the Office of the President/ Office of T e Beretitenti (OB). An assessment of the capacity of the Implementing Agency to implement procurement actions for the project has been carried out by Cristiano Nunes (EAPCO) inJuly, 2005 and updated by Bisma Husen (EAPCO) in December 2005. The assessment reviewed the organizational structure for implementing the project and the interaction between the project's staff responsible for procurement and other Government Agencies. Based on the assessment, the procurement risks are considered to be "High". This i s mainly due to the weak procurement capacity. In order to mitigate the risks, the following actions were recommended: 0 At least one staff should be designated as the Procurement Assistant. Provisions should be made for hs/her trainingininternational procurement. 0 A Procurement Specialist, with qualifications acceptable to the Bank, should be recruited to provide support to the Project, for a time commensurable with the project procurement load. He/she would also be responsible for assisting the Deputy Secretary and mentoring the Procurement Assistant, organizing record keeping, preparing procurement documents, helping in evaluation of bids/proposals, and contract supervision and management 0 The Operations Manual should include a Procurement Section, providmg step-by-step process for managing procurement. It should also include the Procedures Manual for the Pilot IslandAdaptation Component, where community basedprocurementis envisaged. With regards to the uthzation of Force Account, the Ministry of Public Works and Uulities (MPWU) would be responsible for carrying out physical improvements inthe water supply system in selected locations under component 3. MPWU has had previous experiences with Force Account and the Task Team found it to have the overall capacity to implement such activities. Nevertheless, risks were identified and mitigation actions were included under the Project's design. Technical assistance for construction supervision has been included. Also, the use of Force Account would have to be managed through Departmental Warrants (DW) issued by the OB, so that productivity controls are in 66 place. The PMU would monitor MPWU's performance and ensure that warrants are properly acquitted. The MPWU would also manage any necessary storage of construction materials and, as a result, it has been established that MPWU would provide detailed reports accounting for the use of these materials to the OB (a stock control system i s already in place which i s capable of accounting for materials at a job level). C) Procurement Plan The Recipient, at appraisal, developed a Procurement Plan for Project implementation which provides the basis for the procurement methods. This plan has been agreed between the Recipient and the Project Team o n December 23,2005 and i s available at the Office of the President/ Office of T e Beretitenti (OB). It will also be available in the Project's database and in the Bank`s external website. The Procurement Plan will be updated in agreement with the Project Team annually or as required to reflect the actual Project implementation needs and improvements in institutional capacity. D) Frequency of Procurement Supervision In adbtion to the prior review supervision to be carried out from Bank offices, the capacity assessment of the Implementing Agency has recommended a yearly supervision mission to visit the field to carry out post review of procurement actions. E) Prior Review Thresholds (a) Prior review by the Bank of Goods and Civil Works will include: (a) all International Competitive Bidding; @) first two contracts implemented through Force Account; and (c) first two contracts awarded on the basis of NCB. The remaining procurement will be subject to post review. (b) Prior review by the Bank of consultant services wdl involve: (a) prior review of all Terms of Reference regardless of the estimated value; (b) contracts greater than US$lOO,OOO equivalent for consultant services provided by firms, (c) selected contracts for i n l v i d u a l consultants (on an exceptional basis and based on a specific request from the TTL. To be indicated in the procurement plan); and (d) all Single Source Selection and Sole Source, regardless of value. Other procurement of consultant services will be subject to post review. (c) All the prior review contracts will be statedinthe Procurement Plan 67 Attachment 1 Details of the ProcurementArrangement involving internationalcompetition 1. Goods andWorks. fi (a) Goods and Works contracts estimated to cost above US$ 100,000 per contract and all Direct Contracting WIU be subject to prior review by the Bank. @) List of contract Packages (no PQ and Domestic Preference applied): Goods RefN o . Description Cost Component Procurement Bank's Completion Notes (US$ Method Review Date equiv.) goods:pipes and fittings for rehabilitation o f Betio distribution and 190,000 3.2.5 household plumbing system - Component 3.2.5 solar pumps, pipes, etc. for 01water 1 Ic Review Prior supply upgrades - 190,000 3.3.2 ICB 29-Jan-07 _ _ Component 3.3.2 Vorks Ref No. Description cost Component Procurement Donor Notes (US$) Method Review Opening / Bid receipt beach nourishment WK1 at national hospital 1 I 1 (indicative) - 190,000 2.2.2 ICB s:w I 11-May-07 s:w I 1 1 I 1 Component 2.2.2 I I I climate proofing wK2 causeway structure (indicative) - 228,000 2.2.2 ICB 11-May-07 Component 2.2.2 climate proofing vulnerable wK3 infrastructure 199,120 (indicative) - Component 2.2.2 2. ConsultingServices. (a) L i s t of ConsultingAssignments with short-list of international fums. Ref Description cost (US$) Component Procurement Donor Sign Notes No. Method Review Contract 9ppm nTA4 to supervise surveys (3+3+3) + 30ppm FS1 nTA2 to carry out Prior surveys 54,720 1.2.4 CQS Review 1-Nov-06 (3surveys*2month*5p ersons) - - Component 1.2.4 6ppm to supervise surveying (2+2+2) + 30ppm nTA2 to carry FS2 out survey 47,880 3.2.2 Prior CQS 1-NOV-06 (3surveys*2month*5p Review ersons) - Component 3.2.2 4ppm water int'l resource assessment crew (2 persons) + FS3 4ppm local crew for Prior water resource 77,520 3.2.3 Review 1-Oct-06 assessments (incl. per diems) - Component 3.2.3 2ppm water resources assessments on 01 (possibly same as firm FS4 as 3.2.3)+ 12ppm Prior local support for 01 56,240 3.3.1 Review 1-Oct-06 water resources assessments - ComDonent 3.3.1 @) Consultancy services estimated to cost above US$50,000 per contract and Single Source selection of consultants (firms)for assignments regardless of the amount involved wdl be Subject to priorreview by the Bank. (c) Short lists composed entirely of national consultants: None 69 ANNEX 9: SAFEGUARD POLICY ISSUES KIRIBATI ADAPTATION PROJECTIMPLEMENTATION - PHASE(KAP 11) Introduction: This annex reviews the socialand environmental safeguards issues germane to the IGribatiAdaptation Project 11, and notes steps taken during project preparation and to be taken during project implementation to carry out the fiduciary responsibilities with respect to safeguards policies. There are two safeguards policies triggered under the project. These are OD 4.01: Environmental Assessment, and OP 4.12: Resettlement. This annex will deal with each inturn. A. Resettlement Following the National Consultations, the CCST identified 10 priority areas for IGribati with respect to adapting to c h a t e change: awareness, water resources, inundation/coastal erosion, health impacts, agriculture, family planning, fisheries, waste management, overcrowdmg, and miscellaneous other options. Implementation of subprojects in these areas in the pilot islands may require some small amount of land acquisition and possible small-scale resettlement of affected people. Therefore a Resettlement Policy Framework has been developed that identifies the principles to b e followed in the event of land acquisition, resettlement, and compensation based on Ihibati's legislation, and the Bank's policy on involuntary resettlement. The purpose of the Resettlement Policy Framework i s to provide guidance for the process and intended outcomes of resettlement plans and activities to be applied to subprojects during subproject implementation. The overall principle of the Resettlement Policy Framework i s to ensure that those people whose livelihoods or assets are directly affected by the project realize benefits as a result of project implementation and that all steps are taken to minimize negative impacts on them. Institutional Arrangements The MELAD p i n i s t r y of Environment, Lands and Agricultural Development) i s the lead agency responsible for co-coordinating planning and implementation of lands acquisition and resettlement. The Ministry formulates and manages the resettlement budget and pays compensation to the affected people after the Lands Management Division (LMD)has carried out a survey of the assets and trees on the site. The LMD is also responsible for surveying the house sites. The MELADprovides the secretariat for the Resettlement Committee. The Resettlement Committee was establishedby the GoK to deal with the resettlement of Tabuaeran, Teraina and IGritimati islands. The Committee i s responsible for developing guidelines, eligibility criteria, plans, strategies and priorities for the GoK resettlement schemes. T h e Committee i s therefore involved in the planning and implementation of resettlement schemes. T h e Committee makes recommendations to the Cabinet for consideration and approval. The Committee i s a high-level body consisting of the main GoI< stakeholders under the chairmanship of the NIinister of Environment Lands and Agricultural Development. The members include the Minister and Secretary of the M u u s t r y for Line and Phoenix Development (ML,PD), Secretary MELAD, Secretary M i n i s t r y of Internal and Social Affairs, Director of Lands Management, Director of Environment and Conservation Division, Director of W s t r y of Education, Youth and Sport, a n Economist from the M i n i s t r y of Finance and Economic Development, C h e f Health Inspector, Chief Councilor (Betio Town Council), and the Chief Councilor (TUC). 70 The existing Resettlement Committee has the experience and the capabhty to deal with general resettlement issues, and it can also adequately handle any proposed lands acquisition and resettlement for the IUP. The resettlement plan for the Resettlement Committee i s drawn as a joint effort by the principal GoK stakeholders, includmg the Lands Management Division and the Environmental and Conservation Division of the MELAD. The MELAD has the expertise to draw up resettlement plans inline with the Bank's RAP procedures, and it i s recommended that the MELAD, in conjunction with the other GoI< key stakeholders, and the respective Island Councils and communities, i s given responsibility in drawing up either the RAPS or the settlement plans for each island community. The participation of island community representatives i s crucial both in the planning and implementation stages of these resettlement plans, as noted further below. The Resettlement Process Targeting and provision of information are critical to attaining the overall goals of the Project with particular reference to the project clientele. The objective i s to disseminate information about the project to the potential affected population. On those islands where it i s planned that subprojects will be implemented, an initial meeting shouldbe held before any subprojects are prepared inwhich Island residents meet together at the Island Council maneaba. The purpose of this meetingwill be to: 0 Provide an overall explanation of the project and its objectives; 0 Discuss the possible impacts with respect to land acquisition and resettlement; 0 Explain that all land will be acquired voluntarily, the general nature of compensation and resettlement assistance to be provided, and the mechanisms for filing and assessing grievances for activities under the project; 0 Explain the general process for preparing and submitting proposals for subprojects. The details of thls process are dmussed in the Procedures Manual for the pilot small-scale adaptation investments. Subproject Preparation and Screening On each island the Island Project Officer will be the key official who wdl work with villages and groups within villages to prepare subproject proposals under the project. Once villages decide on a subproject proposal and the proposal i s prepared in a form that can be submitted for evaluation, the proposal will be passed on to the Island Development Committee. The process of evaluation by the IDC is discussed in detail in the Procedures Manual for the pilot small-scale Outer Island adaptation investments. As a part of h s process, for each subproject identified for possible fundmg under IUP-I1a screeningprocess shouldbe carried out to identify the impact of the subproject with respect to land acquisition, resettlement, livelihood interruption or other impacts on livelihood and/or assets that will trigger the resettlement policy framework. It i s expected that in most cases the impacts on the affected people wdl b e minor - that is, either no people are displaced and less than 10% of their productive assets are affected, or fewer than 200 people are displaced. In such cases an Abbreviated Resettlement Action Plan wdl be prepared. It i s expected that most subprojects under IUP-I1will require Abbreviated Resettlement Action Plans. Where this i s not the case, a fullResettlement Action Plan must be agreed and implemented. 71 Consultations Consultations with the local residents will be an ongoing feature of the process of subproject formulation, submission, approval, implementation and monitoring, and will include consistent attention to resettlement, land acquisition and related issues. Consultations with potential affected people will b e an important part of this process. Such consultations will begm with the information and awareness meetings that take place before any subproject proposals are prepared, and continue through the life of the project. The people must be informed about their options and rights pertaining to resettlement, consulted on, offered choices among, and provided with technically and economically feasible resettlement alternatives, and provided prompt compensation at full replacement for loss of assets because of the project (OP 4.12 para.6a). A consultation framework will be developed for each subproject that will o u h e exactly how the process of discussion and negotiation will take place. Survey As a part of the preparation of subproject proposals, a survey will be conducted to identify the likely impact of the subproject with respect to land acquisition and resettlement. This survey wdl be carried out under the duection of the IPO on each island for each subproject. The results of this survey will b e included in the subproject proposal submission provided to the IslandDevelopment Council. The proposal submissionwill need to include the following information: 1. For any voluntary contributions of individual land without compensation, a consent form which includes the name of the land donor/s, and details of the contribution (type, size, location, specified period of use etc. as appropriate). This should be signed (or thumb-printed) by the land donor/s (includmg the male and female heads of the householdinvolved), and the chalrperson of the Council of Unimane. 2. For land contributions against compensation, a consent form which includes the name of the land donorls, details of the contribution (type, size, location, specified period of use etc. as appropriate), and details of the agreed compensation arrangements. This should be signed by the land donor/s (including the male and female household heads), a nominated representative of the group makingthe subproject proposal, and the chairperson of the council of elders (the unimane). 3. Where the land donated i s communal land, these forms can be signed on behalf of the vdlage by a recognized village leader. For sub-projects where land is donated or provided against compensation, the Island Development Council will take the following steps duringits appraisal of proposed sub-projects: i>verify with the land donor/s that the donation is indeed made on a voluntary basis, that the donor/s is/are the legitimate owner/user of such lands, and that the land donor/s is/are fully informed of the nature of the sub-project and the implications of donating the property; ii) assess that the landdonor does not suffer a substantialloss affectinghis/her economic viability as a result of the arrangement. Where there i s substantial loss the sub-project cannot be approved as proposed (the amount donated shouldusually not exceed 10% of his/her land or assets without appropriate Compensation); iii) assessthat thecompensationarrangementsareappropriate.Thecompensation shouldbe roughly equivalent to tradtional compensation arrangements. Where demands are excessive, compensation inappropriate and/or the land donor and the community cannot agree, the IPO and/or Community Facilitators will encourage alternative sites or arrangements. T h e sub- project will not be approved forfunding by a Small Grant untd suitable alternative sites are 72 identified and land has been voluntarily made available through the process described above. If suitablelandismadeavailablethroughtheVoluntaryLandContributionprocess,the no sub-project would not be further processed. Disclosure of the RAPto the Affected People A public meeting will be held in each affected village to inform the affected people about the resettlement and compensation issues. Once a Resettlement Action Plan i s completed, a public meetingwdl be held to dlsclose the exact contents of the RAP to the affected people. SignCompensationContract and Pay Compensation The final step of resettlement implementation i s agreement of all parties to the compensation and related arrangements, and payment of compensation, if necessary. Alternative forms of compensation, such as allocation of land and employment opportunities, will also be explored. Source of Funding The project will be responsible for funding all resettlement and land acquisition related expenses. Fundingarrangements are discussedinmore detail insection 4. Grievance Redress Mechanism The mechanisms for redressing grievances will also be presented and explained to the affected population in a public meeting. Affected people will be given opportunities to review the survey results and compensation policies during the resettlement planning and implementation. The first step in any grievance procedure will be negotiation at the vlllage level between the affected persons and island representatives, particularly with the IPO and, through the IPO, with the Island Council. If thls does not lead to a satisfactory arrangement, the grievance will be forwarded to the Project Management Office for adjudication. If this does not result in agreement the affected people shall have the right to pursue the grievance through the court system. Monitoring It is the responsibility of the GoK to make an assessment to determine that the objectives of the resettlement instrument has been achieved. The Bank requires that both an internal and external monitoring of the project's progress be undertaken. The details of the monitoring processes are discussed in Section 12. This section has covered the basic approaches to be taken inthe event of resettlement and/or land acquisition under the project. For a more complete discussion of these issues please refer to the Resettlement Policy Framework inproject files. B. Environment Introduction A Strategic EnvironmentalAssessment was done as part of the preparation of IUP-11. The SEA was examined the environmental issues that are likely to arise under the Kiribati Adaptation Program Phase 11, and particularly under Component 1, Priority National Adaptation Investment, and Component 2, Pilot Island Adaptation, and makes recommendations concerning how best to undertake environmental assessment of these activities to mitigate any possible negative consequences. As the specific activities to be undertaken under I U P - I 1have yet to be designed, the strategc assessment provides a general methodology for environmental screening of policies and plans, the preparation of environmental impact assessments for various kmds of potential activities and the monitoring of the implementation of the recommendations of those EMS. 73 The CCA Strategy: Rationale and Aims The key policy document covering adaptation to climate change in IGribati i s the Climate Change Adaptation Strategy. The CCA Strategy aims to strengthen IGribati's abhty to handle c h a t e change by action under eight broad headmgs: integration of CCA into national planning; external financial and technical assistance; population and resettlement; governance and services; freshwater resources and supply systems; coastal zones and structures; marine resources; and survivability and self-reliance As part of the preparation process for IUP-I1 a number of "soft" community options and interventions have been identified as likely areas for possible subprojects: Planting schemes for coastal erosion control, including, e.g., mangrove replanting or expansion, coastal land reforestation, planting of ironwood plants ("te nikabubuti", "te aroua", etc.) and other steps to stabilize coastal and foreshore areas. Marine protection strategies such as coral replanting and protection schemes and establishment of marine conservation areas Widening of channels for wetlands flushing. Water and sanitation improvements, such as relocation or protection of communal drinking sources, water tank construction and guttering, water pumps and pipes for distribution, etc. Materials would be provided by the grant funding, while labour and other inputs would be provided by the community or relevant groups. Replanting of food plants and trees or introduction of additional kinds of agricultural products and practices, restoration of inundated large community or extended f a d e s babai pits. Planting suitable trees around houses Community or village waste management system Control of vector-borne hsease. Other projects not mentioned but which fall within GEF focal area of conserving biodmersity, reducing adverse climate change, and protecting international waters. EnvironmentalManagement It is clear that many of these options wlll have environmental impacts, though in most cases these impacts are not likely to be substantial, and inmany, if not most, the longer term consequences will be positive. There i s an established regulatory environment in IGribati that mandates certain actions in the case of negative environmental impacts. The Environment A c t 1999 provides for and establishes an integrated system of development control, environmental impact assessment and pollution control for IQribati. The Minister of Environment, Lands and Agricultural Development is responsible for the due administration and implementation of the Act. All development proposals of government ministries, island councils, private developers and non-government organizations must undergo the environmental screening procedures of the Environment and Conservation Division (ECD) as stipulated in the Environment Regulations 2001. The screening procedure requires all project proponents to apply for a permit to carry out a prescribed development. The application form will be reviewed by ECD to determine whether the particular proposal requires further environmental study inthe formof aninitial environmental examination (IEE)or an EIS (a comprehensive environmental impact assessment PIA]study) report. The EIA procedure allows for the project proponent to conduct its own ELA study and implement the ECD approved environmental management plan of project activities. The ECD would also provide monitoringmeasures for the proponent to implement 74 and for which NationalEnvironment Inspectors would closely monitor environmental compliance of the project. A CCA project activity in an Outer Island would undergo the same environmental screening system where the initial application and subsequent regulatory activities are handled through the Environment and Conservation Division. Implementation, management and monitoringof the local project would be supervisedby the Island Council involved, with possible assistance from ECD. The central EIA unit of the ECD can best take on the role of referee and watchdog responsible for issuing regulatory and technical guidelines, resolving interagency conflicts, dsseminating information, and the like. Under the guidance of the central EIA agency, however, primary responsibility for infusing environmental values into project-identification and development activities should remain with line ministries, sectoralagencies, Island Councils and private businesses. All subprojects under the Pilot IslandAdaptation component and any major activity under the MOPS will undergo environmental screening to determine the hkely level of environmental impact. Activities will be categorized in a way consistent with Bank OD4.01. A proposed project with likely significant adverse environmental impacts that are sensitive, &verse or unprecedented will require preparation of a full EIA with an Environmental Management Plan, consistent with the requirements for a Category A project under OD4.01. A proposed project with impacts that are site-specific; few if any of which are irreversible; and where mitigation measures can be designed more readily than for Category A projects will be treated consistent with Category B projects under OD4.01. A project with few or minimal environmental impacts will be treated in a manner consistent with Category C projects, and wdl generally entail only initial environmental screening. Key Institutional Players inEnvironmentalAssessment and Monitoring Planning and implementing CCA Strategies involves many ministries and agencies with different technical specializations. Recent institutional changes and developments have helped to streamline and coordinate activities among those ministries and agencies. Central policy coordination will be provided by the Office of T e Beretitenti (OB) through the recently established &vision of Strategic Rsk Management. A technical working group designated the Climate Change Study Team (CCST) is currently based inthe Ministry of Environment, Lands and Agricultural Development (MELAD)and chaired by a senior MELAD official. This group i s made up of national climate change specialists and officials from the most concerned ministries. CCST monitors climate change nationally and globally and assesses the vulnerabhty of islands and investments or activities to clunate-related risks. CCST reports to the National Adaptation Steering Committee (NASC), w h c h i s chaired by the Secretary to the Office of T e Beretitenti (OB) and includes senior officials from concerned ministries and representatives of churches, the national women's organization and non-government organizations. NASC reports to and advises OB, and through OB it advises Cabinet on CCA matters. Cabinet decisions are advised to NASC and implemented by responsible ministries. Responsibility for operational planning and the carrying out of activities to implement CCA strategy wdl lie with the relevant technical ministries and public enterprises, but all such activities must undergo environmental scrutiny as stipulated in the national environmental screening procedures. These implementing agencies are Ministry of Public Works and Utilities (MPWU) (water, infrastructure and public buildings), the W s t r y of Environment, Lands and Agriculture Development PELAD) (external liaison on climate change, environmental management and regulation, agricultural extension), and MISA (support to Local Government inurban areas and Outer Islands), Ministry of Communications, Transport and Tourism Development (MC'M'D) (telecommunications, weather and climate monitoring and weather forecasting). Each ministry's operational commitments will be found in the relevant programs in its M i n i s t r y Operational Plan 75 (MOP),whde the appropriation of local funds and allocation of external aid to these purposes wdl be foundinthe Annual GoKBudget. At practical level coordmating committees will be established as required by the appropriate ministries. The Foreshore Management Committee of MELAD, with inter-ministry membershlp, i s expected to assist MELAD to discharge its environmental regulatory and permitting functions relating to seawalls and foreshore structures. Generally, the regulatory functions of MELAD and other agencies concerned with land use and structure design appear to be frequently bypassed by Government developers. This strategy wdl requite the overhaul of arrangements for co-operation among regulatory agencies and Government ministries to close loopholes throughwhich unexamined developments can slip, and to avoid unnecessary processing delays or variations in standards. Improving the capacity and effectiveness of local government is crucial to implementing this CCA strategy. Many of the services that most directly affect people's ability to handle climate variability and change fall naturally to be delivered at local government level, both inurban areas (South Tarawa) and the Outer Islands. Buildingstandards and densities, waste dlsposal, land planning and permitting, land reclamation and community coastal defenses are all within the remit of local government. IGritimati, where national government has until now been responsible for everything, i s now moving towards provisionof services by localgovernment. Government of IGribati i s taking steps (not for the first time, but with an increased sense of urgency) to strengthen capacity at local level and to equip local governments with more and better information on CCA and related issues. The CCA project under design for submission to GEF includes a small grants scheme to assist island-level CCA-driven investments, and the possibility of aid to construct community storm refuges incertain islands i s discussed inthe strategy statement. Public Consultations Two IGxibati Adaptation Program documents provide extensive coverage of the NationalAdaptation Consultation, a crucial element of the process of agreeing on national adaptation priorities and benchmarks and the mainstreaming of adaptation into economic planning. There were two national consultation workshops conducted in South Tarawa but with participation from all Outer Island representatives, including 28 community consultations in4 islands, and one consultation on IGxitimati covering the Line and Phoenix Islands. The documents `Report on the Second National Consultation held at Otintaai Hotel, Bikenibeu, from 3rd to 6th November 2003' and `Social Assessment Final Report' document the inputs and opportunities for vulnerability reduction by the various stakeholders themselves that do reflect the real national priorities which will have local support once the priorities that are identified need to be implemented. A process of continuingconsultation implies a commitment by the authorities to listen to the insights and concerns of people and communities and to make a credible and relevant response. The first national CCA consultations in 2003, conducted as a joint NAPA-I(AP exercise, were necessarily broad-based. With the backing of thls strategy statement, future consultations can focus on a few priority concerns, and can aim at identifying activities and investments and allocating responsibility for taking action. Funds for the continuing consultative process wdl be provided in the GoI< Annual Budget, using both local and external funding. Agreed action by GoK on concerns identified in thls way dappear inthe appropriate MOPS. Project Assessment A simple impact matrix was formulated to review the broad environmental implications of the various project proposals. The matrix i s shown in Appendix B of the SEA and helps to compare the broad environmental implications across the various projects and provides guidance in identifying possible 76 cumulative impacts, and interactions between projects that might create enhanced impacts or other problems, such as hazards. It can also be used to examine the distributional aspect of impacts, that is, who is winning and who is losingfrom the overall set of projects. The assessment explicitly differentiates between the construction phase of the projects and their subsequent operational phase. It i s clear that many, if not all the proposed projects are hkely to have adverse effects at the construction stage. These are mainly impacts such as noise, dsruption of dady social and economic activities and the exposure of soil to rainfall and coastal erosion processes during the construction period. Most of the adverse effects fall on the local people and the marine environment, which is entirely as expected; given the CCA projects will take place incoastal areas. There are some indirect effects inthe rural and urban sectors mainly due to the sand mining and dredging operations which provide aggregate for road and other infrastructure construction. The environmental reserve, by preserving a major area of comparatively unmodrfied coastal area (e.g. North Tarawa Conservation Area), i s the only project that wouldimpinge directly on terrestrial and marine natural ecosystem components (soil, fauna and flora). It can also be considered to have long term benefits for the marine environment since it i s a permanent reserve set aside to compensate for the loss of lagoon reef ecosystems due to the growing number of lagoon reef dsturbances In terms of cumulative impacts, the most obvious one is the combined effects of the construction phases of all or several projects if they were to be undertaken concurrently. Being ina comparatively small geographical area the construction impacts could be severe in any particular island. At Tarawa the disruption to traffic and pedestrian access, noise, dust, and the danger of a substantial increase in the volume of sediment drift within Tarawa Lagoon are a major consideration. Although the timetable for implementing projects is largely determined by the availability of funds, some thought could be given to the possibhty of co-coordinating the construction phases of certain projects to minimize the potential for social and economic disruption and sedimentation transport. These cumulative impacts are likely to be much less severe in the Outer Islands where population density i s considerably less and the number of activities dhkely be less as well. The marine environment is, not surprisingly, the major recipient of many of the possible adverse effects of the proposals, largely through the sedimentation problem. However, the combined benefits wouldbe large if the proposals were effective. Reduced sewage from seepage and surface run-off, and reduced silting in the long term as a result of properly drained and sealed roads. At the same time, it must be recognized that a substantial contribution to the sedimentation problem comes from the activity of all coastal constructions (such as seawalls, causeways and dredging or reef extraction) pigs on beach backyards, removing groundvegetation over large areas and exposing surface soil to erosion by rainfall. A comprehensive approach to managing marine water quality and the sedimentation/erosion problem in South Tarawa lagoon, for instance, will have to include strateges for d e a h g with these issues. One way to tackle this i s to involve the community in recognizing and solving the problems with the marine environment. Solutions to illegal reef reclamation and coastal infrastructure development will need to be initiated by the community and enforced by social pressure and sanctions if they are to be successful. ImpactAssessment Needs All the Climate Change Adaptation (CCA) proposals would need closer scrutiny for their environmental implications, as stipulated under the Environment A c t 1999 despite the efforts made in the rankmg of adaptation options, to weigh up the benefits and Qsadvantages of the various climate change adaptation options. 77 For each proposed subproject under the Pilot Islands Adaptation component o f IUP-I1 an environmental screening process should be undertaken. Ths process would determine the hkely environmental impacts of the proposed activity, and could be overseen by MELAD, with the cooperation of the Island Projects Officer and the Island Development Committee. The initial screening would determine if the environmental impacts would be significant enough to merit further study. If impactsareconsideredlikelytobesignificant,anEnvironmentalManagementPlanwouldbe the formulated to detail the manner inwhich the environmental consequences of the development would be mitigated. This EMP would form part of the subproject documentation and its implementation would be the responsibhty of government though the various agencies responsible for the sectors in which the development wdl occur. For those activities included in MOPSthat might entail environmental impacts, in most cases the responsible ministry would be tasked with environmental screening in order to assess the hkely environmental impacts of proposed activities. The ministries would be provided assistance as needed fromthe secretariat. A social impact assessment might be considered for the general set of proposals that would alter the physical and social nature of I(iribati Islands. The change in location of coastal d w e h g s (being set back from the beach area, now with a protective seawall), the concentration of Government offices on Outer Islands, the breakmg up of family and community units for resettlement purposes and the concept of zoning land for development. The nature and extent of the cumulative effects of these proposals may not be anticipated by the local community and a social impact assessment would be a usefulvehicle to address any concerns that might be evident before the proposals go any further. Whde not strictly an impact assessment, a study would be required to prepare a series of Codes of Environmental Practice (COEP) for the Government of Kiribati use during the planning, design, construction, and operation as well as maintenance of all infrastructure projects and coastal works in I(iribati. The codes would ensure that minimum environmental standards are m e t and that appropriate procedures are undertaken to reduce the environmental impact of various activities related to coastal works and services. Each of the phases of a coastal infrastructure project, i.e. planning, design, construction, and operation and maintenance are interrelated and have Qffering potential to effect (either adversely or beneficially) the environment. The overall objective of the codes i s to provide a pollution prevention approach to general coastal infrastructure works and services, establish guidelines for the mitigation of adverse environmental effects, and wherever possible indicate opportunities for environmental enhancement for, the planning, design, construction and operation and maintenance of the infrastructure projects. It is intended that the development, approval, and subsequent adoption of the codes inconjunction with the identification of project specific issues and the preparation of management and mitigation plans for those issues will allow a reduction in the dependence on the conventional environmental impact assessment (EIA) system. Codes of Environmental Practice are identified within the framework of environmental assessment o u h e d in IGbati's Environment A c t 1999 and the Environment Regulations 2000. Monitoring Requirements The concept of sustainable development implies a concern to ensure that undesirable changes in the natural social environment are minimized. Impact assessment, at both the strategic and project levels, seeks to foresee such changes and to suggest appropriate molfications to the proposal in question, in order to avoid the changes preQcted. However, forecasting possible changes i s fraught with 78 uncertainty. Sustainable development must therefore, also include the monitoring function - to provide information on the actual state of the environment so that appropriate management responses can be formulated. This i s an important issue. Increased economic activity in the primary sectors and inthe marineenvironmentwill only be sustainable ifthat increasedactivity does notbeginto damage the resources on which it i s based. Monitoring i s the only way h s can be detected, which i s the first step in developing a management response. Therefore, environmental or resource inventories are necessary, which use indicator variables to characterize the current state of the environmental sector of interest. There are considerations about takmg measurements that will allow for spatial and temporal characterization of existing variability, so that the inventories have to be designed carefully, on a scientific, statistical basis. Then monitoring activities have to be designed with equal care, the i n l c a t o r variables are periodically measured and compared with the baseline values to provide the basis for detecting changes. Monitoringpriorities inrelation to the CCA proposals (and not including strict economic performance monitoring)are: (a) the marine ecological resources of Tarawa and around Outer Islands; water quality (turbidity, faecal coliform, etc.); indicator organisms (algae, benduc organisms, diversity of reef fish, etc.); habitat indicators (health and integrity of coral, etc.); and, sedrnentation processes adjacent to settlements (and other local population centers). @) the physical resources; atmosphere (e.g. air quality and climate, average solar radiation, and wind speed); waves (for calculation of design wave height for seawalls and causeways the following parameters are required: wind speed, wind dnection, effective fetch, wind duration); and, coastline topography to include beach profiles. (c) the village community, age/sex make-up of the population, household structure, employment characteristics, health inlcators, public order indicators, attitudmal indicators, and so forth. Conclusions The strategic environmental assessment identified a number of issues: There i s a basic sustainable development objective evident in the Government of IGribati Climate Change Adaptation Policy, especially as expressed through the CCA strategies. However, there does not seem to have been any formal environmental assessment of development options during the early stages of the IGribati Adaptation Program. Nor did there appear to have been any studies into such parameters as carrying capacities, environmental constraints, etc., that would indicate an environmental planning approach to the development policy. The CCA strategies appear to favor a set of coastal infrastructure development options. At the same time there i s no apparent attempt to integrate these development options into an institutional framework that specifically considers the wider coastal developmental planning and environmental implications for the nation. An integrated coastal management planning unit strategically placed in the appropriate ministry should plan, implement and monitor the climate change adaptation projects. Most of the effects of the various proposed projects wdl probably fall on the local community and the marine environment. The construction phase of most proposed projects would probably lead to increased sedimentation transport in the marine environment, especially near the b d t coastal structures. Social and amenity impacts tend to be adverse in the short term and positive in the longer term; health and general welfare, in particular, are hkely to improve 79 ifthe proposals areimplemented.The combinedsocialimpacts ofthevarious proposals affecting the host community, itself, could be quite marked. d) Agricultural and fishing activities would probably benefit mainly from three proposals (road and causeway constructions, and sanitation and waste management). Local communities would benefit from allproposals. In conclusion, the environmental consequences of the proposed climate change adaptation projects have not been closely examined in the CCA Strategy and nor have the wider environmental implications been considered in the CCA Policy. The nature of the proposals, constructing coastal structures, means that there are likely to be some environmental problems in the short term. The increasing and cumulative effects of coastal infrastructure developments are important, and it will be clearly advisable to initiate an environmental management program targeted at the coastal development sector. An integrated coastal management program would examine the current extent of climate change adaptation options and coastal construction activities and the impacts (both beneficial and adverse) experienced to date. The environmental management program should consider the preparation of a NationalEMTrainingProgram and a series of Codes of Environmental Practice for use during the planning, design, construction, and operation as well as maintenance of all roads and coastal works inKiribati. Itwould also be advisable to consider the environmental factors that wouldlimit coastal development activities (environmental sensitivities, natural hazards, natural carrying capacities, etc.). Sedimentation and sediment transport play a crucial role in the coastal management sector (for instance, Tarawa), and consideration should be made to commission a sediment budget study of Tarawa Lagoon, as a start. In h s way, the very features that support coastal development activities can be managed and protectedinthe longer term, to sustain the economic viabihty of the sector. All CCA project proposals listed in the matrix would require closer environmental scrutiny through the conduct of project environmental impact assessment. A social impact assessment would b e specifically required for the resettlement project, the decentraking government to Outer Islands proposal and for the host community attitude to the proposed changes to their village landscape and functions. Finally, there shouldperhaps be provisions in the CCA Strategy for monitoringkey indicators of the marine and physical environment, but also the local host community to the CCA projects. The early detection of undesirable changes allows appropriate responses to be devised and implemented intime to avoid major damage to the environment, including the social fabric of the village and the whole island communities. 80 ANNEX 10: PROJECTPREPARATIONAND SUPERVISION KIRIBATI ADAPTATION PROJECTIMPLEMENTATION - PHASE(KAP 11) Planned Actual PCN review 09/15/2004 09/29/2004 InitialPID to PIC 10/07/2004 InitialI S D S to PIC 10/06/2004 Appraisal 01/30/2006 12/06/2005 Negotiations 03/14/2006 03/27/2006 Board/RVP approval 05/30/2006 Planned date of effectiveness 06/30/2006 Planned date of mid-term review 12/15/2007 Planned closing date 06/30/2009 K e y institutions responsible for preparation of the project: The Ministry of Finance and Economic Development (MFED) was the institutional home for ISAP-I, which represented the preparation phase of ISAP-11. Furthermore, the National Economic Planning Office (NEPO) was responsible for mainstreaming of adaptation into the NationalDevelopment Strategy and the MOPS,and has co-organized the national consultations. The Office of T e Beretitenti (OB) has provided the leadership for the National Adaptation Steering Committee, and has been responsible for policy coordination among key ministries, now to be institutionalized inthe form of the SNPRA Unit. The Ministry of Social Affairs (MISA) has guided the development of component 4, on local governments and community-level adaptation activities. The Ministry of Environment and Agriculture Development (MELAD) has provided technical support to the adaptation efforts inIGribati, and has led the preparation of the I-IGribati NAPA, including the C h a t e Change Study Team, responsible for prioritization of adaptation options and establishing climate scenarios. The Ministry of Public Works and Utilities has gulded the design of investments in the water sector and for coastal protection, including capacity buildingelements. 1 The IGribati Association of NGOs (IUNGO), the IGribati Council of Churches (ICCC), the NationalWomen's Organization (AMAIC), and the Chamber of Commerce have all contributed through their participation inthe National Adaptation Steering Committee and the consultations duringISAP-I. Bank staff and consultants who worked on the project included 81 IIIBismaHusen Procurement SDecialist NurulAlam ProcurementSDecialist CristoDher Bleaklev IIISenior CountrvOfficer Stuart Whitehead Consultant EASUR Richard Croad Infrastructure Specialist Consultant IanBurton IndependentScholar Consultant MeiWang Senior Counsel LEGEA FaridMazhar Paralegal LEGEA Patricia IUeystuber Consultant TFO Josephme Masanque Senior Financial Management Specialist MNAFM Bankfunds expendedto date onproject preparation: 1. Bankresources: $80,676.92 2. Trust funds (GEF-PDF-B):$82,465.43 3. Total: $163,142.35 EstimatedApproval and Supervision costs: 1. Remainingcosts to approval: $50,000 - BB 2. Remainingcosts to approval: $16,634.57 -TF :GEFPDF-B 3. Estimated annual supervision cost: $75,000 82 ANNEX 11:DOCUMENTSTHE PROJECTFILE IN KIRIBATI ADAPTATION PROJECTIMPLEMENTATION - PHASE(KAP 11) 1. Climate Change AdaptationPolicy and Strategy Statement, 2005 2. I U P SocialAssessment, 2004 3. IGribatiAdaptation Program I1IBTF, 2005 4. Detailed Project Implementation Plan, which includes the following commissioned reports and handbook 0 Procedures Manual for Small-scale Adaptation Investments on the Outer Islands 0 Coastal Protection Measures 0 Water Resources Investments 0 Legislative and Regulatory Review 0 Land Acquisition and Resettlement Policy Framework 0 Strategic EnvironmentalAssessment 0 Economic analysis of adaptation to climate change 5. Various Project Preparation documents, including the Grant Agreements that funded preparation; mission reports 6. Procurement Plan, 2005 7. ISribati I(AP ksk Rating, 2005 83 ANNEX 12:STATEMENT OF LOANS CREDITS AND KIRIBATI ADAPTATION PROJECT IMPLEMENTATION PHASE- (m11) (No Information available) Difference between expectedand actual OriginalAmount inUS$Millions disbursements ProjectID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm.Rev'd Total: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 KIRIBATI STATEMENTOF IFC's HeldandDisbursedPortfolio InMillionsofUS Dollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. Total portfilio: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Approvals PendingCommitment FYApproval Company Loan Equity Quasi Partic. Total pendingcommitment: 0.00 0.00 0.00 0.00 84 ANNEX 13:COUNTRY AT A GLANCE KIRIBATI ADAPTATION PROJECTIMPLEMENTATION - PHASE(KAP 11) East Lower- POVERTY and SOCIAL Asia 8 middle- Kiribati Pacific income Development diamond' 2002 Population, mid-year(millions) 0.09 1,838 2,411 Lifeexpectancy GNIper capita (Atlas method, US$) 8x1 950 1,390 T GNI(Atlas method, US$billions) 0.08 1,740 3,352 Average annual growth, 1996-02 Population (%) 2.5 10 1.0 Laborforce(%) 12 12 GNI per 1 M o s t recent estimate (latest year available, 1996-02) capita I Poverty (%of populationbelownationalPOvefty line) Urbanpopulation (%of totalpopulation) 39 38 49 Lifeexpectancyat birth(years) 63 69 69 Infant mortality(per 1,000livebirths) 50 33 30 Childmalnutrition (%of childrenunder5) '6 11 Access to improvedwater source Access to an improvedmter source (%ofpopulation) 48 76 81 Iiliteracy(%ofpopulation age a+) Q Q Gross primaryenrollment (%ofschool-age population) a8 0 6 111 -Kiribati Male P7 x15 111 Lowr-middle-income group Female P9 x16 1x1 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1982 1992 2001 2002 Economic ratios' GDP (US$ billions) 0.03 0.03 0.04 0.04 Gross domestic investment/GDP 63.3 56.2 Exportsof goods and services/GDP 9.1 P.5 Trade Gross domestic savings/GDP -44.1 -45.0 Gross nationalsavings/GDP 60.3 1ff.3 1 Current account balance/GDP .. 214 , , \ ,\ \ Interestpayments/GDP Domestic , , savings , 1 Investment % , Total debt/GDP > , \, Total debt servicelexports Present value of debt/GDP Present value of debt/exports Indebtedness 1982-92 1992-02 2001 2002 2002.06 (average annualgrokfh) GDP 0.2 2.8 16 2.8 ---Kiribati GDP percapita -2.0 0.5 -0.7 0.7 Lower-middle-incomegroup STRUCTURE o f the ECONOMY 1982 1992 2001 2002 Growth of investment and GDP (%) (%of GDP) Agriculture 26.2 25.1 'OT Industry 8.3 9.2 Manufacturing 2.0 2.1 Services 65.5 65.7 Private consumption 90.1 90.9 Generalgovernmentconsumption 54.0 54.1 -5 Imports of goods and services 16.5 lQ.8 1982-92 1992-02 2001 2002 (averageannualgrokfh) Agriculture 17 Industry 1.2 Manufacturing -0.9 Services -0.7 Private consumption Generalgovernmentconsumption Gross domestic investment Imports of goods and services 85 Kiribati PRICESand GOVERNMENT FINANCE 1982 1992 2001 2002 Inflation (%) Domestic prices (% change) Consumer prices 5.5 4.0 Implicit GDP deflator 7.4 3.1 2.4 2.7 Government finance (% of GDP, includescurrentgrants) Current revenue Current budget balance ----GDP deflator -0-CPI Overall surplus/deficit TRADE 1982 1992 2001 2002 Export and import levels (US$ mill.) (US$ millions) I Total exports (fob) Copra Fish Manufactures I Total imports (ci9 1 Food Fueland energy Capital goods 01 Export price index (1995-100) 96 97 98 99 00 02 Importprice index (1995-700) Exports Imports Terms of trade (1995-100) BALANCEof PAYMENTS 1982 1992 2001 2002 Current account balanceto GDP (%) (US$ millions) I Exports of goods and services 5 22 Importsof goods and services 31 55 Resourcebalance -26 -33 Net income 6 13 Net current transfers 16 27 Currentaccount balance 7 Financingitems(net) 3 Changes in net reserves 3 -11 Memo: ReSeNeS includinggold (US$ millions) Conversionrate (DEC, /oca//US$) 1.o 1.4 1.9 1.8 EXTERNALDEBT and RESOURCE FLOWS 1982 1992 2001 2002 (US$ millions) Total debt outstandingand disbursed IBRD IDA Total debt service IBRD IDA Compositionof net resource flows Official grants Official creditors Private creditors Foreigndirectinvestment Portfolio equity World Bank program Commitments Disbursements Principalrepayments 86 ANNEX 14: INCREMENTAL COSTAND ECONOMICANALYSIS KIRIBATI ADAPTATION PROJECT IMPLEMENTATION - PHASE(KAP11) The 'Do Nothing' Scenario. A World Bank-funded study in 2000 indicated that in the absence of adaptation, the impacts of current climate change scenarios in IGribati could b e severe, disrupting major economic and social sectors. Up to 25-54 percent of areas inBikenibeu, South Tarawa and 55- 80 percent of Buarh, North Tarawa, could be inundated by 2050. The combined effect of sea level rise, changes inrainfall, and changes in evapo-transpiration due to higher temperatures could result in a 19-38 percent d e c h e in the thlckness of the main groundwater lens in Tarawa. Agriculture productivity - particularly for taro and pandanus - could decline due to storm-induced saltwater intrusioninto groundwater lenses. Higher temperatures could also increase the epidemic potential for dengue fever by 22-33 percent, increase the incidence of ciguatera poisoningand degradation of coral reefs, and &vert critical tuna resources away from IGribati waters. Continued degradation i s estimated to result in potential economic damages averaging US$8-$16 million a year, equivalent to 17 to 34 percent of the 1998 GDP. Along with the other chate-related risks facing the country, IGribati's ecosystems also experience extreme vulnerability, particularly of their plant, animal, soil and water resources, and their cultures as well their traditional resource-use systems to outside human induced disturbance and over- exploitation. Given this, successful atoll development requires that the integrated aspects of the environment and social conditions, as well as external conditions - in relation to stability of global economic systems - are taken into account. Ecosystems. IGribatiis home to a number of globally important marine biodiversity, including up to 200 species of coral; hundreds of fish species, including threatened species such as the Humphead wrasse (Cheilinus undulates) and Sicklefin Lemon Shark (Negaprion acutidens); and several threatened turtle species, such as the endangered green turtle (Chelonia mydas) and critically endangered Hawksbill turtle (Eretmochelys imbricata). IGribati also provides a nesting area for a variety of birds, including vulnerable migratory species such as the Bristle-thlghed Curlew (Numenius tahltiensis) and endangered species such as I