The Bank’s GEF Portfolio and the 1991 Forest Strategyieg.worldbankgroup.org/sites/default/files/Data/reports/gef.pdf · Mishra, Augusta Molnar, Jessica Mott, Ridley Nelson, B. Essama

2000

The World Bank

www.worldbank.org/html/oed Washington, D.C.

W O R L D B A N K O P E R A T I O N S E V A L U A T I O N D E P A R T M E N T

J. Gabriel CampbellAlejandra Martin

Financing the GlobalBenefits of Forests

The Bank’s GEF Portfolio andthe 1991 Forest Strategy

A Review of the World Bank’s 1991 ForestStrategy and Its Implementation

Copyright © 2000

The International Bank for Reconstruction

and Development/THE WORLD BANK

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First edition October 2000

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Photo credits: Cover, Still Pictures (Jaguar, Pantanal, Brazil); page 19, www.fotofinder.net; page 42,Still Pictures.

ISBN 0-8213-4842-6

Library of Congress Cataloging-in-Publication Data

Campbell, J. Gabriel, 1946–

Financing the global benefits of forests : the Bank’s GEF portfolio and the 1991forest strategy / Gabriel Campbell, Alejandra Martin.

p. cm. — (Operations evaluation studies)

Includes bibliographical references.

ISBN 0-8213-4842-6

1. Forestry projects. 2. Forests and forestry—Economic aspects. 3. Forest policy. 4. Forestconservation. 5. Global Environment Facility. I. Martin, Alejandra, 1970– II. Title. III. World Bankoperations evaluation study.

SD387.P74 C26 2000

333. 75’16—dc21 00-043861

Printed on recycled paper.

C o n t e n t s

iii

Contents

vii Acknowledgmentsix Forewordxi Executive Summaryxvii Abbreviations and Acronyms

1 1. Role of the GEF in the OED Forest Strategy Review2 The Global Environment Facility3 The 1991 Bank Forest Strategy4 The Bank’s GEF Forest Portfolio and the 1991 Forest Strategy

9 2. Relevance of the GEF Portfolio9 Relevance to Global Biodiversity Objectives11 Relevance to the World Bank and the Forest Strategy12 Relevance to Country and Bank Development Priorities

15 3. Effectiveness of GEF Projects15 The Measurement Problem15 Project Components and Threat Analysis20 Performance and Safeguard Ratings and Covenants

23 4. Sustainability of GEF Projects23 Financial Sustainability24 Trust Funds24 Other Mechanisms for Financial Sustainability25 Sustainable Use and Forest Strategy26 Cofinancing Conservation

29 5. Social and Institutional Issues29 Policy Synergy29 Changing Approaches to Participation31 Identifying the Stakeholders

iv

F i n a n c i n g t h e G l o b a l B e n e f i t s o f F o r e s t s : T h e B a n k ’ s G E F P o r t f o l i o a n d t h e 1 9 9 1 F o r e s t S t r a t e g y

33 6. Mainstreaming Within the World Bank and Client Countries33 Financing Mechanisms for Mainstreaming34 Nonlending Mechanisms for Mainstreaming

39 7. Conclusions: The Bank, the GEF, and the 1991 Forest Strategy39 Policy Co-evolution40 Mutually Enabling Roles41 Conceptual Lacunae and Policy Implementation Weaknesses45 Concluding Words

Annexes47 Annex A: Terms of Reference53 Annex B: GEF’s Interim Guiding Principles for Projects Associated with Logging55 Annex C: Methodology of Participation Review57 Annex D: Project Summaries63 Annex E: Attempt to Identify Area Conserved and People Affected65 Annex F: Results of Staff Survey67 Annex G: GEF Projects Associated with Bank Projects69 Annex H: GEF Forest-Related Projects in the Pipeline

71 Endnotes

75 Bibliography

Boxes3 Box 1.1: Operational Principles for the Development and Implementation of the

GEF Work Program10 Box 2.1: GEF and the Mesoamerican Biological Corridor Program16 Box 3.1: Evolution of Project Design Indicators—Two Examples25 Box 4.1: Conclusions from Experience with Conservation Trust Funds27 Box 4.2: Lao PDR Forest Management and Conservation Project30 Box 5.1: Social Assessments36 Box 6.1: Regional Environmental and Information Management Project51 Box A.1: The World Bank’s Forest Strategy at a Glance

v

Tables5 Table 1.1: Word Bank–Implemented GEF Projects7 Table 1.2: Financing for Tropical Moist Forest Projects9 Table 2.1: Primary Project Objectives of Bank GEF Biodiversity Projects11 Table 2.2: Criteria Cited for Global Biodiversity Values13 Table 2.3: Projects with Explicit Linkage to CAS13 Table 2.4: GEF Forest Funding for IDA and Non-IDA Countries24 Table 4.1: Financial Sustainability Mechanisms Identified in Project Documents30 Table 5.1: Participation in Project Stages31 Table 5.2: Participatory Methods31 Table 5.3: Stakeholders Identified in Project Design Documents35 Table 6.1: Projects with Reference to CASs37 Table 6.2: International Cooperation in Bank GEF Projects49 Table A.1: Total Yearly Biodiversity Investments50 Table A.2: Evaluation of the 1991 Forest Strategy: A Results-Based Framework64 Table E.1: Project Document Estimates of Area Conserved/People Affected65 Table F.1: Staff Assessment of Effectiveness

Figures4 Figure 1.1: Bank GEF Projects by Date7 Figure 1.2: Funding by Region, GEF Percentages18 Figure 3.1: Total Financial Resources by Allocated Category27 Figure 4.1: Cofinancing27 Figure 4.2: Proportional Cofinancing48 Figure A.1: Logical Framework for Country Study

C o n t e n t s

vii

Acknowledgments

his report was carried out as part of the OED Review of the World Bank’s 1991 Forest

Strategy and its Implementation. Preparation of the report would not have been possible

without the support and valuable contributions of a number of individuals. The report

Shepardson, Andrea L. J. Silverman, Michel Simeon,Scott E. Smith, George Taylor, Lars Vidaeus, Tom B.Wiens, Aaron Zazueta, and Dominique Zwinkels.

This publication was prepared by the Dissemina-tion and Outreach team of the Partnerships andKnowledge Programs Group (OEDPK), under the guid-ance of Elizabeth Campbell-Pagé (task team leader),including Caroline McEuen (editor), Kathy Strauss(graphics and layout), and Juicy Qureishi-Huq (admin-istrative assistant).

GEF TeamJ. Gabriel Campbell

Alejandra Martin

Director-General, Operations Evaluation: Robert Picciotto

Director, Operations Evaluation Department: Gregory Ingram

Task Manager: Uma Lele

Tbenefited greatly from the intellectual advice and guidance provided by Uma Lele, Jarle Harstad,

and the Advisory Committee to OED’s Forest Strategy and Implementation Review: Conor Boyd,

Angela Cropper, Hans Gregersen, and Emmy Hafild.

The team expresses its sincere thanks to thefollowing for their time and contributions: RainierAlmazan, Louis Boorstin, Marjory-Anne Bromhead,Alejandro Camino, Eduardo Canales, Gonzalo Castro,Noel Rene Chabeuf, Manab Chakraborty, Nola Chow,Chona Cruz, Rod De Vletter, Madhur Gautam, MaishaHyman, Syed Arif Husain, Malcolm A. B. Jansen,Lauren Kelly, Asmeen Khan, Robert Kirmse, TimothyKoomson, Nalini Kumar, Kanta Kumari, AndreyKushlin, Kathy Mackinnon, Kathy Mikitin, HemantaMishra, Augusta Molnar, Jessica Mott, Ridley Nelson,B. Essama Nssah, Afolabi Ojumu, PAKISAMANational Office, Francisco Pamplona-Rangel, Jean-Michel G. Pavy, Mario Ramos, Carlos Rodriguez, LuizCarlos Ros, Lorenzo Rosenzweig, Susan Shen, Karin

ix

Foreword

his report was a cooperative endeavor between the Operations Evaluation Department

and the Global Environment Facility. The terms of reference for the study were jointly

crafted and the consultants for the study were selected through mutual consultation be-

Robert Picciotto

Director-General, Operations Evaluation Department

Ttween GEF and OED. GEF financed the study, made GEF databases available, and commented

on the drafts of the study. GEF comments, together with the comments of others, offered a useful

input into the report. The GEF input was managed by Jarle Harstad. The review was conducted

under the direction of Uma Lele.

xi

Executive Summary

he Global Environment Facility (GEF) was launched in October 1991 to provide a new

financial mechanism to protect the global environment. The GEF provides grants and

concessional funds to countries eligible for World Bank assistance for the additional

costs (the “incremental costs”) of providing global environmental benefits. This support is

provided to projects and activities in four focal areas: climate change, biological diversity,

international waters, and depletion of the ozone layer. Roughly 16 percent of total GEF

Tallocations up to June of 1999 ($2.4 billion) have beenfor projects primarily concerned with protecting orsustainably managing forest ecosystems or resources—mostly within the biodiversity focal area.

The GEF implements its programs throughthe World Bank, the United Nations DevelopmentProgram (UNDP), and the United Nations Environ-ment Program (UNEP). These implementing agenciesare responsible for developing projects with theirclient countries with GEF funding and for imple-menting them through executing agencies, includinggovernment bodies, nongovernmental organizations(NGOs), and regional project authorities. Theseinternational agencies are also charged with inte-grating (mainstreaming) GEF objectives and activi-ties within their own operations and in their clientcountries’ activities. Each agency has established itsown GEF coordinating unit, which transmits allproject proposals to the GEF for approval. Projectproposals are prepared in accordance with theagency’s regular preparation and appraisal proce-dures, often in association with regular projects,with efforts to ensure that they also meet GEFcriteria.

From 1991 until June 1999, the World Bank tookon implementation of 162 projects with grant fund-ing from the GEF. Of these, approximately 44 can beclassified as forest projects, which have received$370 million in GEF funding. The total value ofthese projects, with cofinancing from a variety ofsources, including direct cofinancing of $181 millionfrom the World Bank, is over $1 billion. Theseprojects represent a significant proportion of theBank’s forest sector portfolio and play an importantrole in the Bank’s implementation of the 1991 ForestStrategy, the subject of the Operations EvaluationDepartment (OED) review.1

Overall, this review of the Bank’s GEF forestportfolio concludes that the GEF has been instrumentalin allowing the Bank to pursue many aspects of the1991 Forest Strategy. The conservation orientation ofthe policy and the co-evolution of both the Bank’sparticipatory approach and GEF’s guidelines allowedthe Bank and the GEF to serve essential, mutuallyenabling roles in fulfilling their overlapping mandatesto improve the conservation of forest resources. Thereview recommends that the Bank’s partnership withGEF to conserve the world’s forest biodiversity be

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expanded, with more realistic goals and more innova-tive approaches, and that the GEF engage otherentities, including the private sector. Conceptual issuesand policy implementation weaknesses, however,remain to be addressed.

Key issues: The review examines the degree towhich GEF policies are compatible with the 1991Forest Strategy and identifies a number of key GEF-specific issues that are important to forests and to theimpact of the Bank’s GEF-funded portfolio on the forestsector. The following issues are among the mostimportant:

• The challenge of reconciling global environmen-tal priorities, country priorities, and implement-ing agency priorities

• The compatibility of short project cycles withlong-term environmental concerns

• The need to address wider policy and multisectorissues to make conservation effective

• The degree to which sustainable use of forestresources (including logging) is consistent withenvironmental objectives

• The difficulty of determining the additional costof global environmental benefits

• The difficulty of developing and implementingan effective monitoring system

• The appropriate roles of government, localcommunities, and private nonprofit and for-profit entities in conservation management

• The financial sustainability of GEF projects.

GEF and the 1991 Forest StrategyThe main elements of the 1991 World Bank ForestStrategy are fully consistent with GEF policies. TheBank’s strategy focuses on reducing the alarming rateof deforestation, especially of tropical moist forests,and on the inadequate planting of alternativeresources. The strategy highlights the global environ-mental benefits of forest biodiversity and the role ofexternalities. The GEF, whose pilot stage had just beenestablished at the time the forest strategy was formu-lated, was specifically mentioned as a source ofconcessional grant financing for these global benefits,to compensate countries forfeiting development benefitsfor conservation and to test new approaches to preser-vation. Both policies stress participatory approaches,capacity building, international cooperation, and sus-tainability.

Main AchievementsIncreased access and coverage: Without the GEF’sability to provide grant funding for the additional costsof forest biodiversity conservation associated withglobal benefits, it is unlikely that the Bank could havepersuaded as many client countries to borrow funds—even on a concessional basis—for these externalities.For this and other reasons, the GEF funding allowed theBank to remain active in forest sector policymakingand to partially fulfill the 1991 Forest Strategy man-date to conserve tropical moist forests in 16 of the 20countries identified as policy priorities. The GEFfunding also gave the Bank an entrée into the EasternEuropean countries and allowed it to maintain a policydialogue about and lending for the forest sector inAfrica.

International cooperation: The GEF also provideda means for the Bank to put together and financeregional multicountry projects, enabling it to achievemore progress on the 1991 Forest Strategy mandate forinternational cooperation than would have been likelywithout the grant funding and impetus of the GEF.Regional initiatives cover the Congo basin, EasternEurope, the Mesoamerican corridor, and Central Asiaand include corridor protection, coordinated policydevelopment, and shared data systems.

Protected area conservation: Together, the GEFand the Bank contributed to the conservation of specificforest sites and species and the development of forestresources to offset climate change in 44 countries.Seventy-five percent of the portfolio has gone toexpanding and improving protected area managementthrough capacity building, planning, applied research,infrastructure, publicity and education, and a numberof linked community development and buffer zoneinvestments. This approach has been widely accepted,although the implementation performance is mixed andthe impact has not been measured.

Legitimacy: The Bank’s GEF portfolio, and thenon-financing policy and sector activities that accom-panied it in many countries, was also instrumental inincreasing the legitimacy of conservation investmentsin many countries. Elements of civil society, includingNGOs and elected representatives, along with govern-ment agencies, have added voice and have had height-ened impact on their own countries’ policies.

Leverage: GEF funds increasingly have been ableto leverage additional Bank, bilateral, and host coun-try cofinancing. Although some question this conclu-

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E x e c u t i v e S u m m a r y

sion, most task managers and independent experts areof the opinion that much of this cofinancing is addi-tional funding for forest biodiversity conservation,support that would not otherwise have been availablefor this purpose.

Participation and safeguards: The GEF and theBank were also mutually enabling agencies in promot-ing a genuine increase in local community and NGOparticipation in the forest and conservation sector, asmandated by the 1991 strategy. The projects also havea relatively good record in adhering to social safe-guards, particularly regarding the indigenous peopleswho inhabit most conservation areas. The Bankacknowledges, however, that it has yet to encourageadequately women’s participation in forest sectorprojects, despite their critical role in natural resourcemanagement and use. In addition, there have beeninitial calls for inspection panel reviews of indigenouspeoples for two projects (India and Mexico) that weresubsequently not approved for formal inspection.

Poverty reduction: Given the high incidence ofpoverty among most of the communities that dwell inthe forest and buffer-zones, the community-basedapproach to conservation of most projects has helped toincrease the poverty reduction impacts of the portfolio.The magnitude of these impacts, however, is unlikelyto be known, because monitoring and evaluation effortshave been weak in most early projects.

Innovation: The Bank’s GEF portfolio has beenimportant in supporting innovations that might other-wise have remained small-scale. The pilot projects inBrazil and Mexico, the new instruments developed inCosta Rica, and the institutionalization of community-based approaches to conservation in China, Indonesia,India, and Uganda are some of the many examples ofsupport for innovative approaches at the national level.NGOs have played a critical role in identifying andtesting innovative approaches that have been supportedby the Bank GEF portfolio.

Main WeaknessesUnrealistic goals for mainstreaming: While there hasbeen progressively more mention of global forestconservation goals in the Bank’s country strategies andclient country plans, conservation remains a lowpriority in comparison with other economic and socialdevelopment objectives. GEF program objectives havenot become part of the mainstream of most countries’development agendas, or of World Bank Country

Assistance Strategies (CASs). But such a goal is unreal-istic. Long-term global biodiversity issues are unlikelyto be given priority equal to other pressing economicand social concerns in the short or medium term. Boththe Bank and GEF may need to accept more realisticobjectives for biodiversity mainstreaming. They mayalso need to accept that concessional and/or new formsof financing will be required for a long time ifconservation is to become sustainable in many develop-ing countries.

Unrealistic goals of scale: Considering the globalconservation objectives set out in the 1991 ForestStrategy, especially for the world’s moist tropicalforests, the scale of GEF project assistance is certainlyfar less than is needed to begin to offset benefits forgonefrom wholesale logging and conversion of land to otheruses. As a direct method of financing global conserva-tion values, the level of GEF funding is woefullyinadequate. With the low country priority givenbiodiversity conservation, the GEF’s objectives of pro-viding the funding for the exclusively global benefits offorest conservation are unrealistic. The Bank and GEFmust develop operational strategies to savebiodiversity and use the limited funding currentlyavailable more strategically. As documented in consid-erable detail in the OED Country Case Studies, theeconomic incentives to retain substantial areas of landunder moist tropical forests are not currently evident incountries such as Brazil or Indonesia. This foreshadowsa rather gloomy future for these forests without massiveglobal transfers or major policy changes.

Limited strategic coherence: Although it hashelped to support innovative models and to increasesupport for forest biodiversity conservation in manykey countries, the portfolio has had limited strategiccontent for dealing with the formidable problems ofscale and low perceived priority. The OED CountryCase Studies have shown that difficult issues such asdeveloping global biodiversity priorities while main-taining distributive equity, competing land uses, com-mercial and regional threats to forest biodiversity, andimpending technology change in the areas of biotech-nology are of paramount importance. However, manyof these issues have not been adequately addressed inthe projects reviewed, and an overall strategic frame-work that would allow individual projects to havemore significant program impacts has been lacking.Similarly, while many projects have policy elements,they have generally represented piecemeal approaches,

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rather than a strategic program that could increaseoverall impact.

Policy constraints on projects with logging:The tropical moist forest logging ban policies of boththe Bank and the GEF have kept the agencies free ofassociation with deforestation, but have reduced thepotential to engage the governments and the privateforest industry sectors of the project countries inextending biodiversity conservation into their vast,nonprotected forest areas. Avoiding the forests’ mostvaluable commodity—the tree trunks—has curtailedthe impact of conservation investments, although GEFpolicy, and many project investments, strongly supportsustainable use of non-timber forest products andcommunity forest management. Effective conservationof forest biodiversity will require extending projectinvestments beyond the current protected areas andbuffer zones to include the connectivity and vastlyextended ecosystems of managed forests. Conservationmust also be linked to more effective income streams ifit is to be financially sustainable.

Insufficient attention to regional threats: Whilesome individual projects have included rigorous analy-ses of threats to biodiversity in project design, manyothers have not, and there is relatively little overallstrategic analytical work to guide project preparation.As some of the Bank’s analyses have shown, projectshave too often assumed that local communities are thegreatest threat, or that they are capable of dealing withthe outside threats posed by logging, agriculturalplantations, infrastructure projects, and the like. TheOED Country Case Studies have pointed out theimportance of these regional threats, as well as theneed for a more inclusive and strategic approach toforest conservation.

Inadequate work with the private sector: Both theGEF and the Bank have failed to engage the privatesector in most forest sector projects, despite its majorimpact on forest biodiversity. The absence of anysignificant coverage of this sector in the 1991 strategyappears to have contributed to this. At the same time,both governments and nongovernmental organizations(NGOs) have often been reluctant to work with theprivate sector, even in sectors such as commercialtourism, and GEF policies have not developed frame-works for including these critical stakeholders.

Unlikely or uncertain sustainability: With the partialexception of endowment trust funds, most of the portfoliohas paid inadequate attention to sustainability. In part this

stems from the underlying dilemma of seeking to supportinvestments for their global benefits, while attempting topersuade countries to take over future financing based onnational interests. It also results from inadequate ap-praisal of potential alternative sources of financing suchas royalties, fees, private sector investments, and carbontrading options, and of the social and institutionaldimensions of sustainability. While endowment trustfunds do address the long-term financing issue, they limitannual flows to, for example, 5 percent of capital, andwould require enormous resources to generate the level offunding required.

Limited impact on country-level policy: Increas-ingly the Bank has packaged GEF projects with naturalresource and agricultural initiatives with greater policyimpact. But with the important exception of supportingpolicy changes that increase community participationin conservation, most of the projects have had limitedpolicy or legal reform content. Countries sometimes seeGEF grant funds as an entitlement, and the GEF haslimited leverage to include larger policy changes unlessit becomes part of a more comprehensive policy reformprogram. Policy reform and supporting legislation,however, appear to be the most effective way to obtainsignificant global impacts with the limited fundsavailable. Brazil, China, and Eastern Europe areexamples of countries in which policy has been lever-aged through GEF investments.

Weak performance on gender: Although the keyrole women play in natural resource use and manage-ment in most developing nations are widely recog-nized, the Bank GEF projects did not include women inthe project design and implementation in almost three-quarters of the projects reviewed. A similar lack is seenin the Bank-financed projects reviewed by OED. Thedifficulty of increasing women’s participation in theface of resistance by the forestry establishment in manycountries must be acknowledged, but improved perfor-mance in this area is needed.

Lack of data: The impact of the Bank’s GEFportfolio has not been measured, partly because of theinherent difficulties of measuring biodiversity andproject change, but also because of inconsistent andinadequate project monitoring and evaluation efforts.The lack of project and overall portfolio monitoringand evaluation constrains the development of a moretargeted and effective program strategy, as well as theexpansion of government, Bank, and public support forforest conservation.

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E x e c u t i v e S u m m a r y

Summary RecommendationsThe main recommendations of the GEF review aresimilar to many of those in OED’s review of the Bank’sprogram:

• Enlarge the scope of the GEF cofinanced forestprograms developed by the Bank to better in-clude the private sector and other public sectors.

• Develop a more strategic approach to addressthe most important threats to biodiversity andthe most effective investments of limited funds toleverage large-scale impacts.

• Expand the grant and investment portfolio toprojects outside of protected areas, involvingmore sustainable use.

• Evaluate options for transferring implementationof small, stand-alone projects to other imple-menting organizations or establish a new win-dow to continue to harness the creative andcritical energy of the NGO sector, while remov-ing the “burden” on Bank task managers forsmall projects, which they have little institu-tional incentive to pursue.

• Develop modest and clear monitoring indicatorswith country ownership, and work on clientcapacity for implementation.

• Develop policies and projects that more effec-tively work with sustainable forest use andmanagement to incorporate conservation objec-tives and extend forest strategy goals into theprivate sector forest industry.

• Pursue opportunities to develop incentives forconservation that are linked with private enter-prise, including agriculture, non-timber forestproducts, tourism, hydroelectric generation, live-stock rearing, and the like.

• Continue to identify and operationalize newfinancial mechanisms for sustaining conserva-tion funding, including trust funds, royalties andfees, conservation easements and tax mecha-nisms, contingent grants, partial credit guaran-tees, reserve funds, and so forth.

In conclusion, it is recommended that the Bank’spartnership with the GEF for sustainable conservationof the world’s forest biodiversity be expanded, withmore strategically developed, realistic goals and moreinnovative approaches. The limitations ofmainstreaming and national financing of globalbiodiversity benefits require a more realistic, compre-hensive, and sustainable approach. Given the limitedfinancing, and the huge global need, impact needs to beexpanded through increased policy and legislativereform, new forms of financing, and engagement withthe private sector—including the logging industry. Thecritical role of NGOs in mobilizing the support of civilsociety and in developing innovative models should befurther supported through more appropriate fundingmechanisms. The Bank’s comparative advantage inanalytic work and investment leverage should becaptured through expanding the trend toward incorpo-rating GEF projects in larger strategic programs toaddress the powerful threats and opportunities forbiodiversity conservation emerging from other, linkedsectors.

The complementarity of the Bank and the GEF inthe forest sector should allow both institutions toexpand strategically focused programs to the scale andscope needed to conserve vanishing forest biodiversityfor global and national benefit.

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ABBREVIATIONS AND ACRONYMS

AFR – Africa RegionBAP – Biodiversity Conservation Action PlanBTF – Bhutan Trust Fund for Environmental ConservationCAS – Country Assistance StrategyCBD – Convention on Biological DiversityCBO – Community-based organizationCEO – Chief executive officerCI – Conservation InternationalCIFOR – Center for International Forestry ResearchCITIES – Conservation on International Trade in Endangered SpeciesCOP – Conference of PartiesDNR – Department of Natural ResourcesEA – Enabling activityEAP – East Asia and Pacific RegionECA – Europe and Central Asia RegionESSD – Environmentally and Socially Sustainable DevelopmentFCCC – Framework Convention on Climate ChangeFAO Food and Agricultural OrganizationFONAMA – National Environmental Fund, BoliviaFUNBIO – Brazilian Biodiversity FundGEF – Global Environment FacilityGTZ – Deutsche Gesellschaft für Technische ZusammenarbeitIBRD – International Bank for Reconstruction and DevelopmentICDP – Integrated Conservation and Development ProjectICR – Implementation Completion ReportIDA – International Development AssociationIDB – Interamerican Development BankIFAD – International Fund for Agricultural DevelopmentIFC – International Finance CorporationIICA – Instituto Interamericano de Cooperación para la AgriculturaINRENA – National Institute for Natural Resources, PeruIUCN – International Union for the Conservation of NatureLAC – Latin America and Caribbean RegionMBC – Mesoamerican Biological Corridor ProgramMNA – Middle East and North Africa RegionMSG – Medium-size grantNEAP – National Environmental Action PlanNGO – Nongovernmental organizationNSBAP – National Biodiversity Strategic Action PlanNSPA – National System of Protected AreasNTFP – Non-timber forest productOP – Operational programPA – Protected areaPAD – Project Appraisal DocumentPAMSU – Uganda Protected Areas Management and Sustainable UsePIR – Project Implementation ReviewPPPB – Research and Development Center for Biology, IndonesiaPRA – Participatory rural appraisalPSR – Project Status Report

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QAG – Quality Assurance GroupREIMF – Central Africa Regional Environment Management ProjectSAR – Staff Appraisal ReportSFM – Sustainable forest managementSTRM – Short-term response measuresTNC – The Nature ConservancyUNCED – U.N. Conference on Environment and DevelopmentUNDP – United Nations Development ProgramUNEP – United Nations Environment ProgramUSAID – United States Agency for International DevelopmentWB – World BankWCS – Wildlife Conservation SocietyWWF – Worldwide Fund for Nature

All dollar ($) figures are in U.S. dollars.

1

F

11Role of the GEF in the OEDForest Strategy Review

rom 1991 until June 1999, the World Bank took on implementation of 162 projects with

grant funding from the Global Environment Facility (GEF, forthcoming). Approximately

44 of these can be classified as forest projects,1 which have received $370 million in GEF

funding. The total value of these projects, with cofinancing from a variety of sources,

including direct cofinancing of $181 million from the World Bank, is over $1 billion. The projects

represent a significant proportion of the Bank’s forest sector portfolio and play an important role

• GEF evaluations and Project ImplementationReviews

• Studies conducted by GEF and the Bank GEFcoordinating unit

• Independent studies by researchers and nongov-ernmental organizations (NGOs).

The review is also based on a series of structured,informal interviews with Bank project task managersand with GEF specialists in the NGO and donorcommunities, supplemented by a questionnaire. When-ever possible, country officials visiting Washingtonwere also interviewed. Other members of the OEDstudy team3 provided comparative data on the Bank’sregular portfolio. This review also draws on thefindings of the six Country Case Studies4 that form partof the OED implementation review.

The review did not include any field studiesbeyond those undertaken by the Country Case Studyauthors and the OED team leader. The ability toprovide an independent assessment of impacts on theground has been constrained by the continuing lack ofmeaningful monitoring of results, the relatively earlystage of many of the projects in the portfolio, and the

in the Bank’s implementation of the 1991 ForestStrategy, the subject of the Operations EvaluationDepartment (OED) review. For this reason, the GEFSecretariat contributed to the OED review to ensurethat this portfolio was evaluated along with regularBank operations.

This study examines this Bank GEF portfolio asone component of the OED Review of the 1991 WorldBank Forest Strategy and Its Implementation. ThisGEF study is based on a review of the following reportsand databases:2

• Project design documents: Staff AppraisalReports and GEF Project Documents, ProjectAppraisal Reports, Project Information Docu-ments, and Project Concept Documents.

• Recent supervision reports: Project StatusReports (590s)

• Implementation Completion Reports (availablefor eight projects)

• Quality Assurance Group reports (available foronly three projects)

• World Bank databases (Social Development-ESSD, Portfolio Information System)

2


necessary reliance on secondary data and impressionsfiltered through World Bank task managers. While thisstudy has sought to maintain an objective and indepen-dent perspective, it has not had the resources to verifyinformation and conclusions, or to conduct an in-depthstudy of the projects reviewed.

Fortunately, conclusions can be triangulated withother independent evaluations and annual performanceimplementation reviews,5 which have tended to highlightoverlapping issues that are still being debated andscrutinized. Along with the issues relating specifically tothis study’s mandate with regard to the 1991 ForestStrategy, a number of the issues were identified in thestudy’s terms of reference and found to be critical toevaluating the role of the Bank’s GEF forest portfolio. Thepersistent issues include questions about the following:

• The challenge of reconciling global environmen-tal priorities, country priorities, and implement-ing agency priorities

• The compatibility of short project cycles withlong-term environmental concerns

• The need to address wider policy and multisectorissues to make conservation effective

• The degree to which sustainable use of forestresources (including logging) is consistent withenvironmental objectives

• The difficulty of determining the additional costof global environmental benefits

• The difficulty of developing and implementingan effective monitoring system

• The appropriate roles of government, localcommunities, and private nonprofit and for-profit entities in conservation management

• The financial sustainability of GEF projects.

While some of these issues are applicable to mostinternational development projects, others are specificto the GEF and its role as a mechanism for fundingglobal priorities in the context of country shareholders.This bipolar orientation is the source of an underlyingtension that runs through this review as a counterpartto the attempts by the Bank’s 1991 strategy to reconcileconservation with economic development.

The Global Environment FacilityThe GEF was launched in October 1991 to provide anew financial mechanism to protect the global environ-ment. The GEF provides grants and concessional funds

to countries eligible for World Bank assistance for theadditional costs (“incremental costs”) of global envi-ronmental benefits. This support is provided to projectsand activities in four focal areas: climate change,biological diversity, international waters, and deple-tion of the ozone layer. Each of these areas is dividedinto operational programs, with specific guidanceprovided by the GEF. Approximately 16 percent of GEFallocations up to the end of June of 1999 ($2.36 billion)have been for projects primarily concerned with pro-tecting or sustainably managing forest ecosystems orresources—mostly within the biodiversity focal area.

Until 1994, the GEF operated under a pilot phase.This period was meant to “test innovative approachesand potentially valuable technologies with an eyetoward finding methods that could be replicated on alarger scale (Sjöberg 1999). On the ground, a largenumber of project proposals were developed to demon-strate the advantages of GEF in time for the U.N.Conference on Environment and Development(UNCED) in 1992, and to prepare a practical fundingmechanism for future international environmental con-ventions (the Convention on Biological Diversity, orCBD, and the Framework Convention on ClimateChange, or FCCC). As later sections of this report show,projects designed in the early years of the GEF werecharacterized by broad development objectives, a lackof performance indicators, and little cofinancing.

The GEF was restructured and refinanced into itscurrent form in 1994. Governance became the responsi-bility of the GEF Council. As the GEF is designated thefinancial mechanism for the CBD as well as the FCCC,the Council is guided by and accountable to the Partiesto the Conventions. Though located administratively inthe World Bank, the GEF Secretariat is an independententity whose CEO and chairman reports to the Council.Altogether, $5.5 billion has been provided or pledgedby donor countries for GEF activities through FY2000.6

The Operational Principles developed by the GEF inresponse to the directions provided by the Conventionsand Parties are listed in box 1.1.

The GEF implements its programs through theWorld Bank, United Nations Development Program(UNDP), and United Nations Environment Program(UNEP). These implementing agencies are responsiblefor developing projects with their client countries withGEF funding, and for implementing them throughexecuting agencies, including government bodies,NGOs, and regional project authorities. These agen-

3

R o l e o f t h e G E F i n t h e O E D F o r e s t S t r a t e g y R e v i e w

cies are also charged with integrating (mainstreaming)GEF objectives and activities within their own opera-tions and in their client countries’ activities. Eachagency has established its own GEF coordinating unit,which transmits all project proposals to the GEF.Project proposals are prepared in accordance with theagencies’ regular preparation and appraisal proce-dures, while ensuring that they also meet GEF criteria.

In theory, the implementing agencies divide theworkload in accordance with their comparative advan-tages: the Bank, in investment and the private sector;the UNDP, in technical assistance and capacity build-ing; and the UNEP, in catalyzing scientific and techni-cal support. In practice, these lines have becomeblurred, and most Bank GEF projects contain technicalassistance, capacity building, and scientific researchsupport in addition to physical investments. The Bankand UNDP administer 47 percent and 41 percent,respectively, of the projects overall. But the Bank’sshare of GEF financing was 61 percent. Bank projects

are generally twice the size of UNDP projects, averag-ing about $10 million each in GEF funding as of June1999 (GEF, forthcoming).

The 1991 Bank Forest StrategyThe main elements of the 1991 World Bank ForestStrategy (see Annex B for a summary) are fullyconsistent with GEF policies. The Bank’s strategyfocused on reducing the alarming rate of deforestation,especially in tropical moist forests, and the inadequateplanting of alternative resources, and highlighted theglobal environmental benefits of forest biodiversity andthe role of externalities. The GEF, which had justestablished its pilot stage, was specifically mentionedas a source of financing for these global benefits:

Through involvement in activities such as theGlobal Environment Facility (GEF), the Bankwill encourage the transfer of concessionalresources from developed countries to those

For purposes ofthe financialmechanisms forthe implementa-

BOX 1.1. OPERATIONAL PRINCIPLES FOR THE DEVELOPMENT AND IMPLEMENTATION OF THE GEFWORK PROGRAM

1tion of the Conventionon Biological Diversityand the United NationsFramework Conventionon Climate Change, theGEF will functionunder the guidance of,and be accountable to,the Conference of theParties (CoPs). For pur-poses of financingactivities in the focalarea of ozone layerdepletion, GEF opera-tional policies will beconsistent with those ofthe Montreal Protocolon Substances that

Deplete the Ozone Layerand its amendments.

2. The GEF will pro-vide new, and additional,grant and concessionalfunding to meet theagreed incremental costsof measures to achieveagreed global environ-mental benefits.

3. The GEF will en-sure the cost-effectivenessof its activities to maxi-mize global environmen-tal benefits.

4. The GEF will fundprojects that are countrydriven and based onnational prioritiesdesigned to supportsustainable development,as identified within the

context of nationalprograms.

5. The GEF willmaintain sufficient flex-ibility to respond tochanging circumstances,including evolving guid-ance of the Conference ofthe Parties and experi-ence gained from moni-toring and evaluationactivities.

6. GEF projects willprovide for full disclo-sure of all non-confiden-tial information.

7. GEF projects willprovide for consultationwith, and participationas appropriate of, thebeneficiaries andaffected groups of people.

8. GEF projectswill conform to the eli-gibility requirementsset forth in paragraph9 of the GEF Instru-ment.

9. In seeking tomaximize global envi-ronmental benefits, theGEF will emphasize itscatalytic role andleverage additionalfinancing from othersources.

10. The GEF willensure that its pro-grams and projects aremonitored and evalu-ated on a regular basis.

Source: GEF: 1996a, p.2.

4


developing countries that are taking effectivemeasures to safeguard world biodiversity, par-ticularly in tropical moist forests, because thesecountries contribute to the global welfare byforfeiting the development benefits that theycould derive from the exploitation of theirforests. In addition to its support for specificprojects, the GEF is designed to be a means oftesting new policy and program approaches topreservation. To accomplish this, it is harnessingthe experience of the United Nations Develop-ment Program (UNDP), the UNEP, and theBank. This combination is uniquely suited todeveloping broad intellectual leadership in ad-dressing environmental issues. As experience isgained through GEF support for forest conserva-tion, the types of activities and the nature offinancing requirements will be assessed.

The recently established Global EnvironmentFacility is a useful mechanism for testinginnovative financing approaches, and theexperience gained in its operation may needfollow-up initiatives.

In promoting conservation of natural forests andthe sustainable development of forest resources, theBank strategy promoted five principles that are highlycompatible with the GEF:

• A multisectoral approach• International cooperation• Policy reform and institutional strengthening• Resource expansion and intensification• Preservation of intact forest areas.

The policy also stressed a strong participatoryapproach that safeguarded the interests of forest dwell-ers, particularly indigenous peoples.

The Bank’s GEF Forest Portfolio and the 1991 ForestStrategy

Forty-four projects largely concerned with forestareas were reviewed for this study, including all 25biodiversity projects in the Operation Program forforest ecosystems,7 4 projects for mountain ecosystems,5 in arid and semi-arid ecosystems, 8 termed “short-term response measures,”8 and 2 projects from theClimate Change focal area that included a significant

component dealing with household energy (mainly treeplanting).9 Table 1.1 lists the projects included in thisreview in chronological order, and Annex D includes abrief description of their objectives.

As shown in figure 1.1, the number of Bank-initiated GEF forest projects has remained ratherconstant at seven projects each year over the past fouryears (excluding 1999).10 With the exception of theMiddle East and North Africa (MNA) Region, wherethere are no forestry projects, most Bank GEF forestprojects are found in Latin America and Africa, and therest are relatively evenly distributed among theremaining Regions (see figure 1.2).

Although direct forest projects in the Bank’s regularportfolio in the Africa (AFR) and East Asia and Pacific(EAP) Regions were reduced over the past decade,11 thisrelatively even distribution of GEF-funded projects,appears to have been critical to maintaining the Bank’spotential ability to carry out many of the mandates ofthe 1991 Forest Strategy. A number of task managersreported that the availability of GEF grants provided acontinuing entrée to the forest and environment sectorofficials. Without this instrument, the Bank’s ability toengage effectively in the policy dialogue called for inthe 1991 Forest Strategy would have been reducedsignificantly, at least in the Africa Region.12

Since it is likely that the reduction in Bank directforest project lending to these two Regions is related to the1991 ban on Bank financing for tropical forestry timberoperations, it is useful to examine the pattern of GEF-

Number

0

1

2

3

4

5

6

78

1991 92 93 94 95 96 97 98 99

FIGURE 1.1. BANK GEF PROJECTS BY DATE

Note: There was only one project with forest components for1999 at the time the project desk review was completed; theCentral Asia project was the only one that had beenapproved by the World Bank Board of Directors.

5

TABLE 1.1. WORLD BANK–IMPLEMENTED GEF PROJECTS (US$ MILLION)NGO/

Board Host Found- Total Country Project name date GEF WB/IDA country Bilateral ation cost

Poland Forest Biodiversity Protection 1991 4.50 0.00 1.40 0.30 0.00 6.20

Belarus Biodiversity Protection 1992 1.00 0.00 0.25 0.00 0.00 1.25

Bhutan Trust Fund for Environmental Conservation 1992 10.00 0.00 0.17 9.41 1.00 20.59

Bolivia Biodiversity Conservation 1992 4.50 0.00 0.00 3.90 0.00 8.40

Congo Wildlands Protection and Management 1992 10.10 0.00 1.00 2.60 0.20 13.90

Mexico Protected Areas Program 1992 25.00 0.00 0.00 0.00 0.00 25.00

Czech Biodiversity Protection 1993 2.00 0.00 0.20 0.55 0.00 2.75 Republic

Slovak Biodiversity Protection 1993 2.30 0.00 0.06 0.50 0.31 3.17 Republic

Turkey In-Situ Conservation of Genetic Biodiversity 1993 5.10 0.00 0.60 0.00 0.00 5.70

Ukraine Transcarpathian Biodiversity Protection 1993 0.50 0.00 0.07 0.00 0.01 0.58

Ecuador Biodiversity Protection 1994 7.20 0.00 1.60 0.00 0.00 8.80

Indonesia Biodiversity Collections 1994 7.20 0.00 4.20 0.00 0.00 11.40

Lao PDR Wildlife and Protected Areas Conservation 1994 5.00 8.70 1.00 5.60 0.00 20.30

Philippines Conservation of Priority Protected Areas 1994 20.00 0.00 2.86 0.00 0.00 22.86

Africa West Africa Pilot Community- (Burkina Based Natural Resource and Faso & Côte Wildlife Management 1995 7.00 0.00 1.79 4.40 0.00 13.19 d’Ivoire)

Cameroon Biodiversity Conservation and Management 1995 5.96 0.00 1.00 5.43 0.00 12.39

China Nature Reserves Management 1995 17.80 0.00 5.70 0.00 0.00 23.50

Mali Household Energy 1995 2.50 0.00 1.20 7.40 0.00 11.10

Mauritius Biodiversity Restoration 1995 1.20 0.00 0.20 0.00 0.20 1.60

Peru National Trust Fund for Protected Areas 1995 5.00 0.00 0.00 1.50 1.36 7.86

Uganda Bwindi Impenetrable National Park and Mgahinga Gorilla National Park Conservation 1995 $4.00 0.00 0.00 0.89 1.42 6.31

financed projects in countries with tropical moist forests.The 1991 Forest Strategy identified 20 countries withsignificant tropical moist forests. These countries, espe-cially the large, “mega-diversity” countries, containdisproportionately large shares of the world’s biologicaldiversity and are urgently in need of increased protection.The review of regular Bank forest projects reveals thatwhile only 3 of these countries received direct forestproject lending, 16 tropical moist forest countries havebeen addressed by Bank-implemented GEF projects.13 The

GEF portfolio thus played a significant role in fullfillingthe mandate of the 1991 Forest Strategy to fill gaps incoverage—especially in providing assistance to countriesrich in tropical moist forests.

The adequacy of these projects in addressing thechallenges posed by the tropical most forest countries,however, is a critically important, separate question.GEF projects are relatively small in comparison withthe millions of hectares of tropical moist forest in needof improved management and conservation. While tiny


6


TABLE 1.1. WORLD BANK-IMPLEMENTED GEF PROJECTS (US$ MILLION) (CONTINUED)NGO/

Board Host Found- Total Country Project name date GEF WB/IDA country Bilateral ation cost

Brazil National Biodiversity Project 1996 10.00 0.00 10.00 0.00 0.00 20.00

Brazil Brazilian Biodiversity Fund 1996 20.00 0.00 0.00 0.00 5.00 25.00

India India Ecodevelopment 1996 20.00 28.00 19.00 0.00 0.00 67.00

Indonesia Kerinci Seblat Integrated Conservation and Development 1996 15.00 19.10 13.00 0.00 0.00 47.10

Kenya Tana River National Primate Reserve 1996 6.20 0.00 0.94 0.00 0.00 7.14

Madagascar Environment Program Support 1996 20.80 30.00 31.00 68.59 9.25 159.64

Mozambique Transfrontier Conservation Areas Pilot and Institutional Strengthening 1996 5.00 0.00 0.50 2.60 0.00 8.10

Russian Biodiversity Conservation 1996 20.10 0.00 4.80 1.10 0.00 26.00 Federation

Africa Central Africa Region: Regional Environment and Information Management Project (REIMP) 1997 4.35 0.00 2.91 12.78 0.00 20.04

Argentina Biodiversity Conservation 1997 10.10 0.00 11.80 0.00 0.00 21.90

Honduras Honduras Biodiversity Project 1997 7.00 0.00 2.50 0.00 0.00 9.50

Nicaragua Atlantic Biodiversity Corridor 1997 7.43 3.00 2.67 8.70 0.00 21.80

Panama Atlantic Biological Corridor 1997 8.40 2.30 2.10 0.00 0.00 12.80

Senegal Sustainable Participatory Energy Management 1997 4.70 5.20 1.20 8.80 0.00 19.90

Sri Lanka Conservation and Sustainable Use of Medicinal Plants 1997 4.60 0.00 0.50 0.00 0.00 5.10

Bangladesh Biodiversity Conservation in the Sundarbans Reserved Forest 1998 12.20 0.00 10.00 53.30 0.00 75.50

Costa Rica Biodiversity Resources Development 1998 7.28 0.00 1.00 12.00 0.00 20.28

El Salvador Promotion of Biodiversity Conservation within Coffee Landscapes 1998 0.75 1.00 0.22 0.00 1.86 3.84

Ghana Natural Resource Management 1998 8.70 9.30 2.20 12.00 0.30 32.50

South Africa Cape Peninsula Biodiversity Conservation Project 1998 12.30 0.00 69.90 0.00 8.00 90.20

Uganda Protected Areas Management and Sustainable Use 1998 2.00 12.37 5.92 0.00 0.00 20.29

Zimbabwe Biodiversity Conservation in Southeast Zimbabwe 1998 4.80 62.50 7.50 0.00 0.00 74.80

Central Asia Central Asia Transboundary Biodiversity Project 1999 10.49 0.00 2.00 1.50 0.00 13.99

Total 370.06 181.47 224.96 223.85 28.91 1,029.26

7


FIGURE 1.2. FUNDING BY REGION, GEF PERCENTAGES

AFR 27%

EAP 18%

LCR 30%

SAR 13%

ECA 12%

AFR = AfricaEAP = East Asia and the PacificECA = Europe and Central AsiaLCR = Latin America and the CaribbeanSAR = South Asia

in comparison with the potential need, it is noteworthythat the average total cost of projects in moist tropicalforests is $29 million, in comparison to average projectcosts of $18 million in other countries. The GEFcontribution to this total is also correspondingly higher,as shown in table 1.2.

The GEF portfolio has also provided an importantentrée for the Bank into a forest dialogue in the ECARegion. Six of the eight ECA projects studied wereimplemented in the first three years after GEF’s cre-ation (1991–94). With the exception of Turkey, theseBank GEF projects marked the initial contacts betweenthe World Bank and these countries in transition. TheWorld Bank projects in Belarus and Ukraine becamethe first in those countries and among the first in Polandand the Czech and Slovak Republics. Even though therewas no Bank lending for these projects,14 by imple-menting GEF projects, the Bank established a presencein the Region and began a regional partnership thatcontinues to grow today.15

TABLE 1.2. FINANCING FOR TROPICAL MOIST FOREST PROJECTS ($ MILLION)Average Average

GEF NGO/ Total total cost GEF costTropical moist allo- Host foun- Total projects per perforest statusa cation WB/IDA nation Bilateral dation cost (no.) project project

Not tropical moist forest $188 $104 $137 $125 $13 $567 31 $18.3 $6.1Tropical moist forest $182 $77 $88 $99 $16 $463 16 $28.9 $11.4Total $370 $182 $225 $224 $29 $1,029 47b $21.9 $7.9

a. As defined in the1991 Forest Strategy. Most figures are rounded to the nearest million.b. The amount is greater than the scope of the review (44) because there are 3 GEF-funded projects implemented by the UNDP, whichare located in the threatened moist forest countries as identified in the 1991 Forest Strategy. The countries are Malaysia, Colombia,and Venezuela.

9

22Relevance of theGEF Portfolio

Relevance to Global Biodiversity ObjectivesThe conservation of forest biodiversity is a major shared objective of the 1991 Forest

Strategy and the GEF. The traditional method for preserving forest biodiversity is theprotection of forest ecosystems through the establishment and management of protected areas

(PAs) by national forest or environment departments. International goals and norms for PA

coverage and classification have been the subject of continuous development in conservation

networks. Nongovernmental organizations have takenleading roles in developing approaches to PA manage-ment in both international and national fora, whichincreasingly recognize the rights and skills of localindigenous peoples and the importance of stakeholderparticipation. NGOs have also been instrumental inhelping map the critical ecosystems for protection.While there is widespread agreement that local people’ssupport is needed for effective biodiversity conserva-tion, the magnitude of rights to be recognized and theresponsibility of government for management andenforcement are contested—sometimes hotly. Recentattention has also focused on the need to protect largerregional ecosystems and connecting corridors. Both ofthese initiatives are supported to varying degrees in the1991 Forest Strategy and the Convention on BiologicalDiversity. At the GEF project level, this focus is beingaddressed by the design of projects emphasizingmulticountry cooperation and biological corridorsbeyond national boundaries (see box 2.1).1

Given this widespread attention to PAs, it is notsurprising that 75 percent2 of the portfolio focuses onexpanding PA area and/or improving PA manage-ment.3 Other objectives identified in project documents

and shared by a number of projects include improvingpolicy and coordination with other public and privatesectors, providing income alternatives and sustainablemeans for poverty reduction linked to local communityconservation, increasing the financial sustainability ofpoorly funded conservation activities, and increasingbiodiversity or forest supply in non-PA areas such ascoffee plantations, linking corridors, or energywoodlots.4 Except for the two energy projects, theoverall goal of these projects is improved biodiversityconservation.

The relevance of these project objectives to conserv-ing globally important biodiversity is generally widelyaccepted. All of the task managers and others inter-

TABLE 2.1. PRIMARY PROJECT OBJECTIVES OFBANK GEF BIODIVERSITY PROJECTS

PercentageObjective of portfolio

Expanding area and/or improving 57 PA managementEnvironmental planning (at any level) 23Policy/legal reform 7Increasing and/or documenting 14 biodiversity and/or forest supply

10


viewed or responding to the questionnaire rated therelevance of their projects to the GEF’s globalbiodiversity objectives very highly. This may be, in part,because the objectives as formulated in the projects andpolicies are very broad. The objectives are typicallydeveloped to meet GEF criteria directly, thereby ensur-ing their relevance from the perspective of the GEFCouncil and Secretariat. From this perspective, however,

the projects’ relevance to global biodiversity must bebalanced by their relevance to country concerns. Aproject must have significant global biodiversity benefitsand be “country driven” to be eligible for GEF funding.One of the main strategic considerations guiding GEF-financed activities is the “development of a portfolio thatencompasses representative ecosystems of global signifi-cance” (GEF 1996a, p. 14).

BOX 2.1. GEF AND THE MESOAMERICAN BIOLOGICAL CORRIDOR PROGRAM

The Meso-americanBiological

Corridor Program(MBC) emerged in thelate 1980s as a multi-country, ecosystem-based approach toconservation and devel-opment. Internationalorganizations and envi-ronmental NGOs sup-ported the planningand design of conserva-tion programs through-out the contiguousstretch of forests andreef ecosystems.1 Whilethe program originallyfocused on protectedarea management anddiminishing habitatfragmentation fromMexico to Colombia,the scope has expandedto include poverty alle-viation, productive

uses, and improvedgovernance.

These organizations,along with national gov-ernments, have partneredto foster interregionalcooperation, informationsharing, and increasedparticipation of indig-enous groups and peas-ants living aroundprotected areas.Examples of biodiversityconservation in produc-tive landscapes includecorn and wheat produc-tion combined with pineforest management inGuatemala, biodiversity-friendly coffee planta-tions in El Salvador, andorganic cocoa growing inCosta Rica.

As the fourth-largestfunder of biodiversity inLatin America, the GEFhas supported this initia-

tive with three Bank-implemented projectsthat focus on improvingprotected areas of globalsignificance in Hondu-ras, Nicaragua, andPanama.2

Project developmentobjectives are:

• Improved institu-tional nationalcapacity for parksmanagement

• Better and moreparticipatory protec-tion of selectedprotected areas

• Support for naturalresource managementactivities in bufferareas

• Stronger nationalbiological monitoringcapacity

• Development and dis-semination of tools

for integrating thebiological corridorconcept intosectoral strategies.

Related projectsalso funded by GEFinclude a medium-sizegrant to coffee-growerassociations to adapttheir practices to makeshade coffee morebiodiversity-friendly, aregular-size projectmaking an inventoryof biodiversityresources in CostaRica, and two recentlyapproved projects: onefor sustainable hillsidemanagement in south-ern Mexico, and thesecond to develop mar-kets for environmentalservices in Costa Rica.

Note: Project information extracted from GEF Project Documents for Panama (May 1998), Nicaragua (June 1997), and Honduras(September 1997); MBC Newsletter No. 99-1, April 1999; and Status of the Global Vision and National Perspectives on theMesoamerican Biological Corridor, Background Documentation No. 2, International NGO and Donors Conference for the MBC,Paris, October 29-30, 1998.1. Some of the international development organizations, development banks, and NGOs that have participated at different stagesof the MBC program are the FAO, IBRD, IFAD, USAID, GTZ, Danida, IDB, UNDP, GEF, governments of Norway, Japan, andSweden, IICA, WWF, TNC, CI, and ProPeten. A regional office (RUTA-Regional Unit of Technical Assistance) is currently fundedby various organizations to coordinate donor efforts and multicountry dialogue to implement sustainable development programs.2. These three projects (Honduras Biodiversity Project 1997, Nicaragua Atlantic Biodiversity Corridor 1997, and Panama AtlanticBiological Corridor Project 1997) are implemented by the Bank; the GEF also funds other MBC projects through the UNDP.

11

R e l e v a n c e o f t h e G E F P o r t f o l i o

Biological diversity, however defined, is not dis-tributed equitably. Furthermore, there is no agreed setof criteria on how to measure biological diversity. Thishas led to continuing debate on GEF’s selection ofecosystems and its prioritization of projects based onbalancing global biodiversity criteria with countrypriorities by favoring “ecosystem representation.” Fur-thermore, parties to the Convention on BiologicalDiversity have not agreed on any priority-settingexercise; all countries want, and are eligible to have,access to financial resources from GEF. Some regardthis issue as more political than technical,5 and thisdebate continues even within the NGO community:

Some NGOs have emphasized the need toprioritize ecosystems at a global, rather thanjust a national, level. Global prioritizationwould promote the protection of biodiversity“hot spots” and “megadiversity centers” withhigh endemism, species richness and levels ofthreat or vulnerability. Other NGOs questionthe ability to define globally representativeecosystems and are concerned that the currentGEF approach may focus too much on globalpriorities rather than national ones (IUCN1997).

As part of the recommendations of the study GEF’sOverall Performance (Porter and others 1998), the GEFCouncil was asked to authorize the Secretariat and theimplementing agencies, in consultation with the CBDSecretariat, “to identify the ecosystems and ecosystemstypes within each OP in biodiversity that should be thehighest priorities for GEF in terms of a set of agreedcriteria” (Porter and others 1998, p. 10). However, thesecond progress report (GEF 1999f) addressing theactions to implement the recommendations from theabove-mentioned report states that the “responsibilityfor determining priorities in the biodiversity focal arearests with the CoP of the CBD. A formal exercise toidentify priority ecosystems is not consistent with GEF’scountry-driven approach. This recommendation isclosed” (GEF 1999f). Given the limited resourcesdevoted to biodiversity conservation, a lack of geo-graphic or level-of-threat priority-setting greatlyreduces the impact of funding on biologically richareas with great needs.

An examination of the global biodiversity justifica-tions cited in project appraisal reports for the 44 forest

projects reveals that task managers use a variety ofbiodiversity criteria in justifying their projects tomanagement. Analysis indicates no significant differ-ence by Region or by year of project approval.

From the perspective of some biologists and conser-vationists, this appeal to different criteria for differentcountries, and the failure to develop a prioritized list ofecosystems and criteria, lessens the impact of the GEFportfolio on global biodiversity conservation (IUCN1997). However, from a pragmatic, country stake-holder perspective, this willingness to accept a varietyof criteria is an honest reflection of the lack ofconsensus on biodiversity prioritization and an essen-tial recognition of the importance of increasing globalsupport, equity, and ownership for the overall objectiveof biodiversity conservation. As other evaluations havealso concluded, there is room for improving thebiological criteria and their application to projectselection, while continuing to recognize the need forglobal buy-in and equity in fund distribution (Porterand others 1998). While the debate on this issuecontinues, NGOs seem to have reconciled themselvesto accepting both points of view as valid and coexist-ent, even if not completely reconcilable.

Relevance to the World Bank and the ForestStrategyFrom the perspective of the World Bank, these projectobjectives are also considered highly compatible withthe 1991 Forest Strategy.6 The provision of grant fundsfor conservation allowed the Bank to implement the1991 strategy mandate for conservation of tropicalmoist forests at a time when (it is generally agreed) fewcountries would borrow for biodiversity conservation,and when the strategy specifically prohibited invest-ments in logging in primary tropical moist forests.These objectives are also relevant to Bank goals ofpromoting environmental sustainability and localcapacity building.

From the Bank’s perspective, any underlying ten-sions of relevance spring primarily from its over-riding

TABLE 2.2. CRITERIA CITED FOR GLOBALBIODIVERSITY VALUESCriterion Percentage

Bio-geographic importance and threats 61Endemism 50Representative ecosystems 35Flagship species 23

12


mandate: poverty reduction.7 Approximately a third ofthe 44 projects included poverty reduction objectives asa justification. PAs are customarily located in remoteareas (by definition, these are usually the only areaswith relatively intact ecosystems), and the local peopletend to be disproportionately poor. They are alsodisproportionately tribal, indigenous peoples who aremarginalized within mainstream country economiesand societies and vulnerable to centralized decision-making by government officials or large private sectorcompanies. Thus, projects that seek to combine povertyreduction objectives with forest biodiversity conserva-tion or rural tree growing frequently work in projectareas that are highly appropriate for such activities.

But PAs are also characterized by restrictions inforest resource use. Indigenous peoples’ livelihoodshave generally depended on selective use of forestresources—fruits, nuts, edible tubers, wildlife, or small-scale commercial collection and sale of honey, mush-rooms, fibers, medicinal plants, or timber. Even themost progressive PA projects, which incorporate indig-enous rights and resource use, face (or will likely face)the need to place limits on resource extraction in orderto maintain biodiversity values. As Brandon (1997)points out, “as long as the opportunity exists toincrease income, people are willing to do so—and withincreased income comes increased consumption. Inmany cases, having people live in areas such as bufferzones, where the uses are restricted, is equivalent tocondemning them to lives of poverty.” The potentialtradeoffs among conservation, forest use, and povertyreduction are a source of continuing debate in each ofthese projects, as well as in relation to the Bank’spolicy.

To date, the Bank and the GEF have followed abiologically conservative course. Both endeavor tomeet poverty reduction objectives through the genera-tion of alternative income sources and, presumably,low-impact forest uses such as ecotourism and non-timber forest products. But these are relatively smallcomponents of overall investment, which fuels alongstanding, and constantly changing, debate fromthree sides. The advocates of indigenous peoples’ rightsargue for increased delegation of resource control anduse rights—usually with the somewhat naïve assump-tion that this delegation will always result in increasedconservation values. The advocates of the privatesector argue for increased investment in sustainableforest management to extend conservation into greater

forest areas and expand the economy. Other conserva-tion advocates argue for decreasing the use of the forestby both indigenous peoples and private commercialinterests as the best means of maintaining biologicaldiversity. The Bank’s current strategy, like that of theGEF,8 attempts an acceptable compromise by avoidingthese more controversial issues surrounding the sustain-able use of forest resource that underlie reconcilingconservation and poverty reduction in many of theworld’s forests.

Relevance to Country and Bank DevelopmentPrioritiesBoth Bank task managers and country officials thinkthat the World Bank and national authorities placerelatively lower priority on the objectives of GEFprojects than Bank loans and investments. Typicalcomments include, “The government is happy to take agrant for biodiversity, but would not consider taking aloan”; “The line ministries are enthusiastic about theproject, but the finance ministry places a lower priorityon environmental projects;” and “The Bank countrydirector is not as interested in GEF projects as in hisregular portfolio of economic investments.”

One test for the perceived relevance of the GEFportfolio to the Bank, and indirectly to the country, isthe treatment of environmental objectives in the Coun-try Assistance Strategy (CAS). In the regular Bankforest portfolio countries, only 22 percent of forestproject countries and 33 percent of threat countries hadsatisfactory ratings in terms of mentioning environ-mental issues in a meaningful way. The 1997 study ofGEF overall performance also found that half of the tenCASs examined in countries with GEF projects made nomention of GEF or global biodiversity conservation(GEF 1997a). While recent guidelines require inclusionof environmental issues in CAS preparation, the qualityof analysis and commitment in the context of globalenvironmental priorities indicates a lower prioritystatus compared with economic objectives.

The situation is similar at the country level. Globalenvironment is recognized as important, but secondary.Of the 121 countries that have received biodiversityEnabling Activities Grants, 28 have completed theirNational Biodiversity Strategic Action Plans (NSBAP)and 20 had drafted them as of March 31, 1999.9

Although these plans are mandated by the signatoriesto the Biodiversity Convention, many countries did nottake them up until strongly encouraged to do so by the

13

R e l e v a n c e o f t h e G E F P o r t f o l i o

Bank or the UNDP and given funds for their comple-tion.10 A recent GEF study found mixed results fromthese Enabling Activities. Key findings from Regionalworkshops identified constraints of inadequate politicalsupport, uncertainty about type and level of outputrequired, uncertainty about how to prioritize strategiesand actions, problems of ownership, and activitiesbeing driven by donors (Wells and others 1999a).

It is noteworthy, however, that the efforts under-taken by the GEF Secretariat; concerned Bank andcountry officials; and, perhaps most important, theactive NGO conservation community have resulted inmeasurable improvements in the perceived relevance offorest biodiversity conservation and sustainable forestresources. None of the early Bank GEF projectsmentioned the CAS in its design documents. Now overfour-fifths make reasonably prominent mention of theprojects’ linkage to the CAS. Recent Secretariat projectreview criteria (core commitments, linkages to imple-menting agencies’ work programs, cooperation, and soforth) have voiced the need to include this information.Although this information is not required in project

TABLE 2.4. GEF FOREST FUNDING FOR IDA AND NON-IDA COUNTRIES ($ MILLION)Average Average

GEF NGO/ Total total cost GEF costallo- Host found- Total projects per per

IDA eligibility cation WB/IDA nation Bilateral ation cost (no.) project project

Non-IDA 185 23 124 16 17 364 25 15 7IDA eligible 186 160 101 208 14 669 22 30 8Total 371 183 225 224 31 1,033 47 22 8

preparation, that it is highlighted in the review criteriais an indicator of increased attention. While advocatesof increased forest conservation are disappointed by thepriority placed on global environmental conservation,a comparison of the prevailing attitudes and practicesin 1990 and 1999 at both the country and the Banklevel indicate substantial progress. This was borne outby the OED country studies.

An analysis of funding provided by GEF to Interna-tional Development Association (IDA) countries (thepoorer countries of the world) and non-IDA countriesshows an equal allocation of funds to both (see table2.4). However, because the World Bank and bilateraldonors considerably increased their cofinancing to thepoorer countries, these countries received double theamount of GEF-leveraged financing for forestbiodiversity and climate change projects.

It should not be disappointing, perhaps, that globalenvironmental concerns play a lesser role in nationaldevelopment priorities. The rationale for the creationof the GEF was to provide a dedicated fundingmechanism to finance global costs that, by definition,are not national development priorities. In the attemptto integrate global environmental priorities intonational development priorities, it is unrealistic toassume that countries can absorb the long-term costs ofglobal conservation benefits when those costs are toohigh. These include poorer countries as well as forest-rich countries such as Brazil and Indonesia, where theopportunity costs of extensive conservation are high.11

Integration of global environmental objectives withinthe development framework, in ways that establish therelevance of biodiversity conservation and land degra-dation to national agendas, and enable an on-goingdialogue over the value and means for funding theirglobal benefits, may be all that is possible at this stage.

TABLE 2.3. PROJECTS WITH EXPLICIT LINKAGETO CASYear(s) Number

1991-1993 0 of 101994 1 of 51995 4 of 71996 3 of 71997 5 of 71998 5 of 71999 1 of 1Total 19 of 44

Note: These projects are, in chronological order: Indonesia,China, West Africa, Mali, Senegal, India, Indonesia, Madagas-car, Argentina, Honduras, Nicaragua, Sri Lanka, Zimbabwe,Uganda, South Africa, El Salvador, Ghana, and Central AsiaRegion.

15

33

T

Effectiveness of GEF Projects

he Measurement ProblemIt is not possible to measure the effectiveness of the Bank’s GEF portfolio in an

objective, quantitatively reliable, and valid way. Although there are numerous

candidates for core indicators, there is no agreed set of indicators to measure the global objectives

of biodiversity conservation or sustainable forest management—or any concurrent poverty

reduction results. The criteria for developing these indicators, as noted earlier, are still subject to

debate. Despite marked improvements in recentprojects, not even project-level indicators have beendefined clearly and pragmatically enough to promptsystematic data collection at the project level. In short,the exact results sought, and the means to collect them,have yet to be developed and implemented by GEF, theBank, or recipient countries.

This study extracted, reviewed, and ranked clarityand quality of indicators in project appraisal documents.1

The basis for the ranking was the same as that used inevaluation of the non-GEF Bank forest sector portfolio,using the following scale for clarity and quality: 1 =highly satisfactory, 2 = satisfactory, 3 = marginallysatisfactory, and 4 = unsatisfactory (Barnes 1999).

The study found that 15 projects had indicatorsthat were reasonably clear, specific, and potentiallymeasurable—satisfactory or better. Thirteen projectswere marginally satisfactory, 4 were unsatisfactory,and 12 were highly satisfactory. However, there was noclear indication that these indicators were, or wouldbe, collected and used by project personnel in the field.It was also unclear to what extent project personnelparticipated in developing the indicators—which wasobviously related to the extent to which they might

collect them. No mechanism was identified in collatingthese indicators across projects so they could beaggregated at a level that could be used to measure theportfolio’s actual results. A detailed attempt by thisreview to identify two potential indicators of areaconserved and people directly benefited—gross andimperfect as these indicators are—yielded very unsatis-factory results (see Annex E).

On the positive side, there was evidence of signifi-cant improvement over time (see box 3.1). Support forinternational biodiversity monitoring and mappingactivities continues to produce databases of increasingdetail and usefulness.2 The current requirement thatproject developers prepare logical frameworks thatidentify indicators has led to some increase in clarity.

These findings are consistent with previous Bankand GEF evaluations, annual GEF reviews, and NGOcritiques. Despite considerable efforts within the Bankand the GEF, project monitoring systems are still weakand do not allow measurement of results.

Project Components and Threat AnalysisGiven the paucity of systematic monitoring data onproject results, as well as the early stage of many of the

16


BOX 3.1. EVOLUTION OF PROJECT DESIGN INDICATORS—TWO EXAMPLES

(1997) Goals/Development Objectives: 1) Develop-ment of a viable participatory management systemfor medicinal plants operating in the wild. 2)Expansion of ex-situ cultivation and conservation ofmedicinal plants. 3) Enhancement of knowledge ofmedicinal plants and capacity development fortheir management and sustainable use.

Goal Performance Indicators: Number of villageaction plans being implemented where harvest ofmedicinal plants from the wild is within permissiblelimits. 2a) Increase in the number of medicinalplants for which cost-effective propagation and cul-tivation techniques are available. b) Increase in thenumber and diversity of medicinal plants propa-gated and grown in government nurseries. c)Increase in the number of farmers using propaga-tion and agronomic information generated throughthe project. 3a) Development of guidelines andimplementation of protection measures for tradi-tional knowledge and plant resources related to theproject. b) New recommendations for strengtheninglegislation and regulations related to conservationand use of medicinal plants. c) National databasedeveloped. d) Increase in number of schools andstudents exposed to education programs. e) Increasein number of persons with skills related to medici-nal plant conservation and use.

(1993) Goals/Development Objectives: The projectobjective is to protect and strengthen forest andrelated ecosystem biodiversity in three zones:Krkonose (alpine meadows), Plava (lowland forestsand wetlands), and Sumava (mountain forests) bysupporting transboundary nature conservationapproaches and developing funding mechanisms forthe financial sustainability of the three protectedzones.

Goal Performance Indicators: No formal indicatorswere developed for monitoring and evaluation pur-poses. An evaluation of the project objectives andan attempt to quantify project results will be carriedout at project completion.

projects in the portfolio, an evaluation of projecteffectiveness had to be limited to examining the qualityof the logic and empirical analyses that served as thebasis of project design. Guidance from GEF Opera-tional Programs has directed designers of forestbiodiversity conservation projects to base projectactivities on an analysis of threats to the ecosystems tobe conserved. Project effectiveness and efficiency arepresumed to result from thorough threat analyses, andfrom the selection of project investments and activitiesthat have the greatest likelihood of containing orreversing these threats.

Projects vary greatly in the extent of their analysisof threats to biodiversity or their means of reaching

other project objectives, such as sustainable povertyreduction and capacity building. While most projectsidentify some kinds of threats, only a few indicate thatthey are based on systematic investigations. Theserecords are often found (or lost) deep in project files,where they are relatively inaccessible to implementers.An example of a project that has carried out systematicthreat analysis is the Central Asian Project, approvedby the GEF Council in June 1999. The project addressesunsustainable fuelwood collection, desertification, anddeforestation by including a habitat restoration andreforestation component.3 In addition, it provides for aphotovoltaic energy supply to meet energy needswithout continuing deforestation, as well as investment

17

E f f e c t i v e n e s s o f G E F P r o j e c t s

in reforestation of degraded forestlands outside of thereserves to reduce pressure on PAs. This project isrepresentative of recent project designs, which moredirectly link project design and activities to the threatsthey are intended to counteract (GEF 1997b).

The threats to biodiversity most frequently identi-fied in project design documents include the following:

• Conversion to agriculture/settlement (Brazil,Madagascar, Panama)

• Mining or oil exploration (Congo, Indonesia-Kerinci, Uganda)

• Unsustainable use of non-timber products/fuelwood (Central Asia, Sri Lanka)

• Overgrazing (India, Kenya, Peru)• Unmanaged tourism impacts (Poland, Czech and

Slovak Republics)• Large infrastructure/roads/canals/rail (India,

Indonesia)• Exotic species colonization (Mauritius)• Illegal or uncontrolled logging (Ghana, Indonesia)• Illegal or uncontrolled hunting/poaching/fishing

(Argentina, Cameroon, China)• Uncontrolled fire (Uganda-Bwindi).

As this list illustrates, identified threats originatefrom local people’s actions, public sector investments,and private or public sector industries. There iswidespread agreement that measures to address thesethreats need to incorporate the following:

• Improved PA management and protection at thelocal level

• Changes in the behavior of local people that maybe causing damage

• Planning and containment of public or privatesector activities that pose a threat to biodiversity

• Policy reform to structure incentives towardbetter conservation

• Increased knowledge of the ecosystem and socio-economic dynamics that affect sustainability.

The recognition of the pivotal role of local indig-enous peoples in safeguarding the forest resources intheir area, together with increased appreciation for thevalue of local participation and indigenous rights, hasled to the adoption of an increasing number of PAmanagement projects that include local economicdevelopment and/or some degree of co-management.

Considered highly innovative a decade ago, theseprojects were pioneered by international NGOs. Withstrong support from the GEF, they have now become thenorm in PA management. All 34 projects dealing withPAs in the Bank GEF portfolio incorporate elements ofthese Integrated Conservation and DevelopmentProjects (ICDPs).

These projects are increasingly attractive to localgovernments and donors because they not only addressthe threats posed by local people to forest biodiversity,but also provide a potential mechanism to compensatelocal communities for the loss of livelihood that istypically associated with restrictions on resource useand investment in PAs. A recent review of ICDPs inIndonesia:

Why are ICDPs so popular? First, becausethey offer a simple and intuitively appealingalternative to earlier, unsuccessful approachesto PA management which have come to beregarded as politically infeasible. Second,because ICDPs offer the attractive prospect ofcontributing to three of the most sought-aftergoals on the sustainable development agenda:more effective biodiversity conservation,increased local community participation inconservation and development, and economicdevelopment for the rural poor. These featuresseem virtually irresistible to many NGOs,government departments, and developmentagencies (Wells and others 1999b).

The potential effectiveness of the ICDP approach iswidely acknowledged.4 In practice, their ability toconserve biodiversity has been challenged in somelocations:

Even at this comparatively early stage ofimplementation, it seems clear that most of theattempts to enhance biodiversity conservationin Indonesia through ICDPs are unconvincingand unlikely to be successful under currentconditions (Wells and others 1999b).

The authors lay the blame for this failure not on theICDP concept, but on a “failure to address the realthreats and capacity constraints that conservationprojects face in the field.” They point to the need toaddress regional threats arising from inadequate plan-

18


ning, enforcement, and policy coordination with othersectors, as well as inadequacies in PA managementcapabilities.

Other analyses of Bank ICDPs have stressed thatthis approach should only be used where “one of theprimary pressures on biodiversity is from local peopleliving in the immediate vicinity of the protected area”(Sanjayan, Shen, and Jansen 1997, p. 3), rather thanfrom inappropriate policies or outside threats. Most ofthe task managers and independent experts interviewedagree that linking conservation to integrated localcommunity development is not sufficient in itself toaddress all major threats to biodiversity. They arguethat this is the reason most of the GEF projects with PAmanagement also include substantive components toaddress capacity building, regional (especiallytransboundary) coordination, policy reform, and finan-cial mechanisms for sustainable financing. Even in thecase of the Indonesia project, the Bank task managerand ecologist argues that while the project was initiallyslow to activate these necessary coordination andcapacity building components, it has now become asuccess story.5

An analysis of the distribution of portfolio invest-ments by type of component reveals that the majorityof investment resources have been devoted to activitiesclassified as physical (55 percent) and project manage-ment (17 percent). Activities classified as institutionbuilding (18 percent) and policy (6 percent) take upmost of the rest of project investments (see figure 3.1).While these gross classifications are inconsistentlycoded by various task managers these figures indicate

that most funding is used for field activities, withrelatively less attention given to larger intersectoralpolicy issues. This was particularly true in the AfricaRegion, where relatively larger percentages of invest-ments went to physical infrastructure and projectmanagement than in Asia or Latin America.

This review used questionnaires to get a sense ofthe effectiveness of the various components from theperspective of Bank task managers and independentobservers. As the sample was very small,6 no statisticalreliability can be claimed for the results (presented inAnnex F). The overall direction of the answers wouldappear to be relatively valid, however, as variance onmost responses was low, and the directions of theconclusions were confirmed by interviews with avariety of respondents. Along with the results obtainedfrom the OED country study, these general conclusionshave been used as a basis for assessing effectiveness.

Most Bank staff report that the technical, planning,and community activities of PA management and bufferzone/community development have been relativelyeffective. Although many projects record the normalproblems with procurement and counterpart funding,the portfolio has performed reasonably well in “physi-cal” components. Country studies from Brazil, China,and Costa Rica confirm these results, although experi-ence of Cameroon and India shows that problems existin these areas. Overall, staff assessments indicatereasonably good progress in addressing the forestzoning and planning thrusts of the 1991 forest strategy.

Likewise, Bank staff and outside observers tend toaffirm the effectiveness of staff training, NGO collabo-ration, and community organization. This conclusionis qualified, however, by a generally lower assessmentof the effectiveness of capacity building for governmentforest institutions. Task managers consider projects tohave done relatively well with project management,NGO and community collaboration, and staff training,but they are less sanguine about their success instrengthening forest institutions. The successful estab-lishment of separate project management units under-scores the inability to effectively work within, andadequately strengthen, the existing forest institutionsfor biodiversity conservation.

The Project Completion Report for the BoliviaBiodiversity Conservation project illustrates the lack ofinstitutional sustainability that can accompany sepa-rate project management entities without adequategovernment ownership. The project was designed and

FIGURE 3.1. TOTAL FINANCIAL RESOURCES BYALLOCATED CATEGORY

$ million

0

200

400

600

Projectmanagement

Physical Institutionbuilding

Policy Other

19


approved by an outgoing government, but imple-mented by a new government whose structure andgoals were not consistent with the project. The reportpoints out that “the collapse and ongoing instability ofFONAMA (the National Environmental Fund) duringthe life of the project serves to emphasize that unless aninstitution has clear and unwavering support from theGovernment, it is unlikely to improve its performanceno matter what level of ‘institutional strengthening’initiative[s] are introduced under a project” (WorldBank 1998d). However, some experts point out that thelarger gains to sustainable development and democ-racy obtained by bringing in a new and larger strategyoutweighed the demise of FONAMA.

Almost all task managers and observers assessprivate sector development as relatively ineffective.This assessment is endemic throughout the Bank’s GEFportfolio for forest biodiversity projects. Whereas cli-mate control energy projects financed by GEF areworking successfully with private sector commercialentities, the only substantive private sector componentsin the forest portfolio are at the level of the householdfarm enterprise. The private sector’s major impact onforest biodiversity is evident in its roles in forestresource use and the associated threats—whether re-lated to medicinal plants, other non-timber forestproducts, nature tourism, wildlife marketing, large-scale agricultural plantations, housing development,hydroelectric power generation, irrigation, or otherinfrastructure investments. The recognized failure towork with the private sector despite its major stake inforestry operations and outcomes is a major lacuna inthe Bank’s performance. The virtual absence of thissector from the 1991 Forest Strategy appears to have

been a reason for this shortcoming, in addition to thegeneral reluctance of government forest institutionsand many NGOs to constructively engage the privatesector in biodiversity conservation.7

Both task managers and independent observers givehigh marks to the Bank for its handling of participatorypolicy issues in the GEF forest portfolio. The supportprovided for community co-management approaches,public participation mechanisms, and measures to ad-dress indigenous rights are policy innovations for whichthe Bank’s GEF portfolio takes justifiable credit, althoughthis support can also be found in the Bank’s regularportfolio. It is noteworthy that independent NGOs,although ready to concede that the Bank has supportedmore participatory innovations in the GEF portfolio thanit has in other sectors, severely criticize the Bank for notgoing far enough on this issue. The advocates forindigenous rights would like to see the Bank insist on fargreater land and resource security, an opinion that isshared by a number of Bank staff. They note that the GEFalso requires that its projects be “country-driven” and citelimitations in their clients’ willingness to devolve govern-ment tenure rights over forest and biodiversity resources(see later section on participation for examples.)

The GEF sustainable use policy initiatives are alsoranked highly by most Bank staff and outside observ-ers. These initiatives include project activities that linklivelihoods to conservation and the introduction ofconservation incentives and sustainable use inbiodiversity projects.8 In both China and India, theBank’s GEF project is credited with scaling up pilotefforts to link local livelihoods with conservationactions (called “ecodevelopment” in India) to main-stream national and provincial approaches to protectedarea management. In Brazil, the GEF project hassupported development of products such as nuts fromextractive reserves. These kinds of enterprise andco-management approaches—while falling short of thedemands of progressive NGOs—have substantiallyincreased the role of local communities in setting forthconservation planning and accepted use of forestresources. This use is usually associated with non-timber forest products, limited grazing, ecotourism, oralternative sources of income, but in a number ofcountries (such as Ghana, India, Indonesia, and the LaoPDR) it also involves sustainable harvesting of trees indesignated buffer zone forests according to approvedmanagement plans.

The most ineffective components identified by the

Picking Guarana berries. Amazon, Brazil. Photo courtesy ofwww.fotofinder.net

20


largest number of Bank staff are those associated withfinancial sustainability. Attempts to increase user fees,taxes and royalties, and private sector financing havebeen disappointing. As the following discussion offinancial sustainability issues concludes, however, thesuccessful trust funds are among the most sustainableand innovative results of the Bank’s GEF portfolio.9

Aside from these, the only reliable source of fundinghas been the allocation of limited government budget-ary resources.

Performance and Safeguard Ratings and CovenantsBank task managers are required to rate projects’implementation performance on the basis of supervi-sion missions. These ratings examine overall progressas well as a small number of process indicators, such asprovision of counterpart funds, project management,and procurement. Only two projects received anunsatisfactory rating for project management andcounterpart funds: Cameroon and India. Fourprojects—China, Costa Rica, Turkey, and Uganda—received highly satisfactory ratings. The remainderwere judged satisfactory. This distribution comparesfavorably with the rest of the Bank’s forest portfolioand suggests that the performance of GEF projects, asmeasured by these gross indicators, is at least as goodas that of other Bank projects in the forest sector.However, the overall view of the GEF Secretariat andMonitoring and Evaluation team is that the projectratings may be inflated. They question why someprojects do not get unsatisfactory ratings in the areas ofproject management and counterpart funds when thesefunds have been used for non-project purposes and thegovernment has given concessions for mining andforestry in key protected areas under GEF support.10

Problems encountered in implementation werethose common to all Bank projects—delays in start-up,counterpart funding, staff assignment and recruit-ment,11 procurement, and the like. As with other Bankprojects, specific management covenants were signedat project approval to serve as conditions for projecteffectiveness. In the view of some task managers, thesecovenants have been useful in increasing the serious-ness with which recipient countries approach theirresponsibilities under the GEF grant program.12

Task managers also rate performance on a few keysocial Safeguards, including resettlement, environmen-tal assessments, and women in development. There areno unsatisfactory ratings on any of these dimensions in

any of the projects examined. It is noteworthy, how-ever, that a majority of projects do not give any ratingfor these social dimensions. Some Regions of the Bank(for example, South Asia) are setting up and maintain-ing their own databases to monitor social developmentand Safeguards. For most of the Bank, however, theexisting monitoring of these important social dimen-sions appears to be very inadequate—especially sinceso much attention has gone into increasing participa-tion at the project design stage.

Given that indigenous and other ethnically vulner-able peoples are disproportionately affected by GEFprojects in remote PAs, where many of these peopleslive, the application of due diligence in examiningsocial and environmental issues becomes especiallycritical. In two cases (India and Mexico), the Bank’sInspection Panel was called upon to make a prelimi-nary investigation into local allegations of failure tofollow the Bank’s Operational Directives on resettle-ment and indigenous peoples. While these allegationswere found unworthy of a full inspection, they indicatethe sensitivity of these projects to social issues regard-ing indigenous peoples and their rights, compared withthe rights of the state to protect areas for conservation.In at least eight of the projects examined, outstandingquestions on these issues led to specific covenants.13

Five of the projects analyzed included covenantsrequiring some form of environmental action. TheIndonesia Biodiversity Collections project successfullycomplied with the requirement to prepare an environ-mental health and safety action plan. The CameroonProject complied with the requirement to create a legalinstrument prohibiting forest exploitation in the fiveproject sites and to prepare implementation contractswith NGOs. In the Philippines Conservation of PriorityProtected Areas Project, as of December 23, 1998, theborrower had partially complied with the requirementto issue presidential proclamations declaring eight often project sites protected areas. In the IndonesiaKerinci Seblat project, the government complied withcovenants ensuring that any logging permits wouldinclude creation of biodiversity management zonesnext to the PA and that mining concessions lackingsignificant economic potential would be terminated.But the government has yet to comply with covenantson road construction; and the zoning plan is complete.The India project’s covenant requiring each state to“ensure that activities outside the scope of the projectshall not undermine effective biodiversity conservation

21


within the PAs or implementation of theecodevelopment strategy under the project” has alsobeen followed by the government.

Covenants on indigenous peoples and resettlementare found in six of the studied projects. The Honduras,Nicaragua, and Indonesia Kerinci Seblat projects haveall made commitments to complete and carry outindigenous peoples development plans.14 The Philip-pines project includes three covenants that deal withdelineating ancestral domain claims and issuing certifi-cates for ancestral lands to indigenous peoples. Thishas achieved partial compliance, although thecountry’s new Indigenous People’s Law and the com-plexity of demarcation and of applicable laws hasdelayed full implementation, so that only one claimhad been approved as of December 23, 1998.15 In theevent that resettlement is required, the Hondurasproject agreed to “prepare and furnish to the Bank andUNDP a resettlement plan for affected persons.” In thecase of India, one of the contested covenants requiredthe government to “take all necessary actions to ensurethat the project activities shall not erode the customarytenure rights over land and other assets of the tribalpopulation in the PAs” and another required that “eachproject State shall, in pursuing the objectives of theproject, not carry out any involuntary resettlement forany people resident within the PAs.”16

The Bank’s Safeguard policies on resettlement andindigenous peoples are being rewritten. A number oftask managers are concerned that their scope will be sobroadened that the Bank will not be able to engage inany projects in protected areas where local peoples’rights have been, or will be, curtailed at any time in thepast or future, since conservation almost always

involves some reduction in unrestrained use of forestresources. For example, it has been proposed that anyresettlement prior to or after the completion of a projectwould also be subject to Bank Safeguards. Such astringent revision of Safeguard policies and theirapplication would have a major impact on the Bank’sability to continue implementing forest biodiversityprojects with GEF or other Bank funds.

Aside from the inadequacies of the Safeguardsmonitoring system, GEF project information has beentreated separately and unequally. GEF performanceand Safeguard data, as well as basic project data, forprojects that are not fully blended with Bank projectshave not been maintained in regular Bank databases.17

Similarly, there have been only three Quality Assur-ance Group (QAG, within the Bank) reviews of GEF-funded projects. Because the GEF portfolio is stillyoung, only eight Implementation Completion Reports(ICRs) have been done.18 While the new databases andinitiatives of QAG and Bank operations are apparentlybeing designed to address this problem, the lack ofintegration of information reduces both internal over-sight and access to learning. As one task managerexplained, there are fewer managerial flags to signalperformance problems with GEF projects than with theregular Bank portfolio, resulting in fewer incentives todevote resources to project supervision and qualitycontrol. Given the Bank’s increasing attention to socialdevelopment issues, any reduction in attention to GEFprojects is cause for concern. It will be critical toevaluate the new information system databases toensure that they are fully integrated and to continuedeveloping better means for monitoring social develop-ment objectives and Safeguards.

23

44Sustainability of GEF Projects

F inancial SustainabilityBy their nature, GEF forest biodiversity conservation projects are likely to be at a

disadvantage with regard to financial sustainability. Conservation of forests, especially inthe short to medium term, can only compete with forest harvesting and alternative land uses such

as agriculture if there is significant asset appreciation of forest “capital.” Compelling arguments

have been made for the value of undiscovered genetic material, as well as unmeasurable

ecosystem benefits that may provide financial oreconomic gains commensurate with the use valuesforgone. Nevertheless, they remain highly speculative.Likewise, low-impact use—such as ecotourism orbrazil nut collection—has not yet proved to providenearly as high an economic return as logging and landconversion to agriculture, except in a few specializedcases and instances of high tourist revenue. The Brazilcountry study documents the comparative advantage ofagriculture and plantation crops over natural forestproduct extraction and the high cost estimates ofbenefits foregone by the conservation option.

In addition, GEF projects, by definition, fund theincremental costs of forest conservation that providesglobal, rather than national, benefit. That is, the GEFfunds project components that, at least theoretically,would not otherwise receive funding from governmentor commercial sources—although they could receivefunding from other international donors. While thereonce was a rather naïve assumption that a project’s“country-driven” requirement would lead the country

to assume responsibility for the financial sustainabilityof the project after five years of GEF/Bank support, amore realistic understanding of the issues underlyinglong-term financial sustainability of the conservationeffort is now emerging. Increased donor coordination,diversification in funding, income-generating activitiesat the local level, and support for the creation ofstructures to channel funds from nongovernmentalsources are among the options explored by someagencies. In addition to highlighting the need forlonger and more flexible project terms (Porter andothers 1998; GEF data), the GEF has embarked on astudy to review the issues surrounding the sustainabil-ity of biodiversity conservation (Smith and Martin2000).

An assessment of the treatment of financial sustain-ability issues in the reviewed portfolio reinforces theneed for urgent attention to this issue. In the 44 projectdocuments, financial sustainability is most oftenpegged to the establishment of trust funds. These fundsusually combine grants for operating expenses with

24


endowment funding, which provides long-term interestincome. Beyond such trusts, financial sustainability istreated more as a long-term goal than a concreteproject objective with mandated activities. Mostprojects either neglect issues of financial sustainabilityor deal with them in vague terms. The most commonmethod of dealing with the issue is to prescribe a studyon trust fund feasibility or alternate sources of financ-ing. Table 4.1 identifies the financial sustainabilitymechanisms found in project documents.

Trust FundsThe use of trust funds to establish perpetual endow-ments to finance the incremental costs associated withforest biodiversity conservation has been a significantinnovation in the conservation donor community. TheGEF and the Bank have played an important role inlegitimizing—as well as providing the capital for—anumber of these trust funds. In the process, lessons werelearned that have been incorporated in recent trust funddesign. These lessons encouraged the GEF to continuefinancing these initiatives after several years of notsupporting trust funds (see box 4.1).

Given the recognized contributions of trust funds andtheir potential as a sustainable source of financing, areother mechanisms and approaches needed to financeconservation? As a rough rule of thumb, endowment trustfunds are unlikely to be able to use more than 5 percent oftheir capital annually (assuming an average rate of returnof 8–10 percent, with 3–5 percent reinvested to keep upwith inflation). This means that even with a $20 milliontrust fund—an average goal in the projects reviewed—it isunlikely that more than $1 million will be available on anannual basis. While conservation trust funds can providea substantial permanent source of financing for a notori-ously underfunded sector, this funding remains woefullyinadequate for dealing with all of the global biodiversityconservation needs pointed out in the 1991 ForestStrategy.

Other Mechanisms for Financial SustainabilityVisitor fees, lodge and guiding concessions, and directtaxes have been identified in project documents aspossible sources of additional financing. Their identifi-cation as mechanisms for sustainability has beensurprisingly low, however, with only five projectsreferring to the use of fees. With nature tourism one ofthe fastest-growing global industries, nine projects referto potential financing from tourism, but few have

concrete policy initiatives to overcome traditionalgovernment management of visitors. A number ofprojects, such as those in China, Costa Rica, India, andUganda, have prescribed that studies be undertaken inan effort to develop proactive policies for tourism andvisitor management. However, most projects have notdirectly engaged the private sector tourism industry indeveloping policies and facilities that could increasebenefits to conservation and local communities throughfees and linked income-generating opportunities.

Investments in local community and householdenterprises designed to increase their conservation rolehave tended to be more concerned with sustainabilityissues. Most of these programs have tried to developparticipatory methods for local communities to identifyinvestments and income opportunities linked withconservation—such as ecotourism, non-timber forestproduct development, or alternative non-forestresource-based employment—that have the potential tobe self-sustaining. In theory, these improvements in thelivelihoods of local people will continue to reduce theirpressure on forest biodiversity and strengthen theirresolve to work for conservation. In practice, thisassumption has been challenged, and the empiricaldata are not yet available to draw any firm conclusionsover the long term (Wells and others 1999b). In theshort term, most task managers and NGO observersconclude that some of these community and householdinvestments do appear to provide a more sustainablebasis for increased community cooperation in conser-vation, as well as poverty reduction. The key to theiroverall effectiveness seems to lie in the degree to whichthey are directly linked to conservation and localpopulations are able to deal effectively with internaland external threats (see also Sanjayan, Shen, and

TABLE 4.1. FINANCIAL SUSTAINABILITYMECHANISMS IDENTIFIED IN PROJECTDOCUMENTS

Projects containingMechanism these mechanisms

Trust funds 15Studies to identify mechanisms 11Trust fund studies 6Nature tourism 9Park fees 5Concessions 5NTFP and game harvesting 3Taxes 1Other 21

25

S u s t a i n a b i l i t y o f G E F P r o j e c t s

BOX 4.1. CONCLUSIONS FROM EXPERIENCE WITH CONSERVATION TRUST FUNDS

Trust funds havemade impres-sive accom-

plishments in the areasof (a) supporting pro-tected areas, includingenabling the creation ofnew national parks,expansion of existingareas, and providing abasic “resource secu-rity” for their opera-tions; (b) generating andmanaging financialresources; (c) enablingthe participation of civilsociety institutions inresource conservation;(d) increasing the levelof scientific researchapplied to conservationissues; and (e) increasingpublic awareness of con-servation issues. Uncer-tainty remains, how-ever, about trust funds’ability to demonstrate

long-term biodiversityconservation impact. Inpart this is due to the diffi-culty of measuringbiodiversity impact, andof attributing impact to aparticular intervention,especially over the shortterm. It is also true thattrust funds generate rela-tively small amounts ofresources in relation tonational conservationneeds (p. vi).

The overall successof conservation trustfunds depends on theirability to participate indeveloping national con-servation strategies, towork with other publicand private agencies todevelop agile and effec-tive managementapproaches, and to nur-ture community groupsand other organizations

becoming involved inbiodiversity conservationfor the first time. To suc-ceed, trust funds need thegovernance structures,staff, and technical sup-port to allow themproactively to influencetheir environment, moni-tor their results and learnfrom experience, main-tain credible and trans-parent procedures, andsupport participatoryapproaches to conserva-tion and sustainabledevelopment (p. vi).

GEF should continueto finance conservationtrust funds when the nec-essary circumstances aremet. Four conditions areessential:

• The issue to beaddressed requires acommitment of at

least 10-15 years;• There is active

government sup-port for a public-private sectormechanism outsidedirect governmentcontrol;

• A critical mass ofpeople fromdiverse sectors ofsociety can worktogether to achievebiodiversity conser-vation and sustain-able development;and

• There is a basicfabric of legal andfinancial practicesand supportinginstitutions(including bank-ing, auditing andcontracting) inwhich people haveconfidence (p. ix).

Source: GEF 1999b.

Jansen 1997; India Ecodevelopment Project Documentdata). Many projects have failed to make these link-ages adequately.

Sustainable Use and Forest StrategyIssues of ecological sustainability are also associatedwith community investment programs in the GEFprojects.1 In 15 cases, PA projects have included someform of sustainable use of forest areas and products ascomponents to deal with local communities residing inand around PAs. For example, Ghana has a pilotcollaborative forest management component in sa-vanna woodlands, and Lao receives support from theGEF for its organizational framework of a sustainableforest management initiative. In addition to naturetourism, which can have some negative impacts on

biodiversity despite being non-extractive, these compo-nents include non-timber forest product harvesting,plantations, and management of community forests inbuffer zones. This management may include small-scale thinning or logging based on approved manage-ment plans (as in Honduras, India, and Indonesia).While ecologists associated with the projects in-countryare usually assigned to determine the ecological sus-tainability of such extractive activities, few projectshave an adequate scientific basis or the requisite datato ensure that there will be no major ecologicalimpacts. However, as most analyses point out, thealternative would likely be much larger adverseimpacts from unmanaged extraction.

This dilemma underlies the 1991 Forest Strategy’sban on logging in tropical moist forests. There is a vast

26


amount of biodiversity in the more than 90 percent offorestland outside the protected areas. These forestsalso serve critical ecosystem functions in maintainingcorridors, genetic variability, and buffers for the conser-vation of biodiversity within PAs. Providing managedaccess to these non-PA forests, including access totrunks, as well as branches, nuts, and flowers, is amajor strategy to reduce pressure on PAs and to extendbiodiversity conservation to the currently neglectedforest resources of the world. The 1991 ban, however,has heavily constrained projects from directly address-ing these issues in tropical moist forests.

Until recently, the GEF had not defined a policy onlogging and sustainable use independent of the Bank’s1991 Forest Strategy. But it has not financed anylogging in tropical moist forests and has avoidedprojects in which this is a component, except wherethere are small-scale community forest activities inbuffer zones. Nevertheless, the GEF has supportedsustainable use of non-timber forest products and islooking for means to expand these activities in wayscompatible with biodiversity conservation.

In an effort to define a clearer policy on logging andsustainable use, the GEF is working with internationalforestry and conservation institutions such as the Centerfor International Forestry Research (CIFOR) and theWildlife Conservation Society (WCS) to develop a basisfor a policy in early 2000. An interim set of “GuidingPrinciples for Projects Associated with Logging” has beenissued (attached as Annex B). These guidelines state that“Logging in primary forests, however, will not besupported by GEF.” This is an even more conservativeban than that outlined in the 1991 Forest Strategy; itextends to temperate as well as tropical moist forests.These interim guidelines also ban financing for activitiesassociated with sustainable forest management, such asthe cost of certification schemes, restoration of habitatsafter logging, and the costs of commercial, industrialtimber plantations and tree farming systems. However,the GEF has supported “small, pilot, local community-based demonstration projects” and the mainstreaming ofbiodiversity considerations into the forest sector. Theguidelines—in conformity with the 1991 strategy—alsoencourage policy reform for sustainable forest manage-ment, mainstreaming biodiversity considerations intobroad land-use planning, participatory forest manage-ment, strengthened monitoring, sustainable harvest ofnon-timber forest products, and nonconsumptive uses suchas tourism (GEF 1999c).

Evidence from the Bank’s GEF forest portfolioindicates that the GEF has avoided logging intropical moist forests. In its interim guidelines, theGEF reaffirmed the 1991 strategy by carrying it onestep further, to cover all primary forests. It isgenerally agreed that these policies have allowed theBank and GEF to maintain widespread supportamong conservation NGOs and to avoid the intensecontroversy generated by Bank forestry projects inpast decades. But the question remains whether thesepolicies have also constrained the Bank and GEFfrom addressing effectively the substantial issuessurrounding biodiversity conservation in forest areasoutside PAs. The sustainability of conservation ofglobal forest biodiversity may require incorporatingthese vast managed forest areas within conservationefforts for the biodiversity they contain, the connec-tivity they provide, and the potential source ofrenewable financing that they offer.

A new approach for the GEF and the World Bank inaddressing biodiversity conservation in private lands isthe Ecomarkets project in Costa Rica. This project wasapproved by the GEF Council in December 1999. The$60.23 million project is designed to increase productionof environmental services in Costa Rica by supporting thedevelopment of markets and private sector providers forservices supplied by privately owned forests, includingprotection of biological diversity, greenhouse gas mitiga-tion, and provision of hydrological services. The globalenvironmental objective, to which GEF allocated $8.33million, is to foster biodiversity conservation and preserveimportant forest ecosystems through conservation ease-ments on privately owned lands outside of PAs in theMesoamerican Biological Corridor in Costa Rica (GEF1999e). This project clearly marks a new approach toproviding incentives to conserve and sustainably manageresources, making it a prime demonstration project,offering the GEF and the World Bank the opportunity toextrapolate valuable lessons. Once implementation be-gins, it will be interesting to see how the conceptualframework evolves on the ground. Creating markets forsequestered carbon and monitoring compliance of envi-ronmental service contracts are among the activities thatwill require new skills in addition to those required fortraditional PA projects.

Cofinancing ConservationBased both on the mandates of the 1991 Forest Strategyand GEF goals, GEF grant funding is intended to

27

S u s t a i n a b i l i t y o f G E F P r o j e c t s

leverage increased cofinancing from implementingagencies and other sources (see box 4.2).

Increased implementing agency and host countrycofinancing serve as indicators for mainstreamingbiodiversity conservation, as well as a means to gaugethe potential for financial support following thecompletion of GEF projects.

Figures 4.1 and 4.2 depict the sources ofcofinancing of portfolio projects in absolute amountsand as a percentage of total project costs. These figuresshow that the Bank and the GEF have been successful inprogressively increasing the percentage of cofinancing

he overallobjective of theproject is to

BOX 4.2. LAO PDR FOREST MANAGEMENT AND CONSERVATION PROJECT

Tassist the governmentof Lao PDR in imple-menting new forestresource managementsystems to betterachieve the sustainablemanagement and con-servation of thecountry’s resourcesthrough (1) supportivelegal, policy, andorganizational compo-nents, (2) human

resource capacity forstaff at all levels, and (3)local management, plan-ning, and administrativeinfrastructure develop-ment. The componentfunded by GEF (this ispart of a larger WorldBank project) focuses onestablishing and manag-ing protected areas andon planning and imple-menting community par-ticipatory programs inand around them.

The project has been

in effect for five years.According to the projectstatus report dated6/9/99, “the most note-worthy achievement todate is the strong partner-ship fostered with otheragencies, including mobi-lization of well-qualifiedand experienced conser-vation advisors (VSA,U.N., and German vol-unteers). SupplementaryDanish-funded grantfinancing is being pro-vided to develop a field

biodiversity monitoringsystem and conserva-tion awareness pro-gram in Xe Piane. Inthis context, the GEF-funded subprogram hasbeen able to leverageconsiderable additionaldonor support. Bothsubprograms havedeveloped close work-ing partnerships withexperienced in-countryNGOs to build capac-ity and strengthen fieldimplementation.”

$ millions

0

50

100

150

200

250

300

350

400

1991 1992 1993 1994 1995 1996 1997 1998 1999

NGO/foundation

Bilateral

Host country

World BankGEFallocation

FIGURE 4.2. PROPORTIONAL COFINANCINGFIGURE 4.1. COFINANCING

World Bank 18%

Host country22%

Bilateral 22%

NGO/foundation 3%

GEF allocation35%

from less than one-third in the early 1990s to two-thirdsby the late 1990s. Most of the increase in thiscofinancing has come from bilateral donors and hostcountry sources. World Bank cofinancing alsoincreased in the later years, but less dramatically.

The GEF coordinating unit in the World Bank hasargued that this relatively small—and highly vari-able—increase in direct Bank cofinancing applies onlyto “blended projects,” projects in which both the GEFand the Bank provide direct financing. Taking intoaccount the biodiversity components of other Bankprojects, the coordinating unit calculates that as of June

28


1998, the Bank had leveraged close to $2 billion forbiodiversity components (World Bank 1998b). Sincethis amount includes cofinancing from host country andother donor sources, a more useful figure would be the$650 million in Bank funds allocated to biodiversity.Since the amount includes non-forest biodiversity aswell, it would need to be further reduced to render itcomparable with the analysis here (World Bank1998b). Even if Bank cofinancing is somewhat less thanimplied in this analysis, it is evident that the Bank isproviding approximately $1.50 to $2 for each grantdollar provided by the GEF. The Bank is also helping toleverage substantial additional host country and donorfunds to fulfill this policy goal.2

Given the future unpredictability of donor financ-ing for conservation, the most critical element in thecofinancing picture is the role of host country financ-ing. The figures show an encouraging increase. Hostcountry contributions by India and Madagascar were$19 and $31 million respectively in 1996, and SouthAfrica’s contribution totaled $69.90 million in 1998. Inthe case of South Africa, valuations of government landand facilities, as well as a substantial private trustfund, greatly boosted the registered cofinancing. Sub-tracting these cases from the analysis leaves a moremodest level of host country cofinancing, on the orderof $2 million per country. Since this figure includes thebaseline financing for the project sites and activitiesprior to Bank GEF financing, it is not evident whether itcan be read as a country commitment to taking over theadditional global costs being borne by the GEF.Instead, comments by task managers and some countryofficials in the case studies suggest that it is unlikelythat host countries will be able to assume the globalconservation costs of the project at its completion.

The same conclusion is reached by the Bankanalysis of Integrated Conservation and DevelopmentProjects (ICDPs) in Indonesia, where the Asian finan-cial crisis further undermined potential increases ingovernment support for forest biodiversity. The authorsstate that “biodiversity conservation in Indonesia andmost other developing countries is clearly going torequire substantial external subsidies for as long asthere is still some biodiversity left to protect” (Wellsand others 1999b). A less pessimistic conclusion is

reached in a recent study of financial mechanisms forsustainable forestry commissioned by the UnitedNations Development Program (UNDP) (Moura andothers 1999). The authors of this study point to the newmechanisms that have been, and are being, developedfor financial sustainability (such as trust funds, visitorfees, conservation easements, tradable carbon seques-tration, biodiversity royalties, and watershed services)as sources of long-term financing. With regard to theGEF, they conclude:

Nevertheless, GEF is and will continue to bean important financing mechanism for forestconservation. What appears to be beyondGEF’s current possibilities, is to play [sic] amajor financing instrument for solving thecomplex problems of deforestation and forestdegradation, not to mention the sustainabledevelopment of forest-dependent human com-munities, in required scale (para. 213).

Although they represent a very small fraction of thefinancial resources involved in GEF and forestbiodiversity conservation projects, conservation-minded NGOs and private foundations have played adisproportionate role in leveraging GEF, Bank, hostcountry, and other donor funding. Local and interna-tional NGOs were involved in the design of 80 percentof the projects in the Bank GEF portfolio, and in manycases initiated the projects as well as playing a majorrole in execution (see the later discussion of participa-tion). NGOs and private foundations have also playeda critical role in developing many of the innovativemodels for ICDPs, rapid biodiversity assessment meth-odologies, database structures, and participatoryapproaches that have been embedded in many of theBank GEF projects. It is their voice that continues todominate global discussions of policy and to goad theirgovernments in both the North and the South tocontinue providing financing for conservation. It maybe reasonable to speculate that NGOs’ strong continu-ing advocacy of conservation will do more to ensuresustainable financing for forest biodiversity—includingthe continuation of the GEF—than any other mecha-nism currently available.

29

55Social and Institutional Issues

P olicy SynergyThe Bank’s increasing emphasis on stakeholder participation in projects, signaled by the

establishment of the Participation Learning Group in the early 1990s and the publica-

tion of a Participation Sourcebook in 1996, was reinforced by strong policy guidelines issued by

the GEF Council in 1996. Titled Public Involvement in GEF-Financed Projects, these guidelines

were applicable to all implementing agencies (GEF 1996b). While stressing local community

participation, the guidelines were explicit in calling forthe participation of all major stakeholders in projectdesign and implementation. These policy initiatives—which reflected innovations introduced by NGOs at theend of the 1980s—led to a noticeable change in the ratesof participation throughout the review period. Thischange is correlated with alterations in project design,with increasing numbers of ICDPs addressing bothbiodiversity management and local population concerns.

Changing Approaches to ParticipationEarly projects in the 1991–95 period tended to focus onworking with nascent environmental agencies thatneeded to build capacity and develop national environ-mental plans and management systems for protectedareas (for example, ECA projects). Other projects inthis period focused on working with research institu-tions to train scientists in sampling and survey tech-niques (Indonesia Biodiversity Inventory, Belarus).While it was recognized with hindsight that even large-scale planning activities would greatly benefit fromstakeholder participation, few of these earlier projectsincorporated participatory elements in either theirdesign or implementation.

The cluster of projects implemented in the Europeand Central Asia (ECA) Region1 during the first yearsof the GEF exemplify the way participatory activitieswere often structured. These projects generally pro-vided institutional support to national organizations,and a number of protected areas were identified as thefocus of the field components. The activities designedfor the communities generally focused on public aware-ness campaigns that highlighted the importance ofprotected areas and biodiversity values, and participa-tion was limited to regional consultations to provideinformation on proposed park changes. In general,emphasis was given to building awareness and garner-ing support from the NGOs, and not necessarily fromthe communities in the protected areas. The UkraineICR states that “local communities approved reserveexpansion. Approval occurred at the local politicallevel and not necessarily based on good understandingof the issues by the local community.” Similarly, theBelarus ICR suggests that “participation would havebeen more effective if the social assessment had beendone earlier in the project and not the last year ofimplementation” (World Bank documentation).

The learning process illustrated by these early

30


tory elements in their objectives. This changed after1996, and some later projects (Honduras, India, Indone-sia Kerinci, Senegal) have extensive participatory com-ponents. In some highly participatory projects, theincorporation of stakeholders in design and implementa-tion is mainstreamed with sufficient thoroughness thatparticipation is no longer mentioned as a separateobjective.3

An examination of participation rankings for leveland breadth by Region showed that the Asian and theLatin American Regions scored marginally higher (5.3)than Africa (4.7). ECA has the lowest ranking (4.0), butmost of the projects in that Region were designed andimplemented in earlier years, as discussed above. Indiscussions with task managers from all Regions, therewas unanimous support for the value of increasingconstructive participation in design and implementa-tion, although some task managers expressed frustra-tion with the limited time and resources available tocarry out this task, as well as at the negative attitudesof some NGOs toward any Bank project.

There was very little reference found to participa-tory monitoring, and even less to participation insupervision mission reports. While discussions withtask managers indicate that there is more participationin supervision and evaluation than is reported, theexisting formats (PSRs or the old 590s) do not includedetailed data on these activities. Participatory monitor-ing was mentioned in less than one-third of the projects,and only one-twelfth of the recent supervision reports

TABLE 5.1. PARTICIPATION IN PROJECT STAGES(PERCENT)

Total(all

Stage 1991–95 1996–99 projects)

Objectives 9 30 40Design 27 36 65Implementation 18 45 65Evaluation 11 16 28

projects has been incorporated into new project design,according to task managers working on the nextgeneration of GEF projects in the ECA Region. The newCentral Asian and Russian projects have incorporatedmuch broader stakeholder participation and focus alarger portion of their project activity on the concernsof the local population in key PAs. Given that the earlyprojects were among the first for the Bank and for thesenewly emerged countries, the openness to learning thatis reported is in itself a valuable contribution of theportfolio.

During the period of the 1996 approval of the newGEF participation guidelines, there was a noticeableincrease in participation in project design and imple-mentation. As shown in table 5.1, participation elementsincreased markedly in design and implementation.2

However, insofar as these elements are captured inproject design documents, they still remain below 50percent, and in the case of participatory evaluation, arestill less than 20 percent of all GEF projects. Very fewprojects (9 percent) in the early years include participa-

he case ofArgentina(Biodiversity

BOX 5.1. SOCIAL ASSESSMENTS

TConservation Project1997, in associationwith the IBRD-financedNative Forests and Pro-tected Areas project)illustrates how morerecent projects dealwith park creation inareas with humansettlements. There is agreater emphasis on

preimplementation par-ticipatory planning withmethods such as socialassessment. The teamdesigned and carried outa targeted census, sur-veys, interviews, andworkshops to assess localinterests in and condi-tions for establishing newprotected areas.

The social assess-ment team consisted ofan agronomist, a sociolo-

gist, and a psychologistwith a specialization inorganizational develop-ment and conflict resolu-tion. They consulted withall families and commu-nities in the core zonesand a cross-section of thecommunities in the bufferzones. Findings and rec-ommendations from thesocial assessment pro-duced two plans—themitigation plan and the

public participationand training plan—aswell as a new partici-patory approach toimplementing bothplans (World Bank1998e). A local socialassessment and publicparticipation specialistwas hired to conductsocial assessmentsthroughout the project(GEF 1997c, p. 60).

31

S o c i a l a n d I n s t i t u t i o n a l I s s u e s

TABLE 5.2. PARTICIPATORY METHODSProjects that employ

Method method (percent)

Workshops 67Surveys 53Social assessments 47Informal interviews 42Participatory rural appraisals 35 (PRAs)Advisory groups 28Beneficiary assessments 21Needs assessments 14Focus groups 14

TABLE 5.3. STAKEHOLDERS IDENTIFIED INPROJECT DESIGN DOCUMENTS

Projects in whichgroup is identified

Stakeholders (percent)

Local district/state government representatives 84Local NGOs 79International NGOs/research institutions 79Community/localresource users 70CBOs/local associations 49Indigenous peoples 47Commercial private sector 35Women’s groups 27

mention participation issues.Over the review period, projects have increased the

number of methods employed to facilitate participa-tion. Many have hired social scientists to design andmonitor participatory project elements. The number ofparticipatory exploratory workshops before projectimplementation has also increased (see box 5.1).

While the study did not aim to assess the level ofquality of each method, table 5.2 identifies the percent-age of total projects that employed various participa-tory methods.

Identifying the StakeholdersWhile participation of some key players, notably localcommunities, has increased throughout the reviewperiod, systematic identification and participation ofall key stakeholder groups has been spotty and incon-sistent. Table 5.3 identifies the stakeholder groups thatwere identified in the project design documents. Thetable demonstrates that local government representa-tives and both national and international NGOs wereidentified more often than local communities or theirrepresentatives in the form of community-based organi-zations (CBOs) as being involved in project design.Indigenous peoples were identified in half of theprojects—a total not much less than the number ofprojects in which indigenous peoples are reported.Given the widespread recognition of the crucial role ofindigenous peoples and local communities in safe-guarding their natural resources, it is encouraging thatprojects have increasingly shown considerable progressin involving these groups in project design and imple-mentation.

It is disappointing that women’s groups were theleast often identified. This poor showing is confirmedby interviews and questionnaire responses of taskmanagers. Although there is widespread recognition of

the key roles women play in natural resource use andmanagement in most developing nations, Bank GEFprojects have not been able to include women in theprocess of project design and implementation in almostthree-quarters of the projects reviewed. While theimpacts of this neglect of women’s participation on theachievement of desired results cannot be easily assessed(and the difficulty of increasing women’s participationin the face of forestry establishment resistance in manycountries must be acknowledged), there is no excuse fornot increasing the visibility of gender concerns in futureBank GEF forest projects.

Even more alarming from the point of view ofeffectiveness, efficiency, and sustainability is the incon-sistent and marginal inclusion of the private sector.While Latin America and Africa have made someprogress in bringing in the private sector as a keystakeholder, in the remaining Regions only Indonesiaappears to have substantive private sector involve-ment. In Latin America, for example, environmentallyprogressive business associations and entrepreneursserved as board members in the creation of theMexican trust fund (1996). In Panama (1997), theproject team plans to work with mining concessions toincorporate social and environmental considerationsinto their extractive operations. In El Salvador (1998),the main beneficiaries are private commercial coffeeassociations who will switch their agricultural prac-tices to promote biodiversity-friendly coffee, whileexpanding their market to environmentally consciousconsumers abroad.

As noted in the section on sustainability, the privatesector is, some would argue, the critical stakeholder infulfilling the GEF and 1991 strategy mandate for

32


biodiversity conservation. Whether involved in roads,hydroelectricity, industrial expansion, mining, com-mercial plantations, or in logging and the industriesdirectly dependent on forest resources, such as pulp,plywood, chipboard, wood energy, and nature tourism,the private sector wields substantial resources andcarries disproportionate influence in many policy deci-sions. Issues of corruption and governance are never farfrom the surface, and have had direct impact on someBank GEF projects.4 Neglecting direct private sectorparticipation in project design and implementation, asmany of the Bank’s GEF projects have done, invitesback door participation and risks undermining projecteffectiveness and sustainability. Despite the reportedhesitation of some government forest departments andNGOs to invite commercial private sector stakeholdersto the table, their continuing exclusion carries evenhigher risk.

The decade-long history of participation in BankGEF projects demonstrates that the nature ofbiodiversity conservation responsibilities and gover-nance is changing—if not changing in fact, changing inperception. It used to be common for countries and theBank to assume that government forest departmentswere solely responsible for forest biodiversity conserva-tion; it is now evident that many other players havecentral roles.

The first group to gain international recognition—including recognition in the policies of the Bank andGEF—was the local community. These communities,often consisting of heterogeneous, indigenous groups,were seen as the traditional and natural stewards of theresources of the forest in which (or near which) theylive. As understanding of their role deepened, there wasincreasing recognition that they needed secure rights toresources, as well as incentives to use these resources inecologically helpful ways. The Bank and the GEF havetended to modify their projects to reflect this under-standing, although many in traditional forest serviceshave yet to be convinced of the wisdom of thisapproach and, as the exclusion of women demon-strates, there is much room for continuing refinementand improvement. Considerable conflict and contro-versy continues over the degree to which these local

rights supercede national and global rights and respon-sibilities, and the degree to which local communitiescan be trusted to conserve and sustainably manageforest resources in a rapidly commercializing world.

The second group to begin receiving internationalrecognition for their critical role in forest biodiversityconservation is the commercial private sector, alongwith the other sectors of the government with whichthey work (for example, mining and industries, roadsand power, tourism and planning). While the mitiga-tion aspects of these groups have long been consideredimportant in achieving the objectives of biodiversityconservation, the constructive engagement potential ofincorporating private sector entities and their govern-ment counterparts is not yet reflected in any but ahandful of innovative projects, especially those inCentral America. Both the 1991 Forest Strategy andGEF guidance encourage addressing intersectoralpolicy issues. But both discourage direct involvementwith forest-based industries in tropical moist forestcountries, and neither provides explicit guidance onengaging the private sector effectively. These lacunaecould severely curtail the scope of impact and sustain-ability of Bank and GEF efforts unless they areaddressed more directly in the future.

The balance of rights and responsibilities of localand indigenous communities, national and globalentities, the private sector, and traditional governmentline agencies is changing—and will continue to change.Decisionmaking powers over forest resources are beingtransferred more consciously and explicitly andassumed by local entities and the private profit andnonprofit sectors. The Bank increasingly has access tothe tools and partners it needs to engage these stake-holders in more effective policy dialogue, program andproject design, and implementation. However, it mayrequire more openness to innovation, more resourcesfor constructive participation, and a longer-term timehorizon to facilitate the most equitable and effectivebalances for the future. Current policies need to reflectthese realities and provide safe passage for directorsand task managers who want to lead the way to thenext decade.

33

66

Both the GEF and the World Bank agree that the Bank should be integrating global envi-

ronmental objectives into its regular lending and non-lending operations (GEF 1998b;

World Bank 1998f). This mainstreaming goal is seen by the GEF as consistent with the

Mainstreaming Within the WorldBank and Client Countries

Conventions on Biological Diversity and Climate Change and as a means for leveraging greater

impact. While country mainstreaming of global environmental concerns is not a binding agree-

ment on client countries under the Conventions, it is encouraged by these Conventions, and it is

the result that forms the basis for ultimate judgement ofthe Bank’s own mainstreaming. The Bank states that“the Bank Group is committed to work with its clientsin integrating global environmental objectives intotheir national sustainable development programs, andin meeting their obligations under the global environ-mental conventions” (World Bank 1998f, p. 1).

According to the 1997–98 Study of GEF’s OverallPerformance,

The World Bank has mainstreamed with regardto cofinancing of GEF projects. However, [theteam] found that the Bank has not done as muchin its regular portfolio of projects in thebiodiversity and climate focal areas as it mighthave; that it has not taken steps to create the staffincentives necessary to put global environmentalconcerns on a par with traditional bank business;that it has not systematically integrated globalenvironmental objects into economic and sectorwork or into the Country Assistance Strategies(CAS) process; and that it has not adequatelyaddressed the impact on the global environmentof its financing of fossil fuel power development.

Finally, the team found that the Bank has not yetundertaken programming based on global envi-ronmental objectives on any significant scale(World Bank 1998f, p. xiv).

In its response to this evaluation, the Bank claimed“important progress” in mainstreaming both the lend-ing and nonlending services provided to its clients, aswell as “in the establishment of ‘in-house’ mechanismsthat are required to make such services global-environ-ment-friendly” (World Bank 1998f, p. 1). The Bank isin the process of developing a strategy for addressingglobal environmental concerns in Bank policies andprograms.1 This review finds that while there has beensome significant progress in mainstreaming GEF objec-tives and funding within the Bank, there are stillcritical gaps in practice and perception that underminethe abilities of both agencies to mainstream globalforest biodiversity concerns within the country pro-grams where they really matter.

Financing Mechanisms for MainstreamingThe Bank cites the increase in Bank and associatedco-funding lending to $1.8 billion for biodiversity as

34


the principal indicator of increased mainstreaming,and uses it to show that GEF funding has not displacedregular Bank funds in this sector (World Bank 1998b).As discussed in the earlier section on cofinancing, it istrue that direct Bank co-funding of GEF projectsincreased slightly toward the latter half of the 1990s. Inaddition, OED’s main report found that there have beensubstantial Bank investments in forestry components innon-forestry projects (World Bank 1998c, p. 5). How-ever, the substantial increase in cofinancing from hostcountry and bilateral sources documented in thisreview (see figures 3.2 and 3.3 in Chapter 3), althoughundoubtedly arranged by the Bank, is not in itselfevidence of the significant increases in Bank fundingclaimed. The increased Bank financing of globalbiodiversity is still modest.

More important, does this amount of total fundingfrom the GEF and cofinancing sources begin to dealwith the scale of the problem of global biodiversityconservation posed by the 1991 Forest Strategy and theGEF? There is also a related question: to what extentdoes financing for national biodiversity—the kindcountries are willing to borrow for—equate withmainstreaming global biodiversity concerns? Willcountries ever be willing to borrow for globalbiodiversity conservation, especially if they are nolonger eligible for concessional International Develop-ment Association (IDA) funding?2

Neither the Bank nor the GEF appears to haveconfronted this issue of the scale and sustainability offunding for global biodiversity with the honest vigor itrequires. While there have been some rough estimatesof the magnitude of funding that would be needed toconserve significant amounts of the world’s forestbiodiversity, such estimates have not figured in theoperational strategies of either the GEF or the Bank.3

Because these estimates of the amount of additionalfunding needed for global conservation are usuallyseveral orders of magnitude above present fundinglevels, it is perhaps not surprising that attention hasfocused on managing the funding now being madeavailable. Furthermore, there is widespread recogni-tion that problems of absorptive capacity in govern-ment institutions, as well as the lack of mechanisms forchanneling funding to private, nongovernmental insti-tutions, limits the effective amount of funds that can beused at this time. By avoiding more direct engagementwith the problems of scale and unwillingness to borrowfor investments in forest conservation, the Bank would

appear to be ducking some of the most difficult issuesrelated to long-term mainstreaming of global environ-ment objectives—and thereby its ability to achieve the1991 Forest Strategy objectives.

Nonlending Mechanisms for MainstreamingIn addition to financial indicators, the Bank identifiedfive additional mechanisms for mainstreaming globalforest biodiversity: operational policies, sector policiesand strategies, analytic tools, new products and part-nerships, and streamlining the GEF in Bank operations.Operational policies for environmental assessment,natural habitats, indigenous peoples, and economicevaluation of investment projects have all been consis-tent with both the 1991 Forest Strategy and the GEF’sobjectives.4 While some task managers expressedconcern that the ongoing revision of some of thepolicies, including the policy on resettlement, mayconstrain future Bank projects or programs frominvesting in protected areas or indigenous peoples (seeChapter 3), other questions about these policies springfrom underlying concerns about the 1991 Forest Strat-egy itself. These deal with the restrictions on thefinancing of logging in moist tropical forests and thelack of encouragement for engaging the private sectorin the global conservation agenda.

Country Assistance Strategies (CASs) are devel-oped by the Bank with the client countries to serve asthe agreed basis for prioritizing Bank assistance. Thedegree to which global environmental issues are incor-porated in the CAS, and the degree to which projectsrefer to the CAS to place their investment within theoverall country strategy, serves as a strong indicator ofthe amount of policy mainstreaming achieved by boththe Bank and the client countries. The review of projectdocuments undertaken in this study to determine thenumber of projects that identify linkages to theirrespective CASs shows noticeable improvement in thelatter half of the decade (see table 6.1). Since recentBank guidance requires CASs to include global envi-ronmental concerns wherever appropriate, and requiresproject documents to refer to the CASs, this improve-ment in nominal mention is not surprising.

However, the Bank admits that few CASs explicitlyaddress global environmental concerns. Passing refer-ences to the environment are rarely integrated into theoverall economic strategy developed with the country.The Bank attributes this shortcoming to “overridingconcerns for short- to medium-term economic problems

35

M a i n s t r e a m i n g W i t h i n t h e Wo r l d B a n k a n d C l i e n t C o u n t r i e s

and low client interest,” “lack of familiarity withanalytical tools to analyze the issues, and insufficientknowledge of Bank staff of client country obligationsunder the global conventions” (World Bank 1998f,p. 16). As an implementing agency directly responsibleto its clients, the Bank is forced to be more “countrydriven” than the GEF, which is one step removed. Assuch, it appears to have acknowledged more directlythe challenges and underlying questions involved intrying to integrate long-term global environmentalconcerns into short-term economic development agen-das. The Bank is willing to ask whether perceivedtradeoffs between short-term economic and social needsand long-term environmental concerns are real, andcan be realistically bridged through win-win solutions(World Bank 1998f, p. 11). The Bank, however, alongwith the GEF, appears to back away from looking at thelikely answers and their implications for global forestbiodiversity mainstreaming within either the Bank orthe client countries. It may well be unlikely that globalenvironmental objectives will be fully mainstreamed ineither the Bank or many of the client country policiesand priorities for the foreseeable future. If so, morerealistic goals and strategies may be required.

The operational tools developed by the Bank tosupport the current commitment to increasedmainstreaming include monitoring and evaluation guide-lines, a “Global Overlays” Program to integrate globalenvironmental concerns in sector and planning work, andtools to adopt greener accounting methodologies. Theseare all thorny conceptual issues that lend themselves todeveloping increasingly complex, and subsequently oftenunused, tools. As noted earlier, despite improvements inthe specification of objectives and indicators over thedecade, there is still no consensus on monitoring indica-tors, and even less consensus on their actual use inprojects. The Bank admits that the impact of the GlobalOverlays Program has been limited. The Bank similarly

TABLE 6.1. PROJECTS WITH REFERENCE TO CASsYear Number of projects Country and project

1991 01992 01993 01994 1 Indonesia Biodiversity Collections1995 3 Burkina Faso, Côte d’Ivoire (West Africa Project); China; Mali1996 3 India, Indonesia-Kerinci Seblat, Madagascar1997 5 Argentina, Honduras, Panama, Senegal, Sri Lanka1998 4 El Salvador, South Africa, Uganda-PAMSU, Zimbabwe1999 1 Kazakhstan, Kyrgyz Republic, Uzbekistan (Central Asia Project)

acknowledges that despite advances, “few countries havecontinued to develop and maintain complete GreenAccounts,” and it has been necessary to simplify tools tofocus on more useful “resource accounts” in key sectors(World Bank 1998f, pp. 17–18). No clear pathway tomainstreaming operational tools for global environmen-tal issues, or more realistic reinterpretation of this goal,has yet been developed.

The Bank has also sought to mainstream globalbiodiversity objectives through new partnership initia-tives with NGOs. These include the Forest MarketTransformation Initiative in 1994 (now Forest Trends),the World Bank-WWF Alliance for effective protectedarea expansion and certified sustainable forest man-agement in 1998 (renamed the Alliance for ForestConservation and Sustainable Use), and the CriticalEcosystems Partnership Fund to evaluate ecosystempressures and develop new projects. These initiatives(with the exception of the first), were established sorecently that it is premature to evaluate their success.Nevertheless, the substantive progress achieved at thepolitical level in these initiatives could be bettermatched if more funds were committed for theirimplementation. Increasing the range of nongovern-ment stakeholders directly involved in promoting theglobal biodiversity agenda is clearly an innovativeapproach that is closely aligned with both the 1991Forest Strategy and GEF objectives. Successfullyattaining results, as well as mainstreaming theseefforts, however, may require more work to make theseinitiatives more inclusive of other NGOs—particularlythose from the South—as well as key governmentstakeholders.

Streamlining the GEF in Bank operations has a mixedrecord to date. Despite stated intentions to do away withdisincentives for Bank staff to deal with the relativelysmaller, more processing-intensive requirements of GEFprojects compared with regular Bank lending, the major-

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ity of staff who were interviewed and who responded tothe review questionnaires cited continuing problems andlack of support. These problems stemmed partly from theextra requirements of the GEF (“double reporting is adisincentive”), and partly from the perception that the“GEF added hurdles to project development and theincreased public profile of controversies—if cost is not toomuch, better to look at another source of funding.”5

Other sources of disincentives for Bank staff work-ing on GEF projects were described by task managersas a lack of management support, comparable levels ofaccountability, and integration in internal databases.Typical comments were, “GEF projects need more

support from country directors and Regional manage-ment” and “the environment is still not a priority formanagement in our Region.” Some staff also cited the“lack of disincentives for neglected GEF projects.”With such statements, task managers indicated thatthere was less internal accountability and review thanfor other Bank projects (that is, the lack of red flags forpoor performance throughout the system). This obser-vation is buttressed by the lack of integration ofseparate GEF projects in the regular Quality AssuranceGroup (QAG) reviews or in Operations EvaluationDepartment (OED) audits—as well as the lack ofintegration into the database system.6

he Congo Basin Rainforest is the second-largestcontiguous primary forest in the world and oneof the last three remaining blocks of intact

BOX 6.1. REGIONAL ENVIRONMENTAL AND INFORMATION MANAGEMENT PROJECT

Ttropical rainforest. With the financial support of theGEF, international donors, NGOs, and national au-thorities, Cameroon, the Central African Republic,Congo, the Democratic Republic of Congo, Equato-rial Guinea, and Gabon are working together to im-prove planning and management of natural re-sources in the Congo Basin at the regional andcountry levels.

National authorities identified the following con-straints:

• Existing environmental knowledge regardingthe region is poorly shared.

• Not enough well-informed decisions are madein the forestry and environmental sectors.

• Major gaps exist in basic and thematic informa-tion on natural resources.

• National capacity to generate and manageinformation is limited.

As a response, the project seeks to address theseissues by:

Ensuring information circulation and optimizingbenefits from existing initiatives through:

• Setting up a primary network• Promoting and harmonizing standards for data

collection and integration

Source: GEF 1997d.

• Implementing or improving telecommunicationinfrastructure, including internet facilities

• Developing information services• Developing catalogues and rosters.

Encouraging decisionmakers to use environmen-tal information and facilitating sound planningfor land use in the Congo Basin by:

• Organizing sensitization and communicationworkshops for decisionmakers

• Developing user-friendly information tools andelaborating a regional report on the environ-ment

• Developing communications tools for the ruralpopulation and the public.

Providing users with environmental informationto meet their demand by producing and updating:

• Basic environmental information• Information on forestry and biodiversity• Agriculture and rural development• Geological resources and mining extraction.

Strengthening national capacitiesThe project has been effective for a year and a half,and two more countries are interested in joining.Funding covers regional coordination activities andindividual country work.

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TABLE 6.2. INTERNATIONAL COOPERATION IN BANK GEF PROJECTSProject Cooperating countries

Mesoamerican Biological Corridor Honduras, Nicaragua, and PanamaCentral Asia Transboundary Project Kazakhstan, Kyrgyz Republic, and UzbekistanWest Africa Pilot Community-Based Natural Resource Burkina Faso and Côte d’Ivoire ManagementEastern Carpathian Biodiversity Conservation Poland, Slovakia, and Ukraine TranscarpathianRegional Environment and Information Cameroon, Central African Republic, Congo, Democratic Management Project Republic of Congo, Equatorial Guinea, and Gabon

There were also complaints regarding the inad-equacy of financial reimbursement for staff time allo-cated to GEF projects and access to these funds by taskmanagers.7 This complaint was most strongly voicedin relation to the new GEF Medium-Size Grants (grantsunder $750,000, often to NGOs). Most task managersfelt medium-size grants were far too time-intensive andsmall to realistically allow Bank management toprocess and manage them. In countries where thenational focal points (the designated offices for process-ing and endorsing GEF proposals within countries)passed on large numbers of proposals, the Bank hasfound it impossible to deal with the volume. As onetask manager said, “we are not a foundation staffed toprocess a large number of proposals from NGOs andother agencies.”

Balancing this pessimistic view of somewhat frus-trated (and overworked) staff, a longer-term view of thechanges since the 1991 strategy and the initiation of GEFprojects suggests that there has been considerable progressin raising the profile of environmental concerns andintegrating project portfolios into more strategic pro-grams of Bank assistance. Most Bank staff interviewed forthis review indicated that their goal was to develop GEFprojects as part of a larger, strategic approach toaddressing conservation and productivity issues in theforestry/natural resource sector. Given the mandates ofthe 1991 Forest Strategy for developing improved policyframeworks and the increasing recognition of the impor-tance of non-forest sector impacts on conservation, thisintegration of GEF projects in other ongoing Bank lendingis an important indicator of effective mainstreaming.

Integration of GEF projects has taken place along acontinuum. At one financial end are the “fully blended”projects in which GEF and Bank financing is fullyintermingled. In the middle are “partially blended”projects in which GEF and the Bank finance differentcomponents of a single project. At the other end are

“stand-alone” GEF projects that are “associated” withseparate Bank projects; it is likely that the projectswere designed together, then separated for processingand management purposes. The table in Annex Gpresents the current list of projects categorized accord-ing to these criteria.

The new GEF project in El Salvador illustrates thekind of conceptual integration that was developed forassociated projects. The Bank’s agricultural marketingproject supports increases in productivity and market-ing returns for shade coffee production. The GEF grantprovides funding for the incremental cost of increasingbiodiversity in coffee grower’s farmsteads by support-ing tree plantations and corridors for bird migration.Both poverty reduction and sustainable economicgrowth and biodiversity objectives have been devel-oped into separate but highly complementary andinterdependent projects, which strategically seek toplace the country’s primary cash crop on a moreenvironmentally sustainable trajectory.

The Regional Environment and Information Man-agement project in Central Africa illustrates the inter-national cooperation dimensions of mainstreamingsuccess, as mandated by the 1991 Forest Strategy. Thisproject illustrates the growing number of Regionalprojects supported by GEF (see box 6.1).

Similar examples of international cooperationthrough regionally developed projects are found inCentral and West Africa, Eastern Europe, and CentralAsia (see table 6.2). Since GEF projects consist ofgrants, the Bank has found it much easier to establishregional multi-country programs than it would have ifseparate loan repayments were required by eachborrowing country.8 This promotion of internationalcooperation on forest conservation made possible bythe GEF is a significant contribution of the GEF to theBank’s ability to fulfill another of the mandates of the1991 Forest Strategy.

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olicy Co-evolutionThe World Bank’s 1991 Forest Strategy emerged in the year that the GEF began its pilot

phase. Both the Bank’s strategy and the GEF were born out of the same worldwide

ConclusionsThe Bank, the GEF, andthe 1991 Forest Strategy

Pimprovements, and moral imperatives toward globalpriorities of arresting deforestation and conservingnatural forest resources. While the Bank’s strategysought to direct this effort largely toward the 20tropical moist forest countries where it feared thegreatest deforestation and biodiversity loss, the GEFdeveloped a wider spectrum of concern for representa-tive ecosystems throughout the developing world. Bothagencies banned logging of primary tropical moistforests, and the GEF has—at least for the present—extended that ban to any primary forest.

Both the Bank, in its 1991 strategy, and the GEFhave sought a multisector approach to integratingforest conservation and sustainable managementwithin country policies. While the Bank emphasized thebenefits of sustainable forest management to povertyreduction, the GEF focused on the global benefits thatare incremental to national returns. Both accept thatglobal externalities are to be financed by GEF. Yet bothentities have stated that their programs must be country

concern for the alarming loss of primary forests and the biological diversity they harbor. Both

agencies evolved along with worldwide development consensus to place increasing emphasis on

stakeholder participation and indigenous peoples. Both sought to direct finances, policy

(client) driven. Both have sought to assert the comple-mentarily of forest conservation and economic devel-opment over the long term, although the Bank hasvoiced more reservations over the extent to which thesediffering objectives can be reconciled by countries inthe short to medium term.

Both the objectives of the GEF and the Bank’s 1991Forest Strategy have been guided and reinforced by,depending on the chronology involved, the Conventionon Biological Diversity and the U.N. FrameworkConvention on Climate Change, as well as by the RioUNCED in 1992. The GEF is the formally designatedfinancial mechanism for these two conventions. TheBank serves as one (and the largest) of three imple-menting agencies for the GEF. The Bank’s clientcountries are almost all signatories of these conven-tions. Thus, the financing and nonfinancing activitiesof the Bank on behalf of the GEF and its regularprogram are constrained to follow the guidance of theConference of Parties carrying out these conventions.

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Fortunately, as with the GEF and the 1991 ForestStrategy, this guidance is congruent and reinforcing—although considered to be overly general (Porter andothers 1998, pp. 55–56).

Mutually Enabling RolesThere has been close co-evolution and congruencebetween the Bank’s 1991 Forest Strategy and GEFpolicies. This overlap has allowed each agency to playa major role in enabling the other to implement thecommon conservation policies and achieve significant(if unmeasurable) results.

Without the GEF’s ability to provide grant fundingfor the additional costs of forest biodiversity conservationassociated with global benefits, it is highly unlikely thatthe Bank could have persuaded its client countries toborrow funds—even on a concessional basis—for theseexternalities. While other bilateral and private donors arenow helping to address this gap, the evidence presented inthis review suggests that GEF funding was instrumental inleveraging these funds and has been able to steadilydecrease its financing percentage.

Furthermore, the GEF funding allowed the Bank toremain active in forestry policy and fulfill, partially,the 1991 Forest Strategy mandate to conserve tropicalmoist forests in 16 of the 20 countries identified aspolicy priorities. Given the ban on logging, the strengthof commercial investments, and the tropical moistforest countries’ disinterest in Bank forest loans, theBank would have been more restricted in its ability toengage in any kind of policy dialogue in these countrieswithout the entrée of GEF grants. The Bank would havehad a very difficult time in showing any progresstoward the goal of tropical moist forest conservationwithout the GEF. While the degree of success in slowingthe pace of deforestation and biodiversity loss in thesecountries cannot be measured at this time, it isarguable that these projects have increased the supportfor conservation, if not affected the rates of biodiversityloss and deforestation.1

Similarly, the GEF funding provided the Bank withan entrée into the Eastern European countries and allowedit to maintain policy dialogues and projects on forestry inAfrica. In countries unwilling, or because of the loggingban unable, to take forestry loans, there was a reductionin forestry projects in Africa that was compensated, inpart, by GEF projects. The GEF also provided a mutuallyacceptable vehicle for the Bank to commence its lendingprogram in Eastern Europe and Central Asia, the newly

emerging states that were not accustomed to dealing withBank loans and conditionality.

The GEF also provided a means for the Bank to puttogether and finance multicountry projects, enabling itto achieve some progress on the 1991 Forest Strategymandate for international cooperation, at least at theregional level. Given loan funding constraints, it isdoubtful whether these cooperative endeavors wouldhave been possible without the GEF, or similar grantfunding with the same overlapping objectives.

Together, the GEF and the Bank contributed to theconservation of specific forest sites and species and tothe development of forest resources to offset climatechange in 44 countries. Unfortunately, a lack ofmonitoring data precludes measurement of the extentor impact of this achievement.

The Bank’s GEF portfolio, and the nonfinancingpolicy and sector activities that often went along withit, was also instrumental in increasing the legitimacy ofconservation investments in many countries. In addi-tion to the interview comments, evidence of thisincreased legitimacy is seen in the increased hostcountry and other donor financing leveraged by theBank’s GEF portfolio. Given strong country and Bankpriorities for other economic and social sectors, itwould be going too far to say that global biodiversityconcerns have been mainstreamed within most coun-tries—or even within the Bank itself.2 It is argued thatsuch a goal is unrealistic: that it is unlikely that long-term global biodiversity issues will ever be on a parwith the myriad other pressing economic and socialconcerns. The implications of accepting more realisticobjectives for biodiversity mainstreaming are thatconcessional and/or new forms of financing will beneeded to make conservation sustainable.

The GEF and the Bank were also mutually en-abling agencies in promoting a genuine increase inlocal community and NGO participation in the forestryand conservation sector, as mandated by the 1991strategy. Strong policy reinforcement from GEF andNGOs active in conservation continued to push theBank and its client countries into greater local govern-ment, community, and NGO participation in designand implementation by the second half of the 1990s. Italso fostered increased attention to indigenous peoplesand resource rights, although this is an area in whichthe Bank is still criticized by some NGOs for not goingfar enough. Nevertheless, it is widely recognized thatincreased acceptance of co-management regimes in

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forest conservation and management has been fosteredby the Bank and GEF’s progressive approach to theseissues in the latter part of the decade. The Bankacknowledges, however, that it has yet to encourageadequately women’s participation in forest projects,despite their critical role in natural resource manage-ment and use. And, unfortunately, the inclusion of somemembers of civil society concerned with forestry didnot extend to the private sector—an issue that will berevisited in the next set of conclusions.

One final area in which the GEF and the Bankforest strategy played a mutually enabling role is instarting to address the wider policy issues and intersec-toral linkages that directly and indirectly impinge onthe success of forest biodiversity conservation, energypolicy, and sustainable forest management. By increas-ingly integrating (mainstreaming) GEF projects withina larger, strategic set of investments and policy interac-tions, the Bank has made real progress in starting todeal more effectively with the wider policy andintersectoral issues. Few, if any, implementing agencieshave the leverage to increase the GEF’s impact in thisarena. Together, the GEF and the Bank have shownpolicy impact in a number of countries along the linesmandated by the 1991 Forest Strategy—even if thisimpact is minimal in some of the critical tropical moistforest countries and is considerably less than the scaleof the problem requires.3

Conceptual Lacunae and Policy ImplementationWeaknessesThe 1991 Forest Strategy, like the GEF’s GuidingPrinciples for Projects Associated with Logging, hastraditionally favored forest conservation projects oversustainable use.4 While seeking integration into theagendas for economic and social development thatdominate client countries and the World Bank, thepolicy eschews involvement with the most valuablecommodity involved—the tree trunks (logs)—containedin the vast primary forests of the tropical developingworld. This keeps both agencies’ hands “clean,” butseverely reduces the potential for engaging the govern-ment and private forest industry sector in extendingbiodiversity conservation into the vast, nonprotectedarea forest estate. GEF policies, as well as those of theBank, do encourage other forms of sustainable use,including non-timber forest product use, communityforest management, and ecotourism, for example.5

However, more emphasis on integrating conservation

into sustainable timber use would have better bridgedthe development-environment gap and provided thepotential for vastly extending the impact of Bank GEFinvestments.

The GEF was established to fund the costs ofconserving the global values of forest conservation,with the realization that developing country govern-ments are unlikely to provide funding—or borrow fromthe Bank—for benefits that do not accrue directly tothem. But neither the 1991 Forest Strategy nor the GEFhas adequately confronted the underlying gap in long-term financial sustainability, the current result of thisapproach. Although innovative trust funds have beenestablished by some Bank GEF projects for long-termfunding, there has been little evidence of systematicpolicy or project strategies for dealing with financialsustainability until very recently.

The gulf between the global biodiversity conserva-tion priority of the 1991 strategy and the GEF and thecountries that must carry it out is unlikely to be bridgedany time soon. As the QAG review of first-generationAfrican GEF projects noted:

Biodiversity is still primarily an agenda of theinternational community. National govern-ments usually have more immediate priorities,and can even be hostile to programs promoted,and sometimes managed, by external agentswhich are felt to favor ‘animals and trees overpeople’ (World Bank 1998a).

While the OED Country Case Studies, which spana number of Regions, have found more progress indeveloping country ownership and integration of envi-ronmental concerns than was found by the QAG reviewof early African projects, the fundamental gap inpriorities remains an underlying reality. A more realis-tic assessment of the degree of mainstreaming that ispossible in developing countries or their global bank-ing partner would allow more realistic strategies forfinancial and policy sustainability.

This conceptual and strategic priority gap isfurther exacerbated by the scale of the problem of forestbiodiversity conservation and the multiplicity of actorsinvolved. There have been significant achievements inestablishing, improving, and encouraging the creationof more effective PAs with local community involve-ment in most of the 44 countries involved in thisreview. However, with a total of only $1 billion

C o n c l u s i o n s : T h e B a n k , t h e G E F, a n d t h e 1 9 9 1 F o r e s t S t r a t e g y

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invested over nine years, the scale of the investment interms of the number of forest hectares better protectedis small compared with the global scale of the problem.Unless there is either considerable leverage of otherfunding or significant change in policies affecting theremaining forest areas, rates of primary forest andbiodiversity loss will likely continue at a level unac-ceptable to most of the world. The new Bank GlobalInitiative to establish 5 million hectares of protectedarea and improve management on an additional 5million hectares is an important attempt to address thisgap, although it is too early to evaluate its ability todevelop the country ownership and financial supportthat would make it truly effective.

The World Bank–WWF global initiative, alongwith some of the other partnerships with NGOsdeveloped by the Bank, also represents an acknowl-edgment of the need to address issues of sustainableforest management and the other actors left out of the1991 Forest Strategy: the private sector. As pointedout in the review, the absence of effective privatesector involvement undermines a project’s ability todeal with threats originating from these sources, aswell as its ability to harness large sources ofpotential financial sustainability. The World BankPresident’s CEO Forum, the inclusion of a target of 5million hectares of certified forest management inthe WWF initiative, and the statements of the GEFCouncil welcoming increased private sector involve-ment are indicators of the need to increase participa-tion of private sector stakeholders in projects andpolicy development. While the direct participation ofthe logging and primary forest-using industries isconstrained by the current policies of both agencies,involvement of other private and public entities insectors such as agriculture, tourism, transportation,power, and water management is far less than thescope of their impact on forest biodiversity demands.The Bank has made substantial progress in linkingGEF forest projects to agricultural and watershedprograms, and the International Finance Corporation(IFC) has demonstrated how the private sector can becreatively involved in GEF energy and biodiversityprojects (for example, Terra Capital BiodiversityEnterprise Fund for Latin America, 1997).6 But theoverall lack of private sector participation in policyand strategy remains significant, despite its status asa major source of biodiversity impacts, as well as itspotential as a key to arriving at the scale and

sustainability of financing necessary to achieve the1991 strategy and GEF’s conservation objective.

Implementation effectiveness is directly related tothe extent to which it is averting, or redirecting, threatsto the conservation of forest biodiversity. This review,in agreement with other recent evaluations, finds thatwhile there has been significant progress in developinginnovative models for dealing with the negativeimpacts of local residents, there has been much lesssuccess in dealing with the threats emanating fromother sectors of the economy.7 The analysis of threatshas been inconsistent in project design—sometimessystematic, and other times haphazard. The design ofproject components also has a mixed record in thedegree to which it directly addresses the threats.Threats to biodiversity related to local people havebeen increasingly addressed through project compo-nents and co-management policy innovations in waysthat show promise of finding far better win-winsolutions than past practices in PA management.However, there is still considerable scope for strength-ening the linkages between community-level invest-ments and conservation actions in the ICDPs along thelines outlined in the India Ecodevelopment Project.8

Perhaps even more important, projects and policyinitiatives will have to enlarge their scope to developmore systematic strategies for identifying and workingto overcome threats emerging from other sectors,whether private or public. This reinforces the need tobring the private sector stakeholders more centrallyinto the policy and project dialogues and to look for

Juju dance for the environment. Juju dancers, dressed as forestanimals, depict the destruction of the forest. Mount Oku,Bamenda Highlands. Cameroon. Photo courtesy of Still Pic-tures. London.

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ways to seek win-win—or at least less lose-lose—solutions with their constructive collaboration.

There are several concomitant implications ofenlarging the scope of the GEF co-financed forestprograms developed by the Bank to better include otherprivate and public sectors to meet the goals of the 1991Forest Strategy. These needs, or opportunities, include:

• The opportunity to continue developing a morestrategic programmatic approach

• The opportunity to expand the grant and invest-ment portfolio to projects identified by thisapproach to areas outside the protected areasinvolving more sustainable use

• The opportunity to develop new mechanisms forworking with the private sector that help providenew avenues for sustainable financing

• The opportunity for the GEF to transfer imple-mentation of small, stand-alone projects (such asthe medium-size grants) to a different imple-menting mechanism that could continue to har-ness the creative and critical energy of the NGOsector

• The opportunity to develop modest and clearmonitoring indicators with country ownershipand some chance of implementation.

A number of Bank task managers stressed that theircurrent approach to developing GEF grants is increas-ingly interwoven with more strategic approaches tonatural resource management and agriculture as awhole. This wider approach is the Bank’s comparativeadvantage, but has too often been only weakly sup-ported by analytic sector work and CASs. Furthermore,countries that measure the Bank’s credibility by theamount of GEF grant funds it has helped channel totheir coffers are less interested in a strategic program-matic approach than in funding for their stand-aloneproposals. These are two reasons why a programmaticapproach must be both strategic and involve funding toensure operationalization of strategies. By seeking outa wider array of potential partner stakeholders in boththe private sector and the linked public sectors, andusing their interests and perspectives to construct awider program of support—including support that isnot based on a specific project—it may be possible todevelop a level of country acceptance and forestbiodiversity impacts beyond what is currently feasible.

A wider spectrum of partners that includes the

private sector would also open up opportunities to fundmore project or program initiatives directed towardbiodiversity outside of PAs. While there are researchinventory and database projects that deal with forestbiodiversity outside PAs, and a number of PA projectsthat fund sustainable use in adjacent buffer zones, thereare very few that address this issue at any scale or as acentral objective.9 Improving the sustainability andbiodiversity conservation consequences of better log-ging operations obviously has the largest potential forwidespread impact and financial sustainability. TheWorld Bank–WWF initiative for certification is apioneering attempt in this direction, but there are manyapproaches to improved logging and sustainable forestuse that involve mechanisms other than certification,which has yet to gain widespread acceptance. How-ever, changing Bank or GEF policy to more directlyengage in working with logging operations clearlycarries the risk of lessening support from the vocalconservation community, a consequence that could alsoundermine the long-term success of conservationefforts. Nonetheless, it should be possible to moreeffectively engage the forest industry and loggingsector in dialogue and policy development that wouldenhance opportunities to increase the biological sus-tainability of their operations.

There are also many opportunities in non-timberforest product development for increasing incentives toconserve biological diversity. While some of the earlyhopes for finding sustainably harvestable non-timberforest products (such as Brazil nuts) are proving to berelatively uneconomical, or only economical on a verylimited scale, encouraging opportunities are beingexplored. Within the Bank’s GEF portfolio, theseinclude cultivation of medicinal plants; development ofnew agroforestry models for coffee; buffer zone forestmanagement for fodder, fuelwood, fiber, and smalltimber; and ecotourism. The Biodiversity ConservationNetwork10 recently concluded a three-year actionresearch project that tested a number of promising linksbetween enterprise and biodiversity conservation withlocally collaborating NGOs in the Asia Region (BCN1997). While no one approach or sector emerges fromthis work, it is evident that there is potential in a widearray of industries and sectors to increase biodiversityconservation incentives and impacts.

The GEF has recently been criticized by NGOs forhaving “lost its experimental edge—its ability to testnew ideas and take risks in new ventures” related to


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financial innovation (Bionet 1999, p. 1). Both the needand the opportunity to develop new financial mecha-nisms—particularly mechanisms that could bring thecommercial private sector on board and better respondto innovative opportunities created by the non-profitNGO sector—is large. The GEF has prepared threepapers on engaging the private sector for the GEFCouncil (GEF 1995, 1996c, 1999a). It has made anumber of recommendations in its internal evaluations,but acknowledges the “need to operationalize thesuggestions from these studies both at a project leveland programmatically” (GEF 1999a). A number ofalternative financing mechanisms have been identifiedby the GEF, including contingent grants, contingent orconcessional loans, partial credit guarantees, invest-ment funds, and reserve funds (GEF 1999a, Annex 1). Inaddition, NGOs have suggested developing a specialwindow for high-risk, experimental projects; expand-ing the scope of trust funds and financial intermediar-ies; developing ecoenterprise funds; expanding thescope of private sector partnerships to help developbankable projects; and exploring the possibility ofbenefit-sharing from genetic resources. In addition,NGOs point to the potential for developing carbonoffset projects, new debt swaps, and more effectiveemployment of user fees and tax mechanisms. A recentelectronic conference on paying for mountain resourcesdocumented the high value of watershed protectionservices provided by protected forests to downstreamhydroelectric and irrigation users, as well as newmechanisms used to share the financial savings result-ing from conservation between urban users and up-stream farm households (The Mountain Institute 1997).

As the GEF has noted, implementing many of theseinnovations requires resolving issues related to country-drivenness and incremental costs. From the Bank’spoint of view, it also requires addressing issues notspelled out in the 1991 Forest Strategy. Given the needto expand the scope and scale of impact of forestconservation to meet the objectives of the 1991 ForestStrategy, these should be surmountable hurdles.

Approaching biodiversity conservation and sus-tainable use of resources also requires looking beyonda project-by-project approach. A recent thematicreview on achieving sustainability of biodiversityconservation suggests shifting the discussion of sustain-ability from “How can we design a project that willmake a contribution to biodiversity conservation andwhat does it take to make it sustainable?” to “What

does it take for biodiversity conservation to be sustain-able, and how can we design a project (together withother activities) to make a contribution to that?” (Smithand Martin 2000).

An expansion of the scope and strategicinterlinkages of the Bank’s GEF-related forestbiodiversity program will require additional staff time.Two ways to free-up time, as well as to develop a moreresponsive mechanism to support innovative, stand-alone projects, are to either develop a new window forinnovative small and medium-size grants or to transferresponsibility for these grants to other implementingagencies that find them more compatible with theirworkloads and institutional incentives. In the conserva-tion field, much of the innovation in approach, andmany of the most effective field and research projects,are those carried out by NGOs—especially partner-ships of international and local NGOs. These innova-tive projects and the support of civil society (includingthe private sector) for biodiversity conservation whichthey often engender, are often not part of the Bank’sstrategic investment program. These projects will oftennot be part of the government establishment’s currentstrategy or priorities. Yet it is evident from the relianceof current establishment projects funded by the Bank onthe innovations and executing skills of NGOs thatfunding for these relatively small efforts can providedisproportionate benefits to conservation. Bank taskmanagers acknowledge that they are unable to processall of the proposals for medium-size grants and stand-alone projects, which are being proposed in increasingnumbers.11 Furthermore, they state that supportingfunding for a separate stand-alone project that does notfit their strategic portfolio would be counter to theirefforts to fulfill the Bank and GEF policy mandates tomainstream biodiversity conservation and leverageadditional funding and impacts. The obvious conclu-sion is that a separate implementing mechanism, moreakin to a grant program of a private foundation, shouldbe established to fulfill this vital role, or that it shouldbe transferred to an agency, such as the UNDP, that isnot loan-oriented and would not have the same biastoward large projects.

Finally, the review has underscored the lack of anycomparable monitoring information that could be usedto measure progress and results. The conceptual diffi-culties in developing meaningful biological indicatorsthat can be used within the timeframe of Bank GEFprojects should not be underestimated. A number of

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highly professional efforts have gone into developingforestry and biodiversity indicators.12 Despite this highlevel of effort, there is no widely shared consensus onwhat indicators should be used. More important, thereis no consensus among task managers and projectimplementers in various countries about whether theseindicators can and will be measured. It is problematicwhether any such consensus can be developed. Butgiven the importance of assessing the value of the forestbiodiversity conservation efforts being undertakenworldwide—specifically by the Bank and the GEF—itwould appear worthwhile to try to develop a modest setof comparable indicators that might actually getmeasured. If the GEF and Bank were to harness theownership-building potential of its participatory meth-odologies, it might be possible to develop such a resultthrough a patient, multiyear process. This would likelyrequire special project funding and organization.

Concluding WordsOverall, this review of the Bank’s GEF forest portfolioconcludes that the GEF has been instrumental inallowing the Bank to pursue many aspects of the 1991Forest Strategy. The conservation orientation of thepolicy and the co-evolution of both the Bank’s partici-patory approach and the GEF’s guidelines allowed bothto serve mutually enabling and essential roles infulfilling their overlapping mandates to improve theconservation of forest biodiversity.

As a result, significant conservation results havebeen achieved. These include improved conservation ofspecific PAs, increased participation of civil society inconservation, and improved policy frameworks andconservation understanding in the 44 countries wherethe Bank was active with GEF financing. New mecha-nisms for sustainable financing—notably the trustfund—have been successfully implemented. Lessons inintegrated conservation and development projects, inthe time frame needed for conservation, and thedifficulty of developing and using indicators are amongthose that have been identified and are being ad-dressed.

More fundamental problems of integrating conser-vation within economic and social priorities and theconsequences of this problem for financial sustainabil-ity are only beginning to receive the attention theydeserve. Participation of the private sector and theadequacy of the current project approach to dealingwith the real threats to biodiversity from outside the

local community are major issues confronting thefuture of the program. These will require some strate-gic new initiatives in developing more effective pro-grammatic approaches, new instruments for privatesector involvement and financial sustainability, andnew mechanisms for sustaining NGO innovations.They will also require rethinking some aspects of the1991 Forest Strategy that inhibit sustainable use ofsome forestry products and the development of long-term, financially self-sustaining solutions.

The main recommendations of the GEF review forthe future are similar to many of those in the OEDreview of the Bank’s regular program:

• Enlarge the scope of the GEF co-financed forestprograms developed by the Bank to betterinclude the private sector and other public sectors.

• Develop a more strategic approach to addressingthe most important threats to biodiversity andthe most effective investments of limited funds toleverage large-scale impacts.

• Expend the grant and investment portfolio toprojects outside PAs involving more sustainableuse and forest management for both timber andnon-timber forest products.

• Transfer implementation of small, stand-aloneprojects to a different implementing mechanism(either new or existing) that could continue toharness the creative and critical energy of theNGO sector.

• Develop modest and clear monitoring indicatorswith country ownership and work on clientcapacity for implementation.

• Develop policies and projects that more effec-tively work with sustainable forest use andmanagement to incorporate conservation objec-tives and extend forest strategy goals into theprivate sector forest industry.

• Pursue opportunities to develop incentives forconservation that are linked with private enter-prise, including agriculture, non-timber forestproducts, tourism, hydroelectric generation, live-stock rearing, and the like.

• Continue identifying and operationalizing newfinancial mechanisms for sustaining conserva-tion funding, including trust funds, royalties andfees, conservation easements and tax mecha-nisms, contingent grants, partial credit guaran-tees, reserve funds, and so forth.


46


Overall, it is recommended that the Bank’s partner-ship with the GEF to sustainably conserve the world’sforest biodiversity be expanded, with more strategi-cally developed, realistic goals and more innovativeapproaches. The limitations of mainstreaming andnational financing of global biodiversity benefits re-quire a more realistic, comprehensive, and sustainableapproach. Given the limited financing available toaddress the huge global need, impact needs to beexpanded through increased policy and legislativereform, new forms of financing, and engagement with

the private sector—including the logging industry. Thecritical role of NGOs in mobilizing civil societysupport and developing innovative models should befurther supported through more appropriate fundingmechanisms. The Bank’s comparative advantage inanalytic work and investment leverage should becaptured through expanding the trend toward incorpo-rating GEF projects within larger strategic programs toaddress the powerful threats and opportunities forbiodiversity conservation emerging from other, linkedsectors.

ANNEXES

47

ANNEX A: TERMS OF REFERENCE

Forests and the Global Environment Facility (GEF): AReview of GEF Projects to Contribute to the OEDReview of the 1991 Forest Strategy and Its Implemen-tation (Draft Terms of Reference)1

The ContextThe Operations Evaluation Department (OED) of theWorld Bank is currently undertaking a Review of the1991 Forest Strategy and Its Implementation as an inputinto the Bank’s forest strategy. This review will be in twoparts. One part will consist of six country case studies(China, Brazil, India, Indonesia, Cameroon, and CostaRica), and the other will consist of an assessment of theglobal lending and nonlending services of the World BankGroup (including IFC and the GEF) in the post-1991period, to assess the impact on the world’s forests.Together, the country studies and the portfolio reviewinputs will form the basis of the overall OED report. Tocoordinate with the Bank’s Forest Strategy Implementa-tion Review, a draft of the overall OED report is plannedto be ready by April 1999. The OED review will bepresented to the Board in or about August 1999, at aboutthe same time as the presentation of the new Bank foreststrategy. (See Approach Paper and Design Paper of OEDStudy for details.)

BackgroundThe GEF was created in 1991 (it was restructured after itspilot phase in 1994) to provide cofinancing to developingcountries and those with economies in transition forprojects and activities that protect the global environment(that is, where benefits are global but costs are local). TheGEF is the interim funding mechanism for two interna-tional treaties: the Convention on Biological Diversityand the Convention on Climate Change. The World Bankis one of the three financial implementing agencies forGEF projects; the others are the UNDP and UNEP. As ofJune 1998, a total of $751 million has been committed inWorld Bank/GEF projects. This has been complementedby $722 million in cofinancing from the World Bank (GEF1998c, p. 65). Whereas the Bank’s forest sector lendinghas stagnated,2 GEF activities have been growing sub-stantially in recent years. Annual commitments tobiodiversity have doubled (see table A.1). Funding fromGEF is limited to countries that fall within the eligibilitycriteria provided by the Convention Secretariats orqualify for technical assistance grants from UNDP orloans from the World Bank.

Four focal areas qualify for GEF funds:biodiversity, international waters, climate change, andthe ozone layer. The biodiversity component, becauseof its direct and indirect impact on forests, is particu-larly important for the OED review. Nearly 50 percentof all GEF-financed projects have been in the area ofbiodiversity conservation. GEF funding to countries isin the form of grants. The World Bank-implementedGEF projects usually complement its regular loanprogram in client countries.

ProposalThe portfolio review of Bank projects and countrystudies, which will include both ongoing and completedprojects, will be managed in-house by the core OEDteam led by Uma Lele. The Operations EvaluationGroup of IFC is evaluating the IFC portfolio. It isproposed that a review of the GEF’s completed andongoing projects be carried out, in addition to a limitednumber of audits of completed projects currentlyproposed by OED. The purpose is to:

• Tell a more complete story of the World BankGroup’s activities in and impact on the forestsector.

• Capture developments in the rapidly growingGEF portfolio.

• Explore the relationship between Bank and GEFlending in its impact on forests.

The review of GEF projects will contribute to bothparts of the OED study, the country case studies and theportfolio review. To increase synergy between the two,the GEF review will be carried out concurrently withthe OED review (i.e., with a first draft by February1999). The GEF review, although done in-house byOED, will be a self-standing product. As agreed, GEFwill finance the core team and the country study part ofthe GEF review.

It is proposed that the advisory committee for theOED review concurrently give its comments, sugges-tions, and the like on the GEF review (see Design Paperfor details).

For a proper understanding of issues, GEF projectsshould be evaluated in the context of a conceptualframework being developed to evaluate Bank projects(for details, see figure A.1 and the OED Design Paper).

During 1992–98 there were 89 GEF projects.3

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Table A.1 gives total yearly biodiversity investmentsby the Bank, IDA, and GEF.

Depending on the direction of GEF granting, the GEFreview will look at countries with and without Bankprojects. In addition to studying project documents, theGEF team will hold extensive interviews with taskmanagers of GEF and Bank projects. In consultation withthe OED team, the GEF team will also undertake fieldvisits to a selected number of projects.

The review will also take into account the findingsand recommendations of reports recently produced byGEF, the Bank’s Environment Department, and otherorganizations, including the following:

• Annual Reports for the Global Environment Facility• Biodiversity Conservation Projects in Africa:

Lessons Learned from the First Generation.

FIGURE A.1. LOGICAL FRAMEWORK FOR COUNTRY STUDY

QAG evaluation in an Environment DepartmentDissemination Note, July 1998. Quality Assur-ance Group, The World Bank.

• “Evaluation of Experience with ConservationTrust Funds.” October 1998. GEF.

• The Global Environment Facility from Rio toNew Delhi: A Guide for NGOs, by Stanley W.Burgrel and Sheldon Cohen. IUCN, 1997.

• The Global Environment Facility: IndependentEvaluation of the Pilot Phase.

• The Global Environment Facility: SharingResponsibility for the Biosphere, by David Reed.1991 (vol. 1), 1992 (vol. 2). Worldwide Fund forNature.

• “Incorporating Social Assessment and Participa-tion into Biodiversity Conservation Projects,”

• “Issues and Options in the Design of GEF-

Resource endowments

Human NaturalFactor proportions

External factors

Macroeconomic policies(monetary, fiscal, and exchange

rate policies)

Sectoral policies outside forests(infrastructure, agricultural,

and land policies)

Forest sector policies(legal and regulatory,

institutional, biophysical,factor- and product-market-related)

Investment policies

IncentivesEconomic (factor and product prices)

Noneconomic

Institutional arrangements

Information

Cultural factors

Technological possibilities

Behavior of socioeconomic agents and stakeholders(donors, governments, NGOs, state and localadministration, private individuals, industries,

indigenous people, poor people)

Demand and supply of forest and non-forest products and services

Impact and externalities of forestsForest coverQuality of natural forestsBiodiversityWatershedIndigenous peoplePoverty, employment, and incomesCarbon sequestration

(climate change)

49

Supported Trust Funds for Biodiversity Conser-vation.” Paper No.11. GEF.

• “Mainstreaming the Global Environment inWorld Bank Group Operations.” October 1998.The World Bank

• “Monitoring and Evaluation Guidelines forBiodiversity Conservation Projects,” (GEF)

• Partners or Hired Hands? Procurement Reform forEffective Collaboration between NGOs and Multi-lateral Institution: The Case of the GEF. IUCN.

• Pilot Phase Portfolio Project and Implementa-tion Review. 1996. GEF.

• Project Implementation Review.1997. GEF.• Study of GEF’s Overall Performance, by Gareth

Porter, Raymond Clémençon, Waafas Ofosu-Amaah, and Michael Philips. GEF.

• “Summary Report on Study of GEF ProjectLessons.” January 1998.

Major Issues for GEF ReviewFrom the perspective of OED’s Forest Strategy Review,certain issues (outlined below) stand out as important.The biodiversity focal area is of particular interest. Inaddition, lessons of experience that arise out of conflictbetween the interests of protected areas and people willbe relevant.

1. What is the scope of GEF projects? Are theirobjectives clear? Can the benefits be measuredand monitored? Have outputs, outcomes, andimpacts, along with associated indicators, beenadequately identified in project formulation?

2. The OED standard evaluative framework isstructured by the concepts of relevance4 (andin the context of the Rio, Biodiversity, andClimate Change Conventions) efficacy,5 effi-ciency,6 sustainability,7 and institutional de-

A n n e x e s

TABLE A.1. TOTAL YEARLY BIODIVERSITY INVESTMENTSNumber of projects or

US$ (millions) projects with components

Fiscal year IBRD IDA GEF IBRD IDA GEF

1992 69.8 175.2 49.6 2 9 31993 44.7 31.7 44.5 5 2 71994 53.0 17.4 63.0 6 3 71995 99.5 11.2 60.8 7 1 91996 32.3 1.8 113.5 3 1 71997 78.1 224.1 109.4 5 9 9

Note: Data for 1998 are not available in the Update.Source: World Bank 1998b.

velopment impact.8 To the extent possible, theGEF Review will try to evaluate GEF projectsin a similar framework.

3. For the six country case studies, and in the reviewof global lending, it will be important to knowthe relationship of the GEF portfolio to the Bank’sforest portfolio. Country authors will also exam-ine GEF components of Bank projects and GEFprojects while looking at the implementationexperience of Bank projects. Did the forestportfolio enable GEF activities, or vice versa?Did it add new dimensions to the Bank’s activi-ties (on community participation, biodiversityprotection, and interactions between agricultureand forestry) or additional consideration tobiodiversity conservation and sustainable use ofbiological resources that would not have takenplace without the GEF? To what extent haveglobal environmental concerns related to bio-logical diversity and climate change been inte-grated into World Bank forest sector loan strate-gies, policy discussions, and relevant sections ofthe Country Assistance Strategies? To whatextent has the World Bank forest portfolioidentified causes of loss of biological diversity? Isthere a big difference between the biodiversityimpact of straight Bank forest projects and GEFprojects within forested areas? This will includeland degradation issues, especially in case stud-ies—transformation of land habitats (both theacceleration and reversal of land degradation).

4. For GEF funding, the relevant benefits are“incremental;” that is, projects must have posi-tive incremental costs if they are to receive GEFsupport. Simply put, incremental costs are thedifference in costs between a project with global

50


environmental benefits and one without.9 Towhat extent do GEF projects deal with incremen-tal cost terms and as “truly global externality”projects? How has this policy affected projectdesign and performance? Will countries borrowBank funds on Bank/IDA terms to do what GEF isdoing, particularly if GEF benefits are reallyglobal?

5. What means does the World Bank use to try tomainstream global environmental issues?How is GEF helping scale up efforts in theclient countries (for example, national envi-ronmental strategies)? Does the Bank main-stream environmental issues, and, if so, how?

6. Participation with stakeholders is a central

tenet of GEF policy and operations. What isthe nature of participation with primary localstakeholders, especially the local community?To what extent have other stakeholders (stateand local governments; local, national, andinternational NGOs; private industries; andindividuals) participated in GEF project andpolicy activities? Do GEF projects havegreater NGO involvement than Bank projects?Is participation with stakeholders significantlyable to influence quality and kind of GEF grantgiving? What are the implications for projectimplementation and success? What is the GEFoutreach and communication strategy to workwith NGOs and civil society?

TABLE A.2. EVALUATION OF THE 1991 FOREST STRATEGY: A RESULTS-BASED FRAMEWORKResource inputs Implementation outputs Outcomes Impacts

World Bank

IDA

• Strategy development• Country Assistance Strategies

(CASs)• Economic work• Sector work• Forest sector work• Non-forest sector work with

effects on forests• Lending• Macroeconomic adjustment

lending• Sector adjustment lending;• Forest sector project loans• Other non-forest project loans

with impacts on forests; e.g.,infrastructure, agriculture,mining

• Quality standards: Bankoperational manuals onoperational policy and goodpractices, e.g.:– Forestry– Environmental assessment– Indigenous peoples– Involuntary resettlement– Involving nongovernmental

organizations in Bank-supported activities

• Aid coordination groups• Quality assurance• Quality Assurance Group

(QAG) reviews:• Self-assessment: Project

Implementation Reviews• OED sector reviews• OED project audits

• Improvements in countrypolicies and strategies

• Institutional reforms,legislative reforms

• Improved incentives• Improved patterns of public

expenditures• Innovative models, e.g.,

participatory approaches,sustainable forestmanagement approaches

• Improved legal framework• Improvements in tax and

subsidy policies• Reduced role of the public

sector• Improved public and private

sector management capacity• Improved rights for

indigenous peoples• Increased human capital• Improved environmental

assessments• Improved monitoring and

evaluation of impacts

• Improved forest coverthrough reduced rates ofdeforestation and increasedtree plantings

• More sustainable use ofnatural resources

• Protection of biodiversity• Carbon sequestration• Increased supply of

fuelwood and othernon-timber forest products

• Increased incomes andemployment, particularlyof the poor

• Improvement in the qualityof resources: soils, water

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A n n e x e s

BOX A.1. THE WORLD BANK’S FOREST STRATEGY AT A GLANCE

The goal of the Bank’s Forest Strategy was toaddress the twin challenges of rapid defores-tation, especially of tropical moist forests,

and inadequate planting of new trees to meet therapidly growing demand for wood products. Thesechallenges were perceived to be connected to fivekey factors:

• Externalities that prevented market forces fromachieving socially desired outcomes

• Strong incentives, particularly for the poor, tocut trees

• Weak property rights in many forests andwooded areas

• High private discount rates among thoseencroaching on the forests

• Inappropriate government policies, particularlyconcession arrangements.

Five principles were proposed for Bank involvementin the forest sector:

• Multisectoral approach• International cooperation• Policy reform and institutional strengthening

• Resource expansion• Land use controls including zoning, demarca-

tion, and tenure issues to preserve intact forests.

Bank-financed activities were expected to complywith seven conditions:

• No Bank Group financing for commercial log-ging in primary tropical moist forests

• Adoption of policies and an institutional frame-work consistent with sustainability

• A participatory approach to the management ofnatural forests

• Adoption of comprehensive and environmentallysound conservation and development plans withclear definitions of the roles and the rights ofkey stakeholders, including local people

• Basing commercial use of forests on adequatesocial, environmental, and economic assessments

• Making adequate provisions to maintainbiodiversity and safeguard the interests of localpeople, including forest dwellers and indigenouspeoples

• Establishing adequate enforcement mechanisms.

7. How financially sustainable are GEF projects?What are the incentives for sustainability?How can sustainability be improved?

8. What is the overall policy environment withinwhich a GEF project operates? Is the projectconsistent with that policy? Has the projecttackled key policy constraints, particularlythose relevant to sustainability? Are GEFprojects more successful when integrated withBank projects? What are the leverage issues?Would larger Bank interventions have helped?

9. How do World Bank forest projects comparewith GEF forest-related projects with regard topublic participation, national ownership, andprovisions for longer-term institutional andfinancial sustainability?

10. What promising sustainable use models can beidentified in the World Bank forest portfolio?

The following conditions will ensure that the GEFreview contributes effectively to the OED review:

• The GEF portfolio will be reviewed in closecoordination with OED’s Enabling ActivitiesEvaluation of the GEF projects.

• Terms of reference for the GEF portfolio will bedeveloped in close consultation with the GEFSecretariat and Bank GEF colleagues to ensure thatthey highlight particular aspects of the GEF portfo-lio and differences from the Bank’s portfolio.

• The review process will be independent andobjective, both in reality and perception, at alltimes, as expected of all OED reviews.

See table A.2 for the results-based frameworkunderlying the evaluation of the 1991 Forest Strategy.

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ANNEX B: GEF’S INTERIM GUIDING PRINCIPLES FOR PROJECTS ASSOCIATED WITH LOGGING

A n n e x e s

The GEF will continue to secure the conservation andsustainable use of the biological resources in forestecosystems in accordance with good practice. It willalso pursue the objective of benefit sharing, as appro-priate.

1. In the Corporate Business Plan 1998, the GEFSecretariat noted that among the strategic issuesneeding attention, the role of the GEF in sustain-able forest management (SFM) is key. A centralpart of integrated SFM is the need to pursuemultiple objectives. In accordance with the forestecosystem operational program, GEF currentlysupports sustainable forest uses. The one excep-tion is sustainable logging, because its linkage tothe conservation objective remains very muchopen to question.

2. Consequently, the Secretariat has commissionedan issues paper to provide strategic advice onthis topic. The paper will review the state ofknowledge on biodiversity conservation goodpractice in logged forests and will provide thebasis for the formulation of further guidance forGEF operations. However, as the paper and thefollow-up work will not be completed untilMarch 2000, there is need to formulate guidancefor the Implementing Agencies’ processing oftheir forest projects associated with loggingoperations. Logging in primary forests, however,will not be supported by GEF.

3. The following are some guiding principles forthe interim period. These principles do notreplace existing review criteria, or need forconformity with GEF policies and principles,including the incremental cost and publicinvolvement policies.

A. GEF financing will not be used:1. To finance logging operations in primary forests2. For the conversion of forests to alternative

land use3. To meet sustainable baselines of pursuing SFM4. To meet the cost of forest certification schemes5. To improve timber harvesting methods to meet

FSC/ITTA criteria6. For reforestation or restoration of habitat follow-

ing logging operations

7. To finance the costs of reduced-impact logging tosecure SFM

8. To finance the costs of commercial, industrialtimber plantations and tree-farming systems.

B. GEF financing for projects associated with log-ging will be used:

1. In conformity with its objectives of conservation,sustainable use and benefit sharing for theconservation of biodiversity (in forests)

2. In conformity with the incremental cost policy(GEF support to forest management activitiescould be additional, substitutional, or both, andeach of these activities must concur with all theguiding principles)

3. In conformity with the public involvement poli-cies (where relocation or resettlement is antici-pated, this should be done in a transparent,participatory, and voluntary basis)

4. For small, pilot, local-community-based demon-stration projects, but not for large commercial-scale interventions

5. To mainstream biodiversity considerations intothe forestry sector (biodiversity overlays)

6. For alternative livelihoods in production foreststo take the pressure off biodiversity in protectedareas, but only where (i) production forests arepart of the national baseline and are beingpracticed in accordance with other criteria (forexample, ITTA, FSC, and the like); and (ii)where production forestry and the alternativelivelihood under this scheme do not underminethe biodiversity targeted for conservation in theprotected areas.

C. In furthering the objective of sustainable use inforests, GEF will encourage:

1. Policy reform and institutional strengthening,including the removal of barriers critical tosecuring sustainable forest management

2. Broad land-use planning and management exer-cises to mainstream biodiversity considerationsinto planning

3. Alternative resource control systems (decentrali-zation, forest co- and joint managementschemes, and the like);

4. Participatory and adaptive forest management

54


involving local communities and the governments5. Strengthened systems for monitoring of resource

use and audits of institutional performance6. Sustainable harvest of non-timber forest prod-

ucts, such as medicinal plants7. Management of forests for nonconsumptive uses,

such as recreation and tourism.

55

The study covered 44 project documents to review theinclusion of participatory elements in project design.Supplementary sources included Social Data, Commu-nity-Based Rural Development and ResettlementProject Perspective sheets, when available.1 TheProject Status Reports (590s) reviewed contained lim-ited or no information on participatory activities. Nineprojects have been completed and only six haveImplementation Completion Reports, which containlimited assessment of project participation.

The study looked at the following variables toassess inclusion of participatory elements:

• Inclusion of participatory elements in statedproject objectives

• Inclusion of participatory activities in plannedproject components

• Participatory activities identified in projectimplementation

• Inclusion of participatory evaluation• Changes in design as a result of participatory

concerns• Percentage of budget going to NGOs/local com-

munities• Inclusion of participatory indicators in monitor-

ing system• Inclusion of participatory indicators in supervi-

sion missions• Methods intended:

– Social assessments– Beneficiary assessments– Needs assessments– Surveys– Participatory rural appraisals

ANNEX C: METHODOLOGY OF PARTICIPATION REVIEW

– Advisory groups– Informal interviews– Focus groups– Workshops.

• Types of stakeholders involved at any stage ofproject:– Community/local resource users– Community-based organizations, local

associations– Local NGOs– International NGOs/research institutions– Indigenous peoples– Women’s groups– Local district/state government representatives– Commercial private sector.

In addition, the study looked at information onarea conserved/managed, and the number of projectsthat dealt with land tenure access issues, includingresettlement.

Rankings were given according to the followinglevel and breadth:

• level of participation:0 = no participation1 = information sharing2 = consultation3 = collaboration4 = empowerment.

• Participation breadth:1 = no participation2 = limited3 = moderate4 = high.

A n n e x e s

57

AFRICACentral Africa Regional Environment InformationManagement Project (REIMP)The project establishes a demand-driven, action-oriented environmental information database for thetropical forest region of Central Africa to supportdecisionmaking and to build national capacity forenvironmental monitoring, land-use planning, andconservation priority setting. Strong emphasis will beput on capacity building in the public and privatesectors to use such data; on creating an integrated,standardized regional information network for datasharing; on connecting data suppliers and users to theelectronic highway; and on defining and developingspecific products desired by end-users.

West African Pilot Community-Based NaturalResources and WildlifeThe project will facilitate conservation of biodiversityin one of West Africa’s most diverse and threatenedecosystems, the Comoe. It will introduce a newapproach to biodiversity conservation in West Africathat aims to find a common solution to both develop-ment and conservation concerns by involving localcommunities in ecologically sustainable and profitablemanagement of natural resources. The project’s specificobjectives are (i) to strengthen the capacity of localcommunities, NGOs, and government to manage wildplant and animal resources in a sustainable manner;(ii) to improve the management and use of habitat andwildlife populations at each site; (iii) to improve localland management practices and infrastructure; and (iv)to establish a durable system for monitoring andevaluating project implementation and impact.

Cameroon Biodiversity Conservation andManagementThe project has two major development objectives.First, it will help the government to protect a signifi-cant amount of Cameroon’s biological diversitythrough careful management of ten national parks,faunal reserves, and ungazetted sites located in sixsensitive ecological regions, including the developmentof alternative activities for the local population in thebuffer zones. The project will also strengthen keynational institutions concerned with research, plan-ning, and coordination of biodiversity conservation

ANNEX D: PROJECT SUMMARIES

activities at the national level. In addition to receivinggrant funds from the GEF the project is cofinanced withcontributions from bilateral donors including France,Germany, the Netherlands, and the United Kingdom.

Congo Wildlands Protection and ManagementThe project objective is to strengthen the protection of asignificant amount of Congo’s globally valuedbiodiversity by (i) expanding the areas earmarked forconservation from 4.4 percent to over 10 percent of thenational territory, (ii) preparing and implementingparticipatory management plans for several key conser-vation areas representative of the country’s biologicalwealth, and (iii) strengthening the institutional andregulatory framework and national capacity and sup-port for biological conservation, and the financialsustainability of biodiversity conservation programs.

Kenya Tana River National Primate ReserveThe project concerns the development and implementa-tion of a management plan for the Tana River NationalPrimate Reserve, which contains the last remainingcontiguous area of indigenous riverine forest along theTana River. The Tana Reserve protects two endangeredprimate species, the Red Colobus and CrestedMangabey monkeys.

Mozambique Trans-frontier Conservation Area andInstitutional StrengtheningThe primary objective of the project is to assist thegovernment of Mozambique in creating an enablingpolicy and institutional environment for rehabilitating,conserving, and managing its unique natural environ-ments and biodiversity, which are of global signifi-cance. The project will also provide an opportunity totest and implement community-based conservation andmanagement methods aimed at empowerment of localcommunities, economic development, and povertyreduction.

Mauritius Biodiversity RestorationThe project will (i) protect critically endangeredbiodiversity of international importance by restoringdegraded small island habitats, propagating and rein-troducing endemic species to these habitats; and (ii)strengthen capacity for the management and monitor-ing of biodiversity restoration.

A n n e x e s

58


Madagascar Second Environmental Program SupportThe global environment objective of the GEF support tothe program is to curb the loss of globally significantbiodiversity by slowing current environmental degrada-tion trends, promoting the sustainable use of naturalresources, and creating the conditions for environmentalconsiderations to become an integral part of macroeco-nomic and sectoral management of the country.

Mali Household Energy ProjectThe long-term development objectives of the projectare reduction of CO2 emissions, the abatement of forestresource depletion, and increased participation of theprivate sector in the management of the householdenergy sector. The main implementation objectives areto promote popular participation in household energyactivities, rational use of household energy resources,and improved end-use of household fuels.

South Africa Cape Peninsula BiodiversityThe project will establish and manage the new CapePeninsula National Park for an initial period of fiveyears and will strengthen biodiversity conservation inthe entire Cape Floral Kingdom. Components include(i) implementing an initial five-year Cape PeninsulaNational Park management plan to address the park’surgent conservation needs, including controlling ofinvasive exotics, improving local emergency responseto oil spills and wildfires, launching a marine conser-vation program for the Peninsula and an environmentaleducation program, and developing an environmentalinformation system and a targeted research program;(ii) designing a visitor promotion and managementprogram, including upgrading of visitor facilities andanalyzing visitor pricing options to ensure biologicaland financial sustainability of the park; (iii) supportingthe Table Mountain Fund, which mainly funds NGO-led conservation initiatives around the park and inother critical areas of the Cape Floral Kingdom; and(iv) preparing a strategic conservation strategy andaction plan for the entire Cape Floral Kingdom.

Uganda Protected Areas Management and SustainableUse (PAMSU)The project will support management and conservationof priority protected areas by (i) strengthening theUganda Wildlife Authority, (ii) making direct invest-ments in rehabilitation of infrastructure and improvedmanagement of biologically critical protected areas,

and (iii) building capacity for developing locally basedtourism and other activities compatible with conserva-tion, such as sustainable collection of forest products inbuffer zones, that provide economic returns. Theproject will emphasize planning, promotion, and regu-lation of environmentally sustainable tourism bystrengthening government capacity at all levels tofacilitate tourism, and by providing a supportiveenvironment for private sector tourism development.The Ministry of Tourism, Wildlife, and Antiquities willreceive assistance to develop appropriate policies andlaws promoting tourism and conservation and tomanage its many current projects and programs.

Uganda Bwindi Impenetrable National Park andMgahinga Gorilla National ParkThe objective of the project is to support biodiversityconservation in Bwindi Impenetrable National Parkand Mgahinga Gorilla National Park throughimproved park management, research, and financinggrants to build community support for conservationand assist local community groups to develop alterna-tives to harvesting forest resources.

Zimbabwe Park Rehabilitation and ConservationWith the involvement of local communities, the projectwill design and implement a natural resource manage-ment program for Gonarhezou National Park on theMozambique/South Africa border, to complement theMozambique Transfrontier Conservation Areasproject. The project will rehabilitate the infrastructureof Gonarhezou to stimulate ecotourism, develop com-munity wildlife management and sustainable use pro-grams, and strengthen park management capacity.

EUROPE AND CENTRAL ASIABelarus Biodiversity ProtectionThe project aims to address conservation planning andresearch outreach programs for the BelovezhskayaForest and Berezinsky and Pripiatsky Reserves.

Czech Republic BiodiversityThe project objective is to protect and strengthen forestand related ecosystem biodiversity in the Czech Repub-lic. The project is highly innovative and unusual in itsscope and aims to achieve its objectives through (i)establishing transboundary, integrated conservationover formerly strictly protected (under military admin-istration) cross-border areas (each of the three proposed

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ecosystem reserve zones in are in transboundary areas:the Sumava National Park [Austria, Czech Republic,and Germany], the Krkonose Reserves [Czech Republicand Poland], and the Morava Floodplain Forests andWetlands [Austria and the Czech and Slovak Repub-lics]; and (ii) initiating a major effort to ensure thelonger-term financial sustainability of these protectedecosystems through the planning and development ofrecurrent funding mechanisms.

Poland Forest Biodiversity ProtectionThe project has initiated programs to conserve thebiodiversity of key endangered forests and is providinginstitutional support to the Ministry of Environment,Natural Resources, and Forests to undertake biodiversityconservation management activities. Innovative featuresinclude the establishment of a gene bank and arboreta toprotect genetic diversity and to provide plants for refores-tation in areas degraded by pollution.

Russian Federation Biodiversity ConservationThe project aims to (i) provide a safety net to ensure theimmediate protection of biodiversity in conformancewith the government’s obligations under the Conven-tion on Biological Diversity; (ii) assist the governmentto develop its national biodiversity strategy and iden-tify sustainable funding mechanisms for the nationalbiodiversity conservation system; (iii) support the pro-cess of institutional development; (iv) sustain the mostcritically affected federal protected areas and enhancethe self-sufficiency and effectiveness of the protectedareas system through an integrated set of actions; (v)provide a regional demonstration of the synergy amongthe processes of organization, structuring, and inte-grated sectoral management.

Slovak Republic Biodiversity ProtectionConsistent with its pilot phase criteria, the mainobjective of this project is to assist the government ofSlovakia in protecting and conserving its biodiversity.The project will undertake analytical work and pilot/demonstration programs to (i) test systems of finan-cially sustainable biodiversity protection through theintroduction of user fees, related charges for visitors,and concessions to manage the areas within theirdetermined carrying capacities; (ii) protect three zonesof representative threatened ecosystems: meadows(Tatras), wetlands (Morava Floodplain), and mountainforests (Eastern Carpathians); and (iii) support the

activities of three transnational biodiversity protectionnetworks: The Eastern Carpathians Biosphere Reserve(Poland, the Slovak Republic, and Ukraine); the TatraBiosphere Reserve (Poland, the Slovak Republic), andthe Morava Floodplain Forests and Wetlands (Austriaand the Czech and Slovak Republics).

Turkey In-Situ Conservation of Genetic BiodiversityThe project will identify, survey, inventory, and man-age selected areas for the in-situ protection of the wildrelatives of herbaceous and woody species, with a focuson globally significant species. Based on the results ofproject field work, a national strategy will be preparedfor in-situ gene conservation of wild relatives andhabitats of these species.

LATIN AMERICA AND THE CARIBBEANArgentina Biodiversity ConservationIn conjunction with the IBRD-supported Native Forestsand Protected Areas Project, the GEF Biodiversity Conser-vation Project will expand the protected area systemthrough the creation and management of protected areasin currently unprotected ecosystems of global biologicalsignificance (Pampas grasslands, Andean Puna, theChaco, Patagonian Steppe, and so forth). The project alsoincludes a public participation plan to ensure widespreadstakeholder involvement in project activities, strengthen-ing of institutions and policy, legal and regulatoryframeworks at the national and provincial levels tosupport biodiversity conservation, an Internet-connectednational biodiversity information management system,and establishment of a grants program targeted tosustainable development, conservation, and publicawareness activities in the surrounding buffer zones.

Bolivia Biodiversity ConservationThe project will help ensure the protection of representa-tive samples of some of Bolivia’s most diverse andthreatened ecosystems. This will be accomplished in partby strengthening the government’s institutional capabilityto protect the country’s biodiversity and by promoting theparticipation of local indigenous communities and institu-tions in the management of the PA system.

Brazil National Biodiversity ProjectThe main objective is to assist the Brazilian governmentto initiate a program for the conservation and sustainableuse of biodiversity by identifying priority actions, stimu-lating the development of subprojects through the facilita-

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tion of partnerships between the public and privatesectors, and disseminating biodiversity information.

Brazil National Biodiversity FundThe main objective of the project is to provide long-termand sustainable support for conservation and sustainableuse of biological diversity in Brazil. This goal will bepursued by supporting the establishment and developmentof a Brazilian Biodiversity Fund (FUNBIO) within theGetulio Vargas Foundation to administer a long-termgrants program to promote conservation and sustainableuse of biodiversity in Brazil.

Costa Rica Biodiversity Resources DevelopmentThe project seeks to demonstrate that increased andsystematically catalogued information about specieswould increase the value of biological diversity and themarketability of biodiversity services. The projectsupports (i) development of a framework for a compre-hensive inventory and protocols for collection andcataloguing for four taxa (Hymenoptera, Coleoptera,Diptera, and fungi); (ii) completion of the collectionand cataloguing of these four taxa; (iii) development ofhuman capacity in systematic biology, especially at theparataxonomist level; (iv) development of revenue- andnon-revenue-generating activities and increased aware-ness of the values of biodiversity; and (v) strengthenedinstitutional capacity at INBio. Collection activitieswill start in the Guanacaste Conservation Area, andwill expand to other conservation areas during projectimplementation, according to agreed criteria.

Ecuador Biodiversity ProtectionThe project will support the restructuring of the country’sinstitutional capacity and overall policy and legal frame-work for adequate management of the National System ofProtected Areas (NSPA). Special emphasis will be placedon ensuring financial sustainability of the NSPA throughthe establishment of an efficient fee and tariff system.While most of the project’s activities will benefit the entiresystem, proposed investments will be made in eight of themost biologically rich conservation units, selected fortheir contribution to protection of globally importantbiodiversity. Proposed actions are designed to comple-ment ongoing government and NGO activities on theNSPA.

Honduras Biodiversity in Priority AreasThis UNDP/World Bank project is the Honduran link in

the Mesoamerican Biological Corridor (MBC). Theproject will strengthen the protection and management offive biologically rich protected areas in the MBC,representing a range of ecosystem types, as well assupport ecologically compatible development demonstra-tion projects in the surrounding buffer zones. Specialattention will be given to indigenous peoples’ develop-ment and gender issues. The project funds biologicalmonitoring of the protected areas and adjacent zones;institutional strengthening of the Forestry AdministrationCorporation, DAPVS, and local committees; and environ-mental awareness activities. The associated IDA creditfinances complementary activities in land administration/tenure, natural resources management, institutionalstrengthening, protected area establishment, and biologi-cal monitoring.

Mexico Protected Areas ProgramThe project will support the Mexican government in itsefforts to (i) implement protection/conservation pro-grams in ten biosphere reserves in high-priority ecosys-tems containing endemic and/or endangered species ofglobal importance; (ii) strengthen protected area (PA)management at the reserve level; (iii) promote localparticipation, including that of indigenous communi-ties, in the implementation of reserve management andoperating plans; and (iv) ensure the availability oflong-term recurrent cost financing for core protectionand conservation activities.

Nicaragua Atlantic Biodiversity CorridorThe project promotes the long-term integrity of aBiological Corridor along Nicaragua’s Atlantic slope.It will support preparation and implementation ofprotected area management plans for the Corridor, andwill fund subprojects in direct support of biodiversityconservation in the Corridor. It will assist local indig-enous communities in demarcating territories that abutbiologically important zones. The project includescapacity building and public awareness in the protec-tion and sustainable use of biodiversity for indigenousand non-indigenous communities, as well as for mu-nicipal and regional authorities. It will support land-use planning in the Corridor, a biodiversity monitoringsystem, and an impact assessment system for develop-ment activities, as well as means to enforce mitigatingmeasures. These activities will be closely coordinatedwith traditional community development activities inthe Corridor supported by the associated IDA Credit.

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Panama Atlantic Mesoamerican Biological CorridorAs part of the MBC initiative, this project will conservethe Panamanian section of the Corridor. It will include(i) biodiversity assessments, monitoring, land-use plan-ning and information dissemination for the Corridor;(ii) capacity building for governmental, NGO, andindigenous groups in protected area and biologicalcorridor management; (iii) support to field activities inprotected areas (infrastructure and equipment for pro-tected area management, protected area demarcationand management plans, community/NGO involve-ment, and research and visitor facilities); and (iv)support to field activities in indigenous lands (commu-nity participation in corridor management, possiblyassistance in land tenure) and corridor areas (sustain-able economic activities, partnerships with local com-munities and private economic agents).

Peru National Trust Fund for Protected AreasThe project has four major objectives: (i) to provide along-term and predictable source of funding for theprotection of Peru’s biodiversity through the establish-ment of a trust fund; fund income will be used forfinancing the management of priority PAs; (ii) toimprove the capacity of the National Institute forNatural Resources (INRENA) to protect and managePeru’s protected areas; (iii) to provide the country witha reliable institutional mechanism to channel debtdonations for sustainable development and conserva-tion through bilateral and commercial debt-for-natureswap agreements; and (iv) to test the viability of trustfunds as mechanisms for providing long-term andsustainable funding for biodiversity conservation.

ASIABhutan Trust Fund for Environmental ConservationThe objectives of the project are (i) to assist the RoyalGovernment of Bhutan to conserve its relatively pris-tine forests and preserve its rich biodiversity in the faceof growing pressures from population increase andagricultural expansion and (ii) to test the feasibility of atrust fund as a mechanism for providing long-term andsustainable support for conservation of biodiversity ina country with severe financial constraints. The BhutanTrust Fund for Environmental Conservation (BTF) isfinancing (i) training to develop human resourcecapacity for PA system management and biologicaldiversity monitoring; (ii) establishing a national systemof PAs; (iii) strengthening the management of two

existing PAs, Jigme Dorji Wildlife Sanctuary and RoyalManas National Park; and (iv) developing a modelmanagement plan for new PAs.

China Nature Reserves ManagementIn accordance with China’s NEAP and BAP priorities,the project will prepare and implement managementplans in five priority PAs, train staff, fund physicalinvestments, and work with communities adjacent toand within PA boundaries to create incentives forsustainable resource use. A second component willrestructure a major timber industry in Changqing topromote sustainable forestry and create a core PA ofgiant panda habitat, surrounded by a limited-useproduction/buffer zone. The project will build thetechnical and managerial capacity of the DNR throughdeveloping a national training team for biodiversity. Itwill fund a national nature reserve plan, equipment,policy studies, and operational research, and set up aninformation management system.

Indonesia Kerinci Seblat Integrated Conservation andDevelopmentThe project will secure the future of the biologicallyrich, 1-million-hectare Kerinci-Seblat National Park byintegrating park management and conservation withlocal and regional development. Park management andprotection will be strengthened, based on collaborativelinkages with buffer-zone communities and local NGOsand governments. The project will stabilize land useoutside the park by promoting local-community andalternate livelihood activities consistent with parkconservation objectives and by improving overall localland use to relieve pressure on the park. Biodiversityassessments in lowland forest concessions surroundingthe park will contribute to better management of apermanent buffer zone in these areas. The project will(i) strengthen regulatory guidelines for interprovincial,regional planning; (ii) improve conservation awarenesslocally and in the government; (iii) provide trainingand extension services to villagers, park staff, and localgovernment staff; and (iv) monitor and evaluatebiodiversity conservation, human impacts, and sustain-able development in and around the park.

Indonesia Biodiversity CollectionsThe project strengthens the capacity of the Researchand Development Center for Biology (PPPB) to managesystematic collections, including the establishment of a

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computerized database to serve as a basic referencetool for biodiversity inventory and monitoring. Poten-tial information users in other sectors will provideadvice on database development. Specific componentsinclude human resource development, collectionsmaintenance and development, improvement ofresearch facilities, and publications and user products.

India EcodevelopmentThe project will improve the capacity of PA manage-ment to conserve biodiversity and increase opportuni-ties for local participation in PA management activitiesand decisionmaking. It will reduce the negativeimpacts of the local people on biodiversity, and of PAson the local people, and increase their collaboration inconservation efforts.

Lao P.D.R. Wildlife and Protected Areas Conserva-tion/Forest ManagementThe project will protect biological diversity through (i)the designation, establishment, and management ofpriority PAs, (ii) protection of associated wildlife, and(iii) planning and implementation of community par-ticipatory programs in and around PAs. Componentsinclude the establishment and management of at least

four protected areas (NBCAs), technical assistance andconservation training with particular emphasis on therecruitment of NGOs for community mobilization,environmental monitoring and evaluation, and thedesign of a conservation trust fund for long-termfinancing.

Sri Lanka Conservation and Sustainable Use ofMedicinal PlantsThe project will design and implement a medicinalplants conservation program. For five botanicalreserves where medicinal plants are collected from thewild, it will support baseline research, monitoring,conservation planning, community organizing, enrich-ment plantings, research on traditional medicinal plantknowledge, sustainable economic activities relating tomedicinal plants or taking pressures off wild resources,improved marketing of such plants, and education. Exsitu cultivation and conservation of medicinal plantswill be supported through research on and promotion ofex situ cultivation, and through enhancing ex situcollections. The project will also finance legal andpolicy reforms in support of medicinal plant conserva-tion, a national information network, and training andawareness campaigns.

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In an attempt to measure some gross results across theportfolio, this review noted indicators of the forest orecosystem area being conserved and the numbers oflocal people potentially benefiting directly (or beingaffected directly) by project investments. These aregross indicators that are not necessarily correlated withbiodiversity conserved or poverty reduced. Area con-served says nothing about the nature of the area—whether sparsely vegetated or populated—nor does itcapture the number of threatened or endemic species,degree of species richness, ecosystem functions, ordegree of threat averted. The number of beneficiarieslikewise says nothing about the degree of incomeimprovements or social objectives achieved per benefi-ciary. Also, these indicators are not appropriate for allprojects in the portfolio; some projects are concernedwith policy, information systems, and financial mecha-nisms. However, the indicators at least form a commonframework and attempt to address two of the mostpervasive project objectives regarding PA management

ANNEX E: ATTEMPT TO IDENTIFY AREA CONSERVED AND PEOPLE AFFECTED

with local participation. These measures are also foundin most lists of potential indicators. They are poten-tially illustrative of the extent of project effectivenessand the conceptual problems entailed in developingsystematic monitoring systems within the Bank’s GEFprojects.

The study found that 19 projects concerned withPAs and local community benefits provided some kindof baseline estimate of the area being conserved, out ofa total of 34 projects that address PA management. Thetotal area reportedly conserved by the reportingprojects is estimated at 292,469 km2.

Only 13 projects provided an estimate of thenumber of local people affected or identified as possiblebeneficiaries. The total population affected is estimatedat 2 million for the ten reporting projects. Threeadditional projects reported villages as beneficiaries,but did not provide an indication of the size of villagesinvolved. (See table E.1).

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TABLE E.1. PROJECT DOCUMENT ESTIMATES OF AREA CONSERVED/PEOPLE AFFECTEDArea

conserved/ Number ofCountry/ managed beneficiariesarea Project name (km2) intended Comments

Africa Central Africa Region: Regional 111,000 Equal to 5 percent of Congo Basin Environment and Information Management Project (REIMP)

Africa West Africa Pilot Community-Based 3,048 Natural Resource and Wildlife Management

Bhutan Trust Fund for Environmental 9,505 Conservation

Cameroon Biodiversity Conservation and 27,670 Management

Central Asia Central Asia Transboundary 8,000Biodiversity Project

China Nature Reserves Management 9,521 415,487 415,487 people in reserves, buffer and border areas

Ecuador Biodiversity Protection 15,073 15,000El Salvador Promotion of Biodiversity 120 12,000 hectares of coffee farms to

Conservation within Coffee connect 75,000 hectares biological Landscapes corridor area

Honduras Biodiversity in Priority Areas 350 150,000 150,000 total inside buffer zone, 75,000 of those are indigenous peoples. 350 km demarcated in total project

India India Ecodevelopment 6,711 804,608Indonesia Kerinci Seblat Integrated 13,000 1,815 Estimated to benefit 1.5 million

Conservation and Development people. Involuntary resettlement: GEF social development sheet: 266 hectares and 1,200 individuals, IBRD social development sheet: 137 hectares and 615 individuals displaced

Kenya Tana River National Primate Reserve 169 9 villagesLao PDR Wildlife and Protected Areas 5,000

ConservationMali Household Energy 7,200 245,000 260 villagers, new stove users

(245,000 stoves)Mexico Protected Areas Program 48,413 10 reservesMozambique Transfrontier Conservation Areas 23,140

Pilot and Institutional StrengtheningPoland Forest Biodiversity Protection 1,170Senegal Sustainable and Participatory 3,000 125 villages incrementally; no

Energy Management. mention of average village sizeUganda Bwindi Impenetrable National Park 379 1,000 Affected people>1,000 forest

and Mgahinga Gorilla National Park dwellers, 100 households cultivating Conservation inside reserve

Nicaragua Atlantic Biodiversity Corridor 380,000 At least 200 communities/ 380,000 people

Panama Atlantic Biological Corridor Project 50,000Sri Lanka Conservation and sustainable use of 2,000 2,000 hectares

medicinal plantsTOTAL 292,469 2,064,910Average 15,393 206,491

Source: Project appraisal documents.

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On a scale of 1– 4 (poor-fair-good-excellent), Bank taskmanagers rated the project effectiveness of componentscommon to GEF projects. As there were very few“poor” or “excellent” responses, a simplified table(table F.1) was constructed by placing components withscores above the mean (2.6) in the “good” column and

ANNEX F: RESULTS OF STAFF SURVEY

TABLE F.1. STAFF ASSESSMENT OF EFFECTIVENESSComponent Good Fair

Institution building Staff training, research and inventory, Private sector development, government technical assistance, NGO collaboration, forest institutions, public awareness community organization

Policy Biodiversity action plans, legislative reform, Land and resource security, coordination conservation incentives, indigenous rights, with infrastructure sectors public participation, linked income generation, co-management

Financial mechanism Government budget allocation General taxes, user fees and royalties, private sector promotion

Project management Institution strengthening, project Monitoring and evaluation management unit, participatory management

Physical PA management, PA/forest planning, PA infrastructure community/buffer zone management

those below the mean in the “fair” column. As noted,the sample (20 task managers and 12 others) was toosmall to be considered more than indicative—althoughthe low variance does provide some modest reassur-ance on the results.

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A n n e x e s

ANNEX G: GEF PROJECTS ASSOCIATED WITH BANK PROJECTSGEF project Country Associated/blended project

Biodiversity Conservation Argentina Native Forest and Protected Area

Biodiversity Conservation Bolivia Environmental Technical Assistance

National Biodiversity Project Brazil National Environment

National Biodiversity Fund Brazil National Environment

Nature Reserves Management China Forest Resource Development

Biodiversity Protection Ecuador Environmental Management

Forest Biodiversity Ghana Natural Resource Management

Biodiversity Project Honduras Rural Land Management

Ecodevelopment India Ecodevelopment

Kerinci Seblat ICDP Indonesia Kerinci Seblat ICDP

Wildlife and Protected Area Management Lao, P.D.R. Forest Management and Conservation

Environment II Madagascar Environment II

Household Energy Mali Second Power Project

Protected Areas Program Mexico Environment–Natural Resources

Transfrontier Conservation Areas Pilot and Mozambique Rural Rehabilitation Project Institutional Strengthening Project

Atlantic Biodiversity Corridor Nicaragua Rural Municipalities

Atlantic Biodiversity Corridor Panama Rural Poverty and Natural Resources

Conservation of Priority Protected Areas Philippines Environment and Natural Resource Management

Biodiversity Conservation Russia Environmental Management

Sustainable Participatory Energy Management Senegal Sustainable Participatory Energy Management

In Situ Gene Conservation Turkey East Anatolia Watershed Management

Protected Area Management and Sustainable Use Uganda Protected Area Management and Sustainable Use

Biodiversity Conservation in Southeast Zimbabwe Zimbabwe Biodiversity Conservation in SE Zimbabwe

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A n n e x e s

ANNEX H: GEF FOREST-RELATED PROJECTS IN THE PIPELINE ($ MILLION)Country Project name GEF allocation Cofinancing Total cost

Belize Northern Belize Biological Corridors 0.768 3.135 3.903

Bolivia Sustainability of the National System of 15.300 31.400 46.700 Protected Areas

Cambodia Biodiversity and Protected Area 2.750 2.250 5.000 Management Pilot Project for the Virachey National Park

Colombia Conservation of the Biological Diversity in 9.380 11.110 20.490 the Sierra Nevada de Santa Marta

Costa Rica Ecomarkets 8.330 51.900 60.230

Cote d’Ivoire National PA Management Program 16.500 51.720 68.220

Croatia Kopacki Rit Wetlands Management Project 0.750 1.105 1.855

Ethiopia Conservation and Sustainable Use of 1.910 4.900 6.810 Medicinal Plants

Georgia Conservation of Forest Ecosystems 9.050 24.100 33.150

Guyana National PAs System 6.000 2.100 8.100

Malawi Mulanje Mountain Biodiversity 5.300 1.530 6.830 Conservation Project

Mexico El Triunfo Biosphere Reserve: Habitat 0.750 1.371 2.121 Enhancement in Productive Landscapes

Mexico Oaxaca Sustainable Hillside Management 0.198 0.000 0.198 Project

Pakistan PAs Management Project 11.140 15.700 26.840

Papua New Guinea Forestry and Conservation Project 17.300 38.200 55.500

Peru Indigenous Management of Protected 10.350 14.000 24.350 Areas in the Amazon

Peru Collaborative Management for the 0.750 1.325 2.075 Conservation and Sustainable Development of the Northwest Biosphere Reserve

Romania Integrated PAs and Conservation 5.300 1.600 6.900 Management

Syria Conservation of Biodiversity and PAs 0.750 0.680 1.430 Management

Uganda Kibale Forest Wild Coffee Project 0.750 3.400 4.150

Total 123.330 261.530 384.800

Note: These projects have been approved by the GEF Council, but most have not been approved by the World Bank Board of Directors,and thus have not been considered for review. This review only includes projects approved by the Board before June 1999.Source: GEF data.

7 1

ENDNOTES

Executive Summary1. Uma Lele is the team leader of the OED Forest Strategy

and Implementation Review; this paper is one component. JarleHarstad, Senior Monitoring and Evaluation Coordinator in theGEF, provided additional support to this component of the OEDstudy.

Chapter 11. Of the 44 projects reviewed, World Bank categorization

places 7 in the forestry sector, 14 in natural resource management,5 in environmental adjustment, 3 in other environment, 4 inagricultural adjustment, 7 in other agriculture, 1 in technicalassistance–education , and 2 in oil and gas adjustment. Whilesome projects are not classified as being in the forestry sector perse, all have a significant forest conservation and managementfocus.

2. The documents consulted can be found in the Bibliography.

3. Led by Uma Lele, the core team consisted of NaliniKumar, S. Arif Husain, B. Essama Nssah, Aaron Zazueta, LaurenKelly, and Maisha Hyman.

4. Case studies include Brazil, Cameroon, China, Costa Rica,India, and Indonesia (see Annex A).

5. The most recent of these are Porter and others 1998; GEF1999b, d.

6. in 1998, 36 nations pledged a total of $2.75 billion overfour years for the GEF trust fund. They are Argentina, Australia,Austria, Belgium, Brazil, Canada, China, Côte d’Ivoire, CzechRepublic, Denmark, Egypt, Finland, France, Germany, Greece,Ireland, India, Italy, Japan, Republic of Korea, Luxembourg,Mexico, the Netherlands, New Zealand, Nigeria, Norway, Paki-stan, Portugal, Russian Federation, Republic of Slovenia, Spain,Sweden, Switzerland, Turkey, the United Kingdom, and theUnited States (GEF 1998a).

7. The Biodiversity Conservation in the Sunderbans man-grove project in Bangladesh was included for financial analysis,but dropped from other analyses because no performance ordisbursement information was available. Even though the WorldBank implements the project, the Asian Development Bankexecutes it.

8. Short-term response measures (STRM) refer to “proposedactivities that are not an integral part of an operational programbut are still cost-effective, or that enable the GEF to respond to anurgent need, or seize a promising country-driven opportunity in atimely manner” (GEF 1996a).

9. Includes the Household Energy project in Mali ClimateChange Operational Program 6 and the Sustainable Participa-tory Energy Management project in Senegal STRM. As these twoprojects have fundamentally different objectives and activities(rural tree-growing for fuel wood) from the projects with abiodiversity orientation, most of this study’s analysis is focused onthe latter.

10. The low number in 1999 is the result of the cut-off date(June 1999) for project selection. At the time of the desk review,only one GEF project with forest components had been approvedby the World Bank’s Board of Directors, although there were

additional projects approved by the GEF Council. OED’s scope islimited to projects under implementation, and not in the pipeline.

11. As the OED evaluation of the Bank’s regular portfolioappears to indicate, the decline in direct forest project lending inAfrica and EAP after 1991 may have been offset by significantforest components in natural resource projects, as well as by GEFgrants.

12. OED’s Design Paper on Forests and the World Bankshows that direct lending for forest projects before and after theforest strategy dramatically decreased in all regions except LACand MNA (4 and 3 projects in 1980–91, 4 and 3 projects post-1991, respectively) and to a lesser extent in South Asia (1980-91,15; post-1991; 11). Africa experienced the largest decrease, from27 projects to only 3. EAP followed with 11 projects in 1980–91and 5 in the post-1991 period. (World Bank 1998c).

13. The tropical moist forest countries with Bank GEFprojects are: Cameroon, Central African Republic, Congo Repub-lic, Côte d’Ivoire, Democratic Republic of Congo, Gabon, Mada-gascar, India, Indonesia, Papua New Guinea (FY2000), Philip-pines, Bolivia, Brazil, Ecuador, Mexico and Peru. Of theremaining, Malaysia, Colombia, and Venezuela have UNDP-implemented GEF projects, leaving only Myanmar unserved.

14. These projects were implemented with grant funds fromGEF, governments, and other donors, but not with IBRD loans.

15. There are at least 15 World Bank-funded projects in theforestry category, either active or in the pipeline, for the ECARegion.

Chapter 21. These projects include the Central Asia Transboundary

Biodiversity Project (Uzbekistan, Kyrgyz Republic, and Kazakh-stan 1999); Mesoamerican Biological Corridor (Honduras 1997,Nicaragua 1997, and Panama 1997); West Africa Pilot Commu-nity-Based Natural Resource and Wildlife Management (Côted’Ivoire and Burkina Faso 1995); Transcarpathian BiodiversityProtection (Poland, Slovak Republic, and Ukraine 1993); andCentral Africa Region: Regional Environment and InformationManagement Project (Central African Republic, Congo, Demo-cratic Republic of Congo, Gabon, Cameroon, and EquatorialGuinea 1997).

2. The percentage is higher than the category in table 2.1because some projects have protected area improvement andexpansion as a secondary objective.

3. The draft GEF study by ITAD (ITAD 1999) found that in29 of 61 GEF biodiversity projects, PA management was thesingle main change objective. This was followed by environmentplanning (seven projects), regional coordination (eight projects),and policy reform (three projects), although many more projectshad these latter goals as secondary objectives.

4. Sustainable tree production for energy supply is theprimary forest component of the two energy conservationprojects in Mali and Senegal.

5. Response by GEF Secretariat to December draft report,January 21, 2000.

6. Three-quarters of task managers considered their projectshighly relevant. One quarter did not respond. Some stated that they

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had not considered the GEF project in light of the forest strategy.

7. GEF has no clear mandate for poverty reduction since itsjustification is tied to global environmental objectives. Some GEFprojects address poverty alleviation as a byproduct, but not as acore activity.

8. See Annex B, “GEF’s Interim Guiding Principles forProjects Associated with Logging.”

9. The GEF provided $2,320,000 through the World Bank to17 projects to help countries elaborate and complete theirNBSAPs. This represents 11 percent of the funds allocated to thethree implementing agencies of GEF.

10. GEF grants termed “Enabling Activities” are providedby the GEF through the UNDP, UNEP, and the World Bank forpreparation of these plans. Thirty-five of the countries in theBank GEF portfolio received such grants.

11. See OED country studies of Brazil and Indonesia.

Chapter 31. The study did not go into all the project files and annexes

where monitoring indicators are frequently discussed in moredetail than in the main appraisal documents. The authors inde-pendently ranked the indicators identified in the design documentand averaged the results. The results must be considered asindicative, not exhaustive.

2. The GEF has supported the World Monitoring Center’sactivities in developing global biodiversity databases. Interna-tional conservation organizations and NGOs such as WWF,IUCN, Conservation International, and The Nature Conservancyhave all developed databases and geographical informationsystems identifying biodiversity priority areas. Species aretracked through CITES (Convention on International Trade inEndangered Species), the IUCN Redbook, and national lists ofendangered and threatened species.

3. Project Concept Document for Central AsiaTransboundary Biodiversity Project, August 6, 1997.

4. For a recent Bank review of ICDPs in Asia, see, Sanjayan,Shen, and Jansen 1997; Wells and Brandon 1997.

5. Asmeen Khan, questionnaire response.

6. Thirty-two responses were received, 20 from task manag-ers (12 written, 8 verbal), and 12 from independent experts (8written, 4 verbal).

7. Interviews with task managers.

8. Task managers interviewed observed that many of theprojects had some aspects of sustainable use components.

9. For an in-depth evaluation of GEF trust fund projects,refer to GEF 1999b.

10. Comments by GEF Secretariat in response to Decemberdraft report, January 21, 2000. The response team specificallyrefers to the project in Congo.

11. See ICRs and QAG reports for specific enumeration ofproblems encountered.

12. Since GEF funds are grants, ministries of finance aresometimes seen as less serious about their commitments to theseprojects than to similar Bank loan-fund projects.

13. As not all of the project supervision reports (590s, nowPSRs) available in the Portfolio Manager Database includedcovenants, the actual number is likely to be higher.

14. Section 6.01, Class covenant 8, Project ID: NI-GE-41790.

15. Legal Covenant 3.10, Class covenant 8, Project ID: PH-GE-4403.

16. Sch. to PA-para.5(a), Class covenant 10,07, Project ID:IN_GE-9584.

17. These databases include Portfolio Reports, PC PortfolioPerformance Monitor.

18. As of March 2000.

Chapter 41. During the last project implementation review discussions

in 1999, 3 categories were highlighted to classify sustainable use:(a) those that address uses in buffer zones near PAs, (b) those thatoverlay biodiversity concerns on wider productive landscapes andidentify uses that optimize biodiversity conservation while explic-itly recognizing the tradeoffs that will occur in that productivelandscape, and (c) those that focus on economic components ofbiodiversity per se. The GEF recognizes that the third category iswhere the main future challenges lie.

2. Beyond the GEF-Bank portfolio, and including all othertypes of projects funded by the GEF and implemented by theBank, Mr. Koch-Weser states that “for every dollar of Bank-GEFassistance, there is an associated dollar of IBRD and IDAresources, and two additional dollars of funding from elsewhere”(Koch-Weser 1998).

Chapter 51. Belarus 1992, Czech Republic 1993, Russian Federation

1996, Slovak Republic 1993, and Ukraine 1993.

2. See Annex C for the methodology used by this review.Participation elements were identified only in principal designdocuments (such as SARs, GEF Project Documents), and theextent of participation was ranked by the presence of eachstakeholder and the type of activities performed; projects wereindependently ranked by each author and then averaged.

3. Examples of highly ranked projects with no mention ofparticipation in their objectives: Nicaragua 1997, Panama 1997,and Sri Lanka 1997.

4. While this issue is likely to be important to some degree inmany of the portfolio’s projects, it came to a head in the Ghanaproject when a change of government resulted in changes inagreements over forest management and protection.

Chapter 61. This strategy will be presented to the Bank’s Board of

Executive Directors by October 2000, and the GEF Council hasrequested the Bank to submit a copy to the Council meeting inNovember 2000, as well as a summary setting out specificelements that will have a direct bearing on integrating globalenvironmental concerns into Bank policies and programs.

73

E n d n o t e s

2. This question is critically important in the case of China,whose IDA eligibility ceased on June 31, 1999. According to theOED review team leader’s findings, China is generally not interestedin borrowing at IBRD market rates for forestry operations, let aloneconservation. (Uma Lele: personal communication).

3. The 1991 Forest Strategy cited figures of $750 million to$3.2 billion for 21 million hectares of Amazon forest, while thecost of that land would be $420 million to $600 million.

4. Operational Procedures of the World Bank: OPs 4.01,4.03, 4.04, 10.04; GEF’s Operational Program 4 (Forestry).

5. Anonymous responses in review questionnaire from Banktask managers, supported by interview results (Spring 1999).

6. All of these issues were scheduled to be addressed in 1999with the introduction of SAP software and actions by both QAGand OED to take up GEF projects for review.

7. In the latest GEF Council meeting, on May 5–7, 1999, theCouncil approved a new fixed fee structure for each of theImplementing Agencies. The impacts of this change will only beknown with time.

8. This is particularly the case where some of the countriesare IDA-eligible and others not—for example, the Central Afri-can project.

Chapter 71. The OED Country Case Studies of Brazil and Indonesia,

however, argue that there has been negligible impact on slowingthe rate of deforestation

2. The QAG review of African biodiversity projects reachedthe same conclusion: “But ‘mainstreaming’ biodiversity has notyet taken place in most countries, nor even within the Bank”(World Bank 1998a).

3. Policy impacts have been carefully documented in the sixcountry case studies carried out by other members of the OEDteam (see case studies). These are reinforced by interviews andquestionnaire data.

4. The GEF is currently using these interim guiding principlesas it awaits guidance from the Scientific and Technical AdvisoryPanel. The initial guidance of the Convention on BiologicalDiversity in the first part of the 1990s had a strong emphasis onprotected areas. More recent guidance has focused on sustainableuse. For forest biodiversity, however, this has not changed dra-matically. The most recent Conference of the Parties (Bratislava,1998) just began to develop a work program on forestbiodiversity, which is largely focused on research at this stage.

5. The focus on sustainable use, and away from traditionalprotected area projects, is more apparent in the projects that werein the pipeline at the time of the review. OED does not review/assess projects in the pipeline. For a list of projects in the pipeline(after June 1999), see Annex H.

6. This project will support the establishment of a fund of$20–50 million to make equity and quasi-equity investments inLatin American companies that sustainably use or protectbiodiversity (such as sustainable agriculture, use of underutilizedspecies, SFM, non-timber products, and ecotourism). The reportedtotal cost of $55 million assumes full authorized capitalization of

the fund, combined with the value of GEF funds. GEF’s contribu-tion is $5.0 million.

7. See evaluations cited in this review, including thoseconducted by GEF, QAG, and Bank task managers.

8. See Annex F. This approach has been included in morerecent project designs, including Pakistan and Central Asia.

9. The Sri Lanka medicinal plants project and the ElSalvador shade coffee project are two relatively small exceptions.

10. The BCN is a consortium of The Nature Conservancy,WWF-US, and the World Resources Institute, with funding fromthe United States Agency for International Development.

11. In Mexico, approximately four proposals were preparedfor consideration for medium-size grant funding in the last year.These figures are increasingly being repeated elsewhere.

12. These include the Biodiversity Conservation Network’sM&E Guidelines, 1998; World Bank Guidelines for Biodiversity(mentioned in Koch-Weser 1998); and the current GEF study ofbiodiversity monitoring indicators.

Annex A1. This draft has benefited from discussions with Lars

Vidaeus, Gonzalo Castro, Christine Kimes, Jarle Harstad (GEF),Ken Newcombe (ESSD), and Ridley Nelson (OED).

2. Since the adoption of the 1991 Forest Strategy, the WorldBank has committed $1.6 billion in forestry and $1.8 billion inforestry component projects.

3. Of these, 61 are agricultural or biodiversity projects thatare directly or indirectly relevant for the forest sector. Note: this isa tentative number derived from a preliminary review and couldchange.

4. Operations’ goals are relevant if they are consistent withthe country’s overall development strategy, the Bank’s assistancestrategy for that country, and at least one of the Bank’s broadergoals of reducing poverty, protecting the environment, develop-ing human resources, and fostering private sector growth.

5. The operation is efficacious if it achieves its statedphysical, financial, institutional, or policy-related goals.

6. To judge efficiency an evaluator assesses results in relationto inputs, looking at the cost, implementation time, and economicand financial results. For details on OED’s methodology, pleaserefer to World Bank 1998g.

7. Sustainability is defined as the likelihood that the projectwill maintain its results in the future.

8. Institutional development impact is the process of improv-ing a country’s ability to make use of its human, organizational,and financial resources.

9. From the GEF’s perspective, an activity that makeseconomic sense in its own right but produces a national benefit isa nonincremental activity or output, in contrast with an incre-mental activity, which produces a global benefit.

Annex C1. Information taken from the Social Development Data-

base found in ESSD’s website.

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7 5

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77

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