Documentof The World Bank ReportNo: 25655-SA PROJECTAPPRAISAL DOCUMENT ONA PROPOSEDGRANT FROMTHE GLOBAL ENVIRONMENT FACILITY TRUST FUND INTHE AMOUNT OFUS$5.50MILLIONEQUIVALENT TO THE REPUBLICOF SOUTHAFRICA FOR THE GREATERADD0 ELEPHANT NATIONAL PARK PROJECT January 27,2004 Environmentand SocialDevelopmentUnit AFTSl - Country Department 1,Botswana,Lesotho,Namibia,SouthAfrica, Swaziland AFCOl - Africa RegionalOffice CURRENCY EQUIVALENTS (Exchange RateEffective July 2002) CurrencyUnit = SouthAfrican Rands R1 = US$O.O9 U S $ I = R11 FISCAL YEAR January 1 -- December 31 ABBREVIATIONS AND ACRONYMS AENP Addo Elephant National Park APF Addo Planning Forum ART Africa Resource Trust CAPE Cape Action Plan for the Environment CAS Country Assistance Strategy CBA IICost Benefit Analvsis CBD Convention on Biodiversity CBO Community-Based Organization CD: EA ChiefDirectorate: Environmental Affairs IICDD Communitv Driven Development CEN I1Communitv EnvironmentalNetwork II CEPF Critical Ecosystems Partnership Fund CI ConservationInternational CITES Convention for International Trade inEndangered Species C-PLAN Conservation Plan DA Department o f Agriculture DANCED Danish Corporation for Environment and Development DBSA Development Bank of Southern Africa DEAET Department o f Economic Affairs, Environment & Tourism (Eastern Cape) DEAT Department of EnvironmentalAffairs & Tourism DLA Department of Land Affairs DME Department of Mineral and Energy DPLG Deuartment of Provincial and Local Government IDWAF I Deuartment o f Water Affairs and Forestrv I EA Environmental Assessment ECGMA Eastern Cape Management Association ECTB East Cape Tourism Board EE Environmental Education IEIA EMCAs I I Environment Imuact Assessment I Environment Management Cooperation Agreements EMP I EnvironmentalManagement Plan EMS Environmental Management Systems FMR Financial Management Report gAENP Greater Addo Elephant National Park GDP Gross Domestic Product GEAR Growth, Emplovment and Redistribution IGEF IGEFSEC Global Environment Facilitv I GEFSEC II Global Environment Facility Secretariat GEM ~ Group for Environmental Monitoring GIS Geographical Information System IHSUS HSUS I Human Society of the United States 11& ADS I IIDA II International DeveloDment Association Interested and Affected Parties III IDC Industrial Development Corporation IDPs IntegratedDevelopment Plans IDZs Industrial Development Zones IEMS IntegratedEnvironmental Management System IFAW II IntegratedFundfor Animal Welfare ISDS Integrated Social Data Sheet KT Kagiso Trust LFA Logical Framework Analysis M & E Monitoring; and Evaluation IIMIRS MOU II Management Information and Reporting System Memorandum of Understanding: II MPA Marine ProtectedArea MSP MediumSize Project NCL National Land Committee NDA NEMA I National DeveloDment Agency National Environment Management Act (1998) NO0 Non-Government Organization NSSD National Strategy for Sustainable Development PF Park Forum PDF Proiect Development Facility B IIPIP PID II Proiect Information Document Proiect Imdementation Plan II PMU Project Management Unit PSC Park Steering Committee PSR Project Supervision Report PWG Project Working Group RAPS Resettlement Action Plans I RDP I Reconstruction and DeveloDment Program I RDSN Rural Development Services Network RWG Resettlement Working Group SANGOGO South African National NGO Coalition SANParks South Africa National Parks Isc I Steering Committee I SDIs Spatial Development Initiatives SEA Strategic Environmental Assessment S M M E Small, Medium and Micro Enterprise SOE Statement o f Expenses STAP Scientific and Advisorv Panel STEP Subtropical Thicket Ecosystem Planning U N C C D United Nations Convention to Combat Desertification UNDP UnitedNation Development Program WDM Western District Municipality WESSA Wildlife and Environment Societv o f Southern Africa IWFW I Work for Water I Vice President: Callisto Madavo Country Director: Fayez Omar Sector Manager: RichardScobey Task Team Leader: Christopher Wamer SOUTHAFRICA THE GREATER ADD0 ELEPHANT NATIONAL PARK PROJECT CONTENTS A. Project Development Objective Page 1. Project development objective 2 2. Key performance indicators 4 B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supportedby the project 4 2. Main sector issues and Government strategy 5 3. Sector issues to be addressed by the project and strategic choices 8 C. Project Description Summary 1. Project components 9 2. Key policy and institutional reforms supported by the project 17 3. Benefits and target population 18 4. Institutional and implementation arrangements 20 D.Project Rationale 1. Project alternatives considered and reasons for rejection 22 2. Major related projects financed by the Bank andor other development agencies 23 3. Lessons learned and reflected inthe project design 25 4. Indications o f borrower andrecipient commitment and ownership 26 5. Value added o f Bank and Global support inthis project 26 E. Summary Project Analysis 1. Economic 27 2. Financial 27 3. Technical 29 4. Institutional 29 5. Environmental 32 6. Social 34 7. Safeguard Policies 36 F. Sustainability and Risks 1. Sustainability 37 2. Critical risks 38 3. Possible controversial aspects 39 G. Main Conditions 1. Effectiveness Condition 39 2. Other 39 H. Readinessfor Implementation 39 I.CompliancewithBankPolicies 40 Annexes Annex 1: Project Design Summary 41 Annex 2: DetailedProject Description 48 Annex 3: Estimated Project Costs 57 Annex 4: Incremental Cost Analysis 58 Annex 5: Financial Summary for Revenue-EarningProject Entities, or Financial Summary 63 Annex 6: (A) ProcurementArrangements 64 (B) Financial Managementand DisbursementArrangements 71 Annex 7: Project ProcessingSchedule 74 Annex 8: Documents inthe Project File 76 Annex 9: Statementof Loans and Credits 80 Annex 10: Country at a Glance 82 Annex 11:Environmental Threats Analysis 84 Annex 12: Mainfindings of the Strategic Environmental Assessment 88 Annex 13: Resettlement Policy Framework 96 Annex 14: Strategic Framework for the Conservation of Cultural Resource 98 Annex 15: Potential of the gAENP 101 Annex 16: Socio-Economic Context 102 Annex 17: Biodiversity Value of gAENP inthe SouthAfrican and the EasternCape Context 104 Annex 18: Performanceof SANParks inmeeting its Mandate 109 Annex 19: Summary of Land Incorporation & Incentive Framework for SANParks 114 MAP(S) Figure 1: ProposedgAENP Boundary (page 4) IBRD32799 IBRD32809 SOUTHAFRICA THE GREATER ADD0 ELEPHANT NATIONAL PARK PROJECT ProjectAppraisal Document Africa Regional Office AFTS1 Date: January 27, 2004 Team Leader: Christopher James Warner Sector ManagerElirector: RichardScobey Sector(s): Generalagriculture, fishing and forestry sector Country ManagerElirector: Fayez S. Omar (100%) Project ID: PO64438 Theme@): Environmental policies and institutions (P), Focal Area: B Biodiversity - Biodiversity (P), Other environment and natural resources management (S) For LoanslCreditslOthers: Amount (US$m): $5.5 BorrowerlRecipient: GOVERNMENT OF SOUTH AFRICA Responsible agency: South African National Parks Address: P.0 Box 20419, Humewood, Port Elizabeth, South Africa Contact Person: Dr.MichaelKnight Expected closing date: 04/30/2010 A. Project Development Objective 1. Project development objective: (see Annex 1) The project's development objective is to establish a megabiodiversity conservation area around the existing Addo Elephant National Park (AENP) to avert further ecosystem degradation. The project also aims to contribute to poverty reduction by creating direct employment in nature conservation and by catalyzing the development of eco-tourism. Global environmental objective. The global environmental objective o f the project i s to conserve a significant representation o f five of the country's seven terrestrial biomes (63% o f the Addo footprint), including globally important biodiversity (236,000 ha) and 120,000 ha of one o f the country's three marine provinces, into a single National Park. The project will address threats and root causes o f biodiversity degradation across a wide range of terrestrial, aquatic and marine systems. Background to the project area and project The project is located inthe Eastern Cape Province, situated along the eastern seaboard o f South Africa. The Province i s the second largest in South Africa and comprises 24% o f the surface area of the country. The province i s situated in a climatic transition zone with rainfall ranging from 250 mm inlowland areas to 900 mm per annum on high mountain peaks. The relief i s varied and comprises coastal dunes, river valleys, mountains and a plateau. Low rainfall and poor soils means that only 4% of the surface area i s used for agriculture, mainly grazing. Agricultural lands are generally o f lower productivity classes. The Province has a population o f 6.4 million people out o f a national total of 43 million (Census estimate 2001) and is experiencing high annual population growth. The Province lags behind most other parts o f the country in terms o f socio-economic development, with average Gross Domestic Product (GDP) per capita at 50% of the national figure. Approximately 57% of all households live in poverty. The Eastern Cape's economic base i s less diverse than in other provinces and i s centered around agriculture, manufacturing and industry, although tourism i s becoming a more important sector inmany rural areas. While traditional agriculture i s in decline, eco-tourism i s growing and can offer a productive land-use alternative. Secondary industry i s focused around motor vehicle manufacturing, largely around the main commercial centers o f Port Elizabeth, Uitenhague and East London. The proposed Coega Harbor development east o f Port Elizabeth i s expected to enhance economic expansion in this area, through container traffic and a possible aluminium smelter. The Eastern Cape Provincial government has had to amalgamate former so-called homelands including the Ciskei and Transkei, together with administrations from South Africa. This has proven to be a difficult task as provincial and local governments are generally regarded as weak in terms of staff numbers and technical capacities. South Africa is considered a megadiversity country (Conservation International) primarily due to its floristic variation and high levels of endemism. South Africa's plant diversity i s estimated at - 2 - over 23,000 species, representing at least 9% of the global total. Two o f the world's 25 threatened biodiversity hotspots are found within the country's boundaries. These include the Succulent Karoo Biome and the Cape Floral Kingdom, portions of which are found within the project area. The project area also contains the so-called Albany Center of Plant Endemism, which is located in the Thicket Biome. This Biome, which is confined to South Africa, has some of the highest levels of endemism globally per km. The project area also contains five out of South Africa's seven plant biomes making it a unique and critical transition zone to conserve. Terrestrial biodiversity is under threat from land uses such as agriculture, which i s causing land degradation, but also from the loss of key species inthe ecosystem including major herbivores and carnivores. I t i s for these reasons that two other GEF activities are focused on the region. The Thicket Biome Project will develop a bioregional plan for the greater area, while the Conservation Farming Project will develop broad land-use models, and research how farmers can change from traditional (and environmentally degrading) agricultural practices to those of lower impact and higher economic value. This land-use change is particularly important as a buffer on the edges of areas requiringprotective management (see Annex 10). In the marine environment, over 11,000 species have been found, o f which 3,500 are endemic. Algoa Bay contains 10% of South Africa's population of humpback dolphins. Two island groups within Algoa Bay (Bird islands and St. Croix group) are of great historical and conservation value. Over-harvesting o f marine resources i s a key cause o f biodiversity loss. The Addo Elephant National Park (AENP) was established in 1931 and currently covers approximately 165,000 ha. I t i s a main tourism attraction inthe province, with 120,000 visitors in 2002 (50% foreign). Tourism only impacts on 11% o f the Park area at present. The project offers land users the prospect o f higher net returns and more diversified and sustainable income sources. The financial retums to livestock farming are generally low in the area. SANParks receives numerous sale offers, and several farms are undergoing market driven conversion to game farming and eco-tourism. Behindthe low averages are significant variations. Dairy farming can be very profitable, and the Park does not intend to compete with this activity. At the other extreme, marginal lands are already so overgrazed that rehabilitation and game introduction appears to be the only viable alternative, (see section E.2 for further detail). The Eastern Cape's 800 km o f coastline supports a small fishing industry based on squid, sardines, hake, kingklip and crayfish. Mariculture ventures produce abalone and oysters for export, mainly to the Far East. In the Algoa Bay project area, the dune coast provides high tourism potential for beach activities, boating, whale and shark watching, recreational fishing, and diving. The aim of the project i s to increase the area under conservation within the current AENP, into the Greater Addo Elephant National Park (gAENP), including terrestrial and marine ecosystems. Over six years, the project will seek to protect the area o f globally significant biodiversity through land acquisition and partnerships with private land owners. Only a very small percentage of land inthe project area falls under communal land tenure. A detailed assessment has beenundertaken of the number of inhabitants who have been and will in future be affected by the proposed expansion. The number o f inhabitants to date affected and who in future may be affected, i s not expected to exceed 188 inhabitants. - 3 - It is within this context that the South African Government has identified this project as one o f its key deliverables in the Eastern Cape and requested World Bank and GEF assistance. The overall investment inthis project will be approximately US$40 million with approximately US$5.5 million coming from GEF, US$6.5 million from private sector and the remainder primarily from government and the South African National Parks (SANParks). This provides an excellent leveraging ratio for GEF funds o f 1: 6.3. 2. Key performance indicators: (see Annex 1) Outcome/ImpactIndicators: The key impact indicators measuring progress towards achieving the project development and global environmentalobjectives include: 1. 236,000 ha of globally significant terrestrial biodiversity and 120,000 ha o f marine protected clustered around the AENP falling under protected area management 2. Globally significant biodiversity maintained and enhanced through the protection o f five key biomes under 63% o f the gAENP footprint 3. Additional 46,000 ha o f private land (nature-based conservation partnerships) included into the Park by year 6 4. Formal proclamation o f a contiguous Addo Marine Protected Area (MPA), inclusive o f the two island groups 5. A Monitoring and Evaluation System will be implemented to determine improvements in ecosystem health, safeguarding o f endemism and recovery o f threatened species (monitored according to the Guidelinesfor Monitoring and Evaluation of GEF Projects) 6. Employment levels inthe gAENP area increased by 30% over the current baseline case. B. Strategic Context 1.Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: 18995 Date of latest CAS discussion: 03/1999 This project is not in the current CAS. In 2003, the South African Government identified this project as a key deliverable to sustainable development in the Eastern Cape and requested World Bank and GEF assistance. This project addresses two of the main development objectives o f the CAS, namely: 1) Promoting higher growth and employment while maintaining macro-economic stability in order to generate sustained improvement in living standards; and 2) Fostering social and environmental sustainability by reducing poverty and inequality through investment inhuman and natural capital, accelerating and improving the delivery o f assets and services to the disadvantaged segments o f society and enhancing environmental management. The project will make contributions towards these two CAS objectives by: sustaining improvements in living standards especially among the poorest groups in society in the area through employment indirect work programs and increased private sector eco-tourism expansion; strengthening sustainable conservation and integrated ecosystem management through investments in human and natural capital, institutional strengthening, and park business development; and implementing a replicable model o f community-supported, protected area management. - 4 - la. Global Operational strategyprogram objective addressed by the project: South Africa ratifiedthe Convention on Biodiversity (CBD) on November 2, 1995. Inmeeting its obligations to this convention, the Government completed a preliminary First African National Report to the Fourth Conference o f the Parties in January 1998. A National Biodiversity Strategy and Action Plan is currently being prepared. As a result, South Africa has identified at national and regional levels, key natural ecosystems to be protected. The proposed project is directly linked to the efforts of the Government of South Africa to address national and global environmental priorities by reversing land degradation and enhancing biodiversity, while also improving local livelihoods. The project is fully consistent with the objectives and priorities of the GEF Operational Strategy and the GEF Operational Programs for OP 1, Arid and Semi-Arid Zone Ecosystems and OP 2, Coastal Marine and Freshwater Ecosystems. Linkages with OP 1 and 2 are through: conservation and sustainable use o f biodiversity; monitoring of outcomes using key indicators; investing in technical and capacity building activities; focusing on critical habitats and integrating biodiversity protection with sustainable rural development; following best practice and ensuring local participation in planning and implementation. The project i s located in an arid to semi-arid global biodiversity hotspot containing five out o f seven o f the country's biomes, including the Albany Plant Center o f Endemism. The marine component is located in a critical transition zone after which the diversity of marine species drops off considerably. 2. Main sector issues and Government strategy: Key sectoral issues and government strategies: Issue 1. Low economic growth and employment, poverty and inequality. In the Eastern Cape province, more than half of all households live below the poverty line. Almost one-third of the provincial population i s below the age of 15 years, suggesting continued high population growth in the future. An estimated 39% of the provincial labor force of 3.9 million (in the 16-64 year group) is unemployed. Conventional livestock farms inthe project area generally employ no more than 1 worker per 367 ha, and up to 50% of farms in the planning domain of the project are vacant. Monthly wages on the most profitable commercial farms average only US$36-US$56 per month. The more productive and profitable dairy and citrus farms are located near the coast rather than inland in the further reaches of the project area. Economic growth alone will not be sufficient to reduce chronic poverty and inequality to more acceptable levels. Disadvantaged people need greater access to education and natural resources (especially clean air and water). They also need better opportunities to share in the benefits from natural resource development, including mining, forestry, and tourism. Government strategy. The government has introduced a number o f initiatives to address low economic growth and employment in the Eastern Cape Province. Priority in government spending is on basic infrastructure and social services. For example, 83% o f the Eastern Cape's budget i s spent on Health, Welfare and Education. The Nelson Mandela metropole is proposing to undertake an impact study to design a realistic and effective intervention strategy for the HIV/AIDS problem. The government is trying to attract foreign and domestic investment to - 5 - expand the local economy, generate foreign exchange and provide employment: examples include the Greater Fish River and East London Spatial Development Initiative, and the Coega Industrial Development Zone, located on the edge of the proposed gAENP. The Working for Water and Poverty Relief Program are targeting poorer provinces by providing investment to eco-tourism infrastructure and the employment of local communities in public works programs. The Eastern Cape Province i s expected to receive over US$9million from these programs over the next three years. Government has reduced unsustainable subsidies to the agricultural sector, which is encouraging some farmers to convert land (presently used for grazing) to more environmentally compatible and economically efficient uses such as hunting and eco-tourism. South Africa's White Paper on tourism targets the sector as a key contribution to growth. Nationally, tourism is currently growing at over 5% per annum and a target has been set to generate 10% of GDP from tourism in the near future. The Eastern Cape has been identified as a prime location in which to stimulate and support eco-tourism. SANParks i s increasingly focusing on the social ecology components of parks and designing them to benefit neighboring communities through greater access to resources and benefit sharing. Furthermore, the private sector i s being invited to manage facilities especially at the upper end of the tourism market, which will generate local employment and income. The gAENP project fits well with this national strategy. Issue 2. Conservation of natural resources as basisfor sustainable development. Environment i s a cornerstone of the economy encompassing mining, agriculture, forestry, and nature-based tourism. There i s considerable scope for growth in all these sectors, especially tourism. A t the same time, serious concerns exist about land degradation, loss of biodiversity, water scarcity and poor quality o f water in some areas, coastal zone degradation, solid waste management, air pollution, and inappropriate development from poor regional planning. Environmental problems, ifnotaddressed,willhinderlonger-termeconomic andsocialdevelopment inthecountry. In addition, environmental degradation affects the poor most of all because of their high dependency on natural resources for livelihoods. The project area contains a portion of one of the world's 25 biodiversity hotspots. Further, the area contains valuable cultural property such as rock art and artifacts, which need better management and protection. The primary land-use has historically been for grazing on marginal agricultural land, This has placed considerable pressure on much of the area and land degradation i s evident in the lower rainfall areas. However, given the inherently low productivity of land for agriculture and the resulting unprofitable nature o f traditional agriculture in the Eastern Cape, farms are getting larger as they shift towards more extensive practices. De-population i s occurring with fewer owners and staff on farms, and there has been a movement towards game farming and commercial hunting(see Annex 12). While this has been a provincial-wide response, it i s not taking place at the pace required in the project area to allow sufficient boundary expansion to sustain the growing population o f elephants, as well as the re-introduction o f key big game species. Without this boundary expansion, coupled with re-introduction o f major game species and ecosystem management, the conservation o f globally significant biodiversity will be at risk. The marine resources inthis area are under considerable pressure from recreational angling, pollution, and commercial fishing operations in and around the MPA. Illegal harvesting o f abalone by organized syndicates and individuals is becoming a serious issue, far outstripping the legal harvest worth US$65,000 in2002. - 6 - Government strategy. Government strategy has been fairly comprehensive through a series of reforms, which are designed to: (i)enable economic growth while protecting biodiversity; (ii) protect biodiversity and the country's natural resource base since half of the population still lives inrural areas and dependonclean river water, fuelwood, plants for medicinal use, and subsistence agriculture for survival; (iii)meet international commitments to conserve biodiversity and the environment; (iv) place people at the center of development; and (v) effectively promote integrated ecosystem management in order to achieve these objectives. Over the next ten years, the government i s planning to increase the total land area under protected management in South Africa from the current 6% to the international norm of 8%. South Africa has ratified international conventions aimed at conserving biodiversity - Convention on Biodiversity (CBD) - International Trade in Endangered Species (CITES); reversingland degradation - United Nations and begun to fulfill its obligations; preventing trade in endangered species - Convention for Convention to Combat Desertification (UNCCD), etc. The government has introduced new legislation to promote sustainable development through its National Environmental Management (NEMA) Act (1998). New National Biodiversity, and Protected Areas Acts will be promulgated in2003, to enable new approachesfor protectingbiodiversity andpromoting sustainable use. On the marine side, a White Paper for Sustainable Coastal Development (2000) has beenproducedto guide proper coastal protection. This will help manage the incorporation of the proposed Addo MPA into the gAENP. SANParks i s currently negotiating with Marine and Coastal Management (DEAT) to draw up a Memorandum of Understanding (MOU) regarding shifting specific management responsibilities in the proposed MPA to SANParks, especially for monitoring and enforcement. SANParks will be appointing a Marine Coordinator and a specialist from the SANParks poaching unit in 2003 to assist the gAENP team with MPA planning and coordination. Issue 3. Institutional structures, capacity, and governance for natural resources/biodiversity. Concerns exist over national as well as sub-national institutional structures, capacity and governance with respect to natural resource management. These concerns include inadequate local participation in resource management planning and program implementation; weak management capacity; insufficient coordination among relevant government organizations; and poor program monitoring procedures. National Parks in South Africa have historically been constrained by low finance, and to some extent insufficient numbers o f trained staff, outdated management systems, and governance structures. Protected areas such as AENP are slowly expanding revenues to meet operating costs, fund strategic investments in infrastructure and land acquisition, and provide services to the high standard demanded by visitors. However, without GEF support, it will be difficult for the Park to develop a solid and sustainable financial foundation, as well as achieving expansion to the desired level to conserve globally important biodiversity. Government strategy. Within protected area management in South Africa, the needto reform and strengthen institutions has been recognized. While the forthcoming National Biodiversity Act, and Protected Areas Act provide policy guidance inthis regard, SANParks will increasingly focus on its core objective o f national biodiversity conservation and integrated ecosystem management, while improving financial performance. A major organizational strategy was designed and implemented in 2002 to help achieve these objectives (see Annex 18 on performance of - 7 - SANParks inmeeting its mandate). Management consultants assisted with this process through a performance audit of SANParks. One result o f the new strategy i s increased outsourcing o f non-core functions, rationalized tariff structures, dedicated fund-raising units, and streamlining. Restructuring has reduced staff numbers by 12% and increased operating efficiencies. Revenue generation has improved and a deficit position o f US$2.7 million two years ago has now been turned into a modest operating surplus o f US$0.7 million. New initiatives approved by the government (and integrated into the project), will help National Park managers to meet strategic conservation goals by entering into various incentive-based arrangements with surrounding land owners. These innovative alternatives to outright land purchase can increase the area under Conservation while using financial resources more efficiently. Committees involving stakeholders are being established across the country as part o f the new park governance regime. Parks are expected to be more consultative; ensuring community support i s regarded as critical for future success. Parks are also viewed as a key mechanism to contribute towards community development and improved local livelihoods. The capacity o f government and SANParks has been recognized as needing strengthening in some areas to better deliver on its mandate. Priorities identified to date include the installation o f new environmental management systems, the introduction o f electronic information systems, using GIS to better design and manage parks and conservation areas, and increased public education, awareness, and participation. Training associated with each o f these priorities i s also needed. 3. Sector issues to be addressed by the project and strategic choices: The project will make interventions to address the strategic issues described above: Low economic growth and employment, poverty and inequality. The project will support implementation o f government policy in the region to reduce poverty, improve livelihoods and strengthen provincial economic development. The aim i s to develop a management model which maximizes the socio-economic advantages o f the protected area without compromising the globally valuable biodiversity. A key objective i s therefore to support a land conversion process from marginal traditional farming to conservation management and eco-tourism within the gAENP. Recent experience has shown this land-use shift generates higher employment while supporting enhanced conservation; a win-win situation. Inparticular, the project aims to develop a social ecology and community development program to improve the local community benefits from the Park, To this effect, SANParks i s developing a new social policy specifically for this project, which could be a model for other protected areas inthe country. Farm workers displaced by Park expansion will be resettled and compensated in accordance with Bank safeguard policies. Displaced farm workers will be given priority for new employment generated through the project. This includes expanded eco-tourism with the private sector, sustainable harvesting o f natural resources in specified zones, alien species removal, and small works programs in the Addo community. The creation of small and medium enterprises i s another integral element. Overall, the expansion o f environmentally sustainable tourism will generate local income and employment as well as contribute to regional and national economic development. Conservation of natural resources as basis for sustainable development. The most important project intervention will be the sustained conservation o f the region's globally significant biodiversity. Inparticular, the project will address the root causes and threats to biodiversity loss - 8 - by focusing on integrated ecosystem management. The strategic interventions will create an integrated terrestrial and marine park based on best-practice conservation planning principles, The area required for incorporation into the Park i s predicated on baseline targets for vegetative units and the habitat requirements of large herbivores and predators, some of which need to be re-introduced into the ecosystem. It is also based on the need to maintain critical ecological patterns and processes in the landscape. In order to achieve the longer-term goals o f expanding the protected area into the gAENP, legal and institutional barriers hindering conversion o f farms to conservation areas will be evaluated and an incentive framework put in place to attract more farm owners bordering the Park to participate. The project will also develop and implement a sustainable resource-use policy with local communities in specific zones. With the marine environment, the project area will bring under protection over 86% o f South Africa's endemic marine vertebrate species, 34% o f South Africa's endemic fish species, and 95% o f the primary marine production in Algoa Bay (See Annex 17). The project area will also include critically important offshore islands containing threatened bird species such as the Cape Jackass (or African) penguin. Commercial and recreational fishing in the MPA will be rationalizedin specific use-zones and put on a more sustainable footing. Institutional structures, capacity, and governance for natural resourcedbiodiversity. The project will support the South African government and SANParks to develop and pilot new institutional arrangements for participatory management and integrated ecosystem management. It will design a cost-effective and efficient structure for managing the Park, based on more outsourcing o f non-core functions, improved staff structures, posts and job descriptions, as well as work program requirements. The project will facilitate implementation o f an Integrated Environmental Management System (IEMS), building on experience and lessons learned in the Cape Peninsula Biodiversity Conservation Project and Cape Strategy and Action Plan. Training programs will then be developed and implemented. The project will also establish a sound financial framework for the gAENP, create new and unique relationships with the private sector for eco-tourism and the management o f tourist facilities, and form new governance structures and consultative processes with key stakeholders. C. Project Description Summary 1. Project components (seeAnnex 2 for a detaileddescriptionandAnnex 3 for a detailedcost breakdown): Project Vision The project has identified five inter-related components to protect the exceptional terrestrial and marine biodiversity o f the Addo region through strategic conservation planning and implementation, innovative land incorporation and development planning, and social capacity building. Over the six years of the project, the total Park area will likely increase to cover about 236,000 ha o f terrestrial (Table 1) and 120,000 ha o f marine habitat. During the project, the majority o f land acquisition will be through new contractual arrangements and gradually reduce the ratio o f purchasedcontractual land from 88/12 to about 72/28. - 9 - Table 1. Land acquisition planned under the gAENP Time Frame I Purch;;; Land Contractual Land Total Land (ha) PurchasedContrac ~ I (ha) I tual IPresent time I 145.000/ 20.0001 165.0001 88/12 I Endo fproject 170,000 66,000 236,000 72/28 Increment from 25,000 46,000 72,000 35/64 project The current AENP i s a mosaic of landscapes, which are not completely contiguous. The long-term vision i s that of a Park with a single fenced area for wildlife, but significantly larger than at present. The project will achieve this vision by consolidatingexisting Park areas through highly strategic land acquisition, focusing on priority parcels identified using a range o f criteria, but in particular, potential conservation values and threats. Given the need to address broader goals o f greater public participation, expanded tourism development with private-public partnerships, and increased social development in the region, a cautious and phased approach i s warranted. Park expansion i s planned over five phases (see Annex 19). Each phase will focus on a specific block o f the Park, and include boundary expansion, fencing, wildlife management, tourism development and social development. When all five phases are completed, many o f the fences separating each of the five blocks will be removed, thus consolidating one single large Park with expanded wildlife range and well-developed tourism products. A marine protected area o f 120,000 ha will be added inAlgoa Bay to complete the vision o f a contiguous Park spanning several terrestrial and marine ecosystems. See Figure 1below. - 10- Figure 1: ProposedgAENP Boundary COMPONENT1: CONSERVATIONPLANNING GEF: US$0.268 million Co-financing: US$0.553 million Total: US$0.821 million - - This is concerned with theplanning and monitoringframework for the long-term conservation of the unique assemblageof biodiversity in the region and the arrest of environmental degradation. This component builds on the conservation planning exercise largely undertaken during the preparation phase of the project and forms the biological basis for the implementationphase. The -11 - preparatory studies focused on the systematic conservation planning exercise, freshwater conservation, proposed marine protected area (MPA), and ecological monitoring o f the marine environment (see Annex 2). The five sub-components each largely deal with park planning and will form part o f the overall IntegratedEnvironmental Management System (IEMS). i)ConservationPlan: This sub-component will update the terrestrial, aquatic, marine, and cultural databases produced during preparation, and subsequent studies, and amend the drafted conservation plan as required to help conservation science better direct management. Selected research projects will be identified and commissioned, monitored and evaluated under this component as part o f the ongoing maintenance o f the Conservation Plan. Issues concerning zonation, surrounding land-use, contractual incorporation and business arrangements will be further negotiated, with action plans prepared for implementation. ii)Strategic(Development)Plan: Based primarily on the above information, a costed and phased strategic development plan will be produced to guide the Park for the next six years. It will indicate the preferred development zones (as part o f the Zonation Plan), rehabilitation areas, as well as infrastructure (roads, fences, buildings, visitor facilities) within the Park. In addition, it will address the redefinition o f an upgraded SANParks management structure for the Park, plus the development o f a re-introduction plan for key game species. iii)ParkManagementPlan: A Park Management Plan (procedures and policies) will be drafted as part o f the IEMS to facilitate more effective and efficient daily management. It will include clear and measurable deliverables, which will be monitored andreported on a monthly basis. iv) MonitoringSystem andResearch: The Project monitoring system will be implemented and updated based on year 1 experience. It will be augmented with key research on the biophysical and socio-economic environments in order to monitor and adjust the impact o f the Park on the community, economy and environment. The project Business Plan for year 1, sets out in the Project Implementation Plan (PIP) the indicators for the monitoring o f project objectives. Further, the IEMS to be implemented under component 3 will be used as an adaptive management instrument to ensure the sustainability o f park management. v) Marine ProtectedArea (MPA): To facilitate the proclamation o f the Addo Marine Protected Area (MPA), a marine planning framework will be developed through consultations with all relevant stakeholders. An implementation plan will then be prepared once all required negotiations have been conducted and approvals obtained. Legal studies will be undertaken to address potential conflicts between current terrestrial and marine conservation legislation. A social assessment will be undertaken to evaluate the impact o f the M P A on current users as part o f the marine planning framework. - 1 2 - GEF: US$2.44 million- Co-Financing: US$21.420 million Total: US23.864 million COMPONENT 2: IMPLEMENTATION OF THE DEVELOPMENT PLAN - The implementation of the development plan including ecological management, infrastructure and land incorporation, and socio-economic capacity building. Implementation will occur in three different management scenarios: (1) SANParks land owned and managed by SANParks, (2) concessioned areas within SANParks land, and (3) contractual land adjoining the Park where SANParks may or may not manage the land. The three sub-components will roll out o f the development plan, inclusive o f ecological management, infrastructure development and land incorporation, to ensure effective implementation o f the development plan. i)SANParkdParkEnvironmentalInfrastructureProvision: This sub-component focuses on the implementation o f the development plan. Development within identified zones will follow a plan, and investments will include all fixed infrastructures (roads, fences, water provision, conservation center, heritage sites, waste management systems, alien control, EMP and rehabilitation plans). ii)LandIncorporation: Land will be incorporated into the Park depending upon: its relative value with respect to enhancing ecological integrity and biological representativeness and biodiversity; improving local socio-economic conditions and minimizing costs o f acquisition (including resettlement); and the potential to reduce threats to biological integrity. Options for land acquisition include direct purchasing, contractual arrangements, management agreements, buffer arrangements, and expropriation. A prioritization matrix for the incorporation option has been developed for SANParks (see Annex 19). The Conservation Plan developed in the preparatory phase helped define the strategic incorporation zones but will need constant refinement as new information and assessment techniques are developed (see Component 1). iii) IncentiveContractingPartnerships: Incentives will be offered to induce land owners to convert high priority areas to conservation. Incentives could include legal recognition, traversing rights, management inputs, extension services, fencing support, tax exemptions and game stocking (see Annex 19). COMPONENT 3: INSTITUTION & GOVERNANCE STRUCTURES GEF: US$1.460 million - Co-Financing: US$2.097 million Total: US$3.557 million - The development of institutions and governance structures to ensure the successful implementation of theAddo project and management of the Park. This component includes the design, implementationand maintenance o f management systems and structures to enhance Park management and strengthening/creating institutional structures for effective, participatory Park planning and program implementation. - 13- i)IntegratedEnvironmentalManagementSystem(IEMS): An IEMS based on IS014000 will be developed to enhance Park environmental and general management. Technology and expertise developed in the GEF-financed Cape Peninsula National Park project will be used in developing the Addo IEMS. The IEMS will include the development o f corporate policies and park specific policies, the strategic development plan, procedures, monitoring indicators, review and auditing procedures. ii)gAENPManagementStructures: Based on the developmental plan and the extent to which concessions will be introduced, a new gAENP management structure will be developed and approved by SANParks for implementation for the day-to-day management o f the expanded Park. The existing Park Steering Committee (PSC) will be reviewed and restructured in line with SANParks strategy for overall governance o f the gAENP. The Steering Committee's prime function will be to provide a high level oversight function for the Park, the project and the Project Management Unit (PMU), to ensure compliance with the project's goals and GEF grant funding agreement. It is envisaged that as the development o f the Park management plan i s initiated, the Addo Planning Forum (APF) will be adapted and transformed to form a dedicated Park Forum. iii)ProjectManagementUnit(PMU): The PMU which i s responsible for day to day project management, procurement, and administrative functions, will continue to execute the project on a daily basis. The unit will work closely with gAENP staff but under supervision o f the PSC, and particularly that o f the gAENP Coordinator. Financial management will be provided through SANParks staff and management systems. iv) Park BusinessPlan: A business plan will be prepared, which models the financial requirements o f the Park including income and expenditure, and which provides a basis for adjusting to the roll out o f the Development Plan from the PIP. Initially, a year-one business plan will be drafted with financial budgets, followed by a full plan, utilizing consultants under P M U and PSC guidance. The full business plan will take into consideration the deliverables o f the PIP inclusive o f detailed action plans, responsibilities, measurables and financials. The business plan will be reviewed annually as the project i s implemented. v) Management Informationand ReportingSystem (MIRS): An electronic hardware and software system will be designed and implemented to manage the IEMS. The MIRS will be database driven, producing reports in conformance with the requirements o f the governance structures o f the project, plus the management o f the gAENP. A GIS officer will be appointed by SANParks to oversee the necessary databases and generate the required reports in consultation with the PMU. The design and implementation o f the MIRS will be coordinated by the PMU, utilizing services o f suitable providers. vi) TrainingPrograms: Training programs will help staff apply the new systems and technologies, and build a clearer understanding o f policies and operational procedures contained in the IEMS. A training needs - 14- analysis for new and existing staff will identify required training to implement the new requirements posed by monitoring systems, environmental and cultural management, business and financial management, socioecology, communication and public information, and HIV-AIDS awareness. Training needs will be matched with suitable activity-related courses, and staff enrolled accordingly. Staff will be monitored on completion o f training to ensure conformance with new systems and usefulness o f training programs. Training for non-SANParks staff will be addressed inComponent 4. COMPONENT4: COMMUNITYDEVELOPMENT & SOCIAL ECOLOGY. GEF: US$0.153 million Co-Financing: US$3.321 million Total: US$3.474 million - - ThePark should benefit communities through enabling managed access to natural resources, access to employment, micro enterprise opportunities, training and environmental education. This component will support implementation o f the Park development plan where it relates to employment and economic benefits through communal conservation strategies, Small, Medium and Micro Enterprise (SMME) opportunities, environmental education and fair resettlement o f displaced individuals. This component will forge the benefits o f sustainable natural resource use with social upliftment, particularly o f previously disadvantaged sectors o f society. i)AccesstoNaturalandCulturalResources: Although a preliminary survey was completed during project preparation, the project will finance further research to better understand the scope and importance o f important cultural sites and resources within the Park boundaries (see Annex 14). In addition, a policy guiding managed access to these resources, in compliance with SANParks policies, will be developed and implemented for the Park. This will also meet the requirements o f the Bank's safeguards for cultural resources (OPN 11.03 and OP 4.11). ii) Access to Employment: Members of local communities, and in particular displaced people, will be given priority for new jobs created through the project directly and through expanded eco-tourism development. In addition, these individuals will be offered training opportunities to help them benefit from new employment opportunities in the Park. As part o f this process, a database and suitable policy framework are needed. The SANParks national policy on Social Ecology will be modified to suit the gAENP project in relation to meeting Bank safeguard requirements on involuntary resettlement. Available employment datddatabases will be acquired from local government for analysis to match with gAENP employment opportunities. The Resettlement Policy Framework (RPF) and Resettlement Action Plans (RAPS) will provide useful baseline information about individuals affected by farm conversion that can feed into employment programs (see Annex 13). Gaps inthe database, such as skills analysis, will be identified and corrected. iii)EmploymentandEconomicBenefitsBasedonCommunalConservationStrategies: Analyses will be undertaken to identify small micro-enterprise (SMME) development opportunities within gAENP in areas such as fencing, arts and crafts, charcoal production, eco-tourism, alien clearing, rehabilitation, construction, and sustainable harvesting. SMMEs will - 15- be assisted by gaining access to all available national S M M E incentive schemes. Research will be done to identify what goods and services to gAENP may be sourced from SMMEs. Training o f SMME staff members will be an important section o f this component with a needs analysis having to be undertaken, with training undertaken in identified gap areas. Such training will be coordinatedwhere possible with that identified in Component 3. Some employment opportunities will be through Working for Water and Poverty Relief programs funded by the South African Government. iv) Conservation Education: An Environmental Education (EE) Program will be designed and implemented. As part o f the program, a sustainable and cost-effective education program and conservation center will be established to support community and visitor awareness about the Park. A limited number o f tertiary scholarships @ossibly two per annum) will be provided to train a cadre o f new officials from the community to enter SANParks at a professional level and advance in the organization. Relevant tertiary education courses will be identified and then a recruitment process will be pursued to select suitable candidates for evaluation and enrolment. To ensure effective operation of the Conservation Education Center, a number o f Conservation Education Officers will be recruited. v) Resettlement Compensation(Resettlement): Although the project's social objective i s to ensure that the greater Addo community largely benefits from the project, SANParks will make funds available and source opportunities in associated projects (Work for Water, and Poverty Relief) to ensure that any local people negatively affected by the project are fairly compensated. Site-specific criteria for compensation, developed during project preparation as part o f the Resettlement Policy Framework (RPF) and Resettlement Action Plans (RAPS), will be implemented in conjunction with other government and local government authorities responsible for restitution issues. COMPONENT5: ECONOMIC DEVELOPMENT GEF: US$0.340 million Co-Financing: US$6.729 million Total: US$7.069 million - - Stimulating overall economic development in the area by creating an enabling environment for tourism and associated economic activity. This component will focus on enhancing the conditions for broader economic development inthe area, largely through the tourism sector and the National Park. Mainstreaming the project objectives and achievements will be a priority to sustain the considerable support the project has received from central government, local communities and donors. i) Marketingand ProductDevelopment: A marketing plan will be prepared for the Park, inclusive o f existing Addo market research information plus a management information reporting system (MIRS) module to record relevant tourism statistics. The marketing plan will include a communication strategy, new product development, and identify prospective eco-tourism products emanating from gAENP. These identified products will be packaged on an established web site, along with all other relevant - 16- information associated with the project (see www.addoe1ephantpark.co.za). A communications/marketing officer will be recruited as part o f the new gAENP management structure. ii)ConcessioningandPartnership: The SANParks concessioning plan will be implemented to attract private sector investment in eco-tourism facilities in the Park. Part o f this sub-component includes the development o f terms o f reference, identification o f contractual partners, and creating a MIRS module to feed into the wider IEMS-MIRS. Note: Rounding o f f changes figures slightly Yo of GEF % of financing GEF US$M) financlng (US$M) inancing 1. Conservation planning 0.25 4.5 2. Implementation of development plan 21.62 0.00 0.0 2.33 42.4 3. Institutionaland governancestructures 0.00 0.0 1.60 29.1 4, Community development and social ecology 0.00 0.0 0.15 2.7 5. Economic development 6.34 0.00 0.0 0.34 6.2 Physical contingencies 0.00 0.0 0.00 0.0 Price contingencies 2.83 7.1 0.83 15.1 Total Project Costs 39.94 99.7 5.50 100.0 Total Financing Required 39.94 99.7 0.00 I 0.0 5.50 100.0 2. Key policy and institutionalreforms supported by the project: The project will focus on three key reform issues as follows: 2.1, Incentive based conservation strategy: A conservation strategy will be developed that provides incentives for landowners and communities to support new contractual land conversion arrangements with gAENP (see Annex 19). While landowner conversion to eco-tourism is taking place in some parts o f the province, a number o f barriers appear to be preventing enough landowners and communities in the project area from following suit. The creation o f large consolidated areas are also essential for the introduction o f new game. Building on the findings o f the preparatory phase, the project will prioritize the barriers to be removed and further develop and implement the incentive framework to support the conversion process. The scale o f this project, including the number o f farms involved, makes this a unique venture in South Africa. 2.2. Park planning to be informed by integratedecosystem planning: In South Africa, park planning and establishing park boundaries have not always been based on scientifically sound methodologies. Project preparation has piloted the use o f a new model which sets targets for the determination o f marine, aquatic and terrestrial components to be included into the Park as well as their integration. This new approach applies the concept o f bioregional planning, which has effectively been adopted as government policy. The project will demonstrate - 17- the value o f this method for adoption in future SANParks operations, in addition to guidinghow to include local stakeholders to a much greater degree inplanning processes. 2.3. Sustainable use and resettlement: Buildingon SANParks policy on sustainable use o fnaturalresources, the project will develop and implement sustainable resource use policies and practices as part o f routine park management operations where applicable. This will be undertaken inthe marine and terrestrial components and will provide experience for other SANParks operations. With resettlement, SANParks is developing a new policy and practices based on South African and World Bank requirements which should have potential for wider application. Some program sub-components will be integrated with social ecology components o f the project to ensure that local residents, and especially displaced farm workers benefit from the project. The creation and development o f SMME's will endeavor to draw upon this framework, as well as ideas from well established Community Driven Development (CDD) projects inthe subregion. 3. Benefits and target population: Benefits Environmental benefits 0 The over-riding benefit o f the gAENP project is the conservation o f a unique association o f biodiversity though integrated ecosystem management. The opportunity to bring five o f the seven biomes o f South Africa, estuaries and marine systems, coastal dunefields and offshore islands all within one park will generate unique national and global benefits. 0 The conservation o f endangered and Red Data Book species i s enhanced, such as the African elephant, the south western black rhino (Diceros bicornis bicornis), African penguins, certain succulent plants, etc. 0 Cultural resources, such as archaeology and paleontology, are preserved (see Annex 14). 0 The project will reduce land degradation currently being caused by overgrazing, alien plant encroachment and unsustainable land use. At the same time it will not detract from more productive and viable agriculture such as dairy, chicory and mohair in the larger region. 0 Environmental education programs will be made available through the development o f at least one Environment Education Center with associated staff. Socio-economic benefits 0 Of the US$39 million to be spent on the gAENP project, at least US$6 million will benefit local communities and normal contractors through community developmenthocia1ecology and routine contracting opportunities. Funding will include government-sponsored Working for Water, Poverty Relief, and social ecology projects to enhance ecological services, natural resource management, minor works and eco-tourism. Wages paid, will be significantly higher than in agriculture. In addition, resources will also be made available through the incentive framework to enable interested land owners to convert to more viable conservation land-use options. Tourism numbers are expected to increase from 120,000 in 2002 to 180,000 by the end o f year 6, in-line with capacity expansion. Associated tourism expenditures and indirect economic impacts will also increase significantly. The Park will be the only one in the - 18- world offering visitors the "Big 7" experience, comprising o f the traditional Big 5 terrestrial game species (lion, elephant, leopard, rhino, buffalo) plus marine whales and sharks (including the Great White shark). Through the project, conservation programs and eco-tourism development are estimated to create no less than 212 permanent and 914 temporary, contract jobs. The figure could reach 2,370 jobs. Employment with conservation land-use and eco-tourism represents about 1job/210 ha versus the agricultural norm o f 1job/367 ha. The Park i s expected to attract foreign investment from donors and investors. Given the fact that the Park i s already functional, and there i s to be greater diversification o f the wildlife product, investment opportunities will be enhanced. Target Population SANParks SANParks, as the executing agency, will be one o f the key target groups in the project. It will benefit from technical and financial support, capacity building, institutional development and assistance relating to policy and management reform. SANParks will also gain valuable hands-on experience in developing cutting edge conservation and integrated ecosystem management and economic models. The project will also share models and lessons learned with the CAPE Action Plan and the United Nations Development Program (UNDP) supported Wild Coast project. Government The project will support effective implementation o f government environmental policies, poverty alleviation strategies and enhanced social equity. Departments and agencies involved in supporting the project will benefit from institutional capacity building. Collaboration will be enhanced between agencies and departments supporting the project. NGOs and civil society NGOs will be consulted together with other stakeholders about the project. They will also play a more specific role in formalized Park structures such as the Park Forum. Civil society, including farm workers, will be consulted at all stages and views and opinions used to inform the implementation o f the project. Environmental education components will aim to strengthen civil society understanding about environment issues and Park management. Private sector and land ownersJarmers The project will further develop and implement a planning model, which provides far greater private sector and land-owner involvement in management implementation. Land-owners will be specifically targeted to form partnerships that shift underutilized farmland into sustainable conservation, ensure better retention o f labor, rehabilitation o f land and development o f minor infrastructure. Private sector operators, outside o f landowners, will be invited to develop and/or manage aspects of the park development inareas o f comparative advantage such as eco-tourism. - 19- Local unemployedpeople Employment and entrepreneurial opportunities will materialize from Poverty Relief and Working for Water funding as well as more stable forms of employment associatedwith the Park expansion and development of eco-tourism. Training opportunities will first be targeted at resettled people. Inaddition, the identification and creation of SMMEs will be encouraged. A training planwill be developed through the project which will include basic environmental and cultural management, natural resource use enterprises (charcoal, arts and crafts), alien vegetation removal, basic business and financial management, basic adult education, and HIV/AIDS awareness. 4, Institutionaland implementationarrangements: SANParks, largely using existing staff, will be the lead executing agency for the Project over the six year duration. Other stakeholders that will collaborate in implementation include the provincial Department of Economic Affairs, Environment and Tourism, national government departments (Environmental Affairs and Tourism, Land Affairs, Labor), various NGOs, community-based organizations (CBOs), the farming community, academic institutions, private land-owners and private enterprise. Collaboration with project implementation will be effected through the following institutions: ProjectManagementUnit (PMU) The current PMU consisting o f a part time SANParks project manager, finance officer and administrative officer will be strengthened with the project paying for a procurement officer and full-time project coordinator/manager. SANParks has already deployed a full time marine coordinator (October 2003) to the PMU. The PMU will be responsible for project implementation including: (i)drafting and coordinating the development, management and business plans by short term consultants; (ii) day-to-day management of project development and implementation; (iii)annual work plans and budget preparation; (iv) donor coordination; (v) secretariat function for the Project Steering Committee (PSC) and the Addo Planning Forum (APF); (vi) financial management including establishing a financial management system, withdrawal applications, financial reporting, procurement of consultants, goods, and services; (vii) establishing the Park Forum (viii) reporting via a new Management InformationReporting System (MIRS). ProjectSteeringCommittee(PSC) The PSC will provide a high-level oversight function for project implementation according to the requirements o f the gAENP, the vision for the Park, Bank requirements, and the GEF Grant Agreement. It will therefore ensure full integration o f project development into Park management activities and provide a holistic and well-coordinated management platform. The PSC will meet approximately every 6 months to review project progress and agree to the proposed project deliverables for the following 6 months. The PSC will be chaired by the gAENP Park Manager. The PSC composition is expected to be mainly SANParks personnel including: (i) PMU The Project Manager (ii)Park Manager, team leaders of the working groups (and section rangers, financial, tourism representation as required); (iii)SANParks gAENP Coordinator; (iv) Head: SANParks Park Planning; (v) Poverty Relief & Work-for-Water Coordinator; (vi) SANParks Manager: Commercial Development; (vii) contractual park representative; (viii) representative from Provincial DEAT; (ix) representative from APF and later the Park Forum. - 20 - ProjectWorking Groups (PWG) The PWGs, comprising o f 4-10 people, will be tasked with execution o f the key project +components by the Project Manager. They will play a crucial role in integrating the project activities into ongoing work of the Park organization and staff. A specific structure is not required at this stage; working groups will be formed as needed and dissolved as the assigned activity i s completed. Members will be co-opted as needed but in general will include the Project Manager, a senior working group leader (preferably drawn from Park management), SANParks staff, government officials and any other key organizations or individuals. ParkForum It is envisaged that as development o f the Park management plan proceeds, the existing Addo Planning Forum will be transformed into a Park Forum. The establishment o f the Forum entails the nomination o f local stakeholders including farm worker representatives through a consultative process. This process will commence duringproject implementation phase. Other structures are also envisaged and may include the creation o f land-owner forums through which the Park management will work in order to enter into land incorporation and management agreements to achieve project objectives. Resettlement Working Group (RWG) The RWG will deal with all relevant issues associated with the resettlement o f affected farm workers, The functions o f the RWG include: acting as an advisory and oversight body to SANParks in matters relating to resettlement; serving as a forum to solve any arising problems; and assisting SANParks in overseeing all the phases o f the resettlement process, including the allocation o f jobs and generation o f livelihoods, compensation and other benefits. The RWG composition includes: (i)farm workers representatives as nominated by the farm workers (affected by Phase 1, from 1997-2003 phase); (ii)designated SANParks representative responsible; (iii)a representative o f each o f the following departments o f the Government o f the Eastern Cape: Land Affairs, Agriculture, Tourism; (iv) a representative o f the Resettlement Monitoring Team, when it i s on site; (v) a representative from surrounding fandagriculture; and (vi) a resettlement expert. They will meet twice a year or more often as needed. FinancialManagement Financial management assessment SANParks will provide financial management functions to the PMU. A financial self-assessment has been completed and reviewed by the Bank staff. The assessment indicates high compatibility between Bank guidelines and requirements, and the SANParks financial management systems and procedures. SANParks has demonstrated excellent financial management performance in other Bank/GEF projects. A demonstration that the system and arrangements are able to produce the periodic Financial Management Reports (FMRs) will take place prior to effectiveness. A Bank accredited FMS will review the situation prior to declaration o f project effectiveness. Project monitoring, evaluation, and management reports The PMU will produce Project Management Reports (PMRs) that reflect project performance, including expenditures, against the logframe indicators presented in Annex 1. Other key - 21 - monitoring systems will include the production of six-month project progress reports to the Bank prior to supervision missions, as well as routine SANParks and national and provincial data, which will indicate whether the project i s achieving its goals or not. The PSC will also perform a monitoring role by assessingproject progress reports. General civil society monitoring will take place via the APF and Park Forum, while resettlement issues will be monitored through the Resettlement Working Group (RWG). Where specific sub-components require detailed monitoring and evaluation (such as land incorporation), more detailed systems will be developed. The design of project components will be overseen by the PWGs. A Bank led mid-termreview will be undertaken at the conclusion o f year 3 (May 30,2007), informed by a SANParks external assessment. Audit arrangements SANParks external auditors, who are already approved for other Bank supported projects, have been appointed to audit the Project accounts and financial statements on annual basis. In addition SANParks internal auditors (a separate external entity) will provide internal auditing on a 6 monthly basis. The cost of the external audit will be financed from project funds. D. Project Rationale 1. Project alternatives considered and reasons for rejection: N o Project Alternative. The alternative o f not addressing the current scenario of environmental degradation and loss of valuable biodiversity, both inside and outside the existing protected area, with its links to rural poverty, was rejected. This alternative would lead to high economic and social costs from a continued and gradual deterioration of the natural resource base and eventual loss of globally important biodiversity. Without project support, expansion into the larger gAENP would be limited and not based on an integrated and systematic conservation planning and management system. Modest expansion of game ranches and eco-tourism ventures would be a positive trend but insufficient to meet conservation objectives for globally important biodiversity, in particular the re-introduction of key predator species including lion, and the reintroduction o f the larger herbivores including elephant and rhino over much of the area. These species can only be introduced into very large areas of suitable habitat being managed appropriately. There would be reduced opportunity for the development o f an economic alternative to unsustainable pastoralism, which continues to undermine globally important biodiversity (within two hotspots and Albany Center for Plant Endemism). The no project alternative would limit private sector eco-tourism investment in the region, hinder job and skills creation opportunities, and reduce support for the conservation o f natural resources, particularly among rural communities. The marine environment would continue to suffer from over-harvesting of resources, and water pollution from the catchment would remain largely undetected and untreated. A MPA would not be established and more integratedmanagement o f the marine and terrestrial components would not take place. Traditional Protected Area Management Project Alternative. The traditional approach to protected area management including boundary expansion, i s to purchase additional land at market value. Where failure occurs, expropriation and compensation can be applied. In either case, the usual focus of management activity i s on biodiversity conservation and where possible, - 22 - limited eco-tourism development to generate revenues. People and landowners surrounding the protected area are not usually given opportunities to participate in management planning and implementation, but rather are viewed as threats to conservation. This alternative was rejected because of the major social impacts on surrounding communities, and creation o f an adversarial climate between landowners, local people and SANParks in the gAENP area. This approach does not draw on the comparative strengths o f different players, and would not build local support for biodiversity conservation. Therefore, a project alternative has been selected which involves private land owners and inhabitants as detailed inAnnexure 19. 2. Major related projects financed by the Bank and/or other development agencies (completed, Latest Supervision Sector Issue Project (PSR) Ratings (Bank-inancel wojects only) I Bank-financed Implementation Development Progress (IP) Objective (DO) Industry IndustrialCompetitiveness S S Municipal Municipal Financial S S Management Support I Bank supportedGEF GEF Cape PeninsulaBiodiversity S S Conservation GEF Maloti Drakensberg S S Transfrontier Cooperation and Development Project GEF Conservation Farming. MSP S S GEF Sustainable Protected Area S S Development inNamaqualand. MSP RichtersveldCommunity Conservation Project (preparation) 1 GEF /CapeAction Plan (preparation) I GEF RenewableEnergy Project (preparation) - 23 - GEF Sub-TropicalEcosystem S S Planning(STEP) UNDP Agulhas Plain(preparation) UNDP SABONET UNDP Wild Coast CEPF Succulent Karoo Ecosystem Profile CEPF Cape EcosystemProfile DANCED Capacity Building inSANParks DANCED Socio-Economic Overview of DisadvantagedCommunity NeighboringAENP IndustrialDevelopment Corporation Tourism ProductDevelopment (IDC) IFC Tourism ProductDevelopment SA Government Poverty ReliefProgram I SA Government Work for Water Program (Wfw) IFAW ElephantRange Expansion Program HSUS ElephantRangeExpansion Program Leslie Hill Succulent Trust SucculentKarooConservation Program Rhino & ElephantFoundation ElephantRangeExpansion Program PlDO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), 1(Highly Unsati: - 24 - 3. Lessons learned and reflected in the project design: The Bank, GEF, and SANParks have a wealth o f experience in designing, financing, and implementing protected area projects to meet multiple management objectives including biodiversity conservation, community participation, private-public partnerships, social development, and poverty alleviation. The main lessons for project design from a review o f the Bank/GEF global experience in protected area management and SANPark's local experience include: Use of comprehensive baseline information and biodiversity prioritization Effective protected area planning i s based largely on accurate and comprehensive spatial baseline biophysical information. SANParks has brought considerable national experience to bear in designing this project. A thorough investigation into the terrestrial, freshwater and marine environments has allowed critical environmental factors to be "layered" into a strategic GIS conservation planning tool (C-Plan) and map. Minimal areas necessary to meet conservation objectives were identified and the areas needed for conservation and ecosystem management are therefore defensible and based on scientific rigor. Creating effective partnerships Positive and negative experience with the IFC supported commercialization o f certain Park facilities in South Africa (such as new tourism resorts in Kruger National Park) have been evaluated and lessons learned incorporated into project design and financial modelling. The project will buildon this experience in developing partnerships with the private sector for tourism development which will reduce Park costs, increase income and enhance ownership and support for the wider gAENP. Lessons learned in other BanWGEF financed projects suggest that a partnership for land reallocation can be applied inthis project through various methods. Allowing landowners to be incorporated into the Park without necessarily involving a transfer o f title, has a number o f benefits. Fullpublic participation and communication Active participation o f project beneficiaries and other stakeholders from the initial planning process i s important to identify potential problems and solutions, generate support, and foster knowledge sharing. The project rationale, benefits and impacts need to be made clear from the outset. The public participation process inthe AENP has been a part o f regular Park management for some time through the APF. Through the project, this process will be strengthened by the establishment o f new and more effective institutions. Planningfor long-termjnancial sustainability GEF projects should help beneficiaries develop mechanisms to improve financial sustainability. Global experience suggests there i s little justification in GEF and the government o f South Africa investing inprotected area management without building capacity to generate sufficient revenues to cover reasonable operations and maintenance budgets. The current project has been designed to expand gAENP revenues from increased eco-tourism development through private sector partnerships and contracting out various concessions. Forecasts indicate the gAENP will be in a strong financial position by year 6 onwards. - 25 - Single institutional authority Divided or unclear institutional authority has plagued other worthwhile protected area investments both globally and locally (e.g. Dongola-Vhembe, and Pondoland). The institutional roles and responsibilities were clarified early in the AENP program and provide a strong foundation to strengthen the institutional framework for the project. 4. Indications of borrower and recipient commitment and ownership: Insupport ofthe project, the Government of South Africa, through SANParks hasundertaken the following: Relocated a dedicated team of four scientific staff, assistant project coordinator, and an administrative officer to Port Elizabeth in 1999 to manage the GEF funded PDF-B grant. National DEAT and SANParks Directorate have identified the gAENP as a national conservation priority. To this effect they directed the entire land purchase allocation component (US$3.5 million) of the IDC loan to SANParks in 2000 - 2001 for land conversion around AENP and about 10% of the remaining loan into product development in the Park. DEAT has also directed a further US$5.8 million for 2003/04 for land incorporation. Organized visits to AENP by high profile personalities, such as President Thabo Mbeki, the Portfolio Committee for Conservation, and the Boardof SANParks. Successfully negotiated the transfer of the Woody Cape Nature Reserve in 2001 from the Eastern Cape provincial administration to Schedule 1 National Park for incorporation in AENP. Successfully allocated South African governmental funding of US$6 million from Working 2001 - 2003. A separate SANParks project coordinator for this money has been seconded for Water, and Poverty Relief programs specifically in the Addo project for the period to the parks management team. 5. Value added of Bank and Globalsupport in this project: Based on the success o f previous and current Bank engagement in South Africa, the Bank i s in a strong position to assist with implementation of this project. The aim of this assistance i s to : 0 Incorporate experiences and lessons learned from other GEF regional biodiversity projects. 0 Develop a resettlement policy for gAENP based on Bank safeguard policies for involuntary resettlement, thus ensuringpeople are fairly and fully compensated. 0 Build on successes and experiences gained from the support to the Cape Peninsula National Park, to support the development o f cost effective institutional and governance arrangements for Park and project management. These will serve as best practice to be rolled out across SANParks. Continue to attract co-funding by building relationships with government and other partners to leverage additional funds to the project. - 26 - E. Summary Project Analysis (Detailedassessmentsare inthe projectfile, see Annex 8) 1. Economic (see Annex 4): 0 Costbenefit NPV=US$million; ERR= % (see Annex 4) 0 Costeffectiveness 0 IncrementalCost 0 Other(specify) The baseline cost without the GEF Alternative includes regular government o f South Africa expenditures on the Park management and biodiversity conservation, implementation, institutional development, community development, and regional development. The baseline costs are an estimated US$34 million without project support. Incremental costs are estimated to cover project expenditures on components that have global benefits and are eligible for GEF financing. The incremental costs will help achieve global benefits by supporting improved conservation planning processes, additional research and monitoring for globally important terrestrial and marine biodiversity; implementation of activities that conserve globally important biodiversity; strengthening o f lead institutions and governance structures for improved biodiversity conservation; local community development programs aimed at conserving biodiversity; increased public awareness and education programs; and regional development for eco-tourism as part of a sustainable finance strategy to support long-term biodiversity conservation. SANParks and the Government o f South Africa have already committed and will further commit US$27.6 million for the GEF alternative. This includes US$15.77 million for land purchase, infrastructure and institutional development. A National Government contribution of approximately US$12 million i s expected by project closure for land purchase and removal of alien vegetation. A portion o f this funding was made during project preparation and the remainder will be provided during Project implementation. Building on the previously successful IFC supported concessioning program, another US$6.5 million i s expected to be leveraged from the private sector, primarily for visitor and public facilities. The location of these opportunities has been determined. The other investments in infrastructure and game which are likely to take place on private land have not been factored into these calculations. The GEF Grant contribution, towards the GEF Alternative, i s US$5.5 million over six years. 2. Financial (see Annex 4 and Annex 5): NPV=US$ million; FRR= % (see Annex 4) The project will finance investments in Park planning, management capacity and environmental rehabilitation, with the objective of creating a megabiodiversity conservation area representing five o f the country's seven terrestrial biomes and one of the country's three marine protected areas. To help meet this objective, the project will finance new approaches for participatory management systems involving communities, private sector and government. As part o f project preparation, work has been undertaken on the land incorporation and incentive framework to encourage landowners to contract into the Park. Sufficient investigations and precedent has been set to indicate the viability of this proposal and refinements will be made during implementation. The project i s expected to generate an incremental 212 permanent and over 900 contract jobs. Wages will be significantly higher than for farm labor. On pastoral and dairy farms, average monthly labor rates are betweenUS$32 and US$60/month. By contrast, average labor rates for SANParks are between US$116 and US$250/month. Private tourism operators are paying within - 27 - and above these rates depending on the skill required. Workers displaced from unproductive farms, who are subsequently employed in the Park or private sector eco-tourism, will benefit from higher incomes. Fiscal Impact: From a financial perspective, the project offers land users the prospect o f higher returns and more diversified and sustainable income sources. Specialist Reports (see no. 10 and 11) prepared specifically for this project have examined the comparative returns o f land use options in the area. The Gross Margin (GM), i.e. total revenue less direct variable cost) for livestock has been estimated at about US$1l/ha (R116/ha). It should be noted that this average i s raised somewhat by the inclusion o f dairy farm areas that are not part o f the Park's intended expansion. The Net Margin i s more difficult to determine, because local data on indirect costs are not available. Using results from other studies, Specialist Report no. 10 concludes that the NM i s inthe order of 70% o f the GM, i.e. only US$8/ha. The GM for game farming i s estimated to be similar to the average for livestock farming: US$9/ha (R103). Using the same rule o f thumb as above to derive the NM, it would be in the order o f only US$6/ha. Adding eco-tourism, which would be compatible with game farming, would raise the net return somewhat. However, Specialist Report no. 11 indicates that the increase would be very limited: about US$1-3 NM per ha per annum. However, the NM concept utilized there appears to be more inclusive than that utilized inReport no. 10. It should also be noted that the calculation only includes income that accrues to the owner o f the land and facilities on site. Tourists will obviously spend beyond those limitedboundaries. It is noteworthy that market actors are in many cases convinced that game farming and eco-tourism can yield higher returns than livestock. Multiple examples o f such conversion in a wide area o f the Eastern Cape can be given. This i s less surprising if one considers the wide variation in returns behind the averages discussed above. On some marginal lands, livestock farming has effectively ceased as the vegetation i s exhausted. There i s also an emerging success o f high-end eco-tourism. The many offers o f selling land which SANParks has received bears further testimony to the limited prospects o f livestock farming, and the attraction o f the incentives offered for conversion. Hence, the Park was able to buy in the order o f 75,000 ha from 1997 to date. Purchases have also increased drastically inthe last two years. The Park i s already financially viable given its current size: it turned a modest operating surplus before corporate overhead costs o f about R1.3 million (US$118,000) in2002/3 for the first time in decades. While this provides a sound platform onto which to build, it is quite clear that the Park does not generate sufficient funds to carry the expansion that the project entails. The project can therefore be seen as a vehicle to assist the Park to reach a new and much higher level o f investment. The transitional period o f six years i s projected as sufficient time to adjust to a higher level o f financial sustainability. - 28 - Wider regional economic impacts will result from project investments, and more importantly, private sector investment funds leveraged and tourism expenditures on goods and services. Approximately US6.5 million will be invested by private companies as part o f eco-tourism expansion in the area. By year 6, it i s estimated that 180,000 tourists will visit the Park spending money on accommodation, food, fuel, tours, souvenirs, guides, etc. Direct and indirect economic impacts o f tourist spending will be a significant contributor to provincial GDP. 3. Technical: The proposed project interventions require a skill mix o f human capacity with relevant knowledge to ensure effective implementation and more importantly, the sustainable management o f the expanded gAENP using new and innovative conservation approaches. South Africa, and more specifically, SANParks has a long history o f national park management. South African parks (and staff) are recognized as continental leaders in the areas o f wildlife management, tourism development, and sustainable finance. South Africa i s also blessed with several universities having outstanding research programs relevant to the project and its aims. Regional experience in community participation in natural resource management, eco-tourism and benefit-sharing (for example in Zimbabwe, Zambia, Botswana, Namibia, Tanzania, etc) will provide some external knowledge to draw on. The project design i s appropriate for the level o f knowledge and expertise available within South Africa and more specifically within SANParks (and gAENP). The country, and SANParks, has a strong record o f investment in similar projects, therefore, estimates o f investment and recurrent costs, and contingencies are felt to be very reliable. The general macro-economic stability o f the country also lends itself to more accurate projections o f costs and benefits, Project investments will build on the organization's current knowledge base, experience, and organizational assets to improve longer-term park development planning and implementation, strengthen institutions and governance structures, enhance community development and social ecology, and assist in economic development through sustainable tourism. 4. Institutional: Institutional assessment SANParks staff tasked with project implementation through the P M U are highly qualified in technical areas and are highly committed to the organization and its mission, which focuses on protected area management and biodiversity conservation. A broader assessment o f institutional capacity however, suggests more generally that staff in SANParks, and in this case the AENP will require training to buildmanagement skills. The proposed project has provided for such training. The organization i s gradually shifting its focus to include greater use o f private sector partnerships for revenue generation, and to use a wider range o f stakeholders (such as local communities and landowners) inparticipatory Park management. SANParks i s slowly building experience in these new directions, which will help with implementing the proposedproject. 4.1 Executing agencies: The project preparation phase and other GEF financed projects in the country have demonstrated solid project management experience within SANParks. While SANParks will be the Executing Agency, success will also depend on active participation o f other stakeholders representing relevant government agencies, NGOs, community-based organizations, farming communities, tertiary institutions, private land owners and the private business sector. In this regard, the - 29 - membership composition and coordination functions o f various institutions i s critical. These are described below. 4.2 Project management: As indicated in C4 of this PAD, several institutions will contribute towards overall project delivery. The proposed institutions will provide a strong foundation for dynamic and highly participatory project implementation. These include: 0 Project Management Unit (PMU), consisting o f three contract personnel and SANParks financial management to deal with day-to-day project planning, finance, implementation and coordination. A marine-coordinatorwill be redeployedwithin SANParks to the Park. 0 Project Steering Committee (PSC), consisting o f senior representatives o f SANParks, other Government Agencies, and other Project Institutions (APF-PSC), and providing broad oversight o f project implementation and coordination. 0 Addo Planning Forum (APF), already operating in the AENP and providing a forum for consultative dialogue between local stakeholders and SANParks. It will be transformed into a dedicated Park Forum as the project develops a new Park Management Plan. 0 Project Working Groups (PWGs) o f 4-10 people from across various stakeholders will be established to aid inthe execution o f specific project activities. 4.3 Procurement issues: Consulting services, goods and works shall be procured in accordance with the Bank's procurement guidelines. SANParks has demonstrated highly satisfactory compliance to Bank procurement requirements in other projects. A procurement self-assessment completed in December 2002 indicates that existing controls within SANParks (AENP) for procurement are relatively well-managed with no noticeable deviation from the Public Finance Management Act. The assessment does however suggest a need to separate procurement from finance and that a highly skilled procurement officer should be recruited. SANParks is committed to these actions through the P M U where a procurement officer will manage the procurement function under the direct supervision o f the Project Manager, while financial management will be through SANParks Finance Department. Depending on the background o f the person recruited, short-term training in Bank procurement processes may be required. A procurement plan will be provided prior to effectiveness. N o major procurement issues are anticipated. 4.4 Financial managementissues: Financial management capacity (i)CapacityofstaffinSANParks SANParks will be responsible for the overall financial management o f the project. The team at the AENP's Financial Administration is well qualified and sufficiently familiar with Bank procedures to ensure sound management and control. A qualified and experienced full-time financial officer will be seconded from SANParks to support the project. The officer will work under the Project Manager but with financial management accountability still vesting with Addo's finance officer who will ensure adherence to SANParks and Grant requirements. Short-term training in Bank financial procedures, including reporting may be required depending on the background o f the person recruited. -30 - (ii)FinancialManagementSystems. The financial self-assessment, carried out in August 2002, indicated high compliance by SANParks with Bank requirements and guidelines. A further Bank assessment was carried out in March 2003 which substantially confirmed the self assessment. SANParks has a well established internal control system. Rules and regulations, including rules o f ethics, are well defined and documented in manuals. The institutional arrangements for financial management o f the project will follow the proven Cape Peninsula National Park model. At the time o f the financial management assessment it was noted that although the SANPark's Internal Audit department was functional, the coverage given to the AENP seemed inadequate. This weakness will be addressed through a recently signed contract with a reputable independent accounting firm to provide annual internal control audits to each Park including the AENP. The contract i s effective as o f March 2003. The previous SANParks computer-based financial management system (Prophecy accounting software) has a proven track record. However, as o f September 1, 2003, SANParks switched to a new and better system called Great Plains. Staff training i s underway to facilitate the transfer to the new system. SANParks has shown highly satisfactory financial management under another Bank/GEF- financed project (Cape Peninsula National Park - GEF, US$6.3 million). SANParks will demonstrate the capabilities o f the new system to the Bank, prior to effectiveness, by providing a proposed FMW prototype quarterly report. A Bank staff member (FMS) will also review the operationality and reliability o f the system before the project i s declared effective. (iii)ProjectFlowoffunds. The Grant funds will be disbursed over a period o f 6 years with project Completion Date set for 10/31/2009 and Closing Date o f 04/30/2010. SANParks will be the recipient and the Executing Agency for the Grant. A four month advance from the proceeds o f the Grant, equal to US$200,000, will be deposited by the Bank into a US$ denominated Special Account to be opened by SANParks at a commercial Bank acceptable to IBRD. SANParks will fund all Project expenditures from its existing Rand bank account, then reimburse itself, on a monthly basis with the Rand equivalent o f eligible expenditures from the US$ Special Account to its Rand bank account. Application for replenishment will be based on these reimbursements from the US$ Special Account, and will be supported by details o f the individual payments made. All transactions will be managedthrough the SANParks financial management system. The South African auditing system i s robust and no risks are foreseen with these arrangements (iv) Auditing arrangements The audit trail was found to be robust at the SANParks, given the capabilities o f the computerized system, protocol surrounding processes, and information management. SANParks has received no less than 7 consecutive unqualified audits from its independent external auditors. The filing and archiving was also found to be one o f the strongest in the region. South Africa i s home to all o f the major international management and audit firms, therefore, no major risks exist with respect to project auditing. As in the case o f the Bank supported Cape Project. Peninsula National Parks Project, SANParks will appoint its current auditors on same terms to the -31 - (v) Readiness and next steps. The format o f FMRs will be provided by SANParks prior to effectiveness. Project Special Account ($US)to be opened up at a commercial bank on terms acceptable to the World Bank. 5. Environmental: Environmental Category: B (Partial Assessment) 5.1 Summarize the steps undertakenfor environmental assessment and EMP preparation (including consultation and disclosure) and the significant issues and their treatment emerging from this analysis. The project objectives are to achieve a number o f positive environmental, socio-economic and developmental impacts. The project components will also include mitigation measures for potential adverse effects. A Strategic Environmental Assessment (SEA) was undertaken to meet Bank EA requirements. A SEA was selected instead of an Environmental Impact Assessment (EIA) (with Bank approval), as the exact location o f the new Park boundaries could not be determined with great precision during preparation. While priority lands have been identified, the specific areas encompassed by expansion will depend on the nature and uptake o f land conversion incentives developed, negotiations, etc. A broad, forward planning instrument was needed, therefore, an SEA was selected as an appropriate EA instrument. The SEA evaluated the natural environment in the project area, socio-economic environment, financial viability o f the gAENP, legal and institutional framework, issues and concerns raised through public consultation, and potential development scenarios. Following this review, a Category B assessment was assigned: First the project focuses on protected areas. Second, it will have an overall positive environmental impact by reversing current trends o f natural resource degradation through improved protected area management and conservation o f globally and nationally important biodiversity. Third, all sub-components involving potential impacts on the environment will be subject to individual EIAs under South African EA policy and regulations as well as those o f the Bank. (see Annex 12). The major potential impacts noted through the public participation process o f the SEA were: displacement and relocation o f farm workers; uncertainty about Park development; impact o f the project on farming related industries and activities; inadequate communication with affected parties; impact on employment opportunities; impact created by the Coega industrial development zone on the coast (not part o f the project); need for socio-economic indicators and targets; compliance with SEA draft policy proposals; impact on dairy, beef and chicory production; impact on mohair production and land purchase process. The key issue to emerge has been a concern by some land owners with land incorporation into the Park and the impact on livelihoods. The project makes detailed provision through its design to not only address this issue but to have mutually beneficial impacts. The key instrument to achieve this will be the design and implementation o f an incentive framework to landowners and communities to incorporate into the gAENP as well as community development and social ecology components. A Resettlement Policy Framework (RPF) and Resettlement Action Plans (RAPS) have been developed and approved by the Bank to comply with OP/BP 4.12. 5.2 What are the mainfeatures of the EMP and are they adequate? The project intends to develop detailed plans to conserve and rehabilitate the biodiversity o f the - 32 - area. Project outputs will include the development and implementation o f a conservation plan to inform a Park development pladecological management plan, and development o f an environmental management system which includes park policies and procedures to manage and mitigate all Park operations and potential impacts. Further, there will be detailed socio-economic and biophysical monitoring. Domestic EA laws, policies, and regulations will apply to development in the Park. For developments deemed to require an EIA, a mitigation and monitoring strategy will be identified. The project has budgeted funds for EMPs under various components that may require an EIA, such as roads, fencing, etc. 5.3 For Category A and B projects, timeline and status o f EA: Date of receipt of final draft: April, 2, 2003 The draft SEA was received on April 2,2003 with "InCountry Disclosure" on July 21,2003. 5.4 How have stakeholders been consulted at the stage of (a) environmental screening and (b)draft EA report on the environmental impacts and proposed environment management plan? Describe mechanisms of consultation that were usedand which groups were consulted? An independent consultationplanwas prepared and implemented to consult with key stakeholders during the screening and impact mitigation identification stage o f the SEA. The consultation process included scoping all principal concerns, feeding these back to inform the planning process and stakeholders, and to include stakeholders in the final SEA report. The process was implemented by independent consultants in collaboration with SANParks and several other government agencies. Key stakeholder groups were first identified, and an advertising/awareness campaign about the consultation process then implemented through media and networking. Stakeholders were invited to respond in writing to help identify critical issues and concerns over the project, and more generally, protected area management in the area. A series o f meetings were then held across the protected area. Materials for public review were prepared in three o f the official languages. During this process, 234 interested and affected parties were consulted, including civic organizations, farmers associations, landowners, businesses, chamber o f commerce, farm laborers, labor unions, local authorities, councillors, community based organizations and landowner associations. The semi-final report was presented to stakeholders in M a y 2002 for inclusion of final public comments and considerations. The SEA was officially disclosed "In Country" on July 21, 2003. The Addo Planning Forum facilitated much o f this initial process. 5.5 What mechanisms have been established to monitor and evaluate the impact of the project on the environment? D o the indicators reflect the objectives and results o f the EMP? The Project will entail the implementation and adaptive updating o f both biophysical and socio-economic monitoring systems to inform management o f Project impacts and to ensure that it remains beneficial. SANParks has already developed a comprehensive list o f indicators and an Mand E system duringpreparation. The system will be supported by regular field measurements to further build a solid baseline and to capture data change. Supportive research is also included in the Project design. Monitoring information will be managed through the proposed IEMS to facilitate reporting back on the Project impact at least on an annual basis. - 33 - 6. Social: 6.1 Summarize key social issues relevant to the project objectives, and specify the project's social development outcomes. The key social issue revolves around the resettlement o f farm workers as farms are incorporated into the gAENP. A survey has been undertaken to identify all individuals who could be affected by the proposedexpansion of Addo over the next 6 years and who have been affected since 1997. Since 1997, SANParks has been purchasing land with a clause requiring land to be purchased free o f occupation. Subsequent to the Bank Appraisal Mission, SANParks agreed to drop the clause from all future land purchases. Original estimates o f potentially affected individuals varied from a low of 570 inhabitants (191 workers) to a higher figure o f approximately 3300 inhabitants. The variability inthe figures i s ascribed to the underlying assumptions which were made including: the area o f land to be included into Addo, the ratio o f farm workers per ha o f land and the number o f dependants. Further, the actual number o f workers and inhabitants which might require resettlement support will also depend on the extent to which workers and inhabitants, displaced since 1997, can be found. With the recently completed farm-by-farm survey and survey to find displaced farm workers and inhabitants, the number o f affected people has been reduced to 188 (workers plus dependents) o f which 70 were permanent workers at the time o f sale o f the farms to SANParks. Of the 70 workers, 30 (plus 75 dependants) are currently unemployed and will, therefore, be fully incorporated into the SANParks RPF and RAPs. Another 25 000 ha o f land i s proposed for purchase by SANParks. Based on the calculated figure o f 1 unemployed person per 1000 ha, an additional 25 workers plus dependants are expected to fall under the RPF and RAPs. Based on current phasing for the expansion o f the Park, it i s anticipated that SANParks resettlement obligations in this regard will end inapproximately 2010. SANParks has also agreed to monitor and to include any farm workers and their dependents into the RPF and RAPs where private land owners have sold land to SANParks or who have contracted land into the Park and who renegade on resettlement agreements reached with farm workers and their dependents. The RPF and RAPs were disclosed "InCountry" on July 7, 2003. In recent years, three new private tourism developers in the Park (Darlington Dam, Gorah Elephant Camp, Kazouko), absorbed most o f the displaced farm laborers, offered additional jobs to disadvantaged people from local communities, provided training in service jobs, and paid wages at several times the level in agriculture. The project's social development objective is to deliver improved socio-economic benefits to people living in communities inside and outside o f the proposed larger Park. Key outcomes are expected to include gainful employment, improved income levels for people who currently live in the proposed Park area and more secure livelihoods. To achieve this objective, the project will: ensure that community representatives serve on local advisory committees (the Resettlement Working Group); employ local members o f the community and provide training to shift from farming based employment to park and eco-tourism work; prepare resettlement action plans prior to appraisal; and leverage over US$6 million from Working for Water and Poverty Relief funds for local employment programs as part o f resettlement plans. 6.2 Participatory Approach: How are key stakeholders participatingin the project? The project includes several mechanisms to ensure stakeholder participation, and most critically, - 34 - mechanisms to address the resettlement process. The Addo Planning Forum (to be transformed into a Park Forum) already provides a mechanism for a wide representation o f local stakeholders to participate in project (and Park) management and implementation. The RWGs will include: Departments of the Government of the Eastern Cape - Agriculture, and Tourism; National farm workers' representatives; a designated SANParks representative; a member of the Department o f Land Affairs; a representative of the Resettlement Monitoring Team; a representative from surrounding farmdagriculture; and a resettlement expert. The functions of the RWG will include: acting as an advisory and oversight body to SANParks in matters relating to resettlement in the gAENP; serving as court of first appeal to solve any arising problems and then channelling them through the appropriate grievance procedures; assisting SANParks in overseeing all the phases o f the resettlement process, including the allocation of jobs and generation of livelihoods, compensation and other benefits. 6.3 How does the project involve consultations or collaboration with NGOs or other civil society organizations? Extensive consultations have taken place with civil society and with NGOs through public meetings and the Greater Addo Forum. The Forum will be transformed into a Park Forum. Detailed consultations will continue inall project components as needed. 6.4 What institutional arrangements have been providedto ensure the project achieves its social development outcomes? Local communities will be represented on the proposed Park Forum. The project also has a social ecology and community development component to provide a mechanism for implementing social development initiatives with the communities. Displaced workers will have priority for local employment through the project, training, and other social support programs such as the Working for Water and Poverty Relief fund as identified in the RAPS. Purchases of land by SANParks (as opposed to other forms o f conversion) will hold back 10-15% o f the price to ensure that the land owner addresses resettlement of displaced farm workers within current South African law and Bank requirements. 6.5 How will the project monitor performance interms of social development outcomes? The project will undertake a baseline socio-economic survey for planning purposes, against which the results o f regular monitoring o f attitudes and needs o f local stakeholders and communities will be measured and applied as feedback for project implementation. Monitoring is a specific project sub-component. Bank supervision missions, every six months, will pay special attention to the socio-economic monitoring results. -35 - 7. SafeguardPolicies: Policy Triggered Environmental Assessment (OP 4.01, BP 4.01, GP 4.01) 0 Yes 0No Natural Habitats(OP 4.04, BP 4.04, GP 4.04) 0 Yes 0No Forestry(OP 4.36, GP 4.36) 0Yes 0No PestManagement (OP 4.09) 0Yes 0No CulturalProperty(OPN 11.03) 0 Yes 0No IndigenousPeoples(OD 4.20) 0Yes 0No InvoluntarvResettlement(OP/BP 4.12) 0 Yes 0No Safety of Dams (OP 4.37, BP 4.37) 0Yes 0No Projectsin InternationalWaters (OP 7.50, BP 7.50, GP 7.50) 0Yes 0No Proiectsin DisputedAreas (OP 7.60, BP 7.60, GP 7.60)" 0Yes 0No 7.2 Describe provisions made by the project to ensure compliance with applicable safeguardpolicies. With regard to environmental assessment (OP 4.01, BP 4.01, GP 4.01), the project was rated environmental Category B. A strategic environmental assessment was carried out, which included local stakeholder participation. The assessment and record o f public consultations was submitted to the Infoshop before appraisal. All developments in the Park will be subject to national EA processes, which hlly meet Bank requirements (see Annex 12). With regard to cultural property (OPN 11.03), the project meets Bank requirements through a number o f measures. These include adherence to the National Heritage Resources Act (1999), development by SANParks o f a strategic framework for the conservation o f cultural resources, and a cultural resource management policy (see Annex 14). A preliminary inventory and mapping o f cultural sites has been completed as part o f project preparation. This will form the basis for further assessment and guide the development o f suitable measures for cultural site management, compatible with Bank policy. Field staff will receive basic training in cultural resource management and a specialist staff member will be appointed to manage the data base and oversee policy compliance. With regard to involuntary resettlement (OP/BP 4.12), due to the fact that some farm workers will fall within the scope o f the resettlement definition, a Resettlement Policy Framework has been completed and RAPs produced for farms anticipated to be incorporated into the gAENP in year one. The community development component o f the project and a SANParks budgetary provision including Poverty Relief Programs, will set aside sufficient financial resources to cover the resettlement requirements for the lifespan o f this project. (see Annex 13 and applicable SA legislation). Employment creation through the project and with private sector tourism development i s expected to absorb most displaced workers who wish to remain in the area and continue working. Salaries paid by these alternative employment options are significantly higher than inpastoral agriculture. The Bank i s responsible for approving the RAPs. - 36 - F. Sustainability and Risks 1. Sustainability: This project will strengthen conditions for protected area management and biodiversity conservation inthe Addo Elephant National Park (AENP) area, with a well-defined component to improve local livelihoods through eco-tourism development. Several factors are linked to sustainability. First, institutional sustainability i s important and i s being pursued by the initial building o f a consensus on project design and scope with a wide range of stakeholders and strengthening o f a participatory process. Appropriate institutions are being used inthe project to facilitate long-term local participation in Park planning and management. The lead executing agency, SANParks, has been undergoing business re-engineering processes in the past few years with demonstrated success in improving operating efficiencies. The project is designed to ensure that staff from the gAENP will participate in project execution through the Project Steering Committee and the proposed Project Working Groups. This will ensure that the project i s well integrated into the park operations and that a seamless transition i s made from the project deliverables to their incorporation into routine park operations. Second, Jinancial sustainability i s critical to ensure that the achievements from project investments can be maintained inthe longer-term. The project i s designed with post-GEF closure in mind; investments will generate improved income streams over time at both the executing agency and local community levels. Detailed financial simulations, using the best available data, indicate that project investments will enable the Park to be financially independent by year 6. Financial sustainability will be based on increased and differentiated gate fees, a larger number o f visitors, concession fees from accommodation and game sales. At the local level, the project will build conditions for increased private sector investment in eco-tourism, creating sustained direct and indirect employment and income benefits long after the project i s closed. The project i s attracting initial private sector investment o f US$6.5 million. In the long-term, there is considerable upside potential for expanded investment to provide visitors with access to a world-class Park. Third, social sustainability is critical and is addressed through two main design elements. The first design element will be establishing an economically viable Park, which will provide an income and livelihood return to local residents greater than the current returns from agriculture. This will greatly assist to enhance support for the Park and create more sustainable livelihoods. The proposed social ecology community development component o f the project will lead this program. The second design element is to involve stakeholders in the Park and the project through consultative fora to ensure that support i s maintained. Finally, environmental sustainability i s addressed through the SEA that was undertaken as part o f project preparation, and the application o f South African EA processes (which meet Bank requirements) for specific site developments during and after project implementation. The project will improve biodiversity conservation and sustainable natural resource use inthe area. - 37 - la. Replicability: The lessons learned from this project will have wide applications for other protected areas in South Africa with respect to participatory planning and implementation, social assessment, resettlement, management information systems, monitoring, land acquisition, and public-private partnerships. In turn, this project is being strengthened by lessons learned in other GEF biodiversity conservation projects in South Africa such as the C.A.P.E. initiative. M o r e broadly, the gAENP project will demonstrate important and valuable lessons for other countries in the region and beyond when addressing similar marine and terrestrial protected area, and biodiversity conservation challenges. 2. Critical Risks (reflecting the failure o f critical assumptions found inthe fourth column o f Annex 1): Risk Risk Rating Risk Mitigation Measure From Outputs to Objective Output 1. Community resistance prevents M Consult widely and ensure clear communication establishment o f M P A andseek consensus model, including compensation where appropriate Output 2. Baseline SANParks funds N Monitor funding to the gAENP during reduced supervision missions Output 3. Personnel and financial M As above. Staffing shortage poses higherrisk resources diminished and some outsourcing o f functions may be needed Output 4. Accurate socio-economic data N Create own project baseline infomation for unavailable monitoring program Constructive dialogue with community N Assess adequacy of consultation processes breaks down during supervision missions, and adjust accordingly ,Output5. Economic growth and visitor M Reduce increases inPark operating budget and numbersdecline adjust plan roll-out Social stability inprovince declines N Reduce increases inPark operating budget and causing reduction invisitors to the Park adjust plan roll-out From Components to Outputs Component 1. Public support for MPA's M Ensureproper communication to the public and lacking seek consensus proposal Component 2. Local component funds do N Adjust development horizons or increase private not materialize sector support inPark development Component 3. Key support organizations M Involve organizations through project structures show inertia to supporting the RPF indecisionmaking Component 4. Effective stakeholder M Monitor and adjust communication based on communication does not take place feedback results Component 5. Local component funds no1 M Source funds from various sources to reduce - 38 - available for marketing risk of funds not materializing Overall Risk Rating M Indications are that this is a low to mediumrisk project 3. Possible ControversialAspects: A possible issue is the involuntary resettlement o f people, mainly farm workers and their families, affected by Park expansion to meet biodiversity conservation objectives. It should be noted that the number o f affected people involved i s relatively limited and that many farm workers are offered new employment with their current employers. However, to the extent that involuntary resettlement occurs, this will be mitigated by a number o f strategies. First and foremost, any resettlement resulting from this project will be governed by Bank safeguard policies. Second, SANParks has developed a Resettlement Policy Framework (RPF) and will complete RAPS to cover individual and previous farm acquisitions. Third, resettled people will be the highest priority for employment under the project, for example in small works or conservation activities funded by other programs. Fourth, wages paid to people employed directly in the Park or on small works/conservation initiatives are significantly higher than people would have earned as farm labor. Fifth, expanded eco-tourism development will offer various employment opportunities for people, again with a priority on those individuals resettled. G. Main Conditions 1. Effectiveness Condition 0 SANParks has appointed a Procurement Officer. 0 SANParks has provided, to the satisfaction o f the Bank, prototype financial management reports demonstrating the capability o f the newly installed accounting software system. 0 SANParks has provided to the satisfaction o f the Bank a procurement plan. 2. Other [classify according to covenant types used in the Legal Agreements.] none H. Readiness for Implementation 0 1.a) Theengineeringdesigndocuments for thefirstyear'sactivities arecompleteandreadyfor the start o f project implementation. 3 1. b) Not applicable. 02. Theprocurementdocuments for thefirstyear's activitiesarecomplete andready forthestartof project implementation. iXi 3. The Project Implementation Planhas been appraised and found to be realistic and o f satisfactory quality. IXI 4. The following items are lacking and are discussed under loan conditions (Section G): Prior to effectiveness, a Procurement Officer must be appointed to the PMUand the draft procurement plan must be submittedand approved to the satisfaction o fthe Bank. - 39 - Compliancewith Bank Policies Thisproject complieswith all applicableBank policies. 2. The followingexceptionsto Bankpoliciesare recommended forapproval. Theproject complieswith all other applicable Bank policies. Team Leader Sector Manager/Director Country Manager/Director - 40 - . . ....... . . , . Annex 1: Project Design Summary SOUTH AFRICA: THE GREATER ADD0 ELEPHANT NATIONAL PARK PROJECT KeyIndicators Performance Data Collection Strategy Hierarchy of Objectives Critical Assumptions Sector-related CAS Goal: Sector Indicators: Sector1country reports: from Goal to Bank Mission) Enhancedlivelihoods, [mprovement in Joint WB/SANParks :ountry overall economic and poverty reducedand capacity socio-economicstatus of supervisionmissions(twice olitical stability built through enhanced :ommunity per annum) mid-term review - natural resourcemanagement year 3 with external experts `ourism numbers leadto [ncreasein income from icreased Park income :ourism Socio-economicsurveys Long term positive trends in Biodiversity monitoring status of biodiversity reports Annual gAENP report GEF Operational Program: 3utcome IImpact Indicators: OP 1. Arid and semi-arid 4s above Annual gAENP report i s above ecosystems management with incorporating state of strong relevanceto integrated biodiversity indicators ecosystem management and biodiversity management M&E results Global Objective: 3utcome IImpact Project reports: from Objective to Goal) Indicators: Proiect DeveloDment 236,000 ha of globally Review of Government ,oca1 willingness o f local Objective: significant terrestrial Gazettes indicatingareas .ommunity to participate in biodiversity and 120,000 proclaimed interms of the he project To establisha ha of marine protected National Park Act and the megabiodiversity conservation area clustered aroundthe Marine Living ResourcesAct idequate growth in national area around the existing Addo AENP falling under md international economy, Elephant National Park protected area specially tourism (AENP) to avert further management ecosystem degradation. The Globally significant Review of areas proclaimed project also aims to contribute biodiversity maintained interms ofthe NationalParks to poverty reductionby and enhancedthrough the Act and land incorporation creating direct employment in protection of five key agreements with private land natureconservationandby biomes under 63% o fthe owners catalyzing the developmentof gAENP footprint eco-tourism. Additional 46 000 ha of Agreements reachedwith private land (conservation private landowners partnerships) included into the Park by year 6 Formal proclamation of a Proclamation of MPA in contiguous Addo Marine terms of the Marine and -41- Protected Area (MPA), Living Resources Act inclusive o f the two island groups A monitoring and 'resence o f M&Esystem evaluation system will be implemented to determine improvements inecosystem health, safeguarding o f endemism and recovery o f threatened species (Monitored according to the Guidelinesfor Monitoring and Evaluation of GEF Projects). Employment levels in the :mployment survey o f the gAENP increased by 30% rea over the current baseline case 'roiect Global Obiective: 'he global environmental jlobally significant roint WB/SANParks Zee risks assessment sbjective o f the project is to )iodiversity maintained and upervision missions onserve a significant nhanced through :presentation o f five o f the ncorporation o f key broad h n u a l gAENP report ountry's seven terrestrial iabitats under protected area Niomes and one o f the nanagement, ultimately vI&E Surveys ountry's three marine ncluding 63% o f the gAENP srovinces, including globally ootprint 'roclamations/legal nportant biodiversity, igreements indicating nrough enhanced protected donitoring o f key indicator Irotectedareas rea and ecosystem ,peciesshows enhanced ianagement in a single iodiversity goals achieved Jational Park. ;lobal environmental ibjectives will be monitor ccording to the Guidelines rnd Monitoring of GEF 'rojects butput from each Iutput Indicators: 'roject reports: from Outputs to Objective) Iomponent: , Park conservation and 'ark development plan 2onservation and nformation and consulting evelopment plans inplace howing zonation and Ievelopment plans available :apacity available within the lroposed infrastructure reject time constraint Aarine ProtectedArea Zopy o f MPA proclamations 'roclaimed - 42 - . Park infrastructure 'ark environmental nnual gAENP report 'aseline SANParks financial eveloped, stocked with game nfrastructure rolled out :sources and co-funding ndrehabilitated. ncluding fences, roads, paths, upervision missions rovided ignage, visitor facilities inancial statements rivate sector investment jam, stocking and alien rovided :learing taking place . Capacitated Park jANParks gAENP structures nnual gAENP report ,vailability o f suitable nstitutions and governance ully operational ersonnel and resources for tructures operational uditors' reports le institutional structures 'roject management itructures operational teering Committee and Park :ommunity support for Park ommittee minutes orum appointments 'artnerships with landowners )perational M S report 9 user-friendly Znvironmental Management System (EMS) suitable for his and other similar projects ncluding management iolicies developed and mplemented Monitoring and research mdertaken I.Parkrelatedsocial Socio-economic baseline mnual gAENP report iccurate socio-economic data :cology/community report produced an be compiled to monitor levelopment program bank supervisory missions irogress mplemented Job opportunities, benefits to :ffected communities, 'ocialEcology Unit feedback :onstructive dialogue with SMME's created in the nd independent reports ieighboring communities immediate community by the project #teeringCommittee minutes Environmental education infrastructure and program complete within budgets and deadlines Annual increase in learnerships and internships offered 5 .Regional economic Increase of 1%pia in tourism Aarket survey report indicate Idequate economic growth to ievelopment benefits achievec in the area. ;rowth. :ustainincreases in tourism :hrough the project md private sector interest in Increase in eco-tourismjobs hpervision missions :oncessions. - 4 3 - surrounding the gAENP Increase in concessions in the Number o f concession locial stability makes area a Park resulting in tourism contracts ireferred visitor destination infrastructure ProjectComponents / Inputs: (budget for each Project reports: from Componentsto Sub-components: component) lutputs) 1. Park Planning USS0.821 million Conservation Plan US$153,000 Conservation plan and report Update and maintain the conservation plan for the Park including terrestrial, marine, aquatic and cultural heritage resources Development Plan US$36,000 Development plan and report Produce a prioritized and costed conservation management, rehabilitation zonation and infrastructure plan Park Management Plan US$ 7,000 IEMS report and M I R S including Development o f available IEMS and MIRS Monitoring System, Research US$320,000 Monitoringreports and survej findings Implement the M&E system and identify and undertake research into the marine, terrestrial and aquatic components US$295,000 Proclaimed M P A Support for Marine Protected Marine ProtectedArea 4rea Investigate and prepare plans including proclamation of Marine Protected Area 2. Implementationof Park US$23.864million DevelopmentPlan I SANParks/ Park US$18.119million gAENP annual report ?undingavailability Environmental Infrastructure Provision Supervision missions Visitor demand increases Implement the Park Annual game capture reports - 44 - DevelopmentPlanwhich includes: 'resence of fixed andmovable (a) the provisionof all issets including register environmentalSANParks infrastructureincludingroads buildings fences,.visitor facilities, signage; (b) rehabilitation schemes; (c) game introduction; (d) waste management systems; (e) equipment and vehicles; ( f ) support to Marine ProtectedArea Land Purchase JS$5.316 million Implementland purchase strategy Incentivised Partnerships JS$428,000 .and incorporation Zommunity support .greements ncorporation Implementthe incentivised partnershipframework to incorporatekey properties 3. Developmentand JS$3.557 million Implementationof Park Institutionsand Governance Structures EMS JS$473,000 innualEMS review Zxpertise and funding ivailable Prepareand implement hpervisionmissions electronic Environmental zooperationof institutions Management System(EMS) ?omwhom support is needed which includes an overall corporate and sector polices ir key areas as well as gAENP monitoringindicators gAENP Management JSS1.420million 'resenceof staff, equipment Structures nd fixed assets Prepare and implement 'ark budget and approved overall management taff structure structures for the Park including, desiredoutcomes, responsibilities,staffing, reportinglines, program competences Project Management Unit iS%1.307million 'MUinplace - 45 - 3evelop and support Project Management Unit (PMU) ncluding salaries, equipment, iffices and operating costs Prepare a Park Business Plan JS$63,000 ark business plan :financial viability plan with :imeframes and targets and iotential income streams and 2xpenditure) Cnowledge Management JS$90,000 Iardware and systems report Design and install electronic iardware and software to iperate Geographical [nformation System (GIs), Environmental Management System (EMS) and Conservation Plan (C-Plan) modules Training Programs JS$204,000 innual training plan verified Prepare and implement training programs in relation to the above (cross cutting) 1. Community LJS3.474million development/socialecology component Research Cultural and JS$3 1,000 jpecialist independent reports Zffective communication Natural Resources Inventory md survey findings yathways maintained Produced and Management Plan Access to Employment JS$27,000 ;AENP annual report 3nance materializes Training provided for Park rraining relevant to skills contractors eve1as well as employment Ipportunities resulting from iroject Employment and Economic JS2.314 million hipervision missions BeneJits based on Communal Conservation Strategies [nitiate eco-tourism and xvironment related projects 46- that can generate economic opportunities for the zommunity Co-ordinate gAENP specific 'raining report national projects such as Working for Water, Poverty Relief, etc. Environmental Education X $ 1 5 1,000 1 monthly supervision reports [ncrease the number o f internships and learnerships available through the project Develop a gAENP :nvironmental education :enter and programs Resettlement Provision JS$950,000 donitoring reports o f RAPS SANParks provision for resettlement 5. Regionaleconomic US $7.069 million developmentand an enabling environment for tourism Marketing and Product JS$421,000 :AENP annual report ?undingmaterializes Development Conduct market research to IMS Market interested in determine visitor demand :oncessions patterns and predictions for the Park and develop and implement Concessioning and JS$6.647 million Partnerships Attract private sector 'artnership agreements investment through partnerships, concessions and sommercialization Dpportunities - 47 - Annex 2: Detailed Project Description SOUTH AFRICA: THE GREATER ADD0 ELEPHANT NATIONAL PARK PROJECT The project has identified five inter-related components that strive to protect the exceptional assemblage of terrestrial and marine biodiversity of the Addo region through strategic conservation planning and implementation, innovative land incorporation and development planning, and social capacity building. Justificationfor their inclusion is givenhere, and supported by the preparatory studies listedinAnnex 8. By Component: Project Component 1. CONSERVATION PLANNING US$0.82 million GEF: US$0.268million Co-financing: US$0.553million Total: US$0.821million - - - This component builds on the conservation planning exercise largely undertaken during the PDF-B phase of the project and forms the biological basis for the implementation phase. The preparatory studies generated extensive documentation on the biological, social, institutional, legal and economic environments (see Figure 1 for irreplaceability map generated from the Conservation Plan and ongoing planning). The concept developed is one of a national park protecting areas of global and national importance through effective and efficient management through a combination o f state and private initiatives. Issues concerning zonation, land-use, contractual incorporation and business arrangements need further negotiations, with action plans prepared for implementation. This implies conservation planning that would require involvement of SANParks, provincial conservation, private land-owners, communities, local government and the business sector. This i s a critical step as it requires compiling a detailed social assessment of properties identified for incorporation and matching that with the biological assessment of the area. The second is, developing a cross-cuttingincentive framework and funding line to roll out to private land-owners and communities wishing to be incorporated into the Park. This activity will be integrated and implemented with the Resettlement Policy Framework (RPF). The approach being taken i s to identify the barriers to be removed to enable these social and economic conversions to take place and to provide programmed support. This component cuts across the remaining project components which will be integrated into the Integrated Environmental Management System (IEMS) for the Park. Deficiencies indata, particularly for biodiversity, were identifiedduringthe preparationphase and will be the focus of specific studies such as: restoration and rehabilitation; impacts of megaherbivores and alien species (terrestrial and marine); marine mapping, biodiversity surveys and monitoring with emphasis on the marine environment; freshwater biota surveys and mapping; river ecological reserve determination. Developing monitoring and research capacity within SANParks i s essential to ensure the activities continue beyond the life o f the project. SUB COMPONENTSAND ACTIVITIES: The five sub-components each largely deal with park planning and will form part o f the overall IEMS which will be subject to the monthly Management Information Reporting System (MIRS). Four conservation planning and research related reports facilitated the formulation o f this - 48 - component. Sub-component 1.1- Conservation Plan: GEF: US$0.04million - Co-Financing: US$0.113million - Total: US$0.153million This section will update the terrestrial, aquatic and marine, cultural databases produced during preparation and amend the drafted conservation plan as required. Extensions to the original PDF grant fine tuned the conservation planning recommendations under different land incorporation scenarios. It will also address the issue of deficiency in data, by identifying biodiversity, conservation planning plus herbivore conservation research projects, and the preparation o f a rehabilitation plan. Once the research projects have beenidentifiedthey will be commissioned and monitored and evaluated under this component as part o f the ongoing maintenance of the Conservation Plan. Sub-component 1.2 Strategic (Development) Plan: - GEF: US$O.O16million Co-Financing: US$0.020million - - Total: US$0.036million Based primarily on the above information a costed and phased development plan and planning process will be produced to guide the Park for the next six years. It will indicate the preferred development zones (as part o f the Zonation Plan), rehabilitation areas, as well as infrastructure (roads, fences, buildings, visitor facilities) within the Park. The development plan will also take into consideration a broad infiastructural plan (including camps, fences, roads, etc.) which will be adapted to suit each use zone. Inaddition, it will includea redefinition of an upgraded SANParks management structure for the Park, plus the development of a game re-introduction plan. Sub-component 1.3 Park ManagementPlan: - GEF: US$0.012million Co-Financing: US$0.05million - - Total: US$0.036million A Park Management Plan (procedures & policies) will be drafted (usingPAD & PIP information) as part of the IEMS to make for effective daily management. It will include clear and measurable deliverables which will be required to be reported against on a monthly basis (MIRS). The plan will form an integral part of the IEMS. Sub-component 1.4 MonitoringSystem andResearch: - GEF: US$0.152million - Co-Financing: US$0.168million Total: US$0.032million - Key baseline information has beengathered inthe biophysical and socio-economic environment to monitor the internal and external impact o f development o f the Park, and other management actions on the community, economy and environment. A monitoring and evaluation plan has been developed for year one and will be adapted accordingly in subsequent years. This component will also cater for the implementation o f an electronic monitoring and evaluation system for each of the identified elements. Areas requiring specific research will be identified and approved and research projects commissioned. These will include marine research in support o f the proposed MPA and research into the impact o f major herbivores on the Park and the management actions to be taken. Given the overall dearth of information for the marine environment, key projects have been planned with detailed research, monitoring and cost protocols developed. The monitoring and evaluation system will be updated on an annual basis and will also form part of the overall IEMS. - 49 - Sub-component 1.5 Marine ProtectedArea (MPA): - GEF: USSO.048 million - Co-Financing: USS0.247million Total: USS0.295million - The proclamation of the Addo Marine Protected Area (MPA) will require detailed planning in terms o f management, cost and public consultation requirements. A marine planning framework will need to be developed for interaction with all relevant stakeholders, as well as an implementationplan once all requirednegotiations have beenconducted and approvals obtained. Project Component 2. IMPLEMENTATIONOF THE DEVELOPMENTPLAN US$28.86 million GEF: USS2.444 million Co-Financing: USS21.420million Total: USS28.864million - - - This component deals largely with the implementation o f the Greater Addo Project and includes the provision o f environmental infrastructure, tapping into existing national poverty alleviation programs to develop local SMME's in contracting services and goods on infrastructure projects. The environmental infrastructure will be in line with a zonation plan developed within Component 1. Infrastructure will be in the form of fencing, roads, water provision, heritage sites, cultural village, educational center, waste management systems, jetties, Environmental Management Planning (EMP), rehabilitation and identifying the existence of natural and cultural resources. A major focus will be placed on rehabilitation schemes including alien control and land rehabilitation via biological and infrastructural schemes. Within the development of the zones will be the inclusion of wildlife re-introduction and the provision of maintenance equipment and vehicles. Support to the MPA will be in the form of infrastructural rehabilitation on the islands plus infrastructure for marine support services. Three differentmanagement models exist with regards to implementing land incorporation, as identified by the conservation planning exercise and highlightedin SANParks incorporation policy (see Annex 19): 1. SANParks land owned and managedby SANParks. 2. Concessioned areas within SANParks land. 3. Contruaktual parks adjoining SANParks land where SANParks may or may not manage the land. With incorporation of new tracts of land, the RAPS, will be implemented to ensure the fair resettlement or incorporation o f affected individuals. Incentivised partnerships will be canvassed to facilitate land incorporation via contractual arrangements. SUB-COMPONENTSAND ACTIVITIES: The sub-components concern the roll-out o f the development plan, inclusive of ecological management, infrastructural development and land incorporation. Specialist reports undertaken to facilitate in the preparation of this component included: Legal framework; Development prospects for communities/private partnerships; Economic activities; Incentives framework; Land incorporation framework; Resettlement policy framework; Public participation; Social assessment; Social monitoring prospects; and Cultural resources framework (see Annex 8). The following sub-components ensure effective implementationof the development plan. - 50 - Sub-component2.1 SANParkdParkEnvironmentalInfrastructureProvision: - GEF: US$2.012million Co-Financing: US$16.107million - - Total:US$lS.119million Focuses on the implementation o f the development plan and includes the provision of environmental infrastructure in which the existing poverty alleviation programs (Working for Water, Poverty Relief) development o f SMMEs have been incorporated. Development within identified zones will follow a plan and budget which will include the provision o f all fixed environmental infrastructure, roads, fences, water provision, heritage sites, waste management systems, alien control, E M P and rehabilitation plans. Research will have to be done within each development zone to identify the existence o f cultural and natural resources, to which managed access may need to be provided to resettled communities. Plans are underway to establish a cultural village and conservation education center. New sections incorporated into the Park will be stocked with game according to a re-introduction plan. Infrastructure provision also includes the provision o f equipment and vehicles inclusive o f land vehicles, boats, office equipment, maintenance equipment, supportive to Park Management in the terrestrial and marine areas. Support to the M P A will be in the form o f infrastructural rehabilitation on the islands plus the provision o f infrastructure for marine services (Le. harbors, jetty, ablutions, educational facilities, etc.) Sub-component2.2 Land Incorporation: GEF: US$0.016million - Co-Funding: US$5.300million - Total: US$5.316million The incorporation o f land through land-owner partnerships (contracts), and direct purchase will be integrated with the recommendations o f the strategic Park conservation plan developed and refined as part o f the preparatory studies. The budget figures only include land to be purchased and not the value of private land incorporated through partnership agreements. A further activity in this sub-component concerns fund raising for land purchases. GEF funds will facilitate this through payment o f legal fees and valuations. Sub-component2.3 IncentivisedContractingPartnerships: GEF: US$0.415million Co-Financing: US$0.013million Total: US$0.428million - - Financial and intellectual assistance (such as legal, infrastructural, rehabilitation training and knowledge enhancement) will be provided to implement the proposed incentive framework over the six year project period to remove barriers preventing farmers, land owners and the community from converting from current unsustainable land-uses into nature-based ventures within the gAENP. Criteria for their inclusion on a contractual basis have been developed and organized into a prioritization matrix weighting conservation value and threats (see Annex 11). Prospective contractual partners will need to be identified, together with the possible incentives, to secure incorporation now and into the future. A monitoring and evaluation system will need to be developed to ensure conformance to contractual agreements. Project Component3. INSTITUTION & GOVERNANCE STRUCTURE US$ 3.56 million GEF: US$1.620million Co-Financing: US$2.097million - - - Total: US$3.557million This component focuses on management arrangements. It includes the design, implementation and maintenance o f an IEMS to enhance Park Management. The Park Steering Committee (PSC) will be re-engineered to ensure compliance with corporate governance. The present Addo -51 - PlanningForum(APF) will be transformedto a Park Forumto ensure greater representation, and inclusivemanagementdecisionmaking. To ensure the effectivemanagementofthe gAENPproject,the PMU will be continuedfor the six year project. The PMU will also be responsible together with consultants to develop and implement a MIRS covering all activities with the IEMS. The MIRS will be an electronic database driven system. The maintenance of the data bases and generation of reports will be carried out by a GIS Officer to be recruited as part of the new Park management structure. Trainingwill needto be providedto ensure conformanceto the newly developed systems. SUB-COMPONENTSAND ACTIVITIES: Sub-component3.1 IntegratedEnvironmentalManagement System (IEMS): - GEF: US$0.05million Co-Financing: US$0.423 million Total: US0.473 million - - An IEMS, based on I S 0 14000, will be developed to enhance Park environmentaland general management. Technology and expertise developed in the GEF funded Cape Peninsula National Park projectwill be usedindevelopingthe Addo IEMS. The IEMS will includethe development of corporate policies and Park specific policies, strategic (development) plan, procedures, monitoring indicators, review and auditing procedures. It will be the guiding document for the overallPark Management, encompassingthe conservation, development, managementandreview of Park activities. An IEMS reportwill be producedeach year. Sub-component3.2 gAENPManagement Structures: - GEF: US$0.020 million Co-Financing: US$1.400million Total: US$1.420 million - - Based on the developmentalplan and the extent to which concessions will be introduced, the required Park management arrangements will be costed and developed. These will include definition of the required outcomes of the organization, definition of responsibilities, staff organograms, andreportinglines etc. These will all form part of the Business Planandpart of the IEMS. Within this sub-component, in conformance with the Park management plan, a new gAENP management structure will need to be developed and approved by SANParks for implementationfor the day to day management of the expandedpark, The existingPSC will need to be reviewed and re-engineeredin line with SANParks strategy for overall governance of the gAENP. The PSC prime function would be to provide high leveloversight function for the Park and project, to ensure compliance with the project's goals and GEF grant funding agreement. It is envisaged that as the Park Management Plan development i s initiated, so the APF will be adaptedandtransformedto form a dedicatedParkForum. Sub-component3.3 ProjectManagement Unit (PMU): - GEF: US$1.250 million Co-Financing: US$O.057 million Total: US$1.307 million - - To execute the project on a daily basis, the PMU consistingof projectmanagement, procurement and financial and administrative functions will be continued. The unit will work closely with gAENP staff, Project Working Groups (PWGs), but under supervisiono f the PSC and gAENP Coordinator. The PMU will follow closely the Project Implementation Plan (PIP) with its expected six year budget, detailedfirst year budget and Gant Chart. - 52 - Sub-component3.4 Prepare a Park BusinessPlan: GEF: US$O.04m Co-Financing: US$O.O23m Total: US$O.O63m - - - A business plan which models the financial requirements o f the Park including income and expenditure and which provides a basis for adjusting to roll-out o f the Development Plan will be prepared. The Business Plan will commence with the preparationo f a year one business plan with financial budgets. The full business plan will be prepared utilizing consultants and will take into consideration the deliverables of the PIP inclusive o f detailed action plans, responsibilities, measurables and financials. The business plan will need to be reviewed on an annual basis as the project rolls out. Sub-component3.5 ManagementInformationand ReportingSystem (MIRS): - GEF: US$0.60million Co-Financing: US$0.30 million Total: US$0.090million - - An electronic hardware and software system will be designed and implemented inorder to manage the IEMS. The MIRS will be database driven producing reports in conformance with the requirements o f the governance structures o f the project, plus the management o f the gAENP. A GIS officer will be appointed by SANParks to manage the databases and generate the required reports. The design and implementation o f the MIRS will be coordinated by the P M U utilizing services o f suitable service providers. Sub-component 3.6 TrainingPrograms: - GEF: US$0.040 million Co-Financing: US$O.l64 million Total: US$0.204 million - - Inorder to implement the above, training programs will be required so that staff are able to apply the various new systems and technologies, and have clear understanding o f policy and operational issues contained in the IEMS and how it operates within SANParks. Together with gAENP management, the P M U will, through consultants, conduct a training needs analysis for new and existing staff to identify required training to conform with the new systems. Training needs will be matched with suitable activity related courses and staff enrolled. Staff will be monitored on completion o f training to ensure conformance with new systems. N o n SANParks staff will be trained as part o f Component 4. Project Component 4. COMMUNITY DEVELOPMENT 8 SOCIAL ECOLOGY US$3.47 million GEF: US$0.153 million Co-Financing: US$3.321 million Total: US$3.474 million - - - Importantly this component will provide major support to the implementation o f the development plan for the Park and will cover employment and economic benefits based on communal conservation strategies, developing S M M E opportunities, environmental education and the all important issue o f fair resettlement o f displaced communities and individuals. The Social Ecology department within SANParks remains an expanding and important concept that recognizes that communities should benefit from the Park and its opportunities, without compromising biodiversity conservation. A total o f 12preparatory reports were generated indeveloping this component (see Annex 8). - 53 - SUB COMPONENTS AND ACTIVITIES: Sub-component4.1 - Access GEF: US$O.010 million Co-Financing: US$O.023m Total: US$O.033 million - to Natural& CulturalResources: - Research will need to be done to identify what natural and cultural resources exist within the Park boundaries, and develop a policy guiding managed access to these resources, in compliance with SANParks use of natural resourcespolicy and specialist report findings and recommendations. Sub-component 4.2 Access to employment: - GEF: US$0.005million Co-Financing: US$0.023 million Total: US$0.028 million - - The aim is to train members of the community to the point that they can benefit from work opportunities in the Park. Accessing some of these opportunities will be through Working for Water and Poverty Relief funds. The SANParks Social Ecology national employment policy will need to be modified to suit the gAENP project. I t will be necessary to acquire all available employment data/databasesfrom local stakeholders (local government) for analysis to match with gAENP employment opportunities. Where the analysis of the available data identifies gaps, these gaps will need to be corrected to provide the required data. The Resettlement Framework Assessment o f the labor force and skills assessment of those affected by Park expansion, will provide a starting point inthis regard (see Annex 13). Sub-component4.3 Employment and Economicbenefit basedon Communal - Conservation Strategies: GEF: US$O.040 million Co-Financing: USS2.280 million Total: US$2.320 million - - This deals with employment opportunities based on eco-tourism and small works supporting roll out of Park infrastructure. Analyses will need to be done to identify SMME development opportunities within gAENP in areas such as fencing, arts and crafts, charcoal production, eco-tourism, alien clearing and harvesting. Where opportunities are identified, prospective SMMEs originating from the community will need to be incubated to avail themselves of the opportunities. SMMEs will needto be assistedby gaining access to all available SMME incentive schemes. Researchmustbe linkedto the working for water exit strategy. Research will also need to be done to identify what goods and services for gAENP may be sourced from Previously Disadvantaged Individuals (PDI) SMMEs. A PDI procurement policy will need to be developed and implemented. National SANParks SMME development projects will need to be identified, so as to be included for the gAENP. In addition, training programs for SMME staff will be undertaken after a needs analysis. Sub-component4.4 Conservation Education: - GEF: US$O.llOmillion Co-Financing: US$0.058million Total: US$0.168million - - A sustainable and cost-effective conservation education program and conservation education center will be established to support community and visitor awareness about the Park. A limited number of tertiary scholarships (possibly 2 per annum) will be provided to train a cadre of new officials from the community to enter SANParks at a professional level and to advance in the organization. Relevant tertiary education courses will need to be identified following which a recruitment process will need to be pursued to select suitable candidates for evaluation and enrolment. Evaluation should be against a skills analysis within gAENP to ensure that - 54 - scholarships are awarded against required skills. To ensure effective operation o f the conservation education center, a Conservation Education Officer will needto be recruited. Sub-component 4.5 Resettlement Compensation: - GEF: US$0.015 million Co-Financing: US$0.93 7 million Total: US$0.952 million - - Although the project's social objective i s to ensure that the greater Addo community largely benefits from the project, SANParks will either make funds available or source opportunities in associated projects (Working for Water & Poverty Relief) to ensure that any members o f the community who were unjustly affected by the project are fairly compensated. Site-specific criteria for compensation, developed as part o f the RAPS will need implementation in conjunction with other government and local government authorities responsible for restitution issues. All of the above i s addressed inthe Bank approved RPF and RAPSfor the gAENP (see Annexes 13 & 19). Project Component 5. ECONOMIC DEVELOPMENT US$14.26 million GEF: US$0.400 million Co-Financing: US$6.729 million Total: US$7.129 million - - - Within this component, a communication strategy will be developed as well as a marketing plan. It will be coordinated by the PMU, via appointed consultants. A MIRS module will be developed and implemented to ensure the recording and reporting o f activities against the marketing plan. A Communicationhiarketing Officer will be recruited as part o f the new gAENP management structure, gAENP product packages will be researched and identified in each development zone for packaging and offering to clients as part of the overall marketing plan. A web site will be developed whereon all relevant marketing material will be listed and continually updated. Also part of this component will be the concessioning and partnerships process where prospective concessions and partners will be identified and incorporated into the gAENP. Negotiations with concessionaires will be undertaken by SANParks. A MIRS module will be developed and implemented to monitor the contractual obligations o f concessionaires. SUB COMPONENTS AND ACTIVITIES: Sub components5.1 - Marketing GEF: US$0.350 million Co-Financing: US$0.124 million Total: US0.474 million - and ProductDevelopment: - Entails the drafting o f a marketing plan for the Park, inclusive o f existing Addo market research information plus a MIRS module to record relevant tourism statistics. The marketing plan will need to include a communication strategy which will be developed out o f the SANParks communication strategy. These identified products will need to be packaged for marketing purposes, via an established web site, along with all other relevant information associated with the project (see www.addoelephantpark.co.za). The CommunicatiodMarketing Officer will be part o f the new gAENP management structure. The marketing plan will also need to include product development, identifying prospective eco-tourism products emanating from gAENP. These identified products will need to be packaged for marketing purposes. Sub-component5.2 Concessioningand Partnerships: - GEF: US$O.OSOmillion Co-Financing: US$6.605million Total: US$6.655million - - The SANParks concessioning process/plan will be implemented within this sub-component in order to attract private sector investment in eco-tourism facilities in the Park. This includes the - 55 - development o f terms o f reference, identification o f contractual partners, and a MIRS module will need to be developed as part of the proposed IEMS-MIRS. - 56 - Annex 3: Estimated Project Costs SOUTH AFRICA THE GREATER ADD0 ELEPHANT NATIONAL PARK PROJECT Total US $million 0.80 21.62 3. Developmentof institutions 3.70 4. Community development 3.15 5. Economicdevelopment 6.34 Total Baseline Cost 35.61 Physical Contingencies 1S O Price Contingencies 2.83 Total Project Costs1 36.54 3.40 39.94 Total Financing Required 36.54 3.40 39.94 Goods 1.46 0.16 1.62 Works 9.00 1.95 10.95 Services 25.98 1.29 27.27 Operating costs 0.06 0.00 0.06 Training 0.04 0.00 0.04 Total Project Costs1 36.54 3.40 39.94 Total Financing Required 36.54 3.40 39.94 I Identifiable taxes and duties are 7 (US$m)and the total project cost, net of taxes, is 32.94 (US$m). Therefore, tlie project cost sharing ratio is 0% of total project cost net o f taxes. - 57 - Annex 4: IncrementalCost Analysis SOUTH AFRICA. THE GREATER ADD0 ELEPHANT NATIONAL PARK PROJECT Background The proposal to create a megabiodiversity National Park in South Africa to include five out o f seven o f the country's biomes and a marine component, has strong national support and a high level o f co-financing. It meets both national ecological and socio-economic objectives. 1. Baseline scenario The baseline scenario i s assumed to primarily be the current SANParks budget to manage the existing AENP. However, under this scenario, opportunistic foreign donor funding as well as additional government funding could materialize from time to time to purchase land and support other conservation or tourism related projects. This i s unpredictable and to some extent can not be assumed. The baseline scenario represents what will happen in the event o f GEF funds not materializing. Elements o f the baseline are therefore: 0 ThePark would not receive the national and international attention it deserves to conserve its important biodiversity. 0 Minor additional Park expansions with little focus on conservation o f globally significant biodiversity in the terrestrial environment. Unsustainable agriculture would continue in the project area with some conversion to game ranching and eco-tourism, but national and global biodiversity objectives would not be achieved. In fact, global biodiversity would continue to be lost through increased land degradation and unsustainable use o f marine resources. 0 Few opportunities would be provided to neighboring communities to participate in rehabilitation, works and services inthe Park. 0 Relatively less fundingmaterializes from other sources. 0 Park management structures and systems would replicate existing SANParks practice. 0 SANParks would continue to meet its baseline commitment o f approximately US$1.6 million to the Park. 0 Some SANParks eco-tourism concessions would be granted to the private sector but more than likely short o f the US$6.5 million under the GEF alternative. 0 Few opportunities would arise for the neighboring communities to participate in opportunities in the Park. 0 The Park would not receive the opportunity to develop itself into an economic engine for the impoverished Eastern Cape and function as an example o f how conservation can enhance ecological, social and economic value. 0 The Park would not receive the large contribution from Poverty Relief and Working for Water funding. 2. GEF alternative Under the GEF alternative the following main benefits will materialize: The GEF alternative scenario i s approximately US$40 million. It will leverage approximately US$34.5 million intotal. This includes no less than US$15.77 million from SANParks as counterpart and financial contribution to land purchase, infrastructure and - 58 - institutional development and support, US$6.5 million from the private sector for eco-tourism development, US$12 million from Government for land purchase, removal o f alien vegetation and environmental rehabilitation. The project seeks US$5.5 million from the GEF which will be critical to both catalyze the additional investment and to undertake the planning, development and support needed to bring about a consolidated gAENP spanning from the marine to the terrestrial environments. It i s needed to support key elements including detailed planning roll-out, environmental rehabilitation, conservatiodeducation infrastructure, SANParks institutional reform and towards the creation o f sustainable eco-tourism based industries amongst the previously disadvantaged communities. GEF funds will be used to implement the proposed incentive framework to encourage private landowners to incorporate into the Park. Since much o f the Park expansion strategy i s predicated on the success o f this, it cannot materialize without GEF funds. 0 Most importantly, GEF funds will catalyze the conservation of globally significant biodiversity in both terrestrial and marine ecosystems through the creation o f a megabiodiversity National Park. The protection o f this expanded area will allow reintroduction o f native species which are extinct from the area, as well as rehabilitation o f the degraded ecosystems. 0 The combined M P A will be the largest in South Africa and importantly linked to its terrestrial component. By financing the incremental costs o f these activities, GEF funding will complement domestic resources channeled through SANParks and other government entities, contributions from visitors to the Park as well as other possible donations and private sector investment. Components of the GEF alternativeand incrementalcosts The matrix below inTable 1summarizes the baseline and incremental costs for the project. COMPONENT I: CONSERVATIONPLANNING: This i s concerned with the planning and monitoring framework for the long-term conservation o f the unique assemblage o f biodiversity inthe region and the arrest o f environmental degradation. Output: Updated conservationplan andplanning system, development plan, biological surveys, monitoring and research component to support Park operations including the marine and terrestrial environment. GEF funds will be used to support the conservation and development planning process started during preparation, the research and monitoring program and the planning and execution o f the marine and coastal program. GEF funding i s critical for this component, to carry out these activities. SANParks will provide counterpart funding for staff, basic research and monitoring. Sub-total costs o f the GEF Alternative: US$0.82 1 million. GEF funding: US$0.268 million. COMPONENT 2: IMPLEMENTATION OF DEVELOPMENT PLAN: The implementationo f the development plan including ecological management, infrastructure and - 59 - land incorporation, and socio-economic capacity building. Output: A megabiodiversity Park in South Africa developed with infrastructure to manage the marine, terrestrial and conservation education environments. This will include game relocation, roads,paths and a rehabilitated landscape. Land-owners will have contracted into the Park thus enhancing conservation. The marine component will be protected through deployment of patrol and monitoring equipment. GEF funds will be used primarily to provide support to the above components in the Park (US$2.425 million) and to support implementation of the incentive framework (US$O.S million). Whilst no GEF funds will be used inrelation to purchase of land, minor support (US$0.020) will be provided to assist the legal and valuation aspects of including land via purchases or contracting. Sub-total costs o f the GEF Alternative: US$28.865 million. GEF Funding: US$2.444 million. COMPONENT3: INSTITUTION& GOVERNANCESTRUCTURES: The development of institutions and governance structures to ensure the successful implementation o f the Addo project and management o f the Park. Output: Appropriate institutional structures will be established and capacitated, including management and business plans, an IEMS, a monitoring system and a project management unit ("MU). GEF funds will be used primarily to support the overall development of this component as discussed above but not the operating costs of SANParks staff and gAENP which will be met by SANParks. GEF funds will support the operations of the Project Management Unit (PMU), development of a financial plan to ensure sustainability of the Park and to introduce new Integrated Environmental Management Systems (IEMS) to the Park, which will be replicable in other SANParks, and hopeklly elsewhere. To enhance project management and monitoring a Management Information & Reporting System (MIRS) will be developed with GEF funds. Sub-total costs o f the GEF Alternative: US$3.557 million. GEF funding: US$1.620 million. COMPONENT 4: COMMUNITYDEVELOPMENT & SOCIALECOLOGY: The Park should benefit communities through enabling managed access to natural resources, access to employment, micro enterprise opportunities, training and environmental education. Output: The main outputs will include a more socially viable community having benefited from Park related employment through, eco-tourism projects, training, resource harvesting and environmental rehabilitation. The work undertaken will make a major contribution towards provision of Park infrastructure and the expansion of the social ecology concept in the direction of Community Driven Development (COD). Any compensation in terms of resettlement action plans willfall within this component. GEF is not requested tofund this aspect. - 60 - GEF funds will be usedto develop the environmental education component and to support review and monitoring of the Poverty Relief and Working for Water Programs. CDD concepts will be advanced. Sub-total costs o f the GEF Alternative: US$3.474 million. GEF Funding: US$0.153 million. COMPONENT 5: ECONOMIC DEVELOPMENT: Stimulating overall economic development in the area by creating an enabling environment for tourism and associated economic activity. Output: This will include developing a tourism, marketing and product awareness plan. The largest activity will be leveraging private sector investment in the Park via concessioning. Funds will also be used to support providing information relating to the incentive framework process. GEF funds will be usedto better market and provide information about the Park to bothvisitors and the community in order to increase its use and thus its income. Sub-total costs o f the GEF Alternative: US$7.069 million. GEF Funding: US$0.340 million. Total costs of the GEF Alternative: US$39.94 million. GEFFunding: US$5.5 million. Table 1. Incremental Cost Matrix onservation Limited global benefits planning, and capacity and little captured beyond partial further management monitoring habitat inclusion and black plans, research, rhino & elephant conservation and M P A GEF 0.821 Planning systems developed Planning and monitoring alternative to enhance national directed to conserve globally development and biodiversity significant terrestrial & marine objectives biodiversity Increment 0.268 2. Implementation Baseline 21.420 Park resources directed to o f development maintaining current significant biodiversity taking plan (land infrastructure and place in the Park but losses incorporation, biodiversity, and landowners outside on private land partnerships, continuing to farm marginal PMU, MIRS & agriculture training) , , GEF 23.864 Park meeting national alternative infrastructure, and biodiversity and rehabilitation biodiversity objectives Increment 2.444 3. Institutional Baseline 2.097 Status quo maintenance o f development, Park institutions with use of significant global contribution governance& existing management to biodiversity management, economic systems and greater empowerment empowerment GEF 3.557 Institutional reform to Institutions developedto point alternative support achievementof to be able to manage a global national biodiversity and biodiversity asset social developmentobjectives Increment 1.460 4. Community Baseline 3.321 Limited progressin social Community not positioned to development ecology and community make contribution to development components conservationof globally significant biodiversity assets GEF 3.474 Significant achievement of Community positioned to Alternative local social ecology and support global biodiversity community development objectives and to benefit from objectivestowards greater increasedtourism local involvement Domestic eco-tourism Overseasvisitor numbers development continues to marginally grow continue to increase but visitor and private but little additional private facilities do not keep pace with sector investment sector investment in the Park international standards or growth Significant private sector Private sector investments alternative investmentaccommodates accommodates foreign tourists, and grows local tourism and boosts revenues to the providing Provincial benefits Park and South Africa Increment 0.340 TOTAL IIBaseline 1I34.44 39.94 alternative - 62 - Annex 5: Financial Summary SOUTH AFRICA THE GREATER ADD0 ELEPHANT NATIONAL PARK PROJECT Years Ending I * i . -. \ I I I 1 I 2 % - t y .' 'IMPLEMENTATIONPERIOD ' I I Year1 I year2 year3 year4 Year5 Year6 Year 7 Total Financing Required Project Costs Investment Costs 3.2 5.2 6.2 5.3 5.4 5.1 1.2 Recurrent Costs 0.8 1.5 1.6 1.4 1.4 1.3 0.3 Total Project Costs 4.0 6.7 7.8 6.7 6.8 6.4 1.5 Total Financing 4.0 6.7 7.8 6.7 6.8 6.4 1.5 IBRDllDA 0.3 1.1 1.3 1.o 1.o 0.6 0.2 Government 3.2 4.6 5.0 4.5 4.8 4.8 1.o Central 3.2 4.6 5.0 4.5 4.8 4.8 1.o Provincial 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Co-financiers 0.5 1.o 1.5 1.2 1.o 1.o 0.3 Jser FeeslBeneficiaries 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Project Financing 4.0 6.7 7.8 6.7 6.8 6.4 1.5 Main assumptions: Public andprivate sector investmentincursrecurrent expenditureof approximately 20% per annum. - 63 - Annex 6(A): Procurement Arrangements SOUTH AFRICA: THE GREATER ADD0 ELEPHANT NATIONAL PARK PROJECT Procurement Procurementresuonsibilities South African National Parks (SANParks) will be responsible for carrying out the procurement of goods and services. SANParks i s expected to work with a variety o f partners in the project, including for-profit companies and nonprofit organizations. Procurementprocedures Procurement of goods, works, and services by SANParks will be carried out following Annual Procurement Plans agreed with the Bank as part of the Annual Work Plan. Procurement of goods and works will be in accordance with the Bank's "Guidelinesfor Procurement under IBRD Loans and IDA Credits" (January 1995, revised in January and August 1996, September 1997 and January 1999) (hereafter referred to as the 'Procurement Guidelines ') and procurement o f Consulting Services will be in accordance with the Bank's "Guidelines for Selection and Employment of Consultants by World Bank Borrowers" (January 1997, revised September 1997, January 1999 and May 2002) (hereafter referred to as the 'Consultants' guidelines'). The Bank's Standard Request for Proposals will be used for Consulting Services under QCBS. As the project contains no procurement where International Competitive Bidding (ICB) will be used and there are no major intemational consultancies foreseen, a General Procurement Notice (GPN) will not be required. The following summarizes the procurementmethods to be used: Procurement methods (Table A) Goods The grant will largely finance the roll out of implementation o f the gAENP project. GEF funds will be used to purchase equipment such as vehicles (for biodiversity and fence operations, anti-poaching patrols, and game recovery) and a boat for patrolling the proposed marine protected area (largest proposed MPA in South Africa). In addition, office support will be provided to the SANParks Scientific ServicedPark Planning unit in Port Elizabeth and the Project Management Unit (PMU) by replacingthe current computer system and installing a GIS computer system. The use of GIS technology in the development and updating o f a conservation plan will be an integral component o f the biodiversity conservation activity. Computer technology will also form an integral component o f the IEMS and the MIRS. Procurements using ICB procedures i s not expected to take place. The procurement of goods and services, other than consulting services, will be undertaken inthe following manner: 0 Contracts for goods, equipment and services estimated to cost US$30,000 - US$250,000 equivalent per contract will be procuredusingthe National Competitive Procedures which are - 64 - acceptable to the Bank and which are in accordance with paragraphs 3.3 and 3.4 o f the Procurement Guidelines. Contracts for goods, equipment and services estimated to cost less than US$30,000 equivalent per contract will be procured using the Shopping Procedures in accordance with paragraphs 3.5 and 3.6 o f the Procurement Guidelines. 0 Contracts will not be deliberately split to avoid usinga specific procurement method. ConsultantServices The SANParks will obtain consultant services in the form o f technical assistance, facilitation, and planning advice through consultant contracts with firms, NGO's and/or universities, and individuals. These consultants will assist the SANParks in a suite o f activities such as: project management, formulating an IEMS, MIRS, landscape planning, biological surveys and monitoring, conservation planning, social, legal, economic information, training, environmental education, health awareness, business establishment and management associated with implementing the project. The selection of consultants will be done inthe following manner: For contracts estimated to cost less than US$250,000 equivalent per contract, the shortlist may contain entirely o f national consultants. Quality-and-Cost-based Selection: All consulting service contracts valued at more than US$200,000 equivalent will be awarded through the Quality and Cost Based Selection (QCBS) method in accordance with the provisions o f Section 11, paragraph 3 of Appendix 1 and Appendix 2 thereto, as per the Consultants ' Guidelines. Selection Based on Consultants Qualifications (applicable to selection of Firms): This method may be used for assignments, valued at less than US$200,000 equivalent per contract, for which the need for preparing and evaluating competitive proposals i s not justified. In such cases, SANParks will follow the procedures as per paragraph 3.7 o f the Consultants' Guidelines - "the Client will prepare the TOR'S, request expressions o f interest and information on the consultants' experience and competence relevant to the assignment and establish a short list, and select the firm with the most appropriate qualifications and references. The selected firm shall then be asked to submit a combined technical and financial proposal for consideration and contract negotiation". Services o f Individual Consultants meeting the requirements o f Section V o f the Consultant Guidelines will be selected under the provisions for the Selection of Individual Consultants method. Individual Consultants (IC) will be selected through comparison o f curriculum vitae against job description requirements o f those expressing interest in the assignment, or those having been identified directly by SANParks. Civil servants cannot be hired as consultants under the project. Single Source Selection o f consultants may be done on an exceptional basis, provided it meets the criteria as stated in paragraph 3.8 to 3.11 o f the Consultants' Guidelines. It i s envisaged - 65 - that the aggregate amount of contracts under single source selection method will not exceed US$70,000 equivalent. The Bank's prior approval must be sought by SANParks for all contracts under single source selection. Works The (South African), Preferential Procurement Policy Act o f 2000 mandates all the Organs o f State to apply specific criteria in their procurement processes to allow for preferential treatment o f the historically disadvantaged enterpriseshndividuals. The Country Procurement Assessment Report (CPAR) conducted jointly by the government and the Bank identified a number o f issues in respect o f the implementation o f the Preferential Procurement Policy Act and its supporting Regulations. Arising from the CPAR recommendations, the government, in its policy paper o f July 2003 (now approved by the Cabinet), highlighted all the relevant issues in the application o f the Preferential Procurement Policy Act and resolved to review the existing Preferential Procurement Policy Act and its associated Regulations as an integral part o f the process to promulgate the broad based Black Economic Empowerment Bill o f 2003. The Preferential Procurement Policy Act however, continues to be in operation until the Act and its associated Regulations are formally amended. As SANParks is mandated by an Act o f Law to apply the preferential rules in their national procurement, the procurement o f works, under this Project, which are going to follow the national competitive procurement procedures, may follow the Preferential Procurement Policy Act and its associated Regulations. Works contracts will include development o f supportive tourism infrastructure in a selected few sites, fencing activities, path and road construction, alien vegetation control and construction o f a conservation education centre. A large focus o f the allocation o f these activities will be towards previously disadvantaged groups, following Bank and SANParks procurement policies. The following procurement methods will be used: 0 Contracts for works estimated to cost US$50,000 - US$500,000 equivalent per contract will be procured usingthe National Competitive Procedures which are acceptable to the Bank and which are inaccordance with paragraphs 3.3 and 3.4 o f the Procurement Guidelines. 0 Minor Works including clearing o f alien vegetation, estimated to cost less than US$50,000 equivalent per contract, up to an aggregate amount not to exceed US$2.15 million equivalent, may be procured under lump-sum,fixed-price contracts awarded on the basis o f quotations obtained from three qualified domestic contractors in response to a written invitation. The invitation will include a detailed description o f the works, including basic specifications, the required completion date, a basic form o f agreement acceptable to the Bank, and relevant drawings, where applicable. The award will be made to the contractor who offers the lowest price quotation for the required work, and who has the experience and resources to complete the contract successfully. All procurement documents relating to Small Works will be properly filed and retained by SANParks, the main coordinating agencies for post review and audit by the Bank. - 66 - SANParksSelection Processof Consultants Procurement proposals will be vetted by the gAENP Steering Committee (PSC) that consists o f the following SANParks staff Director: Conservation Development; Head: Park Planning & Development; gAENP Project Co-ordinator; Park Manager o f Addo Elephant National Park; and the General Manager: Commercialization. The Park Steering Committee will meet on a quarterly basis and more frequently as the need requires during the early phase o f the project. Procurement CaDacitv Assessment Findings Although the current procurement function at AENP, is essentially part o f the Finance Department, it functions well in it's current arrangement. However, it ideally needs to gain greater independence especially in light o f the World Bank Project and the anticipated procurement to be spent on goods, works and consultant services. The existing controls for the financial aspect o f the procurement function are well managed with a high level o f discipline evident, with no noticeable deviation from the Public Finance Management Act. AENP has limited experience and capacity in general handling o f the procurement cycle and has no procurement planning. Their knowledge o f procurement i s on the basis o f their experience on the job and they have had no training inprocurement. Current contracts are not well managed in terms o f compliance to the contract provisions. AENP's knowledge o f the Bank's procurement procedures and guidelines i s very limited. N o documented dispute resolution procedure exists. N o separate procurement audits are undertaken. Recommendations Further procurement skills training for the AENP staff who will be handling procurement. A procurement officer will be contracted by the project to the PMUand Bank training may be provided ifrequired. Independent procurement reviews and evaluations on performance should be conducted by the Project once every six months (at least for the first 18 months until the capacity reaches a satisfactory level). The reports should be submitted to the Bank for review. Inaddition, Bank staff should conduct periodic reviews (once in four months) at least for the first year o f operation to ensure progress inbuildingcapacity and satisfactory performance. Prior to awarding any contract for clearing o f alien vegetation gAENP will adopt a similar - 67 - procurement system that has been developed and used by the Cape Peninsula Project (being implementedby Cape PeninsulaNationalPark). The procurement system for gAENP will be reviewedby the Bank. 0 A procurementplanwill beprovidedto the Bank for its approvalprior to Effectiveness. - 68 - Table A: Project Costs by Procurement Arrangements (US$ million equivalent) (0.00) (2.12) (0.01) (0.00) (2.13) 2. Goods 0.00 0.52 0.11 0.79 1.42 (0.00) (0.52) (0.1 1) (0.00) (0.63) 3. Services 0.00 2.55 0.13 20.77 23.45 (0.00) (2.55) (0.13) (0.00) (2.68) 4. Miscellaneous 0.00 0.00 0.06 5.36 5.42 (0.00) (0.00) (0.06) (0.00) (0.06) Total 0.00 5.19 0.40 34.35 39.94 (0.00) (5.19) (0.31) (0.00) (5.50) I'Figuresinparenthesesare the amounts to be financedby the Bank Grant. All costs include contingencies. Includescivil works andgoods to be procuredthroughnationalshopping,consultingservices, services of contractedstaff of the project managementoffice, training, technical assistance services, and incrementaloperating costs relatedto (i) managingthe project, and (ii) re-lendingproject funds to local governmentunits. - 69 - Prior review thresholds(Table B) Table B: Thresholds for Procurement Methods and Prior Review' <50 Small Works All post review. 2. Goods >250 ICB ALL 30-250 NCB All post review. <30 Shopping Post Review 3. Services >200 QCBS 1.o 50-200 QCBS/CQ/Other All contracts >$50,000 for individual consultants and >$lOO,OO for firms. - 4 0 QCBS/CQ/Other Post review 4. Miscellaneous 5. Miscellaneous 6. Miscellaneous Total value of contracts subject to prior review: >US$500,000 Overall Procurement Risk Assessment: Average Frequency of procurementsupervisionmissions proposed: One every 4 months (includes special procurement supervisionfor post-reviewiaudits) "Thresholds generally differ by country and project. Consult "Assessment of Agency's Capacity to Implement Procurement"and contact the RegionalProcurementAdviser for guidance. - 70 - Annex 6(B): Financial Management and DisbursementArrangements SOUTH AFRICA: THE GREATER ADD0 ELEPHANT NATIONAL PARK PROJECT FinancialManavement 1. Summary ofthe Financial ManagementAssessment Financial management capacity (i)CapacityofstaffinSANParks: SANParks will be responsible for the overall financial management o f the project. The SANParks team at the AENP's Financial Administration is well qualified and sufficiently familiar with Bank procedures to ensure sound management and control. A relevantly qualified and experienced full-time Financial Officer will be seconded from SANParks to support the project. The officer will work under the Project Manager but with financial management accountability still vesting with Addo's Finance Officer who will ensure adherence to SANParks' and Grant requirements. Short-term training inBank financial procedures, including reporting, will be required. (ii)FinancialManagementSystems(FMS): The financial self-assessment, carried out in August 2002, indicated high compliance by SANParks with Bank requirements and guidelines. A further Bank assessment was carried out in March 2003 which substantially confirms the self assessment. SANParks has a well established internal control system. Rules and regulations, including rules of ethics, are well defined and documented in manuals. The institutional arrangements for financial management of the project will follow the proven Cape Peninsula National Park model as per section C4 of the PAD and as discussed above. At the time of the financial management assessment it was noted that although the SANPark's Internal Audit department was functional, the coverage given to the gAENP seemed inadequate. This weakness i s being addressed through a recently signed contract with a reputable accounting firm to annually provide internal audits for all of SANParks including the AENP. The contract i s effective as o f March 2003. The previous SANParks computer-based financial management system (Prophecy accounting software) has a proven track record. However, as o f September 1, 2003, SANParks switched to a new and better system called Great Plains. Staff training i s underway to facilitate the transfer to the new system. SANParks has shown highly satisfactory financial management under another Bank/GEF-financed project (Cape Peninsula National Park - GEF, US$6.2 million). SANParks will demonstrate the capabilities of the new system to the Bank, prior to effectiveness, by providing a proposed FMR prototype report. A Bank staff member (FMS) will also review the operationality and reliability of the system before project effectiveness. (iii)Readinessandnextsteps: The format of FMRs will be provided by SANParks prior to effectiveness and demonstrating that FMRscanbe producedby the computerized systemprior to effectiveness. 2. Audit Arrangements The audit trail was found to be robust at SANParks, given the capabilities of the computerized system, protocol surrounding processes, and information management. SANParks has received -71 - no less than 7 consecutive unqualified audits from its independent external auditors. The filing and archiving system was also found to be one o f the strongest in the region. South Africa i s home to all o f the major international management and audit firms and the existing SANParks' auditors, approved for other Bank supported projects, have been appointed to audit this project. Therefore, no major risksexist with respect to project auditing. Inconclusion, the financial management risk is considered to be minimal and well mitigated. As to the counterpart funds, the Recipient has provided, its financial projections to demonstrate its ability to provide counterpart funds. 3. DisbursementArrangements The Grant funds will be disbursed over a period o f 6 years with project Completion Date set for 10/31/2009 and Closing Date o f 04/30/2010. SANParks will be the recipient and the Executing Agency for the Grant. A four month advance from the proceeds o f the Grant, equal to US$200,000, will be deposited by the Bank into a US$ denominated Special Account to be opened by SANParks at a commercial Bank acceptable to IBRD. SANParks will fund all Project expenditures from its existing Rand bank account, then reimburse, on at least a monthly basis, the Rand equivalent o f eligible expenditures from the US$ Special Account to its Rand bank account. Application for replenishment will be based on these reimbursements from the US$ Special Account, and will be supported by details of the individual payments made. The exchange rate to be used, will be the exchange in effect on the day that funds are withdrawn from the Special Account. Applications for replenishment will be submitted monthly. All transactions will be managed through the SANParks financial management system. A retroactive financing amount o f US$7,000 will be permittedto enable an advert to be placed in the press for the Procurement Manager and for related office equipment to be purchased. -72 - Allocation of grant proceeds (Table C) Table C: Allocation of Grant Proceeds Goods 0.65 100%of foreign expenditures; 100%of local expenditures (ex-factory cost) and 80% of local expenditures for other items procured locally Consultant services 2.60 100%of foreign expenditures and 83% of local exDenditures Operating costs I 0.06 I 80% I Training 0.04 100% Total Project Costs with Bank 5.50 Financing Total 5.50 The term "Operating costs" means the incremental operating costs arising under the Project on account o f SANParks' and PMU's maintenance o f vehicles, fuel, office supplies, printing,office equipment rentals, utilities, communication expenses, advertising associated with recruitment o f P M U staff and procurement o f works, goods and consultants' services, travel and related expenses, but excluding salaries o f the Recipient's employees. Use of statements of expenditures (SOEs): All applications to withdraw proceeds from the grant will be fully documented except for expenditures under contracts valued less than: (a) goods under contracts costing less than $250,000 equivalent each; (b) works under contracts costing less than $50,000 equivalent each; (c) consultants' services under contracts for consulting firms and for individual consultants costing less than $100,000 equivalent and $50,000 equivalent, respectively; and (d) training and (e) operating costs, under such terms and conditions as the Bank shall specify by notice to the Recipient. Documentation supporting expenditures claimed against the SOEs will be retained by the PCU and will be made available for review when requested by the World Bank supervision missions and project auditors. -73 - Annex 7: Project Processing Schedule SOUTH AFRICA: THE GREATER ADD0 ELEPHANT NATIONAL PARK PROJECT ITime taken to prepare the project (months) 36 48 I FirstBank mission (identification) II 0211611999 0211611999 IAppraisal mission departure 02/21/2003 0712112003 III I Negotiations 11/19/2003 11/19/2003 IPlanned Date of Effectiveness III 03/08/2004 IIIII II Prepared by: Chris Warner (Team Leader), Caroline Guazzo (Language Program Assistant), and Erika Odendaal (Task Team Assistant) Preparation assistance: CSIR and CES Feasibility studies CES Strategic Environmental Assessment Lala Steyn - Resettlement Zaheer Fakir Sandy Mazizi Associates Resettlement - Biodiversity- Bank staff who worked on the Droiect included: . - Name Speciality Chris Warner TTL, overall design and social components Christophe CrCpin Overall support to project designand GEF policy Agi Kiss Biodiversity Phillip Brylski Support to project design Jan Bojo Project design quality and economic aspects Grant Milne Draft P A D compilation and technical support Aberra Zerabruk Legal EdithMwenda Legal Marie-Christine Balaguer Legal Iraj Talai Finance Jonathan Nyamukapa Finance V.S. Krishnakumar Procurement Ivonna Kratynski Disbursement Suzanne Morris Disbursement Hiep Quan Phan Disbursement Matthew Stern Economic aspects DanAronson Safeguards Kristine Ivarsdotter Safeguards Jean-Roger Mercier Safeguards - 74 - John Boyle Safeguards Erika Odendaal Processing Caroline Guazzo Processing Melanie Jaya Processing -75- Annex 8: Documents in the Project File* SOUTH AFRICA: THE GREATER ADD0 ELEPHANT NATIONAL PARK PROJECT A. Project Implementation Plan Project Implementation Plan (PIP). 2002. Melville Park SME Project Management and Technical Support Services. B. Bank Staff Assessments Financial ManagementAssessment ProcurementAssessment Safeguards C. Other e Aide-memoires 0 November 8,2001 0 July 18, 2002 0 September 23,2002 0 February 14,2003 0 August 8,2003 e Addo PlanningForumMeetings: 0 October 1, 1999 0 November 16,2000 0 February 20,2001 0 March 12,2001 0 September 5,2001 0 February 16,2002 0 April 9,2002 0 June 20,2002 0 October 22,2002 e Addo SteeringCommitteeMinutes: 0 July 29, 1999 0 August 25-26, 1999 0 September 25, 1999 0 November 10, 1999 0 January 26, 2000 0 March 3, 2000 0 November 10,2000 0 January 24,2001 0 June 4,2001 0 August 20,2001 0 April 9,2002 0 September 13,2002 REFERENCES Coastaland Environmental Services (CES). 21July 2003. Strategic Environmental Assessment Volume 2. Gordon J. 21 Jul2003. ResettlementPolicy Framework. SANParks Knight M& Warner C. 2001. Project Concept Document Melville Park SME Project Managementand Technical Support Services. 2002. Project Implementation GANT Chart and budgetedexpenditure Busico RD. 2002. Incentives and Framework for Private Land-owners incorporation: gAENP Knight M.2002. Land Incorporation Framework (draft). SANParks Jackleman J. 2002. Resettlement Policy for SANParks Jackleman J. 2002. Strategic Management Plan for Addo ElephantNational Park Jackleman J. 2002. Park Management Policy Gordon J & Knight M.2002. Communication Strategy. SANParks Holness S. 2002. Conservation Planning Framework for the gAENP. SANParks Consultants/Specialistsreports towards the Strategic Environmental Assessment tabled below (fullreports I----- available in SpecialistReports File) Title ConsultancyFirm/Authors BiophysicalStudies ConservationPlanning II Date 2001 J. Nel, S. Davies, I.Kotze, C. for GreaterAddo Geldeblom,B van Wilgen, L. ElephantPark Schonegevel, S. Hughes(CSIR), G. Kerley, R. Cowling & A. Boshoff(TERU) Fieldmappingof land 2001 L.Kruger andC. Sykes classes andland transformation The potential 2001 A. F.Boshoff,G.I.H.Kerley, R distributions, and MCowling& S. L.Wilson estimatedspatial requirementsand populationsizes, ofthe medium-to large-sized mammals A review of the species-, 2001 A. F.Boshoff, G. I.H.Kerley, R. population- and M.Cowling& S. L.Wilson spatially-driven processes involvingthe medium-to large-sized mammals I -77 - Preliminary survey and 2001 H.Barber- James, J. Cambray, desktop approachto F.deMoor andD.Roux conservationplanning o f freshwater ecosystemsinthe proposedgAENP ProposedgAENP 2001 B.Newman, E.Campbell,N. marineprotectedarea Klages, C. Mcquaid,W. Sauer, E. Schuman, R. Shone, M.Smale and T. Wooldridge Marine researchand 2002 The Department of Ichthyology monitoring programfor andFisheriesScience (Rhodes gAENP University) Social Component Public Participation 2001 Sandy and Mazizi Consulting report Social Assessment 2001 Teresa Connor Resettlement 2001 Chris de Wet (Rhodes University) Framework Social Monitoring 2001 MauraAndrew (Rhodes Program Commentstrail 2002 ResettlementPolicy 2002 Framework Connor Resettlement Action October 2002 G. Huggins and C. de Wet Plansfor the priority farms inthe gAENP gAENP Cultural 15 December 2002 M.Cocks, B.de Klerk,F. MappingReport Way-Jones,L.Webley (Albany Museum) FinancialComponent EconomicActivitiesin 2001 B. Geach the planningdomain Incomefrom livestock 2001 G.Antrobus (RhodesUniversity) farming Eco-tourismscenarios 2001 R.Davies (CES) Developmentprospects 2001 R.Davies (CES) for partnerships compatiblewith long-termeco-tourism andpark expansion Park forecasts 2001 R. Davies (BusicoConsulting) IncrementalCost 2002 R. Davies (Busico Consulting) analysis InstitutionalComponenl Institutionalreview 2001 H.Timmermans,L.Sisitka (RhodesUniversity) Institutional 2001 B.Geach arrangements and capacity needs for tourism managementin the gAENP Environmentallegal 2001 Imbewuenviro- legal specialists framework and compliance -78- requirements applicable to the proposed extension o f the gAENP Policies applicable to 2001 B.Geach the proposed gAENP ProceedingsReports: Proceedings o f a January 2001 V.C. Management Services workshop for the gAENP Interim Progress Report October 2001 V. C. Management Services Proceedings o f the final January 2002 V. C. Management Services consultants workshop for the gAENP *Including electronic files - 79 - Annex 9: Statement of Loans and Credits SOUTH AFRICA: THE GREATER ADD0 ELEPHANT NATIONAL PARK PROJECT 27-Oct-2003 Difference between expected and actual Original Amount in US$ Millions disbursements' Project ID FY Purpose IERD IDA GEF Cancel. Undisb. Orig Frm Rev'd PO76901 2003 MunicipalFinancialManagement TA 15.00 0.00 0.00 0.00 14.85 3.38 0.00 PO52368 2002 MALOTI-DRAKENSBERGCONSERV. 8 DEVELOP 0.00 0.00 7.93 0.00 8.07 1.92 0.00 PO35923 1998 CAPE PENINSULA 0.00 0.00 12.30 0.00 0.71 12.28 0.00 PO48606 1997 IND.COMPET&JOB CREAT 46.00 0.00 0.00 21.53 8.93 30.46 8.93 Total: 61.00 0.00 20.23 21.53 32.56 48.03 8.93 - 80 - SOUTH AFRICA STATEMENT OF IFC's HeldandDisbursedPortfolio June 30 2003 - InMillions USDollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic 1999 AEF Bulwer 0.00 0.00 0.19 0.00 0.00 0.00 0.19 0.00 1996 AEF CarosaFarm 0.00 0.09 0.11 0.00 0.00 0.09 0.11 0.00 2000 AEF DBS 0.00 0.00 0.75 0.00 0.00 0.00 0.75 0.00 1999 AEF Dargle Timbr 0.35 0.00 0.00 0.00 0.35 0.00 0.00 0.00 1997198 AEF E.R. Medical 0.00 0.18 0.00 0.00 0.00 0.18 0.00 0.00 1999 AEF FOXTROT MEAT 0.34 0.00 0.00 0.00 0.34 0.00 0.00 0.00 2001 AEF Freecom 0.00 0.00 0.39 0.00 0.00 0.00 0.39 0.00 1999 AEF IHSTechno 0.2 1 0.00 0.65 0.00 0.21 0.00 0.65 0.00 0 AEF NSAPIC 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2000 AEF Tusk 1.52 0.10 0.00 0.00 1.52 0.10 0.00 0.00 1995196199 AFLIFE 0.00 5.94 0.00 0.00 0.00 5.94 0.00 0.00 2002 African Bank 58.10 0.00 0.00 0.00 27.34 0.00 0.00 0.00 2002 Bioventures 0.00 2.41 0.00 0.00 0.00 1.30 0.00 0.00 2000 EDU LOAN 2.73 0.00 0.00 0.00 2.73 0.00 0.00 0.00 0 FRBl 18.00 0.00 0.00 0.00 18.00 0.00 0.00 0.00 2002 NAMF 0.00 5.00 0.00 0.00 0.00 0.06 0.00 0.00 2001 Printability 5.31 1.50 2.36 0.00 5.31 1.50 2.36 0.00 2001102 Rubico 0.00 0.00 1.25 0.00 0.00 0.00 1.25 0.00 1995 SACGF 0.00 1.50 0.00 0.00 0.00 1S O 0.00 0.00 1995 SAFCF 0.00 1.18 0.00 0.00 0.00 1.18 0.00 0.00 SAHL 0.00 2.52 0.00 0.00 0.00 2.52 0.00 0.00 2000102/03 SAPEF 0.00 27.22 0.00 0.00 0.00 13.31 0.00 0.00 1999 Spier 0.00 1.87 14.65 0.00 0.00 1.87 14.65 0.00 2001 Total Portfolio: 86.56 49.51 20.35 0.00 55.80 29.55 20.35 0.00 Approvals PendingCommitment FY Approval Company Loan Equity Quasi Partic 2001 AEF Fin-X 0.00 0.00 0.00 0.00 2000 EDULOAN 0.00 0.00 0.00 0.00 2002 Futuregrowth 0.00 0.00 0.01 0.00 2004 Hemic 0.02 0.00 0.01 0.00 2001 Spier Estate 0.00 0.01 0.00 0.00 Total PendingCommitment: 0.02 0.01 0.02 0.00 -81 - Annex I O : Country at a Glance SOUTH AFRICA: THE GREATER ADD0 ELEPHANT NATIONAL PARK PROJECT Sub- Lower- POVERTY and SOCIAL South Saharan middle- Africa Afrlca income Developmentdiamond" 2002 Population,midyear (millions) 43.6 688 2,411 Life expectancy GNI per capita (Atlas method, US$) 2,520 450 1,390 GNI (Atlas method, US$ billions) 113.5 306 3,352 Average annual growth, 1996-02 Population (%) 1.5 2.4 I.o Labor force (%) 1.8 2.5 1.2 GNI Most recent estimate (latest year available, 1996-02) per capita Poverty (% ofpopulation belownationalpovertyline) Urban population (% of totalpopulation) 58 33 49 Life expectancy at birth (years) 46 46 69 Infant mortality (per 1,000live births) 65 105 30 Child malnutrition (% of children under 5) 11 Access to improved water source Access to an improvedwater source (% of population) 86 58 81 Illiteracy (% ofpopulation age 15+) 14 37 13 - Gross primaryenrollment I%of school-age population) 111 86 111 South Africa Male 115 92 111 Lower-middle-income group ~ Female 108 80 110 KEY ECONOMICRATIOS and LONG-TERM TRENDS 1982 1992 2001 2002 Economic ratlos' GDP (US$ billions) 80.1 130.5 114.2 104.2 Gross domestic investmenVGDP 24.9 14.8 15.1 15.8 Exports of goods and services/GDP 26.6 21.3 30.6 34.0 Trade Gross domestic savings/GDP 24.6 18.8 18.7 19.2 Gross nationalsavingslGDP 20.9 16.2 14.8 16.1 Current account baiance/GDP -4.0 1.5 -0.3 0.3 Interest payments/GDP 0.0 0.0 0.3 0.3 Total debtlGDP 1.1 0.5 21.1 24.0 Total debt service/exports 0.2 0.2 11.6 12.2 1 Present value of debtlGDP 20.5 Presentvalue of debtlexports 62.3 Indebtedness 1982.92 1992-02 2001 2002 2002.06 (average annual growth) 1 GDP 1.1 2.7 2.8 -South Africa 3.0 3.0 GDP Der capita -1.1 1.2 1.3 1.5 1.5 1982 1992 2001 2002 Growth of Investment and GDP (%) (% of GDP) Agriculture 5 7 3 8 3 5 3 8 lo Industry 442 364 31 5 32 1 5 Manufacturing 237 21 9 186 188 Services 50 1 598 650 642 0 Private consumption 589 610 625 615 -5 General government consumption 164 202 189 192 Imports of goods and services 269 173 27 1 305 -GDI *GDP 1962-92 1992-02 2o01 2o02 (average annual growth) Growth of exports and imports (%) Agriculture 3 2 2 6 -1 7 4 0 l5 Industry 0 3 1 7 2 6 2 7 '0 Manufacturing 0 7 2 2 3 6 4 0 5 Services 1 9 3 2 3 4 3 1 o Private consumption 1 4 2 9 2 8 3 1 General government consumption 3 1 0 7 3 3 3 7 -10 Gross domestic investment -30 3 8 0 2 9 0 -Exports *Imports - 82 - PRiCES and GOVERNMENT FINANCE 1982 1992 2001 2002 Domestic prices Inflation(O h ) h (% change) Consumer prices 14.7 13.9 4.6 8.9 Implicit GDP deflator 13.9 14.6 7.6 8.5 Government finance (% of GDP, includes current grants) Current revenue 22.3 23.7 24.4 24.6 ~:'l 97 98 99 00 01 02 Current budget balance 1.3 -4.5 0.4 1.o Overall surplus/deficit -3.7 -7.4 -1.5 -1.2 -GDP deflator ' O ' C P I I TRADE 1982 1992 2001 2002 (US$ millions) Export and Import levels (US$ mlll.) Total exports (fob) 20,135 24,487 30,731 32,042 Gold 7,945 7,871 3,415 4,165 40'oooT Food, beverages, and tobacco 1,879 1,582 2,629 2,741 30,000 Manufactures 3,048 5,653 4,556 4,750 Total imports (cio 20.218 166.224 25,869 27,556 20,000 Food 1,059 946 1,893 2,017 Fuel and energy 7,035 6,390 3,436 3,661 10,000 Capital goods 14,130 15,052 0 Export price index (1995=700) 75 16 15 96 81 08 99 00 01 import price index (1995=100l 75 31 32 SExports Imports Terms of trade (1995=100) 100 52 47 BALANCE of PAYMENTS 1982 1992 2001 2002 (US$ millions) Current account balanceto GDP (Oh) Exportsof goods and services 20,118 27,839 35,254 36,670 Importsof goods and services 20,372 22,581 31,061 33,039 Resource balance -254 5.258 4,193 3,631 Net income -3,181 -2,945 -3,749 -2,748 Net current transfers 257 -366 -739 -572 Current account balance -3,178 1,947 -295 310 Financing items (net) 2,931 -2,146 -668 -3,715 Changes in net reserves 247 199 963 3,404 Memo: Reserves including gold (US$ millions) 3,981 4,069 7,494 7,620 Conversion rate IDEC. local/US$) 1.o 2.9 6.6 10.5 EXTERNAL DEBT and RESOURCE FLOWS 1982 1992 2001 2002 (US$ millions) Composltlon of 2002 debt (US$ mlll.) Total debt outstanding and disbursed 857 612 24,050 25,041 IBRD 73 129 0 13 IDA 177 A 13 D: 117 13 0 0 Total debt service 44 62 4,355 4,692 IBRD 4 32 0 1 IDA 2 0 0 0 Composition of net resource flows Official grants 0 0 0 0 Official creditors 59 26 0 4 Private creditors -16 -3 -1,634 432 17,511 Foreign direct investment Portfolioequity World Bank program Commitments 0 15 A IBRD - E Bilateral - Disbursements 48 5 0 5 B IDA - D Other multilateral - F Private ~ Principal repayments 2 21 0 0 C IMF - G.Short-term Net flows 46 -16 0 5 Interestpayments 4 11 0 1 Net transfers 42 -27 0 4 - 83 - Additional Annex 11: Environmental Threats Analysis SOUTH AFRICA THE GREATER ADD0 ELEPHANT NATIONAL PARK PROJECT Major environmental Root causes Solutions, includingGEF Risks threats focusedon intervention(numbersrefer Park development, to LFA component managementand addressingthe issue) sustainability 1. Biodiversity losses, . Past government's agricultural . Develop and promote the ' Should economic benefits land degradation and subsidies led to distorted market- implementation o f not materialize, would see a ecosystem fragmentation prices and unsustainable ecologically and economically loss o f support for the around and impacting agricultural practices. more sustainable land use project. on the gAENP. models through either . Historically landowners acquisition andlor under-valuationo f biodiversity incorporation via contractual led to habitat destruction. means (2, 3, 5). ' Inadequate recognition o f 1 Prepare Park plan for biodiversity value by government terrestrial and marine areas led support for inappropriate (1). projects (e.g. dams) which furthered habitat destruction. . Greater regional - cooperation, integration and Inability o f land-owners to planning, particularly at the shift from entrenched local government level, to agricultural practices to higher minimize inappropriate earning, lower impact land uses. developments within Park footprint (3,4). . Lack o f institutional capacity within government to identify * Enhance communication root causes to biodiversity losses and information and means to switch strategy to dissemination around reduce habitat destruction. alternative land use options through stronger institutional . Lack o f integrated regional arrangements (4). planning. . Increased environmental ' Poverty, inequality and education through focused inequitable distribution o f attention on the SANParks natural resources. environmental education section (3). ' Disjointed state land tenure I system (national verses . Enhanced institutional provincial). capacity to support integrated planning & land use ' Differential support from the conversion & marine P A (1, range o f state institutions. 3). . Disparate environmental * Environmental policies and laws at the rehabilitation programs - 84 - provincial and national levels. undertaken with scientific support (1). . Inadequate communication with landowners. 8 Legal and social compliance associated particularly around land purchase issues (3). . Harmonization o f environmental policies and laws through input into the national legislation review process, inaddition to consolidating the different state land tenure within the footprint under the SANParks (224). 2. Unsustainable use o f . Inadequate information base * Consolidation o f s SANParks does not marine natural on marine resources and management o f marine area receive sufficient resources resources. ecological processes. under SANParks and to manage MPA. harmonization o f appropriate . The public (largely legislation (1, 3, 4). * Lack o f institutional recreational fishermen) consider cooperation. access to marine resources a . Creation of an integrated public right. marine and terrestrial P A (1, . Public reject concept o f a large consolidated MPA. ' Conflicting legislation (national & provincial). . Improved management activities and infrastructural ' Poor enforcement o f marine support o f SANParks (2). protection due to lack o f state policing capacity. . Either enhance information . Inappropriate coastal base or apply precautionary principle inabsence o f developments increases threat o f harvesting targets (1, 2). pollution. . Lack o f coordinated 'Enhanced institutional capacity building, particularly inter-institutional cooperation inlaw enforcement (2,4). and management. . Create public awareness . Inadequate communication campaign relating to M P A with public. (4). . Poverty, inequality and . Development o f innovative inequitable distribution o f economic incentive schemes natural resources. that would enhance conservation o f the natural resource base (3). - 85 - 3. Alien biota can not . Lack o fknowledge as to ' Identification o f scope and ' Insufficient financial be brought under potential risks to the intensity o f problem through support o f ongoing control management control environment. detailed biological surveys costs. (1). . Inappropriate and uncoordinated * Increased understanding o f control/elimination and biological processes monitoring procedures. associated with alien species . Insufficient financial resources. (1). . Incorporation into EMS ' Lack o f inter-institutional monitoring program (2). buy-in. * Dissemination o f . Lack of biological survey information and information. environmental education (3, 4). * Poor scientific understanding o f ecological processes associated . Enhance inter-institutional with alien biota invasion and coordination via expansion. communication pathways, meetings and forums (4). 4. Environmentalthreat . Lack o f formally accepted - Gain acceptance o f . Could lead to caused by expanding elephant policy for the gAENP. elephant policy for the implementation inertia and mega-herbivore gAENP (2). hence a major impact on populations, particularly . Lack o funderstanding of biodiversity o f global elephants biological impacts causedby ' Estimate ecological significance. expanding elephant populations. carrying capacity for elephants (1, 2). . Lack o f nationalpolicy as to control mechanisms. . Incorporate monitoring program into E M S (2). . Lack o f understanding and appreciation at the national and . Improved marketing o f international level o f sustainable policies and biological needs natural resources use. (4). . Insufficient lobby actions and . Improve communication communication at network with provincial and nationaliinternational levels. private land owners with elephants to promote greater regional cooperation (4). 5. Lack o f capacity for ' Lack o f institutional capacity . Immediate support o f . General inertia amongst institutions to within SANParks to maintain SANParks & other SANParks staff to support implement biodiversity and implement conservation governance structures to project. conservation and plan. introduce proper regional economic benefits . Lack o fsupport from local . Insufficient funds for planning, management systems, project development institutions. implementation, particularly & roll out (1, 2, 3,4, 5). land consolidation. . Compromise social and . Support project economic support base for - 86 - * Lack o f inter-institutional management structures for project, which would in turn cooperation between national, project execution and have a negative affect on provincial and local government management. (3). global biodiversity levels. conservation. . Models and governance * Implement an E M S as part o f the Management Plan (2). structures to integrate private sector and land-owners into the * Support development o f Park are adequately developed. incentive and models involving private sector (2, 3). - 87 - Additional Annex 12: Main findings of the Strategic Environmental Assessment SOUTH AFRICA THE GREATER ADD0 ELEPHANT NATIONAL PARK PROJECT 1. Background The project objectives are to achieve a number o f positive environmental, socio-economic and developmental impacts from investments to conserve nationally and globally important biodiversity in both terrestrial and marine ecosystems. A Strategic Environmental Assessment (SEA) has been undertaken to meet Bank EA requirements. A SEA was selected instead o f an EA (with Bank approval), as the exact nature of the new Park boundaries could not be determined with great precision duringpreparation. The specific areas encompassed by expansion will depend on the nature and uptake o f land conversion incentives developed, negotiations, etc. Beyond the SEA, specific project investments, for example land conversion, or tourism development, will require site-level Environmental Impact Assessment (EIA) as required under South African legislation. This annex summarizes the key issues identified in the SEA, and the compatibility o f South African environmental assessment policy and regulations with World Bank safeguard policy requirements for project-level EIA. 2. Main Findingsof the SEA The SEA was comprehensive and examined the biophysical and socio-economic environment in the project area, financial viability o f the gAENP, broad legal and institutional framework, and concerns raised by interested and affected parties, Strategic issues identified by the SEA, which are associated with the proposed gAENP include: Displacement and relocation o f farm workers 0 Ongoing uncertainty about the development o f gAENP 0 Impact o f the project on farming related industries and activities Lack o f communication with affected parties 0 Impact on unemployment and economic opportunities 0 Impact created by the Coega Industrial Development Zone Need for socio-economic indicators and targets 0 Compliance with SEA regulations Impact on dairy, beef and chicory production 0 Impact on mohair production Landpurchase process Most o f the strategic issues identified by the SEA, through extensive public consultations, were socio-economic or institutional. The main environmental issue was the potential impact of the Coega harbor development on the proposed gAENP, particularly the marine component. The issues identified inthe SEA have been accounted for inproject design (Table 1). Generally, the gAENP was perceived to bring positive environmental benefits to the planning area, in particular by converting agriculture land (in some cases associated with agro-chemical inputs) to more benign biodiversity conservation and ecotourism development. The project has been classed as Category B under Bank guidelines, thus requiring a partial EA. Specific project investments will be subject to environmental impact assessment (EIA) as required under South African legislation. This should address the requirement for a partial EIA. Precedentshave been set for this approach. The Bank's urban investment program (SUDP) in Swaziland undertook a broad SEA during project preparation and then focused more detailed EIAs on site-specific investments inroad, water and sewage, housing upgrading etc. Table 1: SEA strategic issues and project design Strategic Issue Proiect Design to Address Issue Displacement and relocation of farm workers. Project i s following requirements in Bank safeguard policy OP 4.12 for any displaced workers. Ongoing uncertainty about the development of Project i s now going ahead with GEF support and EAENP. public consultations. Impact of the project on farming related SANParks has developed criteria for land acquisition. industries and activities. Priority land is mostly lower value pastoral farms; many of them abandoned. Lack of communication with affected Project i s strengthening institutions and programs for parties. public education, awareness and direct participation inimdementation. Impact onunemployment and economic Project will have a positive impact on employment opportunities. through project activities and local tourism expansion. Land conversion to ecotourism has been demonstrated to create significant net improvements inemdovment. Impact created by the Coega Industrial The Coega development will have to follow the Development Zone. national EA process and impacts on the proposed marine Park will be taken into account. Needfor socio-economic indicators and targets. A social monitoring program has been designed into project components. Compliance with SEA regulations, All site-level investments will be subject to national EA regulations. Impact on dairy, beef and chicory High value farms are not a priority for conversion production. because o f high opportunity costs and locations generally outside of desired targets for expansion. Impact on mohair production. High value farms are not a priority for conversion because o f high opportunity costs and locations generally outside of desired targets for expansion. Land purchase process. Project i s developing new mechanisms for land conversion including purchase and different contractual arrangements. 3. Framework for Environmental Management and EIA in South Africa South Africa has a long history of legal and institutional support for environmental management. The three most critical pieces of South African environmental legislation are the Constitution of the Republic o f South Africa (1996); the National Environmental Management Act (NEMA - 89 - 1998); and the Environment Conservation Act (ECA 1989). The ECA represented a major step forward to consolidate legislation governing protection and control over the environment, A number of provisions dealt with protected areas and natural resources, waste management and pollution, general regulatory powers and provisions for dealing with offenses and penalties. The Constitution enshrined the fundamental right of every person to an environment.,.."which i s not detrimental to hidher health or well-being." The environment would be protected for the benefit of present and future generations through legislative and other measures that would prevent pollution and ecological degradation, promote conservation, and secure ecologically sustainable development. The NEMA strengthened a number of statutes under the old ECA. The NEMA provides broad principles for national environmental management; outlines new environmental institutions (National Environmental Advisory Forum, and Committee for Environmental Coordination); procedures for cooperative governance, decision making and conflict management; outlines the principle o f integrated environmental management; specifies international obligations and agreements; provides guidance on compliance and enforcement; environmental management cooperation agreements; and administration of the Act. In 1989,when the ECA was promulgated, it provideda framework for compulsory environmental impact assessment (EIA). South Africa uses the term EIA (Environmental Impact Assessment) while the Bank uses EA (Environmental Assessment). The two terms are essentially interchangeable. However, government resisted a legislative basis and continued to support EIA as a voluntary planning tool. The 1992 Guidelines for Integrated Environmental Management emphasized the importance of EIA as a mechanism for incorporating environmental factors into planning and development but the process remained outside existing legislation. In 1994, draft regulations for EIA were published and a lengthy consultative process was initiated in 1995. RevisedEIA regulations were publishedin 1996 for public comment. 4. Recent DevelopmentsinEIA in South Africa In September 1997, the Minister of DEAT promulgated regulations under the Environment Conservation Act to require compulsory EIA. Guidelines for EIA were released in April 1998 while the NEMA was being formulated. When the NEMA was promulgated in November 1998, the existing EIA regulations were incorporated. The EIA regulations have been subject to minor modifications since 1998, the most recent in May 2002. For the most part, the amendments tightenup wording inthe regulations, and clarify prescribed activities. The Department of Environmental Affairs and Tourism (DEAT) is the competent authority with respect to implementingthe NEMA. Intergovernmental coordination i s through the Committee for Environmental Coordination, while the Minister is advised by the National Environmental Advisory Forum. 5. Compatibilityof Bank and SEA Requirementsfor EA The DEAT is the competent authority with respect to implementing the NEMA. Intergovernmentalcoordination is through the Committee for Environmental Coordination, while the Ministeris advised by the National EnvironmentalAdvisory Forum. - 90 - 5.1 The EIA Processin SouthAfrica The South African EIA process has the following main steps: When an activity prescribedby the ECA i s proposed, the project proponent must either make an application for authorization to the relevant Provincial authority, or seek exemption from compliance with the EIA regulations. In Gauteng Province, for example, exemptions are sought via a "Pre-Application/EIA Exemption Checklist" that describes the project, the existing land uses and environmental sensitivities, expected solid waste and effluent generation, and requiredpermits under other legislation. If an exemption is not granted, the Provincial authority either requires a Scoping Report or a plan for preparing a Scoping Report. The plan must be approved by the authority. A Scoping Report must identify how the environment might be affected, what environmental issues are involved, what the project alternatives are, and how the public will be consulted. 0 The proponent then prepares the Scoping Report, involving the public, and submits it to the Provincial authority for approval. In a number of provinces, it has become practice for the Scoping Report to include an analysis of potential impacts, proposed mitigation and monitoring measures, and an EMP. 0 Based on the Scoping Report, the Provincial authority then authorizes the project with or without conditions, refuses the application, or determines that a full EIA must be undertaken. It issues a formal Record of Decision. 0 If required, a full EIA is then produced and provided to the authority for a decision. The authority either authorizes the project with or without conditions, or refuses the application. I t issues a formal Record o f Decision. 5.2 The World Bank World Bank requirements for Environmental Assessment (EA) are specified in OP/BP 4.01 on Environmental Assessment, supported by the EA Sourcebook and Updates. Since gAENP involves the management o f cultural resources, OP 4.1 1 on Cultural Property also applies. The requirements of OP 4.11 are normally addressed within the EA process specified under OP/BP 4.01. EA documents are prepared by the Borrower. They must be approved by the Bank and disclosed to the public before the project i s allowed to proceed to appraisal in preparation for negotiations and approval by the Board. 6. Compatibilityof Bank and RSA Requirements for EA 6.1 Screeningand Scoping At the project level, both processes currently require an initial environmental screening to determine the need for and scope o f further environmental assessment. The Bank assigns a proposed project to one o f three categories to prescribe the appropriate level of assessment (A: full EA; B: partial EA; C: no EA). Projects in certain sectors or of certain types are normally categorized as shown in Table 1. These examples are illustrative only. Categorization i s not a function of the type or scale o f project, but of the location and sensitivity of environmental issues and the nature and magnitude of potential environmental impacts. For projects requiringa partial or full EA, an initial scoping and ongoing public consultation are part o f the preparation of the EA - 91 - report. In South Africa, a proponent must first submit an application for authorization to undertake an activity prescribed by the ECA (Table 1). The application is reviewed by the Provincial environment authority and a decision is then made to either requirea Scoping Report or a plan of study to complete such a report. In the latter case, the authority must approve the plan before preparation o f the report can begin. Table 2 indicates a close correlations between the two screening lists. The two gaps inthe South African list are mining and resettlement. For the purposes of the gAENP project, mining i s not a consideration. Resettlement issues will be managed through a Resettlement Policy Framework prepared according to the requirements o f the World Bank resettlement policy OP/BP 4.12. Table 2: World Bank and South African ScreeningLists World Bank South Africa Category A (Full EA) ECA PrescribedActivities Aquaculture and mariculture (large-scale) Concentration of aquatic organisms including aquaculture and mariculture Dams and reservoirs Dams, reservoirs, levees, weirs Forestry production projects Resource removal, resource renewal Hazardous waste management and disposal Manufacture, transportation, storage, handling of dangerous or hazardous materials Industrial plants (large-scale) and industrial Industrial processes estates, includingmajor expansion, rehabilitation, or modification Irrigation, drainage, and flood control (large-scale) Water transfer schemes 1 Land clearance and leveling: Landuse and transformation Manufacture, transportation, and use o f pesticides IManufacture, transportation, storage, handlingI or other hazardous andor toxic materials o f dangerous or hazardous materials Mineral development (including oil and gas) Not directly applicable under EIA regulations New constructionor major upgradingo f highways Construction or major upgrading o f roads, or rural roads railways, airfields, communication networks, 1 cablewavs Port and harbor development Construction o f marinas, harbors and all structures below the high-water mark of seas, marinas and inland waters Reclamationand new land development Reclamation of land below the highwater mark, and specified changes inland use Resettlement Not directly applicable under EIA regulations Riverbasindevelopment Canals and channels and water transfer betweencatchments Thermal power and hydropower development or Energy generation and distribution - 92 - expansion Water supply and wastewater collection, Waste and sewage disposal treatment and disposal projects (large-scale) Genetically modification o f any organism Release o f any organism outside its natural area o f distribution that i s to be used for pest control Agro-industries (small-scale) Electrical transmission Energy efficiency and energy conservation Irrigation and drainage (small-scale) Protected areas and biodiversity conservation Rehabilitation or maintenance o f highways or rural roads Rehabilitation or modification of existing industrial facilities (small-scale) Renewable energy (other than hydroelectric dams) Rural electrification Rural water supply and sanitation Tourism Watershed projects (management or rehabilitation) In terms of scoping the issues that are to be addressed in an EA study, there may be minor differences between Bank and South African requirements. For example, the NEMA o f RSA defines "environment" to mean the surroundings within which humans exist that are made up of: 1. the land, water and atmosphere o f the earth; 2. microorganisms, plant and animal life; 3. any part or combination o f (1) and (2) and the interrelationships among and between them; and 4. the physical, chemical, aesthetic and cultural properties and conditions o f the foregoing that influence humanhealth and well-being. Inits preamble, the NEMA also states a number ofprinciples that project proponentsand decision makers need to take into account when undertaking EA: (i) The State must respect, protect, promote and fulfill the social, economic and environmental rights o f everyone and strive to meet the basic needs o f previously disadvantaged communities; and (ii) Sustainable development requires the integration of social. economic and environmental factors in the planning, implementation and evaluation o f decisions to ensure that development serves present and future generations. -93 - The World Bank broadly defines the scope o f EA to "take into account the natural environment (air, water and land); human health and safety; social aspects (involuntary resettlement, indigenous peoples, and cultural property); and transboundary and global environmental aspects (e.g. climate change, ozone-depleting substances, pollution o f international waters, and adverse impacts on biodiversity)." (OP 4.01). There i s considerable overlap in these prescriptions for the scope o f EA studies. At the same time, Scoping Reports and, if needed, consequent full EIAs, prepared to meet RSA EA regulations will need to be cognizant o f World Bank requirements in order to satisfy the needs o f both processes. For gAENP, involuntary resettlement concerns will be addressed through a separate Resettlement Policy Framework, and there are no indigenous peoples concerns within the meaning o f World Bank policy on the matter. 6.2 Consultation Both the Bank and South Africa require public consultation for projects needing either a full or partial EA (Bank) and Scoping Report and EIA (South Africa). The level o f consultation ranges from publishing notices o f project intent and invitations to review EIA reports, to full public hearings. With the South African process, the selection o f an appropriate public consultation instrument depends on the nature o f the project and what the provincial DEAT determines as minimum requirements. Duringscoping, this may range from simply informing neighbors about the project and seeking input, to holding public meetings with interested and affected parties, after publishing notices about the project in various media. Interested and affected parties are also given time to respond to the draft scoping report. If an EIA i s then required under the South African process, interested and affected parties must be given an opportunity to provide input as well as comment on the draft EIA report. The proponent will first present authorities with a plan o f study for the EIA, which must include public consultation mechanisms. The authorities will either approve the plan o f study or request modifications, including recommended public consultation processes to be followed duringthe EIA. The 1998 Bank EA Guidelines provide proponents with directions to identify interested and affected parties relative to the project, and appropriate consultation methods. The South African requirements for consultation are fully compatible with Bank requirements. 6.3 Mitigationand Monitoring The Bank EA process calls for a distinct Environmental Management Plan (EMP) for projects deemed to require a full or partial EA. These plans generally outline the mitigation, monitoring, and institutional measures to be taken during project implementation and operation to avoid or control adverse environmental impacts, and the actions needed to implement these measures. The South African guidelines do not require such an EMP. Instead, the EIA report must describe mitigation and monitoring. The general requirements for an EMP (Bank) and EIA (South Africa) are listed inTable 3. Table 3 indicates that South Africa meets Bank requirements for specifying mitigation and monitoring measures. However, the South African guidelines do not directly specify an - 94 - implementation schedule and reporting procedures, and do not address training needs. Table 3: ContentRequirementsfor BankEMP and South African Mitigationand Monitoring Bank EMP SouthAfrica EIA Summary o f impacts Summary o f significant impacts Descriptiono f mitigation measures Description o f mitigation options Description o f monitoring program Covers activity untildecommissioning Institutional arrangements Specified inregulations Legal considerations Legal requirements, implications Implementation schedule and reporting Not directly specified. Implementation schedule procedures is implied Cost estimates and sources o f funds Cost implications on government, public and developer Training Not directly speciJied Consultation 7. Conclusions The South African EA process generally meets Bank requirements under OP/BP 4.01. While the processes operate in a slightly different manner, the main elements o f screening, scoping, report preparation, public consultation, mitigation and monitoring are quite similar in content. The two processes offer essentially the same level o f independent authority over project approval. The apparent "gaps" between the two are: a) Under World Bank OP/BP 4.01, all physical investments under the gAENP will require either an EA containing an EMP, or just an EMP. Depending on the nature o f the investment, the South Africa process might not require a Scoping Report, or if it does, a subsequent EIA and an EMP, as defined by the World Bank, may or may not be required; b) There is considerable overlap in RSA and World Bank prescriptions for the scope o f EA studies. At the same time, Scoping Reports and, if needed, consequent full EIAs, prepared to meet RSA EA regulations will need to be cognizant of World Bank requirements in order to satisfy the needs o f both processes; and c) The Bank requires a more comprehensive E M P than i s specified inRSA EA regulations. - 95 - Additional Annex 13: Summary :Resettlement Policy Framework SOUTH AFRICA THE GREATER ADD0 ELEPHANT NATIONAL PARK PROJECT 1. Background This annex provides an overview of the Resettlement Policy Framework (RPF) and associated Resettlement Action Plans (RAPs), provided in a separately Bank approved document. Since 1997, SANParks has been purchasing land with a clause requiring land to be purchased free o f occupation. Subsequent to the Bank Appraisal Mission, SANParks has agreed to drop the clause from all future land purchases. A survey has been undertaken to identify all individuals who could be, and have been, affected by the proposed expansion o f Addo over the next 6 years. Original estimates o f potentially affected individuals varied from a low o f 570 inhabitants (191 workers) to a higher figure o f approximately 3300 inhabitants. The variability in the figures i s ascribed to the underlying assumptions which were made including: the area o f land to be included into Addo, the ratio o f farm workers per ha o f land and the number o f dependants. Further, the actual number o f workers and inhabitants which might require resettlement support will also depend on the extent to which workers and inhabitants, displaced since 1997, can be found. With the recently completed farm-by-farm survey and survey to find displaced farm workers and inhabitants, the number o f affected people has been reduced to 188 (workers plus dependents) o f which 70 were permanent workers at the time o f sale o f farm to SANParks. Of the 70 workers, 30 (plus 75 dependants) are currently unemployed and will, therefore, be fully incorporated into the SANParks RPF and RAPs. Another 25,000 ha o f land i s proposed for purchase by SANParks. Based on the calculated figure o f 1 unemployed person per 1,000 ha, an additional 25 workers plus dependants are expected to fall under the RPF and RAPs. Based on current phasing for the expansion o f the Park, it i s anticipated that SANParks' resettlement obligations in this regard will end in approximately 2010. SANParks has also agreed to monitor and to include any farm workers and their dependents into the RPF and RAPs where private land owners have sold land to SANParks or who have contracted land into the Park and who renegade on resettlement agreements reached with farm workers and their dependents inthis regard. 2. ResettlementPolicy Framework(RPF) and ResettlementActionPlans (RAPs) SANParks has developed a RPF to comply with Bank OP 4.12 and a series o f RAPs for years 1 and 2 o f implementation. The RPF includes a broad identification o f the affected community, South African legal requirements, development o f guiding principles for compensation, generic income restoration plans and implementation and monitoring arrangements. Part 2 o f the document consists o f a series o f Resettlement Action Plans (RAPs) for the first year of project implementation in which 8 farms were surveyed. Of these 8 farms, one had no inhabitants and the sale o f one other had not been finalized, therefore, 6 farms and a total o f 69 inhabitants have been located. The RAPs include income restoration plans. Phase 1o f the project refers to the first 3 years o f project implementation. This first 3 year phase includes the 6 farms and 69 inhabitants referred to above. Since there has been a lag time in Appraisal, the first year o f Phase 1i s currently underway Le. Phase 1will be fully implemented within approximately another 2 years. - 96 - Detailed planning for the marine component o f the project will only begin in year 1 to 2 o f the project. Therefore, it i s premature to produce RAPs or to develop detailed RPF proposals. The RPF is likely to need 'some updating in future as the marine component o f the project is developed. 3. Disclosure The RAPs and the RPF have been developed with those directly affected. They have been disclosed to affected parties directly through meetings due to low levels o f literacy and long travelling distances in the project area. The document has also been made available at public libraries and the Bank. A detailed and comprehensive public participation process around the implementation o f the RPF and RAPs had been completed. The process included the following: 0 Identification o f the target audience, which resulted in less written communication and more visual presentation and one-on-one meetings. Providing the identified target audience (key leadership, community representatives, affected farm workers and farm owners) with an overview o f the RPF and RAPS. Creating opportunities for these entities to comment on the RPF and RAPs. Obtaining buy-in for the RPF and RAPs. Communicating with above entities through letters, one-on-one meetings, questionnaires and public workshops with presentations. 4. Implementation/institutionalarrangements Implementation o f the RAPs will be as follows: The lead responsibility for implementation will rest with SANParks who will provide the necessary staff and budget for implementation including the use o f an agent if needs be. At community level, local level fora will be convened for purposes o f communication and liaison. The local level fora will nominate representatives to sit on the proposed Resettlement Working Group (RWG). The RWG will primarily provide an oversight function including serving as a vehicle to raise issues and concerns and to monitor the implementation o f the RAPs. The RWG will meet every 3-4 months and will be broadly convened to include government, key agencies, NGO's and community representatives. The RWG will report to the Addo Steering Committee. SANParks will also appoint an independent team to bi-annually monitor the implementation o f the RAPs. The reports o f the independent monitor will be provided to the Addo Park Manager, the Addo Steering Committee, the RWG and the Bank. 5. Bank monitoringand supervision The Bank will be provided with copies o f all RAPs for approval. Supervision missions will, on a 6 monthly basis, pay special attention to the planning and implementation o f the RAPs. Emphasis will be placed on ensuring that corrective actions are taken where needed. - 97 - Additional Annex 14: Strategic Framework For The Conservation Of Cultural Resource SOUTH AFRICA THE GREATER ADD0 ELEPHANT NATIONAL PARK PROJECT 1. Background The SANParks, in keeping with its corporate Cultural Resources Management (CRM) Policy and desire to comply with South African cultural heritage legislation has selected to produce a Strategic Framework for the Conservation o f Cultural Resources in the area o f the gAENP. Further, as a precautionary principle, rather than a necessity, an initial desktop cultural resources inventory has been compiled. Whilst parts o f the area in which the gAENP proposal i s found, are known to contain important rock art, fossils and artifacts, none o f these resources are threatened by the gAENP proposal. Therefore, whilst World Bank safeguard policy for Cultural Resources, OPN 11.03 and OPN 4.11, i s triggered by virtue o f the presence o f cultural property in the area, the beneficial land use impact o f the gAENP proposal, South African heritage legislation, SANParks C R M Policy, the gAENP Cultural Resources Framework discussed below, together with the compilation o f a cultural resources inventory, result incompliance with OPN 11.03. Inthe south eastern portionofthe gAENP,the Alexandria Dune FieldArea is considered by the South African authorities to have World Heritage Status. Motivations in this regard have been made to UNESCO. It i s anticipated that some heritage sites found in gAENP will be o f National importance while others have regional and local significance. The South African Heritage Resources Agency (SAHRA) and/or the local Provincial Heritage Authority will be involved in the determination o f significance in consultation with experts. It is clear that the proposed extent o f the gAENP encompasses an area with significant heritage resources. In 1996, a small dinosaur called Nqwebasaurus thwazi (Kirky) was discovered near Kirkwood, while the very first dinosaur to be identified in South Africa was discovered on the Bushman's River (on the edge o f the Park) in 1845. Archaeologically, the area includes extensive evidence o f Khoisan settlement in the past. This is reflected in the shell middens on the Alexandria coast, the rock art o f the Zuurberg and the stone cairns found along the Sunday's River. The proposed area o f the gAENP also has many important historic connections. Early travellers accounts provide information on the old wagon paths and the history o f early elephant (and game) hunting. The settlement o f the region by Xhosa-speakers and Europeans is reflected in the old farm houses, mission stations, cemeteries and villages. There are early frontier posts associated with the successive Wars o f Dispossession (Frontier Wars) also some activity related to the South African War (Anglo Boer). 2. World Bank Safeguard Policies- OPN 11.03 The main objective o f OPN 4.11 i s to ensure that Bank supported projects avoid, minimize and mitigate the risks associated with the possible loss o f cultural resources. OPN 11.03 uses the United Nations definition of "cultural property" to include sites having archaeological (prehistoric), palaeontological, historical, religious, and unique natural values. Cultural property, therefore, encompasses both remains left by previous human inhabitants (for example, middens, - 98 - shrines, and battlegrounds) and unique natural environmental features such as canyons. Therefore, where such features exist as inthe case of the gAENP proposal, OPN 4.11i s triggered and needs to be complied with. 3. The SANParksCultural ResourcesManagement ( CRM ) Policy The conservation of heritage resources in the gAENP is o f importance. I t i s therefore praiseworthy that SANParks has committed itself to the conservation of heritage resources in its Parks (see Policy Guidelinesfor Cultural Resource Management inNational Parks). Inthis policy document SANParks accepts responsibility for the effective protection, preservation and sustainable utilization of cultural resources and explicitly commits itself to an integration into the development planning process as well as Park management. 4. Cultural resources mapping of the gAENP The Albany Museum has been contracted to undertake a first-phase cultural (archaeological, palaeontological, anthropological and historical) mapping exercise of the gAENP. In addition to the physical description; information on significance, key management issues, potential impact and recommendations for mitigation (if these are adverse) and conservation objectives will be addressed. The survey has been completed and the heritage resources have been catalogued in a spreadsheet database. The database i s constructed in such a way that it can be constantly updated as new sites are discovered. It i s envisaged that the database may be integrated within the GIS system for the Park, making it a valuable tool inthe management of heritage resources inthe Park. 5. Legalissues All heritage resources within the gAENP fall under the Natural Resources Heritage Act (1999). The Act provides the general principles for governing the management of heritage resources. I t provides for an integrated system for the identification, assessment and management o f heritage resources; sets norms and standards for the management of heritage resources and empowers civil society to conserve their own heritage resources so that they may be preserved for future generations. The Act will form the basis of the management recommendations flowing out of the specialist study. The key implications of this legislation for the gAENP area are as follows: The regulation of National Heritage sites is generally a Provincial Government function. However, when significant sites are adopted as National Heritage Sites they will fall under the jurisdiction o f the national regulatory body, the South African Heritage Resources Agency (SAHRA). Shipwrecks are also deemedthe responsibility o f SAHRA. SAHRA needs to authorize the sale ofpictures ofNational Heritage Sites. Structures older than 60 years may not be altered or demolished without a permit from SAHRA. All archaeological material and remains of human activity (which are older than 100 years) and palaeontological sites as well as meteorites are protected by the Act. - 99 - 0 Burial grounds and graves are afforded particular protection and a permit to exhume a grave or demolish a cemetery/grave will not be granted if detailed efforts are not made to contact and consult communities and individuals who have an interest in the cemetery/grave concerned. The Act makes provision for the protection o f Living Heritage and also defines Heritage Objects. It allows for the restitution o f heritage objects to communities, which may claim them. SANParks i s taking the necessary measure to ensure compliance with the Act. 6. Mitigationmeasures The main mitigation measures will include: The adoption o f the proposed cultural heritage database to ensure that small works are built away from sites o f culturalheritage importance. The updating o f the database as a planning instrument as new data becomes available. The training o f staff on cultural resources identification and management including reporting procedures on new finds. Inthe event that an impact cannot be avoided the requirements o f SAHRA will be complied with and where needed a mitigation plan will be producedby a reputable specialist. 7. Recommendations A basic training program for staff in the identification, management and reporting procedures o f heritage resources. To appoint a staff member to update and maintain the cultural resources database as new heritage resources are discovered. 0 To integrate the management o f the database and cultural resources as a part o f the gAENP environmentalmanagement system which i s about to be adopted. Therefore, whilst the World Bank Safeguard Policy for Cultural Resources, OPNl1.13 and OP 4.11,i s triggered by virtue o f the presence o f cultural property inthe area, the beneficial land use impact o f the gAENP proposal, South African heritage legislation, SANParks CRM Policy, the gAENP Cultural Resource Framework, together with the compilation o f a cultural resource inventory, result in compliance with OPN 11.03. - 100- Additional Annex 15: Potential of the gAENP SOUTH AFRICA: THE GREATER ADD0 ELEPHANT NATIONAL PARK PROJECT Addo ElephantNationalPark's tourism role in the Eastern Cape Inthis regardAENP alone attracted 120,000 tourists in2002. The number oftourists to the Park has been increasing at a steady 8% per annum since 1991 when only 51,000 tourists visited the Park. But of importance in this number is the fact that over 50% of the tourists are from foreign countries, mainly Germany, Holland and United Kingdom. This high proportion of foreigners, almost twice that of those visiting Kruger National Park, i s important from the point of earning forex and job creation. A t the moment the AENP tourism product o f self-catering units with a total of 140 beds i s running at an average hut and bed occupancy o f 97% and 67%, respectively, and employing a total o f 39 tourism personnel. With the above wildlife product running on only 13,500 ha, or 11% o f the total Park area, the plan i s to expand the eco-tourism product to diversify the eco-experience and encourage the tourists to stay more than the present half to one day to at least three days. Planned developments include boosting the number of beds to 200-250, split between eight tourists facilities (four of which would be outsourced to concessionaires). An average bed occupancy of 60% and catering for a total o f 180,000 visitors per annum is expected to generate an annual income of US$2.3 million for the Park, as well as directly employing 360 people inthe tourism aspects alone. Increasinghut occupancy between 10 - 20% would firther increase income by a further US$0.08 - 0.6 million. This i s expected to it have a positive knock-on affect in the local economy. Knock-on affects o f the increase in tourism around Addo is reflected in the 10 fold increase in the number of private bed and breakfasts institutions around the Park in the last eight years. The planned development o f tourist lodges on adjacent contractual Park land will also increase employment. For example the Kuzuko Game Farm employs seven times the number of staff previously employed on the 16,000 ha farm properties. Thus, a total of 72 new direct jobs and a further 48 indirecthemporary jobs were created. -101 - Additional Annex 16: Socio-Economic Context SOUTH AFRICA THE GREATER ADD0 ELEPHANT NATIONAL PARK PROJECT 1. General The Republic o f South Africa is situated at the southernmost tip of the African continent, Since 1994, when apartheid ended and elections were held on the basis o f universal adult franchise, the Republic has been a politically stable multi-party democracy. A two-chamber national government with certain governmental responsibilities also devolves to each o f the nineprovinces. The country is classified as a middle-income developing country with a modem economic infrastructure. It has an abundant supply of natural resources with well-developed financial, legal, communications, energy and transport sectors. The challenges facing South Africa are to use these resources in a sustainable manner to create a strong and balanced economy, to eliminate poverty, to develop a dynamic human resource capacity and engage itself in the world economy. Inthis regard, the Eastern Cape Province is the poorest of the country's nineprovinces, with the highest unemployment rate in the country and thus in desperate need of development. I t i s also the province which offers some of the most substantial opportunities with regard to its natural resource base and biodiversity. 2. Population According to the latest population census, South Africa has a population o f 43 million. The Eastern Cape is South Africa's second largest o f the country's nine provinces (169,580 sq km), with the third largest population of 6.4 million (15% of the total South African population) growing faster than the national average of 2.4%. The main urban areas are Port Elizabeth and East London. The gAENP project is situated 70 km from Port Elizabeth. The languages spoken are Xhosa, 83.8% and English, 3.7%. The province has a highproportion (43%) o f people under the age o f 15. This i s likely to continue although the impact o f HIV/Aids on the trend i s not known. The Eastem Cape has a highproportion of low paid workers. The economic diversity is confined mostly to agriculture, manufacturing, commerce and services, with the weight o f this restricted to the main commercial centers of Port ElizabetWitenhageand East Londonwhere the focus o f the industrial and manufacturing sectors are in the motor industry. There is no mining and energy sector to speak of and the 800 km of relatively undeveloped coastline supports a relatively small sea fishing industry. Although agriculture only contributes to 3.6% of the economic output o f the province, it is important as an employer accounting for 13.2% o f the labor force incomparison to 18% in the manufacturing sector. By far the largest contributor to the economy remains the community and social sector providing 27% o f the economic input and 29% of the employees. The province has the highestunemployment rate (48% versus the national average o f 34%) o f all the provinces as well as a high labor dependency ratio (3.1% versus the national average o f 1.9%). As part o f the national government's overall economic strategic framework to stimulate economic development in deprived areas such as the Eastern Cape, two Spatial Development Initiatives (SDIs) were identified for the region, namely the Fish River and the Wild Coast SDIs, and two Industrial Development Zones (IDZs) - West Bank, East London, and Coega (see below) within those areas. - 102- A survey o f socio-economic conditions in the project area shows that rural wages on large commercial farms are low. The average wage for male workers on commercial farms in the area (dairy, mixed) i s approximately R550 per month. If females are included (the average female wage i s R141.00) the average drops to R282.00. Research has shown that certain agricultural practices, particularly pastoralism, are neither ecologically nor economically sustainable, thus undermining long-term social benefits. The future challenge lies in using the province's unique assemblage o f biological and landscape diversity to provide more sustainable ecological and social benefits. In this regard the gAENP can play an important and model example of meeting conservation and social goals for the Eastern Cape and South Africa. - 103- Additional Annex 17: BiodiversityValue of gAENP in the South African and the Eastern Cape Context SOUTH AFRICA: THE GREATER ADD0 ELEPHANT NATIONAL PARK PROJECT 1. SouthAfricanenvironment South Africa's surface area i s 1,219,090 sq km. Its coastline is swept by two currents, the warm south-flowing Mozambique-Agulhas which skirts the east and southern coasts and the cold Benguela that flows northwards on the west coast towards southern Angola. Consequently there are significant climatic variations in South Africa. There are two main relief features: an interior plateau and the land (generally an escarpment o f varying height) between the plateau and the coast. Inthis area betweenplateau and sea there are three major subdivisions, the easternplateau slopes, the Cape folded belt and adjacent regions, and the western plateau slopes. The average rainfall of South Africa i s 464 mm. The rainfall i s unreliable and unpredictable, droughts are common and the rate o f evaporation is generally high, exceeding precipitation. In addition, the soils of South Africa are unstable and around 500 million tons of topsoil i s lost through erosion each year, largely because of poor land management. Ecologically sustainable land use is crucial to the long-term welfare of South Africa. The Republic has amongst the world's greatest diversity of plant and animal species contained in one country and includes a large number of endemic species. It ranks among the upper quarter of the world's mega-biodiversity countries. This remarkable richness i s the result of the variety of the landforms, geology and soil types, as well as the mix o f tropical and temperate climates. South Africa i s the thirdmost biologically diverse country inthe world and i s of major global importance for biodiversity conservation (1997, White Paper on the Conservation and Sustainable Use of South Africa's Biological Diversity). Some 23,404 vascular plant species occur within the boundaries o f South Africa o f which 80% are found nowhere else. In addition to the extraordinary wealth o f plant life, 5.8% of the worlds' total mammal species, 8% of bird species, 4.6% of the global diversity o f reptiles, 16% of the total marine fish species and 5.5% o f the worlds' described insects are to be found on 0.8% of the land area. Faunal endemicity i s notably high amongst the amphibians (44%) and reptiles (31%). In terms of biomes, South Africa is world renowned, with a total o f seven biomes, two o f which, the Cape Floral Kingdom (or Fynbos) and Thicket, are restricted to within the country. The Cape Floral Kingdom is identified as one of the richest such areas in the world, while the Succulent Karoo biome i s o f extreme importance because some 33% o f the worlds' succulents are found in this area of South Africa alone. Human activity has impacted on South Africa's biomes for many thousands of years. The pace and extent has varied with the centuries. Agriculture and urban development has transformed parts of the landscape. The country's rich biodiversity i s under great threat with about 47% of South Africa's natural vegetation having been transformed. South Africa has the third highest number of threatened reptile, amphibian and invertebrate species. Although only 13% of its diverse mammalian fauna are considered threatened, the country i s still noted to be among those areas under severe threat o f extinctions. Among the vascular plants, Southern Africa records the highest number of Red Data Book species (2,575 species) per unit area, exceeding countries like -104 - Australia, India and Mexico. Thus, in the global context, South Africa with its rich biodiversity and increasing levels of threat makes it an area worthy o f conservation attention. 2. EasternCape Provinceenvironment The Eastern Cape i s temperate rather than tropical and it i s free of malaria. Much of the landscape o f this second largest province consists of undulating hills. The surface area i s 169,580 sq km, some 13.9% of South Africa. The proposed gAENP area covers approximately 383,000 ha, 263,000 ha inthe terrestrial zone and 120,000 ha inthe marine zone. The area falls within the recent demarcation of four local government authorities (municipalities) of the Western District Council, Blue Crane, Sundays River Valley and Ikwesi. The closest towns are Port ElizabetWUitenhage, Jansenville, Somerset East, Paterson, Kirkwood, Addo and Alexandria. Rainfall within the gAENP planning domain varies from 250mm on the northern rain-shadow side o f the central Zuurberg Mountains belt, to 1,200" on the mountains and 900" in the south eastern coastal section. The diversity of topography, the proximity to the coast, a diversity o f soil types and its position at the boundary between major climatic zones has produced a range of landscapes and biodiversity of unique proportions, making the gAENP potentially the most diverse conservation area inSouthern Africa. The diversity o f abiotic conditions prevalent in the Eastern Cape has made the region the most botanically varied area of the country. It forms a major transition or tension zone between four of the sub-continent's five major phytochoria: the Cape, Afromontane, Karoo-Namib and Tongaland-Pondoland. This i s further witnessed by the convergence within the Eastern Cape of five (Nama-Karoo, Fynbos, Grasslands, Forests and Thicket) of the seven recognized biomes in the country. These biomes are all represented within a 120km radius of Port Elizabeth. Furthermore, within these biomes inthe Eastern Cape, a total o f 27 different vegetation types are represented, more than any o f the other eight provinces o f South Africa. Thus, at the level o f the vegetation type and biome, biodiversity inthe Eastern Cape i s the highest in Southern Africa. 3. Albany hot-spot Within the Eastern Cape and includedwithin the gAENP, the Albany hot-spot has been identified as one of the eight biodiversity hot-spots in the subcontinent. Although the f 2,000 species and 10% endemism in the Albany hot-spot i s not particularly high, the species-to-area relationship compares with the other Southern African hot-spots, and it should be ranked among the worlds' most conservation-worthy areas. Inaddition, the transitional nature of the vegetation types within the Albany area, where many of the species are at their distributional limits, is particularly unique. This pattern offers ideal opportunities to test the factors limiting species distribution, which i s of particular importance in studying the ramifications o f global environmental change. Endemics within the Albany hot-spot tend to be mainly succulents from the succulent thicket vegetation types. For example 30% o f Southern Africa's succulent Euphorbia species are represented in the Eastern Cape, of which 48% are endemic to the region. 4. Coast and estuaries In addition to the diverse terrestrial elements, the Eastern Cape's coastal, marine and estuarine - 105- components add further to the biodiversity richness of the area. The Eastern Cape i s particularly richly endowed with river estuaries, several of which - suchas the Sundays River (inthe gAENP) - remain perennially open. The Sundays i s unique in that it exits through the Alexandria dunefield and i s also ranked as the eighth most biological diverse estuary in the country. The Eastern Cape marine component includesa diversity o f sandy and rocky shores and two island groups, Birdand St. Croix islands (also in the proposed gAENP), add to the scenic and biological diversity of the region. This section o f the South African coast falls within the South Coast marine biogeographical province (one of three nationally identified) and has been independently identified inneedof protection. Muchlikethe terrestrial areas inclose proximity to Algoa Bay, this section of the coast appears to be a transitional area of marine species from the cool temperate west coast and warm tropical elements and i s particularly important for its diversity o f bivalves, limpets and endemic fish species. Eastwards of Algoa Bay the proportion of endemic fish species rapidly declines. The continental islands are also important sea-bird breeding sites supporting the largest population o f the vulnerable jackass penguin, Spheniscus demersus, and the world's largest gannetry o f the South African gannet, Morus capensis. It also supports other conservation worthy species such as the endangered roseate tern, Sterna dougallii and South African oystercatcher, Haemotopus moquini. The islands also harbor the most easterly colony of the Cape fix seal, Arctocephalus pusillus. 5. Landscapesand biomes to be conservedby the gAENP The gAENP project plans to conserve representation of the uniquerange o f landscapes and viable samples of five of the country's seven biomes (described below) but, importantly, this long-term conservation is dependent upon the inclusion of sufficiently large enough areas to include the critical processes (both abiotic and biotic) supporting the biodiversity pattern as recommended in the Conservation Plan for the gAENP (see Specialist Reports listed inreferences). The proposed gAENP would conserve representatives of a wide range o f landscapes, terrestrial biomes and aquatic systems including offshore islands (rare on the African coast), a river estuary, one of the largest coastal dunefields, coastal forests, inland moist and semi-arid plains, mountains, and perennial and ephemeral river system. 5.1 Terrestrialbiomes 0 Thicket: Restricted to the South African eastern seaboard, only 4.5% o f this biome i s formally conserved. I t is under immense threat from degradation as a result of unsustainable farming practices. I t i s home to important elephant and black rhino populations (both endangered species) that will increase in their international value as the Park expands. The Park will contribute substantially to the conservationo f this biome. Nama Karoo: This biome has a relatively highdegree o f endemicity estimated to be about 18% of its 2,100 plant species. This biome i s historically known for the mass movements of its once huge springbok populations, and will play an important part in the semi-arid processes characteristic o f the dry northern Karoo plains. The area has been extensively degraded through overgrazing, principally by small stock, so much so, that it was ranked as the most degraded vegetation type in South Africa. It thus remains a conservation priority. Although it covers 28% o f the country and 25% o f the Eastern Cape, it remains - 106- poorly conserved with a meager 1.9% formally protected. The gAENP project will increase protection by about 60%. Fynbos: Fynbos vegetation forms the major component of the Cape Floral Kingdom, the smallest of the six Floral Kingdoms of the world. The Fynbos Biome i s the second best protected biome in the country with about 12% formally conserved. The gAENP's planned expansions will only marginally increase the amount o f these vegetation types under conservation. More importantly, conservation of the mountainous areas has been noted to be a key area linking biological and abiotic processes between the lowland and upland areas of the Park, critical to the long-term survival o f many large mammal species. The biome remains under threat from flower collectors, agriculture, alien vegetation and changing fire regimes, so much so that 1,700 (23%) plant species are threatened with extinction - the highest for any biome in South Africa. Forest: The Eastern Cape is particularly important in the conservation of the country's smallest biome, as it i s home to 95% and 47% o f the country's Coastal and Afromontane forests, respectively. The fact i s that they occur in small isolated patches under diverse management authorities and they are still under great pressure from exploitation, grazing and medicinal plant collection, so much so, that more than 43% of the original areas have been transformed. The relatively isolated nature of the forest patches in the Zuurberg section o f the gAENP makes them an important biological link between the eastern and southern Cape forest blocks. Inaddition, the Alexandria coastal forest i s important as it is the only forest that has a true mix of Tongaland-Pondoland and Cape elements together. Grassland: Essential to the livestock industry in the Eastern Cape, the biome has been placed under great threat, with an average o f 58% o f the biome having been transformed. The gAENP would increase the area of this biome under conservation by a further 50%. O f importance inthe conservation of the above biodiversity, i s the need to preserve the ecological processes driving the system. To this effect, the conservation planning undertaken as part o f the PDF-B grant determined that about 82% of the planning domain was required to meet the conservation of both ecological pattern and processes. This emphasizes the point that to conserve those processes unique to this area with a full complement o f African herbivores and carnivores indigenous to the region requires large areas under conservation. 5.2. Marine component The proposedMPA o f the Park includes the following important attributes: Will greatly contribute to South Africa's national goal of increasingits MPAs from the 5% towards 20%. maintaining important ecological processes, particularly the sandy beach - surf zone Will create critical linkages between terrestrial and marine conservation areas thereby interaction important in diatom production, which accounts for 95% o f Algoa Bay's primary production. Conservation of sandy beach ecosystems, not adequately conserved in South Africa. Conservationo f 280 macro-algae species, 38% o f which are endemic to South Africa. The Park will protect representation o f over 86% of South Africa's endemic marine invertebrate species. - 107- 0 The area will offer protection to the highest concentration of endemic coastal marine fish species (34% o f South Africa's endemic fish species). The M P A will also play a pivotal role in re-stocking surrounding waters with over exploited reef fish species. -108 - Additional Annex 18: Performance of SANParks in Meetings its Mandate SOUTH AFRICA: THE GREATER ADD0 ELEPHANT NATIONAL PARK PROJECT SANParks has extended the National Parks area under protection by a further 300,000 ha since 1995, with most o f the focus on under-conserved biomes. During this period a further four National Parks were proclaimed thus increasing South Africa's conservation assets towards meeting national and international conservation obligations. In2002, SANParks achieved apositive turn-around inits financial performance. This was largely due to the implementation of an improvement plan called "operation prevail". The plan was an immediate eight-point action plan to improve the financial situation of SANParks. The major activities included: 0 Reducingstaff costs by way of staffretrenchment, especially at middlemanagement level 0 Outsourcing non-core activities. This was initiated with the commercialization o f shops and restaurants Replacing and upgrading and investing in additional profitable accommodation units by borrowing funds 0 Repaying expensive debt 0 Better managing margins and stock holdings 0 Approaching the Dept o f Environmental Affairs and Tourism (DEA&T) for a cash injection to cover lost revenue resultingfrom the 2000 floods inKruger National Park. The financial performance o f SANParks is annexed to this report. The bank overdraft facility of R25m was breached and fully utilized. The improved financial performance has enabled SANParks to repay its overdraft and SANParks i s operating with surplus cash and i s earning interest on its operational bank account. DEA&T has allocated increased grants to SANParks. These grants cover new poverty relief projects, land acquisition, road maintenance and an element to cover inflationon costs. Tourism remains the main generator o f funds for SANParks. Accommodation occupancies are relatively high and continue to grow. The tourism products and activities offered by the Parks continue to enjoy success. SANParks largest costs remain salaries and wages for staff, however this is benchmarked at a respectable 55% of total cost. Other major costs include refurbishment of the tourism infrastructure. Accountability has been cemented through full compliance with the Public Finance Management Act as well as compliance with the King Code of Corporate Governance. SANParks also received an unqualified audit report for 2002. During the year, Mckinsey Management Consultants assisted SANParks with a performance audit, to enable the organization to organize itself better. Recommendations from this report were briefly as follows: Streamline the Directorate and organization to support strategic objectives. Builda strong constituency building section that will focus increasingly on broad national support for SANParks, enhanced conservation education and attention to local communities. The new Directorate is inthe process of being created. - 109- 0 Dedicated fund raising section required with personnel resident in the United States focused on this important market. 0 Realizing best practice in conservation through an enhanced Conservation Services section with greater emphasis on adaptive management principles through an integrated environmental management system. This i s now been effected through employment o f further staff inpriority academic areas. 0 African and non - South African citizens, per diem gate fees, tourism accommodation), Develop internal fund raising capacity through increased pricing (split tariffs for South better product offering, marketing and concession allocation. These measures, designed to improve efficiency and effectiveness are already in the process o f implementation and their effect i s still to be recorded. The financial outlook for year ended 31 March 2003 remains positive. It is expected that SANParks will deliver a similar financial performance compared to 2002. The income from concessions i s also coming on stream for the first time in this financial year. This source o f income i s expected to last for the next twenty years. -110- SouthAfrican National Parks BALANCE SHEET at 31 Murch 2002 31 March 31 March Notes 2002 200I R'000 R'000 ASSETS Non-current assets Property plant and equipment I 280 493 247 217 Construction work in progress 2 16 181 3 370 Investments 3 24 734 35 655 321 408 286 242 Current assets Inventory 4 I 3 290 22 161 Receivablesand prepayments 5 15 430 I 6 603 Cash and cash equivalents 6 I57 779 3 483 186 499 42 247 Total assets 507 907 328 489 EQUITY AND LlABlllTlES Capltul and reserves Accumulated surplus 171 061 181 976 Reserves 8 000 5 000 I79 061 I86 974 Non-current /iobl/lties Post-retirementhealth benefit obligations 7 90 725 I 8 300 Long-termborrowings 8 42 779 17 152 133 SO4 35 452 Current /labillties Trade and other pzyables 9 43 915 37 789 Provisionsfor liabilities and charges I O I 2 938 14 938 Current borrowings II I I719 21 053 Reservation deposrts held 23 946 21 344 Special projects I2 I02 824 IO 937 I95 342 I06 061 Totalliabilities 328 846 Total equity ond liabilities 507 907 -111- SouthAfrican National Parks INCOME STATEMENT for the year ended 31 Morch 2002 31 March 31 March 2002 200I Notes R'000 R'000 Gross revenue - Continuing operations 256 769 211 512 - Discontinued operations 58 279 I l l 116 14 315 048 322,628 Continuing operations Gross operating revenue 15 220 255 179 648 Other operating income 16 62 549 46 663 Toto1income 282 804 226 31 I Human resource expenses I7 175 336 178 526 Office and operatingexpenses 18 129 265 109 536 Depreciation I I O 959 15 037 Maintenance and consumable stock 19 29 477 21 564 Total expenses 345 037 324 663 Operating loss (62 233) (98 352) Governmentgrant 20 51 603 51 000 Road grant 21 I2 000 Local authoritiesgrants 22 I I 530 10 746 Operating income I (loss) from continuing operutions I2 980 (36 606) Operating income from discontinuedoperations 23 7 562 I 2 484 Operating income I (loss) fmm toto1operations 20 542 (24 122) Land acquisitiongrant 24 8 000 Sale of fauna and flora for land development 25 15 176 20 868 Donations 26 5 801 9 170 Restructuringcosts (8 06 I) (400) h o m e from operations 41 458 5 516 Interest and investment income 27 8 272 I1 218 Interest and finance charges 28 (10753) (12 801) lncome from ordinary activitles 38 977 3 933 Extraordinaryitems 29 13 952 15 625 Net income for the year 52 929 19 558 - 112- SouthAfrican National Parks INCOME STATEMENT for the yeur ended 31 March 2002 31 March 31 March 2002 200I Notes R'000 R'000 Gross revenue - Continuing operations 256 769 211 512 - Discontinued operations 58 279 I l l 116 14 315 048 322,628 Continuingoperutions Gross operating revenue 15 220 255 179 648 Other operating income 16 62 549 46 663 Total income 282 804 226 31I Human resource expenses 17 175 336 178 526 Office and operating expenses 18 129 265 109 536 Depreciation I I O 959 15 037 Maintenance and consumable stock 19 29 477 21 564 Total expenses 345 037 324 663 Operating loss (62 233) (98 352) Government grant 20 51 683 51 000 Road grant 21 I2 000 Local authorities grants 22 II 530 I O 746 Operotingincome I (loss) from continuing operations I 2 980 (36 606) Operating incomefrom discontinuedoperations 23 7 562 I 2 484 Operating income I (loss) from total operations 20 542 (24 122) Land acquisitiongrant 24 8 000 Sale of fauna and flora for land development 25 15 176 20 868 Donations 26 5 801 9 170 Restructuringcosts (8 061) (400) Income from operations 41 458 5 516 Interest and investment income 27 8 272 II 218 Interest and finance charges 28 ( I O 753) (I2 801) Income from ordinary activities 38 977 3 933 Extraordinaryitems 29 13 952 15 625 Net income for the year 52 929 19 558 -113- Additional Annex 19: Summary of Land Incorporation& Incentive Framework for South African National Parks SOUTH AFRICA: THE GREATER ADD0 ELEPHANT NATIONAL PARK PROJECT 1. Introduction As the country's premierConservationorganization, SANParks has beenmandated by the national government to contribute to the expansion of South Africa's biodiversity conservation areas from the present 6% to 8% of the country's surface areaby 2010, and to increase the marine protected areas substantially. National Parks as megabiodiversity repositories primarily serve conservation purposes, but also have an enormous potential for economic development, so much so that when fully developed they should be viewed as an asset and not a liability to South African society. The booming eco-tourism industry in the gAENP and other Parks reflects this. In meeting both conservation and socio-economic obligations, SANParks is attempting to address the issue o f conserving a healthy environment, thus combining the objectives of conservation and the sustainable use of biodiversity with restitution. This is in accordance with the National Constitution, the National Environment and Management Act (NEMA), and social justice initiatives as advocated through the Land Restitution, and Reconstruction and Development programs. The national government has played a pivotal role of late towards land purchases, consolidating 40% of the 20,000 ha, in the Addo Elephant National Park alone in 2001-2, in addition to facilitating the transfer o f a further 22,000 ha of state land to SANParks. Private investors have also played an important role. However, alternative forms of incorporation into National Parks through contractual arrangements with private land-owners and community land, offering them a suite of incentives, are also being actively pursuedby SANParks. The general requirement of setting aside large conservation areas is primarily designedto meet the essential ecological patterns and processes associated with preserving sustainable functioning examples o f the country's different biomes, but also enhances the aesthetic, recreational and spiritual appeal. Furthermore, expansion of National Parks remains necessary in the face of climate change and the habitat needs o f threatened and endangered species. Thus, for National Parks to meet their essential requirement of conserving biodiversity, yet meeting human needs, they must: 0 Be large enough to support representative examples of one or more natural ecosystems. 0 Contribute to biodiversity and ecological processesand preserve special cultural features. 0 Provide spiritual, scientific, educational and recreational opportunities. Incorporatethe needs and aspirations o f local, national and international communities. Reduce occupation and exploitation that are a direct threat to its main purpose. To rationalize the expansion process o f National Parks, the following land incorporation and associated resettlement frameworks, bound within their legal guidelines and obligations are elucidated below. - 114- 2. Legalrequirements As part o f South Africa's democratization process since the early 1990's, the country has developed possibly the most progressive national constitution and supporting social legislation. A great deal of emphasis has been placed upon legally supporting the poorest and most vulnerable sectors o f South African society. Inthis regard, a suite o f laws such as: The Constitution 108 o f 1996; Labour Tenants Act 30 of 1996; Restitution o f Land Rights Act 22 of 1994; Prevention o f Legal and Unlawful Occupation of Land Act 19 o f 1998; National Parks Act 57 of 1976; National Environment and Management Act 107 of 1998 (NEMA); Expropriation Act 63 of 1975; Extension o f Security and Tenure Act 62 o f 1997 (ESTA); Marine Living Resources Act 18 of 1998; Sea Shore Act 21 o f 1935; The Sea Birds and Seals Protection Act 46 of 1973 govery resettlement and land/marine right activities. These are addressed in the SANParks Land Incorporation policy and Resettlement Framework below. 3. LandAcquisition Framework The SANParks land acquisition policy seeks to: 0 Establish the criteria for incorporating land into national parks. 0 Prioritize areas based upon national conservation priorities. 0 Prioritize areas for incorporationaccording to their contribution to the goals and objectives o f the specific Park. 0 Provide a fair and equitable framework by which to include areas. 0 Show flexibility with regardto different means o f incorporation. 0 Establish legally bindinginstitutions whereby contractual landowners can collectively contract with SANParks. Any further expansion of a National Park or proclamation of a new one remainsjustified ifone or more o f the five following basic principles are met, namely: maintaining ecological integrity; representativeness; enhancing biological diversity; enhancing economic viability; and minimizing threats. Thus the importance placed upon any particular tract o f land or expanse of sea for incorporation into a National Park will dependon its contribution to the goals and objectives of the Park and the threat o f these not being achieved in the long-term because o f irreversible actions. This therefore requires the weighing up o f a suite of criteria including: conservation value; location; size; cultural value; economic contribution; purchase price; aesthetic value; and social constraints. 4. Incorporationoptions Differentincorporation options would be exercised as follows: Purchase: will be entertained when the property i s considered to be of high biological importance within the identified core area o f the Park, adjoining or surrounded by current SANParks property, o f cultural or aesthetic value, managerial importance (straightening boundaries etc), at a reasonable price. The property will be proclaimed as a National Park. Contractual Arrangements: will be entertained when the property i s situated on the periphery o f the proposed Park area, preferably outside the core conservation area, i s o f biological merit o n its own account, o f such a size that it would be able to support a sustainable conservation-based enterprise, or was part o f a larger cluster o f smaller properties making up an economic unit. The property will be proclaimed as a National Park. Management Agreement: will apply to areas on the periphery o f the Park, o f limited biological value but with managerial importance and importantly can be fenced into the Park. The property will not be proclaimed as contractual National Park land. Buffer Agreement: will be encouraged with surrounding land-owners largely outside the desired Park boundary but where by Park integrity would be enhanced if their land use conformed with that o f the Parks. This entails a weak agreement. Expropriation: will be considered when the purchase route could not be exercised on a willing-buyer willing-seller basis for key properties identified for purchase, and all other avenues have been exhausted. - 116- Reducedor no management input, fencing support, consumption o f game, extension service. 2. Government landsea 2. Government landsea Negotiationpriority - high Negotiationpriority - moderate The extent to which SANParks implements any of the above alternatives will depend upon the resources which they have at their disposal when considering the options and the perceivedvalue o f the property as illustrated inthe above matrix. The incorporation of government land (either terrestrial or marine) for conservation purposes would also be governed by the conservation value and risk matrix above as a means of weighting its priority for negotiation for transfer from other departments to SANParks. Given the fact such land has no transactions costs would generally rate its inclusion highly provided it meets inclusion criteria mentioned above. 5. Incentives The full project expects to be able to use a broad set of incentives to encourage land users to incorporate their land into gAENP. This includes assistance inthe following areas: 0 Introduction o f game for use ineco-tourism. 0 Wildlife management knowledge transfer. 0 Traversing rights to the Park. 0 Invasive alien plant control. 0 Rehabilitation o f land. 0 Firemanagement assistance. 0 Marketing cooperation. 0 Fundingconduit to mobilize government subsidies. 0 Innovative fund for sewage works, etc. 0 Joint program for fencing and roads. 0 Tourism transport assistance. 0 Legal recognition to incorporated areas, including status as Schedule 2, National Park. The level of contractual land has already reached 20,000 ha. I t is projected to increase to some 66,000 ha by project end. With the incentive package comes a set o f obligations for the land users, and returns to SANParks. Land users will be contractually committed to observe good standards in biodiversity management, including stocking rates, fencing, and rehabilitation of vegetation. There could also be direct financial obligations to share a percentage of financial turnover with SANParks. Resettlement will be addressed as per the Bank approved RPF and RAP. -117- -118- MAP SECTION