Updated Project Information Document (PID) Report No: AB986 Project Name CENTRAL AMERICA - Indigenous Integrated Ecosystem Management GEF Region Latin America and Caribbean Region Sector General agriculture, fishing and forestry sector (100%) Theme Indigenous peoples (P); Biodiversity (P) Project P075219 Borrower(s) CENTRAL AMER. COMM. FOR ENV.& DEV.(CCAD) Implementing Agency(ies) CEN AM INDIG-PEASANT COORD ASSOC COM AGROFORESTRY (ACICAFOC) Address: Apartado Postal 2089-1002, San Jose Costa Rica Contact Person: Alberto Chinchilla, Regional Facilitator Tel: (506) 240 6274 Fax: (506)241-1916 Email: oficinaregional@acicafoc.org Central America Indigenous Council (CICA) Address: Contact Person: Tel: Fax: Email: Environment Category B (Partial Assessment) Date PID Prepared June 18, 2004 Auth Appr/Negs Date May 27, 2004 Bank Approval Date August 31, 2004 1. Country and Sector Background Indigenous Peoples and Natural Resources Management Central America has a broad natural richness and high biodiversity, with a distinctly heterogeneous mix of terrains and climate, and high vulnerability to natural disasters. From Guatemala to Panama there are at least 10 main ecological zones of importance for biodiversity conservation within the Mesoamerican Biological Corridor, including the Moist Forests of Tehuantepec, Central American Atlantic Moist Forests, Central American Pine and Oak Forests, Central American Pacific Dry Forests, Isthmian Pacific Moist Forests, Miskito Pine Forests, Central American Montane Forests, Talamanca Montane Forests, and Eastern Panamanian Montane Forests (Conservation of the Terrestrial Ecoregions of Latin America and the Caribbean, World Bank/WWF, 1995). Central America is also rich in culture and tradition. The region is pluricultural and multilingual, with 14 distinct indigenous ethnic groups speaking 39 languages, totaling about 6.7 million people (24 percent of the total population of the region). Guatemala has the largest concentration of indigenous peoples (66 percent), mainly of Mayan descent, followed by Belize (20 percent), and Honduras (15 percent) (ILO). Outside of Guatemala, indigenous peoples are concentrated in areas that are less populated, including the areas that still have intact natural forests and ecosystems; about 85 percent of the region's national protected areas overlap with indigenous populations. Indigenous peoples in Central America currently occupy an estimated 170,000 square kilometers, or about 2 PID 33 percent of the area of the seven countries. More than 50 percent of this land contains forests or natural ecosystems, and a similar amount corresponds with the MBC. Likewise, a disproportionate share of forests and natural ecosystems, and an even greater share of national protected areas, overlap with indigenous populations. The strong overlap between indigenous peoples and natural resources is not coincidental. The ecosystems of many areas of high biodiversity have been shaped by human management practices related to subsistence agriculture, home gardens, forest extraction, hunting or gathering practices, and the use of forests as a refuge from mainstream society and as sacred sites. Although social research has not developed an agreed understanding of the complex population­nature relationships, it is known that under certain circumstances greater population density fosters biological diversity rather than destroying it. This is the case, for example, in parts of Sri Lanka, the Caribbean islands, and the Indo-Burma region. Some interdisciplinary approaches suggest that traditional community governance mechanisms may help develop sustainable systems. Even in parts of Central America with supposedly "assimilated" Mayan populations, a study of municipal forest management comparing communities in historically Mayan and non-Mayan areas of western Honduras document significantly better managed forests in Mayan areas (Tucker, 1999). Historically, indigenous peoples have had a strong relationship with the natural resource base in their culture, livelihood strategies, and value systems. The table below shows a number of contemporary natural resources management projects involving indigenous communities in Central America. Sustainable Natural Resource Management by Indigenous Communities in Central America Project Description Global Benefits Costa Rica Indigenous Organic production in Agroforestry cacao Ø Biodiversityprotection Sustainable Agroforestry syatems using selected varieties and growing Ø Carbonsequestration Cacao Production under a regulated forest cover. Forest Protection with Indigenous Communities sign environmental Ø Biodiversityprotection Payments for Environmental easements to protect their forest against fires, Ø Carbonsequestration Services in Costa Rica hunting, poaching, etc. Ø Protectionofwaterresources Indigenous Maya Community Land use planning to protect riparian habitats of Ø Biodiversityprotection management of The Sarstum the black Sartumm Temash protected area by Temash in Belize Maya Kek'chi Community Forest Community land concessions regulated by Ø Biodiversityprotection Concessions in Petén, management plan with the identification of Ø Carbonsequestration Guatemala timber production, preservation and agriculture areas. Indigenous Community Natural forest management, forest preservation, Ø Biodiversityprotection Management of the Bio-Itza and ecotourism activities in remaining primary Ø Carbonsequestration Reserve in Péten, Guatemala forests of the Maya Itzá, including conservation Ø Globalculturalandlanguageheri of language, culture and thousands of years of traditional forest management, agriculture and hunting methods. Historically, the economic and development model for rural areas was based on individual, private land tenure as a means to foster efficient resource use. The communal systems of indigenous peoples and the cultural values underpinning land use were actively undermined through (a) private land acquisition on the agricultural frontier; (b) rural development and trade policies; (c) the legal implications of land registration 3 PID systems; and (d) educational policies. Most of the countries in the region initiated ambitious land reform and land redistribution programs, but with the implicit goal of creating private holdings on nongovernmental lands and with a bias against preserving communal or municipal forest management systems, which were seen as more risky than state or individual tenure. However, over the past two decades there has been a continually evolving shift in the policy mindset on the relationship between individual land holdings and economic progress, and on the role of government in managing natural resources. More recently, land regularization and registration initiatives have been shaped by environmental policy dialogue and are more respectful of common property regimes and co-management schemes that maintain the environmental value of upper watersheds and priority coastal and inland ecozones through local action. However, none of the countries in the region have created an adequate legal framework for establishing, based on customary law, the tenure rights of indigenous peoples over their remaining traditional territories. There is growing recognition that viable ecosystem management systems can be found in existing indigenous lands based on traditional land tenure, inheritance, and normative frameworks for specific categories of land use, without the environmental community having to "create" them. In parallel, indigenous communities have themselves become more aware of their constitutional rights and international political space, including ILO Convention 169 and Article 8(j) of the Convention on Biological Diversity. They have begun to take a public stance on the value of community management of resources and the need to secure tenure and control over those resources. From an indigenous peoples' perspective, the persistence of healthy and diverse ecosystems within their territories or areas of influence is due precisely to the fundamental maintenance role and relationship of indigenous peoples to those ecosystems. In areas where they have maintained access and control over these ecosystems, indigenous peoples have sought to be environmental stewards rather than enforcers of environmental policies. Constraints to Indigenous Ecosystem Management Despite the positive developments mentioned, there are a number of constraints to the promotion of human-managed ecosystems in indigenous landscapes, including: Poverty-Induced Degradation of Natural Resources. Poverty and the need for immediate income streams leads to shorter rotation cycles and continued clearing of agricultural plots by indigenous people and results in less diversification of crops, plants, and forest products. It also frequently leads communities to sell their timber resources to outsiders for negligible sums as a way to generate cash. Outside settlers move into areas of traditional rotating agriculture and permanently clear lands for pasture and agro-pasture, further displacing indigenous systems. Cleared lands are being farmed unsustainably for longer periods and there are no resources to restore degraded soils. Lack of Attention to Indigenous Cultural Ties to Traditional Lands. Many rural development programs are based on a strategic framework focused on identifying areas of global competitiveness and increasing overall efficiency in the economy. While there is growing emphasis on asset creation in rural areas, particularly on rural infrastructure, human capital formation, and access to land and financial credit, greater resources should still be allocated to expand the scope of existing programs aimed at increasing the viability of farming systems and economic frameworks in areas where indigenous populations are concentrated. There is also little or no strategic response to the expressed desire of indigenous peoples in many rural areas to maintain their links to traditional areas and to use cultural land practices in assuring sustainability while improving quality of life. Agricultural programs are more commonly linked to food security and human capital formation rather than to economic activities that improve livelihoods while maintaining indigenous ties to traditional lands. Lack of Resources for Exchange of Experiences. While there are numerous positive initiatives at the national level for specific formal protected areas and priority regions, and there is support for creating a 4 PID network among communities to exchange experiences across countries and to share culturally driven standards for sustainable and culturally appropriate land use, resources for setting up such a network have not yet been available. Some indigenous land use models are vastly different from prevailing national models, which are developed mostly for non indigenous areas and often emphasize modern, technology-oriented approaches with little or no consideration of traditional practices. In addition, relevant experiences evolving in similar ecosystems in indigenous communities in Mexico could be incorporated into the management practices of communities in Central America. Government Strategies The broad development goals of the seven participating Central American countries focus on poverty alleviation, natural resource management, and reduction of social and economic inequalities, particularly in rural areas. These Central American countries are all parties to the main international environmental conventions, including the Convention on Biological Diversity and the United Nations Framework Convention on Climate Change (UNFCC). Regional agreements on biodiversity conservation and climate change have also been signed between the Central American countries. Three countries in Central America (Costa Rica, Guatemala, and Honduras) have ratified ILO Convention 169 on Indigenous and Tribal Peoples. Mesoamerican Biological Corridor. The governments of Central America value the Mesoamerican Biological Corridor (MBC) as a tool for environmental stability and recognize the importance of incorporating indigenous development and natural resource management into poverty reduction strategies. In 1995, the heads of state of Guatemala, Belize, Honduras, El Salvador, Nicaragua, Costa Rica, and Panama resolved to collaborate in the protection and sustainable use of the MBC, demonstrating their recognition that international cooperation in managing these valuable resources and the wide range of environmental products and services they provide is essential for the economic competitiveness and social stability of the region. The Central American Commission for Environment and Development (CCAD), composed of the region's environment ministers, was charged with implementation responsibility for the MBC. Bilateral and multilateral donors and technical cooperation agencies began to support regional and national projects to monitor and manage the environmental resources of the MBC and to promote education and participatory processes that give communities within the corridor a better understanding of the importance and value those resources. At the December 2002 donor meetings in Paris CCAD presented a comprehensive MBC Business Plan, developed through a participatory process, which is now accepted as the guiding framework for all MBC-related projects and initiatives. 2. Objectives The development/global objective of the proposed project is to achieve more effective biodiversity conservation in Central America (Guatemala, Belize, Honduras, El Salvador, Nicaragua, Costa Rica, and Panama) by strengthening the capacity of indigenous communities to protect and manage their natural and cultural resources, and by recuperating and promoting their cultural values and sustainable traditional land use practices, thereby helping to (a) prevent further land degradation that threatens environmental services, livelihoods, and economic well-being, and (b) conserve the region's high, though increasingly threatened biodiversity resources. The project will build on the positive cultural values and traditional practices that indigenous communities have developed over centuries to manage natural resources, and will support and expand the initiatives of indigenous communities that inhabit areas of high biodiversity in six priority ecoregions within the Mesoamerican Biological Corridor (MBC), and whose livelihoods depend on the conservation and 5 PID sustainable use of the natural resources. The project will (a) create a network of indigenous communities engaged in biodiversity conservation and sustainable and culturally appropriate land uses, (b) build organizational and institutional capacity across countries and groups, (c) promote exchanges between indigenous communities on traditional knowledge, experiences, and lessons learned, (d) develop an enabling environment to reorient projects that deal with sustainable rural development and conservation areas so that they include activities and approaches that promote participatory land use planning in indigenous lands and regions, (e) consolidate culturally based sustainable natural resource management practices and sustainable cultural land use across the region, (f) support projects for sustainable production, promotion, and marketing of traditional products, environmental services, and eco/ethnotourism, and (g) conduct participatory monitoring and evaluation of progress in the conservation and sustainable use of biological diversity. 3. Rationale for Bank's Involvement The baseline scenario (without proposed project) consists of projects that affect indigenous communities, including projects that focus on national protected areas, community conservation and sustainable use, rural development and rural poverty, and land administration, as well as potential indigenous peoples development projects (see Annex 4, Incremental Cost Analysis). Although the baseline provides a window for improving the livelihoods of indigenous communities and protecting their cultural and natural resource management traditions, there is tremendous potential to generate additional global benefits for biodiversity by: l Building the capacity of indigenous communities to actively participate in and benefit from rural development and land administration projects so that traditional ecosystem models, related to culturally based uses of the land that will benefit global biodiversity conservation, remain intact; and l Supporting a regional network of indigenous communities involved in integrated ecosystem management so that (a) community leaders in areas that are benefiting from existing GEF and other projects have an opportunity to share their experiences with other communities throughout Central America; and (b) common legal and technical standards for environmental goods and services can be developed and sufficient regional economies of scale created to attract more significant financiers to markets that support IEM based on traditional values and practices. Because there currently are no projects on a regional scale that focus on these two issues, there is great potential for value-added through World Bank and GEF support for such a regionwide project. In addition to the global and local benefits of the regionwide approach itself, described in earlier sections of this document, the Bank and GEF can bring unique incremental benefits to the project because of their experience and comparative advantage in several important areas. Community forestry and protected areas/biodiversity conservation. The World Bank has been involved for the past six years in community forestry and protected areas/biodiversity conservation in several Central American countries. This project is based on insights derived from those projects and from a long policy dialogue with the Central American governments, beginning with an analysis of the difficulties encountered in countries where national projects have been carried out. The proposed project has also drawn on experiences gained in Mexico and elsewhere in Latin America with community resource management and joint partnerships between governments and local level institutions. For example, the World Bank's Indigenous Peoples Initiative is building parallel experiences in Peru and in Bolivia on 6 PID community biodiversity conservation, which will generate valuable lessons in the future. Indigenous peoples capacity building. The World Bank also has significant experience in indigenous capacity-building financed through the IDF window, both in Central America and elsewhere in Latin America. The capacity of the executing agency is one of the key risks in the project, and successful implementation will require specialized expertise and practical experience to build the necessary capacity. The IDF funds have been highly successful in transferring resources directly to indigenous community networks to organize participatory training events and processes that accelerated technical innovation and institutional development among indigenous peoples, while building institutional capacity. World Bank and IDB staff have strong relationships with key indigenous organizations, including two of the major regional indigenous organizations directly relevant to this field. The project is based on the experience that linkages among indigenous organizations have been an effective learning tool and addresses the fact that community members lack trust in government officials and outside NGOs that are perceived as being opposed to their culture and way of life. Multiple confinancing projects. The cofinancing arrangements for this project is unlike any other GEF project. It includes cofinancing from 18 other projects, and is specifically designed to create synergies between national indigenous peoples, conservation, ecosystem management, and land administration initiatives to create a regional framework for sustainable, financially viable, and culturally appropriate ecosystem management. Integration with the extensive World Bank and IDB portfolio in the region is critical to the design structure and successful outcomes of the project. Making indigenous communities and their networks the implementing agents of the regional integrated ecosystem management initiative will strengthen ownership and enable action around an indigenous vision of development in which quality of life is defined in terms of a specific ecological space and according to specific cultural values towards resource management. The linkage to these projects will help sustain and outward and inward exchange of information that will allow them adapt ongoing investment projects at the national level by tailoring community subproject investments and protected areas management models to the lessons emerging in the regional initiative. Land tenure. Among the cofinancing projects, the land administration arena in particluar stands out as one in which the World Bank is more deeply involved than other development agencies. Considering the importance of land tenure and administration issues to land use and management planning, the shared dialogue on knowledge, practices, and experiences will have particular relevance to national land modernization schemes and will help participating communities make decisions within national frameworks. Mesoamerican Biological Corridor. The World Bank and GEF are major partners with CCAD and the Mesoamerican Biological Corridor. The strength of these regional linkages and connection to an overarching conservation approach for Central America give the Bank and GEF unique experience and perspective for implementing an initiative as complex and innovative as the proposed integrated ecosystem management project. The regional studies and networking involved in these partnerships will help tremendously in the development of standards and criteria for activities that have a potential or nascent market for payment of environmental services, an emerging concept in which the World Bank and GEF are involved in pioneering work. Financing options and GEF's global experience. It is unlikely that another source of financing could be found for such an innovative and regional project, in which global benefits are optimized only through a regional approach, and in which local benefits derived from the regional network are strong but might not garner financing from national goverments accostumed to a more conventional development approach. GEF 7 PID involvement in this project will enable the participating communities and countries to draw upon the GEF's worldwide experience in complementary protection and sustainable use activities in biosphere reserve management, and in recently approved projects that support indigenous peoples' involvement in biodiversity conservation. GEF involvement has catalyzed federal support for locally based conservation initiatives, which otherwise might not have received adequate operational and financial support. The proposed project is expected to provide models that can be disseminated and adapted for use in other countries. 4. Description The project would be implemented in highly Biodiversity priority areas of the six eco-regions selected for the project. The project priority areas have been identified based on project preparation (Block B) supported analyses study and consultation process. The priority eco-regions study delimited in the study, include 558 communities and 607 organizations within the priority biological areas of the six priority eco-zones, all with relatively equivalent Biodiversity values. Participating communities have been identified through a participatory social assessment which includes a regional consultation using criteria for measuring interest and capacity for conservation (see annex 11) and over the life of the project approximately 558 communities are expected to come forward to participate in the project activities. Within the 558 communities universe, social assessment have been categorized a subset of communities by their level of absorptive capacity and organizational commitment to conservation. A typology of four categories ranging from the least organized for conservation (Category 1) to the most organized (Category 4) has been developed and activities tailored to these different levels of organization. Transparent criteria for selecting proposals have been developed and would provide a basis for decision-making by the CMU and the liaison organizations (LOs) located in the project area (see annex 12 Eligibility criteria for subprojects). The project will be implemented over a period of five years, and will finance the following components (see detailed desciption in annex 2): 1. Cultural and institutional strengthening and capacity building a. Generation and strengthening of the organizational, technical and administrative capacities of the indigenous communities regarding the cultural values and the management of their natural resources b. Systematization of standards and criteria for traditional ecosystem management of indigenous communities, including a certification process for indigenous communities who engage in effective ecosystem management c. Strengthening of the negotiation and empowerment capacities of the indigenous community organizations for traditional ecosystem management 2. Promotion of sustainable cultural land use and traditional ecosystem management a. Development of sustainable cultural land use plans in the project intervention areas b. Strengthening of technical capacities for traditional management of the ecosystems in the community areas c. Interchange of experiences of traditional ecosystem management 3. Development of culturally appropriate financial mechanisms for environmental sustainability in indigenous communities Activities Type A: a. Quantifying and marketing a consolidated regional supply of traditional products 8 PID b. Exploring opportunities to create markets for consolidated environmental services derived from community projects Activities Type B: a. Defining and marketing consolidated, community-based eco/ethnotourism routes and projects b. Identifying, evaluating, and marketing community projects of traditional ecosystem management 4. Participatory Project Monitoring and Evaluation a. Capacity building on participatory monitoring and evaluation of both project global impacts and project implementation as well as human development b. Monitoring and evaluation of project global benefits c. Monitoring and evaluation of project activities d. Evaluation of project intervention model based on cultural values and traditional management practices that indigenous communities have developed over the centuries 5. Financing Source (Total ( US$m)) BORROWER/RECIPIENT ($1.50) IBRD ($12.30) LOCAL COMMUNITIES ($1.00) GLOBAL ENVIRONMENT FACILITY ($9.00) INTER-AMERICAN DEVELOPMENT BANK ($25.08) Total Project Cost: $48.88 6. Implementation Institutional Arrangements (see Annex 13) GEF Implementing Agencies. Coordination and collaboration between the World Bank and IDB will be reflected in an agreement between the two agencies on cofinancing and implementation arrangements. The IDB will be responsible for Components 1 and 2, while the World Bank will be responsible Components 3 and 4. Use of project funds for each component will be carried out in accordance with the norms and procedures of the agency responsible for that component. Project Coordination and Management. Project implementation will be carried out by ACICAFOC through a Project Coordination Unit (PCU). The PCU will be responsible to ACICAFOC for implementing the project in the field. The unit will work in close collaboration with the national and local indigenous communities in the project priority areas established by CICA and ACICAFOC. ACICAFOC's financial management capacity will be evaluated and strengthened during project preparation and implementation. The staff of the PCU will include a project coordinator, financial administrator, procurement officer, accountant, secretary, and 2 technical officers (as needed). Project Council (Consejo Directivo del Proyecto). During the interinstitutional meetings to develop the project proposal, the representatives of the national indigenous councils (mesas) and the lead indigenous communities agreed to form common coordination group, or Wayib, which together with CCAD will form the Project Council, which will serve as a board of directors and will make decisions regarding project planning and implementation. The Project Council will have five members: two from ACICAFOC, two from CICA, and one from CCAD. The council is an important forum to ensure real influence and feedback by the local communities and the member organizations or ACICAFOC and CICA 9 PID Liaison Organizations (Organizaciones de Enlace): Seven Liaison Organizations (LOs), all members of CICA and ACICAFOC, have been identified during preparation of the project and as the result of an institutional analysis that took place in each of the project's ecoregions. The LOs are responsible for facilitating and promoting the project at the ecoregion level. Each LO will follow the operational manual's guidelines for criteria and procedures for promoting the project, selecting community proposals, and ensuring efficient implementation. Financial Administrator. CCAD will endorse the project to ACICAFOC to sign the Grant Agreement with the Bank. ACICAFOC will be the recipient of the grant resources for administrative porpouses and provide oversight as well technical assistance on financial management to the seven liaison organizations (LOs). The financial administrator will house the project coordination unit (PCU) and disburse resources from the special accountto be set up for administration of grant money. Disbursement and Flow of Funds. Project funds will flow from: (i) the World Bank and IDB, either via the SA in US dollars which will be replenished on the basis of Withdrawal Applications or by direct payments in US dollars. Two project bank accounts in local currency (colones) will be opened to manage local payments in local currency for the management of the different components accordingly to the mentioned distribution. All project payments will be concentrated and managed only by ACICAFOC as the PCU. Transfers will be made in US dollars to the different liaison organizations upon their request directly from the SA. Auditing. ACICAFOC as the Financial Administrator, will maintain record, accounts, files and project documentation and will produce the standard financial statements (including those from the special account) according to the International Accounting Standards. As required by the Bank, project operations will be auditing annually in accordance generally with accepted auditing standards and procedures applied, by an independent qualified auditor (based on Bank guidelines and TORs for auditing). Initial and Midterm Review. As will be specified in the Operational Manual for the project, an initial review will be carried out toward the end of the second year to evaluate needed adjustments in the project implementation arrangements and design. CCAD representatives and Indigenous organizations would participate. There would be a participatory evaluation mechanisms for consultation with communities at the local level and to design the evaluation framework. Indicators will be revised at this time as well, if needed. A midterm review would be carried out at the end of the third year for a full assessment of the model and any adjustment needed in project design. 7. Sustainability The proposed project will achieve sustainability by focusing capacity building on indigenous communities in Central America and recognizing and capitalizing on the crucial role of regional networking to expand the initiatives of national and local indigenous organizations and indigenous producers. The project is based on the experience that training and capacity building have a more long-term impact when communities themselves are the catalysts to transfer knowledge and skills. Leader communities can maintain a training role that can be sustained after project financing. The project also will build long-term sustainability of cultural-based land uses and products in indigenous communities by supporting traditional institutions and practices (i.e. traditional authorities, intercommunity associations, sustainable cultural land use, customary law, and adaptive technologies). This strategy reflects the lessons learned from projects supported by the World Bank, IDB, and GEF in Central America that have attempted to introduce new technical approaches in rural areas without recognizing and 10 PID incorporating traditional institutions and practices. To obtain institutional sustainability, the Wayib, the regional organizations (ACICAFOC, CICA), and the national indigenous federations will have a key role in mobilizing local organizations and communities. The local institutional setup will be studied case by case to assure collaboration with municipalities and other local stakeholders. The following specific activities and outcomes will ensure sustainability beyond the project period: (a) improving the local, national, and regional institutional capacity of indigenous peoples to assess and integrate natural resources, biodiversity, and carbon sequestration values into development planning; (b) disseminating strategic activities at the regional, national, and community levels and demonstrating investments in specific ecosystems to show the value of traditional management; (c) enabling indigenous communities to assess the sustainability of their cultural land use categories and make the adjustments necessary to ensure future sustainability; (d) creating economies of scale at the regional level among communities for private sector investment in products and services; and (e) disseminating lessons to national programs and the general public within the Mesoamerican Biological Corridor so that traditional indigenous land uses and management models can be more widely understood. Financial viability Educational and training activities will be complemented by a review of the legal and regulatory incentive frameworks and a certification of indigenous communities that engage in effective sustainable ecosystem management to assure that they get direct financial returns. Financial sustainability of community conservation should be feasible because much of the community investment required is in the form of community labor, which is consistent with long-standing, traditional indigenous systems of labor exchange for community maintenance. The support of projects for sustainable use of natural resources and environmental services that can be certified for marketing purposes increases the economic return and market scope of these activities for communities. In addition, creation and management of a regional community conservation financing window during implementation will increase the capacity of indigenous communities to manage financial resources and prepare and monitor subprojects, and demonstrate that communities in the region are capable of developing and managing their own initiatives. By the end of the project it is expected that communities will begin to leverage their own funds and attract new funding or payment for the environmental services they are providing. 8. Lessons learned from past operations in the country/sector This proposed regional project has been informed by many lessons learned from activities associated with the GEF-supported Mesoamerican Biological Corridor program (World Bank and UNDP), investment projects in the rural sector financed by theWorld Bank and IDB, the Latin America and Caribbean Indigenous Capacity Building Program (carried out with World Bank Institutional Development Fund grants), and the Indigenous Peoples Profiles studies carried out by the World Bank and RUTA. The first lesson is the need for full community involvement is all stages of project design, implementation and monitoring and evaluation. At least three GEF-MSP projects are under implementation and is providing that full community involvement is an effective strategy for improving natural resources management and conservation by indigenous communities. This proposed project is continuing this approach in both the preparation and implementation phases. Participation of Local Populations. One of the key lessons learned is the importance of involving local populations and institutions (such as NGOs, local government, and community and sectoral organizations) 11 PID in the design, implementation, and distribution of benefits of the project to ensure the long-term conservation of biodiversity. It is also important to view the "biological corridor" as a "cultural corridor" within the broader context of sociocultural sustainable development in the region. Experience has shown that conservation of natural resources is only possible through integration of the local users of these resources and support for their sustainable resource management. Pure conservation programs that do not include participation by the local population will likely have limited success and could even have adverse environmental impacts if the local population responds negatively to the initiative. For this reason both the indigenous peoples and the farmers living in the MBC are essential for the success of both this operation and other projects currently under implementation or preparation. To sustainably manage natural resources in the MBC, the subprojects and activities that are part of the MBC framework must integrate not just environmental issues, but also the sociocultural, economic, and institutional aspects of sustainability. The initiative proposed in this project will be managed by the indigenous communities themselves and will allow them to pursue their own vision of biodiversity conservation and natural resources management. Importance of Indigenous Collective Areas to Sustainability. Communal conservation areas tend to achieve a higher level of sustainability than government-decreed protected areas because communities can use their customary legal frameworks to establish long-term, legally binding conservation areas supported by community sanctions. This community conservation approach is being fostered in the integrated management strategy of the World Bank-financed Community Forestry Project in Mexico, which has shown the effectiveness and sustainability of biodiversity conservation planned through participatory rural appraisals, participatory land use planning, intercommunity information sharing, forest management plans, and market studies for nontimber forest products. Given appropriate support, communities throughout the region will be able to establish their own conservation areas and achieve greater biodiversity protection than would likely occur under governmental management. The proposed project will support culturally driven ecosystem models designed and implemented by indigenous communities on their collective lands. Value of Information Exchanges Among Indigenous Peoples. The World Bank IDF indigenous peoples training programs were highly successful in building the institutional capacity of indigenous community networks and transferring resources directly to them to organize their own training events. Horizontal learning among indigenous organizations has proved very effective and has been shown to work faster and create longer-term networks for intercommunity initiatives in Central America and the Mexican part of the MBC. Indigenous-led initiatives also address the lack of trust that communities feel toward government and outside NGOs that are perceived as being opposed to indigenous culture and ways of life. This project will foster the horizontal exchange of experiences and knowledge by supporting a regional network of indigenous communities involved in sustainable and culturally appropriate land use. Creation of Subproject Financing Window. Drawing on project experience of the World Bank and the action plans developed by communities in the IDF-financed capacity building initiatives, the proposed regional project will establish a financing window to channel resources to community subprojects. This project account will be administered by a financial agent advised by the project council. By assuming responsibility for decisionmaking and monitoring of the financing window, indigenous communities will build their capacity to transparently absorb financial resources and to determine and monitor subproject priorities and selection criteria. The process will demonstrate that communities in the region are capable of developing and managing their own initiatives. The mentioned window will finance small grants, but by the end of the project it is expected that communities will begin to leverage their own funds and attract new funding or payments for environmental services and green enterprises. At that time the Wayib--the indigenous coordination group that is part of the Project Council--may determine that communities should seek funding individually or in small groups, or may choose to establish a regional fund to channel 12 PID resources to the communities. 9. Environment Aspects (including any public consultation) Issues : In preparing the EA (annex 12), information, maps and data available from previous assessments conducted for the preparation of national protected areas projects in the Central America region were analyzed. TORs were prepared for the consultant responsible for developing the set of criteria to be used for identifying project sites in the sis priority areas. Secondary statistical and biological information was collected and documented in a GIS information system to complement data collected in the site identification study. This information was analyzed in conjunction with data generated through the social assessment in order to produce a set of socioeconomic information about potential project sites for project implementation. The project will not result in significant or foreseeable negative environmental or social impact due to the nature of its activities with focus on positive environmental and social impacts, described in this document. Screening of local activities during the implementation will follow indicative criteria for environmental acceptability based on the WB and IDB policies and safeguards, defined in the Operative Regulations. If this screening detects any possible adverse impacts, these will be analyzed through an environmental assessment, to be sure to mitigate these impacts. Overall, the operation will have positive environmental impacts, particularly by promoting the prevention of further land degradation and conservation of globally significant biodiversity associated with measurable results in terms of (a) increased local capacity for environmental management; (b) reduced deforestation due to introduction of sustainable forest management methods; (c) improved soil and water conservation, through maintaining traditional sustainable land use practices; and (d) improved biodiversity conservation through sustainable traditional use and management of ecosystems. 10. List of factual technical documents: 11. Contact Point: Task Manager Juan Martinez The World Bank 1818 H Street, NW Washington D.C. 20433 Telephone: 506-255-4011 Fax: 506-222-6556 12. For information on other project related documents contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-5454 Fax: (202) 522-1500 Web: http:// www.worldbank.org/infoshop Note: This is information on an evolving project. Certain components may not be necessarily included 13 PID in the final project.